DEFM14A 1 d445118ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒ Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

COMPUTE HEALTH ACQUISITION CORP.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

 

 

 


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PROXY STATEMENT FOR SPECIAL MEETINGS OF

COMPUTE HEALTH ACQUISITION CORP.

PROSPECTUS FOR 93,397,815 SHARES OF COMMON STOCK AND 21,562,322 WARRANTS TO PURCHASE SHARES OF COMMON STOCK OF ALLURION TECHNOLOGIES HOLDINGS, INC.

(TO BE RENAMED ALLURION TECHNOLOGIES, INC. AFTER THE BUSINESS COMBINATION DESCRIBED HEREIN)

 

 

The members of the board of directors (the “Compute Health Board”) of Compute Health Acquisition Corp., a blank check company incorporated as a Delaware corporation (“Compute Health,” “we,” “us” or “our”), including the independent members of the Compute Health Board, have approved the Business Combination Agreement, dated as of February 9, 2023 (as the same has been amended as of May 2, 2023 and may be further amended, modified, supplemented or waived from time to time, the “Business Combination Agreement”), by and among Compute Health, Compute Health Corp., a Delaware corporation and a direct, wholly-owned subsidiary of Compute Health (“Merger Sub I”), Compute Health LLC, a Delaware limited liability company and wholly-owned subsidiary of Compute Health (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), Allurion Technologies, Inc., a Delaware corporation (“Allurion”), and Allurion Technologies Holdings, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Allurion (“New Allurion”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A and Annex A-1.

Pursuant to the Business Combination Agreement, and subject to the terms and conditions set forth therein, the business combination will be effected in three steps: (a) subject to, among other things, the approval and adoption of the Business Combination Agreement by the stockholders of Compute Health, Compute Health will merge with and into New Allurion (the “CPUH Merger”), with New Allurion surviving the CPUH Merger as a publicly listed entity (the time at which the CPUH Merger becomes effective, the “CPUH Merger Effective Time”) and becoming the sole owner of each Merger Sub; (b) at least three hours following the consummation of the CPUH Merger, Merger Sub I will merge with and into Allurion (the “Intermediate Merger”), with Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of New Allurion (the time at which the Intermediate Merger becomes effective, the “Intermediate Merger Effective Time”); and (c) thereafter, Allurion will merge 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 New Allurion (the time at which the Final Merger becomes effective, the “Final Merger Effective Time”).

On the closing date of the Mergers and immediately prior to the transactions contemplated by the Sponsor Contribution Agreement (as defined in the accompanying proxy statement/prospectus), pursuant to the terms of the Sponsor Support Agreement, dated as of February 9, 2023, by and among Compute Health, Compute Health Sponsor LLC, a Delaware limited liability company (the “Sponsor”), Allurion, New Allurion and the persons set forth on Schedule I thereto (the “Additional Class B Holders”), (a) the Sponsor has agreed to recapitalize its shares of Class B common stock, par value $0.0001 per share, of Compute Health (“Compute Health Class B Common Stock”) and warrants to purchase shares of Class A common stock, par value $0.0001 per share, of Compute Health (“Compute Health Class A Common Stock”) into Compute Health Class A Common Stock, and (b) the Additional Class B Holders have agreed to recapitalize their shares of Compute Health Class B Common Stock into Compute Health Class A Common Stock (clauses (a) and (b), together, the “CPUH Recapitalization”).

Pursuant to the CPUH Merger: (a) immediately prior to the CPUH Merger Effective Time, each unit of Compute Health (the “Compute Health Units”) that is outstanding immediately prior to the CPUH Merger Effective Time will be automatically detached and the holder thereof will be deemed to hold one share of Compute Health Class A Common Stock and one-quarter of one warrant to purchase Compute Health Class A Common Stock (a “Compute Health Public Warrant” and, together with the warrants of Compute Health issued in a private placement that closed contemporaneously with our initial public offering (the “Compute Health Private Warrants”), the “Compute Health Warrants”); (b) at the CPUH Merger Effective Time, each then-outstanding share of New Allurion common stock, par value $0.0001 per share (“New Allurion Common


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Stock”), shall be redeemed for par value; (c) at the CPUH Merger Effective Time, each then-outstanding share of Compute Health Class A Common Stock (including, for the avoidance of doubt, shares of Compute Health Class A Common Stock issued in the CPUH Recapitalization and in the separation of the Compute Health Units described in (b) above, but excluding any dissenting shares, shares that are redeemed in connection with the Business Combination, shares held as treasury stock or held by any subsidiary of Compute Health and any shares to be contributed by the Sponsor to Compute Health immediately prior to the CPUH Merger Effective Time pursuant to the Sponsor Contribution Agreement (as defined in the accompanying proxy statement/prospectus)) will be automatically canceled and extinguished and will be converted into the right to receive 1.420455 shares of New Allurion Common Stock (the “CPUH Exchange Ratio”); (d) at the CPUH Merger Effective Time, each then-outstanding Compute Health Public Warrant will be assumed by New Allurion and represent a warrant to purchase a number of shares of New Allurion Common Stock (a “New Allurion Public Warrant”) as set forth in the Warrant Assignment, Assumption and Amendment Agreement, to be entered into by and among Compute Health, New Allurion and the Continental Stock Transfer & Trust Company (the “Warrant Agent”) in connection with the closing of the CPUH Merger (subject to the outcome of the solicitation of the consent of the holders of each Compute Health Warrant, which currently entitle the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50 per share, to certain amendments to that certain warrant agreement, dated February 4, 2021, by and between Compute Health and the Warrant Agent); and (e) at the CPUH Merger Effective Time, each share of treasury stock held by Compute Health or any subsidiary of Compute Health will be canceled for no payment or consideration. Unlike other business combinations with special purpose acquisition companies, the transactions contemplated in the Business Combination are structured such that holders of Compute Health Class A Common Stock that do not redeem their shares in connection with the Business Combination will receive 1.420455 shares of New Allurion Common Stock in exchange for each non-redeemed share of Compute Health Class A Common Stock held by such holder. These shares are being registered pursuant to this registration statement, will be delivered by means of application of the CPUH Exchange Ratio and will be delivered to such holder as New Allurion Common Stock. By virtue of the exchange mechanism in the Sponsor Support Agreement (which, among other things, effectively cancels out the CPUH Exchange Ratio), neither the Sponsor nor any of the Additional Class B Holders will receive the benefit of the CPUH Exchange Ratio.

Immediately prior to the Intermediate Merger Effective Time, the outstanding principal and accrued but unpaid interest on the outstanding convertible unsecured promissory notes issued by Allurion pursuant to those certain Convertible Note Purchase Agreements, dated December 22, 2021, February 15, 2023 and June 14, 2023, by and among Allurion and the investors party thereto (the “Allurion Convertible Notes”), will be converted into the applicable number of shares of Allurion common stock, par value $0.0001 per share (“Allurion Common Stock”) provided for under the terms of such Allurion Convertible Notes (collectively, the “Allurion Convertible Notes Conversion”), and will thereafter no longer be outstanding and will cease to exist, and each holder thereof will thereafter cease to have any rights with respect thereto. Immediately following the Allurion Convertible Notes Conversion, at the Intermediate Merger Effective Time, all shares of Allurion Common Stock issued in the Allurion Convertible Notes Conversion will be canceled and converted into the right to receive New Allurion Common Stock as described below.

Pursuant to the Business Combination Agreement, Allurion is required to use reasonable best efforts to obtain gross cash proceeds of at least $15 million of additional financing pursuant to one or more private sales of Allurion’s equity securities, which shall automatically convert into shares of Allurion Common Stock upon the consummation of the Business Combination, which is referred to as the Incremental Financing. From February 15, 2023 until July 5, 2023, Allurion issued an aggregate principal amount of $19.6 million of convertible unsecured promissory notes (the “Bridge Notes”), including the 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. The Bridge Notes 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 Business Combination on or before August 31, 2023, the Bridge Notes shall be converted into the number of shares of 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 Business


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Combination (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., RTW Venture Fund Limited, 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 Business Combination, 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 Holders with additional shares of New Allurion Common Stock, in the event that the trading price of the shares of New Allurion Common Stock was lower than the Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio (as defined in the accompanying proxy statement/prospectus) (the “Initial Financing”).

Following the consummation of the Initial Financing, the parties determined to refinance the Initial Financing and, 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.

At the Intermediate Merger Effective Time, pursuant to the Intermediate Merger: (a) each then-outstanding share of Allurion Common Stock, other than dissenting shares and shares held by Allurion as treasury stock or held by any subsidiary of Allurion, the treatment of which is described in the Business Combination Agreement, issued and outstanding as of immediately prior to the Intermediate Merger Effective Time will automatically be cancelled and extinguished and will be converted into the right to receive shares of New Allurion Common Stock; (b) each then-outstanding share of preferred stock, par value $0.0001 per share, of Allurion designated as Series A Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D-1 Preferred Stock, Series D-2 Preferred Stock, and Series D-3 Preferred Stock (collectively with the Allurion Common Stock, the “Allurion Shares”) (other than dissenting shares and shares held by Allurion as treasury stock or held by any subsidiary of Allurion, the treatment of which is described in the Business Combination Agreement) issued and outstanding as of immediately prior to the Intermediate Merger Effective Time will automatically be cancelled and extinguished and will be converted into the right to receive shares of New Allurion Common Stock; (c) each then-outstanding and unexercised option exercisable for shares of Allurion Common Stock, whether vested or unvested (each, an “Allurion Option”), will be converted into an option exercisable for shares of New Allurion Common Stock (each, a “Rollover Option”), on the same terms and conditions as were applicable to such Allurion Option; (d) each then-outstanding award of restricted stock units of Allurion, whether vested or unvested (each, an “Allurion RSU Award”), will be converted into an award covering shares of New Allurion Common Stock (each, a “Rollover RSU Award”); and (e) each then-outstanding warrant to purchase Allurion Shares (“Allurion Warrants”) will be converted into a warrant to acquire a number of shares of New Allurion Common Stock in an amount and at an exercise price as set forth on an allocation schedule to be delivered by Allurion to Compute Health (each, an “Rollover Warrant”).

At the Final Merger Effective Time, (i) each share of Allurion (as the surviving entity in the Intermediate Merger) issued and outstanding immediately prior to the Final Merger Effective Time will be cancelled and will cease to exist and (ii) each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Final Merger Effective Time will remain outstanding as a limited liability company interest of Merger Sub II.

We would expect each share of Allurion Common Stock to be converted into 1.0355 shares of New Allurion Common Stock in the Intermediate Merger based on a no redemptions scenario and that the stockholders of Allurion will own 32,452,484 of the outstanding shares of New Allurion Common Stock immediately following the consummation of the Business Combination. The preceding sentence reflects numerous assumptions. The accompanying proxy statement/prospectus discloses those assumptions and presents various alternate scenarios regarding the ownership of New Allurion following the Business Combination. The estimated net cash per share of Compute Health Class A Common Stock that is being contributed by Compute Health to New Allurion (as the


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combined company in the Business Combination) is less than the amount that holders of Compute Health Class A Common Stock would be entitled to receive upon exercise of their redemption rights, as described in the accompanying proxy statement/prospectus.

The accompanying proxy statement/prospectus covers 93,397,815 shares of New Allurion Common Stock, including shares issuable upon conversion of the Contingency Shares (as defined in the accompanying proxy statement/prospectus), Compute Health Class A Common Stock, and certain Allurion Shares in connection with the CPUH Merger or the Intermediate Merger, as applicable, shares issuable upon exercise of the New Allurion Public Warrants and Rollover Warrants, and shares issuable upon the exercise of Rollover Options and settlement of Rollover RSU Awards. The number of shares of New Allurion Common Stock that the accompanying proxy statement/prospectus covers represents the maximum number of shares that may be issued, or may be issuable, to holders of Allurion Shares (other than certain shares to be covered by the Resale Registration Statement (as defined in the accompanying proxy statement/prospectus)), Allurion Warrants, Allurion Options, and Allurion RSU Awards in connection with the Intermediate Merger (as more fully described in the accompanying proxy statement/prospectus), together with the maximum number of shares that may be issued, or may be issuable, to the existing holders of shares of Compute Health Class A Common Stock, Compute Health Public Warrants, and Compute Health Units in connection with the CPUH Merger.

As described in the accompanying proxy statement/prospectus, Compute Health’s stockholders are being asked to consider and vote upon (among other things) the Business Combination and the other proposals set forth herein.

The Compute Health Units, shares of Compute Health Class A Common Stock, and Compute Health Public Warrants are currently listed on the New York Stock Exchange (“NYSE”) under the symbols “CPUH.U,” “CPUH,” and “CPUH WS,” respectively. The parties anticipate that, following the Business Combination, the New Allurion Common Stock and New Allurion Public Warrants will be listed on the NYSE under the symbols “ALUR” and “ALUR WS,” respectively, and the Compute Health Units, shares of Compute Health Class A Common Stock, and Compute Health Public Warrants will cease trading on the NYSE and will be deregistered under the Securities Exchange Act of 1934, as amended, upon the consummation of the CPUH Merger. New Allurion will not have units trading upon the consummation of the Business Combination. The receipt of approval for listing on NYSE of the shares of New Allurion Common Stock to be issued in connection with the Business Combination is a condition to the closing of the Business Combination, unless waived by the parties to the Business Combination Agreement.

 

 

The accompanying proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the special meetings of Compute Health. We urge you to carefully read this entire document, including the annexes. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 90 of the accompanying proxy statement/prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement/prospectus, passed upon the fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement/prospectus. Any representation to the contrary is a criminal offense.

 

 

The accompanying proxy statement/prospectus is dated July 7, 2023, and is first being mailed to Compute Health’s stockholders on or about July 7, 2023.


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COMPUTE HEALTH ACQUISITION CORP.

A Delaware Corporation

1100 North Market Avenue, 4th Floor

Wilmington, Delaware 19890

NOTICE OF THE SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JULY 28, 2023

TO THE STOCKHOLDERS OF COMPUTE HEALTH ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the “Special Meeting”) of Compute Health Acquisition Corp., a Delaware corporation (“Compute Health,” “we,” “us” or “our”), will be held at 9:00 a.m., Eastern Time, on July 28, 2023. For the purposes of the amended and restated certificate of incorporation of Compute Health, dated as of October 7, 2020 and amended as of December 5, 2022 (the “Compute Health Certificate of Incorporation”), the physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. You may attend the Special Meeting and vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/2023. You will need the meeting control number that is printed on your proxy card to enter the Special Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 4267501#. You are cordially invited to attend the Special Meeting, which will be held for the following purposes:

Proposal No. 1 — The Business Combination Proposals — to consider and vote upon three separate proposals to approve the Business Combination (as defined below) and approve and adopt the Business Combination Agreement, dated as of February 9, 2023 (the “Existing Business Combination Agreement”) and amended as of May 2, 2023 (the “BCA Amendment” and, the Existing Business Combination Agreement, as amended by the BCA Amendment, the “Business Combination Agreement”), by and among Compute Health, Compute Health Corp., a Delaware corporation and a direct, wholly-owned subsidiary of Compute Health (“Merger Sub I”), Compute Health LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Compute Health (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), Allurion Technologies, Inc., a Delaware corporation (“Allurion”), and Allurion Technologies Holdings, Inc., a Delaware corporation and a direct, wholly-owned direct subsidiary of Allurion (“New Allurion”), pursuant to which, subject to the terms and conditions set forth therein, the Business Combination will be effected in three steps: (a) subject to, among other things, the approval and adoption of the Business Combination Agreement by the stockholders of Compute Health, Compute Health will merge with and into New Allurion (the “CPUH Merger”), with New Allurion surviving the CPUH Merger as a publicly listed entity (the time at which the CPUH Merger becomes effective, the “CPUH Merger Effective Time”) and becoming the sole owner of each Merger Sub; (b) at least three hours following the consummation of the CPUH Merger, Merger Sub I will merge with and into Allurion (the “Intermediate Merger”), with Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of New Allurion; and (c) thereafter, Allurion will merge with and into Merger Sub II (the “Final Merger” and, collectively with the CPUH Merger and the Intermediate Merger, 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 New Allurion (clauses (a) through (c), collectively, the “Business Combination Proposals”). A copy of the Existing Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A and a copy of the BCA Amendment is attached to the accompanying proxy statement/prospectus as Annex A-1;

Proposal No. 2 — The Organizational Documents Proposal — to approve and adopt, assuming the Business Combination Proposals and the Exchange Proposal (as defined below) are approved and adopted, the proposed new certificate of incorporation (the “Proposed Charter”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex B, and the proposed new bylaws, a copy of which is attached to the accompanying proxy statement/prospectus as Annex C (the “Proposed Bylaws”), of New Allurion

 

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as the post-CPUH Merger company, which, if approved, would take effect substantially concurrently with the CPUH Merger Effective Time (the “Organizational Documents Proposal”);

Proposal No. 3 — The Advisory Organizational Documents Proposals — to approve, on a non-binding advisory basis, certain governance provisions in the Proposed Charter and the Proposed Bylaws, which are being presented separately in accordance with United States Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as seven sub-proposals (collectively, the “Advisory Organizational Documents Proposals”):

 

   

Advisory Organizational Documents Proposal A — to change the corporate name of New Allurion to “Allurion Technologies, Inc.” from and after the time of the Business Combination;

 

   

Advisory Organizational Documents Proposal B — to increase New Allurion’s capitalization so that it will have 1,000,000,000 authorized shares of common stock, par value $0.0001 (the “New Allurion Common Stock”), and 100,000,000 authorized shares of preferred stock, par value $0.0001;

 

   

Advisory Organizational Documents Proposal C — to divide the New Allurion board of directors into three classes with staggered three-year terms;

 

   

Advisory Organizational Documents Proposal D — to provide that the removal of any director be only for cause and only by the affirmative vote of holders of at least 66 2/3% of New Allurion’s then-outstanding shares of capital stock entitled to vote at an election of directors;

 

   

Advisory Organizational Documents Proposal E — to not include in the Proposed Charter any requirement that New Allurion be dissolved and liquidated 30 months following the closing of its initial public offering, and to not include in the Proposed Charter provisions applicable only to blank check companies;

 

   

Advisory Organizational Documents Proposal F — to provide that New Allurion stockholders may only act by holding a stockholders meeting; and

 

   

Advisory Organizational Documents Proposal G — to provide that the New Allurion board of directors would be expressly authorized to adopt, amend, alter or repeal the Proposed Bylaws on an affirmative vote of the majority of directors. In addition, to provide that the Proposed Bylaws could be amended or repealed by New Allurion stockholders by the affirmative vote of the holders of at least 66 2/3% of the then-outstanding shares of capital stock of New Allurion entitled to vote on such amendment or repeal, voting together as a single class; unless the New Allurion board of directors recommends that New Allurion stockholders approve such amendment or repeal at such meeting of New Allurion stockholders, in which case such amendment or repeal shall only require the affirmative vote of the majority of outstanding shares of capital stock of New Allurion entitled to vote on such amendment or repeal, voting together as a single class.

Proposal No. 4 — The Exchange Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposals and the Organizational Documents Proposal are approved and adopted, for the purposes of complying with the applicable listing rules of the New York Stock Exchange, the issuance of (i) up to 37,812,000 shares of New Allurion Common Stock in the Intermediate Merger pursuant to the terms of the Business Combination Agreement, (ii) 5,386,695 shares of New Allurion Common Stock to the PIPE Investors (as defined below) pursuant to the PIPE Subscription Agreements (as defined below), (iii) up to 3,602,114 shares of New Allurion Common Stock, in the aggregate, to Compute Health Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and the independent directors of Compute Health, assuming the maximum amount allowable in the Sponsor Loan Conversion (as defined below) and the minimum number of shares of Compute Health Class A Common Stock (as defined below) are contributed by the Sponsor to Compute Health pursuant to the Sponsor Contribution Agreement (as defined below), (iv) 13,101,132 shares of New Allurion Common Stock to the Public Stockholders (as defined below), (v) up to 1,500,000 shares of New Allurion Common Stock, in the aggregate, to RTW and Fortress (each as defined below) or its affiliates pursuant to the Backstop Agreement, Amended and Restated RTW Side Letter or the Term Loan Credit Agreement (each

 

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as defined below), as applicable, (vi) up to 1,600,000 shares of New Allurion Common Stock pursuant to HVL’s Termination Agreement (as defined below), and (vii) up to 9,000,000 shares of New Allurion Common Stock to certain Allurion equityholders if certain share price thresholds are achieved within five years after the effective date of the resale registration statement on Form S-1 to be filed with the SEC by New Allurion (the “Exchange Proposal”);

Proposal No. 5 The Equity Incentive Plan Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposals, the Exchange Proposal, and the Organizational Documents Proposal are approved and adopted, the New Allurion 2023 Stock Option and Incentive Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex G (the “Equity Incentive Plan Proposal”); and

Proposal No. 6 — The Adjournment Proposal — to consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, any of the Required Transaction Proposals (as defined below) would not be duly approved and adopted by our stockholders or we determine that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal” and, collectively with the Business Combination Proposals, the Organizational Documents Proposal, the Exchange Proposal, and the Equity Incentive Plan Proposal, the “Required Transaction Proposals”).

Only holders of record of shares of the Class A common stock, par value $0.0001 per share, of Compute Health (“Compute Health Class A Common Stock”) and shares of the Class B common stock, par value $0.0001 per share, of Compute Health (“Compute Health Class B Common Stock,” and, together with the Compute Health Class A Common Stock, “Compute Health Common Stock”) at the close of business on July 3, 2023 are entitled to notice of and to vote and have their votes counted at the Special Meeting and any adjournment of the Special Meeting.

The resolutions to be voted upon in person or by proxy at the Special Meeting relating to the above proposals are set forth in the accompanying proxy statement/prospectus sections entitled “Proposal No. 1 — The Business Combination Proposals,” “Proposal No. 2 — The Organizational Documents Proposal,” “Proposal No. 3 — The Advisory Organizational Documents Proposals,” “Proposal No. 4 — The Exchange Proposal,” “Proposal No. 5 — The Equity Incentive Plan Proposal,” and “Proposal No. 6 — The Adjournment Proposal,” respectively.

We will provide you with the accompanying proxy statement/prospectus and a proxy card in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournment of the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read, when available, the proxy statement/prospectus, including the annexes, carefully. Please pay particular attention to the section entitled Risk Factors beginning on page 90 of the accompanying proxy statement/prospectus.

After careful consideration, the members of the board of directors of Compute Health (the “Compute Health Board”) have determined that each of the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Exchange Proposal, the Equity Incentive Plan Proposal, and the Adjournment Proposal are fair to, advisable, and in the best interests of Compute Health and its stockholders and unanimously recommend that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of Compute Health’s directors may result in a conflict of interest on the part of one or more of the directors between what he, she, or they may believe is in the best interests of Compute Health and its stockholders and what he, she, or they may believe is best for himself, herself, or themselves in determining to recommend that stockholders vote for the proposals.

 

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See the subsection entitled “Proposal No. 1 — The Business Combination Proposals — Interests of Compute Health Directors and Officers in the Business Combination” in the accompanying proxy statement/prospectus for a further discussion.

Under the Business Combination Agreement, the approval of each of the Required Transaction Proposals is a condition to the consummation of the Business Combination. The adoption of each Required Transaction Proposal is conditioned on the approval of all of the Required Transaction Proposals. If our stockholders do not approve each of the Required Transaction Proposals, the Business Combination may not be consummated.

In connection with our initial public offering, consummated on February 9, 2021, the Sponsor and our officers and directors at the time of our initial public offering entered into a letter agreement (the “IPO Letter Agreement”) pursuant to which they agreed, among other things, to vote their shares of Compute Health Class B Common Stock purchased prior to our initial public offering, as well as any shares of Compute Health Class A Common Stock sold by us in our initial public offering and purchased by them during or after our initial public offering, in favor of our initial business combination. Accordingly, we expect them to vote their shares of Compute Health Class B Common Stock and such shares of Compute Health Class A Common Stock in favor of the Business Combination Proposals. On December 2, 2022, in connection with Compute Health’s extension, 77,026,806 shares of Compute Health Class A Common Stock (representing approximately 89.3% of the then-outstanding Compute Health Class A Common Stock) were tendered for redemption and redeemed, resulting in 9,223,194 shares of Compute Health Class A Common Stock remaining issued and outstanding. As a result and as of the date hereof, the Sponsor and Compute Health’s independent directors, who are the holders of all of the issued and outstanding shares of Compute Health Class B Common Stock (the “Initial Stockholders”), own approximately 70.0% of the outstanding shares of Compute Health Common Stock.

Pursuant to the Business Combination Agreement and in addition to any voting requirement contained in the Compute Health Certificate of Incorporation, each of the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Exchange Proposal, and the Equity Incentive Plan Proposal must be approved by the affirmative vote of the holders of a majority of the then-issued and outstanding shares of Compute Health Class A Common Stock, voting separately as a single class.

Pursuant to the Compute Health Certificate of Incorporation, a holder of shares of Compute Health Class A Common Stock (a “Public Stockholder”) may request that Compute Health redeem all or a portion of his, her, or its shares of Compute Health Class A Common Stock (which would become shares of New Allurion Common Stock in the CPUH Merger if not so redeemed) for cash if the Business Combination is consummated. If you are a Public Stockholder, you will be entitled to receive cash for any shares of Compute Health Class A Common Stock to be redeemed only if you:

(i) (a) hold shares of Compute Health Class A Common Stock or (b) hold units of Compute Health, each comprised of one share of Compute Health Class A Common Stock and one-quarter of one warrant of Compute Health (a “Compute Health Public Warrant”), which currently entitles the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50 per share (“Compute Health Units”), and you elect to separate your Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants prior to exercising your redemption rights with respect to your shares of Compute Health Class A Common Stock; and

(ii) prior to 5:00 p.m., Eastern Time, on July 26, 2023, (a) submit a written request to Continental Transfer & Trust Company, Compute Health’s transfer agent (the “Transfer Agent”), that Compute Health redeem all or a part of your shares of Compute Health Class A Common Stock for cash and (b) deliver your shares of Compute Health Class A Common Stock to the Transfer Agent, physically or electronically through Depository Trust Company (“DTC”).

Holders of Compute Health Units must elect to separate and cancel the Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants prior to

 

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exercising redemption rights with respect to the shares of Compute Health Class A Common Stock. If Public Stockholders hold their Compute Health Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate and cancel the Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants, or if a Public Stockholder holds Compute Health Units registered in his, her, or its own name, the holder must contact the Transfer Agent directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to Compute Health in order to validly redeem its shares. Public Stockholders (other than the Initial Stockholders (as defined below)) may elect to redeem all or a portion of their shares of Compute Health Class A Common Stock even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the shares of Compute Health Class A Common Stock will not be redeemed for cash. If the Business Combination is consummated and a Public Stockholder properly exercises his, her, or its right to redeem his, her, or its shares of Compute Health Class A Common Stock and timely delivers his, her, or its shares to the Transfer Agent, we will redeem each such public share for a per share price, payable in cash, equal to the pro rata portion of the aggregate amount then on deposit in the trust account established in connection with Compute Health’s initial public offering (the “Trust Account”), calculated as of two business days prior to the consummation of the Business Combination, including interest, less taxes payable, divided by the number of then-issued and outstanding shares of Compute Health Class A Common Stock. For illustrative purposes, as of July 3, 2023, there was approximately $98,078,508 on deposit in the Trust Account, which would have amounted to approximately $10.63 per issued and outstanding public share. If a Public Stockholder exercises his, her, or its redemption rights, such Public Stockholder’s shares of Compute Health Class A Common Stock will (i) not be exchanged for shares of New Allurion Common Stock pursuant to the CPUH Merger and (ii) immediately prior to the CPUH Merger Effective Time, be canceled and cease to exist, and be redeemed for the consideration, on the terms and subject to the conditions and limitations set forth in the Business Combination Agreement, the Compute Health Certificate of Incorporation, the Investment Management Trust Agreement, dated February 4, 2021, between Compute Health and the Transfer Agent and the accompanying proxy statement/prospectus. See the subsection entitled “The Special Meeting — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your shares of Compute Health Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares of Compute Health Class A Common Stock with respect to more than an aggregate of 15% of the shares of Compute Health Class A Common Stock. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of Compute Health Class A Common Stock, then any such shares in excess of that 15% limit would not be redeemed for cash.

Pursuant to the IPO Letter Agreement, the Sponsor and the Initial Stockholders have agreed to waive their redemption rights with respect to any shares of Compute Health Common Stock they may hold in connection with either the consummation of Compute Health’s initial business combination or a stockholder vote to extend the timing by which Compute Health must complete its initial business combination. No consideration was provided in exchange for the waiver of redemption rights in the IPO Letter Agreement.

All stockholders of Compute Health are cordially invited to attend the Special Meeting. To ensure your representation at the Special Meeting, however, you are urged to complete, sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible. If you are a stockholder of record holding Compute Health Common Stock on July 3, 2023, you may also cast your vote in person at the Special Meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the Special Meeting and vote in person, obtain a proxy from your broker or bank. If you do not vote or do not instruct your broker or bank how to vote, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will not be voted.

 

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Approval of the Business Combination Proposals requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class, assuming in each case that a quorum is present. Adoption of the Business Combination Proposals is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Business Combination Proposals, subject to the terms of the Business Combination Agreement. If the Business Combination Proposals are not approved, the other proposals (except the Adjournment Proposal) will not be presented to the Compute Health stockholders for a vote. Notwithstanding the approval of the Business Combination Proposals, if the Business Combination is not consummated for any reason, the actions contemplated by the Business Combination Proposals will not be effected. The Sponsor and the Initial Stockholders have agreed to vote any shares of Compute Health Common Stock owned by them in favor of the Business Combination Proposals. See the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.” After careful consideration, the Compute Health Board has determined that each of the Business Combination Proposals is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” each of these proposals.

Approval of the Organizational Documents Proposal requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class, assuming in each case that a quorum is present. Adoption of the Organizational Documents Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Organizational Document Proposal, subject to the terms of the Business Combination Agreement. The Sponsor and the Initial Stockholders have agreed to vote any shares of Compute Health Common Stock owned by them in favor of the Organizational Documents Proposal. See the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.” After careful consideration, the Compute Health Board has determined that the Organizational Documents Proposal is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” this proposal.

Approval of each of the Advisory Organizational Documents Proposals requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class, assuming in each case that a quorum is present. Adoption of each of the Advisory Organizational Documents Proposals is conditioned on the approval of the Business Combination Proposals, the Organizational Documents Proposal, the Equity Incentive Plan Proposal, and the Exchange Proposal at the Special Meeting. Although Compute Health is seeking a stockholders vote regarding the Advisory Organizational Documents Proposals, a vote for each such proposal is an advisory vote, and is not binding on Compute Health or the Compute Health Board, and is not a condition to the closing of the Business Combination. Notwithstanding the approval of the Advisory Organizational Documents Proposals, if the Business Combination is not consummated for any reason, the actions contemplated by the Advisory Organizational Documents Proposals will not be effected. The Sponsor and the Initial Stockholders have agreed to vote any shares of Compute Health Common Stock owned by them in favor of each of the Advisory Organizational Documents Proposals. See the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.” After careful consideration, the Compute Health Board has determined that each of the Advisory Organizational Documents Proposals is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” each of these proposals.

Approval of the Exchange Proposal requires the affirmative vote of (i) a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class, in each case assuming a quorum is present. Adoption of the

 

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Exchange Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Exchange Proposal, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Exchange Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Exchange Proposal will not be effected. The Sponsor and the Initial Stockholders have agreed to vote any shares of Compute Health Common Stock owned by them in favor of the Exchange Proposal. See the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.” After careful consideration, the Compute Health Board has determined that the Exchange Proposal is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” this proposal.

Approval of the Equity Incentive Plan Proposal requires the affirmative vote of (i) a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class, assuming in each case that a quorum is present. Adoption of the Equity Incentive Plan Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Equity Incentive Plan Proposal, subject to the terms of the Business Combination Agreement. The Sponsor and the Initial Stockholders have agreed to vote any shares of Compute Health Common Stock owned by them in favor of the Equity Incentive Plan Proposal. See the subsection entitled “The Business Combination Agreement Related Agreements Sponsor Support Agreement.” After careful consideration, the Compute Health Board has determined that the Equity Incentive Plan Proposal is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” this proposal.

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon, assuming that a quorum is present. The Business Combination is not conditioned upon the approval of the Adjournment Proposal. The Sponsor and the Initial Stockholders have agreed to vote their shares of Compute Health Class B Common Stock and any other shares of Compute Health Common Stock owned by them in favor of the Adjournment Proposal. After careful consideration, the Compute Health Board has determined that the Adjournment Proposal is fair to, advisable and in the best interests of Compute Health and its stockholders and unanimously recommends that you vote “FOR” this proposal.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you have any questions or need assistance voting your shares, please contact Morrow Sodali, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400.

Thank you for your participation. We look forward to your continued support.

July 7, 2023

 

By Order of the Board of Directors,

/s/ Omar Ishrak

Omar Ishrak

Chairman

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE

 

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YOUR REDEMPTION RIGHTS, YOU MUST (I) IF YOU HOLD COMPUTE HEALTH CLASS A COMMON STOCK THROUGH COMPUTE HEALTH UNITS, ELECT TO SEPARATE YOUR COMPUTE HEALTH UNITS INTO THE UNDERLYING SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK AND COMPUTE HEALTH PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK, (II) SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT THAT YOUR SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK BE REDEEMED FOR CASH AND (III) DELIVER YOUR SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DTC’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE THE SUBSECTION ENTITLED “THE SPECIAL MEETING — REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS FOR MORE SPECIFIC INSTRUCTIONS.

This notice was mailed by Compute Health on July 7, 2023.

 

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COMPUTE HEALTH ACQUISITION CORP.

A Delaware Corporation

1100 North Market Avenue, 4th Floor

Wilmington, Delaware 19890

NOTICE OF THE SPECIAL MEETING OF WARRANT HOLDERS

TO BE HELD ON JULY 25, 2023

TO THE WARRANT HOLDERS OF COMPUTE HEALTH ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that a special meeting (the “Warrant Holders Meeting”) of the warrant holders of Compute Health Acquisition Corp., a Delaware corporation (“Compute Health”, “we”, “us”, or “our”), will be held at 9:00 a.m., Eastern Time, on July 25, 2023. For the purposes of the amended and restated certificate of incorporation of Compute Health, dated as of October 7, 2020 and amended as of December 5, 2022, the physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. You may attend the Warrant Holders Meeting and vote your shares electronically during the Warrant Holders Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/warrant2023. You will need the meeting control number that is printed on your proxy card to enter the Warrant Holders Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 8520972#. You are cordially invited to attend the Warrant Holders Meeting, which will be held for the following purposes:

 

   

Warrant Holder Proposal 1 — Warrant Amendment Proposal — to consider and vote upon an amendment (the “Warrant Amendment”) to the warrant agreement that governs all of Compute Health’s outstanding warrants (the “Warrant Agreement”). The Warrant Amendment proposes to (i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination (as defined in the accompanying proxy statement/prospectus), each of the outstanding warrants of Compute Health, which currently entitle the holder thereof to purchase one share of Class A common stock, par value $0.0001 per share, of Compute Health at an exercise price of $11.50 per share (each, a “Compute Health Public Warrant” and, together with the warrants of Compute Health issued in a private placement that closed contemporaneously with our initial public offering (the “Compute Health Private Warrants”), the “Compute Health Warrants”), will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder (as defined below) will be issued one-half of one New Allurion Public Warrant (as defined in the accompanying proxy statement/prospectus) for each outstanding Compute Health Public Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation (collectively, the “Warrant Amendment Proposal”), the substantive text of which is attached to the accompanying proxy statement/prospectus as Annex D; and

 

   

Warrant Holder Proposal 2 — Warrant Holders Adjournment Proposal — to consider and vote upon a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Warrant Holders Meeting, the Warrant Amendment Proposal would not be duly approved and adopted by the requisite holders of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants (all holders of Compute Health Public Warrants and Compute Health Private Warrants, the “Compute Health Warrant Holders”) (the “Warrant Holders Adjournment Proposal”).

Only holders of record of Compute Health Warrants at the close of business on July 3, 2023 are entitled to notice of and to vote and have their votes counted at the Warrant Holders Meeting and any adjournment of the Warrant Holders Meeting.

 

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The resolutions to be voted upon in person or by proxy at the Warrant Holders Meeting relating to the above proposals are set forth in the accompanying proxy statement/prospectus sections entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal” and “Warrant Holder Proposal 2: The Warrant Holders Adjournment Proposal,” respectively.

We will provide you with the accompanying proxy statement/prospectus and a proxy card in connection with the solicitation of proxies to be voted at the Warrant Holders Meeting and at any adjournment of the Warrant Holders Meeting. Whether or not you plan to attend the Warrant Holders Meeting, we urge you to read, when available, the accompanying proxy statement/prospectus, including the annexes, carefully. Please pay particular attention to the section entitled “Risk Factors” beginning on page 90 of the accompanying proxy statement/prospectus.

After careful consideration, the members of the board of directors of Compute Health have determined that each of the Warrant Amendment Proposal and the Adjournment Proposal are fair to, advisable, and in the best interests of Compute Health and its warrant holders and unanimously recommend that you vote or give instruction to vote “FOR” each of those proposals.

All Compute Health Warrant Holders are cordially invited to attend the Warrant Holders Meeting. To ensure your representation at the Warrant Holders Meeting, however, you are urged to complete, sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible. If you are a Compute Health Warrant Holder of record holding one or more Compute Health Warrants on July 3, 2023, you may also cast your vote in person at the Warrant Holders Meeting. If your Compute Health Warrants are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your Compute Health Warrants or, if you wish to attend the Warrant Holders Meeting and vote in person, obtain a proxy from your broker or bank. If you do not vote or do not instruct your broker or bank how to vote, your Compute Health Warrants will not be voted.

Approval of the Warrant Amendment Proposal requires the affirmative vote of the holders of at least 50% of each of (i) the outstanding Compute Health Public Warrants and (ii) the outstanding Compute Health Private Warrants. Approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of at least 50% of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants, present in person, online or represented by proxy at the Warrant Holders Meeting, with such votes cast by Compute Health Warrant Holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting.

Your vote is important regardless of the number of Compute Health Warrants you own. Whether you plan to attend the Warrant Holders Meeting or not, please sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible in the envelope provided. If your Compute Health Warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the Compute Health Warrants you beneficially own are properly counted.

If you have any questions or need assistance voting your Compute Health Warrants, please contact Morrow Sodali, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400.

Thank you for your participation. We look forward to your continued support.

July 7, 2023

 

By Order of the Board of Directors,

 

/s/ Omar Ishrak

Omar Ishrak

Chairman

This notice was mailed by Compute Health on July 7, 2023.

 

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TABLE OF CONTENTS

 

ADDITIONAL INFORMATION

     1  

TRADEMARKS

     1  

SELECTED DEFINITIONS

     2  

MARKET AND INDUSTRY DATA

     19  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     20  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

     23  

QUESTIONS AND ANSWERS ABOUT THE WARRANT HOLDERS MEETING

     47  

SUMMARY

     53  

SELECTED HISTORICAL FINANCIAL INFORMATION OF COMPUTE HEALTH

     85  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ALLURION

     86  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     87  

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

     89  

RISK FACTORS

     90  

INFORMATION ABOUT THE PARTIES TO THE BUSINESS COMBINATION

     157  

THE BUSINESS COMBINATION AGREEMENT

     159  

THE SPECIAL MEETING

     228  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSALS

     235  

PROPOSAL NO. 2 — THE ORGANIZATIONAL DOCUMENTS PROPOSAL

     239  

PROPOSAL NO. 3 —  THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS

     241  

PROPOSAL NO. 4 — THE EXCHANGE PROPOSAL

     244  

PROPOSAL NO. 5 — THE EQUITY INCENTIVE PLAN PROPOSAL

     246  

PROPOSAL NO. 6 — THE ADJOURNMENT PROPOSAL

     255  

THE WARRANT HOLDERS MEETING

     257  

WARRANT HOLDER PROPOSAL 1: THE WARRANT AMENDMENT PROPOSAL

     260  

WARRANT HOLDER PROPOSAL 2: THE WARRANT HOLDERS ADJOURNMENT PROPOSAL

     262  

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     263  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     273  

INFORMATION ABOUT COMPUTE HEALTH

     297  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF COMPUTE HEALTH

     301  

INFORMATION ABOUT ALLURION

     308  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ALLURION

     333  

DESCRIPTION OF SECURITIES

     355  

SECURITIES ACT RESTRICTIONS ON RESALE OF SECURITIES

     359  

COMPARISON OF CORPORATE GOVERNANCE AND STOCKHOLDERS’ RIGHTS

     360  

BENEFICIAL OWNERSHIP OF SECURITIES

     372  

EXECUTIVE AND DIRECTOR COMPENSATION

     376  

MANAGEMENT FOLLOWING THE BUSINESS COMBINATION

     388  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     393  

STOCKHOLDER PROPOSALS AND NOMINATIONS

     400  

STOCKHOLDER COMMUNICATIONS

     400  

LEGAL MATTERS

     401  

EXPERTS

     401  

WHERE YOU CAN FIND MORE INFORMATION

     401  

INDEX TO FINANCIAL STATEMENTS

     F-1  


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ADDITIONAL INFORMATION

If you have questions about the Business Combination, the Special Meeting or the Warrant Holders Meeting, or if you need to obtain copies of the enclosed proxy statement/prospectus, proxy cards or other information regarding Compute Health, you may contact Compute Health’s proxy solicitor listed below. You will not be charged for any of the documents you request.

Morrow Sodali

Individuals call toll-free: (800) 662-5200

Banks and Brokerage Firms, please call: (203) 658-9400

Email: CPUH.info@investor.morrowsodali.com

In order for you to receive timely delivery of the documents in advance of the Special Meeting or the Warrant Holders Meeting, as applicable, each to be held on July 28, 2023 and July 25, 2023, respectively, you must request the information no later than five business days prior to the date of the Special Meeting and Warrant Holders Meeting, by July 21, 2023 and July 18, 2023.

TRADEMARKS

This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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SELECTED DEFINITIONS

When used in this proxy statement/prospectus, unless the context otherwise requires:

2023 Equity Incentive Plan” refers to the New Allurion 2023 Stock Option and Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex G.

2023 ESPP” refers to the New Allurion 2023 Employee Stock Purchase Plan.

Additional Class B Holders” refers to the persons set forth on Schedule I of the Sponsor Support Agreement, being each of the independent directors of Compute Health.

Adjournment Proposal” refers to the Stockholder Proposal to be considered at the Special Meeting to adjourn the Special Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based on the tabulated vote at the time of the Special Meeting, any of the Required Transaction Proposals would not be duly approved and adopted by Compute Health Stockholders or we determine that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived.

Advisory Organizational Documents Proposals” refers to the proposals to approve, on a non-binding advisory basis, the following governance provisions in the Proposed Charter and the Proposed Bylaws, which are being presented separately in accordance with SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions: (i) the proposal to change the corporate name of New Allurion to “Allurion Technologies, Inc.” from and after the time of the Business Combination; (ii) the proposal to increase New Allurion’s capitalization so that it will have 1,000,000,000 authorized shares of New Allurion Common Stock and 100,000,000 authorized shares of New Allurion Preferred Stock; (iii) the proposal to divide the New Allurion Board into three classes with staggered three-year terms; (iv) the proposal to provide that the removal of any director be only for cause and only by the affirmative vote of holders of at least 66 2/3% of New Allurion’s then-outstanding shares of capital stock entitled to vote at an election of directors; (v) the proposal to not include in the Proposed Charter any requirement that New Allurion be dissolved and liquidated 30 months following the closing of its initial public offering, and to not include in the Proposed Charter provisions applicable only to blank check companies; (vi) the proposal to provide that New Allurion stockholders may only act by holding a stockholders meeting; and (vii) the proposal to provide that (a) the New Allurion Board would be expressly authorized to adopt, amend, alter or repeal the Proposed Bylaws on an affirmative vote of the majority of directors and (b) the Proposed Bylaws could be amended or repealed by New Allurion stockholders by the affirmative vote of the holders of at least 66 2/3% of the then-outstanding shares of capital stock of New Allurion entitled to vote on such amendment or repeal, voting together as a single class, in each case, to take effect upon the Closing Date if the Organizational Documents Proposal is approved.

Aggregate Consideration” refers to the aggregate consideration consisting of (i) up to 37,812,000 shares of New Allurion Common Stock to be issued to Allurion stockholders or to be reserved for issuance in respect of certain options, restricted stock units and warrants of Allurion, the obligations of which the Surviving Corporation will assume, (ii) up to 9,000,000 additional shares of New Allurion Common Stock that may be issued following the Closings, subject to certain vesting criteria, and (iii) net debt of Allurion which the Surviving Corporation will assume and which as of December 31, 2022 was approximately $46.8 million.

Aggregate Intermediate Merger Closing Merger Consideration” refers to a number of shares of New Allurion Common Stock equal to (a) 37,812,000 minus (b) the Allocated Shares.

AI” refers to artificial intelligence.

Allocated Shares” means a number of shares of New Allurion Common Stock equal to the Backstop Shares plus the Net Closing Cash Shares; provided that, if the Backstop Percentage equals one hundred percent (100%),

 

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then Allocated Shares means a number of shares of New Allurion Common Stock equal to greater of (a) the Backstop Shares or (b)(i) 1,500,000 multiplied by (ii) the Net Closing Cash Percentage, rounded down to the nearest whole share.

Allurion” refers to Allurion Technologies, Inc., a Delaware corporation.

Allurion Acquisition Proposal” refers to any inquiry, proposal or offer (written or oral) with respect to (i) any transaction or series of related transactions under which any person(s), directly or indirectly, acquires or otherwise purchases (a) Allurion or (b) 15% or more of the assets or businesses of Allurion and its subsidiaries, taken as a whole (in the case of each of clause (a) and (b), whether by merger, consolidation, recapitalization, purchase, business combination or issuance of equity securities, tender offer or otherwise), or (ii) 15% or more of any class of equity securities of Allurion or any of its subsidiaries.

Allurion Balloon” refers to the swallowable, procedure-less intragastric balloon for weight loss developed by Allurion.

Allurion Board” refers to the board of directors of Allurion.

Allurion Cancelled Shares” refers to the Allurion Shares held immediately prior to the Intermediate Merger Effective Time by Allurion as treasury stock or held by any subsidiary of Allurion, that, at the Intermediate Merger Effective Time, by virtue of the Intermediate Merger and without any action on the part of any party or any other person, shall be canceled and extinguished, with no consideration being paid with respect thereto.

Allurion Certificate of Incorporation” refers to the Fifth Amended and Restated Certificate of Incorporation of Allurion, dated July 23, 2021, as amended by that certain Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation of Allurion, dated December 29, 2021 and that certain Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation of Allurion, dated March 1, 2023.

Allurion Common Stock” refers to the common stock, par value $0.0001 per share, of Allurion.

Allurion Convertible Notes” refers to the outstanding convertible unsecured promissory notes issued by Allurion pursuant to that certain (i) Convertible Note Purchase Agreement, dated December 22, 2021, by and among Allurion and the investors listed on Exhibit A thereto, (ii) Convertible Note Purchase Agreement, dated February 15, 2023, by and among Allurion and the investors listed on Exhibit A thereto or (iii) Convertible Note Purchase Agreement, dated June 14, 2023, by and among Allurion and the investors listed on Exhibit A thereto.

Allurion Convertible Notes Conversion” refers to the conversion of the outstanding principal and accrued but unpaid interest on the Allurion Convertible Notes into the applicable number of shares of Allurion Common Stock provided for under the terms of such Allurion Convertible Notes, immediately prior to the Intermediate Merger Effective Time.

Allurion D&O Expenses” refers to any fees, costs and expenses related to directors’ and officers’ liability insurance with respect to the individuals who, as of immediately prior to the Intermediate Merger Effective Time or at any time prior to such time, were directors or officers of Allurion or any of its subsidiaries, including in respect of Allurion’s “tail” policy or policies providing directors’ and officers’ liability insurance coverage.

Allurion Disclosure Schedules” refers to the disclosure schedules to the Business Combination Agreement delivered to Compute Health and each Merger Sub by Allurion and New Allurion on the date of the Existing Business Combination Agreement.

Allurion Dissenting Shares” refers to the shares of Allurion capital stock held by Allurion Stockholders who neither voted in favor of the Intermediate Merger nor consented thereto in writing and who have demanded

 

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properly in writing appraisal for such shares of Allurion capital stock in accordance with Section 262 of the DGCL and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of dissenters’ rights.

Allurion Equity Plans” refers to Allurion’s Amended and Restated 2020 Stock Option and Grant Plan and 2010 Stock Incentive Plan, in each case, as amended or restated from time to time.

Allurion Expenses” refers to, as of any determination time, the aggregate amount of fees, expenses, commissions or other amounts incurred by or on behalf of Allurion or any of its subsidiaries, whether or not due and payable, and not otherwise expressly allocated to a CPUH Party pursuant to the terms of the Business Combination Agreement or any Ancillary Document, in connection with the negotiation, preparation or execution of the Business Combination Agreement or any Ancillary Documents, the performance of its covenants or agreements in the Business Combination Agreement or any Ancillary Document or the consummation of the transactions contemplated thereby, including (a) the fees, costs, commissions and expenses of outside legal counsel, accountants, advisors, brokers, investment bankers, finders, consultants, or other agents or service providers of Allurion, (b) any change of control payment (including the employer portion of any payroll, social security or similar taxes related thereto) and (c) reimbursement of fees and expenses of (i) RTW pursuant to the terms of the Revenue Interest Financing Agreement and (ii) Fortress pursuant to the terms of the Fortress Bridging Agreement. Notwithstanding the foregoing or anything to the contrary in the Business Combination Agreement, Allurion Expenses do not include any CPUH Expenses, D&O Expenses, New Equity Incentive Fees, Registration Statement Expenses or Warrantholder Solicitation Expenses.

Allurion Options” refers to, as of any determination time, each option to purchase shares of Allurion Common Stock granted to any current or former director, manager, officer, employee or other service provider of Allurion or any of its subsidiaries that is outstanding and unexercised as of immediately prior to the Intermediate Merger Effective Time.

Allurion Preferred Stock” refers to, collectively, the Allurion Series A Preferred Stock, the Allurion Series A-1 Preferred Stock, the Allurion Series B Preferred Stock, the Allurion Series C Preferred Stock, Allurion Series D-1 Preferred Stock, the Allurion Series D-2 Preferred Stock and the Allurion Series D-3 Preferred Stock.

Allurion RSU Award” refers to all outstanding restricted stock unit awards denominated in shares of Allurion Common Stock immediately prior to the Intermediate Merger Effective Time, whether or not vested, granted pursuant to the Allurion Equity Plans.

Allurion Series A Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series A Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Series A-1 Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series A-1 Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Series B Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series B Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Series C Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series C Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Series D-1 Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series D-1 Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Series D-2 Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series D-2 Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

 

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Allurion Series D-3 Preferred Stock” refers to preferred stock, par value $0.0001 per share, of Allurion designated as “Series D-3 Preferred Stock” pursuant to the Allurion Certificate of Incorporation.

Allurion Shares” refers to, collectively, the shares of Allurion Common Stock and Allurion Preferred Stock.

Allurion Stockholder Approval” refers to the approval of the Business Combination Agreement, the Ancillary Documents to which Allurion will be a party and the transactions contemplated thereby by the Requisite Allurion Stockholders.

Allurion Stockholders” refers to the holders of Allurion Shares.

Allurion Support Agreement” refers to the stockholder support agreement, dated as of February 9, 2023, by and among Allurion and certain Allurion Stockholders, a copy of which is attached to this proxy statement/prospectus as Annex F.

Allurion Warrants” refers to the warrants exercisable for a number of shares of Allurion Common Stock or Allurion Preferred Stock.

Amended and Restated RTW Side Letter” refers to that certain letter agreement, dated as of May 2, 2023, by and among Allurion, New Allurion, Compute Health, Merger Sub II, and RTW, as may be further amended or restated from time to time.

Ancillary Documents” refers to the Investor Rights Agreement, the PIPE Subscription Agreements, the Sponsor Support Agreement, the Non-Redemption Agreement, the Allurion Support Agreement, the Revenue Interest Financing Agreement, the Fortress Bridging Agreement, the Warrant Assumption Agreement, the Backstop Agreement, the Termination Agreements, the RSU Forfeiture Agreement, the Contribution Agreements, the Amended and Restated RTW Side Letter and the Fortess Letter Agreement, and each other agreement, document, instrument or certificate contemplated by the Business Combination Agreement executed or to be executed in connection with the transactions contemplated thereby.

Available Closing Cash” refers to, without duplication, an amount equal to, as of immediately prior to the Intermediate Merger Effective Time and after the CPUH Merger Effective Time: (a) the funds contained in the Trust Account (after reduction for the aggregate amount of payments made, or required to be made, in connection with redemptions by the holders of Compute Health Class A Common Stock in connection with the Business Combination, as contemplated by the Compute Health Existing Organizational Documents), plus (b) the amount of funds available pursuant to the PIPE Investment, plus (c) the amount of funds available to Allurion as of the Intermediate Merger Closing pursuant to the Revenue Interest Financing, plus (d) (A) the amount of funds available to Allurion as of the Intermediate Merger Closing pursuant to the Fortress Financing, less (B) the amount payable to Runway in connection with the repayment and termination of the indebtedness under the Runway Loan, plus (e) if Allurion raises more than $15 million of net proceeds in connection with the Incremental Financing, an amount equal to the lesser of such excess and the amount of Allurion’s cash on hand immediately prior to the Intermediate Merger Closing.

Backstop Agreement” refers to the Backstop Agreement, dated as of May 2, 2023, by and among RTW, the Fortress Investor, Allurion, New Allurion, and HVL, pursuant to which the Backstop Purchasers have agreed to purchase up to an aggregate of $4.0 million of the HVL Bridge Note at the Backstop Closing.

Backstop Amount” refers to the aggregate principal amount of the HVL Bridge Note purchased by each Backstop Purchaser pursuant to the Backstop Agreement.

Backstop Closing” refers to the closing of the Backstop Purchasers’ purchase from HLV of the relevant portion of the HLV Bridge Note, as contemplated by the Backstop Agreement, which will take place at the same time, on the same date and concurrently with but immediately prior to the Intermediate Merger Closing.

 

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Backstop Closing Date” refers to the date on which the Backstop Closing occurs.

Backstop Percentage” means the percentage obtained by the following calculation: (a) the Backstop Amount divided by (b) $4,000,000; provided, that the Backstop Percentage shall not exceed one hundred percent (100%).

Backstop Purchasers” refers to, collectively, the Fortress Investor and RTW.

Backstop Shares” refers to the number of shares of New Allurion Common Stock that, subject to the terms and conditions of the Backstop Agreement, New Allurion will issue to each Backstop Purchaser, determined as follows: (a) in the event that the Backstop Amount for each Backstop Purchaser is equal to its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of New Allurion Common Stock equal to the greater of (i) 700,000 shares of New Allurion Common Stock and (ii) the Conditional Additional New Allurion Shares issuable (x) in the case of the Fortress Investor, to the Fortress Investor or its applicable affiliate pursuant to the Term Loan Credit Agreement and (y) in the case of RTW, to RTW pursuant to the Amended and Restated RTW Side Letter; provided that, in the event that for any reason the aggregate number of shares issuable to the Fortress Investor pursuant to clause (ii) above is greater than the aggregate number of shares issuable to RTW pursuant to clause (ii), or vice versa, the Backstop Purchaser that would receive the lesser aggregate number of shares shall instead receive the higher number of aggregate shares so that, pursuant to such clause (ii), each of the Fortress Investor and RTW shall receive the same aggregate number of shares of New Allurion Common Stock; or (b) in the event that the Backstop Amount for each Backstop Purchaser is less than its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of shares of New Allurion Common Stock equal to (i) 700,000 multiplied by a fraction having (x) a numerator equal to such Backstop Purchaser’s Backstop Amount and (y) a denominator equal to 2,000,000.

BCA Amendment” refers to the amendment to the Business Combination Agreement, dated as of May 2, 2023, by and among Compute Health, Merger Sub I, Merger Sub II, Allurion and New Allurion, a copy of which is attached to this proxy statement/prospectus as Annex A-1.

Bridge Notes” refers to $19.6 million aggregate principal amount of convertible unsecured promissory notes sold in a private placement by Allurion to various investors from February 15, 2023 until July 5, 2023.

Business Combination” refers to the transactions contemplated by the Business Combination Agreement.

Business Combination Agreement” refers to the Existing Business Combination Agreement, as amended by the BCA Amendment, and as the same has been or may be further amended or modified, supplemented or waived, from time to time.

Business Combination Proposals” refers to three separate proposals to approve the Business Combination and approve and adopt the Business Combination Agreement, pursuant to which, subject to the terms and conditions set forth therein, the Business Combination will be effected in three steps: (a) subject to, among other things, the approval and adoption of the Business Combination Agreement by the Compute Health Stockholders, Compute Health will merge with and into New Allurion, with New Allurion surviving the CPUH Merger as a publicly listed entity and becoming the sole owner of each Merger Sub; (b) at least three hours following the consummation of the CPUH Merger, Merger Sub I will merge with and into Allurion, with Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of New Allurion; and (c) thereafter, Allurion will merge with and into Merger Sub II, with Merger Sub II surviving the Final Merger and remaining a direct, wholly-owned subsidiary of New Allurion.

Business Day” refers to a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for the general transaction of business.

 

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Chardan Equity Facility” refers to the equity facility agreement New Allurion intends to enter into with Chardan Capital Markets LLC (“Chardan”) on the Closing Date, pursuant to which New Allurion will agree to issue and sell and Chardan will agree to purchase up to $100.0 million of freely tradable shares of New Allurion Common Stock.

Closing Date” refers to the date on which the Closings take place.

Closings” refers to, collectively, the closing of each of the CPUH Merger, the Intermediate Merger and the Final Merger.

Code” refers to the Internal Revenue Code of 1986, as amended.

Compute Health” refers to Compute Health Acquisition Corp., a Delaware corporation.

Compute Health Acquisition Proposal” refers to any inquiry, proposal or offer (written or oral) with respect to any transaction or series of related transactions under which Compute Health or any of its affiliates, directly or indirectly, (i) acquires or otherwise purchases any other person(s), (ii) engages in a business combination with any other person(s), or (iii) acquires or otherwise purchases at least a majority of the voting securities of such person(s) or all or substantially all of the assets or businesses of any other person(s).

Compute Health Board” refers to the Board of Directors of Compute Health.

Compute Health Board recommendation” refers to the Compute Health Board’s recommendation to its stockholders that they approve the proposals contained in this proxy statement/prospectus.

Compute Health Cancelled Shares” refers to the shares of Compute Health Common Stock held immediately prior to the CPUH Merger Effective Time by Compute Health as treasury stock or held by any subsidiary of Compute Health, that, at the CPUH Merger Effective Time, by virtue of the CPUH Merger and without any action on the part of any party or any other person, shall be canceled and extinguished, with no consideration being paid with respect thereto.

Compute Health Certificate of Incorporation” refers to the Amended and Restated Certificate of Incorporation of Compute Health, dated as of February 4, 2021, as amended by that certain Certificate of Amendment of Amended and Restated Certificate of Incorporation of Compute Health, dated as of December 5, 2022.

Compute Health Class A Common Stock” refers to the Class A common stock, par value $0.0001 per share, of Compute Health issued in the IPO.

Compute Health Class B Common Stock” refers to the Class B common stock, par value $0.0001 per share, of Compute Health.

Compute Health Common Stock” refers to the Compute Health Class A Common Stock and the Compute Health Class B Common Stock.

Compute Health D&O Expenses” refers to any fees, costs and expenses related to directors’ and officers’ liability insurance with respect to the individuals who, as of immediately prior to the CPUH Merger Effective Time or at any time prior to such time, were directors or officers of any CPUH Party, including in respect of Compute Health’s “tail” policy or policies providing directors’ and officers’ liability insurance coverage.

Compute Health Dissenting Shares” refers to the shares of Compute Health capital stock held by Compute Health Stockholders who neither voted in favor of the CPUH Merger nor consented thereto in writing and who have demanded properly in writing appraisal for such shares of Compute Health capital stock in accordance with Section 262 of the DGCL and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of dissenters’ rights.

 

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Compute Health Existing Organizational Documents” refers to (i) the Compute Health Certificate of Incorporation and (ii) the Bylaws of Compute Health.

Compute Health Private Warrants” refers to the warrants of Compute Health issued in a private placement that closed contemporaneously with the IPO, each entitling the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50, subject to adjustment as set forth in the Warrant Agreement.

Compute Health Public Warrants” refers to the warrants of Compute Health issued as part of the Compute Health Units in the IPO, each entitling the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50, subject to adjustment as set forth in the Warrant Agreement.

Compute Health Stockholders” refers to the holders of Compute Health Common Stock.

Compute Health Units” refers to the units issued in the IPO, each comprised of one share of Compute Health Class A Common Stock and one-quarter of one Compute Health Public Warrant.

Compute Health Warrant Holder” refers to the holder of a Compute Health Warrant.

Compute Health Warrants” refers to the Compute Health Public Warrants and the Compute Health Private Warrants.

Conditional Additional New Allurion Shares” refers to (i) with respect to Fortress, a number of additional shares of New Allurion Common Stock exceeding the 250,000 shares of New Allurion Common Stock that, at the consummation of the Business Combination, will be issued to Fortress or its applicable affiliate pursuant to the Term Loan Credit Agreement, in a maximum amount not to exceed 750,000 shares of New Allurion Common Stock, that may be issuable to Fortress or its applicable affiliate pursuant to the Term Loan Credit Agreement; and (b) with respect to RTW, a number of additional shares of New Allurion Common Stock exceeding the 250,000 shares of New Allurion Common Stock that, at the consummation of the Business Combination, will be issued to RTW pursuant to the Amended and Restated RTW Side Letter, in a maximum amount not to exceed 750,000 shares of New Allurion Common Stock, that may be issuable to RTW pursuant to the Amended and Restated RTW Side Letter.

Consent Solicitation” refers to the solicitation of the consent of the holders of Compute Health Warrants to certain changes to the Warrant Agreement as described in this proxy statement/prospectus.

Contingency Shares” refers to the up to 9,000,000 shares of New Allurion Common Stock, (i) an aggregate of 4,500,000 of which shall be made available to the Eligible Allurion Equityholders if, during the Earnout Period, the VWAP of New Allurion Common Stock on the NYSE, or any other national securities exchange on which the shares of New Allurion Common Stock are then traded, is greater than or equal to $15.00 over any 20 trading days within any consecutive 30 trading day period, and (ii) an aggregate of an additional 4,500,000 of which shall be made available to the Eligible Allurion Equityholders if, during the Earnout Period, the VWAP of New Allurion Common Stock on the NYSE, or any other national securities exchange on which the shares of New Allurion Common Stock are then traded, is greater than or equal to $20.00 over any 20 trading days within any consecutive 30 trading day period.

Contribution Agreements” refers to the Gaur Contribution Agreement and the Sponsor Contribution Agreement.

CPUH Exchange Ratio” refers to 1.420455.

 

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CPUH Expenses” refers to, as of any determination time, the aggregate amount of fees, expenses, commissions or other amounts incurred by or on behalf of any CPUH Party, whether or not due and payable, and not otherwise expressly allocated to Allurion or New Allurion pursuant to the terms of the Business Combination Agreement or any Ancillary Document, in connection with the negotiation, preparation or execution of the Business Combination Agreement or any Ancillary Documents, the performance of its covenants or agreements in the Business Combination Agreement or any Ancillary Document or the consummation of the transactions contemplated thereby, including (a) deferred underwriting commissions disclosed in any Compute Health SEC reports, (b) the fees, costs, commissions and expenses of outside legal counsel, accountants, advisors, brokers, finders, investment bankers, consultants, the Trustee and transfer or exchange agent, as applicable, or other agents or service providers of any CPUH Party, (c) incurred in connection with the PIPE Investment, including any cash financing fees or third-party advisory expenses in connection therewith and (d) CPUH Extension Expenses (excluding any Sponsor Loans that convert into shares of New Allurion Common Stock in accordance with the Business Combination Agreement). Notwithstanding the foregoing or anything to the contrary in the Business Combination Agreement, CPUH Expenses shall not include any Allurion Expenses, Subscription Agreement Enforcement Expenses, Registration Statement Expenses, D&O Expenses, New Equity Incentive Fees, Warrantholder Solicitation Expenses or any fees, expenses, commissions or other amounts under any Sponsor Loans.

CPUH Extension Approval” refers to the approval of the Compute Health Stockholders at a special meeting of Compute Health Stockholders of a proposal to, among other things, amend the governing documents of Compute Health to extend the date by which Compute Health has to consummate a business combination from February 9, 2023 to the date set forth in the CPUH Extension Proxy Statement.

CPUH Extension Expenses” refers to, as of any determination time, the aggregate amount of fees, expenses, or other amounts incurred by or on behalf of any CPUH Party or the Sponsor in connection with the CPUH Extension Proxy Statement or CPUH Extension Approval, including (a) the preparation, filing and distribution of the CPUH Extension Proxy Statement, (b) amounts outstanding under any unsecured promissory notes issued by Compute Health to the Sponsor, and (c) the fees, costs, commissions and expenses of outside legal counsel, accountants, advisors, brokers, finders, investment bankers, consultants, the Trustee and transfer or exchange agent, as applicable, or other agents or service providers of any CPUH Party.

CPUH Extension Proxy Statement” refers to the definitive proxy statement in connection with the CPUH Extension Approval as filed by Compute Health with the SEC on November 4, 2022, as may be amended or supplemented.

CPUH Merger” refers to the merger, on the Closing Date, of Compute Health with and into New Allurion, with New Allurion surviving the merger as a publicly listed entity.

CPUH Merger Certificate of Merger” refers to the certificate of merger to be executed and filed with the Secretary of State of the State of Delaware with respect to the CPUH Merger.

CPUH Merger Closing” refers to the closing of the CPUH Merger.

CPUH Merger Effective Time” refers to the date and time at which the CPUH Merger becomes effective.

CPUH Parties” refers to, collectively, Compute Health and the Merger Subs.

“CPUH Recapitalization” refers to (i) each of the 21,442,500 shares of Compute Health Class B Common Stock and all 12,833,333 Compute Health Private Warrants held by the Sponsor and (ii) each of the 90,000 shares of Compute Health Class B Common Stock held by the Additional Class B Holders, in the aggregate, immediately prior to the CPUH Merger Effective Time being exchanged and converted into, in the aggregate, 2,151,687 shares of Compute Health Class A Common Stock, in each case, immediately prior to the transactions contemplated by the Sponsor Contribution Agreement and pursuant to the terms of the Sponsor Support Agreement.

 

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D&O Expenses” refers to Allurion D&O Expenses and Compute Health D&O Expenses.

DGCL” refers to the Delaware General Corporation Law, as amended.

dollars” or “$” refers to U.S. dollars.

Earnout Period” refers to the date New Allurion’s Resale Registration Statement with respect to the resale of any New Allurion Common Stock issued pursuant to the PIPE Investment is declared effective by the SEC until five years after such date.

Eligible Allurion Equityholders” refers to the Allurion Stockholders, holders of Allurion RSU Awards, holders of Rollover Warrants and holders of vested Allurion Options.

Equity Incentive Plan Proposal” refers to the proposal to approve, assuming the Business Combination Proposals, the Exchange Proposal, and the Organizational Documents Proposal are approved and adopted, the 2023 Equity Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex G.

Exchange Proposal” refers to the proposal to approve, assuming the Business Combination Proposals and the Organizational Documents Proposal are approved and adopted, for the purposes of complying with the applicable listing rules of the NYSE, the issuance of (i) up to 37,812,000 shares of New Allurion Common Stock in the Intermediate Merger pursuant to the terms of the Business Combination Agreement, (ii) 5,386,695 shares of New Allurion Common Stock to the PIPE Investors pursuant to the PIPE Subscription Agreements, (iii) up to 3,602,114 shares of New Allurion Common Stock, in the aggregate, to the Sponsor and the independent directors of Compute Health, assuming the maximum amount allowable in the Sponsor Loan Conversion and the minimum number of shares of Compute Health Class A Common Stock are contributed by the Sponsor to Compute Health pursuant to the Sponsor Contribution Agreement, (iv) 13,101,132 shares of New Allurion Common Stock to the Public Stockholders, (v) up to 1,500,000 shares of New Allurion Common Stock, in the aggregate, to RTW and Fortress or its affiliates pursuant to the Backstop Agreement, Amended and Restated RTW Side Letter or Term Loan Credit Agreement, as applicable, (vi) up to 1,600,000 shares of New Allurion Common Stock pursuant to HVL’s Termination Agreement, and (vii) up to 9,000,000 million shares of New Allurion Common Stock to the Eligible Allurion Equityholders if certain share price thresholds are achieved within the Earnout Period.

Existing Business Combination Agreement” refers to the Business Combination Agreement, dated as of February 9, 2023, by and among Compute Health, Merger Sub I, Merger Sub II, Allurion and New Allurion, a copy of which is attached to this proxy statement/prospectus as Annex A.

Existing RTW Side Letter” refers to that certain letter agreement, dated February 9, 2023, by and among Allurion, New Allurion, Compute Health, Merger Sub II and RTW.

FDA” refers to the U.S. Food and Drug Administration, or any successor agency thereto.

Final Merger” refers to the merger, on the Closing Date, of Allurion with and into Merger Sub II, with Merger Sub II surviving the merger and remaining a direct, wholly-owned subsidiary of New Allurion.

Final Merger Certificate of Merger” refers to the certificate of merger to be executed and filed with the Secretary of State of the State of Delaware with respect to the Final Merger.

Final Merger Closing” refers to the closing of the Final Merger.

Final Merger Effective Time” refers to the date and time at which the Final Merger becomes effective.

 

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Forfeited RSUs” means a number of Allurion RSU Awards held by Krishna Gupta, determined immediately following the consummation of the Business Combination and after giving effect to the exchange of such Allurion RSU Awards pursuant to the Business Combination Agreement based on the Intermediate Merger Exchange Ratio, equal in number to up to (a) 50,000 shares of New Allurion Common Stock (being one-sixth of the Hunter Closing Shares) plus (b) a number of shares of New Allurion Common Stock equal to one-third of the Additional Hunter Shares.

Fortress” refers to Fortress Credit Corp. and/or one or more of its affiliates, as applicable.

Fortress Bridging Agreement” refers to the Bridging Agreement, dated as of February 9, 2023, by and between Allurion and Fortress.

Fortress Financing” refers to the term loan in an amount of up to $60 million to be provided by Fortress to New Allurion pursuant to and subject to the terms and conditions set forth in the Term Loan Credit Agreement.

Fortress Incremental Amount” refers to the amount payable to Runway in connection with the repayment and termination of the indebtedness under the Runway Loan Documents.

Fortress Investor” refers to CFIP2 ALLE LLC, an affiliate of Fortress Credit Corp. that is party to the Backstop Agreement and the Fortress Letter Agreement.

“Fortress Letter Agreement” refers to that certain letter agreement, dated as of May 2, 2023, by and between Allurion and the Fortress Investor, as amended or restated from time to time.

GAAP” refers to United States generally accepted accounting principles, consistently applied.

Gaur Contribution Agreement” refers to that certain Contribution Agreement by and between New Allurion and The Shantanu K. Gaur Revocable Trust of 2021 (the “Gaur Trust”), dated as of May 2, 2023, pursuant to which the Gaur Trust has agreed to contribute certain shares of New Allurion Common Stock to New Allurion as a contribution to capital, effective immediately following the Closings and the issuance of New Allurion Common Stock to the Gaur Trust pursuant to the terms of the Business Combination Agreement.

HHS” refers to the U.S. Department of Health & Human Services.

HIPAA” refers to the Health Insurance Portability and Accountability Act of 1996, as amended.

Historical Rollover Equityholders” refers to the holders of shares of Allurion Common Stock that will be issued shares of New Allurion Common Stock, holders of Allurion Options who will be issued Rollover Options, holders of Allurion RSU Awards who will be issued Rollover RSU Awards and holders of Allurion Warrants who will be issued Rollover Warrants, in each case in the Business Combination.

HVL” refers to Hunter Ventures Limited, an existing limited partner of a fund managed by Krishna Gupta, a member of the Allurion Board.

Incremental Financing” refers to the additional financing in which Allurion has agreed to use reasonable best efforts to obtain gross cash proceeds of at least $15 million of additional financing pursuant to one or more private sales by Allurion of Allurion Common Stock or any other equity securities of Allurion which shall, in accordance with their terms and without any action or consent of any holder thereof or any other person, automatically convert into shares of Allurion Common Stock immediately prior to the Intermediate Merger Effective Time.

 

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Initial Financing” refers to the entry by Allurion into the Side Letters with the Side Letter Holders, pursuant to which, in the event the Side Letter Holders’ Bridge Notes converted in connection with the consummation of the Business Combination, the conversion rate for such Bridge Notes would be adjusted after the Closing Date to provide each of the Side Letter Holders with additional shares of New Allurion Common Stock, in the event that the trading price of the shares of New Allurion Common Stock was lower than the Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio.

Initial Stockholders” refers to the Sponsor and Compute Health’s independent directors, who are the holders of all of the issued and outstanding shares of Compute Health Class B Common Stock.

Interim Period” refers to the period of time from the date of the Business Combination Agreement to the Intermediate Merger Effective Time.

Intermediate Merger” refers to the merger, on the Closing Date, of Merger Sub I with and into Allurion, with Allurion surviving the merger as a direct, wholly-owned subsidiary of New Allurion.

Intermediate Merger Certificate of Merger” refers to the certificate of merger to be executed and filed with the Secretary of State of the State of Delaware with respect to the Intermediate Merger.

Intermediate Merger Closing” refers to the closing of the Intermediate Merger.

Intermediate Merger Effective Time” refers to the date and time at which the Intermediate Merger becomes effective.

Intermediate Merger Exchange Ratio” refers to the ratio obtained by dividing (a) the Aggregate Intermediate Merger Closing Merger Consideration by (b) the Fully Diluted Company Capitalization (as defined in the Business Combination Agreement).

Intermediate Surviving Corporation” refers to Allurion, subsequent to the Intermediate Merger.

Investor Rights Agreement” refers to the Investor Rights and Lock-up Agreement, to be entered into by and among New Allurion, the Sponsor, certain Allurion Stockholders and certain other persons, which will become effective upon the consummation of the Business Combination.

IPO” refers to Compute Health’s initial public offering of Compute Health Units pursuant to the IPO registration statement and consummated on February 9, 2021.

IPO Letter Agreement” refers to the letter agreement, dated as of February 9, 2021, by and between the Sponsor and the officers and directors of Compute Health at the time of the IPO.

Leased Real Property” refers to material assets or properties, including all real property leased, sub-leased or licensed by Allurion and its subsidiaries, but excluding intellectual property.

Maximum Purchase Amount” refers to, with respect to each Backstop Purchaser, up to $2.0 million aggregate principal of the HVL Bridge Note that such Backstop Purchaser may be required to purchase from HVL at the Backstop Closing pursuant to the Backstop Agreement.

Medtronic” refers to Medtronic, plc.

Medtronic Collaboration” refers to the collaboration entered into by and between Allurion and Medtronic pursuant to the Medtronic Sales Agency Agreement.

 

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Medtronic Sales Agency Agreement” refers to the Sales Agency Agreement, dated May 15, 2023, between Covidien AG, an affiliate of Medtronic, and Allurion.

Merger Sub I” refers to Compute Health Corp., a Delaware corporation and a direct, wholly-owned subsidiary of Compute Health.

Merger Sub II” refers to Compute Health LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Compute Health.

Merger Subs” refers to Merger Sub I and Merger Sub II.

Mergers” refers to, collectively, the CPUH Merger, the Intermediate Merger, and the Final Merger.

Net Closing Cash” refers to an amount equal to (a) the Available Closing Cash minus (b) the Unpaid Expenses.

Net Closing Cash Condition” refers to the closing condition in the Business Combination Agreement that, as of immediately prior to Intermediate Merger Closing and after the CPUH Merger Closing, there be at least $70,000,000 in Net Closing Cash; provided that, if (a) Compute Health’s expenses exceed the amount set forth on an agreed expenses schedule, the Net Closing Cash Condition shall solely be a condition to the obligations of Allurion to consummate the business combination and (b) if Allurion’s expenses exceed the amount set forth on an agreed expenses schedule, the Net Closing Cash Condition shall solely be a condition to the obligations of Compute Health to consummate the Business Combination.

Net Closing Cash Percentage” refers to the percentage obtained by the following calculation: (a) $100,000,000 minus (b) Net Closing Cash, divided by $30,000,000; provided, that (i) if Net Closing Cash equals or exceeds $100,000,000, then the Net Closing Cash Percentage shall be deemed to be zero and (ii) the Net Closing Cash Percentage shall not exceed 100%.

Net Closing Cash Shares” means a number of shares of New Allurion Common Stock equal to (a) (i) 1,500,000 minus (ii) the Backstop Shares multiplied by (b) the Net Closing Cash Percentage.

New Allurion” refers to Allurion Technologies Holdings, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Allurion.

New Allurion Board” refers to the board of directors of New Allurion, including, following the Closings, the board of directors of the Surviving Corporation.

New Allurion Common Stock” refers to the shares of common stock, par value $0.0001 per share, of New Allurion after the CPUH Merger.

New Allurion Preferred Stock” refers to the shares of preferred stock, par value $0.0001 per share, of New Allurion after the consummation of the CPUH Merger.

New Allurion Public Warrant Holder” refers to the holder of a New Allurion Public Warrant.

New Allurion Public Warrants” refers to the Compute Health Public Warrants that will be assumed by New Allurion at the CPUH Merger Effective Time and thereafter such warrants will represent a warrant to purchase a number of shares of New Allurion Common Stock as set forth in the Warrant Assumption Agreement.

New Allurion Warrants” refers to (i) the New Allurion Public Warrants and (ii) the Rollover Warrants, each exercisable for shares of New Allurion Common Stock.

 

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New Equity Incentive Fees” refers to all fees and expenses of the compensation consultant selected by Allurion in connection with the 2023 Equity Incentive Plan, together with all fees and expenses of the compensation consultant selected by Allurion in connection with the 2023 ESPP.

Non-Redemption Agreement” refers to the non-redemption agreement, dated as of February 9, 2023, that was entered into by and among Compute Health, New Allurion and Medtronic, Inc.

NYSE” refers to the New York Stock Exchange.

Organizational Documents Proposal” refers to the proposal to approve and adopt, assuming the Business Combination Proposals, the Exchange Proposal, and the Equity Incentive Plan Proposal are approved and adopted, the Proposed Charter and Proposed Bylaws of New Allurion as the post-CPUH Merger company, which, if approved, would take effect substantially concurrently with the CPUH Merger Effective Time.

Pandemic Measures” refers to any “shelter-in-place,” “stay at home,” workforce reduction, furlough, employee leave, social distancing, shut down, closure, sequester, business or workplace reopening, restrictions or requirements pursuant to any law, order, or directive of or by any governmental entity in connection with or in respect of COVID-19 or any other pandemic, epidemic, public health emergency or virus or disease outbreak.

Parties” refers to, collectively, Compute Health, Allurion, the Merger Subs and New Allurion.

PCAOB” refers to the Public Company Accounting Oversight Board.

PIPE Investment” refers to the private placement pursuant to which PIPE Investors have committed to make a private investment in the aggregate amount of $37.9 million in public equity in the form of the PIPE Securities on the terms and conditions set forth in the PIPE Subscription Agreements.

PIPE Investors” refers to the investors that have signed PIPE Subscription Agreements.

PIPE Securities” refers to the shares of New Allurion Common Stock sold to the PIPE Investors pursuant to the PIPE Subscription Agreements.

PIPE Subscription Agreements” refers to the subscription agreements, dated as of February 9, 2023, by and among Compute Health, New Allurion and the PIPE Investors, pursuant to which New Allurion has agreed to issue an aggregate of 5,386,695 shares of New Allurion Common Stock to the PIPE Investors following the CPUH Merger Closing and immediately prior to the Intermediate Merger Closing at a purchase price of $7.04 per share, as the same may be amended, modified, supplemented or waived from time to time in accordance with their terms.

Proposed Bylaws” refers to the proposed new bylaws of New Allurion, as the surviving corporation in the CPUH Merger, a copy of which is attached to this proxy statement/prospectus as Annex C.

Proposed Charter” refers to the proposed new certificate of incorporation of New Allurion, as the surviving corporation in the CPUH Merger, a copy of which is attached to this proxy statement/prospectus as Annex B.

Proposed Organizational Documents” refers to the Proposed Bylaws and the Proposed Charter.

Public Stockholders” refers to the holders of the shares of Compute Health Class A Common Stock.

record date” refers to July 3, 2023, the date for determining (i) the Compute Health Stockholders entitled to receive notice of and to vote at the Special Meeting and (ii) the Compute Health Warrant Holders entitled to receive notice of and to vote at the Warrant Holders Meeting.

 

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redemption rights” refer to the rights of the Public Stockholders to demand redemption of their shares of Compute Health Class A Common Stock for cash in accordance with the procedures set forth in the Compute Health Certificate of Incorporation and this proxy statement/prospectus.

Registration Statement Expenses” refers to any lodgement and filing fees in connection with the filing of this proxy statement/prospectus with the SEC, and any fees and expenses incurred in connection with the preparation and distribution of this proxy statement/prospectus.

Requisite Allurion Stockholders” refers to the holders of at least (i) a majority of the outstanding Allurion Common Stock and Allurion Preferred Stock, voting together as a single class, (ii) a majority of the Allurion Series C Preferred Stock, voting separately, (iii) a majority of the Allurion Series A Preferred Stock, Allurion Series A-1 Preferred Stock, Allurion Series B Preferred Stock, Allurion Series D-1 Preferred Stock, Allurion Series D-2 Preferred Stock and Allurion Series D-3 Preferred Stock, voting together as a single class and (iv) one of Romulus Growth Allurion L.P. or Benon Group Ltd., voting separately.

Resale Registration Statement” refers to the resale registration statement on Form S-1 to be filed with the SEC by New Allurion.

Revenue Interest Financing” refers to the financing, in the initial amount equal to $40 million, to be provided by RTW to New Allurion, pursuant to and subject to the terms and conditions set forth in the Revenue Interest Financing Agreement.

Revenue Interest Financing Agreement” refers to the Revenue Interest Financing Agreement, dated as of February 9, 2023, by and among Allurion and RTW.

Rollover Options” refers to the options to purchase, on the same terms and conditions as were applicable to the Allurion Options immediately prior to the Intermediate Merger Effective Time, the number of shares of New Allurion Common Stock (rounded down to the nearest whole share) equal to the number of shares of Allurion Common Stock subject to the corresponding Allurion Option immediately prior to the Intermediate Merger Effective Time, which are expected to be converted from Allurion Options at the Intermediate Merger Effective Time.

Rollover RSU Awards” refers to the awards covering shares of New Allurion Common Stock, which are expected to be converted from Allurion RSU Awards at the Intermediate Merger Effective Time.

Rollover Warrants” refers to the warrants to acquire a number of shares of New Allurion Common Stock in an amount and at an exercise price as set forth on an allocation schedule to be delivered by Allurion to Compute Health, which will be converted from Allurion Warrants at the Intermediate Merger Effective Time.

RSU Forfeiture Agreement” refers to the letter agreement, dated as of May 2, 2023, by and between Krishna Gupta, a member of the Allurion Board, and Allurion, pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, Mr. Gupta agreed to forfeit to Allurion the Forfeited RSUs.

RTW” refers to, collectively, RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd., and RTW Venture Fund Limited.

Runway” refers to Runway Growth Finance Corp.

Runway Loan” refers to Allurion’s indebtedness under the Runway Loan Documents.

Runway Loan Documents” refers to the “Loan Documents” as defined in that certain Amended and Restated Loan and Security Agreement, dated as of December 30, 2021, as amended on June 9, 2022 and September 15, 2022, among Allurion, the other borrowers party thereto from time to time, the lenders party thereto from time to time and Runway, as administrative agent and collateral agent for the lenders party thereto.

 

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SEC” refers to the U.S. Securities and Exchange Commission.

Securities Act” refers to the Securities Act of 1933, as amended.

Separate Class Vote Proposals” refers to the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Exchange Proposal, and the Equity Incentive Plan Proposal.

Side Letter Holders” refers to certain of the holders of Bridge Notes, including RTW, HVL and Jason Gulbinas, who have entered into Side Letters with Allurion.

Side Letters” refers to, collectively, the letter agreements entered into by Allurion with the Side Letter Holders, pursuant to which, in the event the Side Letter Holders’ Bridge Notes converted in connection with the consummation of the Business Combination, the conversion rate for such Bridge Notes would be adjusted after the Closing Date to provide each of the Side Letter Holders with additional shares of New Allurion Common Stock, in the event that the trading price of the shares of New Allurion Common Stock was lower than the Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio.

Special Meeting” refers to the special meeting of Compute Health to be held on July 28, 2023 at 9:00 a.m., Eastern Time, to vote on the Stockholder Proposals. The Special Meeting will take place via live webcast at https://www.cstproxy.com/computehealth/2023 and telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 4267501#. For the purposes of the Compute Health Certificate of Incorporation, the physical place of meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001.

Sponsor” refers to Compute Health Sponsor LLC, a Delaware limited liability company.

Sponsor Contribution Agreement” refers to that certain Contribution Agreement between Compute Health and the Sponsor, dated as of May 2, 2023, pursuant to which the Sponsor has agreed to contribute certain shares of Compute Health Class A Common Stock to Compute Health as a contribution to capital, effective immediately following the Sponsor Recapitalization and immediately prior to the CPUH Merger.

Sponsor Loans” refers to loans borrowed by Compute Health from the Sponsor or any of its affiliates to meet Compute Health’s reasonable funding requirements pursuant to those certain promissory notes for working capital loans, dated April 6, 2021, July 28, 2022 and February 9, 2023.

Sponsor Recapitalization” refers to the recapitalization of the Sponsor’s shares of Compute Health Class B Common Stock and Compute Health Private Warrants into shares of Compute Health Class A Common Stock, pursuant to and subject to the terms and conditions set forth in the Sponsor Support Agreement.

Sponsor Support Agreement” refers to the Sponsor Support Agreement, by and among Compute Health, the Sponsor, Allurion, New Allurion and the Additional Class B Holders, dated as of February 9, 2023.

Stockholder Proposals” refers to, collectively, (i) the Business Combination Proposals, (ii) the Organizational Documents Proposal, (iii) the Advisory Organizational Documents Proposals, (iv) the Exchange Proposal, (v) the Equity Incentive Plan Proposal, and (vi) the Adjournment Proposal.

Subscription Agreement Enforcement Expenses” refers to any and all fees, expenses, commissions or other amounts required to be paid or incurred in connection with Compute Health and New Allurion, for the benefit of Allurion, taking all necessary, legally available steps to enforce against any PIPE Investor the terms of that PIPE Investor’s PIPE Subscription Agreement if the PIPE Investor is in material breach of its obligations thereunder, including any material breach caused by the PIPE Investor’s failure to fund its Subscription Amount (as defined in its PIPE Subscription Agreement) at the time and in the amount required pursuant to its PIPE Subscription Agreement.

 

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Surviving Corporation” refers to New Allurion, subsequent to the CPUH Merger.

Surviving Subsidiary Company” refers to Merger Sub II, subsequent to the Final Merger.

Term Loan Credit Agreement” refers to the Credit and Guaranty Agreement, to be entered into by and among Allurion, as the borrower, the guarantors named therein, and Fortress.

Termination Agreements” refers to those certain letter agreements, each dated as of May 2, 2023, pursuant to which the Side Letters previously entered into by the Side Letter Holders were terminated.

Termination Date” refers to August 7, 2023.

Transfer Agent” refers to Continental Stock Transfer & Trust Company.

Trust Account” refers to the trust account of Compute Health which holds the net proceeds from the IPO and certain of the proceeds from the sale of the Compute Health Private Warrants, together with interest earned thereon, less amounts released to pay taxes.

Trust Agreement” refers to the Investment Management Trust Agreement, dated February 4, 2021, between Compute Health and the Transfer Agent.

Trustee” refers to Continental Stock Transfer & Trust Company.

Unpaid Allurion Expenses” refers to the Allurion Expenses that are unpaid as of the relevant determination date.

Unpaid CPUH Expenses” refers to the CPUH Expenses that are unpaid as of the relevant determination date.

Unpaid Expenses” refers to the Unpaid CPUH Expenses and Unpaid Allurion Expenses, in each case, as of immediately prior to the Intermediate Merger Closing.

VWAP” refers to volume weighted average price of a security on the NYSE, or any other national securities exchange on which such securities are then traded, as applicable.

Warrant Agent” refers to Continental Stock Transfer & Trust Company.

Warrant Agreement” refers to the Warrant Agreement, dated February 4, 2021, by and between Compute Health and the Warrant Agent.

Warrant Amendment Proposal” refers to the proposal to (i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination, each of the outstanding Compute Health Public Warrants, which currently entitle the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50 per share, will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder will be issued one-half of one New Allurion Public Warrant for each outstanding Compute Health Public Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation.

 

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Warrant Assumption Agreement” refers to the Warrant Assignment, Assumption and Amendment Agreement, to be entered into by and among Compute Health, New Allurion and the Warrant Agent in connection with the CPUH Merger Closing.

Warrant Holders Adjournment Proposal” refers to the proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Warrant Holders Meeting, the Warrant Amendment Proposal would not be duly approved and adopted by the requisite holders of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants.

Warrant Holders Meeting” refers to the meeting of the Compute Health Warrant Holders to vote on the Warrant Holder Proposals.

Warrant Holder Proposals” refers to, collectively, (i) the Warrant Amendment Proposal and (ii) the Warrant Holders Adjournment Proposal.

Warrantholder Solicitation Expenses” refers to any out of pocket fees, expenses, commissions or other amounts in connection with obtaining the approval of the Warrant Holder Proposals.

 

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MARKET AND INDUSTRY DATA

Certain information contained in this proxy statement/prospectus relates to or is based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we are not aware of any misstatements regarding such third-party information and data presented in this proxy statement/prospectus, such information and data involves risks and uncertainties and is subject to change based on various factors, including, potentially, those discussed under the section entitled “Risk Factors” starting on page 90 of this proxy statement/prospectus. Furthermore, such information and data cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Finally, while we believe our own internal estimates and research are reliable, and are not aware of any misstatements regarding such information and data presented in this proxy statement/prospectus, such research has not been verified by any independent source. Notwithstanding anything in this proxy statement/prospectus to the contrary, we are responsible for all disclosures in this proxy statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws. These forward-looking statements include, but are not limited to, statements regarding the plans, strategies and prospects, both business and financial, of Compute Health, Allurion and New Allurion. These statements are based on the beliefs and assumptions of the management of Compute Health, Allurion and New Allurion. Although Compute Health, Allurion and New Allurion believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, none of Compute Health, Allurion, or New Allurion can assure you that they will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “target”, “goal”, “forecasts”, “may”, “will”, “potential”, “should”, “would”, “could”, “future”, “seeks”, “plans”, “predicts”, “propose”, “scheduled”, “anticipates”, “intends”, or similar expressions.

Forward-looking statements in this proxy statement/prospectus include, but are not limited to, statements about the ability of Compute Health, Allurion and New Allurion prior to the Mergers, and New Allurion following the Mergers, to:

 

   

complete the Business Combination, or, if the parties do not consummate the Business Combination, for Compute Health to complete any other initial business combination;

 

   

meet the closing conditions to the Mergers, including the adoption of the Business Combination Agreement by the requisite Compute Health Stockholders and Requisite Allurion Stockholders, the satisfaction of the Net Closing Cash Condition, and the consummation of the PIPE Investment, Revenue Interest Financing, and Fortress Financing;

 

   

consummate the Non-Redemption Agreement;

 

   

realize the benefits expected from the Mergers;

 

   

successfully defend litigation that may be instituted against Compute Health, Allurion or New Allurion in connection with the Mergers;

 

   

manage various conflicts of interest that could arise among us or our affiliates, investors, directors, and officers;

 

   

fund the costs related to the Business Combination;

 

   

successfully deploy the proceeds from the Mergers;

 

   

manage the risk that the transactions contemplated by the Mergers may not be completed in a timely manner or at all, which may adversely affect the price of Compute Health’s securities;

 

   

manage the risk that the transactions contemplated by the Mergers may not be completed by the Termination Date;

 

   

obtain and maintain the listing of New Allurion securities on the NYSE, and the potential liquidity and trading of such securities;

 

   

manage risks associated with the amount of redemptions made by the Public Stockholders;

 

   

complete the Medtronic Collaboration, PIPE Investment, Revenue Interest Financing and Fortress Financing;

 

   

acquire sufficient sources of funding if and when needed;

 

   

manage the occurrence of any event, change, or other circumstance that could give rise to the termination of the Business Combination Agreement;

 

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attract and retain key employees, officers, and directors;

 

   

manage the effect of the announcement or pendency of the transactions contemplated by the Mergers on Allurion’s business relationships, operating results, and business generally;

 

   

manage risks that the transactions contemplated by the Mergers disrupt current plans and operations of Allurion;

 

   

implement business plans, forecasts, and other expectations after the completion of the Mergers, and identify and realize additional opportunities;

 

   

manage risks associated with the management of New Allurion having limited experience operating as a public company;

 

   

address significant risks, assumptions, estimates and uncertainties related to Allurion’s projections;

 

   

commercialize current and future products and services and create sufficient demand among health care providers and patients;

 

   

successfully complete current and future preclinical studies and clinical trials of the Allurion Balloon and any other future product candidates;

 

   

obtain market acceptance of the Allurion Balloon as safe and effective;

 

   

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;

 

   

timely collect accounts receivable from our customers;

 

   

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 products and services are currently offered;

 

   

accurately forecast customer demand and manufacture sufficient quantities of product that patients and health care providers request;

 

   

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;

 

   

successfully manage any future international expansion of Allurion’s business and navigate business, regulatory, political, operational, financial, and economic risks associated with doing business internationally;

 

   

successfully manage any future growth in Allurion’s business;

 

   

contract with third-party suppliers and providers and monitor their ability to perform adequately under those arrangements;

 

   

comply with applicable legal and regulatory obligations;

 

   

obtain and maintain intellectual property protection for Allurion’s products and technologies and acquire or license (on commercially reasonable terms) intellectual property from third parties;

 

   

sell products, and use proprietary technologies without infringing, misappropriating, or otherwise violating the proprietary rights or intellectual property of third parties;

 

   

manage the impact of any significant acquisitions, dispositions, and other similar or material transactions;

 

   

implement and maintain effective internal controls; and

 

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manage the effects of natural disasters, terrorist attacks, the spread and/or abatement of infectious diseases, such as COVID-19 and the occurrence of other events beyond our reasonable control, including with respect to potential operational disruptions, labor disruptions, increased costs, and impacts to demand related thereto, on the Mergers or on the ability to implement business plans, forecasts, and other expectations after the completion of the Mergers and the transactions contemplated thereby.

We have based the forward-looking statements contained in this proxy statement/prospectus primarily on our current expectations and projections about future events and trends that we believe may affect Compute Health’s, Allurion’s, or New Allurion’s business, financial condition, results of operations, prospects, business strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section entitled “Risk Factors” beginning on page 90 and elsewhere in this proxy statement/prospectus and the Resale Registration Statement that New Allurion will file with the SEC. These risks are not exhaustive. Other sections of this proxy statement/prospectus include additional factors that could adversely impact our business and financial performance. Moreover, Compute Health and Allurion operate in very competitive and rapidly changing environments. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this proxy statement/prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this proxy statement/prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

Before any Compute Health Stockholder or Compute Health Warrant Holder grants his, her, or its proxy, instructs how his, her or its vote should be cast or votes on the proposals to be put to the Special Meeting or the Warrant Holder Meeting, such stockholder or warrantholder, as applicable, should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this proxy statement/prospectus may adversely affect Compute Health or, following the consummation of the Mergers, New Allurion.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

AND THE SPECIAL MEETING

The following are answers to certain questions that you may have regarding the Business Combination and the Special Meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this proxy statement/prospectus.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

Q:

WHAT IS THE BUSINESS COMBINATION?

 

A:

On February 9, 2023, Compute Health entered into the Existing Business Combination Agreement and on May 2, 2023 entered into the BCA Amendment, with the Merger Subs, New Allurion and Allurion. Pursuant to the Business Combination Agreement, and subject to the terms and conditions set forth therein, the Business Combination will be effected in three steps: (a) subject to, among other things, the approval and adoption of the Business Combination Agreement by the requisite Compute Health Stockholders, Compute Health will merge with and into New Allurion, with New Allurion surviving the CPUH Merger as a publicly listed entity and becoming the sole owner of each Merger Sub, (b) at least three hours following the consummation of the CPUH Merger, Merger Sub I will merge with and into Allurion, with Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of New Allurion and (c) thereafter, the Intermediate Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II surviving the Final Merger and remaining a direct, wholly-owned subsidiary of New Allurion. The terms and conditions of the Business Combination are contained in the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A (as amended by Annex A-1), each of which is incorporated by reference herein in its entirety. Compute Health encourages you to read the Business Combination Agreement carefully, as it is the legal document that governs the Business Combination.

Immediately prior to the CPUH Merger Effective Time, each Compute Health Unit that is outstanding immediately prior to the CPUH Merger Effective Time will be automatically detached and the holder thereof will be deemed to hold one share of Compute Health Class A Common Stock and one quarter of one Compute Health Public Warrant. At the CPUH Merger Effective Time, pursuant to the CPUH Merger, (a) each then-outstanding share of New Allurion Common Stock shall be redeemed for par value, (b) each then-outstanding share of Compute Health Class A Common Stock (including, for the avoidance of doubt, shares of Compute Health Class A Common Stock issued in the CPUH Recapitalization and in the separation of the Compute Health Units described in (b) above, but excluding any Compute Health Dissenting Shares, shares that are redeemed in connection with the Business Combination, Compute Health Cancelled Shares and Sponsor Contributed Shares) will be automatically canceled and extinguished and will be converted into the right to receive 1.420455 shares of New Allurion Common Stock, (c) each then-outstanding Compute Health Public Warrant will be assumed by New Allurion and represent a New Allurion Public Warrant (subject to the outcome of the Consent Solicitation) and (d) each Compute Health Cancelled Share will be canceled for no payment or consideration.

Unlike other business combinations with special purpose acquisition companies, the transactions contemplated by the Business Combination are structured such that holders of Compute Health Class A Common Stock that do not redeem their shares in connection with the Business Combination will receive 1.420455 shares of New Allurion Common Stock in exchange for each non-redeemed share of Compute Health Class A Common Stock held by such holder. These shares are being registered pursuant to the registration statement of which this proxy statement/prospectus forms a part, will be delivered by means of application of the CPUH Exchange Ratio and will be delivered to such holders as New Allurion Common Stock. By virtue of the exchange mechanism in the Sponsor Support Agreement, neither the Sponsor nor any of the Additional Class B Holders will receive the benefit of the CPUH Exchange Ratio.

 

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Immediately prior to the Intermediate Merger Effective Time, the outstanding principal and accrued but unpaid interest on the Allurion Convertible Notes will be converted, pursuant to the Allurion Convertible Notes Conversion, into the applicable number of shares of Allurion Common Stock provided for under the terms of such Allurion Convertible Notes, and will thereafter no longer be outstanding and will cease to exist, and each holder thereof will thereafter cease to have any rights with respect thereto. Immediately following the Allurion Convertible Notes Conversion, at the Intermediate Merger Effective Time, all shares of Allurion Common Stock issued in the Allurion Convertible Notes Conversion will be canceled and converted into the right to receive New Allurion Common Stock as described below.

At the Intermediate Merger Effective Time, pursuant to the Intermediate Merger: (a) each then-outstanding share of Allurion Common Stock (other than Allurion Dissenting Shares and Allurion Cancelled Shares, the treatment of which is described in the Business Combination Agreement), issued and outstanding as of immediately prior to the Intermediate Merger Effective Time will automatically be cancelled and extinguished and will be converted into the right to receive shares of New Allurion Common Stock based on the Intermediate Merger Exchange Ratio; (b) each then-outstanding share of Allurion Preferred Stock (other than Allurion Dissenting Shares and Allurion Cancelled Shares, the treatment of which is described in the Business Combination Agreement) issued and outstanding as of immediately prior to the Intermediate Merger Effective Time will automatically be cancelled and extinguished and will be converted into the right to receive shares of New Allurion Common Stock based on the Intermediate Merger Exchange Ratio; (c) each then-outstanding and unexercised Allurion Option will be converted into a Rollover Option, on the same terms and conditions as were applicable to such Allurion Option, based on the Intermediate Merger Exchange Ratio; (d) each then-outstanding Allurion RSU Award will be converted into a Rollover RSU Award; and (e) each then-outstanding Allurion Warrant will be converted into an Rollover Warrant.

In connection with the CPUH Merger, it is anticipated that up to 13,101,132 shares of New Allurion Common Stock will be issued to the Public Stockholders in exchange for shares of Compute Health Common Stock and up to 21,562,500 New Allurion Public Warrants will be issued to the Compute Health Warrant Holders in exchange for Compute Public Health Warrants. In connection with the Intermediate Merger, it is anticipated that up to 37,812,000 shares of New Allurion Common Stock will be issued, or reserved for issuance, to the Allurion equityholders (or RTW, Fortress, or any holders of Allurion securities issued in the Incremental Financing, as applicable, pursuant to the Business Combination Agreement, the Backstop Agreement, the Term Loan Credit Agreement, the Fortress Letter Agreement, or the Amended and Restated RTW Side Letter, as the case may be) in exchange for all Allurion Shares, Allurion Options, Allurion RSU Awards and Allurion Warrants or any other equity issued in the Incremental Financing. In addition, it is anticipated that up to 9,000,000 shares of New Allurion Common Stock will be issued to the Eligible Allurion Equityholders if certain earnout targets are met. For more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination Agreement.”

At the Final Merger Effective Time, (i) each share of the Intermediate Surviving Corporation issued and outstanding immediately prior to the Final Merger Effective Time will be cancelled and will cease to exist and (ii) each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Final Merger Effective Time will remain outstanding as a limited liability company interest of Merger Sub II.

 

Q:

WHAT AMENDMENTS WERE MADE TO THE BUSINESS COMBINATION AGREEMENT SINCE IT WAS ORIGINALLY ENTERED INTO ON FEBRUARY 9, 2023?

 

A:

On May 2, 2023, Compute Health, Merger Sub I, Merger Sub II, Allurion, and New Allurion entered into the BCA Amendment which, among other things, amended the calculation of the aggregate number of shares of New Allurion Common Stock to be issued to (or reserved for issuance for) Allurion equityholders upon the consummation of the Intermediate Merger to be as follows: (a) 37,812,000 minus (b) the Allocated Shares. Additionally, the BCA Amendment replaced the form of Investor Rights Agreement attached as an

 

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  exhibit to the Existing Business Combination Agreement with a revised form of Investor Rights Agreement. See the section entitled “The Business Combination Agreement — Related Agreements — Investor Rights Agreement” for further discussion of the Investor Rights Agreement.

Other than as expressly modified by the BCA Amendment, the Existing Business Combination Agreement remains in full force and effect.

See the subsections entitled “The Business Combination Agreement — Background to the Business Combination,” “The Business Combination Agreement — Related Agreements — 2023 Convertible Note Incremental Financing” and “The Business Combination Agreement — Related Agreements — Backstop Agreement” for a further discussion of the BCA Amendment and the Backstop Agreement.

 

Q:

WHY AM I RECEIVING THIS DOCUMENT?

 

A:

Compute Health is sending this proxy statement/prospectus to its stockholders to help them decide how to vote their shares of Compute Health Common Stock with respect to the matters to be considered at the Special Meeting. Compute Health Stockholders are being asked to consider and vote upon, among other things, the following proposals to: (a) approve the Business Combination Proposals; (b) approve the Organizational Documents Proposal; (c) approve the Advisory Organizational Documents Proposals; (d) approve, for purposes of complying with applicable listing rules of the NYSE, the Exchange Proposal; (e) approve the Equity Incentive Plan Proposal; and (f) approve the Adjournment Proposal. The Business Combination cannot be completed unless the requisite Compute Health Stockholders approve the Business Combination Proposals, the Organizational Documents Proposal, the Exchange Proposal, the Equity Incentive Plan Proposal, and the Adjournment Proposal (collectively, the “Required Transaction Proposals”) at the Special Meeting.

 

Q:

WHAT WILL COMPUTE HEALTH EQUITY HOLDERS OWN AS A RESULT OF THE BUSINESS COMBINATION?

 

A:

Upon the consummation of the CPUH Merger, subject to approval by the requisite Compute Health Stockholders, Compute Health Stockholders will own shares of New Allurion Common Stock, the amount of which will be determined using the CPUH Exchange Ratio. Unlike other business combinations with special purpose acquisition companies, the transactions contemplated in the Business Combination are structured to provide holders of Compute Health Class A Common Stock that do not redeem their shares in connection with the Business Combination with a right to receive 1.420455 shares of New Allurion Common Stock for each share of Compute Health Class A Common Stock not redeemed. These shares are being registered pursuant to this proxy statement/prospectus and will be delivered as shares of New Allurion Common Stock. By virtue of the CPUH Recapitalization (which effectively cancels out this additional consideration mechanism), neither the Sponsor nor the Additional Class B Holders will receive the benefit of such additional shares. For more information about what Compute Health Stockholders will own following the Business Combination, see the section entitled “Beneficial Ownership of Securities.”

 

Q:

WHAT WILL ALLURION EQUITY HOLDERS RECEIVE IN THE BUSINESS COMBINATION?

 

A:

Upon the consummation of the Intermediate Merger, subject to approval by the requisite Compute Health Stockholders, Allurion Stockholders will own shares of New Allurion Common Stock. Furthermore, Allurion Option holders will own Rollover Options, on the same terms and conditions as were applicable to such Allurion Options; Allurion RSU Award holders will own Rollover RSU Awards, on the same terms and conditions as were applicable to such Allurion RSU Awards; and Allurion Warrant holders will hold Rollover Warrants covering shares of New Allurion Common Stock, on the same terms and conditions as were applicable to such Allurion Warrants; in each case in such amounts as calculated using the Intermediate Merger Exchange Ratio. Additionally, (1) the Eligible Allurion Equityholders will have the right to receive the Contingency Shares as follows: (i) an aggregate of 4,500,000 Contingency Shares if,

 

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  during the Earnout Period, the VWAP of New Allurion Common Stock is greater than or equal to $15.00 over any 20 trading days within any consecutive 30 trading day period, and (ii) an aggregate of an additional 4,500,000 Contingency Shares if, during the Earnout Period, the VWAP of New Allurion Common Stock is greater than or equal to $20.00 over any 20 trading days within any consecutive 30 trading day period; and (2) in the event of a change of control of New Allurion, any unissued Contingency Shares will become payable to the Eligible Allurion Equityholders.

 

Q:

WHAT EQUITY STAKE WILL CURRENT COMPUTE HEALTH EQUITY HOLDERS AND ALLURION EQUITY HOLDERS HOLD IN NEW ALLURION IMMEDIATELY AFTER THE CONSUMMATION OF THE BUSINESS COMBINATION?

 

A:

It is anticipated that, immediately upon completion of the Business Combination, the ownership of New Allurion will be as follows:

 

   

the Historical Rollover Equityholders (including as a result of the Incremental Financing) will own shares of New Allurion Common Stock and Rollover Options, Rollover RSU Awards and New Allurion Warrants with shares reserved for issuance, equal to, in the aggregate, 37,812,000 shares of New Allurion Common Stock, or approximately 69.4% of the outstanding New Allurion Common Stock;

 

   

the Public Stockholders will own 12,106,814 shares of New Allurion Common Stock, or approximately 22.2% of the outstanding New Allurion Common Stock;

 

   

Medtronic will own 994,318 shares of New Allurion Common Stock, or approximately 1.8% of the outstanding New Allurion Common Stock;

 

   

the PIPE Investors will own 5,386,695 shares of New Allurion Common Stock, or approximately 9.9% of the outstanding New Allurion Common Stock;

 

   

the Sponsor and the Additional Class B Holders will own in the aggregate 2,913,091 shares of New Allurion Common Stock, or approximately 5.3% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to certain Initial Stockholders in connection with the PIPE Investment, which shares are reflected in the preceding bullet);

 

   

each of RTW and Fortress will own 250,000 shares of New Allurion Common Stock, or approximately 0.5% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to RTW in connection with the PIPE Investment or Incremental Financing, which shares are reflected in the bullets above); and

 

   

HVL will own an additional 729,854 shares of New Allurion Common Stock, or approximately 1.3% of the outstanding New Allurion Common Stock (excluding shares of New Allurion Common Stock that HVL receives upon conversion of the HVL Bridge Note).

The number of shares and the interests set forth above (a) assume (i) that no Public Stockholders elect to have their shares of Compute Health Class A Common Stock redeemed, (ii) there are no other issuances of equity interests of Compute Health, (iii) none of the Sponsor, the Additional Class B Holders, or the Historical Rollover Equityholders purchase Compute Health Class A Common Stock in the open market, (iv) there are no Backstop Shares or exercises of Allurion Options or Allurion Warrants, and (v) the additional assumptions set forth in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information,” (b) do not take into account (i) New Allurion Warrants that will remain outstanding following the Business Combination and may be exercised at a later date or (ii) the Contingency Shares and (c) assume that Net Closing Cash is $100 million. As a result of the Business Combination, the economic and voting interests of Compute Health Stockholders will decrease.

If we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” (i.e., 8,523,194 or more shares of Compute Health

 

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Class A Common Stock are redeemed), and the assumptions set forth in the foregoing clauses (a)(ii)–(v) and (b)(i) – (ii), the ownership of New Allurion upon the completion of the Business Combination will be as follows:

 

   

the Historical Rollover Equityholders (including as a result of the Incremental Financing) will own shares of New Allurion Common Stock and Rollover Options, Rollover RSU Awards and New Allurion Warrants with shares reserved for issuance, equal to, in the aggregate, 36,312,000 shares of New Allurion Common Stock, or approximately 85.3% of the outstanding New Allurion Common Stock;

 

   

the Public Stockholders will own zero shares of New Allurion Common Stock, or approximately 0% of the outstanding New Allurion Common Stock;

 

   

Medtronic will own 994,318 shares of New Allurion Common Stock, or approximately 2.3% of the outstanding New Allurion Common Stock;

 

   

the PIPE Investors will own 5,386,695 shares of New Allurion Common Stock, or approximately 12.6% of the outstanding New Allurion Common Stock;

 

   

the Sponsor and the Additional Class B Holders will own 2,897,617 shares of New Allurion Common Stock, or approximately 6.8% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to certain Initial Stockholders in connection with the PIPE Investment, which shares are reflected in the preceding bullet);

 

   

each of RTW and Fortress will own 1,000,000 shares of New Allurion Common Stock, or approximately 2.3% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to RTW in connection with the PIPE Investment or Incremental Financing, which shares are reflected in the bullets above); and

 

   

HVL will own an additional 776,273 shares of New Allurion Common Stock, or approximately 1.8% of the outstanding New Allurion Common Stock (excluding shares of New Allurion Common Stock that HVL receives upon conversion of the HVL Bridge Note).

If we assume 50% of the maximum redemption scenario (i.e., 4,261,597 shares of Compute Health Class A Common Stock are redeemed), and the assumptions set forth in the foregoing clauses (a)(ii) – (iv) and (b)(i) – (ii), the ownership of New Allurion upon the completion of the Business Combination will be as follows:

 

   

the Historical Rollover Equityholders (including as a result of the Incremental Financing) will own shares of New Allurion Common Stock and Rollover Options, Rollover RSU Awards and New Allurion Warrants with shares reserved for issuance, equal to, in the aggregate, 37,812,000 shares of New Allurion Common Stock, or approximately 78.1% of the outstanding New Allurion Common Stock;

 

   

the Public Stockholders will own 6,053,407 shares of New Allurion Common Stock, or approximately 12.5% of the outstanding New Allurion Common Stock;

 

   

Medtronic will own 994,318 shares of New Allurion Common Stock, or approximately 2.1% of the outstanding New Allurion Common Stock;

 

   

the PIPE Investors will own 5,386,695 shares of New Allurion Common Stock, or approximately 11.1% of the outstanding New Allurion Common Stock;

 

   

the Sponsor and the Additional Class B Holders will own 2,913,091 shares of New Allurion Common Stock, or approximately 6.0% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to certain Initial Stockholders in connection with the PIPE Investment, which shares are reflected in the preceding bullet);

 

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each of RTW and Fortress will own 250,000 shares of New Allurion Common Stock, or approximately 0.5% of the outstanding New Allurion Common Stock (which, for the avoidance of doubt, does not include shares of New Allurion Common Stock that will be issued to RTW in connection with the PIPE Investment or Incremental Financing, which shares are reflected in the bullets above); and

 

   

HVL will own an additional 729,854 shares of New Allurion Common Stock, or approximately 1.5% of the outstanding New Allurion Common Stock (excluding shares of New Allurion Common Stock that HVL receives upon conversion of the HVL Bridge Note).

The ownership percentages with respect to New Allurion set forth above take into account the shares of Compute Health Class B Common Stock, which will be recapitalized into shares of Compute Health Class A Common Stock immediately prior to the consummation of the CPUH Merger pursuant to the CPUH Recapitalization. If the facts are different than these assumptions, the percentage ownership retained by Compute Health Stockholders in New Allurion following the Business Combination will be different.

Please see the sections entitled “Beneficial Ownership of Securities” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

Q:

WHAT IS THE AMOUNT OF NET CASH PER SHARE OF COMPUTE HEALTH CLASS A COMMON STOCK THAT IS BEING CONTRIBUTED TO NEW ALLURION IN THE BUSINESS COMBINATION?

 

A:

The estimated net cash per share of Compute Health Class A Common Stock that is being contributed to New Allurion in the Business Combination is approximately $6.72 per share, assuming no redemptions, and negative $4.60 per share, assuming the maximum redemptions scenario described under the subsection entitled “Notes to Unaudited Pro Forma Condensed Combined Financial Information — Basis of Pro Forma Presentation.” The estimated net cash per share of Compute Health Class A Common Stock that is being contributed to New Allurion is calculated as the quotient of (a) (i) the amount of funds held in the Trust Account (assuming either no redemptions or the maximum redemptions scenario) less (ii) the amount of estimated transaction expenses of $8,390,000 less (iii) the aggregate market value of the Compute Health Public Warrants of $12,075,000 (calculated as the trading price of one public warrant, as of July 5, 2023, multiplied by an aggregate of 21,562,500 Compute Health Warrants anticipated to be outstanding as of the closing of the Business Combination), divided by (b) a number of shares of Compute Health Class A Common Stock anticipated to be outstanding as of the closing of the Business Combination (assuming the CPUH Recapitalization has occurred and before taking into effect any contribution pursuant to the Sponsor Contribution Agreement or issuance of shares in the Sponsor Loan Conversion) being 11,374,881, assuming no redemptions, and 2,851,687 assuming the maximum redemptions scenario. The estimated net cash per share of Compute Health Class A Common Stock that is being contributed to New Allurion (in each of the no redemptions scenario and the maximum redemptions scenario) is less than the amount per share that holders of Compute Health Class A Common Stock would be entitled to receive upon exercise of their redemption rights (which, for illustrative purposes, was approximately $10.63 per share as of July 3, 2023, the record date for the Special Meeting).

 

Q:

WHAT ARE THE REVENUE INTEREST FINANCING AGREEMENT AND THE AMENDED AND RESTATED RTW SIDE LETTER AND HOW WILL THEY AFFECT NEW ALLURION AFTER COMPLETION OF THE BUSINESS COMBINATION?

 

A:

On February 9, 2023, Allurion entered into the Revenue Interest Financing Agreement with RTW. Subject to the terms and conditions of the Revenue Interest Financing Agreement, including the closing conditions set forth therein, RTW shall, concurrent with the Closings, pay or cause to be paid to New Allurion $40 million (the “Investment Amount”) in exchange for a revenue interest in Allurion’s current and future products and digital solutions. As of the Closings, New Allurion will assume all obligations of Allurion under the Revenue Interest Financing Agreement.

Under the terms of the Revenue Interest Financing Agreement, if RTW has not received revenue interest payments equal to 100% of the Investment Amount by December 31, 2027, New Allurion will be required

 

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to make additional payments within 30 days of December 31, 2027, in an amount equal to 100% of the Investment Amount less the aggregate amount of all the payments made by New Allurion to RTW in respect of the revenue interests prior to such date. If RTW has not received revenue interest payments equal to 240% of the Investment Amount by December 31, 2030, New Allurion will be required to make additional payments within 30 days of December 31, 2030, in an amount equal to 240% of the Investment Amount less the aggregate amount of all the payments made by New Allurion to RTW in respect of the revenue interests prior to such date. For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Revenue Interest Financing.”

In addition, in connection with the execution of the Business Combination Agreement, the PIPE Subscription Agreements and the Revenue Interest Financing Agreement, Compute Health, New Allurion, Allurion and Merger Sub II entered into the Existing RTW Side Letter with RTW, pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, (a) Compute Health and New Allurion have agreed not to enter into PIPE Subscription Agreements with PIPE Investors on more favorable or advantageous terms than those included in the PIPE Subscription Agreements entered into by and among Compute Health, New Allurion and RTW, (b) New Allurion has agreed that RTW may elect to convert up to 50% of the consideration RTW pays to New Allurion in connection with the PIPE Investment by forfeiting New Allurion Common Stock into financing provided by RTW to Allurion pursuant to an Additional Revenue Interest Financing Agreement (as defined in the Amended and Restated RTW Side Letter), (c) New Allurion had agreed to issue up to an additional 1,000,000 shares of New Allurion Common Stock to RTW (the “Additional RTW Shares”), with (i) 250,000 of such Additional RTW Shares to be issued at the Closings and not subject to any contingencies and (ii) up to 750,000 of such Additional RTW Shares to be issued based on the Net Closing Cash as of immediately prior to the Intermediate Merger Effective Time (to be determined linearly, based on no Additional RTW Shares being issuable if such Net Closing Cash is equal to or greater than $100 million and 750,000 Additional RTW Shares being issuable if such Net Closing Cash is $70 million), (d) New Allurion has agreed that RTW shall have the right to designate one director that shall be an “independent” director for purposes of NYSE Rules (an “Independent Director”) to the New Allurion Board and (e) New Allurion has agreed to create the board position of lead independent director, who shall serve as chair or co-chair of the New Allurion Board, and who will initially be Omar Ishrak. As a result of the issuance by New Allurion of the Additional RTW Shares, the effective share price of New Allurion Common Stock offered to RTW could range from $6.30 per share to $4.79 per share.

On May 2, 2023, pursuant to the Backstop Agreement and contemporaneous with the execution of the Backstop Agreement, Compute Health, New Allurion, Merger Sub II, Allurion and RTW entered into the Amended and Restated RTW Side Letter, which amends and restates the Existing RTW Side Letter in its entirety, in order to reflect that any Conditional Additional New Allurion Shares issuable to RTW under the Amended and Restated RTW Side Letter, if any, would be calculated net of any Backstop Shares issuable to RTW under the Backstop Agreement. Additionally, pursuant to the Amended and Restated RTW Side Letter, the parties to the Amended and Restated RTW Side Letter have agreed that, if a third party subsequently provides Allurion with debt financing on more favorable terms than those provided to RTW under the Backstop Agreement, RTW will be offered the same or more favorable terms and conditions as Allurion provided to such third party.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Amended and Restated RTW Side Letter.

 

Q:

WHAT IS THE INCREMENTAL FINANCING AND HOW WILL IT AFFECT NEW ALLURION?

 

A:

Pursuant to the Business Combination Agreement, Allurion is required to use reasonable best efforts to obtain gross cash proceeds of at least $15 million of additional financing pursuant to one or more private sales of Allurion’s equity securities, which shall automatically convert into shares of Allurion Common Stock upon the consummation of the Business Combination, which is referred to as the Incremental Financing. From February 15, 2023 until July 5, 2023, Allurion issued an aggregate principal amount of

 

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  $19.6 million of Bridge Notes to various investors pursuant to convertible note purchase agreements, dated as of February 15, 2023 and June 14, 2023, including a $13 million Bridge Note (the “HVL Bridge Note”) sold to HVL on February 15, 2023. The Bridge Notes were offered in a private placement under the Securities Act. The Bridge Notes will mature on December 31, 2026 (the “Maturity Date”) 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 Business Combination on or before August 31, 2023, the Bridge Notes shall be converted into the number of shares of 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 Business Combination (such conversion price, the “Conversion Price”).

The Side Letter Holders, including RTW, HVL and Jason Gulbinas, also entered into the Side Letters, pursuant to which, in the event the Side Letter Holders’ Bridge Notes converted in connection with the consummation of the Business Combination, the conversion rate for such Bridge Notes would be adjusted after the Closing Date to provide each of the Side Letter Holders with additional shares of New Allurion Common Stock, in the event that the trading price of the shares of New Allurion Common Stock was lower than the Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio.

Following the consummation of the Initial Financing, Compute Health, Allurion and New Allurion determined to refinance the Initial Financing and, pursuant to 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 Business Combination, 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.

In addition, under HVL’s Termination Agreement, upon the terms and subject to the conditions set forth therein, New Allurion has agreed to issue to HVL a number of shares of New Allurion Common Stock equal to (a) (i) the New Allurion Share Target (as defined below) minus (ii) the number of shares of New Allurion Common Stock issued to HVL upon the consummation of the Business Combination 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) (such net amount the “Additional Hunter Shares”) plus (b) 300,000 shares of New Allurion Common Stock (the “Hunter Closing Shares”). “New Allurion Share Target” means a number of shares of New Allurion Common Stock equal to (a) the outstanding principal and accrued interest under the HVL Bridge Note immediately prior to the consummation of the Business Combination (after giving effect to the payment of the Repayment) divided by (b) $5.00.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — 2023 Convertible Note Incremental Financing.”

 

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Q:

WHAT IS THE BACKSTOP AGREEMENT?

 

A:

On May 2, 2023, the Backstop Purchasers entered into the Backstop Agreement with Allurion, New Allurion and HVL. Pursuant to the Backstop Agreement, 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 the Backstop Closing, purchase up to its $2.0 million 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 (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 Backstop Amount.

In addition, in consideration of each Backstop Purchaser’s commitment to purchase its Backstop Amount of the HVL Bridge Note at the Backstop Closing, subject to the terms and conditions of the Backstop Agreement, New Allurion will issue to each Backstop Purchaser a number of Backstop Shares as follows:

 

  a)

In the event that the Backstop Amount for each Backstop Purchaser is equal to its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of New Allurion Common Stock equal to the greater of (i) 700,000 shares of New Allurion Common Stock and (ii) the Conditional Additional New Allurion Shares issuable (x) in the case of the Fortress Investor, to the Fortress Investor or its applicable affiliate pursuant to the Term Loan Credit Agreement and (y) in the case of RTW, to RTW pursuant to the Amended and Restated RTW Side Letter; provided that, in the event that for any reason the aggregate number of shares issuable to the Fortress Investor pursuant to clause (ii) above is greater than the aggregate number of shares issuable to RTW pursuant to clause (ii), or vice versa, the Backstop Purchaser that would receive the lesser aggregate number of shares shall instead receive the higher number of aggregate shares so that, pursuant to such clause (ii), each of the Fortress Investor and RTW shall receive the same aggregate number of shares of New Allurion Common Stock.

 

  b)

In the event that the Backstop Amount for each Backstop Purchaser is less than its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of shares of New Allurion Common Stock equal to (i) 700,000 multiplied by a fraction having (x) a numerator equal to such Backstop Purchaser’s Backstop Amount and (y) a denominator equal to 2,000,000.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — The Backstop Agreement.

 

Q:

WHEN WILL THE BUSINESS COMBINATION BE COMPLETED?

 

A:

The parties currently expect that the Business Combination will be completed during the third quarter of 2023. However, neither Compute Health nor Allurion can assure you of when or if the Business Combination will be completed, and it is possible that factors outside of the control of the companies could result in the Business Combination being completed at a different time or not at all. See the subsection entitled “Risk Factors — Risks Related to the Business Combination and Compute Health — If the conditions to the Business Combination Agreement are not met, or suits to enjoin the transaction are successful, the Business Combination may not occur.” The Termination Date for consummation of the Business Combination is August 7, 2023. Compute Health must first obtain the approval of the requisite Compute Health Stockholders for each of the Required Transaction Proposals. Allurion must obtain the approval of certain matters related to the Business Combination by the Requisite Allurion Stockholders and Compute Health and Allurion must also first satisfy certain other closing conditions. See the subsection entitled “The Business Combination Agreement — Conditions to the Closing of the Business Combination.”

 

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Q:

WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED?

 

A:

If Compute Health does not complete the Business Combination by August 9, 2023 (unless such date is further extended in accordance with the Compute Health Certificate of Incorporation) for any reason, Compute Health may search for another target business with which to complete a business combination or may decide to dissolve and liquidate, subject to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. If Compute Health does not complete the Business Combination or a business combination with another target business by August 9, 2023 (unless such date is further extended in accordance with the Compute Health Certificate of Incorporation), Compute Health must redeem 100% of the outstanding shares of Compute Health Class A Common Stock, at a per share price, payable in cash, equal to the amount then held in the Trust Account (less taxes paid or payable, if any, and up to $100,000 of interest to pay dissolution expenses) divided by the number of then-outstanding shares of Compute Health Class A Common Stock. Pursuant to the IPO Letter Agreement, the Sponsor and the Initial Stockholders agreed to waive their redemption rights with respect to any shares of Compute Health Common Stock they may hold other than in connection with Compute Health’s liquidation. No consideration was provided in exchange for the waiver of redemption rights in the IPO Letter Agreement. As such, in the event a business combination is not effected in the required time period, Compute Health, the Sponsor, and Compute Health officers and directors will not have the right to redeem any Compute Health Common Stock held by them.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

 

Q:

WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

 

A:

Compute Health Stockholders are being asked to vote on the following Stockholder Proposals:

 

   

the Business Combination Proposals;

 

   

the Organizational Documents Proposal;

 

   

the Advisory Organizational Documents Proposals;

 

   

the Exchange Proposal;

 

   

the Equity Incentive Plan Proposal; and

 

   

the Adjournment Proposal.

The Business Combination is conditioned upon the approval of the Business Combination Proposals, the Organizational Documents Proposal, the Exchange Proposal, and the Equity Incentive Plan Proposal. If the Business Combination Proposals are not approved, the other proposals (except the Adjournment Proposal) will not be presented to the Compute Health Stockholders for a vote.

 

Q:

WHY IS COMPUTE HEALTH PROPOSING THE BUSINESS COMBINATION?

 

A:

Compute Health was incorporated to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities (each, a “business combination”).

On February 4, 2021, Compute Health completed its IPO, generating gross proceeds of $862.5 million, including the full exercise of the over-allotment option by the underwriters and the sale of Compute Health Private Warrants in a private placement to the Sponsor. Since Compute Health’s IPO, Compute Health’s activity has been limited to the evaluation of business combination candidates.

Allurion is dedicated to ending obesity by creating a best-in-class weight loss platform to treat the estimated two billion people globally who are overweight. Its platform, the “Allurion Program”, features the world’s first and only swallowable, procedure-less intragastric balloon for weight loss (the Allurion Balloon) and

 

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offers access to a proprietary behavior change program, and AI-powered remote patient monitoring tools (the “Allurion Virtual Care Suite”). Over 100,000 patients have already been treated commercially with the Allurion Balloon in over 50 countries globally outside of the United States.

For more information, see the subsection entitled “The Business Combination Agreement — The Compute Health Board’s Reasons for Approval of the Business Combination.”

 

Q:

DID COMPUTE HEALTH OBTAIN A THIRD-PARTY VALUATION OR FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE BUSINESS COMBINATION?

 

A:

Compute Health obtained a fairness opinion from its independent financial advisor, Lincoln International LLC (“Lincoln”), with respect to the fairness to the holders of Compute Health Class A Common Stock (other than (i) holders of Compute Health Class A Common Stock who elect to redeem their shares prior to or in connection with the Business Combination, (ii) officers, directors, or affiliates of Compute Health or the Sponsor, and (iii) the Sponsor), from a financial point of view, of the consideration to be paid by New Allurion in the Business Combination. Additionally, Compute Health’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Compute Health’s advisors and consultants, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, Compute Health’s officers, directors, and advisors have substantial experience with mergers and acquisitions.

 

Q:

DO I HAVE REDEMPTION RIGHTS?

 

A:

Pursuant to the Compute Health Existing Organizational Documents, a Public Stockholder may request that Compute Health redeem all or a portion of its shares of Compute Health Class A Common Stock (which would become shares of New Allurion Common Stock in the CPUH Merger if not so redeemed) for cash if the Business Combination is consummated. As a holder of shares of Compute Health Class A Common Stock, you will be entitled to receive cash for any shares of Compute Health Class A Common Stock to be redeemed only if you:

 

   

hold shares of Compute Health Class A Common Stock or, if you hold shares of Compute Health Class A Common Stock through Compute Health Units, you elect to separate and cancel your Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants prior to exercising your redemption rights with respect to your shares of Compute Health Class A Common Stock;

 

   

submit a written request to the Transfer Agent in which you (i) (a) request that Compute Health redeem all or a portion of your shares of Compute Health Class A Common Stock for cash, (b) deliver your shares of Compute Health Class A Common Stock to the Transfer Agent, physically or electronically through The Depository Trust Company (“DTC”), and (ii) identify yourself as the beneficial holder of the shares of Compute Health Class A Common Stock and provide your legal name, phone number and address; and

 

   

deliver your shares of Compute Health Class A Common Stock to the Transfer Agent physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their shares of Compute Health Class A Common Stock in the manner described above prior to 5:00 p.m., Eastern time, on July 26, 2023 (two Business Days before the Special Meeting) in order for their shares to be redeemed.

Holders of Compute Health Units must elect to separate and cancel their Compute Health Units into the underlying Compute Health Class A Common Stock and Compute Health Public Warrants prior to exercising redemption rights with respect to the shares of Compute Health Class A Common Stock. If Public Stockholders hold their Compute Health Units in an account at a brokerage firm or bank, such Public

 

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Stockholders must notify their broker or bank that they elect to separate and cancel the Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants, or if a Public Stockholder holds Compute Health Units registered in his, her, or its own name, the holder must contact the Transfer Agent directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to Compute Health in order to validly redeem its shares. Public Stockholders (other than the Initial Stockholders) may elect to redeem all or a portion of their shares of Compute Health Class A Common Stock even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the shares of Compute Health Class A Common Stock will not be redeemed for cash. If the Business Combination is consummated and a Public Stockholder properly exercises his, her, or its redemption right with respect to all or a portion of the shares of Compute Health Class A Common Stock that he, she, or it holds and timely delivers his, her, or its shares to the Transfer Agent, Compute Health will redeem the related shares of Compute Health Class A Common Stock for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two Business Days prior to the consummation of the Business Combination. For illustrative purposes, as of July 3, 2023, there was approximately $ 98,078,508 on deposit in the Trust Account, which would have amounted to approximately $10.63 per issued and outstanding public share. If a Public Stockholder exercises his, her, or its redemption rights, such Public Stockholder’s shares of Compute Health Class A Common Stock will (i) not be exchanged for shares of New Allurion Common Stock pursuant to the CPUH Merger and (ii) immediately prior to the CPUH Merger Effective Time, be canceled and cease to exist, and be redeemed for the consideration, and on the terms and subject to the conditions and limitations, set forth in the Business Combination Agreement, the Compute Health Certificate of Incorporation, the Trust Agreement and this proxy statement/prospectus. See the subsection entitled “The Special MeetingRedemption Rights” for the procedures to be followed if you wish to redeem your shares of Compute Health Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares of Compute Health Class A Common Stock with respect to more than an aggregate of 15% of the shares of Compute Health Class A Common Stock. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of Compute Health Class A Common Stock, then any such shares in excess of that 15% limit would not be redeemed for cash.

Pursuant to the IPO Letter Agreement, the Sponsor and the Initial Stockholders have agreed to waive their redemption rights with respect to any shares of Compute Health Common Stock they may hold in connection with either the consummation of Compute Health’s initial business combination or a stockholder vote to extend the timing by which Compute Health must complete its initial business combination. No consideration was provided in exchange for the waiver of redemption rights in the IPO Letter Agreement.

In addition, if a Public Stockholder does not redeem his, her, or its shares of Compute Health Class A Common Stock, but other Public Stockholders do elect to redeem, the non-redeeming stockholders would own shares with a lower book value per share.

Public Stockholders who wish to redeem their shares of Compute Health Class A Common Stock for a pro rata portion of the funds held in the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If Public Stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of Compute Health Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

Public Stockholders electing to redeem their shares of Compute Health Class A Common Stock will receive their pro rata portion of the funds held in the Trust Account calculated as of two Business Days prior to the consummation of the Business Combination, including interest, less taxes payable. Please see the subsection entitled “The Special Meeting — Redemption Rights” for additional information on how to exercise your redemption rights.

 

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Q:

WHAT ARE THE POSSIBLE SOURCES AND THE EXTENT OF DILUTION THAT THE PUBLIC STOCKHOLDERS THAT ELECT NOT TO REDEEM THEIR SHARES WILL EXPERIENCE IN CONNECTION WITH THE BUSINESS COMBINATION AND RELATED TRANSACTIONS?

 

A:

The following table shows all possible sources and the extent of dilution our shareholders who elect not to redeem their shares may experience in connection with the Business Combination, the PIPE Investment, the Fortress Financing, the Revenue Interest Financing, and the Incremental Financing, assuming no redemption, intermediate levels of redemption and maximum redemption scenarios, assuming no Contingency Shares or Backstop Shares are issued, assuming the aggregate Backstop Amount is zero, assuming that the balance of the HVL Bridge Note is $6.5 million immediately prior to the Closing and assuming that $17 million of transaction expenses are assumed and paid by New Allurion and no expenses which would be payable by Compute Health or New Allurion are deducted from their consideration at or after the Closings. In addition, the following table is further based on the assumptions set forth in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” This maximum redemption scenario set forth in the following table assumes that Public Stockholders holding 8,523,194 shares of Compute Health Class A Common Stock (being all Class A Common Stock held by Public Shareholders) will exercise their redemption rights for their pro rata share (approximately $10.23 per share) of the funds in the Trust Account.

 

    No
Redemptions
    %
Outstanding
    25%
Redemptions
    %
Outstanding
    50%
Redemptions
    %
Outstanding
    75%
Redemptions
    %
Outstanding
    Maximum
Redemptions
    %
Outstanding
 

New Allurion Common Stock issued in connection with Mergers

    29,227,362       32     29,227,362       33     29,227,362       35     28,898,803       35     28,025,600       36

New Allurion Common Stock owned by Compute Health public shareholders

    12,106,814       13     9,080,111       10     6,053,407       7     3,026,705       4           0

New Allurion Common Stock owned by Medtronic, not subject to redemption

    994,318       1     994,318       1     994,318       1     994,318       1     994,318       1

New Allurion Common Stock owned by Compute Health Sponsor

    2,999,098       3     2,999,098       3     2,999,098       4     2,994,867       4     2,983,625       4

New Allurion Common Stock issued in connection with the Revenue Interest Financing

    250,000       0     250,000       0     250,000       0     455,048       0     1,000,000       1

New Allurion Common Stock issued in connection with the Fortress Financing

    250,000       0     250,000       0     250,000       0     455,048       0     1,000,000       1

New Allurion Common Stock owned by HVL

    1,600,000       2     1,600,000       2     1,600,000       2     1,600,000       2     1,600,000       2

New Allurion Common Stock owned by other Allurion Convertible Noteholders

    1,625,122       2     1,625,122       2     1,625,122       2     1,607,497       2     1,560,653       2

New Allurion Common Stock issued in connection with PIPE Investment

    5,386,695       6     5,386,695       7     5,386,695       6     5,386,695       7     5,386,695       7

New Allurion Common Stock issued in connection with the Commitment fees of Chardan Equity Facility

    35,511       0     35,511       0     35,511       0     35,511       0     35,511       0

Potential sources of dilution:

                   

New Allurion Public Warrants

    30,628,308       34     30,628,308       35     30,628,308       36     30,628,308       38     30,628,308       39

New Allurion Options to be issued at effective time of the Intermediate Merger

    4,486,492       5     4,486,492       5     4,486,492       5     4,437,833       5     4,308,513       5

New Allurion RSU Awards to be issued at effective time of the Intermediate Merger

    561,880       1     561,880       1     561,880       1     555,786       1     539,590       1

New Allurion Warrants to be issued at effective time of the Intermediate Merger

    454,428       1     454,428       1     454,428       1     449,499       1     436,401       1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    90,606,028       100     87,579,325       100     84,552,621       100     81,525,918       100     78,499,214       100
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Q:

WILL HOW I VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

 

A:

No. You may exercise your redemption rights whether you vote your shares of Compute Health Class A Common Stock for or against, or whether you abstain from voting on, the Business Combination Proposals or any other Stockholder Proposal. As a result, the Business Combination Proposals can be approved by Compute Health Stockholders who will redeem their shares of Compute Health Class A Common Stock and no longer remain stockholders and the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are substantially reduced as a result of redemptions by Public Stockholders. Also, with fewer shares of Compute Health Class A Common Stock and Public Stockholders, the trading market for New Allurion Common Stock may be less liquid than the market for Compute Health Class A Common Stock prior to the Business Combination and New Allurion may not be able to meet the listing standards of a national securities exchange. In addition, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into New Allurion’s businesses will be reduced.

 

Q:

HOW DO I EXERCISE MY REDEMPTION RIGHTS?

 

A:

If you are a holder of Compute Health Class A Common Stock and wish to exercise your redemption rights, you must demand that Compute Health redeem your shares for cash no later than the second Business Day preceding the vote on the Business Combination Proposals by delivering your share certificates (if any) and other redemption forms to the Transfer Agent physically or electronically using DTC’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the Special Meeting. Holders of Compute Health Units must elect to separate and cancel their Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants prior to exercising redemption rights with respect to the shares of Compute Health Class A Common Stock. If Public Stockholders hold their Compute Health Units in an account at a brokerage firm or bank, such Public Stockholders must notify their broker or bank that they elect to separate and cancel their Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants, or if a Public Stockholder holds Compute Health Units registered in his, her, or its own name, the holder must contact the Transfer Agent directly and instruct it to do so. Any Public Stockholder will be entitled to demand that such Public Stockholder’s shares be redeemed for a per-share price, payable in cash, equal to the full pro rata portion of the amount then in the Trust Account (calculated as of two Business Days prior to the consummation of the Business Combination, which, for illustrative purposes, was approximately $98.1 million, or approximately $10.63 per issued and outstanding share of Compute Health Class A Common Stock, as of July 3, 2023, the record date). Such amount, including interest earned on the funds held in the Trust Account and not previously released to Compute Health to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be paid promptly upon consummation of the Business Combination. However, the proceeds deposited in the Trust Account could become subject to the claims of Compute Health’s creditors, if any, which could have priority over the claims of the Public Stockholders, regardless of whether such Public Stockholders vote for or against the Business Combination Proposals. Therefore, the per share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any Stockholder Proposal will have no impact on the amount you will receive upon exercise of your redemption rights.

Any request for redemption made by a holder of Compute Health Class A Common Stock may not be withdrawn once submitted to Compute Health unless the Compute Health Board determines (in its sole discretion) to permit the withdrawal of such redemption request (which it may do in whole or in part).

Any corrected or changed proxy card or written demand of redemption rights must be received by the Transfer Agent prior to the vote taken on the Business Combination Proposals at the Special Meeting. No demand for redemption will be honored unless the holder’s share certificates (if any) and other redemption forms have been delivered (either physically or electronically) to the Transfer Agent prior to the vote at the Special Meeting.

 

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If a Public Stockholder properly makes a request for redemption and the certificates for the Compute Health Class A Common Stock (if any) along with the redemption forms are delivered as described to the Transfer Agent as described herein, then, if the Business Combination is consummated, Compute Health will redeem these shares for the pro rata portion of funds deposited in the Trust Account as described above. If you exercise your redemption rights, then you will be exchanging your shares of Compute Health Class A Common Stock for the consideration, and on the terms and subject to the conditions and limitations, set forth in the Business Combination Agreement, the Compute Health Certificate of Incorporation, the Trust Agreement, and this proxy statement/prospectus, and you will not receive shares of New Allurion Common Stock.

 

Q:

WHAT ARE THE RISKS FOR ANY PUBLIC WARRANT HOLDERS FOLLOWING THE BUSINESS COMBINATION?

 

A:

Following the consummation of the Business Combination, New Allurion has the ability to redeem the outstanding New Allurion Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption to each such New Allurion Public Warrant Holder; provided that, among other things, the closing price of New Allurion Common Stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the subsection entitled “Description of Securities — Warrants — Redemptions of warrants when the price per share of New Allurion Common Stock equals or exceeds $10.00”) for any 20-trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption. The value received upon exercise of such warrants (i) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of such warrants, including because the number of shares of New Allurion Common Stock received upon exercise of such warrants in connection with redemption is capped at 0.361 shares of New Allurion Common Stock per warrant (subject to adjustment).

In the event New Allurion determines to redeem the New Allurion Public Warrants, holders of the redeemable warrants would be notified of such redemption as described in the Warrant Agreement (as amended by the Warrant Assumption Agreement). In addition, New Allurion may redeem New Allurion Public Warrants after they become exercisable for a number of shares of New Allurion Common Stock determined based on the redemption date and the fair market value of New Allurion Common Stock. Any such redemption may have similar consequences to a cashless redemption described in the subsection entitled “Description of Securities — Warrants — Public Warrants.” In addition, such redemption may occur at a time when the New Allurion Public Warrants are “out-of-the-money,” in which case New Allurion Public Warrant Holders would lose any potential embedded value from a subsequent increase in the value of New Allurion Common Stock had the New Allurion Public Warrants remained outstanding. For more information, see the subsection entitled “Description of Securities — Warrants — Public Warrants.”

All outstanding Compute Health Public Warrants will continue to be outstanding notwithstanding the actual redemptions of the Compute Health Class A Common Stock and will become New Allurion Public Warrants. The redeeming Public Stockholders, regardless of whether they redeem, would retain 21,562,500 Compute Health Public Warrants, which will become New Allurion Public Warrants, with a market value of approximately $11,643,750 based on the closing price of $0.54 per Compute Health Public Warrant on the NYSE on June 23, 2023. Because the Compute Health Public Warrants will remain outstanding and become New Allurion Public Warrants regardless of the level of redemptions, as redemptions of the Compute Health Class A Common Stock increases, the New Allurion Public Warrant Holders who exercise such warrants will ultimately own a greater interest in New Allurion because there would be fewer shares of New Allurion Common Stock outstanding overall. See the risk factor entitled “Compute Health Stockholders who redeem their shares of Compute Health Class A Common Stock may continue to hold any Compute Health Public Warrants that they own, which will result in additional dilution to non-redeeming Compute Health Stockholders upon exercise of such Compute Health Public Warrants, as applicable.”

 

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Q:

HOW DO REDEMPTIONS OF COMPUTE HEALTH CLASS A COMMON STOCK IMPACT THE CLOSING OF THE BUSINESS COMBINATION, THE CONSUMMATION OF THE FORTRESS FINANCING, THE NET CLOSING CASH CONDITION AND THE FORTRESS CLOSING CASH CONDITION?

 

A:

Subject to certain exceptions, the Net Closing Cash Condition is for the mutual benefit of Allurion and Compute Health and, as a result, each of Allurion and Compute Health has the right to waive the Net Closing Cash Condition and, subject to satisfaction or waiver of the other conditions to the closing of the Business Combination, to cause the closing of the Business Combination to occur even if Net Closing Cash is less than $70.0 million. Assuming the receipt of all proceeds from the PIPE Investment, Incremental Financing, Fortress Financing, Revenue Interest Financing and other sources set out in the Business Combination Agreement, the Net Closing Cash Condition will be satisfied even if all shares of Compute Health Class A Common Stock are redeemed.

Even if the Net Closing Cash Condition was waived by Compute Health or Allurion, the Business Combination Agreement requires that Compute Health have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately prior to the CPUH Merger Effective Time.

The consummation of the Fortress Financing is conditioned upon New Allurion having received, on the Closing Date, net cash proceeds of the Business Combination, the PIPE Investment, Incremental Financing (in excess of $15 million), Fortress Financing and Revenue Interest Financing (the “Fortress Closing Cash”), of at least $70.0 million (the “Fortress Closing Cash Condition”). Similarly to the Net Closing Cash Condition, the Fortress Closing Cash Condition allows for the payment of certain fees and expenses, notwithstanding that the payment of such fees and expenses may result in the Fortress Closing Cash being less than $70.0 million. However, unlike the Net Closing Cash Condition, if such fees and expenses exceed $6.0 million and the Fortress Closing Cash is less than $70.0 million, the Fortress Closing Cash Condition will not be met.

The Fortress Closing Cash Condition is for the benefit of Fortress and, as a result, only Fortress has the right, but not the obligation, to waive the Fortress Closing Cash Condition and, subject to satisfaction or waiver of the other conditions to the closing of the Fortress Financing, to cause the consummation of the Fortress Financing to occur even if the Fortress Closing Cash is less than $70.0 million.

 

Q:

WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY REDEMPTION RIGHTS?

 

A:

The receipt of cash by a Public Stockholder in redemption of its Compute Health Class A Common Stock will be a taxable transaction for U.S. federal income tax purposes. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see the subsection entitled “U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Considerations for Holders of Compute Health Class A Common Stock and Compute Health Warrants.”

All Public Stockholders considering exercising redemption rights should consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.

 

Q:

DO I HAVE APPRAISAL RIGHTS IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION?

 

A:

Yes. Pursuant to Section 262 of the DGCL and the terms of the Business Combination Agreement, Compute Health Stockholders who comply with the applicable requirements of Section 262 of the DGCL and do not otherwise fail to perfect, waive, withdraw or lose the right to appraisal under Delaware law prior to the CPUH Merger Effective Time have the right to seek appraisal of the fair value of their shares of Compute

 

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  Health Common Stock as determined by the Court of Chancery. The “fair value” of the shares of Compute Health Common Stock held by Compute Health Stockholders that exercise their appraisal rights as determined by the Court of Chancery may be more or less than, or the same as, the value of the consideration that such Compute Health Stockholders may otherwise be entitled to receive pursuant to the CPUH Merger under the Business Combination Agreement. Compute Health Stockholders who do not consent to the adoption of the Business Combination Agreement and who wish to preserve their appraisal rights must so advise Compute Health by submitting a demand for appraisal within the period prescribed by Section 262 of the DGCL after receiving a notice from Compute Health that appraisal rights are available to them, and must otherwise precisely follow the procedures prescribed by Section 262 of the DGCL. If a Compute Health Stockholder fails to perfect or otherwise waives, withdraws, or loses such Compute Health Stockholder’s right to appraisal under Section 262 of the DGCL, then such Compute Health Stockholder’s shares of Compute Health Common Stock will be exchangeable solely for the right to receive the CPUH Merger consideration pursuant to the terms and conditions of the Business Combination Agreement.

Pursuant to Section 262 of the DGCL and the terms of the Business Combination Agreement, Allurion Stockholders who comply with the applicable requirements of Section 262 of the DGCL and do not otherwise fail to perfect, waive, withdraw, or lose the right to appraisal under Delaware law prior to the Intermediate Merger Effective Time have the right to seek appraisal of the fair value of their Allurion Shares as determined by the Court of Chancery. The “fair value” of the Allurion Shares held by Allurion stockholders that exercise their appraisal rights as determined by the Court of Chancery may be more or less than, or the same as, the value of the consideration that such Allurion Stockholders may otherwise be entitled to receive pursuant to the Intermediate Merger under the Business Combination Agreement. Allurion Stockholders who do not consent to the adoption of the Business Combination Agreement and who wish to preserve their appraisal rights must so advise Allurion by submitting a demand for appraisal within the period prescribed by Section 262 of the DGCL after receiving a notice from Allurion that appraisal rights are available to them, and must otherwise precisely follow the procedures prescribed by Section 262 of the DGCL. If an Allurion stockholder fails to perfect or otherwise waives, withdraws or loses such Allurion stockholder’s right to appraisal under Section 262 of the DGCL, then such Allurion stockholder’s Allurion Shares will be exchangeable solely for the right to receive the Intermediate Merger consideration pursuant to the terms and conditions of the Business Combination Agreement.

Failure to follow any of the statutory procedures set forth in Section 262 of the DGCL will result in the loss or waiver of appraisal rights under Delaware law. In view of the complexity of Section 262 of the DGCL, Compute Health and Allurion Stockholders that wish to pursue appraisal rights should consult their legal and financial advisors. For additional information on appraisal rights, see the subsection entitled “The Special Meeting — Appraisal Rights.”

For additional risks relating to the redemption of shares to remaining Compute Health Stockholders see the subsections entitled “Risk Factors — Compute Health may amend the terms of the warrants in a manner that may be adverse to holders of Compute Health Public Warrants with the approval of the holders of at least 50% of each of (i) the then outstanding Compute Health Public Warrants and (ii) the then outstanding Compute Health Private Warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be shortened, and the number of shares of Compute Health Class A Common Stock purchasable upon exercise of a warrant could be decreased, all without approval of each warrant affected,” and “Risk Factors — Compute Health may redeem unexpired Compute Health Warrants prior to their exercise at a time that is disadvantageous to holders of Compute Health Warrants, thereby making such warrants worthless.”

 

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Q:

WHAT ARE THE MATERIAL DIFFERENCES, IF ANY, IN THE TERMS AND PRICE OF SECURITIES ISSUED AT THE TIME OF THE IPO AS COMPARED TO THE SECURITIES THAT WILL BE ISSUED AS PART OF THE PIPE INVESTMENT AT THE CPUH MERGER EFFECTIVE TIME? WILL THE SPONSOR OR ANY OF ITS DIRECTORS, OFFICERS OR AFFILIATES PARTICIPATE IN THE PIPE INVESTMENT?

 

A.

Compute Health issued the Compute Health Units in the IPO at an offering price of $10.00 per Compute Health Unit, with each Compute Health Unit consisting of one share of Compute Health Class A Common Stock and one-quarter of one redeemable Compute Health Public Warrant. At the CPUH Merger Effective Time, each outstanding share of Compute Health Class A Common Stock will be cancelled in exchange for the right to receive the number of shares of New Allurion Common Stock equal to the CPUH Exchange Ratio and each Compute Health Warrant will be assumed and automatically converted into one New Allurion Public Warrant to purchase a number of shares of New Allurion Common Stock equal to the applicable exchange ratio (subject to the Consent Solicitation) pursuant to the Warrant Agreement (as amended by the Warrant Assumption Agreement). In connection with the consummation of the Business Combination, the PIPE Investors will purchase 5,386,695 shares of New Allurion Common Stock at a price of $7.04 per share as part of the PIPE Investment and will therefore hold the same security as the holders of Compute Health Class A Common Stock immediately after the Business Combination.

Unlike other business combinations with special purpose acquisition companies, the transactions contemplated in the Business Combination are structured to provide holders of Compute Health Class A Common Stock that do not redeem their shares in connection with the Business Combination with a right to receive 1.420455 shares of New Allurion Common Stock in exchange for each share of Compute Health Class A Common Stock not redeemed. These shares are being registered pursuant to the registration statement of which this proxy statement/prospectus forms a part and will be delivered as shares of New Allurion Common Stock. By virtue of the CPUH Recapitalization (which effectively cancels out this additional consideration mechanism), neither Sponsor nor the Additional Class B Holders will receive the benefit of such additional shares. For more information about what Compute Health Stockholders will own following the Business Combination, see the section entitled “Beneficial Ownership of Securities.”

Omar Ishrak, Chairman of Compute Health, is participating in the PIPE Investment and has agreed to invest approximately $5 million on the same terms as the PIPE Investors in the PIPE Investment. No other director, officer or affiliate of Compute Health will participate in the PIPE Investment.

 

Q:

HOW WILL THE CPUH MERGER AFFECT MY SHARES OF COMPUTE HEALTH CLASS A COMMON STOCK, COMPUTE HEALTH PUBLIC WARRANTS AND COMPUTE HEALTH UNITS?

 

A:

On the Closing Date and prior to the CPUH Merger Effective Time, each outstanding share of Compute Health Class B Common Stock will automatically be recapitalized into shares of Compute Health Class A Common Stock in the CPUH Recapitalization as set forth in the Sponsor Support Agreement, and each such share of Compute Health Class A Common Stock will then, at the CPUH Merger Effective Time and following the transactions contemplated by the Sponsor Contribution Agreement, convert into shares of New Allurion Common Stock at the CPUH Exchange Ratio. On the Closing Date and immediately prior to the CPUH Merger Effective Time, each outstanding Compute Health Unit (each of which consists of one share of Compute Health Class A Common Stock and one-quarter of one Compute Health Public Warrant) will be automatically separated and canceled into one share of Compute Health Class A Common Stock and one-quarter of one Compute Health Public Warrant. On the Closing Date and at the CPUH Merger Effective Time, pursuant to the CPUH Merger, (x) each outstanding share of Compute Health Class A Common Stock will automatically convert into a number of shares of New Allurion Common Stock equal to the CPUH Exchange Ratio and (y) the outstanding Compute Health Public Warrants (including, for the avoidance of doubt, Compute Health Public Warrants following the separation and cancelation of Compute Health Units) to purchase Compute Health Class A Common Stock will be assumed by New Allurion and converted into

 

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  New Allurion Public Warrants to purchase shares of New Allurion Common Stock equal to the applicable exchange ratio (subject to the Consent Solicitation) pursuant to the Warrant Agreement (as amended by the Warrant Assumption Agreement). Such warrants will become exercisable into shares of New Allurion Common Stock 30 days following the completion of the Business Combination.

 

Q:

WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE CPUH MERGER?

 

A:

The net proceeds of the IPO, together with funds raised from the private sale of the Compute Health Private Warrants simultaneously with the consummation of the IPO, were placed in the Trust Account immediately following the IPO. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of Compute Health Class A Common Stock who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination, and, together with the proceeds of the PIPE Investment, Revenue Interest Financing, and Fortress Financing, to pay for New Allurion’s working capital and general corporate purposes.

 

Q:

WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE CPUH MERGER?

 

A:

As discussed more fully under the subsection entitled “U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Considerations for Holders of Compute Health Class A Common Stock and Compute Health Warrants,” Skadden, Arps, Slate, Meagher & Flom LLP has delivered an opinion that the CPUH Merger should qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code. Assuming that the CPUH Merger so qualifies, holders of Compute Health Class A Common Stock or Compute Health Public Warrants will generally not recognize gain or loss upon the exchange of such securities for New Allurion Common Stock or New Allurion Public Warrants.

The U.S. federal income tax consequences of the CPUH Merger depend on each stockholder’s or warrantholders, as applicable, particular facts and circumstances. Accordingly, all holders should consult their tax advisors regarding the tax consequences to them of the CPUH Merger, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the CPUH Merger, see the subsection entitled “U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Considerations for Holders of Compute Health Class A Common Stock and Compute Health Warrants.

 

Q:

WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE BUSINESS COMBINATION?

 

A:

As discussed more fully under the subsection entitled “U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Considerations for Holders of Allurion Shares,” it is intended that the Intermediate Merger and the Final Merger be considered together as a single integrated transaction and shall together constitute a reorganization within the meaning of Section 368(a) of the Code. Assuming that the Intermediate Merger and Final Merger so qualify, holders of Allurion Shares will generally not recognize gain or loss upon the exchange of such securities for New Allurion Shares.

The U.S. federal income tax consequences of the Intermediate Merger and Final Merger depend on each holder of capital stock’s particular facts and circumstances. Accordingly, all holders should consult their tax advisors regarding the tax consequences to them of the Intermediate Merger and Final Merger, including the applicability and effect of U.S. federal, state, local, and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Intermediate Merger and Final Merger, see the subsection entitled “U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Considerations for Holders of Allurion Shares.

 

Q:

HOW DO THE INITIAL STOCKHOLDERS INTEND TO VOTE ON THE STOCKHOLDER PROPOSALS?

 

A:

The Initial Stockholders own of record and are entitled to vote approximately 70.0% of the aggregate voting power of Compute Health Common Stock. The Initial Stockholders have agreed to vote any shares of Compute Health Common Stock held by them as of the record date in favor of the Stockholder Proposals.

 

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Q:

WHAT CONSTITUTES A QUORUM AT THE SPECIAL MEETING?

 

A:

The holders of a majority of the voting power of the issued and outstanding Compute Health Common Stock entitled to vote at the Special Meeting must be present in person, online or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The Initial Stockholders, who currently own approximately 70% of the aggregate voting power of Compute Health Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has the power to adjourn the Special Meeting. As of the record date, 15,377,848 shares of Compute Health Common Stock would be required to achieve a quorum.

 

Q:

WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING?

 

A:

The Business Combination Proposals: The approval of the Business Combination Proposals requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. Compute Health Stockholders must approve the Business Combination Proposals in order for the Business Combination to occur. Adoption of the Business Combination Proposals is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Business Combination Proposals, subject to the terms of the Business Combination Agreement. If the Business Combination Proposals are not approved, the other proposals (except the Adjournment Proposal) will not be presented to the Compute Health stockholders for a vote. Pursuant to the Sponsor Support Agreement, the Sponsor and the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of the Compute Health Common Stock in favor of the Business Combination Proposals. As such, only the affirmative vote of 4,611,598 of the outstanding shares of Compute Health Class A Common Stock is required in order to approve the Business Combination Proposals.

The Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. Adoption of the Organizational Document Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned on the approval of the Organizational Documents Proposals, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Organizational Documents Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Organizational Documents Proposal will not be effected. If Compute Health stockholders fail to approve the Organizational Documents Proposal, the Business Combination will not occur. Pursuant to the Sponsor Support Agreement, the Sponsor and the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of Compute Health Common Stock in favor of the Organizational Documents Proposals. As such, only the affirmative vote of 4,611,598 of the outstanding shares of Compute Health Class A Common Stock are required in order to approve the Organizational Documents Proposal.

The Advisory Organizational Documents Proposals: The approval of any of the Advisory Organizational Documents Proposals is not otherwise required by Delaware law separate and apart from the Organizational Documents Proposal, but, pursuant to SEC guidance, Compute Health is required to submit these provisions to its stockholders separately for approval. Each Advisory Organizational Documents Proposal will be considered approved if approved by the affirmative vote of (i) the holders of a majority of the outstanding shares of Compute Health Common Stock and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. However, the stockholder votes regarding these proposals are advisory votes and are not binding on Compute Health or the Compute Health Board (separate and apart from the approval of the Organizational Documents Proposal). Notwithstanding the approval of

 

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the Advisory Organizational Documents Proposals, if the Business Combination is not consummated for any reason, the actions contemplated by the Advisory Organizational Documents Proposals will not be effected. Pursuant to the Sponsor Support Agreement, the Sponsor and the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of the Compute Health Common Stock in favor of the Advisory Organizational Documents Proposals. As such, only the affirmative vote of 4,611,598 of the outstanding shares of Compute Health Class A Common Stock are required in order to approve the Advisory Organizational Documents Proposals.

The Exchange Proposal: The approval of the Exchange Proposal requires the affirmative vote of (i) a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. Adoption of the Exchange Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. The Business Combination is conditioned upon the approval of the Exchange Proposal, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Exchange Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Exchange Proposal will not be effected. Pursuant to the Sponsor Support Agreement, the Sponsor the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of the Compute Health Common Stock in favor of the Exchange Proposal. As such, only the affirmative vote of 4,611,598 of the issued and outstanding shares of Compute Health Class A Common Stock are required in order to approve the Exchange Proposal.

The Equity Incentive Plan Proposal: The Equity Incentive Plan Proposal will be considered approved if approved by the affirmative vote of (i) a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon and (ii) a majority of the outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. Adoption of the Equity Incentive Plan Proposal is conditioned on the approval of each of the Required Transaction Proposals at the Special Meeting. Pursuant to the Sponsor Support Agreement, the Sponsor and the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of the Compute Health Common Stock in favor of the Equity Incentive Plan Proposal. As such, only the affirmative vote of 4,611,598 of the issued and outstanding shares of Compute Health Class A Common Stock are required in order to approve the Equity Incentive Plan Proposal.

The Adjournment Proposal: The approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the votes cast by the holders of Compute Health Common Stock present in person, online or represented by proxy at the Special Meeting and entitled to vote thereon. The Adjournment Proposal is not conditioned upon any other Stockholder Proposal. If Compute Health stockholders fail to approve the Adjournment Proposal, the Business Combination will not occur. Pursuant to the Sponsor Support Agreement, the Sponsor and the Additional Class B Holders have agreed to vote shares representing approximately 70.0% of the aggregate voting power of the Compute Health Common Stock in favor of the Adjournment Proposal. As such, no affirmative votes of the outstanding shares of Compute Health Class A Common Stock are required in order to approve the Adjournment Proposal.

 

Q:

DO ANY OF COMPUTE HEALTH’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF COMPUTE HEALTH STOCKHOLDERS?

 

A:

Compute Health’s executive officers and certain non-employee directors may have interests in the Business Combination that may be different from, or in addition to, the interests of Compute Health Stockholders generally. The Compute Health Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination Agreement and the transactions contemplated thereby be approved by the Compute Health Stockholders. See the subsection entitled “Proposal No. 1 — The Business

 

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  Combination Proposals — Interests of Compute Health Directors and Officers in the Business Combination.” In evaluating the Business Combination and determining whether to recommend the Compute Health Stockholders approve the Business Combination, the Compute Health Board also considered, among other things, the fairness opinion delivered by Compute Health’s independent financial advisor, Lincoln, that concluded that the consideration to be paid by New Allurion in the Business Combination is fair, from a financial point of view, to the holders of Compute Health Class A Common Stock (other than (a) holders of Compute Health Class A Common Stock who elect to redeem their shares prior to or in connection with the Business Combination, (b) officers, directors, or affiliates of Compute Health or the Sponsor, and (c) the Sponsor). For more information on the fairness opinion, see the subsection entitled “The Business Combination Agreement — Opinion of Lincoln, the Financial Advisor to Compute Health.” For more information about the Sponsor shares subject to recapitalization, see the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.” For more information about the transactions contemplated by the Sponsor Contribution Agreement, see the subsection entitled “The Business Combination AgreementRelated AgreementsSponsor Contribution Agreement.”

For additional information regarding pre-existing relationships between certain of the parties to the Business Combination Agreement and certain of their affiliates, see the subsection entitled “Risk Factors — Risks Related to the Business Combination and Compute Health — Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination.

 

Q:

WHAT DO I NEED TO DO NOW?

 

A:

After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxies as soon as possible so that your shares will be represented at the Special Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by your broker, bank, or other nominee if your shares are held in the name of your broker, bank, or other nominee.

 

Q:

HOW DO I VOTE?

 

A:

If you are a stockholder of record of Compute Health as of July 3, 2023 you may submit your proxy before the Special Meeting in any of the following ways:

 

   

use the toll-free number shown on your proxy card;

 

   

visit the website shown on your proxy card to vote via the internet; or

 

   

complete, sign, date, and return the enclosed proxy card in the enclosed postage-paid envelope.

If you are a stockholder of record of Compute Health as of the record date, you may also cast your vote at the Special Meeting.

If your shares are held in “street name” through a broker, bank, or other nominee, your broker, bank, or other nominee will send you separate instructions describing the procedure for voting your shares. “Street name” stockholders who wish to vote at the Special Meeting will need to obtain a legal proxy form from their broker, bank, or other nominee.

 

Q:

WHEN AND WHERE IS THE SPECIAL MEETING?

 

A:

The Special Meeting will be held on July 28, 2023, at 9:00 a.m. Eastern Time. For the purposes of the Compute Health Certificate of Incorporation, the physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. Compute Health encourages you to use remote methods of attending the Special Meeting or to attend via proxy. You may attend the Special Meeting and vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/2023. You will need the meeting control number that is printed on your proxy card to enter the Special Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 4267501#. All Compute Health Stockholders as of the record date, or their duly appointed proxies, may attend the Special Meeting.

 

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Q:

IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK, OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME?

 

A:

If your shares are held in “street name” in a stock brokerage account or by a broker, bank, or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank, or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to Compute Health or by voting at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank, or other nominee. In addition to such legal proxy, if you plan to attend the Special Meeting, but are not a stockholder of record because you hold your shares in “street name,” please have evidence of your beneficial ownership of your shares (e.g., a copy of a recent brokerage statement showing the shares) and valid photo identification with you at the Special Meeting.

Under the rules of the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all of the Stockholder Proposals are “non-routine” matters. Broker non-votes occur when a broker, bank, or other nominee is not instructed by the beneficial owner of shares to vote on a particular Stockholder Proposal for which the broker does not have discretionary voting power.

If you are a Compute Health Stockholder holding your shares in “street name” and you do not instruct your broker, bank, or other nominee on how to vote your shares, your broker, bank, or other nominee will not vote your shares on the Stockholder Proposals. Such abstentions and broker non-votes will have the same effect as a vote against the Separate Class Vote Proposals.

 

Q:

WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

 

A:

For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting and does not vote or returns a proxy with an “abstain” vote.

If you are a Compute Health Stockholder that attends the Special Meeting and fails to vote on any of the Stockholder Proposals, or if you respond to any Stockholder Proposal with an “abstain” vote, your failure to vote or “abstain” vote in each case will have the same effect as a vote against the Separate Class Vote Proposals and will have no effect on the Adjournment Proposal.

 

Q:

WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

 

A:

If you sign and return your proxy card without indicating how to vote on any particular Stockholder Proposal, the Compute Health shares represented by your proxy will be voted as recommended by the Compute Health Board with respect to that Stockholder Proposal.

 

Q:

MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD?

 

A:

Yes. You may change your vote at any time before your proxy is voted at the Special Meeting. You may do this in one of three ways:

 

   

filing a notice with the Secretary of Compute Health;

 

   

mailing a new, subsequently dated proxy card; or

 

   

by attending the Special Meeting and electing to vote your shares.

 

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If you are a stockholder of record of Compute Health and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to Compute Health, 1100 North Market Street, 4th Floor, Wilmington, Delaware 19890 and it must be received at any time before the vote is taken at the Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. New York City time on July 27, 2023, or by voting at the Special Meeting. Simply attending the Special Meeting will not revoke your proxy. If you have instructed a broker, bank, or other nominee to vote your shares of Compute Health Common Stock, you must follow the directions you receive from your broker, bank, or other nominee in order to change or revoke your vote.

 

Q:

WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE SPECIAL MEETING?

 

A:

If you fail to take any action with respect to the Special Meeting and the Business Combination is approved by the requisite Compute Health Stockholders and consummated, you will be a stockholder of New Allurion. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will continue to be a stockholder of Compute Health while Compute Health searches for another target business with which to complete a business combination.

 

Q:

WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

 

A:

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered under more than one name, you will receive more than one proxy card. Please complete, sign, date, and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares.

 

Q:

WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS, VOTING, OR THE BUSINESS COMBINATION?

 

A:

If you have any questions about the proxy materials, need assistance submitting your proxy or voting your shares, or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Morrow Sodali, the proxy solicitation agent for Compute Health, at the following address and telephone number:

Morrow Sodali

Individuals call toll-free: (800) 662-5200

Banks and Brokerage Firms, please call: (203) 658-9400

Email: CPUH.info@investor.morrowsodali.com

If you are a holder of shares of Compute Health Class A Common Stock and you intend to seek redemption of your shares, you will need to deliver your shares of Compute Health Class A Common Stock (either physically or electronically) to the Transfer Agent, at the address below prior to 5:00 p.m., New York City Time, on July 26, 2023. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mark Zimkind

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Email: mzimkind@continentalstock.com

 

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QUESTIONS AND ANSWERS ABOUT THE WARRANT AMENDMENT AND THE WARRANT HOLDERS MEETING

The following are answers to certain questions that you may have regarding the Warrant Amendment and Warrant Holders Meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this proxy statement/prospectus.

QUESTIONS AND ANSWERS ABOUT THE WARRANT AMENDMENT

 

Q:

WHAT IS THE PURPOSE OF THE AMENDMENT FOR WHICH APPROVAL IS BEING SOUGHT?

 

A:

Approval is being sought from Compute Health Warrant Holders as of the record date in order to (i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination, each of the outstanding Compute Health Public Warrants, which currently entitle the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50 per share, will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder will be issued one-half of one New Allurion Public Warrant for each outstanding Compute Health Public Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation, the substantive text of which is included as Annex D to this proxy statement/prospectus. Amended warrants will be exercisable only for a whole number of shares of common stock.

The Compute Health Warrants currently provide, in section 4.5 of the Warrant Agreement, that, in the event that Compute Health merges or consolidates with or into another corporation and the other corporation is the surviving corporation, Compute Health Warrant Holders shall thereafter have the right to purchase and receive, upon exercise of their warrants and in lieu of one share of Compute Health Class A Common Stock, such consideration as they would have received had the Compute Health Warrant Holder exercised their Compute Health Warrant immediately prior to such merger or consolidation. Compute Health Stockholders will receive 1.420455 shares of New Allurion Common Stock in exchange for each one share of Compute Health Class A Common Stock that they do not redeem in connection with the Business Combination. If the Warrant Amendment Proposal is not adopted, then Compute Health Warrant Holders (i) will, upon consummation of the Business Combination, receive one warrant of New Allurion for each Compute Health Warrant that they hold and (ii) each such warrant of New Allurion would be exercisable for 1.420455 shares of New Allurion Common Stock for an exercise price of $11.50 per share.

 

Q:

WHAT CHANGES WILL BE MADE TO THE TERMS OF THE WARRANTS IF THE WARRANT AMENDMENT BECOMES OPERATIVE?

 

A:

We encourage you to review the substantive text of the proposed Warrant Amendment attached as Annex D to this proxy statement/prospectus. Please see the section entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal” for additional information.

 

Q:

WHAT PERCENTAGE OF OUTSTANDING WARRANTS MUST VOTE FOR THE WARRANT AMENDMENT PROPOSAL FOR THE WARRANT AMENDMENT TO BE APPROVED?

 

A:

Compute Health must receive affirmative votes or written consents representing at least 50% of each of (i) the outstanding Compute Health Public Warrants and (ii) the outstanding Compute Health Private Warrants for the Warrant Amendment Proposal to be approved.

 

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Q:

WHAT HAPPENS IF THE WARRANT AMENDMENT IS NOT COMPLETED?

 

A:

Amending the Warrant Agreement is not a condition to completion of the Mergers. If the Warrant Amendment Proposal is not approved but all conditions to the closing of the Business Combination are completed, or waived, the Business Combination will still be completed.

 

Q:

WHY AM I RECEIVING THIS DOCUMENT?

 

A:

Compute Health is sending this proxy statement/prospectus to the Compute Health Warrant Holders to help them decide how to vote their Compute Health Warrants with respect to the matters to be considered at the Warrant Holders Meeting. Compute Health Warrant Holders are being asked to consider and vote upon two separate proposals to: (a) (i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination, each of the Compute Health Warrants will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder will be issued one-half of a New Allurion Public Warrant for each outstanding Compute Health Public Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation; and (b) approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Warrant Holders Meeting, the Warrant Amendment Proposal would not be approved and adopted by the requisite Compute Health Warrant Holders.

QUESTIONS AND ANSWERS ABOUT THE WARRANT HOLDERS MEETING

 

Q:

WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

 

A:

Compute Health Warrant Holders are being asked to vote on the following Warrant Holder Proposals:

 

   

the Warrant Amendment Proposal; and

 

   

the Warrant Holders Adjournment Proposal.

The Business Combination is not conditioned upon the approval of the Warrant Amendment Proposal or the Warrant Holders Adjournment Proposal. If the Warrant Amendment Proposal and the Warrant Holders Adjournment Proposal are not approved but all conditions to the closing of the Business Combination are completed, or waived, the Business Combination will still be completed.

 

Q:

WHY IS COMPUTE HEALTH PROPOSING THE WARRANT HOLDER PROPOSALS?

 

A:

Compute Health was incorporated to effect a business combination.

On February 4, 2021, Compute Health completed its IPO, generating gross proceeds of $862.5 million, including the full exercise of the over-allotment option by the underwriters and the sale of Compute Health Private Warrants in a private placement to the Sponsor. Since the IPO, Compute Health’s activity has been limited to the evaluation of business combination candidates.

On February 9, 2023, Compute Health entered into the Existing Business Combination Agreement (and on May 2, 2023, entered into the BCA Amendment) pursuant to which, subject to the terms and conditions contained therein, Compute Health intends to complete a business combination with Allurion. Compute Health and Allurion have agreed that, as promptly as reasonably practicable following the date of the Business Combination Agreement, Compute Health and Allurion will, in accordance with terms, documentation and timing to be mutually agreed, solicit, and exercise reasonable best efforts to obtain, the

 

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approval of the registered holders of at least fifty percent (50%) of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants to amend the Compute Health Warrants as follows: (a)(i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination, each of the Compute Health Warrants will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder will be issued one-half of one New Allurion Public Warrant for each outstanding Compute Health Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation; and (b) approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Warrant Holders Meeting, the Warrant Amendment Proposal would not be approved and adopted by the Compute Health Warrant Holders.

For more information, see the subsection entitled “The Business Combination Agreement — The Compute Health Board’s Reasons for Approval of the Business Combination.”

 

Q:

WHAT CONSTITUTES A QUORUM AT THE WARRANT HOLDERS MEETING?

 

A:

The holders of at least 50% of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants outstanding and entitled to vote at the Warrant Holders Meeting must be present in person, online or represented by proxy at the Warrant Holders Meeting to constitute a quorum and in order to conduct business at the Warrant Holders Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum.

 

Q:

DO ANY OF COMPUTE HEALTH’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF COMPUTE HEALTH WARRANT HOLDERS?

A: Compute Health’s executive officers and certain non-employee directors may have interests in the Business Combination that may be different from, or in addition to, the interests of Compute Health Warrant Holders generally. The Compute Health Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination Agreement and the transactions contemplated thereby be approved by the Compute Health Stockholders. See the subsection entitled “Proposal No. 1 — The Business Combination Proposals — Interests of Compute Health Directors and Officers in the Business Combination.”

For additional information regarding pre-existing relationships between certain of the parties to the Business Combination Agreement and certain of their affiliates, see the subsection entitled “Risk Factors — Risks Related to the Business Combination and Compute Health — Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination.”

 

Q:

WHAT IS THE RECORD DATE?

 

A:

The record date will be the close of business on July 3, 2023. All Compute Health Warrant Holders of record at the close of business on this date will be entitled to vote on the Warrant Holder Proposals.

 

Q.

WHEN AND WHERE IS THE WARRANT HOLDERS MEETING?

 

A.

The Warrant Holders Meeting will be held prior to the Special Meeting on July 25, 2023 at 9:00 a.m., Eastern Time. The physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. Compute Health encourages you

 

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  to use remote methods of attending the Warrant Holders Meeting or to attend via proxy. You may attend the Warrant Holders Meeting and vote your Compute Health Warrants electronically during the Warrant Holders Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/warrant2023. You will need the meeting control number that is printed on your proxy card to enter the Warrant Holders Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 8520972#. All Compute Health Warrant Holders as of the record date, or their duly appointed proxies, may attend the Warrant Holders Meeting.

 

Q.

WHO IS ENTITLED TO VOTE AT THE WARRANT HOLDERS MEETING?

 

A.

Compute Health has fixed July 3, 2023 as the record date for the Warrant Holders Meeting. If you were a Compute Health Warrant Holder at the close of business on the record date, you are entitled to vote on matters that come before the Warrant Holders Meeting.

 

Q:

WHAT DO I NEED TO DO NOW?

 

A:

After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxies as soon as possible so that your Compute Health Warrants will be represented at the Warrant Holders Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by your broker, bank, or other nominee if your Compute Health Warrants are held in the name of your broker, bank, or other nominee.

 

Q.

HOW DO I VOTE?

 

A.

If you are a record owner of Compute Health Warrants at the close of business on the record date, you may submit your proxy before the Warrant Holders Meeting in any of the following ways:

 

   

use the toll-free number shown on your proxy card;

 

   

visit the website shown on your proxy card to vote via the internet; or

 

   

complete, sign, date, and return the enclosed proxy card in the enclosed postage-paid envelope.

If you are a Compute Health Warrant Holder of record as of the record date, you may also cast your vote at the Warrant Holders Meeting.

If your Compute Health Warrants are held in “street name” through a broker, bank, or other nominee, your broker, bank, or other nominee will send you separate instructions describing the procedure for voting your Compute Health Warrants. “Street name” Compute Health Warrant Holders who wish to vote at the Warrant Holders Meeting will need to obtain a legal proxy form from their broker, bank, or other nominee.

 

Q:

MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD?

 

A:

Yes. You may change your vote at any time before your proxy is voted at the Warrant Holders Meeting. You may do this in one of three ways:

 

   

filing a notice with the Secretary of Compute Health;

 

   

mailing a new, subsequently dated proxy card; or

 

   

by attending the Warrant Holders Meeting and electing to vote your Compute Health Warrants.

If you are a Compute Health Warrant Holder of record and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to Compute Health, 1100 North Market Street, 4th Floor, Wilmington, Delaware 19890 and it must be received at any time before the vote is taken at the Warrant Holders Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. New York City time on July 24, 2023, or by voting at the Warrant Holders Meeting. Simply attending the Warrant Holders Meeting will not

 

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revoke your proxy. If you have instructed a broker, bank, or other nominee to vote your Compute Health Warrants, you must follow the directions you receive from your broker, bank, or other nominee in order to change or revoke your vote.

 

Q:

WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

 

A:

Compute Health Warrant Holders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your Compute Health Warrants in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold Compute Health Warrants. If you are a holder of record and your Compute Health Warrants are registered under more than one name, you will receive more than one proxy card. Please complete, sign, date, and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Compute Health Warrants.

 

Q.

IF MY COMPUTE HEALTH WARRANTS ARE HELD IN “STREET NAME” BY A BROKER, BANK, OR OTHER NOMINEE, WILL MY BROKER, BANK, OR OTHER NOMINEE VOTE MY COMPUTE HEALTH WARRANTS FOR ME?

 

A:

If your Compute Health Warrants are held in “street name” by a broker, bank, or other nominee, you must provide the record holder of your Compute Health Warrants with instructions on how to vote your Compute Health Warrants. Please follow the voting instructions provided by your broker, bank, or other nominee. Please note that you may not vote Compute Health Warrants held in “street name” by returning a proxy card directly to Compute Health or by voting at the Warrant Holders Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank, or other nominee. In addition to such legal proxy, if you plan to attend the Warrant Holders Meeting, but are not a warrantholder of record because you hold your Compute Health Warrants in “street name,” please have evidence of your beneficial ownership of your warrants (e.g., a copy of a recent brokerage statement showing the warrants) and valid photo identification with you at the Warrant Holders Meeting.

If you are a Compute Health Warrant Holder holding your Compute Health Warrants in “street name” and you do not instruct your broker, bank, or other nominee on how to vote your Compute Health Warrants, your broker, bank, or other nominee will not vote your Compute Health Warrants on the Warrant Holder Proposals. Such abstentions and broker non-votes will have of the same effect as a vote against the Warrant Amendment Proposal and will have no effect on the outcome of the Warrant Holders Adjournment Proposal.

 

Q:

WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

 

A:

For purposes of the Warrant Holders Meeting, an abstention occurs when a warrantholder attends the meeting and does not vote or returns a proxy with an “abstain” vote.

If you are a Compute Health Warrant Holder that attends the Warrant Holders Meeting and fails to vote on any of the Warrant Holder Proposals, or if you respond to any Warrant Holder Proposal with an “abstain” vote, your failure to vote or “abstain” vote will have of the same effect as a vote against the Warrant Amendment Proposal and will have no effect on the outcome of the Warrant Holders Adjournment Proposal.

 

Q:

WHAT DO I DO IF I WANT TO VOTE AGAINST THE AMENDMENT?

 

A:

If you are a Compute Health Warrant Holder at the close of business on the record date and you wish to vote against the Warrant Amendment Proposal, you should sign and return your proxy card indicating a vote “AGAINST” such proposal.

 

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Alternatively, you may vote in person at the Warrant Holders Meeting. If you are a Compute Health Warrant Holder at the close of business on the record date and you do not sign and return your proxy card to your broker, bank, or other nominee or vote in person at the Warrant Holders Meeting, that will have the same effect as a vote against the Warrant Amendment Proposal.

 

Q:

IN ADDITION TO RECEIVING THE NECESSARY APPROVAL FROM EACH OF (I) THE COMPUTE HEALTH PUBLIC WARRANT HOLDERS AND (II) THE COMPUTE HEALTH PRIVATE WARRANTS, WHAT ARE THE OTHER CONDITIONS TO THE WARRANT AMENDMENT?

 

A:

All other conditions to the completion of the Business Combination must be satisfied for the Warrant Amendment to become operative. If such conditions are not satisfied or the Business Combination does not occur for any reason, the Warrant Amendment will not become operative.

 

Q:

IF I PURCHASE COMPUTE HEALTH PUBLIC WARRANTS AFTER THE RECORD DATE, AM I ENTITLED TO VOTE ON THE WARRANT AMENDMENT?

 

A:

No. Only Compute Health Warrant Holders on the record date will be eligible to vote on the Warrant Amendment. If you purchase Compute Health Public Warrants after this date, you will not be entitled to vote on the Warrant Amendment Proposal or the Warrant Holders Adjournment Proposal.

 

Q:

WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS, VOTING, THE WARRANT HOLDER PROPOSALS, OR THE WARRANT AMENDMENT?

 

A:

If you have any questions about the proxy materials, need assistance submitting your proxy or voting your Compute Health Warrants, or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Morrow Sodali, the proxy solicitation agent for Compute Health, at the following address and telephone number:

Morrow Sodali

Individuals call toll-free: (800) 662-5200

Banks and Brokerage Firms, please call: (203) 658-9400

Email: CPUH.info@investor.morrowsodali.com

 

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SUMMARY

This summary highlights selected information included in this document and does not contain all of the information that may be important to you. You should read this entire document and its appendices and the other documents to which Compute Health and Allurion refer before you decide how to vote with respect to the Stockholder Proposals.

Information About the Parties to the Business Combination

Compute Health Acquisition Corp.

Compute Health Acquisition Corp. is a blank check company incorporated as a Delaware corporation organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination involving Compute Health and one or more businesses or entities.

The Compute Health Class A Common Stock, Compute Health Public Warrants and Compute Health Units, consisting of one share of Compute Health Class A Common Stock and one-quarter of one Compute Health Public Warrant, are traded on the NYSE under the ticker symbols “CPUH,” “CPUH WS,” and “CPUH.U,” respectively. The parties anticipate that, following the Business Combination, the New Allurion Common Stock and New Allurion Public Warrants will be listed on the NYSE under the symbols “ALUR” and “ALUR WS,” respectively, and the Compute Health Units, Compute Health Class A Common Stock, and Compute Health Public Warrants will cease trading on the NYSE and will be deregistered under the Exchange Act, upon the CPUH Merger Closing. New Allurion will not have units trading upon the consummation of the Business Combination.

The mailing address of Compute Health’s principal executive office is 1100 North Market Street, 4th Floor, Wilmington, Delaware 19890, and the telephone number is (212) 829-3500.

For more information about Compute Health, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Compute Health” and “Information About Compute Health,” and the financial statements of Compute Health included herein.

Compute Health Corp.

Compute Health Corp., or “Merger Sub I”, is a Delaware corporation and a direct, wholly-owned subsidiary of Compute Health formed solely for the purpose of effectuating the Intermediate Merger. Merger Sub I does not own any material assets or operate any business.

The mailing address of Merger Sub I’s principal executive office is 1100 North Market Street, 4th Floor, Wilmington, Delaware 19890, and the telephone number is (212) 829-3500.

Compute Health LLC

Compute Health LLC, or “Merger Sub II”, is a Delaware limited liability company and a direct, wholly-owned subsidiary of Compute Health formed solely for the purpose of effectuating the Final Merger. Merger Sub II does not own any material assets or operate any business.

The mailing address of Merger Sub II’s principal executive office is 1100 North Market Street, 4th Floor, Wilmington, Delaware 19890, and the telephone number is (212) 829-3500.

 

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Allurion Technologies, Inc.

Allurion is dedicated to ending obesity by creating a best-in-class weight loss platform to treat the estimated two billion people globally who are overweight. Its platform, the Allurion Program, features the world’s first and only swallowable, procedure-less intragastric balloon for weight loss (the Allurion Balloon) and offers access to a proprietary behavior change program, and AI-powered remote patient monitoring tools (the Allurion Virtual Care Suite). Over 100,000 patients have already been treated commercially with the Allurion Balloon in over 50 countries globally outside of the United States.

The mailing address of Allurion’s principal executive office is 11 Huron Drive, Natick, MA 01760, and the telephone number is (508) 647-4000.

Allurion Technologies Holdings, Inc.

Allurion Technologies Holdings, Inc., or “New Allurion”, is a Delaware corporation and a direct, wholly-owned subsidiary of Allurion formed solely for the purpose of effectuating the Mergers and to serve as the publicly listed parent company of Allurion following the Closings. New Allurion owns no material assets and does not operate any business.

The mailing address of New Allurion’s principal executive office is 11 Huron Drive, Natick, MA 01760, and the telephone number is (508) 647-4000.

The Business Combination

On February 9, 2023, Compute Health entered into the Existing Business Combination Agreement with the Merger Subs, New Allurion, and Allurion and, on May 2, 2023, Compute Health entered into the BCA Amendment with the Merger Subs, New Allurion, and Allurion. Pursuant to the Business Combination Agreement, and subject to the terms and conditions set forth therein, the Business Combination will be effected in three steps: (a) subject, among other things, to the approval and adoption of the Business Combination Agreement by the requisite Compute Health Stockholders, Compute Health will merge with and into New Allurion, with New Allurion surviving as the publicly listed entity and becoming the sole owner of each Merger Sub, (b) at least three hours following the consummation of the CPUH Merger, Merger Sub I will merge with and into Allurion, with Allurion surviving the Intermediate Merger and becoming a direct, wholly-owned subsidiary of New Allurion, and (c) thereafter, the Intermediate Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II surviving the Final Merger and remaining a direct, wholly-owned subsidiary of New Allurion.

Business Combination Agreement

The terms and conditions of the Business Combination are contained in the Existing Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, which is incorporated by reference herein in its entirety, as amended by the BCA Amendment, a copy of which is attached to this proxy statement/prospectus as Annex A-1, which is incorporated by reference herein in its entirety. Compute Health encourages you to read the Business Combination Agreement carefully, as it is the legal document that governs the Business Combination. For more information on the Business Combination Agreement, see the section entitled “The Business Combination Agreement.”

The PIPE Investment

In connection with entering into the Business Combination Agreement, on February 9, 2023, Compute Health and New Allurion entered into the PIPE Subscription Agreements with the PIPE Investors, pursuant to

 

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which, among other things, the PIPE Investors party thereto agreed to purchase an aggregate of 5,386,695 PIPE Securities following the CPUH Merger Closing and immediately prior to or substantially concurrent with the Intermediate Merger Closing at a cash purchase price of $7.04 per share, resulting in aggregate proceeds of approximately $37.9 million in the PIPE Investment. The PIPE Subscription Agreements contain customary representations, warranties, covenants, and agreements of Compute Health, New Allurion, and the PIPE Investors and are subject to customary closing conditions and termination rights.

For more information regarding the PIPE Investment and the PIPE Subscription Agreements, see the subsection entitled “The Business Combination Agreement — Related Agreements — PIPE Subscription Agreements.”

Merger Consideration and the Mergers

Conversion of Compute Health Capital Stock. On the Closing Date, by virtue of the CPUH Merger and without any action on the part of Compute Health, Merger Sub I, Merger Sub II, Allurion, New Allurion, the holder of any shares of capital stock of any of the foregoing, or any other entity:

 

   

immediately prior to the CPUH Merger Effective Time, pursuant to the terms of the Sponsor Support Agreement, the parties thereto will effect the CPUH Recapitalization as follows: (i) each of the 21,442,500 shares of Compute Health Class B Common Stock and all 12,833,333 Compute Health Private Warrants held by the Sponsor and (ii) the 90,000 shares of Compute Health Class B Common Stock held in the aggregate by the Additional Class B Holders will be exchanged and converted into, in the aggregate, 2,151,687 shares of Compute Health Class A Common Stock;

 

   

contingent on the Closings, effective immediately following the Sponsor Recapitalization and immediately prior to the CPUH Merger Effective Time, the Sponsor will contribute to Compute Health, as a contribution to capital, a number of shares of Compute Health Class A Common Stock equal to: (a) (i) 200,000 plus (ii) a number equal to one-third of the Additional Hunter Shares divided by (b) 1.420455 (the “Sponsor Contributed Shares”);

 

   

immediately prior to the CPUH Merger Effective Time, each Compute Health Unit that is outstanding immediately prior to the CPUH Merger Effective Time will be automatically detached and the holder thereof will be deemed to hold one share of Compute Health Class A Common Stock and one-quarter of one Compute Health Public Warrant;

 

   

immediately following the separation of the Compute Health Units and at the CPUH Merger Effective Time, each share of Compute Health Class A Common Stock issued and outstanding immediately prior to the CPUH Merger Effective Time (including, for the avoidance of doubt, shares of Compute Health Class A Common Stock issued in the CPUH Recapitalization and in the separation of the Compute Health Units described above, but excluding Compute Health Dissenting Shares, shares that are redeemed in connection with the Business Combination, Compute Health Cancelled Share) and Sponsor Contributed Shares) but after the consummation of the transactions contemplated by the Sponsor Contribution Agreement will automatically be canceled and extinguished and will be converted into the right to receive 1.420455 shares of New Allurion Common Stock (with the aggregate number of shares of New Allurion Common Stock that each holder of Compute Health Class A Common Stock will have a right to receive to be rounded down to the nearest whole share);

 

   

immediately following the separation of the Compute Health Units and at the CPUH Merger Effective Time, each Compute Health Public Warrant outstanding immediately prior to the CPUH Merger Effective Time will cease to be a warrant with respect to Compute Health Class A Common Stock and will be assumed by the Surviving Corporation and represent a number of shares of New Allurion Common Stock calculated in accordance with the applicable exchange ratio (subject to the Consent Solicitation) pursuant to the Warrant Agreement (as amended by the Warrant Assumption Agreement);

 

   

at the CPUH Merger Effective Time, each Compute Health Cancelled Share will be canceled for no payment or consideration;

 

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at the CPUH Merger Effective Time, each share of capital stock of New Allurion issued and outstanding immediately prior to the CPUH Merger Effective Time shall be redeemed by New Allurion for par value; and

 

   

all shares of Compute Health Class A Common Stock that are redeemed in connection with the Business Combination shall not be exchanged in accordance with the foregoing but will instead, immediately prior to the CPUH Merger Effective Time, be canceled and cease to exist and will thereafter be redeemed for the applicable consideration, upon the terms and subject to the conditions and limitations, set forth in the Business Combination Agreement, the Compute Health Existing Organizational Documents, the Trust Agreement, and this proxy statement/prospectus.

Treatment of Allurion Equity in the Intermediate Merger. On the Closing Date, by virtue of the Intermediate Merger and without any action on the part of Compute Health, Merger Sub I, Merger Sub II, Allurion, New Allurion, the holder of any equity of any of the foregoing, or any other entity:

 

   

immediately prior to the Intermediate Merger Effective Time, the Allurion Convertible Notes Conversion will occur as follows: the outstanding principal and accrued but unpaid interest on the outstanding Allurion Convertible Notes will be converted into the applicable number of shares of Allurion Common Stock provided for under the terms of such Allurion Convertible Notes, and will thereafter no longer be outstanding and will cease to exist, and each holder thereof will thereafter cease to have any rights with respect thereto. Immediately following the Allurion Convertible Notes Conversion, at the Intermediate Merger Effective Time, all shares of Allurion Common Stock issued in the Allurion Convertible Notes Conversion will be canceled and converted into the right to receive New Allurion Common Stock as described below;

 

   

at the Intermediate Merger Effective Time, (A) each share of Allurion Common Stock (other than Allurion Dissenting Shares and Allurion Cancelled Shares, the treatment of which is described in the Business Combination Agreement) issued and outstanding as of immediately prior to the Intermediate Merger Effective Time (including shares of Allurion Common Stock resulting from the Allurion Convertible Notes Conversion or issued or issuable in connection with the Incremental Financing) will automatically be cancelled and extinguished and will be converted into the right to receive a number of shares of New Allurion Common Stock equal to the Intermediate Merger Exchange Ratio and (B) each share of Allurion Preferred Stock (other than Allurion Dissenting Shares and Allurion Cancelled Shares, the treatment of which is described in the Business Combination Agreement) issued and outstanding as of immediately prior to the Intermediate Merger Effective Time will automatically be cancelled and extinguished and will be converted into the right to receive a number of shares of New Allurion Common Stock equal to (x) the aggregate number of shares of Allurion Common Stock that would be issued upon conversion of such issued and outstanding share of Allurion Preferred Stock into Allurion Common Stock based on the applicable conversion ratio immediately prior to the Intermediate Merger Effective Time multiplied by (y) the Intermediate Merger Exchange Ratio (in each case, with the aggregate number of shares of New Allurion Common Stock that each holder of Allurion Shares will have a right to receive to be rounded down to the nearest whole share);

 

   

at the Intermediate Merger Effective Time, each Allurion Option (whether vested or unvested) that is outstanding immediately prior to the Intermediate Merger Effective Time will be converted into a Rollover Option on the same terms and conditions as were applicable to such Allurion Option immediately prior to the Intermediate Merger Effective Time. Each Rollover Option will be exercisable for the number of shares of New Allurion Common Stock (rounded down to the nearest whole share) equal to the number of shares of Allurion Common Stock subject to the corresponding Allurion Option immediately prior to the Intermediate Merger Effective Time multiplied by the Intermediate Merger Exchange Ratio, and each such Rollover Option will have an exercise price per share of New Allurion Common Stock (rounded up to the nearest whole cent) subject to such Rollover Option equal to (A) the exercise price per share of Allurion Common Stock applicable to the corresponding Allurion Option immediately prior to the Intermediate Merger Effective Time divided by (B) the Intermediate Merger Exchange Ratio;

 

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at the Intermediate Merger Effective Time, each Allurion RSU Award, whether vested or unvested, that is outstanding immediately prior to the Intermediate Merger Effective Time will be converted into a Rollover RSU Award covering shares of New Allurion Common Stock, with the same terms and conditions as were applicable to such Allurion RSU Awards immediately prior to the Intermediate Merger Effective Time, and representing the number of shares of New Allurion Common Stock equal to the product of (A) the number of shares of Allurion Common Stock underlying the corresponding Allurion RSU Award immediately prior to the Intermediate Merger Effective Time multiplied by (B) the Intermediate Merger Exchange Ratio (rounded down to the nearest whole share);

 

   

at the Intermediate Merger Effective Time, (A) each Allurion Warrant that is outstanding and unexercised as of immediately prior to the Intermediate Merger Effective Time will be converted into a Rollover Warrant to acquire a number of shares of New Allurion Common Stock, in an amount and at an exercise price and subject to such terms and conditions, in each case, as set forth on an allocation schedule to be delivered by Allurion to Compute Health no later than five Business Days prior to the Closing Date and (B) the Surviving Corporation will become the obligor under such Rollover Warrants;

 

   

at the Intermediate Merger Effective Time, each share of capital stock of Merger Sub I issued and outstanding immediately prior to the Intermediate Merger Effective Time will be converted into one share of common stock, par value $0.0001, of the Intermediate Surviving Corporation; and

In addition, the Eligible Allurion Equityholders will have the right to receive the Contingency Shares, as follows: (i) an aggregate of 4,500,000 Contingency Shares if, during the Earnout Period, the VWAP of New Allurion Common Stock on the NYSE, or any other national securities exchange on which the shares of New Allurion Common Stock are then traded, is greater than or equal to $15.00 over any 20 trading days within any consecutive 30 trading day period, and (ii) an aggregate of an additional 4,500,000 Contingency Shares in the aggregate if, during the Earnout Period, the VWAP of New Allurion Common Stock on the NYSE, or any other national securities exchange on which the shares of New Allurion Common Stock are then traded, is greater than or equal to $20.00 over any 20 trading days within any consecutive 30 trading day period. Additionally, in the event of a change of control of the Surviving Corporation (as described in the Business Combination Agreement), any unissued Contingency Shares will become payable to the Eligible Allurion Equityholders.

Treatment of Intermediate Surviving Corporation Common Stock in the Final Merger. At the Final Merger Effective Time, (i) each share of common stock, par value $0.0001 per share, of the Intermediate Surviving Corporation issued and outstanding immediately prior to the Final Merger Effective Time will be cancelled and will cease to exist and (ii) each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Final Merger Effective Time will remain outstanding as a limited liability company interest of the Surviving Subsidiary Company.

Fractional Shares. No fractional shares of New Allurion Common Stock will be issued in the CPUH Merger or the Intermediate Merger. In lieu of the issuance of any fractional shares of New Allurion Common Stock to which any former holder of Compute Health Common Stock, Allurion Common Stock, or Allurion Preferred Stock would otherwise be entitled to receive (after aggregating all fractional shares of New Allurion Common Stock of the same class and series that otherwise would be received by such holder of Compute Health Common Stock, Allurion Common Stock, or Allurion Preferred Stock), New Allurion shall round down to the nearest whole share of New Allurion Common Stock, as described above. No cash settlements shall be made with respect to fractional shares eliminated by rounding.

Net Cash Per Share of Compute Health Common Stock. We would expect each share of Allurion Common Stock to be converted into 1.0355 shares of New Allurion Common Stock in the Intermediate Merger based on the no redemptions scenario and that the Allurion Stockholders will own 32,452,484 of the outstanding shares of New Allurion Common Stock immediately following the consummation of the Business Combination. The

 

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preceding sentence reflects numerous assumptions. This proxy statement/prospectus discloses those assumptions and presents various alternate scenarios regarding the ownership of New Allurion following the Business Combination. The estimated net cash per share of Compute Health Class A Common Stock that is being contributed by Compute Health to New Allurion (as the combined company in the business combination) is less than the amount that holders of Compute Health Class A Common Stock would be entitled to receive upon exercise of their redemption rights. See the subsection entitled “The Business Combination Agreement — Consideration.

Closings and Effective Time of the Business Combination

Closings. Immediately following the CPUH Recapitalization and immediately prior to the filing of the CPUH Merger Certificate of Merger with the Secretary of State of the State of Delaware, and on the third Business Day following the satisfaction or waiver of all closing conditions (other than those conditions that by their terms are to be satisfied at the Closings), the CPUH Merger Closing shall occur. At least three hours after, but on the same day as, the CPUH Merger Closing, and immediately prior to the filing of the Intermediate Merger Certificate of Merger with the Secretary of State of the State of Delaware, the Intermediate Merger Closing shall occur. Immediately following the Intermediate Merger Closing, and immediately prior to the filing of the Final Merger Certificate of Merger with the Secretary of State of the State of Delaware, the Final Merger Closing shall occur. Each of the Closings shall take place at the offices of Goodwin Procter LLP, 100 Northern Avenue, Boston, MA 02210 (or electronically by exchange of the closing deliverables by the means provided in the Business Combination Agreement). See the subsection entitled “The Business Combination Agreement Conditions to the Business Combination” for a more complete description of the conditions that must be satisfied prior to the Closings of the Business Combination.

At the CPUH Merger Closing, the parties will cause the CPUH Merger to be consummated by filing the CPUH Merger Certificate of Merger with the Secretary of State of the State Delaware, and the CPUH Merger will become effective at the time the CPUH Merger Certificate of Merger is accepted for filing by the Secretary of State of the State of Delaware, or such later date or time as may be agreed by Compute Health and Allurion in writing and specified in the CPUH Merger Certificate of Merger.

At the Intermediate Merger Closing, the parties will cause the Intermediate Merger to be consummated by filing the Intermediate Merger Certificate of Merger with the Secretary of State of the State of Delaware, and the Intermediate Merger will become effective at the time the Intermediate Merger Certificate of Merger is accepted for filing by the Secretary of State of the State of Delaware, or such later date or time as may be agreed by Compute Health and Allurion in writing and specified in the Intermediate Merger Certificate of Merger.

At the Final Merger Closing, the parties will cause the Final Merger to be consummated by filing the Final Merger Certificate of Merger with the Secretary of State of the State of Delaware, and the Final Merger will become effective at the time the Final Merger Certificate of Merger is accepted for filing by the Secretary of State of the State of Delaware, or such later date or time as may be agreed by Compute Health and Allurion in writing and specified in the Final Merger Certificate of Merger.

As of the date of this proxy statement/prospectus, the parties expect that the Business Combination will be effective during the third quarter of 2023. However, there can be no assurance as to when or if the Business Combination will occur.

If the Business Combination is not completed by the Termination Date, the Business Combination Agreement may be terminated by either Compute Health or Allurion. A party may not terminate the Business Combination Agreement pursuant to the provision described in this paragraph if the party seeking to terminate the Business Combination Agreement is in material breach of its obligations set forth in the Business

 

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Combination Agreement on the Termination Date. See the subsection entitled “The Business Combination Agreement Termination.”

Special Meeting and the Stockholder Proposals

The Special Meeting will be held at 9:00 a.m., Eastern Time, on July 28, 2023. For the purposes of the Compute Health Certificate of Incorporation, the physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. Compute Health encourages you to use remote methods of attending the Special Meeting or to attend via proxy. You may attend the Special Meeting and vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/2023. You will need the meeting control number that is printed on your proxy card to enter the Special Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 4267501#. At the Special Meeting, Compute Health Stockholders will be asked to approve the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Exchange Proposal, the Equity Incentive Plan Proposal, and the Adjournment Proposal (if necessary).

The Compute Health Board has fixed the close of business on July 3, 2023 as the record date for determining the holders of Compute Health Common Stock entitled to receive notice of and to vote at the Special Meeting. As of the record date, there were 9,223,194 shares of Compute Health Class A Common Stock and 21,532,500 shares of Compute Health Class B Common Stock outstanding and entitled to vote at the Special Meeting. Each share of Compute Health Common Stock entitles the holder to one vote at the Special Meeting on each proposal to be considered at the Special Meeting. As of the record date, the Sponsor and Compute Health’s directors and officers and their affiliates owned and were entitled to vote shares of Compute Health Common Stock, representing approximately 70.0% of the Compute Health Common Stock outstanding on that date. Compute Health currently expects that the Sponsor and its directors and officers will vote their shares in favor of the Stockholder Proposals and, pursuant to the IPO Letter Agreement, the Initial Stockholders have agreed to do so with respect to the Business Combination Proposals. Pursuant to the Business Combination Agreement and in addition to any voting requirement contained in the Compute Health Certificate of Incorporation, each of the Separate Class Vote Proposals must be approved by the affirmative vote of the holders of a majority of the then-issued and outstanding shares of Compute Health Class A Common Stock, voting separately as a single class. As of the record date, Allurion did not beneficially hold any Compute Health Common Stock.

A majority of the voting power of the outstanding Compute Health Common Stock entitled to vote at the Special Meeting must be present in person, online or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. The approval required for each of the Stockholder Proposals is set forth in the subsection entitled “Questions and Answers about the Business Combination and the Special Meeting — Questions And Answers About the Special Meeting.”

The Business Combination is conditioned upon the approval of the Business Combination Proposals, the Organizational Documents Proposal, the Exchange Proposal, the Equity Incentive Plan Proposal, and the Adjournment Proposal, if presented, subject to the terms of the Business Combination Agreement. If the Business Combination Proposals are not approved, the other Stockholder Proposals (except the Adjournment Proposal) will not be presented to the Compute Health Stockholders for a vote.

Warrant Holders Meeting and the Warrant Holders Proposals

The Warrant Holders Meeting will be held at 9:00 a.m., Eastern Time, on July 25, 2023. For the purposes of the Compute Health Certificate of Incorporation, the physical place of the meeting will be the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Manhattan West, New York, New York 10001. Compute Health encourages you to use remote methods of attending the Warrant Holders Meeting or to attend via proxy. You may attend the Warrant Holders Meeting and vote your Compute Health Warrants electronically during the Warrant Holders Meeting via live webcast by visiting https://www.cstproxy.com/computehealth/warrant2023. You will need the meeting control number that is printed on

 

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your proxy card to enter the Warrant Holders Meeting. You may also attend the meeting telephonically by dialing 1 (800) 450-7155 (within the U.S. and Canada) and +1(857) 999-9155 (outside the U.S. and Canada), conference ID: 8520972#. At the Warrant Holders Meeting, Compute Health Warrant Holders will be asked to approve the Warrant Holders Proposals.

The Compute Health Board has fixed the close of business on July 3, 2023 as the record date for determining the holders of Compute Health Warrants entitled to receive notice of and to vote at the Warrant Holders Meeting. As of the record date, there were 21,562,322 Compute Health Public Warrants and 12,833,333 Compute Health Private Warrants outstanding and entitled to vote at the Warrant Holders Meeting. Each Compute Health Warrant entitles the holder to one vote at the Warrant Holders Meeting on each proposal to be considered at the Warrant Holders Meeting. Pursuant to the Warrant Agreement and in addition to any voting requirement contained in the Compute Health Certificate of Incorporation, the Warrant Amendment Proposal must be approved by the affirmative vote of the holders of at least 50% of each of (i) the outstanding Compute Health Public Warrants and (ii) the outstanding Compute Health Private Warrants and the Warrant Holders Adjournment Proposal must be approved by the affirmative vote of the holders of at least 50% of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants, present in person, online or represented by proxy at the Warrant Holders Meeting. As of the record date, none of Allurion, Compute Health or the Sponsor beneficially held any Compute Health Public Warrants, and the Sponsor held all of the 12,833,333 Compute Health Private Warrants.

At least 50% of the voting power of each of (i) the Compute Health Public Warrants and (ii) the Compute Health Private Warrants outstanding and entitled to vote at the Warrant Holders Meeting must be present in person or virtually, or represented by proxy, at the Warrant Holders Meeting to constitute a quorum and in order to conduct business at the Warrant Holders Meeting. The approval required for each of the Warrant Holder Proposals is set forth in the subsection entitled “Questions and Answers about the Warrant Amendment and the Warrant Holders Meeting—Questions And Answers About the Warrant Amendment.”

Recommendation of the Compute Health Board

The members of the Compute Health Board determined that the Business Combination Agreement and the Business Combination are fair to, advisable and in the best interests of Compute Health and its stockholders. The Compute Health Board unanimously recommends that stockholders vote “FOR” each of the Business Combination Proposals, “FOR” the Organizational Documents Proposal, “FOR” each of the Advisory Organizational Documents Proposals, “FOR” the Exchange Proposal, “FOR” the Equity Incentive Plan Proposal, and “FOR” the Adjournment Proposal (as applicable), in each case, if presented at the Special Meeting.

The existence of financial and personal interests of certain members of the Compute Health Board may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is in the best interests of Compute Health and its stockholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that Compute Health Stockholders vote for the proposals. In considering the recommendations of the Compute Health Board in favor of the above proposals, it is important to keep in mind that, aside from their interests as Compute Health Stockholders, the Sponsor and certain Compute Health directors and officers have interests in the Business Combination that are different from, or in addition to, other Compute Health Stockholders’ interests. See the subsection entitled “The Special Meeting —Recommendation of the Compute Health Board” for more information.

For more information on the existence of potential conflicts of interests of certain directors of the Compute Health Board and officers of Compute Health, see the subsection entitled “Proposal No. 1The Business Combination ProposalsInterests of Compute Health Directors and Officers in the Business Combination” for a further discussion.

 

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Compute Health Board’s Reasons for Approval of the Business Combination

Compute Health was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.

The members of the Compute Health Board considered a wide variety of factors in connection with their respective evaluations of the Business Combination. In light of the complexity of those factors, the Compute Health Board as a whole did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching their respective decisions. Individual members of the Compute Health Board may have given different weight to different factors.

In making its final determination regarding the Business Combination, the Compute Health Board considered the following factors, among others, although not weighted or in any order of significance:

 

   

Pioneering Innovation in the Field of Weight Loss. The Compute Health Board believes that Allurion will continue to execute on Allurion’s unique approach to weight-loss therapy. Allurion’s weight-loss therapy includes the world’s first full stack weight-loss platform, featuring the world’s first and only swallowable, procedure-less intragastric balloon for weight loss (the Allurion Balloon) — the patient swallows a weight-loss balloon and passes the balloon four months later. Allurion’s proprietary behavior change program and AI-powered digital therapeutic and remote patient monitoring solution allow for interactive monitoring of Allurion patients throughout the process.

 

   

Superior Customer Experience and Growing Patient Base. Allurion’s modern product — which utilizes a procedure-less intragastric balloon for weight loss, a proprietary behavior change program and an AI-powered digital therapeutic and remote patient monitoring solution — provides patients with a premium service offering, with an experience centered around the patient. Allurion’s product has launched in over 50 countries to date (with over 100,000 patients), and expects to launch in an additional 15 countries by 2024.

 

   

Experienced and Proven Management Team. Allurion’s management team has extensive experience in key aspects of the healthcare and weight loss industries. Allurion is led by its co-founder and Chief Executive Officer, Shantanu Gaur, and executives from companies such as Moderna, Allergan, Galderma, Ethicon and Boston Scientific. The team has also demonstrated consistent execution from an operational and growth perspective. Under Allurion management’s leadership, the Compute Health Board believes that Allurion has upended the traditional dynamics of weight loss. Compute Health expects that Allurion’s executives will continue to be employed by New Allurion following the Business Combination. For additional information regarding Allurion’s executive officers, see the subsection entitled “Management Following the Business Combination — Executive Officers.”

 

   

Rapid Growth. Allurion’s revenues in 2020, 2021, and 2022 were $20 million, $38 million, and $64 million, respectively, demonstrating Allurion’s rapid growth and potential for continued expansion.

 

   

Ongoing FDA Clinical Trial. Allurion’s AUDACITY trial, an open-label study to evaluate the safety and efficacy of the Allurion Balloon, was approved by the FDA, and began enrollment in May 2022. Allurion anticipates seeking FDA approval in 2024 for the sale of Allurion’s product in the United States.

 

   

Anticipated Collaboration with Medtronic. The Compute Health Board considered Allurion’s anticipated collaboration with Medtronic, which is expected to develop bundled offerings that include Allurion’s virtual program and bariatric surgery as well as the launch of these offerings in the Middle East.

 

   

Potential to Address an Area of High Unmet Medical Need. The Compute Health Board considered the potential for Allurion’s product, should it successfully proceed through clinical trials, and be

 

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approved for use (including by the FDA), in the United States, to address patients with high unmet needs in the weight-loss category.

 

   

Backed by Top-Tier Healthcare Investors. Allurion’s existing investors include Novalis LifeSciences and Segulah Medical Acceleration, among others, which the Compute Health Board believes provides additional validation of Allurion’s clinical and business strategies.

For a more complete description of the Compute Health Board’s reasons for approving, and recommending that the Compute Health Stockholders approve, the Business Combination, please see the subsection entitled “The Business Combination Agreement — The Compute Health Board’s Reasons for Approval of the Business Combination.

Satisfaction of 80% Test

It is a requirement under the Compute Health Certificate of Incorporation that the business or assets acquired in Compute Health’s initial business combination have a fair market value equal to at least 80% of the assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into such business combination. In addition, the rules of the NYSE require that Compute Health’s initial business combination be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust). As of February 9, 2023, the date of the execution of the Existing Business Combination Agreement, the balance of the Trust Account was approximately $94.7 million and 80% thereof represents approximately $75.8 million. In reaching its conclusion that the Business Combination meets the 80% asset test, the Compute Health Board used an enterprise value (as discussed under the subsection entitled “The Business Combination AgreementSummary of Lincoln’s Financial Analysis — Implied Enterprise Value of Allurion based on the Aggregate Consideration”) of $358 million at $7.04 per share and $497 million at $10.00 per share, which would not be subject to any adjustments to purchase price, including for cash, debt and debt-like items, transaction expenses, or working capital, which was implied based on the terms of the transactions agreed to by the parties in negotiating the Business Combination Agreement. In determining whether the enterprise values described above represent the fair market value of Allurion, the Compute Health Board considered all of the factors described in the subsection entitled “The Business Combination Agreement — The Compute Health Board’s Reasons for Approval of the Business Combination” and the fact that the purchase price for Allurion was the result of an arm’s-length negotiation. As a result, the Compute Health Board concluded that the fair market value of Allurion was significantly in excess of 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account).

Conditions to Closing

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions contained therein, the obligations of the parties to consummate the Mergers are subject to the satisfaction or waiver of the following conditions:

 

   

the absence of any orders, laws or other legal restraints preventing the consummation of the Business Combination;

 

   

effectiveness of the registration statement of which this proxy statement/prospectus forms a part;

 

   

the approval and adoption of the Business Combination Agreement and transactions contemplated thereby by the requisite vote of (i) Compute Health Stockholders, including the requisite the vote of Compute Health Class A Common Stock, voting as a separate class, and (ii) the Requisite Allurion Stockholders;

 

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receipt of approval for listing on the NYSE of the shares of New Allurion Common Stock to be issued in connection with the Business Combination;

 

   

after giving effect to the transactions contemplated by the Business Combination Agreement (including the exercise of redemption rights and the PIPE Investment), Compute Health having net tangible assets of at least $5,000,001 immediately prior to the CPUH Merger Effective Time;

 

   

as of immediately prior to the Intermediate Merger Closing and after the CPUH Merger Closing, Net Closing Cash being greater than or equal to $70,000,000; provided that, if either Compute Health’s or Allurion’s expenses exceed the amount set forth on an agreed expenses schedule, the Net Closing Cash Condition can only be asserted by Allurion or Compute Health, respectively; and

 

   

the consummation of the Fortress Financing and the Revenue Interest Financing.

While the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), is also a condition to the respective obligations of the parties to complete the Business Combination, legal counsel for each of Compute Health, Allurion, and New Allurion determined that the Business Combination will not require the parties to make filings under the HSR Act.

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions contained therein, the obligations of Compute Health and the Merger Subs to consummate the Mergers are also subject to the satisfaction, or waiver by Compute Health (on behalf of itself and the Merger Subs), of the following conditions:

 

   

the accuracy of the representations and warranties of each of Allurion and New Allurion as of the Closings;

 

   

the performance or compliance of each of Allurion’s and New Allurion’s covenants in all material respects as of or prior to the Intermediate Merger Closing;

 

   

the absence of a Company Material Adverse Effect (as defined in the Business Combination Agreement);

 

   

the approval and adoption of the Business Combination Agreement and the transactions contemplated thereby by Allurion, as the sole stockholder of New Allurion; and

 

   

receipt of a pay-off letter, in form and substance reasonably satisfactory to Compute Health, and related lien release documents, each in connection with the repayment and termination of all of Allurion’s indebtedness under the Runway Loan.

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions contained therein, the obligations of Allurion and New Allurion to consummate the Mergers are also subject to the satisfaction, or waiver by Allurion (on behalf of itself and New Allurion) of the following conditions:

 

   

the accuracy of the representations and warranties of each of Compute Health and each Merger Sub as of the Closings;

 

   

the performance or compliance of each of Compute Health’s and the Merger Subs’ covenants in all material respects as of or prior to the Intermediate Merger Closing;

 

   

the absence of a CPUH Material Adverse Effect (as defined in the Business Combination Agreement); and

 

   

the approval and adoption of the Business Combination Agreement and the transactions contemplated thereby by Compute Health, as the (i) sole stockholder of Merger Sub I and (ii) sole member of Merger Sub II.

 

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Termination

The Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closings, including, without limitation, (a) by mutual written consent of Compute Health and Allurion; (b) by Compute Health or Allurion, if (i) the Closings have not occurred by August 7, 2023; (ii) if an applicable governmental entity has enacted, issued, enforced, or entered an order or taken any other action permanently enjoining, restraining, or otherwise prohibiting the transactions contemplated by the Business Combination and such order or action has become final and nonappealable; (iii) if the Special Meeting has concluded (including any adjournment or postponement thereof) and the approval of the Business Combination by the requisite vote of Compute Health Stockholders was not obtained; and (iv) if Allurion has not consummated the transactions contemplated by the Incremental Financing on or prior to April 30, 2023; (c) by Compute Health, if (i) Allurion or New Allurion has breached any of its representations, warranties, agreements, or covenants contained in the Business Combination Agreement and such failure or breach would render certain conditions precedent to the Closings incapable of being satisfied, subject to certain cure rights; (ii) approval of the Business Combination by the Requisite Allurion Stockholders has not been obtained within 48 hours following the date that the registration statement of which this proxy statement/prospectus forms a part becomes effective; and (iii) Allurion does not deliver, within 30 days of the execution of the Business Combination Agreement, joinders to the Allurion Support Agreement constituting sufficient Allurion Shares to approve the Business Combination; and (d) by Allurion, if Compute Health or either Merger Sub has breached any of its representations, warranties, agreements, or covenants contained in the Business Combination Agreement and such failure or breach would render certain conditions precedent to the Closings incapable of being satisfied, subject to certain cure rights. As of the date of this proxy statement/prospectus, Allurion has provided Compute Health with joinders to the Allurion Support Agreement, together with the Initial Allurion Supporting Stockholders (as defined below), constituting sufficient Allurion Shares to approve the Business Combination.

Redemption Rights

Public Stockholders may seek to redeem the shares of Compute Health Class A Common Stock that they hold, regardless of whether they vote for the Business Combination, against the Business Combination, or do not vote in relation to the Business Combination. Any Public Stockholder may request that Compute Health redeem all or a portion of his, her, or its shares of Compute Health Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two Business Days prior to the consummation of the Business Combination, including interest, less taxes payable, divided by the number of then issued and outstanding shares of Compute Health Class A Common Stock. If such Public Stockholder properly seeks redemption as described in this section and the Business Combination is consummated, such Public Stockholder will no longer own these shares following the Business Combination.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming his, her, or its shares of Compute Health Class A Common Stock with respect to more than an aggregate of 15% of the shares of Compute Health Class A Common Stock. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of Compute Health Class A Common Stock, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Initial Stockholders will not have redemption rights with respect to any shares of Compute Health Common Stock owned by them, directly or indirectly. Pursuant to the IPO Letter Agreement, the Initial Stockholders have agreed to waive their redemption rights with respect to any shares of Compute Health Common Stock they may hold in connection with either the consummation of Compute Health’s initial business combination or a stockholder vote to extend the timing by which Compute Health must complete its initial

 

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business combination. No consideration was provided in exchange for the waiver of redemption rights in the IPO Letter Agreement.

A Public Stockholder will be entitled to receive cash for any shares of Compute Health Class A Common Stock to be redeemed only if he, she, or it:

 

(i)

(a) holds shares of Compute Health Class A Common Stock or (b) holds Compute Health Units and elects to separate and cancel his, her, or its Compute Health Units into the underlying shares of Compute Health Class A Common Stock and Compute Health Public Warrants prior to exercising his, her, or its redemption rights with respect to such shares of Compute Health Class A Common Stock; and

 

(ii)

prior to 5:00 p.m., Eastern Time, on July 26, 2023, (a) submits a written request to the Transfer Agent that Compute Health redeem his, her, or its shares of Compute Health Class A Common Stock for cash and (b) delivers his, her, or its shares of Compute Health Class A Common Stock to the Transfer Agent, physically or electronically through DTC.

A Public Stockholder may not withdraw a redemption request once submitted to Compute Health unless the Compute Health Board determines (in its sole discretion) to permit the withdrawal of such redemption request (which it may do in whole or in part). Furthermore, if a Public Stockholder delivers his, her, or its certificate (if any) and other redemption forms in connection with an election of his, her, or its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, he, she, or it may simply request that Compute Health permit the withdrawal of the redemption request and instruct the Transfer Agent to return the certificate (physically or electronically). A Public Stockholder can make such request by contacting the Transfer Agent, at the address or email address listed in this proxy statement/prospectus.

If the Business Combination is not approved or completed for any reason, then the Public Stockholders who elected to exercise their redemption rights will not be entitled to redeem their shares. In such case, Compute Health will promptly return any shares previously delivered by Public Stockholders.

If a Public Stockholder exercises his, her, or its redemption rights, such Public Stockholder’s shares of Compute Health Class A Common Stock will (i) not be exchanged for shares of New Allurion Common Stock pursuant to the CPUH Merger and (ii) immediately prior to the CPUH Merger Effective Time, be canceled and cease to exist, and be redeemed for the consideration, and on the terms and subject to the conditions and limitations, set forth in the Business Combination Agreement, the Compute Health Certificate of Incorporation, the Trust Agreement, and this proxy statement/prospectus. In order for Public Stockholders to exercise their redemption rights in respect of the Business Combination, Public Stockholders must properly exercise their right to redeem the shares of Compute Health Class A Common Stock that they hold later than the close of the vote on the Business Combination Proposals and deliver their Compute Health Class A Common Stock (either physically or electronically) to the Transfer Agent, prior to 5:00 p.m., Eastern Time on July 26, 2023. Therefore, the exercise of redemption rights occurs prior to the CPUH Merger. Immediately following the CPUH Merger and the consummation of the Business Combination, New Allurion shall pay Public Stockholders who properly exercised their redemption rights the pro rata portion of the funds in the Trust Account to which they are entitled in respect of their shares of Compute Health Class A Common Stock.

Appraisal Rights

Pursuant to Section 262 of the DGCL and the terms of the Business Combination Agreement, Compute Health Stockholders who comply with the applicable requirements of Section 262 of the DGCL and do not otherwise fail to perfect, waive, withdraw, or lose the right to appraisal under Delaware law prior to the CPUH Merger Effective Time have the right to seek appraisal of the fair value of their shares of Compute Health Common Stock as determined by the Delaware Court of Chancery. The “fair value” of the shares of Compute

 

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Health Common Stock held by Compute Health Stockholders that exercise their appraisal rights, as determined by the Delaware Court of Chancery, may be more or less than, or the same as, the value of the consideration that Compute Health Stockholders may otherwise be entitled to receive pursuant to the CPUH Merger under the Business Combination Agreement.

Compute Health Stockholders who do not consent to the adoption of the Business Combination Agreement and who wish to preserve their appraisal rights must so advise Compute Health by submitting a demand for appraisal within the period prescribed by Section 262 of the DGCL after receiving a notice from Compute Health that appraisal rights are available to them, and must otherwise precisely follow the procedures prescribed by Section 262 of the DGCL. If a Compute Health Stockholder fails to perfect or otherwise waives, withdraws, or loses such Compute Health Stockholder’s right to appraisal under Section 262 of the DGCL, then such Compute Health Stockholder’s shares of Compute Health Common Stock will be exchangeable solely for the right to receive the CPUH Merger consideration pursuant to the terms and conditions of the Business Combination Agreement.

Pursuant to Section 262 of the DGCL and the terms of the Business Combination Agreement, Allurion Stockholders who comply with the applicable requirements of Section 262 of the DGCL and do not otherwise fail to perfect, waive, withdraw, or lose the right to appraisal under Delaware law prior to the Intermediate Merger Effective Time have the right to seek appraisal of the fair value of their Allurion Shares as determined by the Delaware Court of Chancery. The “fair value” of the Allurion Shares held by Allurion Stockholders that exercise their appraisal rights, as determined by the Delaware Court of Chancery, may be more or less than, or the same as, the value of the consideration that such Allurion Stockholders may otherwise be entitled to receive under the Business Combination Agreement. Allurion Stockholders who do not consent to the adoption of the Business Combination Agreement and who wish to preserve their appraisal rights must so advise Allurion by submitting a demand for appraisal within the period prescribed by Section 262 of the DGCL after receiving a notice from Allurion that appraisal rights are available to them, and must otherwise precisely follow the procedures prescribed by Section 262 of the DGCL. If an Allurion Stockholder fails to perfect or otherwise waives, withdraws, or loses such Allurion Stockholder’s right to appraisal under Section 262 of the DGCL, then such Allurion Stockholder’s Allurion Shares will be exchangeable solely for the right to receive the Intermediate Merger consideration pursuant to the terms and conditions of the Business Combination Agreement.

Failure to follow any of the statutory procedures set forth in Section 262 of the DGCL will result in the loss or waiver of appraisal rights under Delaware law. In view of the complexity of Section 262 of the DGCL, Compute Health Stockholders and Allurion Stockholders that wish to pursue appraisal rights should consult their legal and financial advisors. For additional information on appraisal rights see the subsection entitled “The Special Meeting — Appraisal Rights.”

Proxy Solicitation

Proxies may be solicited by mail, telephone, or in person. Compute Health has engaged Morrow Sodali to assist in the solicitation of proxies. If a Compute Health Stockholder grants a proxy, he, she, or it may still vote his, her, or its shares in person if he, she, or it revokes his, her, or its proxy before the Special Meeting. A Compute Health Stockholder also may change his, her, or its vote by submitting a later-dated proxy as described in the subsection entitled “The Special Meeting — Revoking Your Proxy.”

Proposals to be Put to the Stockholders of Compute Health at the Special Meeting

The Business Combination Proposals

As discussed in this proxy statement/prospectus, Compute Health is asking its stockholders to approve and adopt, among other things, the Business Combination Agreement and the Business Combination. In connection

 

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with the approval of the Business Combination Agreement and the Business Combination, the Compute Health Stockholders are being asked to approve the CPUH Merger and to authorize the merger of Compute Health with and into New Allurion, with New Allurion surviving the CPUH Merger as the publicly listed entity and becoming the sole owner of the Merger Subs. Compute Health Stockholders are also being asked to approve (i) the Intermediate Merger, pursuant to which Merger Sub I will merge with and into Allurion, with Allurion surviving the Intermediate Merger as a direct, wholly-owned subsidiary of New Allurion and (ii) the Final Merger, pursuant to which the Intermediate Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II surviving the Final Merger as a direct, wholly-owned subsidiary of New Allurion.

For further details on the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination Agreement.” For more information on the Business Combination Proposals, see the section entitled “Proposal No. 1 — The Business Combination Proposals.”

The Organizational Documents Proposal

If the Business Combination Proposals are approved, Compute Health will ask its stockholders to approve the Organizational Documents Proposal. Under the Business Combination Agreement, the approval of the Organizational Documents Proposal is also a condition to the consummation of the Business Combination. If, however, the Organizational Documents Proposal is approved but the Business Combination Proposals are not approved, then the Business Combination will not be consummated.

If each of the other Required Transaction Proposals and the Organizational Documents Proposal are each approved and the Business Combination is to be consummated, then the Proposed Charter and the Proposed Bylaws will be substantially in the forms set forth on Annex B and Annex C, respectively, and each of the matters contemplated by the Advisory Organizational Documents Proposals will be included in the Proposed Charter or the Proposed Bylaws adopted by New Allurion. The approval or lack thereof of any of the Advisory Organizational Documents Proposals will not affect the effectiveness of the Organizational Documents Proposal if approved by the requisite Compute Health Stockholders.

For more information, see the section entitled “Proposal No. 2 — The Organizational Documents Proposal.”

The Advisory Organizational Documents Proposals

If the Organizational Documents Proposal is approved and the Business Combination is to be consummated, New Allurion will adopt the Proposed Organizational Documents under the DGCL.

As required by SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, Compute Health is requesting that its stockholders vote upon, on a non-binding advisory basis, the Advisory Organizational Documents Proposals, which are separately being presented in accordance with SEC guidance and which will be voted upon on a non-binding advisory basis. This separate vote is not otherwise required by Delaware law separate and apart from the Organizational Documents Proposal. However, the stockholder vote regarding each of the Advisory Organizational Documents Proposals is an advisory vote, and is not binding on Compute Health or the Compute Health Board (separate and apart from the approval of the Organizational Documents Proposal). Furthermore, the Business Combination is not conditioned on the separate approval of the Advisory Organizational Documents Proposals (separate and apart from approval of the Organizational Documents Proposal). Accordingly, regardless of the outcome of the non-binding advisory vote on the Advisory Organizational Documents Proposals, Compute Health intends that the Proposed Charter and the Proposed Bylaws will take effect upon the effectiveness of the CPUH Merger (assuming approval of the Organizational Documents Proposal).

 

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The Advisory Organizational Documents Proposals include seven sub-proposals, as set forth below, and Compute Health is requesting its stockholders approve:

 

   

Advisory Organizational Documents Proposal A — to change the corporate name of New Allurion to “Allurion Technologies, Inc.” from and after the time of the Business Combination;

 

   

Advisory Organizational Documents Proposal B — to increase New Allurion’s capitalization so that it will have 1,000,000,000 authorized shares of New Allurion Common Stock, and 100,000,000 authorized shares of New Allurion Preferred Stock;

 

   

Advisory Organizational Documents Proposal C — to divide the New Allurion Board into three classes with staggered three-year terms;

 

   

Advisory Organizational Documents Proposal D — to provide that the removal of any director be only for cause and only by the affirmative vote of holders of at least 66 2/3% of New Allurion’s then-outstanding shares of capital stock entitled to vote at an election of directors;

 

   

Advisory Organizational Documents Proposal E — to not include in the Proposed Charter any requirement that New Allurion be dissolved and liquidated 30 months following the closing of its initial public offering, and to not include in the Proposed Charter provisions applicable only to blank check companies;

 

   

Advisory Organizational Documents Proposal F — to provide that New Allurion stockholders may only act by holding a stockholders meeting; and

 

   

Advisory Organizational Documents Proposal G — to provide that the New Allurion Board would be expressly authorized to adopt, amend, alter or repeal the Proposed Bylaws on an affirmative vote of the majority of directors. In addition, to provide that the Proposed Bylaws could be amended or repealed by New Allurion stockholders by the affirmative vote of the holders of at least 66 2/3% of the then outstanding shares of capital stock of New Allurion entitled to vote on such amendment or repeal, voting together as a single class; unless the New Allurion Board recommends that New Allurion stockholders approve such amendment or repeal at such meeting of New Allurion stockholders, in which case such amendment or repeal shall only require the affirmative vote of the majority of outstanding shares of capital stock of New Allurion entitled to vote on such amendment or repeal, voting together as a single class.

For more information, see the section entitled “Proposal No. 3 — The Advisory Organizational Documents Proposals.”

The Exchange Proposal

In connection with the Business Combination, Compute Health Stockholders are being asked to approve, for purposes of complying with applicable listing rules of the NYSE: (a) the issuance of up to 37,812,000 shares of New Allurion Common Stock (together with the reservation of additional shares of New Allurion Common Stock for issuance in respect of the New Allurion Warrants, New Allurion Options, and New Allurion RSU Awards issued in exchange for outstanding Allurion Warrants, Allurion Options, and Allurion RSU Awards, respectively) in the Intermediate Merger in accordance with the terms of the Business Combination Agreement; (b) the issuance and sale of 5,386,695 shares of New Allurion Common Stock in the PIPE Investment to certain investors; (c) the issuance of up to 3,602,114 shares of New Allurion Common Stock to the Sponsor and the Additional Class B Holders, assuming the maximum amount allowable in the Sponsor Loan Conversion and the minimum number of shares of Compute Health Class A Common Stock are contributed by the Sponsor to Compute Health pursuant to the Sponsor Contribution Agreement; (d) the issuance of 13,101,132 shares of New Allurion Common Stock to the Public Stockholders; (e) up to 1,500,000 shares of New Allurion Common Stock, in the aggregate, to RTW and Fortress or its affiliates pursuant to the Backstop Agreement, Amended and Restated RTW Side Letter or the Term Loan Credit Agreement, as applicable; (f) up to 1,600,000 shares of New Allurion Common Stock pursuant to HVL’s Termination Agreement, and

 

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(g) 9,000,000 shares of New Allurion Common Stock to the Eligible Allurion Equityholders if certain share price thresholds are achieved within five years after the effectiveness of the Resale Registration Statement.

For more information, see the section entitled “Proposal No. 4 — The Exchange Proposal.”

The Equity Incentive Plan Proposal

The Compute Health Board expects to approve the 2023 Equity Incentive Plan prior to the Special Meeting, subject to the approval by the requisite Compute Health Stockholders. The 2023 Equity Incentive Plan is intended to replace the Allurion Equity Plans, which New Allurion will assume in the Business Combination. Following the Intermediate Merger Closing, no additional stock awards will be granted under the Allurion Equity Plans, although all outstanding stock awards granted under the Allurion Equity Plans immediately prior to the Intermediate Merger Closing will be assumed by New Allurion and generally will continue to be subject to the terms and conditions as set forth under the Allurion Equity Plans and in the agreements evidencing such stock awards.

The Compute Health Board believes that the approval of the 2023 Equity Incentive Plan by the Compute Health Stockholders will benefit the compensation structure and strategy of New Allurion. New Allurion’s ability to attract, retain, and motivate top quality management, employees, partners, consultants, advisors, and non-employee directors is material to its success, and the Compute Health Board has concluded that this would be enhanced by the ability to make grants under the 2023 Equity Incentive Plan.

For more information, see the section entitled “Proposal No. 5 — The Equity Incentive Plan Proposal.”

The Adjournment Proposal

If (i) based on the tabulated vote at the time of the Special Meeting, there are not sufficient votes to authorize Compute Health to consummate the Business Combination (because any of the Required Transaction Proposals have not been approved (including as a result of the failure of any other cross-conditioned Required Transaction Proposals to be approved)) or (ii) we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived, the Compute Health Board may submit a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit the further solicitation and vote of proxies.

If the Adjournment Proposal is not approved by the requisite Compute Health Stockholders, the Compute Health Board may not be able to adjourn the Special Meeting to a later date in the event that there are insufficient votes for the approval of the Required Transaction Proposals, and may be unable to consummate the Mergers.

For additional information, see the section entitled “Proposal No. 6 — The Adjournment Proposal.”

Interests of Compute Health Directors and Officers in the Business Combination

In considering the recommendation of the Compute Health Board to vote in favor of approval of each of the Stockholder Proposals, Compute Health Stockholders should keep in mind that the Sponsor, and certain members of the Compute Health Board and officers of Compute Health, have interests in such Stockholder Proposals that are different from, or in addition to, those of Compute Health Stockholders generally. In particular:

 

   

Prior to the consummation of the IPO on February 9, 2021, the Sponsor purchased 21,562,500 shares of Compute Health Class B Common Stock for an aggregate purchase price of $25,000, or approximately $0.001 per share. Compute Health subsequently transferred an aggregate of 120,000 shares of Compute Health Class B Common Stock held by the Sponsor to the independent directors of the Compute Health Board. As a result of his resignation as a director of Compute Health on January 29, 2023, Dr. Osama Alswailem forfeited the 30,000

 

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shares of Compute Health Class B Common Stock that had previously been transferred to him. If Compute Health does not consummate a business combination by August 9, 2023 (unless such date is extended in accordance with the Compute Health Certificate of Incorporation), it would cease all operations except for the purpose of winding-up, redeeming all of the outstanding shares of Compute Health Class A Common Stock for cash, and, subject to the approval of the remaining Compute Health Stockholders and the Compute Health Board, dissolving and liquidating, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, the Sponsor’s 21,442,500 shares of Compute Health Class B Common Stock and the independent directors’ 90,000 shares of Compute Health Class B Common Stock would be worthless because, following the redemption of the shares of Compute Health Class A Common Stock, Compute Health would likely have few, if any, net assets and because the holders of Compute Health Class B Common Stock have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Compute Health Class B Common Stock if Compute Health fails to complete a business combination within the required period. Additionally, in such event, the 12,833,333 Compute Health Private Warrants purchased by the Sponsor simultaneously with the consummation of the IPO for an aggregate purchase price of $19,250,000 will also expire worthless. Certain of Compute Health’s directors and executive officers also have a direct or indirect economic interest in such Compute Health Private Warrants.

 

   

Michael Harsh, a director of Compute Health, purchased 10,000 Compute Health Units in Compute Health’s IPO. As a result, he owns 10,000 shares of Compute Health Class A Common Stock and 2,500 Compute Health Public Warrants. In the IPO Letter Agreement, Mr. Harsh agreed that he would not redeem any shares held by him in connection with the Business Combination.

 

   

The Sponsor purchased 12,833,333 Compute Health Private Warrants, each exercisable to purchase one share of Compute Health Class A Common Stock at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant, that certain directors and officers of Compute Health may be deemed to beneficially own due to their control of the Sponsor, and such Compute Health Private Warrants will expire and be worthless if a business combination is not consummated within 30 months of the consummation of the IPO (unless such date is further extended in accordance with the Compute Health Certificate of Incorporation).

 

   

The 3,602,114 shares of New Allurion Common Stock into which the 21,442,500 shares of Compute Health Class B Common Stock and 12,833,333 Compute Health Private Warrants held by the Sponsor and the 90,000 shares of Compute Health Class B Common Stock held by the Additional Class B Holders will automatically convert in connection with the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of (i) approximately $38,470,578 million based upon the closing price of $10.68 share of Compute Health Class A Common Stock on NYSE on July 3, 2023, the most recent practicable date prior to the date of this proxy statement/prospectus and (ii) approximately $25,358,883 million, based upon the per share value implied in the Business Combination of $7.04 per share of New Allurion Common Stock. However, given that such shares of New Allurion Common Stock will be subject to certain restrictions, including those described elsewhere in this proxy statement/prospectus, Compute Health believes such shares have less value. Consequently, because (a) Public Stockholders purchased the Compute Health Units at $10.00 per unit and (b) the purchase price of the shares of Compute Health Class B Common Stock and Compute Health Private Warrants (following the recapitalization of 21,532,500 shares of Compute Health Class B Common Stock and 12,833,333 Compute Health Private Warrants into 3,602,114 shares of New Allurion Common Stock) was approximately $5.35 per share, the Sponsor and independent directors may earn a positive rate of return even if the share price of New Allurion Common Stock falls significantly below the per share value implied in the Business Combination of $7.04 per share of New Allurion Common Stock and the Public Stockholders of Compute Health experience a negative rate of return.

 

   

The Sponsor will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to Compute Health Stockholders than liquidate.

 

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The Sponsor has made the following working capital loans to Compute Health: (a) on April 6, 2021, a loan in the principal amount of $1,500,000, which Compute Health has fully drawn, (b) on July 28, 2022, a loan in the principal amount of $1,500,000, which Compute Health has fully drawn, and (c) on February 9, 2023, a loan in the principal amount of $4,750,000, of which Compute Health has drawn $3,300,000, each as of the date hereof. Pursuant to the terms of the Business Combination Agreement, at the time of the Intermediate Merger Closing, (i) $2,500,000 of such Sponsor Loans outstanding as of the Closing Date will be repaid at the Closings from funds available in the Trust Account or from proceeds of the PIPE Investment or Revenue Interest Financing (or, if not so paid, by New Allurion), (ii) in the event the aggregate amount of Sponsor Loans outstanding as of the Closing Date is greater than $2,500,000 (such excess, the “Sponsor Loan Excess”), the Sponsor Loan Excess, up to an amount not to exceed $5,250,000 (the “Sponsor Loan Equity Conversion Cap”), outstanding as of the Closing Date will be converted into shares of New Allurion Common Stock, equivalent in value to the amount of such Sponsor Loan Excess (capped at the Sponsor Loan Equity Conversion Cap), at a price per share of New Allurion Common Stock of $7.04 (the “Sponsor Loan Equity Issuance”) and (iii) with respect to any Sponsor Loan Excess above the Sponsor Loan Equity Conversion Cap (such excess, the “Extinguishable Sponsor Loan Excess”), such Extinguishable Sponsor Loan Excess will be fully extinguished and forgiven, and Compute Health and New Allurion will have no obligation to pay such excess amounts; provided that Allurion may, in its sole discretion, pursuant to an election made prior to the Closings, repay on the Closing Date some or all of the Sponsor Loan Excess, up to the Sponsor Loan Equity Conversion Cap, in cash.

 

   

Given the differential in purchase price that the Sponsor paid for the shares of Compute Health Class B Common Stock as compared to the price of the Compute Health Units sold in the IPO and the number of shares of New Allurion Common Stock that the Sponsor will receive upon the CPUH Recapitalization, the Sponsor and its affiliates may realize a positive rate of return on such investments even if other Compute Health Stockholders experience a negative rate of return following the Business Combination.

 

   

The Sponsor and its affiliates are active investors across a number of different investment platforms, which Compute Health and the Sponsor believe improved the volume and quality of opportunities that were available to Compute Health. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple investment vehicles. In order to provide the Sponsor with the flexibility to evaluate opportunities across these platforms, the Compute Health Certificate of Incorporation provides that Compute Health renounces its interest in any business combination opportunity offered to any founder, director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of Compute Health and is an opportunity that Compute Health is able to complete on a reasonable basis. This waiver allows the Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the investment vehicle. Compute Health does not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on our search for an acquisition target.

 

   

Compute Health’s existing directors and officers will be eligible for continued indemnification and continued coverage under Compute Health’s directors’ and officers’ liability insurance after the Business Combination.

 

   

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to Compute Health if and to the extent any claims by a vendor for services rendered or products sold to Compute Health, or a prospective target business with which Compute Health has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest, or claim of any kind in or to any monies held in the Trust Account or to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

 

   

Following consummation of the Business Combination, the Sponsor, Compute Health’s officers and directors and their respective affiliates would be entitled to reimbursement for certain reasonable out-of-pocket expenses related to identifying, investigating, and consummating an initial business

 

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combination, and repayment of any other loans, if any, and on such terms as to be determined by Compute Health from time to time, made by the Sponsor or certain of Compute Health’s officers and directors to finance transaction costs in connection with an intended initial business combination. However, if Compute Health fails to consummate a business combination within the required period, the Sponsor and Compute Health’s officers and directors and their respective affiliates will not have any claim against the Trust Account for reimbursement.

For additional information regarding pre-existing relationships between certain of the parties to the Business Combination Agreement and certain of their affiliates, see the subsections entitled “Risk Factors — Risks Related to the Business Combination and Compute Health — Pre-existing relationships between participants in the Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the Business Combination” and “Proposal No. 1 — The Business Combination Proposal — Interests of Compute Health Directors and Officers in the Business Combination.”

Opinion of the Financial Advisor to Compute Health

Compute Health obtained a fairness opinion from its independent financial advisor, Lincoln, with respect to the Business Combination. In its fairness opinion, Lincoln concluded that, as of such date and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by Lincoln as set forth in its written opinion, the Aggregate Consideration to be paid by the Surviving Corporation in the Business Combination pursuant to the Business Combination Agreement was fair, from a financial point of view, to the CPUH Unaffiliated Shareholders (defined as holders of Compute Health Class A Common Stock prior to the consummation of the Business Combination other than (i) holders of Compute Health Class A Common Stock who elect to redeem their shares prior to or in connection with the Business Combination, (ii) officers, directors, or affiliates of Compute Health or the Sponsor and (iii) the Sponsor). Additionally, Compute Health’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Compute Health’s advisors and consultants, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, Compute Health’s officers, directors, and advisors have substantial experience with mergers and acquisitions.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a reverse merger in accordance with GAAP. Under this method of accounting, Compute Health will be treated as the acquired company and Allurion is treated as the accounting acquirer for financial reporting purposes. In accordance with this accounting method, the Business Combination will be treated as the equivalent of Allurion issuing stock for the net assets of Compute Health, accompanied by a recapitalization. The net assets of Allurion will be stated at historical cost, with no goodwill or other intangible assets recorded. Allurion has been determined to be the accounting acquiror for purposes of the Business Combination based on an evaluation of the following facts and circumstances:

 

   

Allurion’s existing stockholders will have the greatest percentage of voting interest in New Allurion;

 

   

Allurion’s existing stockholders will have the ability to control decisions regarding election and removal of directors and officers of New Allurion;

 

   

Allurion will comprise the ongoing operations of New Allurion; and

 

   

Allurion’s existing senior management will be the senior management of New Allurion.

See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information regarding the expected accounting treatment of the Business Combination.

 

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Comparison of Corporate Governance and Stockholder Rights

Compute Health is a Delaware corporation and the DGCL and the Compute Health Existing Organizational Documents govern the rights of Compute Health Stockholders. The Compute Health Existing Organizational Documents differ in certain material respects from the Proposed Organizational Documents. As a result, when you become a stockholder of New Allurion, your rights will differ in some regards as compared to when you were a Compute Health Stockholder.

See the section entitled “Comparison of Corporate Governance and Stockholders’ Rights” for more information regarding the important similarities and differences in the corporate governance and rights associated with owning shares of Compute Health and New Allurion.

Summary of Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to Allurion’s business and industry, Compute Health, and the Business Combination are summarized below.

 

   

Allurion expects to incur losses for the foreseeable future, Allurion’s ability to achieve and maintain profitability depends on the commercial success of the Allurion Balloon, and Allurion expects its revenues to continue to be driven primarily by sales of the Allurion Balloon.

 

   

Allurion has a limited operating history and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.

 

   

The failure of the Allurion Balloon to achieve and maintain market acceptance could result in Allurion achieving sales below its expectations, which would cause Allurion’s business, financial condition, and operating results to be materially and adversely affected.

 

   

There is no guarantee that the FDA or non-U.S. regulatory agencies will grant approval or clearance for Allurion’s current or future products, and failure to obtain regulatory approvals or clearances in the United States and other international jurisdictions, or revocation of approvals or clearances in those jurisdictions, will prevent Allurion from marketing its products.

 

   

Allurion Balloon products are not currently approved for commercial sale in the United States. Obtaining such approval is costly and time consuming, and Allurion may not obtain the regulatory approval required to sell its products in the U.S.

 

   

The medical device industry, and the market for weight loss and obesity in particular, is highly competitive. If Allurion’s competitors are able to develop and market products that are safer, more effective, easier to use, or more readily adopted by patients and health care providers, its commercial opportunities will be reduced or eliminated.

 

   

Continued international expansion of Allurion’s business will expose it to business, regulatory, political, operational, financial, and economic risks associated with doing business internationally.

 

   

Allurion depends on a limited number of single source suppliers to manufacture its components, sub-assemblies, and materials, which makes Allurion vulnerable to supply shortages and price fluctuations.

 

   

The regulatory approval process is expensive, time consuming, and uncertain, and may prevent Allurion from obtaining approvals for the commercialization of the Allurion Balloon or its planned products.

 

   

Even if Allurion receives regulatory approval for the Allurion Balloon, it will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject it to penalties if it fails to comply with applicable regulatory requirements.

 

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If patients using Allurion’s products experience adverse events or other undesirable side effects, regulatory authorities could withdraw or modify Allurion’s regulatory approvals, which would adversely affect its reputation and commercial prospects and/or result in other significant negative consequences.

 

   

The medical device industry is characterized by patent litigation and Allurion could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require Allurion to pay damages, or prevent Allurion from marketing its existing or future products.

 

   

If Allurion is not able to obtain and maintain intellectual property protection for its products and technologies, or if the scope of its patents is not sufficiently broad, Allurion may not be able to effectively maintain its market leading technology position.

 

   

Allurion has incurred net operating losses in the past and expects to incur net operating losses for the foreseeable future.

 

   

Allurion has a significant amount of debt, which may affect its ability to operate its business and secure additional financing in the future.

 

   

Allurion may need additional funds to support its operations, and such funding may not be available to Allurion on acceptable terms, or at all, which would force Allurion to delay, reduce, or suspend its planned development and commercialization efforts. Raising additional capital may subject Allurion to unfavorable terms, cause dilution to its existing stockholders, restrict its operations, or require Allurion to relinquish rights to its products and technologies.

 

   

Allurion receives the majority of its revenue from sales to health care providers and other third-party distributors, and the failure to collect receivables from them could adversely affect Allurion’s financial position and results of operations.

 

   

Allurion’s share price may be volatile, and purchasers of its securities could incur substantial losses.

 

   

If the conditions to the Business Combination Agreement are not met or suits to enjoin the transaction are successful, the Business Combination may not occur.

 

   

Some of Compute Health’s officers and directors may have conflicts of interest that may influence or have influenced them to support or approve the Business Combination without regard to your interests or in determining whether Allurion is appropriate for Compute Health’s initial business combination.

 

   

If some or all of the PIPE Investment fails to close, the Fortress Financing, Non-Redemption Agreement or Revenue Interest Financing fail to close, or sufficient Compute Health Stockholders exercise their redemption rights in connection with the Business Combination, there may be insufficient funds to consummate the Business Combination.

 

   

Subsequent to the completion of the Business Combination, New Allurion may be required to take write-downs or write-offs, restructuring and impairment, or other charges that could have a significant negative effect on its financial condition and its share price, which could cause you to lose some or all of your investment.

 

   

If the Business Combination is consummated, Compute Health Stockholders will experience dilution.

 

   

Compute Health is required to cease all solicitations, discussions, or negotiations that could reasonably be expected to lead to, or result in, a business combination with another party because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.

 

   

The terms of the Compute Health Warrants may be amended with the approval of the holders of at least 50% of each of (i) the outstanding Compute Health Public Warrants and (ii) the outstanding Compute Health Private Warrants.

 

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The Compute Health Warrants may have an adverse effect on the market price of the New Allurion Common Stock.

 

   

The exercise of Compute Health Warrants for shares of Compute Health Class A Common Stock would increase the number of shares eligible for future resale in the public market and result in dilution to Compute Health Stockholders. Such dilution will increase if more shares of Compute Health Class A Common Stock are redeemed.

 

   

Public Stockholders who redeem their shares of Compute Health Class A Common Stock may continue to hold any Compute Health Warrants that they own, which results in additional dilution to non-redeeming holders upon exercise of the Compute Health Warrants.

 

   

As the number of redemptions of shares of Compute Health Common Stock increases, the number of shares issuable under the Compute Health Warrants will also increase.

 

   

Certain parties to the Investor Rights Agreement have the right to nominate directors to the New Allurion Board, and their interests may conflict with ours or yours in the future.

Emerging Growth Company

Each of Compute Health and New Allurion is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and they may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Each of Compute Health and New Allurion has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Compute Health and New Allurion, as emerging growth companies, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparability of Compute Health’s and New Allurion’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

New Allurion will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (b) in which New Allurion has total annual gross revenue of at least $1.235 billion, or (c) in which New Allurion is deemed to be a large accelerated filer, which means the market value of New Allurion’s common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which New Allurion has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

 

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Related Agreements

Sponsor Support Agreement

In connection with the execution of the Business Combination Agreement, Compute Health entered into the Sponsor Support Agreement with Allurion, New Allurion, the Additional Class B Holders (as holders of Compute Health Class B Common Stock), and the Sponsor (as the holder of the Compute Health Private Warrants and a holder of Compute Health Class B Common Stock), a copy of which is attached to this proxy statement/prospectus as Annex E.

Pursuant to the Sponsor Support Agreement, upon the terms and subject to the conditions set forth therein, until the earlier of the CPUH Merger Effective Time and the date and time, if any, that the Business Combination Agreement is terminated, the Sponsor and the Additional Class B Holders agreed to (a) vote any shares of Compute Health Common Stock that they own in favor of the proposals regarding the Business Combination, (b) not transfer, sell, pledge, or enter into any voting trusts with respect to any shares of Compute Health Common Stock or Compute Health Warrants they own, (c) solely with respect to the Sponsor, recapitalize its shares of Compute Health Class B Common Stock and Compute Health Private Warrants into 2,088,327 shares of Compute Health Class A Common Stock, (d) solely with respect to each of the Additional Class B Holders, to recapitalize his or her 30,000 shares of Compute Health Class B Common Stock into 21,120 shares of Compute Health Class A Common Stock, (e) waive any adjustment to the conversion ratio set forth in the Compute Health Existing Organizational Documents or any other anti-dilution or similar protection with respect to their respective shares of Compute Health Common Stock in connection with the transactions contemplated by the Business Combination Agreement, and (f) vote against any transaction or series of transactions in which Compute Health would be acquired or acquire another person or business.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Sponsor Support Agreement.”

Allurion Support Agreement

In connection with the execution of the Business Combination Agreement, Compute Health entered into the Allurion Support Agreement with New Allurion, Allurion and certain Allurion Stockholders (the “Initial Allurion Supporting Stockholders”), a copy of which is attached to this proxy statement/prospectus as Annex F. Pursuant to the Allurion Support Agreement, upon the terms and subject to the conditions set forth therein, each Initial Allurion Supporting Stockholder agreed, until the earlier of the Intermediate Merger Effective Time and the date and time, if any, that the Business Combination Agreement is terminated, within 48 hours following the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, to execute and deliver a written consent with respect to all outstanding Allurion Shares held by such Initial Allurion Supporting Stockholder (the “Subject Allurion Shares”) approving the Business Combination Agreement and the transactions contemplated thereby. In addition to the foregoing, each Initial Allurion Supporting Stockholder agreed that, at any meeting of the holders of Allurion capital stock, each such Initial Allurion Supporting Stockholder will appear at the meeting, in person or by proxy, and cause his, her, or its Subject Allurion Shares to be voted (a) to approve and adopt the Business Combination Agreement, the transactions contemplated thereby, and any other matters necessary or reasonably requested by Allurion for the consummation of the Mergers; and (b) against any proposal that conflicts or materially impedes or interferes with, or would adversely affect or delay, the consummation of the transactions contemplated by the Business Combination Agreement.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Allurion Support Agreement.

 

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Non-Redemption Agreement

In connection with the execution of the Business Combination Agreement, Compute Health entered into the Non-Redemption Agreement with New Allurion, Allurion and Medtronic. Pursuant to the Non-Redemption Agreement, upon the terms and subject to the conditions set forth therein, Medtronic agreed, for the benefit of Compute Health, New Allurion, and Allurion, not to, among other things, (a) redeem 700,000 shares of Compute Health Class A Common Stock beneficially owned by Medtronic (the “Medtronic Shares”) and (b) sell, encumber, or otherwise transfer the Medtronic Shares. In connection with these commitments from Medtronic, Compute Health, New Allurion, and Allurion have agreed that, at the CPUH Merger Effective Time, each Medtronic Share will be canceled and converted into the right to receive 1.420455 shares of New Allurion Common Stock.

The obligations of Medtronic pursuant to the Non-Redemption Agreement were subject to Medtronic and Allurion, or their respective designees, having entered into the Medtronic Collaboration pursuant to a sales agency agreement satisfactory to Medtronic, in its sole discretion, so long as such sales agency agreement is substantially consistent with the memorandum of understanding previously entered into between Medtronic and Allurion (the “Medtronic Sales Agency Agreement”). On May 15, 2023, Covidien AG, an affiliate of Medtronic, and Allurion entered into the Medtronic Sales Agency Agreement.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Non-Redemption Agreement.

Investor Rights Agreement

In connection with the Closings, New Allurion, the Sponsor, certain Allurion Stockholders, and certain other parties (each, an “Investor”) will enter into the Investor Rights Agreement. Pursuant to the Investor Rights Agreement, upon the terms and subject to the conditions set forth therein, each Investor (other than New Allurion) will be granted certain registration rights with respect to his, her, or its shares of New Allurion Common Stock.

The Investor Rights Agreement will also restrict the ability of certain Investors to transfer all or a portion of their respective shares of New Allurion Common Stock (or any securities convertible into or exercisable or exchangeable for shares of New Allurion Common Stock), subject to certain permitted transfers, for a period of either 18 months or 12 months following the Closing Date, as applicable. The foregoing lock-up restrictions shall not apply to: (a) any shares of New Allurion Common Stock purchased pursuant to the PIPE Subscription Agreements, (b) 100 shares of New Allurion Common Stock held by each Investor, (c) shares issued to the Sponsor in the Sponsor Loan Equity Issuance, (d) certain incremental shares of PIPE Investors who are existing Allurion Stockholders or existing holders of Allurion Convertible Notes or shares issued upon conversion of securities issued in the Incremental Financing and (e) the Backstop Shares, the Sponsor Contributed Shares, the Gaur Trust Contributed Shares (as defined below) or the shares of New Allurion Common Stock anticipated to be issued to each of HVL, RTW, Fortress and the other holders of Bridge Notes.

Additionally, pursuant to the Investor Rights Agreement, upon the terms and subject to the conditions set forth therein, following the Closings, the New Allurion Board shall consist of seven directors, a majority of which shall be “independent” directors for purposes of NYSE rules, and the following persons will have the following nominations rights with respect to the New Allurion Board, subject to the limitations set forth in the Investor Rights Agreement: (i) one director and one independent director will be nominated by Shantanu Gaur; (ii) one director and one independent director will be nominated by Remus Group Management, LLC (“Remus Capital”); (iii) one director will be nominated by the Sponsor; and (iv) two independent directors will be nominated by Allurion (one of which shall be designated by RTW (as described below)).

 

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For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Investor Rights Agreement.”

PIPE Subscription Agreements

In connection with the execution of the Business Combination Agreement, Compute Health and New Allurion entered into the PIPE Subscription Agreements with the PIPE Investors, pursuant to which, upon the terms and subject to the conditions set forth therein, the PIPE Investors, among other things, have subscribed to purchase the PIPE Securities for a purchase price of $7.04 per share (other than as set forth in the Amended and Restated RTW Side Letter, as described below), for an aggregate purchase price of $37.9 million, which PIPE Securities are to be issued following the CPUH Merger Effective Time and immediately prior to the Intermediate Merger Effective Time. Compute Health and New Allurion may also enter into additional PIPE Subscription Agreements following the execution of the Business Combination Agreement. The obligations of each party to consummate the transactions contemplated by the PIPE Subscription Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the Business Combination.

Omar Ishrak, chairman of the board of directors of Compute Health, has entered into a PIPE Subscription Agreement with an aggregate purchase price of approximately $5 million.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — PIPE Subscription Agreements.

Revenue Interest Financing

On February 9, 2023, Allurion entered into the Revenue Interest Financing Agreement with RTW. Subject to the terms and conditions of the Revenue Interest Financing Agreement, including the closing conditions set forth therein, RTW shall, concurrent with the Closings, pay or cause to be paid to New Allurion the Investment Amount. In exchange for the Investment Amount, New Allurion will remit revenue interest payments on all current and future products and digital solutions developed and to be developed by New Allurion at a rate up to 6.0% of annual net sales prior to December 31, 2026, subject to the terms and conditions of the Revenue Interest Financing Agreement. On or after January 1, 2027, New Allurion will remit revenue interest payments at a rate up to 10.0% of annual net sales, subject to the terms and conditions of the Revenue Interest Financing Agreement and New Allurion will continue to make revenue interest payments to RTW until December 31, 2030. As of the Closings, New Allurion will assume all obligations of Allurion under the Revenue Interest Financing Agreement.

Under the terms of the Revenue Interest Financing Agreement, if RTW has not received revenue interest payments equal to 100% of the Investment Amount by December 31, 2027, New Allurion will be required to make additional payments within 30 days of December 31, 2027 in an amount equal to 100% of the Investment Amount less the aggregate amount of all the payments made by New Allurion to RTW in respect of the revenue interests prior to such date. If RTW has not received revenue interest payments equal to 240% of the Investment Amount by December 31, 2030, New Allurion will be required to make additional payments within 30 days of December 31, 2030 in an amount equal to 240% of the Investment Amount less the aggregate amount of all of the payments by New Allurion to RTW in respect of the revenue interests prior to such date. New Allurion may terminate the Revenue Interest Financing Agreement by prepaying aggregate revenue interest payments equal to 165% of the Investment Amount, or $66.0 million, by March 31, 2026.

The obligations of RTW to consummate the transactions contemplated by the Revenue Interest Financing Agreement, including the Revenue Interest Financing, are subject to the satisfaction or waiver of certain conditions precedent, including the concurrent closing of the Business Combination and PIPE Investment and delivery to RTW of specified closing documents, including a guaranty in favor of RTW.

 

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All obligations under the Revenue Interest Financing Agreement will be guaranteed by New Allurion, Allurion France SAS, Allurion Australia Pty Ltd, and any future material subsidiaries of New Allurion and secured by a second priority lien on substantially all of their assets.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Revenue Interest Financing.

Term Loan Facility

Upon consummation of the Business Combination, Fortress is expected to provide to New Allurion a $60 million senior secured term loan facility (the “Term Loan Facility” and the term loan thereunder, the “Term Loan”) pursuant to the Term Loan Credit Agreement, by and among New Allurion, as the borrower, the guarantors named therein, and Fortress. The Term Loan Facility matures on June 30, 2027.

Monthly amortization payments equal to 1/24th of the original aggregate principal amount of the Term Loan Facility will be due commencing on each monthly amortization payment date following the third anniversary of the date on which the Term Loan Credit Agreement is funded, with the balance payable at final maturity. Interest will accrue on the Term Loan at a rate equal to the sum of 6.44% per annum plus the greater of the Wall Street Journal Prime Rate as of any day and 3.00% per annum.

All obligations under the Term Loan Facility will be guaranteed by New Allurion, Allurion France SAS, Allurion Australia Pty Ltd., and any future material subsidiaries of New Allurion and secured by a first lien on substantially all of their respective assets.

Funding under the Term Loan Facility is subject to certain conditions precedent, including (i) consummation of the Incremental Financing; (ii) consummation of the Business Combination in accordance with the Business Combination Agreement; (iii) a minimum cash closing condition of $70 million, calculated in accordance with the Term Loan Credit Agreement (iv) minimum revenue for the trailing 12 month period equal to (a) $60 million, if the Term Loan funding occurs on or prior to March 31, 2023; (b) $65 million, if the Term Loan funding occurs after March 31, 2023, but on or prior to June 30, 2023; and (c) $70 million, if the Term Loan funding occurs after June 30, 2023 (such condition, the “Minimum Revenue Condition”); and (v) other customary closing conditions. Pursuant to the Fortress Letter Agreement, Fortress waived in its entirety its condition to closing under the Fortress Bridging Agreement, which required that Allurion raise at least $15 million in incremental financing prior to the consummation of the transactions contemplated by the Business Combination Agreement. On July 5, 2023, we requested from Fortress a waiver of the Minimum Revenue Condition because we believed that we would not have satisfied such condition upon closing of the Business Combination. Fortress granted the requested waiver in its entirety on the same date.

Starting April 1, 2023, Fortress’s unfunded commitment under the Term Loan Facility began accruing a ticking fee equal to 1.0% per annum, which shall be payable in full upon the earlier of termination of Fortress’s commitment and the funding of the Term Loan Facility.

New Allurion had agreed to issue up to an additional 1,000,000 shares of New Allurion Common Stock to Fortress (the “Additional Fortress Shares”), with (i) 250,000 of such Additional Fortress Shares to be issued at the Closings and not subject to any contingencies and (ii) 750,000 of such Additional Fortress Shares to be issued based on the Net Closing Cash of Allurion as of immediately prior to the Intermediate Merger Effective Time (to be determined linearly, based on no Additional Fortress Shares being issuable if such Net Closing Cash is equal to or greater than $100 million and 750,000 Additional Fortress Shares being issuable if such Net Closing Cash is $70 million).

On May 2, 2023, pursuant to the Backstop Agreement and contemporaneous with the execution of the Backstop Agreement, the Fortress Investor and Allurion entered into the Fortress Letter Agreement, in order to

 

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reflect that any Conditional Additional New Allurion Shares issuable to Fortress under the Term Loan Credit Agreement, if any, would be calculated net of any Backstop Shares issuable to the Fortress Investor under the Backstop Agreement. Additionally, pursuant to the Fortress Letter Agreement, the Fortress Investor and Allurion have agreed that, if a third party subsequently provides Allurion with debt financing on more favorable terms than those provided to the Fortress Investor under the Backstop Agreement, Fortress will be offered the same or more favorable terms and conditions as Allurion provided to such third party.

Fortress’s commitment under the Term Loan Facility will expire automatically on August 7, 2023, if the Term Loan Facility has not funded prior to such time.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Term Loan Facility.”

Amended and Restated RTW Side Letter

In connection with the execution of the Business Combination Agreement, the PIPE Subscription Agreements, and the Revenue Interest Financing Agreement, Compute Health, New Allurion, Allurion, and Merger Sub II entered into the Existing RTW Side Letter with RTW, pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, (a) Compute Health and New Allurion have agreed not to enter into PIPE Subscription Agreements with PIPE Investors on more favorable or advantageous terms than those included in the PIPE Subscription Agreements entered into by and among Compute Health, New Allurion, and RTW, (b) New Allurion has agreed that RTW may elect to convert up to 50% of the consideration RTW pays to New Allurion in connection with the PIPE Investment by forfeiting New Allurion Common Stock into financing provided by RTW to Allurion pursuant to an Additional Revenue Interest Financing Agreement (as defined in the Amended and Restated RTW Side Letter), (c) New Allurion had agreed to issue up to an additional 1,000,000 Additional RTW Shares, with (i) 250,000 of such Additional RTW Shares to be issued at the Closings and not subject to any contingencies and (ii) up to 750,000 of such Additional RTW Shares to be issued based on the Net Closing Cash as of immediately prior to the Intermediate Merger Effective Time (to be determined linearly, based on no Additional RTW Shares being issuable if such Net Closing Cash is equal to or greater than $100 million and 750,000 Additional RTW Shares being issuable if such Net Closing Cash is $70 million), (d) New Allurion has agreed that RTW shall have the right to designate one independent director to the New Allurion Board, and (e) New Allurion has agreed to create the board position of lead independent director, who shall serve as chair or co-chair of the New Allurion Board, and who will initially be Omar Ishrak. As a result of the issuance by New Allurion of the Additional RTW Shares, the effective share price of New Allurion Common Stock offered to RTW could range from $6.30 per share to $4.79 per share.

On May 2, 2023, pursuant to the Backstop Agreement and contemporaneous with the execution of the Backstop Agreement, Compute Health, New Allurion, Merger Sub II, Allurion and RTW entered into the Amended and Restated RTW Side Letter, which amends and restates the Existing RTW Side Letter in its entirety, in order to reflect that any Conditional Additional New Allurion Shares issuable to RTW under the Amended and Restated RTW Side Letter, if any, would be calculated net of any Backstop Shares issuable to RTW under the Backstop Agreement. Additionally, pursuant to the Amended and Restated RTW Side Letter, the parties to the Amended and Restated RTW Side Letter have agreed that, if a third party subsequently provides Allurion with debt financing on more favorable terms than those provided to RTW under the Backstop Agreement, RTW will be offered the same or more favorable terms and conditions as Allurion provided to such third party.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Amended and Restated RTW Side Letter.”

Chardan Equity Facility

On February 9, 2023, Allurion entered into a commitment letter with Chardan, pursuant to which Allurion agreed that, upon the Closings, New Allurion will enter into the Chardan Equity Facility. Pursuant to the Chardan

 

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Equity Facility, New Allurion will agree to pay a $0.1 million structuring fee to Chardan and issue to Chardan 35,511 shares of New Allurion Common Stock. In exchange, New Allurion will have a right to require Chardan to purchase shares of New Allurion Common Stock up to the aggregate commitment amount of $100.0 million at prices per share based on the VWAP. The closing of the Chardan Equity Facility is conditioned upon the Closings and will remain outstanding for three years from the execution date unless terminated upon reasonable notice.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Chardan Equity Facility.”

2023 Convertible Note Incremental Financing

Pursuant to the Business Combination Agreement, Allurion is required to use reasonable best efforts to obtain gross cash proceeds of at least $15 million of additional financing pursuant to one or more private sales of Allurion’s equity securities, which shall automatically convert into shares of Allurion Common Stock upon the consummation of the Business Combination, which is referred to as the Incremental Financing. From February 15, 2023 until July 5, 2023, Allurion issued an aggregate principal amount of $19.6 million Bridge Notes to various investors pursuant to convertible note purchase agreements, dated as of February 15, 2023 and June 14, 2023, including the $13 million HVL Bridge Note sold to HVL on February 15, 2023. The Bridge Notes were offered in a private placement under the Securities Act. The Bridge Notes will mature on the Maturity Date 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 Business Combination on or before August 31, 2023, the Bridge Notes shall be converted into the number of shares of Allurion Common Stock obtained by utilizing the Conversion Price. If Allurion consummates a qualified financing with proceeds of not less than $15 million, the Bridge Notes shall, at the option of the holder, either (a) be converted into the number of shares of a newly-created series of preferred stock of Allurion obtained by dividing the outstanding balance by (i) $260,000,000 or (ii) the cash price per share of the new securities in the qualified financing issued to investors by 0.85 (whichever is greater), or (b) be repaid on a date on or prior to the Maturity Date chosen by Allurion (the “Repayment Date”), with the balance determined as of the Repayment Date. If Allurion consummates a deemed liquidation event (as defined in the Allurion Certificate of Incorporation), then Allurion shall pay to the holders of the Bridge Notes one and a half times the principal then-outstanding under the Bridge Notes, plus accrued interest then-outstanding immediately prior to the closing of such deemed liquidation event.

The Side Letter Holders also entered into the Side Letters, pursuant to which, in the event the Side Letter Holders’ Bridge Notes converted in connection with the consummation of the Business Combination, the conversion rate for such Bridge Notes would be adjusted after the Closing Date to provide each of the Side Letter Holders with additional shares of New Allurion Common Stock, in the event that the trading price of the shares of New Allurion Common Stock was lower than the Conversion Price, as adjusted for the Intermediate Merger Exchange Ratio.

Following the consummation of the Initial Financing, the parties determined to refinance the Initial Financing and, pursuant to 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 Prepayment in cash by Allurion to HVL on May 2, 2023, $1.5 million of which is deemed a prepayment penalty and (b) immediately prior to the consummation of the Business Combination, an Additional Payment of at least

 

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$6 million under the HVL Bridge Note 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.

In addition, under HVL’s Termination Agreement, upon the terms and subject to the conditions set forth therein, New Allurion has agreed to issue to HVL a number of shares of New Allurion Common Stock equal to (a) the Additional Hunter Shares plus (b) the Hunter Closing Shares.

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.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — 2023 Convertible Note Incremental Financing.”

Backstop Agreement

On May 2, 2023, the Fortress Investor and RTW entered into the Backstop Agreement with Allurion, New Allurion and HVL. 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, such Backstop Purchaser will, at the Backstop Closing, purchase up to its $2 million Maximum Purchase Amount of the HVL Bridge Note from HVL.

As soon as practicable, but in any event within one business day following the Determination Date, Allurion will notify HVL and the Backstop Purchasers of, among other things, the Backstop Closing Date, the Balance and, subject to the limitations set forth in the Backstop Agreement, the Backstop Amount, 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 Amounts, upon the terms and subject to the conditions set forth in the Backstop Agreement, Allurion will (a) cancel the existing HVL Bridge Note and issue a new convertible unsecured promissory note to HVL for any remaining Balance of the HVL Bridge Note expected to be outstanding after the Backstop Closing, together with all unpaid interest on the HVL Bridge Note accrued since the date of issuance thereof and (b) issue new convertible unsecured promissory notes (the “New Bridge Notes”) to each Backstop Purchaser with an issuance date of the Backstop Closing Date and an original principal amount equal to such Backstop Purchaser’s Backstop Purchase Amount, with such New Bridge Notes to be held in escrow until the Backstop Closing.

In addition, upon the terms and subject to the conditions set forth in the Backstop Agreement, in consideration of each Backstop Purchaser’s commitment to purchase its Backstop Amount of the HVL Bridge Note, subject to the terms and conditions of the Backstop Agreement, New Allurion will, no later than the Backstop Closing Date, issue to each Backstop Purchaser a number of Backstop Shares as follows:

 

  a)

In the event that the Backstop Amount for each Backstop Purchaser is equal to its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of New Allurion Common Stock equal to the greater of (i) 700,000 shares of New Allurion Common Stock and (ii) the Conditional Additional New Allurion Shares (as defined below) issuable (x) in the case of the Fortress Investor, to the Fortress Investor or its applicable affiliate pursuant to the Term Loan Credit Agreement and (y) in the case of RTW, to RTW pursuant to the Amended and Restated RTW Side Letter; provided that, in the event that for any reason the aggregate number of shares issuable to the Fortress Investor pursuant to clause (ii) above is greater than the

 

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  aggregate number of shares issuable to RTW pursuant to clause (ii), or vice versa, the Backstop Purchaser that would receive the lesser aggregate number of shares shall instead receive the higher number of aggregate shares so that, pursuant to such clause (ii), each of the Fortress Investor and RTW shall receive the same aggregate number of shares of New Allurion Common Stock.

 

  b)

In the event that the Backstop Purchase Amount for each Backstop Purchaser is less than its Maximum Purchase Amount, New Allurion will issue to each Backstop Purchaser under the Backstop Agreement an aggregate amount of shares of New Allurion Common Stock equal to 700,000 multiplied by a fraction having (x) a numerator equal to such Backstop Purchaser’s Backstop Amount and (y) a denominator equal to 2,000,000.

For additional information, see the section entitled “The Business Combination Agreement — Related Agreements — The Backstop Agreement.”

Contribution Agreements

Gaur Contribution Agreement

On May 2, 2023, the Gaur Trust and New Allurion entered into the Gaur Contribution Agreement, pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, the Gaur Trust agreed to contribute to New Allurion, as a contribution of capital, a number of shares of New Allurion Common Stock (the “Gaur Trust Contributed Shares”) equal to: (a) 50,000 shares of New Allurion Common Stock (being one-sixth of the Hunter Closing Shares) plus (b) a number of shares of New Allurion Common Stock equal to one-third of the Additional Hunter Shares. The Gaur Trust’s contribution of the Gaur Trust Contributed Shares will be effective immediately following the consummation of the Business Combination and the issuance of New Allurion Common Stock to the Gaur Trust pursuant to the terms of the Business Combination Agreement.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Contribution Agreements — Gaur Contribution Agreement.”

Sponsor Contribution Agreement

On May 2, 2023, the Sponsor and Compute Health entered into the Sponsor Contribution Agreement pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, the Sponsor agreed to contribute to Compute Health, as a contribution to capital, the Sponsor Contributed Shares. The Sponsor’s contribution of the Sponsor Contributed Shares will be contingent on the Closings, and will be effective immediately following the Sponsor Recapitalization and immediately prior to the CPUH Merger Effective Time.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — Contribution Agreements — Sponsor Contribution Agreement.”

RSU Forfeiture Agreement

On May 2, 2023, Krishna Gupta, a member of the Allurion Board, entered into the RSU Forfeiture Agreement, pursuant to which, among other things, upon the terms and subject to the conditions set forth therein, Mr. Gupta agreed to forfeit the Forfeited RSUs. The Forfeited RSUs shall be terminated and cancelled without consideration therefor, effective as of immediately following the consummation of the Business Combination.

For additional information, see the subsection entitled “The Business Combination Agreement — Related Agreements — RSU Forfeiture Agreement.”

U.S. Federal Income Tax Considerations

For a discussion summarizing the U.S. federal income tax considerations of the Mergers and exercise of redemption rights, please see the section entitled “U.S. Federal Income Tax Considerations.”

 

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Proposals to be Put to the Compute Health Warrant Holders at the Warrant Holders Meeting

The Warrant Amendment Proposal

In connection with the Business Combination, Compute Health is seeking to (i) amend the anti-dilution provisions of the Warrant Agreement by deleting section 4.5 of the Warrant Agreement, (ii) provide that, upon the completion of the Business Combination, each of the outstanding Compute Health Public Warrants, which currently entitle the holder thereof to purchase one share of Compute Health Class A Common Stock at an exercise price of $11.50 per share, will become exercisable for 1.420455 shares of New Allurion Common Stock at an exercise price of $11.50 per share, (iii) provide that, upon the completion of the Business Combination, each Compute Health Warrant Holder will be issued one-half of one New Allurion Public Warrant for each outstanding Compute Health Public Warrant held by such holder, and (iv) amend the term of the Compute Health Warrants such that they will expire six years after the consummation of the Business Combination, or earlier upon redemption or liquidation.

The effect of the Warrant Amendment Proposal, if approved, will be to reduce the number of shares of New Allurion Common Stock that would otherwise be issuable upon exercise of the New Allurion Public Warrants received by the holders of Compute Health Public Warrants by approximately 50%, thereby reducing the amount by which New Allurion’s stockholders would otherwise have been diluted as a result of the exercise in full of the New Allurion Public Warrants.

For additional information, see the section entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal.”

The Warrant Holders Adjournment Proposal

If, based on the tabulated vote at the time of the Warrant Holders Meeting, there are not sufficient votes to authorize Compute Health to consummate the Warrant Amendment, the Compute Health Board may submit a proposal to adjourn the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies.

If the Warrant Holders Adjournment Proposal is not approved by the Compute Health Warrant Holders, the Compute Health Board may not be able to adjourn the Warrant Holders Meeting to a later date if necessary, to permit the further solicitation and vote of proxies if it is determined by Compute Health that more time is necessary or appropriate to approve the Warrant Amendment Proposal at the Warrant Holders Meeting. If Compute Health does not complete the Business Combination and fails to complete an initial business combination by August 9, 2023, unless Compute Health submits and its stockholders approve an extension of such date, Compute Health will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the Public Stockholders and the Compute Health Warrants will expire worthless.

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF COMPUTE HEALTH

Compute Health is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination.

The summary historical statements of operations data of Compute Health for the periods ended March 31, 2023 and 2022 and the historical balance sheet data as of March 31, 2023 are derived from Compute Health’s unaudited financial statements included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with Compute Health’s financial statements and related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Compute Health” contained elsewhere in this proxy statement/prospectus. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of Compute Health or New Allurion.

Statement of Operations

 

     Three Month Ended  
     March 31,  
     2023     2022  

General and administrative expenses

   $ 3,511,785     $ 533,409  

Franchise tax expenses

     50,050       50,000  
  

 

 

   

 

 

 

Loss from operations

     (3,561,835     (583,409

Other income (expense)

    

Change in fair value of derivative warrant liabilities

     (9,974,780     13,247,800  

Change in fair value of convertible promissory note — related party

     (573,480     41,590  

Income from investments held in Trust Account

     1,012,302       70,395  

Interest earned on bank account

     905       —    
  

 

 

   

 

 

 

Loss (income) before income tax

     (13,096,888     12,776,376  

Income tax expense

     202,073       —    
  

 

 

   

 

 

 

Net (loss) income

   $ (13,298,961)     $ 12,776,376  
  

 

 

   

 

 

 

Weighted average shares outstanding of Class A common stock, basic and diluted

     9,223,194       86,250,000  
  

 

 

   

 

 

 

Basic and diluted net (loss) income per share, Class A common stock

   $ (0.43   $ 0.12  
  

 

 

   

 

 

 

Weighted average shares outstanding of Class B common stock, basic and diluted

     21,562,500       21,562,500  
  

 

 

   

 

 

 

Basic and diluted net (loss) income per share, Class B common stock

   $ (0.43 )    $ 0.12  
  

 

 

   

 

 

 

 

Balance Sheet Data    As of
March 31,
2023
 
     (in dollars,
except for
share numbers)
 

Total assets

   $ 96,959,913  
  

 

 

 

Total liabilities

     24,125,816  
  

 

 

 

Total stockholders’ deficit

     (23,527,623
  

 

 

 

Total liabilities and stockholders’ deficit

     96,959,913  
  

 

 

 

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ALLURION

Allurion is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination.

The summary historical statements of operations data of Allurion for the three months ended March 31, 2023 and 2022 and the historical balance sheet data as of March 31, 2023 and December 31, 2022 are derived from Allurion’s unaudited financial statements included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with Allurion’s financial statements and related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Allurion” contained elsewhere in this proxy statement/prospectus. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of Compute Health or New Allurion.

Consolidated Statements of Operations Data

 

     Three Months Ended
March 31,
 
(in thousands)    2023     2022  

Revenue

   $ 14,071     $ 12,713  

Cost of revenue

     2,940       2,576  
  

 

 

   

 

 

 

Gross profit

     11,131       10,137  

Total operating expenses

     25,022       15,721  
  

 

 

   

 

 

 

Loss from operations

     (13,891     (5,584

Interest expense, net

     (2,237     (702

Changes in fair value of derivative liability

     (29     —    

Change in fair value of warrants

     (1,475     34  

Other expense, net

     (135     (167
  

 

 

   

 

 

 

Loss before income taxes

     (17,767     (6,419

Provision for income taxes

     (34     —    
  

 

 

   

 

 

 

Net loss

     (17,801     (6,419
  

 

 

   

 

 

 

Cumulative undeclared preferred dividends

     (717     (717
  

 

 

   

 

 

 

Net loss attributable to common shareholders

   $ (18,518   $ (7,136)  
  

 

 

   

 

 

 

Net loss per share, basic and diluted

   $ (2.42   $ (0.96)  
  

 

 

   

 

 

 

Weighted-average shares outstanding, basic and diluted

     7,661,736       7,422,026  

Consolidated Balance Sheets Data

 

    

March 31,

    December 31,  
(in thousands)    2023     2022  

Cash and cash equivalents

   $ 9,943     $ 7,685  

Total current assets

     45,730       43,383  

Total assets

     57,966       51,370  

Term loan

     53,521       53,360  

Total current liabilities

     83,980       75,867  

Total liabilities

     107,622       83,684  

Redeemable convertible preferred stock

     39,122       39,122  

Total stockholders’ deficit

     (88,778     (71,436

Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit

     57,966       51,370  

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial data is derived from the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statement of operations included elsewhere in this proxy statement/prospectus and were prepared in accordance with Article 11 of Regulation S-X.

The unaudited pro forma condensed combined financial information is based on Compute Health’s and Allurion’s historical financial statements. The unaudited pro forma condensed combined balance sheet as of March 31, 2023 reflects adjustments that depict the accounting of the Mergers, the PIPE Investment, the Incremental Financing, the Revenue Interest Financing, the Fortress Financing, the Chardan Equity Facility, the Backstop Agreement, the Contribution Agreements, the RSU Forfeiture Agreement, the Termination Agreements, the Amended and Restated RTW Side Letter, and the Fortress Letter Agreement. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2023 and the year ended December 31, 2022 reflects those adjustments assuming they were made on January 1, 2022, which is the beginning of the earliest period presented.

The selected unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. Compute Health and Allurion have not had any historical relationship prior to the Mergers. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The selected unaudited pro forma condensed combined financial information has been derived from:

 

   

the accompanying notes to the pro forma financial information;

 

   

the historical unaudited condensed financial statements of Compute Health as of and for the three months ended March 31, 2023 and the related notes included elsewhere in this proxy statement/prospectus;

 

   

the historical unaudited condensed consolidated financial statements of Allurion as of and for the three months ended March 31, 2023 and the related notes included elsewhere in this proxy statement/prospectus;

 

   

the historical audited financial statements of Compute Health as of and for the year ended December 31, 2022 and the related notes included elsewhere in this proxy statement/prospectus; and

 

   

the historical audited consolidated financial statements of Allurion as of and for the year ended December 31, 2022 and the related notes included elsewhere in this proxy statement/prospectus;

and should be read together with:

 

   

the Existing Business Combination Agreement, a copy of which is attached to this proxy statement/ prospectus as Annex A, which is incorporated by reference herein in its entirety, and the BCA Amendment, a copy of which is attached to this proxy statement/prospectus as Annex A-1, which is incorporated by reference herein in its entirety; and

 

   

the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Compute Health”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Allurion,” and other financial information relating to Compute Health and Allurion included elsewhere in this proxy statement/prospectus.

The selected unaudited pro forma condensed combined financial data has been prepared assuming that (i) the HVL Bridge Note has an outstanding principal of $6.5 million immediately prior to the Closings, (ii) the Backstop Amount is zero and no Backstop Shares are issued, (iii) there are Net Closing Cash amounts of greater

 

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than $100 million under Scenario 1 and at least $70 million under Scenario 2, and (iv) no Contingency Shares are issued, and $17 million of transaction expenses are assumed and paid by New Allurion and no expenses which would be payable by Compute Health or New Allurion are deducted from their consideration at or after the Closings (on an as-converted basis), and assuming two redemption scenarios as follows:

 

   

Assuming No Redemptions (Scenario 1): This presentation assumes that no Public Stockholders exercise their right to have their Compute Health Class A Common Stock converted into their pro rata share of the Trust Account and thus the full amount held in the Trust Account as of the Closings is available for the Mergers; and

 

   

Assuming Maximum Redemptions (Scenario 2): This presentation assumes that Public Stockholders holding 8,523,194 shares of the Compute Health Class A Common Stock will exercise their redemption rights for their pro rata share (approximately $10.23 per share) of the funds in the Trust Account. This scenario gives effect to Compute Health Class A Common Stock redemptions for aggregate redemption payments of $87.2 million using a $10.23 per share redemption price. Additionally, this presentation also contemplates Medtronic electing not to redeem 700,000 shares of Compute Health Class A Common Stock pursuant to the Non-Redemption Agreement effective immediately prior to the Closings. This scenario includes all adjustments contained in the “no redemptions” scenario and presents additional adjustments to reflect the effect of the maximum redemptions.

 

     Pro Forma  
     Three Months Ended March 31, 2023     Year Ended December 31, 2022  
     Scenario 1     Scenario 2     Scenario 1     Scenario 2  
     (Assuming No
Redemptions)
    (Assuming
Maximum
Redemptions)
    (Assuming No
Redemptions)
    (Assuming
Maximum
Redemptions)
 
     (in thousands, except share and per share amounts)  

Combined Statement of Operations data:

 

     

Revenue

   $ 14,071     $ 14,071     $ 64,211     $ 64,211  

Total gross profit

   $ 11,131     $ 11,131     $ 50,726     $ 50,726  

Loss from operations

   $ (14,077   $ (14,077   $ (53,183   $ (53,183

Net loss attributable to common shareholders

   $ (22,645   $ (23,657   $ (42,553   $ (53,214

Basic and diluted net loss per share, Common Stock

   $ (0.42   $ (0.55   $ (0.78   $ (1.25

Basic and diluted weighted average shares outstanding, Common Stock

     54,552,584       42,660,985       54,449,249       42,558,339  

 

     Pro Forma  
     As of March 31, 2023  
     Scenario 1      Scenario 2  
     (Assuming No
Redemptions)
     (Assuming
Maximum
Redemptions)
 
     (in thousands)  

Combined Balance Sheet data:

     

Cash and cash equivalents

   $ 162,193      $ 75,001  

Total assets

   $ 204,635      $ 117,443  

Revenue interest notes payable

   $ 40,000      $ 40,000  

Term loan, net of discounts

   $ 59,550      $ 59,550  

Contingent consideration liability

   $ 53,310      $ 53,310  

Total liabilities

   $ 194,632      $ 194,632  

Total shareholders’ equity (deficit)

   $ 10,003      $ (77,189

 

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MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

Compute Health

Compute Health Units, Compute Health Class A Common Stock, and Compute Health Public Warrants are currently listed on the NYSE under the symbols “CPUH.U,” “CPUH,” and “CPUH WS,” respectively.

The closing price of the Compute Health Units, Compute Health Class A Common Stock, and Compute Health Warrants on February 8, 2023, the last trading day before announcement of the execution of the Existing Business Combination Agreement, was $10.25, $10.25, and $0.14, respectively. As of July 3, 2023 the record date for the Special Meeting, the most recent closing price of the Compute Health Units, Compute Health Class A Common Stock and Compute Health Public Warrants was $10.72, $10.68, and $0.4801, respectively.

Holders of the Compute Health Units, Compute Health Class A Common Stock, and Compute Health Public Warrants should obtain current market quotations for their securities. The market price of Compute Health’s securities could vary at any time before the Business Combination.

Holders

As of July 3, 2023, there was one holder of record of Compute Health Units, one holder of record of Compute Health Class A Common Stock, and were two holders of record of Compute Health Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Compute Health Units, Compute Health Class A Common Stock, and Compute Health Warrants are held of record by banks, brokers, and other financial institutions.

Dividend Policy

Compute Health has not paid any cash dividends on Compute Health Common Stock to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends by New Allurion in the future will be dependent upon New Allurion’s revenues and earnings, if any, capital requirements, and general financial condition subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of the New Allurion Board at such time. New Allurion’s ability to pay dividends may also be restricted by the terms of its Runway Loan, the Term Loan Credit Agreement (when it becomes effective), any future credit agreement or any future debt, or preferred equity securities of New Allurion or its subsidiaries. See the subsection entitled “Risk Factors — Risks Related to Our Financial Condition and Capital Requirements — We have a significant amount of debt, which may affect our ability to operate our business and secure additional financing in the future.”

Allurion

Historical market price information for Allurion Common Stock, Allurion Preferred Stock, and Allurion Warrants is not provided because there is no public market for Allurion Common Stock, Allurion Preferred Stock, and Allurion Warrants.

 

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RISK FACTORS

In addition to the other information contained in this proxy statement/prospectus, the following risks have the potential to impact the business and operations of Allurion and New Allurion. These risk factors are not exhaustive and all investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of Allurion, New Allurion and the Business Combination. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe are immaterial could have a material adverse effect on our business, financial condition, results of operations and future growth prospects.

Risks Related to Allurion

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us,” or “our” refer to the business of Allurion and its subsidiaries prior to the consummation of the Mergers, and New Allurion and its subsidiaries, including Allurion, following the consummation of the Mergers.

Risks Related to the Development and Commercialization of Our Products

We expect to incur losses for the foreseeable future, our ability to achieve and maintain profitability depends on the commercial success of the Allurion Balloon, and we expect our revenues to continue to be driven primarily by sales of the Allurion Balloon.

We have incurred losses to date and expect to continue to incur losses for the foreseeable future. Sales of the Allurion Balloon and related accessories, which have occurred outside of the U.S. because we have not yet obtained the regulatory approval required to sell our products within the U.S., accounted for substantially all of our revenues for the years ended December 31, 2022 and 2021 and the three months ended March 31, 2023 and we expect our revenues to continue to be driven primarily by sales of the Allurion Balloon. In order to achieve and sustain profitability, our revenues from sales of the Allurion Balloon will need to grow beyond the levels we have achieved in the past. If health care providers and/or patients do not perceive our products to be competitive in features, efficacy and safety when compared to other products in the market, or if demand for the Allurion Balloon or for weight loss procedures and programs in general decreases, we may fail to achieve sales levels that provide for future profitability.

Our ability to successfully market the Allurion Balloon and our other current and future product and service offerings depends on numerous factors, including but not limited to:

 

   

outcomes of current and future clinical studies of the Allurion Balloon;

 

   

acceptance of the Allurion Balloon as safe and effective by patients, caregivers and the medical community;

 

   

an acceptable safety profile of the Allurion Balloon in markets where we have obtained regulatory approvals;

 

   

whether key thought leaders in the medical community accept that such clinical studies are sufficiently meaningful to influence their or their patients’ choices of product;

 

   

maintenance of our existing regulatory approvals and expansion of the geographies in which we have regulatory approvals;

 

   

commercially viable processes at a scale sufficient to meet anticipated demand at an adequate cost of manufacturing, and that are compliant with ISO 13485 Quality Management System requirements and/or good manufacturing practice, or “GMP”, requirements, as set forth in the FDA’s Quality System Regulation (“QSR”) and other international regulations;

 

   

our success in educating health care providers and patients about the benefits, administration and use of the Allurion Balloon;

 

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the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;

 

   

the willingness of patients to pay out-of-pocket for the Allurion Balloon and/or Allurion Virtual Care Suite (“VCS”) in the absence of coverage and reimbursement for such treatment;

 

   

the success of our internal sales and marketing organization and the sales forces of our distributors; and

 

   

continued demand for weight loss using balloon products, which may be adversely affected by events involving our products or those of our competitors, among other things.

Some of these factors are beyond our control. If we are unable to continue to commercialize the Allurion Balloon and our other current and future products and services, or are unable to obtain a distributor or partner to commercialize them, we may not be able to produce any incremental revenues related to the Allurion Balloon and our other current and future products and services. This would result in an adverse effect on our business, financial condition, results of operations and growth prospects.

We have a limited operating history and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.

The Allurion Balloon has been marketed in countries outside of the United States since 2016, and as such, we have a limited operating history upon which to evaluate our business and forecast our future revenue and operating results. In assessing our business prospects, you should consider the various risks and difficulties frequently encountered by companies early in their commercialization in competitive markets, particularly companies that develop and sell medical devices. These risks include our ability to:

 

   

implement and execute our business strategy;

 

   

expand and improve the productivity of our direct sales force, distributors and marketing programs to grow sales of our existing and proposed products and services;

 

   

increase awareness of our brand and build loyalty among health care providers and patients;

 

   

manage growth and expanding operations;

 

   

respond effectively to competitive pressures and developments;

 

   

enhance our existing products and develop new products;

 

   

obtain regulatory approval or clearance to enhance our existing products and commercialize new products, including any label expansions for use of our products in adolescents;

 

   

respond to changing regulations associated with medical devices across all geographies;

 

   

perform clinical trials with respect to our existing products and any new products, including products under development;

 

   

attract, retain and motivate qualified personnel in various areas of our business; and

 

   

obtain and maintain coverage and adequate levels of reimbursement for our products.

Due to our limited operating history, we may not have the institutional knowledge or experience to be able to effectively address these and other risks that we may face. In addition, we may not be able to develop insights into trends that could emerge and negatively affect our business and may fail to respond effectively to those trends. As a result of these or other risks, we may not be able to execute key components of our business strategy, and our business, financial condition and operating results may suffer.

 

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We do not expect that health care providers or patients will receive third-party reimbursement for treatment with our products. As a result, we expect that our success will depend on the ability and willingness of health care providers to adopt self-pay practice management infrastructure and of patients to pay out-of-pocket for treatment with our products.

Certain elective treatments, such as an intragastric balloon, are typically not covered by insurance. Accordingly, we do not expect that any third-party payors will cover or reimburse health care providers or patients for the Allurion Program. As a result, we expect that our success will depend on the ability and willingness of health care providers that may not have historically operated a self-pay practice to adopt the policies and procedures needed to successfully operate such a practice. Our sales and marketing efforts have historically targeted bariatric surgeons, gastroenterologists, plastic surgeons and other health care providers. Although many of these health care providers are accustomed to selling cash-pay services in their practices, some are primarily accustomed to providing services that are reimbursed by third-party payors. As a result, these health care providers may need to augment their administrative staff and billing procedures to address the logistics of a self-pay practice. If health care providers are unable or unwilling to make such changes, adoption of our products may be slower than anticipated.

Our success will also depend on the ability and willingness of patients to pay out-of-pocket for treatment with our products. Adverse changes in the economy, including from heightened inflation, the Russia-Ukraine war and the ongoing impact of COVID-19, may cause consumers to reassess their spending choices and reduce the demand for elective treatments and could have an adverse effect on consumer spending. This shift could have an adverse effect on our revenues and operating results. In addition, the operations of the medical device distributors upon whom we rely to sell our products may be negatively impacted by any such adverse economic changes. If our distributors are unable to maintain their operations and effectively market and sell our products, our results of operations and business may suffer. Furthermore, consumer preferences and trends may shift due to a variety of factors, including changes in demographic and social trends, public health initiatives and product innovations, which may reduce consumer demand for our products. The decision by a patient to elect to undergo treatment with the Allurion Balloon may be influenced by a number of additional factors, such as:

 

   

the success of any sales and marketing programs, including direct-to-consumer marketing efforts, that we, or any third parties we engage, undertake;

 

   

the extent to which health care providers offer the Allurion Balloon to their patients;

 

   

the extent to which the Allurion Balloon satisfies patient expectations;

 

   

the cost, safety, comfort, tolerability, ease of use, and effectiveness of the Allurion Program as compared to other treatments; and

 

   

general consumer confidence, which may be impacted by economic and political conditions.

Our financial performance will be materially harmed if we cannot generate significant customer demand for the Allurion Balloon.

Changes in coverage and reimbursement for obesity treatments and procedures could affect the adoption of the Allurion Program and our future revenues.

Currently, intragastric balloon products are not reimbursed by third-party payors. We do not currently plan on submitting any requests to any third-party payor for coverage or billing codes specific to our products. However, payors may change their coverage and reimbursement policies for intragastric balloon products as a category and/or for other obesity treatments and procedures, and these changes could negatively impact our business. For example, healthcare reform legislation or regulation that may be proposed or enacted in the future that results in a favorable change in coverage and reimbursement for competitive products and procedures in weight loss and obesity could also negatively impact adoption of our products and our future revenues, and our business could be harmed as we would be at an economic disadvantage when competing for customers.

 

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The failure of the Allurion Balloon to achieve and maintain market acceptance could result in us achieving sales below our expectations, which would cause our business, financial condition and operating results to be materially and adversely affected.

Our current business and growth strategy is highly dependent on the Allurion Balloon achieving and maintaining market acceptance. In order for us to sell our products to healthcare providers and, ultimately, weight loss patients, we must convince them that our products are an attractive alternative to competitive treatments for patients who are obese and overweight, including traditional pharmaceutical therapies and more aggressive bariatric surgical treatments, such as gastric bypass and sleeve gastrectomy. Market acceptance and adoption of the Allurion Balloon depends on educating health care providers on its safe and appropriate use, as well as the cost, safety, comfort, tolerability, ease of use, and effectiveness of the Allurion Program compared to other treatments. If we are not successful in convincing existing and potential customers of the benefits of our product, or if we are not able to achieve the support of health care providers for our product, our sales may decline or we may achieve sales below our expectations.

Market acceptance of our products could be negatively impacted by many factors, including:

 

   

the willingness of patients to pay out-of-pocket for the Allurion Program in the absence of coverage and reimbursement for such program;

 

   

the failure of our products to achieve and maintain wide acceptance among patients who are obese and overweight, their health care providers, third-party payors and key opinion leaders in the weight loss treatment community;

 

   

lack of evidence supporting the safety, ease-of-use or other perceived benefits of the Allurion Balloon over competitive products or other currently available weight loss treatment alternatives;

 

   

perceived risks or uncertainties, or actual adverse events or other undesirable side effects, associated with the use of our gastric balloons, or components thereof, or of similar products or technologies of our competitors;

 

   

any adverse legal action, including products liability litigation, against us or our competitors relating to the Allurion Balloon or similar products or technologies or the withdrawal or modification of any regulatory approvals for our products; and

 

   

results of clinical studies relating to the Allurion Balloon or similar competitive products.

In addition, the rapid evolution of technology and treatment options within our industry may cause consumers to delay the purchase of our products in anticipation of advancements or breakthroughs, or the perception that advancements or breakthroughs could occur, in our products or the products offered by our competitors. It is also possible that consumers interested in purchasing any of our future products currently under development may delay the purchase of one of our current products. In addition, customers may delay their purchasing decisions, or health care providers may refrain from providing our products, as a result of the COVID-19 global pandemic or unfavorable changes in general economic conditions.

If the Allurion Balloon, or any other therapy or product that we may develop, does not achieve and maintain widespread market acceptance, we may fail to achieve sales consistent with our projections, in which case our business, financial condition and operating results could be materially and adversely affected.

A substantial proportion of our sales are through distributors, and we do not have direct control over the efforts these distributors may use to sell our products. If our relationships with these third-party distributors deteriorate, or if these third-party distributors fail to sell our products or engage in activities that harm our reputation, or fail to adhere to medical device regulations, our financial results may be negatively affected.

Historically, our sales model has been to sell primarily through distributors rather than through our own sales force, but recently we have begun to transition certain territories to both a direct sales model and a hybrid

 

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sales model that includes both distributors and a direct sales effort. We believe that our reliance on distributors improves the economics of our business, as we do not carry the high fixed costs of a large direct sales force in many of the countries in which the Allurion Balloon is commercially available. If we are unable to maintain or enter into such distribution arrangements on acceptable terms, or at all, we may not be able to successfully commercialize our products in certain countries. Furthermore, distributors can choose the level of effort that they apply to selling our products relative to others in their portfolio. The selection, training, and compensation of distributors’ sales personnel are within the distributor’s control rather than our own and may vary significantly in quality from distributor to distributor.

In addition, although our contract terms require our distributors to comply with all applicable laws regarding the sale of our products, including anti-competition, anti-money laundering, sanctions laws and FDA and other health care regulations, we may not be able to ensure proper compliance. If our distributors fail to effectively market and sell our products in full compliance with applicable laws, our results of operations and business may suffer.

In certain large markets, we engage in direct sales efforts. We may fail to maintain and develop our direct sales force, and our revenues and financial outcomes could suffer as a result. Furthermore, our direct sales personnel may not effectively sell our products.

We engage in direct sales efforts in 29 countries. We have hired and will need to retain and motivate a significant number of sales and marketing personnel in order to support our anticipated growth in these countries. There is significant competition for quality personnel experienced in such activities, including from companies with greater financial resources than ours. If we are not successful in our efforts to continue recruiting, retaining, and motivating such personnel, we may not be able to increase our revenues, or we may increase our expenses in greater measure than our revenues, negatively impacting our operating results.

We are also working on creating a direct sales structure and strategy in certain markets. We are working to put in place the correct legal and business structure to comply with taxation and operational requirements. These structures may not ultimately be implemented or, if implemented, be successful or effective and may not be able to increase our revenues or improve our gross margins. In addition, our expenses or tax-related costs may increase in greater measure than our revenues, negatively impacting our operating results.

Furthermore, our sales force may operate independently with limited day-to-day oversight from management. They may engage in sales practices that increase certain risks to our business, including the risk of scrutiny from regulatory authorities and the risk that we violate anti-corruption regulations in one or more countries. These and other independent actions may result in unexpected costs, news that might impair our reputation or revenues, litigation in various jurisdictions, and/or sanctions. Any of these could impair the trading price of New Allurion Common Stock and adversely impact our results.

The effectiveness and safety of the Allurion Balloon depends critically on our ability to educate health care providers on its safe and proper use. If we are unable to do so, we may not achieve our expected growth and may be subject to risks and liabilities.

In addition to educating health care providers on the clinical benefits of the Allurion Balloon, we must also train health care providers on the safe and appropriate use of the Allurion Balloon. If we are unable to provide an adequate training program with respect to the Allurion Balloon, product misuse may occur that could lead to serious adverse events. Many health care providers may be unfamiliar with such treatments or find it more complex than competitive products or alternative treatments. As such, there is a learning process involved for health care providers to become proficient in the use of our products and it may take several procedures for a health care provider to be able to use the Allurion Balloon comfortably. In addition, it is also critical for health care providers to be educated and trained on best practices in order to achieve optimal results, including patient selection and eligibility criteria, as well as complementary methods of use such as diet or behavioral modification

 

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programs. Convincing health care providers to dedicate the time and energy necessary for adequate training is challenging, and we cannot assure you that we will be successful in these efforts. This training process may also take longer than we expect. In the event that health care providers are not properly trained in the use of the Allurion Balloon, they may misuse or ineffectively use our products for the treatment of patients. As a result, patients may experience adverse events or not be able to enjoy the benefits of our program or achieve the weight loss outcomes they expect, leading to dissatisfaction and market rejection of our products. In addition, misuse of our products in any stage of the treatment may result in, among other things, patient injury, adverse side effects, negative publicity or lawsuits against us. Any of these events could have an adverse effect on our business and reputation.

The misuse or off-label use of our products may harm our image in the marketplace, result in injuries that lead to product liability suits or result in costly investigations and sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.

The Allurion Balloon has been approved or cleared by regulatory authorities in the countries in which we sell it or in which we conduct our operations for specific indications. We do not promote the Allurion Balloon for uses outside of approved or cleared indications for use, known as “off-label uses.” We cannot, however, prevent a health care provider from using our product off-label, when in the health care provider’s independent professional medical judgment he or she deems it appropriate. There may be increased risk of injury to patients if health care providers attempt to use our product off-label. Furthermore, the use of our product for indications other than those approved or cleared by regulatory authorities may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

Health care providers may also misuse our products, use improper techniques, ignore or disregard product warnings, contraindications or other information provided in training materials or product labeling, fail to obtain adequate training, or fail to inform patients of the risks associated with procedures that utilize our product, potentially leading to injury and an increased risk of product liability claims. If our product is misused or used with improper technique, we may become subject to costly litigation by our health care providers or their patients.

There is no guarantee that the FDA or non-U.S. regulatory agencies will grant approval or clearance for our current or future products, including the Allurion Balloon, and failure to obtain regulatory approvals or clearances in the United States and other international jurisdictions, or revocation of approvals or clearances in those jurisdictions, will prevent us from marketing our products in such jurisdictions.

We intend to seek regulatory approval or clearance of our current and future products in the U.S. and certain non-U.S. jurisdictions. We have obtained a CE Mark for the Allurion Balloon and are therefore authorized to sell in the EU; however, in order to market in regions such as the U.S., Asia Pacific region and many other jurisdictions, we must obtain separate regulatory approvals or clearances. The procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval or clearance may differ from that required to obtain the CE Mark or FDA approval. As a result of the United Kingdom leaving the EU, since January 1, 2021, the regulatory framework and regimes for medical devices in the United Kingdom and the EU have diverged. In particular, a new UKCA Mark was introduced for medical devices placed on the Great Britain market (which includes England, Scotland and Wales). Northern Ireland has adopted a hybrid approach as a result of the divergence in accordance with the Northern Ireland Protocol. Manufacturers can continue placing CE marked medical devices on the Great Britain market until June 30, 2024. From July 1, 2024, transitional arrangements will apply for CE and UKCA marked medical devices placed on the Great Britain market. Moreover, clinical studies or manufacturing processes conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more international regulatory authorities does not ensure approval by regulatory authorities in other countries or by the FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. An international

 

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regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain regulatory approvals on a timely basis, if at all. We may not be able to submit for regulatory approvals or clearances and even if we submit we may not receive necessary approvals or clearances to commercialize our products in any market.

Before obtaining regulatory approval or clearance for the sale of a product, we may be required to conduct extensive preclinical and clinical studies to demonstrate the safety and efficacy of our planned products in human patients. Preclinical and clinical studies can be expensive, difficult to design and implement, can take many years to complete, and are uncertain as to outcome. A failure of one or more of our studies could occur at any stage of testing. In connection with the initiation of a clinical study in the U.S., we filed an investigational device exemption, or “IDE,” application, which was approved by the FDA in 2016. After we conducted that study and submitted a premarket approval application, or “PMA”, to the FDA, in 2020, the FDA requested additional data. Therefore, we withdrew the PMA and in 2021 submitted an IDE application for our AUDACITY trial, which FDA approved in 2021.

Numerous unforeseen events during, or as a result of, preclinical and clinical studies could occur, which would delay or prevent our ability to receive regulatory approval or commercialize the Allurion Balloon or any of our future products, including the following:

 

   

preclinical and clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional studies or abandon product development programs;

 

   

the number of patients required for clinical studies may be larger than we anticipate, enrollment in these clinical studies may be insufficient or slower than we anticipate, or patients may drop out of these clinical studies at a higher rate than we anticipate;

 

   

the cost of preclinical and clinical studies may be greater than we anticipate;

 

   

third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

 

   

we might suspend or terminate clinical studies of our products for various reasons, including a finding that our products have unanticipated serious side effects or other unexpected characteristics, or that the study subjects are being exposed to unacceptable health risks;

 

   

regulators may not approve our proposed clinical development plans;

 

   

regulators or independent institutional review boards, or “IRBs,” may not authorize us or our investigators to commence a clinical study or conduct a clinical study at a prospective study site;

 

   

regulators or IRBs may require that we, or our investigators, suspend or terminate clinical studies for various reasons, including non-compliance with regulatory requirements;

 

   

regulators in countries where products are currently marketed may require that we suspend commercial distribution if there is non-compliance with regulatory requirements or safety concerns;

 

   

the supply or quality of our products or other materials necessary to conduct clinical studies of our products may be insufficient or inadequate; or

 

   

the enactment of new regulatory requirements in the EU under the new Medical Device Regulation effective since May 26, 2021 may make approval times longer and standards more difficult to pass. In particular, manufacturers are required to: (i) assign a unique device identification, or “UDI”, to a medical device before it is placed on the EU market in order to improve traceability of the medical device; and (ii) register themselves, the medical device and the UDI, among other things, with a new European medical device database, or “EUDAMED”.

If we or any future collaboration or distribution partner are required to conduct additional clinical trials or other testing of the Allurion Balloon or any products beyond those that we contemplate, those clinical studies or

 

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other testing may not be successfully completed. If the results of these studies or tests are not positive or are only modestly positive or if they raise safety concerns, we may:

 

   

be delayed in obtaining marketing approvals for the Allurion Balloon or our future products;

 

   

not obtain marketing approval at all;

 

   

obtain approval for indications that are not as broad as desired;

 

   

have a product removed from the market after obtaining marketing approval;

 

   

be subject to additional post-marketing testing requirements; and/or

 

   

be subject to restrictions on how the product is distributed or used.

Even if we obtain regulatory approvals or clearances in a jurisdiction, our products may be removed from the market due to a variety of factors, including adverse events, recalls, suspension of regulatory clearance to sell, or other factors. We expect that the initial FDA approval of the Allurion Balloon, if obtained, will be subject to a lengthy and expensive follow-up period, during which we must monitor patients enrolled in clinical studies and collect data on their safety outcomes. Even if FDA approval is obtained, the FDA has authority to impose post-market approval conditions, which can include (i) restrictions on the device’s sale, distribution, or use, (ii) continuing evaluation of the device’s safety and efficacy, (iii) additional warning/hazard labeling requirements, (iv) significant record management, (v) periodic reporting requirements, and (vi) any other requirements the FDA determines necessary to provide reasonable assurance of the device’s safety and effectiveness. Completion of this follow-up study, in a manner which results in data sufficient to maintain FDA approval, is subject to multiple risks, many of which are outside of our control. These include, but are not limited to, our ability to fund the ongoing study from our operations or via additional fundraising; study participants’ willingness and ability to return for follow-up study visits; and maintenance of a suitable study database over a long period of time. Even if completed and appropriately evaluated, the study follow-up may reveal safety or other issues that impact the approved labeling, or may result in withdrawal of the Allurion Balloon from the marketplace in the U.S. or elsewhere.

Although we launched the Allurion Balloon commercially in January 2016 and have sold over 100,000 units to date in various countries outside the U.S., we do not have as much post-market surveillance data as our competitors and may not have clearly identified all possible or actual risks of our products. Furthermore, if our clinical trials do not produce patient data that compares favorably with products that are already on the market, health care providers and patients may opt not to use our products, and our business would suffer.

Our product development costs will also increase if we experience delays to our clinical trials or approvals. We do not know whether any clinical studies will begin as planned, will need to be restructured, or will be completed on schedule, or at all.

Significant clinical study delays could allow our competitors to bring products to market before we do, which would impair our ability to commercialize our products and harm our business and results of operations.

Allurion Balloon products are not currently approved for commercial sale in the United States. Obtaining such approval is costly and time consuming, and we may not obtain the regulatory approval required to sell our products in the U.S.

Neither we, nor any future collaboration or distributor partner, can commercialize Allurion Balloon products in the U.S. without first obtaining regulatory approval for the product from the FDA. Extensive preclinical and clinical testing will be required to support FDA approval. Additionally, we will be required to commit to significant and costly post-approval requirements, which will include follow-up of our clinical trial patients, creation of a patient registry, and/or other studies, and implementation of training programs for physicians. We may be unable to fund, enroll, or complete such trials in a timely fashion, or at all, and we may have an

 

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insufficient number of enrolled patients follow up as instructed. The results of clinical studies may not be favorable enough to support marketing approval in the U.S., or may raise other questions (pertaining, for example, to product safety or effectiveness) that jeopardizes our current approvals for sale in other territories. The FDA approval process will take at least several years to complete, and FDA approval may never be obtained. We must also demonstrate that our manufacturing facilities, processes and controls are adequate to support FDA approval and that our clinical investigators complied with good clinical practices in the conduct of the Allurion Balloon clinical trial.

Furthermore, FDA approval is not a guarantee, and the filing and approval process itself is expensive and may take several years. The FDA also has substantial discretion in the approval process. Despite the time and expense exerted, failure may occur at any stage, and we could encounter problems that cause us to abandon or repeat clinical studies. The FDA can delay, limit, or deny approval of a product for many reasons, including, but not limited, to:

 

   

a product may not be deemed to be safe and effective;

 

   

the FDA may not find the data from clinical and preclinical studies sufficient;

 

   

the FDA may not approve suppliers’ processes or facilities; or

 

   

the FDA may change its approval policies or adopt new regulations.

If the Allurion Balloon or our future products fail to demonstrate safety and efficacy in further clinical studies that may be required for FDA approval, or do not gain regulatory approval, our business and results of operations will be harmed.

Even if clinical trials demonstrate acceptable safety and efficacy for the Allurion Balloon in some patient populations, the FDA or similar regulatory authorities outside the U.S. may not approve the marketing of the Allurion Balloon or may approve it with restrictions on the label, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

It is possible the FDA or similar regulatory authorities may not consider the results of our clinical trials to be sufficient for approval of the Allurion Balloon for our desired indications for use. Moreover, even if the FDA or other regulatory authorities approve the marketing of the Allurion Balloon, the approval may include additional restrictions on the label that could make the Allurion Balloon less attractive to health care providers and patients compared to other products that may be approved for broader indications, which could limit potential sales of the Allurion Balloon.

If we fail to obtain FDA or other regulatory approval of the Allurion Balloon, or if the approval is narrower than what we seek, it could impair our ability to realize value from the Allurion Balloon, and therefore may have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Commercial success of the Allurion Balloon in the United States or elsewhere depends on our ability to accurately forecast customer demand and manufacture sufficient quantities of product that patients and health care providers request, and to manage inventory effectively. The failure to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Manufacturing of the Allurion Balloon requires capital expenditures and a highly-skilled workforce. There is a significant lead time to build and certify a new manufacturing facility. Although we believe our current facilities will give us adequate manufacturing capacity to meet demand for at least the next two years, we have, in the past, been unable to fill all incoming orders to meet growing demand. If we obtain FDA approval, we intend to rely on our existing manufacturing facilities to supply products in the U.S. If demand increases faster than we expect, or if we are unable to produce the quantity of goods that we expect with our current facilities, we may not be able to grow revenue at an optimal rate. There may be other negative effects from supply shortages,

 

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including loss of our reputation in the marketplace and a negative impact on our relationships with our distributors, which could have a material adverse effect on our business, financial condition, results of operations, and growth prospects.

On the other hand, if demand for our products declines, or if market supply surpasses demand, we may not be able to reduce manufacturing expenses or overhead costs proportionately. We have invested significantly in our manufacturing capacity. If an increase in supply outpaces the increase in market demand, or if demand decreases, the resulting oversupply could adversely impact our sales and result in the underutilization of our manufacturing capacity, higher inventory carrying costs and associated working capital, changes in revenue mix, and/or price erosion, any of which would lower our margins and adversely impact our financial results, which could have a material adverse effect on our business, financial condition, results of operations, and growth prospects.

Our business depends on maintaining our brand, reputation, and ongoing demand for our products and services, and a significant reduction in sentiment or demand could affect our results of operations.

Our success depends on awareness and the reputation of our brand, which depends on factors such as the safety and quality of our products, our communication activities, including marketing and education efforts, and our management of our heath care provider and patient experience. Maintaining, promoting and positioning our brand is important to expanding our customer base. This will depend largely on the success of our education and marketing efforts and our ability to provide a consistent, high-quality experience to health care providers and patients.

We may need to make substantial investments in the areas of education and marketing in order to maintain and enhance our brand and awareness of our products. Ineffective marketing, negative publicity, significant discounts by our competitors, product defects, serious adverse events and related liability litigation, failure to obtain regulatory approval or clearance for our products, counterfeit products, unfair labor practices and failure to protect our intellectual property rights are some of the potential threats to the strength of our business. We may need to make substantial expenditures to mitigate the impact of such threats.

We believe that maintaining and enhancing awareness of our products and brand in the countries in which we currently sell our products and in new countries where we have limited awareness or brand recognition is important to expanding our customer base. If we are unable to increase awareness of our products or enhance the strength of our brand in the countries in which we currently sell our products and in new countries, then our growth strategy could be adversely affected.

Risks Related to our Business and Industry

The medical device industry, and the market for weight loss and obesity in particular, is highly competitive. We also compete with companies that make weight loss drugs and other weight loss solutions outside the medical device industry. If our competitors are able to develop and market products that are safer, more effective, easier to use or more readily adopted by patients and health care providers, our commercial opportunities will be reduced or eliminated.

The medical device industry is highly competitive, subject to rapid change and significantly affected by new product introductions, results of clinical research, corporate combinations, actions by regulatory bodies, changes by public and private payers and other factors relating to our industry. We also compete with companies that make weight loss drugs and other weight loss solutions outside the medical device industry. Because of the market opportunity and the high growth potential of the non-surgical device market for weight loss and obesity, competitors and potential competitors have historically dedicated, and will continue to dedicate, significant resources to aggressively develop and commercialize their products.

Outside the U.S., we compete with a variety of local and regional competitive intragastric balloon manufacturers including SC MedSil, Medicone and Spatz Laboratories. In the U.S., there are three manufacturers

 

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with an intragastric balloon approved by the FDA at this time: Boston Scientific Corporation, ReShape Lifesciences, Inc. and Spatz FGIA Inc. All of these balloons require endoscopy and anesthesia for placement and/or removal. We also compete against the manufacturers of pharmaceuticals that are directed at treating weight loss, such as NovoNordisk, Eli Lilly, Roche Holding AG, GlaxoSmithKline plc, Arena Pharmaceuticals, Inc., VIVUS, Inc., Orexigen Therapeutics, Inc. and Gelesis Holdings, Inc.

At any time, these or other competitors may introduce new or alternative products that compete directly or indirectly with our products and services. They may also develop and patent products and processes earlier than we can or obtain regulatory clearance or approvals before we are able to obtain required approvals, which could impair our ability to develop and commercialize similar products or services. If clinical outcomes of procedures performed with our competitors’ products are, or are perceived to be, superior to the outcomes of treatments performed with our products, sales of our products could be negatively affected and our business, results of operations and financial condition could suffer.

Many of our competitors have significantly greater financial and other resources than we do, as well as:

 

   

well-established reputations and name recognition with key opinion leaders and health care provider networks;

 

   

an established base of long-time customers with strong brand loyalty;

 

   

products supported by long-term data;

 

   

longer operating histories;

 

   

significantly larger installed bases and distributors and established distribution channels;

 

   

greater existing market share in the obesity and weight management market;

 

   

broader product offerings;

 

   

greater ability to cross-sell products;

 

   

the ability to offer rebates or bundle products to offer higher discounts or incentives; and

 

   

more experience in conducting research and development, manufacturing, performing clinical trials and obtaining regulatory approvals or clearances.

Competition with these companies could result in significant price-cutting, reduced profit margins and loss of market share, any of which would harm our business, financial condition and results of operations. In addition, competitors with greater financial resources than ours could acquire other companies to gain enhanced name recognition and market share, as well as new technologies or products that could effectively compete with our existing and future products, which may cause our revenues to decline and harm our business.

Continued international expansion of our business will expose us to business, regulatory, political, operational, financial and economic risks associated with doing business internationally.

Our products are currently sold in over 50 countries, and we operate subsidiaries in Australia, France, the United Arab Emirates, Hong Kong, the United Kingdom, Italy, Spain, Australia and Mexico. Our business

strategy contemplates continued international expansion, including partnering with medical device distributors and introducing the Allurion Balloon and other products outside the U.S. The sale and shipment of our products internationally, as well as the purchase of components from international sources, subjects us to potential trade, import and export, and customs regulations and laws.

Compliance with these regulations and laws is costly and exposes us to penalties for non-compliance. Any failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of

 

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individuals, fines and penalties, denial of export or import privileges, seizure of shipments, restrictions on certain business activities and exclusion or debarment from government contracting. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our shipping and sales activities.

In addition, several of the countries in which we sell our products or conduct our operations are, to some degree, subject to political, economic or social instability. Doing business in other countries outside the U.S. involves a number of other risks, including:

 

   

compliance with the free zone regime regulations under which the manufacturing sites operate;

 

   

different regulatory requirements for device approvals in international markets;

 

   

multiple, conflicting and changing laws and regulations such as tariffs and tax laws, export and import restrictions, employment laws, and other governmental approvals, permits and licenses;

 

   

potential failure by us or our distributors to obtain and/or maintain regulatory approvals for the sale or use of our products in various countries;

 

   

difficulties in managing global operations;

 

   

logistics and regulations associated with shipping products, including infrastructure conditions and transportation delays;

 

   

limits on our ability to penetrate international markets if our distributors do not execute successfully;

 

   

governmental price controls, differing reimbursement regimes and other market regulations;

 

   

financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable;

 

   

reduced protection for intellectual property rights, or lack of them in certain jurisdictions, forcing more reliance on our trade secrets, if available;

 

   

economic weakness, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions;

 

   

failure to comply with the Foreign Corrupt Practices Act (the “FCPA”), including its books and records provisions and its anti-bribery provisions, by maintaining accurate information and control over sales activities and distributors’ activities;

 

   

unexpected changes in tariffs, trade barriers and regulatory requirements;

 

   

compliance with tax, employment, immigration and labor laws;

 

   

taxes, including withholding of payroll taxes;

 

   

currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

 

   

workforce uncertainty in countries where labor unrest is more common than in the U.S.;

 

   

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

   

business and shipping interruptions resulting from natural or other disasters including earthquakes, volcanic activity, hurricanes, floods and fires.

Any of these risks, if encountered, could harm our future international expansion and operations and, consequently, have an adverse effect on our financial condition, results of operations and cash flows.

 

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We depend on a limited number of single source suppliers to manufacture our components, sub-assemblies and materials, which makes us vulnerable to supply shortages and price fluctuations.

We rely on single source suppliers for some of the components, sub-assemblies and materials for our products. These components, sub-assemblies and materials are critical and, for certain items, there are relatively few alternative sources of supply. These single source suppliers may be unwilling or unable to supply the necessary materials and components reliably and at the levels we anticipate or that are required by the market. We also have two suppliers with which we do not maintain a formal contractual relationship. We typically have at least a six month supply of the materials provided by each of these suppliers but we cannot guarantee that we could find an alternative before our inventory ran out and therefore the loss of these relationships could cause a substantial disruption to our business. We would also have little to no recourse if one of these two suppliers became unwilling or unable to continue to supply materials. While our suppliers have generally met our demand for their products and services on a timely basis in the past, we cannot guarantee that they will in the future be able to meet our demand for their products, either because of acts of nature, the nature of our agreements with those suppliers or our relative importance to them as a customer. Our suppliers may decide in the future to discontinue or reduce the level of business they conduct with us.

We have not qualified or obtained necessary regulatory approvals for additional suppliers for some of these components, sub-assemblies and materials, but we do carry a significant inventory of these items ourselves. While we believe that alternative sources of supply or sterilization may be available, we cannot be certain whether they will be available if and when we need them, or that any alternative suppliers or providers would be able to provide the quantity and quality of components, materials and sterilization that we would need to manufacture and ship our products if our existing suppliers and providers were unable to satisfy our requirements. To utilize other sources, we would need to identify and qualify new providers to our quality standards and obtain any additional regulatory approvals required to change providers, which could result in manufacturing delays and increase our expenses.

Our dependence on third parties subjects us to a number of risks that could impact our ability to manufacture our products and harm our business, including:

 

   

interruption of supply or sterilization resulting from modifications to, or discontinuation of, a third party’s operations;

 

   

delays in product shipments resulting from uncorrected defects, reliability issues or a third party’s failure to produce components or complete sterilizations that consistently meet our quality specifications;

 

   

price fluctuations due to a lack of long-term supply arrangements with our third parties for key components or sterilization requirements;

 

   

inability to obtain adequate supply or services in a timely manner or on commercially reasonable terms;

 

   

difficulty identifying and qualifying alternative third parties for the supply of components;

 

   

inability of third parties to comply with applicable provisions of the FDA’s QSR, or other applicable laws or regulations enforced by the FDA, foreign and state regulatory authorities;

 

   

inability to ensure the quality of products manufactured or sterilization conducted by third parties;

 

   

production delays related to the evaluation and testing of products and services from alternative third parties and corresponding regulatory qualifications; and

 

   

delays in delivery by our suppliers and service providers.

Although we require our third-party suppliers and providers to supply us with components and services that meet our specifications and other applicable legal and regulatory requirements in our agreements and contracts,

 

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and we perform incoming inspection, testing or other acceptance activities to ensure the components meet our requirements, there is a risk that these third parties will not always act consistently with our best interests, and may not always supply components or provide services that meet our requirements or in a timely manner.

Negative publicity, product defects and any resulting litigation concerning our products or our competitors’ products could harm our reputation and reduce demand for the Allurion Balloon, either of which could negatively impact our financial results.

The responses of potential patients, health care providers, the media, legislative and regulatory bodies and others to information about complications or alleged complications of our products, or products liability litigation against us or our competitors, could result in negative publicity and could materially reduce market acceptance of our products. These responses or any investigations and potential resulting negative publicity may have a material adverse effect on our business and reputation and negatively impact our financial condition, results of operations or the market price of New Allurion Common Stock. In addition, significant negative publicity could result in an increased number of product liability claims against us.

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could harm our business.

Our success largely depends upon the continued services of our executive management team and key employees and the loss of one or more of our executive officers or key employees could harm us and directly impact our financial results. Although we have entered into employment agreements with some of our executive officers and key employees, each of them may terminate their employment with us at any time. Changes in our executive management team resulting from the hiring or departure of executives could disrupt our business. We could experience disruptions as each of these individuals begins to integrate into the business and build his or her respective departments. Alternatively, our Chief Executive Officer, Shantanu Gaur, has been with us since inception and has been instrumental in building operational capabilities, raising capital and guiding product development and regulatory strategy. If Dr. Gaur was no longer working at our company, our industry credibility and operational capabilities would be harmed.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for skilled personnel is intense, especially for engineers with high levels of experience in designing and developing medical devices and for sales executives. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize medical devices.

Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources and, potentially, damages. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived value of our stock awards declines, either because we are a public company or otherwise, it may harm our ability to recruit and retain highly skilled employees. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.

 

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We may acquire other businesses or form joint ventures or make investments in other companies or technologies in the future. If we are not successful in integrating these businesses, as well as identifying and controlling risks associated with the past operations of these businesses, we may incur significant costs, receive penalties or other sanctions from various regulatory agencies, and/or incur significant diversions of management time and attention.

We believe our business growth will be enhanced if we continually seek opportunities to enhance and broaden our product offerings. As part of our business strategy, we may pursue acquisitions or licenses of assets, or acquisitions of businesses. We also may pursue strategic alliances and joint ventures that leverage our core technology and industry experience to expand our product offerings or sales and distribution resources.

However, we may not be able to find suitable partners or acquisition candidates, and we may not be able to complete such transactions on favorable terms, if at all. If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business, and we could assume unknown or contingent liabilities. Any future acquisitions also could result in significant write-offs or the incurrence of debt and contingent liabilities, any of which could have an adverse effect on our financial condition, results of operations and cash flows. Integration of an acquired company may also disrupt ongoing operations and require management resources that would otherwise focus on developing our existing business. We may experience losses related to investments in other companies, which could have a negative effect on our results of operations. We may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any acquisition, license, strategic alliance or joint venture. To finance such a transaction, we may choose to issue New Allurion Common Stock as consideration, which would dilute the ownership of our stockholders. If the price of New Allurion Common Stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using our shares as consideration. Alternatively, it may be necessary for us to raise additional funds for acquisitions through public or private financings. Additional funds may not be available on terms that are favorable to us, or at all.

We do not know whether we will be able to successfully integrate any acquired business, product or technology. The success of any given acquisition may depend on our ability to retain any key employees related thereto, and we may not be successful at retaining or integrating such key personnel. Integrating any business, product or technology we acquire could be expensive and time-consuming, disrupt our ongoing business, impact our liquidity, and/or distract our management. If we are unable to integrate any acquired businesses, products or technologies effectively, our business may suffer. Whether as a result of unsuccessful integration, unanticipated costs, including those associated with assumed liabilities and indemnification obligations, negative accounting impact, or other factors, we may not realize the economic benefits we anticipate from acquisitions. In addition, any amortization or charges resulting from the costs of acquisitions could increase our expenses.

If changes in the economy and/or consumer spending, consumer preference and other trends reduce consumer demand for our products, our sales and profitability would suffer.

We are subject to the risks arising from adverse changes in general economic and market conditions. Certain elective procedures, including those for weight loss, are typically not covered by insurance. Adverse changes in the economy may cause consumers to reassess their spending choices, which could have an adverse effect on consumer spending, reduce the demand for these procedures, and therefore have an adverse effect on our revenues. Furthermore, consumer preferences and trends may shift due to a variety of factors, including changes in demographic and social trends, public health initiatives and product innovations, which may reduce consumer demand for our products.

Our overall performance depends, in part, on worldwide economic conditions. In recent months, we have observed increased economic uncertainty in the U.S. and abroad. Impacts of such economic weakness include:

 

   

falling overall demand for goods and services, leading to reduced profitability;

 

   

reduced credit availability;

 

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higher borrowing costs;

 

   

reduced liquidity;

 

   

volatility in credit, equity and foreign exchange markets; and

 

   

bankruptcies.

These developments could lead to supply chain disruption, inflation, higher interest rates, and uncertainty about business continuity, which may adversely affect our business and our results of operations. As our customers react to global economic conditions and the potential for a global recession, we may see them reduce spending on our products and take additional precautionary measures to limit or delay expenditures and preserve capital and liquidity. Reductions in spending on our products, delays in purchasing decisions, failure to complete the Allurion Program, and inability to attract new customers, as well as pressure for extended billing terms or pricing discounts, would limit our ability to grow our business and negatively affect our operating results and financial condition.

We expect to significantly increase the size of our organization; as a result, we may encounter difficulties in managing our growth, which could disrupt our operations and/or increase our net losses.

As of March 31, 2023, we had 256 employees. Over the next several years, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of regulatory affairs, clinical and sales and marketing. We also intend to continue to improve our operational, financial and management controls, reporting systems and procedures, which may require additional personnel. Such growth could place a strain on our administrative and operational infrastructure, and/or our managerial abilities, and we may not be able to make improvements to our management information and control systems in an efficient or timely manner. We may discover deficiencies in existing systems and controls.

Many of these employees will be in countries outside of our corporate headquarters, which adds additional complexity. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. We may not be able to effectively manage these activities. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Future growth would impose significant added responsibilities on members of management, including:

 

   

managing our clinical trials effectively, which we anticipate being conducted at numerous clinical sites;

 

   

identifying, recruiting, maintaining, motivating and integrating additional employees with the expertise and experience we will require, in multiple countries;

 

   

managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties;

 

   

managing additional relationships with various distributors, suppliers, and other third parties;

 

   

improving our managerial, development, operational and finance reporting systems and procedures; and

 

   

expanding our facilities.

Our failure to accomplish any of these tasks could prevent us from growing successfully. Any inability to manage growth could delay the execution of our business plans or disrupt our operations. We may also be exposed or subject to additional unforeseen or undisclosed liabilities as well as increased levels of indebtedness.

We may be subject to substantial warranty or product liability claims or other litigation in the ordinary course of business that may adversely affect our business, financial condition and operating results.

We face an inherent risk of product liability exposure related to the sale of the Allurion Balloon and any products in clinical studies. The marketing, sale and use, misuse or off-label use of the Allurion Balloon and our

 

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other current and future products could lead to the filing of product liability claims against us if someone alleges that our products failed to perform as designed or caused significant adverse events in patients. We may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide. If we cannot successfully defend ourselves against claims that the Allurion Balloon or our other current or future products caused injuries, we may incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

 

   

decreased demand for any products we may develop;

 

   

injury to our reputation and significant negative media attention;

 

   

withdrawal of patients from clinical studies or cancellation of studies;

 

   

significant costs to defend the related litigation and distraction to our management team;

 

   

substantial monetary awards to plaintiffs;

 

   

loss of revenue; and

 

   

the inability to commercialize any products that we may develop.

We currently hold $5.0 million in product liability insurance coverage, which may not be adequate to cover all liabilities we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Any future collaboration agreements (including with respect to product distribution or commercialization) we may enter into with respect to our current or future products may place the development or commercialization of such products outside our control, or may otherwise be on terms unfavorable to us.

We may enter into additional collaboration agreements with third parties with respect to our current or future products, including for distribution or commercialization in or outside the U.S. Our likely collaborators for any distribution, marketing, licensing or other collaboration arrangements include large and mid-size medical device and diagnostic companies, regional and national medical device and diagnostic companies, and distribution or group purchasing organizations. We will have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our products. Our ability to generate revenue from these arrangements will depend in part on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

We rely on third parties to conduct certain components of our clinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such studies, which could interfere with or delay our ability to get regulatory approval or commercialize our products.

We rely on third parties, such as contract research organizations, clinical data management organizations, medical institutions and clinical investigators, to perform various functions for our clinical trials. Our reliance on third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. We remain responsible for ensuring that each of our clinical studies is conducted in accordance with the general investigational plan and protocols for the study. Moreover, the International Council for Harmonization, and the FDA requires us to comply with standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical studies to ensure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of patients in clinical studies are protected. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical studies in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our planned products and will not be able to, or may be delayed in our efforts to, successfully commercialize our planned products.

 

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The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business.

We rely on suppliers, vendors, outsourcing partners, consultants, alliance partners and other third parties to research, develop, manufacture and commercialize our products and manage certain parts of our business. Using these third parties poses a number of risks, such as: (i) they may not perform to our standards or legal requirements; (ii) they may not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) disputes may arise with respect to ownership of rights to technology developed with our partners; and (vi) disagreements could cause delays in, or termination of, the research, development or commercialization of our products or result in litigation or arbitration. Moreover, some third parties are located in markets subject to political and social risk, corruption, infrastructure problems and natural disasters, in addition to country-specific privacy and data security risk given current legal and regulatory environments. Failure of third parties to meet their contractual, regulatory, and other obligations may materially affect our business.

We have significant exposure to the economic and political situations in emerging market countries, and developments in these countries could materially impact our financial results, or our business more generally.

Many of the countries in which our products are sold are emerging markets. Our global growth strategy contemplates the expansion of our existing sales activities in Latin America, the Middle East, Africa and the Asia-Pacific region. Our exposure to emerging markets has increased in recent years, as have the number and importance of our distributor arrangements. Economic and political developments in the emerging markets, including economic crises, currency inflation, or political instability, have had in the past, and may have in the future, a material adverse effect on our financial condition and results of operations. Moreover, as these markets continue to grow, competitors may seek to enter these markets and existing market participants will likely try to aggressively protect or increase their market shares. Increased competition may result in price reductions, reduced margins and our inability to gain or hold market share, which could have an adverse effect on our financial condition and results of operations.

Risks Related to Government Regulation

The regulatory approval process is expensive, time consuming and uncertain, and may prevent us from obtaining approvals for the commercialization of the Allurion Balloon or our planned products.

The research, testing, manufacturing, labeling, approval, selling, import, export, marketing and distribution of medical devices are subject to extensive regulation by the FDA and other regulatory authorities in the U.S. and other countries, where regulations differ from country to country. Our products are registered to be sold in over 50 countries, but we are not permitted to market our products in the U.S. until we receive the requisite approval or clearance from the FDA; we have not received such FDA approval to date. In addition, failure to comply with FDA and other applicable U.S. and foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including the following:

 

   

warning or untitled letters;

 

   

civil or criminal penalties and fines;

 

   

injunctions;

 

   

suspension or withdrawal of regulatory approval;

 

   

suspension of any ongoing clinical studies;

 

   

voluntary or mandatory product recalls and publicity requirements;

 

   

refusal to accept or approve applications for marketing approval of new devices or supplements to approved applications filed by us;

 

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restrictions on operations, including costly new manufacturing requirements; or

 

   

seizure or detention of our products or import bans.

Prior to receiving approval to commercialize any of our products in the U.S. or abroad, we may be required to demonstrate with substantial evidence from preclinical and well-controlled clinical studies, to the satisfaction of the FDA or other regulatory authorities abroad, that such products are safe and effective for their intended uses. Results from preclinical studies and clinical studies can be interpreted in different ways. Even if we believe the preclinical or clinical data for our products are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. Administering any of our products to humans may produce undesirable side effects, which could interrupt, delay or cause suspension of clinical studies of our planned products and result in the FDA or other regulatory authorities denying approval of our products for any or all targeted indications.

Regulatory approval from the FDA is not guaranteed, and the approval process is expensive and may take several years. The FDA also has substantial discretion in the approval process. Despite the time and expense exerted, failure can occur at any stage, and we could encounter problems that cause us to abandon or repeat clinical studies, or perform additional preclinical studies and clinical studies. For example, we previously conducted a clinical trial on the Allurion Balloon and submitted a PMA based on data from that trial. When the FDA requested additional data, we withdrew the PMA and sought FDA approval to conduct our AUDACITY trial, which the FDA granted in 2021. We are currently conducting that clinical trial. The number of preclinical studies and clinical studies that will be required for FDA approval varies depending on the product, the indication that the product is designed to address and the regulations applicable to any particular product. The FDA can delay, limit or deny approval of a planned product for many reasons, including, but not limited to, the following:

 

   

a planned product or one or more of its features may not be deemed safe or effective;

 

   

the FDA may not find the data from preclinical studies and clinical studies sufficient;

 

   

the FDA might not approve our manufacturing or our third-party supplier’s processes or facilities; or

 

   

the FDA may change its approval policies or adopt new regulations.

If the Allurion Balloon or any of our other products fail to demonstrate safety and efficacy in preclinical and clinical studies or do not gain requisite regulatory approval, our business and results of operations will likely be harmed.

Inadequate funding for the FDA, the SEC and other government agencies, including from government shutdowns, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which could adversely affect our business. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

 

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Upon receipt of regulatory approval to market the Allurion Balloon in a given jurisdiction, we are (or will be) subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements.

When a regulatory approval is obtained, the approved product and its manufacturer are subject to continual review by regulatory authorities (including, if applicable, the FDA). Our non-U.S. regulatory approvals for the Allurion Balloon, as well as any future regulatory approval that we receive for the Allurion Balloon or for any of our other products, may be subject to limitations on the indicated uses for which the product may be marketed. Future approvals may contain requirements for potentially costly post-marketing follow-up studies to monitor the safety and efficacy of the approved product. In addition, we are subject to extensive and ongoing regulatory requirements by the FDA and other regulatory authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping for our products. In addition, we are required to comply with regulations regarding the manufacture of the Allurion Balloon, which include requirements related to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Further, regulatory authorities must inspect these manufacturing facilities and determine they are in compliance with FDA good manufacturing practice requirements as set forth in the QSR before the products can be approved. These facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with the QSR and similar regulations. If we or a third party discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturer or us, including requiring withdrawal of the product from the market or suspension of manufacturing.

If patients using our products experience adverse events or other undesirable side effects, regulatory authorities could withdraw or modify our regulatory approvals, which would adversely affect our reputation and commercial prospects and/or result in other significant negative consequences.

Undesirable side effects caused by the Allurion Balloon could cause us, the FDA or other applicable regulatory authorities to interrupt, delay or halt clinical trials, and could result in more restrictive labeling than originally required, cause the FDA or other regulatory authorities to subsequently withdraw or modify our PMA, if we obtain approval, or other regulatory approvals, or result in the delay or denial of regulatory approval by regulatory authorities. For example, in the 1980s and early 1990s, the FDA required post-market safety and efficacy data be collected on an earlier version of an intragastric balloon after patients suffered severe side effects and complications with the device, which ultimately resulted in the withdrawal of the PMA approval.

As of March 31, 2023, we had sold over 100,000 units of the Allurion Balloon in international markets. In our commercial experience, the serious adverse event, or “SAE”, rate has been less than 0.2% and has been similar to the SAE profile reported in the literature.

If we are unable to demonstrate that any adverse events are not related to our product, the FDA or other regulatory authorities could order us to cease further development of, require more restrictive indications for use and/or additional warnings, precautions and/or contraindications in the labeling than originally required, or delay or deny approval of any of our products. Even if we are able to do so, such event(s) could affect patient recruitment or the ability of enrolled patients to complete the trial. Moreover, if we elect, or are required, to not initiate, delay, suspend or terminate any future clinical trial of any of our products, the commercial prospects of such product may be harmed and our ability to generate product revenues from our product may be delayed or eliminated. Any of these occurrences may harm our ability to develop other products, and may harm our business, financial condition and prospects significantly.

In addition, we or others may later identify undesirable side effects caused by the product (or any other similar product), resulting in potentially significant consequences, including:

 

   

regulatory authorities may withdraw or limit their approval of the product;

 

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regulatory authorities may require the addition of labeling statements, such as a contraindication;

 

   

we may be required to change the way the product is distributed or administered, conduct additional clinical trials or change the labeling of the product;

 

   

we may be required to correct or remove the product from the marketplace or decide to conduct a voluntary recall;

 

   

we may decide to alert physicians through customer notifications;

 

   

regulatory authorities may use publicity such as a press release to alert our customers and the public of the issue;

 

   

health care providers and patients may be dissatisfied, seek refunds and refuse to use our products;

 

   

we could be sued and held liable for injury caused to individuals using our product; and

 

   

our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the Allurion Balloon and could substantially increase the costs of commercializing our product and significantly impact our ability to successfully commercialize our product and generate product sales.

Health care reform measures could hinder or prevent our planned products’ commercial success.

In the U.S., there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the health care system in ways that could affect our future revenue and future profitability and the future revenue and future profitability of our potential customers. Federal and state lawmakers regularly propose and, at times, enact legislation, that could result in significant changes to the health care system, some of which are intended to contain or reduce the costs of medical products and services. For example, one of the most significant health care reform measures in decades, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or “PPACA”, was enacted in 2010. The PPACA contains a number of provisions, including those governing enrollment in federal health care programs, reimbursement changes and fraud and abuse measures, all of which will impact existing government health care programs and will result in the development of new programs.

There have been judicial and Congressional challenges to certain aspects of the PPACA, as well as executive efforts to repeal or replace certain aspects of the PPACA. The Tax Cuts and Jobs Act passed in 2017 included a provision that would repeal one of the primary pillars of the law, the PPACA’s individual mandate penalty, which essentially assessed a monetary penalty or fine on certain individuals who fail to maintain qualifying health coverage for all or part of a year. The U.S. Congress may consider other legislation to repeal or replace elements of the PPACA on a provision-by-provision basis. We cannot assure you that the PPACA, as currently enacted or as amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to health care reform will affect our business.

While the result of these efforts is not yet known, any changes that result in price controls, reduce access to and reimbursement for care or add additional regulations may have an adverse effect on our financial condition and results of operations.

We cannot predict the impact that such actions against the PPACA or other health care reform under the Biden administration will have on our business, and there is uncertainty as to what health care programs and regulations may be implemented or changed at the federal and/or state level in the U.S., or the effect of any future legislation or regulation. However, it is possible that such initiatives could have an adverse effect on our ability to obtain approval and/or successfully commercialize products in the U.S. in the future. For example, any

 

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changes that reduce, or impede the ability to obtain, reimbursement for the type of products we intend to commercialize in the U.S. (or our products more specifically, if approved) or reduce medical procedure volumes could adversely affect our business plan to introduce our products in the U.S.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. For example, the Budget Control Act of 2011 and subsequent legislation resulted in reductions to Medicare payments to providers of up to 2% per fiscal year to 2030 unless additional Congressional action is taken. In addition, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, cancer centers and other treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. We cannot predict whether any additional legislative changes will affect our business.

There have been, and likely will continue to be, legislative and regulatory proposals at the federal and state levels directed at containing or lowering the cost of health care. The implementation of cost- containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Such reforms could have an adverse effect on anticipated revenue from our products and product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop future product candidates. We cannot predict the initiatives that may be adopted in the future or their full impact. The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care may adversely affect:

 

   

the demand for our product(s) and product candidates, if approved;

 

   

our ability to set a price that we believe is fair for our products;

 

   

our ability to generate revenue and achieve or maintain profitability; and

 

   

the availability of capital.

If we fail to comply with health care regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

Even though we do not and will not control referrals of health care services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state health care laws and regulations pertaining to fraud and abuse and patients’ rights may be applicable to our business. If we are approved by the FDA to market our products in the U.S., we could be subject to health care fraud and abuse, transparency, and patient privacy regulation by both the federal government and the states in which we conduct our business.

Similar regulations would also apply to our business in countries where we have started direct sales operations where there are different regulations at European and national levels. There is a high degree of complication in complying with the different levels of regulation and the singular differences in the different countries and markets.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in Medicare, Medicaid and other federal health care programs, additional reporting and government oversight, if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. Any such penalties or curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal, state or international privacy, security and fraud laws may prove costly.

 

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We have obtained the authorization to distribute our products in regions/countries through the certification of our Quality System by the corresponding regulatory entities. Failing to demonstrate that our Quality System is in place and consistently and systematically ensures compliance with regulations from such regions/countries might imply losing the certifications and as such, the rights to freely distribute the products which would adversely impact our revenue and reputation.

We have not historically maintained a compliance policy relating to U.S. economic sanctions, export controls or anti-corruption laws and regulations. U.S. and foreign sanctions, export controls, and anti-corruption laws and regulations create the potential for significant liabilities, penalties and reputational harm.

We have not historically maintained a compliance policy relating to U.S. economic sanctions, export controls or anti-corruption laws and regulations. U.S. and foreign sanctions, export controls, and anti-corruption laws and regulations create the potential for significant liabilities, penalties and reputational harm. We are subject to a number of laws and regulations governing commercial activities with and payments and contributions to third parties, including restrictions imposed by the FCPA, as well as trade sanctions and export control laws administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of Commerce and the U.S. Department of State.

The FCPA prohibits bribery of foreign governments and their officials and political parties and requires U.S. public companies to keep books and records that accurately and fairly reflect those companies’ transactions. OFAC, the U.S. Department of Commerce and the U.S. Department of State administer and enforce various export control laws and regulations and economic sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals.

Similar laws in non-U.S. jurisdictions, such as EU sanctions or the U.K. Bribery Act, as well as other applicable anti-bribery, anti-corruption, anti-money laundering, sanctions or export control laws, may also impose stricter or more onerous requirements than U.S. economic sanctions, export controls, and anti-corruption laws and regulations, and implementing compliance measures may disrupt our business or cause us to incur significantly more costs. Different laws may also contain conflicting provisions, making compliance more difficult. If we fail to comply with these laws and regulations, we could be exposed to claims for damages, civil or criminal financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could materially and adversely affect our business, results of operations and financial condition.

While we have implemented policies and procedures designed to promote compliance by us and our personnel with the FCPA and other anti-corruption laws, they may not be effective in all instances to prevent violations. Any determination that we have violated the FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business, financial condition and results of operations.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. On March 10, March 12, and May 1, 2023, the Federal Deposit Insurance Corporation (“FDIC”) took control and was appointed receiver of Silicon Valley Bank (“SVB”), Signature Bank, and First Republic Bank, respectively, after each bank was unable

 

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to continue its operations. We are unable to predict the extent or nature of the impacts of the failures of SVB, Signature Bank and First Republic Bank and related circumstances at this time. Similarly, we cannot predict the impact that the high market volatility and instability of the banking sector more broadly could have on economic activity and our business in particular. The failure of other banks and financial institutions and measures taken, or not taken, by governments, businesses and other organizations in response to these events could adversely impact our business, financial condition and results of operations.

Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of fed