Compute Health in an 8-K disclosed it has made multiple amendments to its merger agreement with Allurion, mostly involving changes to the financing of the deal.
Allurion issued $16.75 million of convertible unsecured promissory notes to investors under a Feb. 15 purchase agreement, including a $13 million bridge note sold to Hunter Ventures Limited. The bridge notes were offered in a private placement and mature Dec. 31, 2026, unless earlier repaid or converted in accordance with their terms, and were to earn interest at 7% annually.
Now, under Hunter Venture’s termination agreement, the post merger company would issue to Hunter Ventures an additional 300,000 shares at the merged company’s shaee target, defined as the number of shares equal to the outstanding principal and accrued interest under the bridge note prior to the completion of the merger (after giving effect to the payment of the Repayment) divided by $5.
As part of this change in the financing, CFIP2 ALLE LLC (“Fortress”) and RTW entered into a backstop agreement. Under that agreement, they agreed that, to the extent any portion of the Hunter Ventures bridge note remains outstanding following the determination date, they will purchase up to $2 million of the Hunter Ventures bridge note.
Allurion offers a weight-loss platform to help individuals overcome obesity.
As announced in FEbruary, the deal has an implied $500 million valuation.
The proposed transaction includes a fully committed PIPE led by RTW Investments and a non-dilutive, synthetic royalty financing from RTW Investments that will close concurrently with the business combination.
Terms also include a minimum cash condition of $70 million (net of expenses) and the deal is expected to provide at least $87 million of gross cash proceeds.
The SPAC raised $750 million in a February 2021 IPO, but took a hit last December when redemptions reached 71% ahead of a six-month extension that shareholders approved. Read more.
