Allurion Technologies swaps 392,766 shares for pre-funded warrants as debt restructuring deal falls apart

A pre-funded warrant is a right to buy shares at a price so close to zero it is treated as already paid. On July 21, 2026, Allurion Technologies (ALUR) issued 392,766 of these instruments to a group of RTW-affiliated funds in direct exchange for the same number of common shares. The transaction arrived the same day a broader, months-old agreement to convert company debt into preferred stock was formally killed.

What the exchange actually does

The mechanics are straightforward. RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd., RTW Biotech Opportunities Operating Ltd., and 4010 Royalty Investments ICAV handed back 392,766 shares of Allurion common stock and received pre-funded warrants to purchase the same 392,766 shares at an exercise price of $0.0001 each.

That exercise price is not a misprint. At a fraction of a cent per share, the warrants are considered economically equivalent to owning the stock outright. The practical difference is in ownership reporting. A beneficial ownership cap, initially set at 9.99% of Allurion's outstanding stock, limits how many warrants the holder can exercise at once. The cap can be raised to 19.99% with 61 days' written notice to the company. Before the exchange, affiliates of RTW Investments, LP held approximately 38% of Allurion's outstanding common stock.

When the warrants disappear

The warrants carry an auto-termination clause that deserves attention. Each warrant becomes void if RTW, as lender under Allurion's Revenue Interest Financing Agreements dated February 9, 2023 and October 30, 2024, and under the company's 6% Convertible Secured Notes due 2031, forecloses on the collateral backing those instruments. A voluntary Chapter 7 or Chapter 11 bankruptcy filing by Allurion also triggers termination. So does a written election by the warrant holder itself.

The party that holds the warrants controls the foreclosure trigger. RTW Investments, LP and its affiliates are both the warrant holders and the lenders under the RIFAs and the Notes.

The deal that did not close

A Securities Purchase and Exchange Agreement signed November 11, 2025 between Allurion and three RTW funds was terminated on July 21, 2026. That agreement had planned to exchange outstanding debt, including amounts under the RIFAs and the 6% Convertible Secured Notes, for shares of a newly designated Series B Perpetual Convertible Preferred Stock. It required shareholder approval by January 31, 2026. That approval did not come, and the agreement never closed before its contractual deadline of February 28, 2026. RTW invoked Section 9.1(iii) to terminate.

No termination penalty applies. The debt that was to have been converted, including all amounts outstanding under the Revenue Interest Financing Agreements and the 6% Convertible Secured Notes due 2031, remains outstanding under its original terms.