# Allurion Technologies, Inc.: Form 10-Q/A for the period ended Mar 31, 2025

- Company: [Allurion Technologies, Inc.](/companies/alur.md) (CIK 1964979)
- Form: 10-Q/A
- Filed: 2025-08-19
- Accepted by EDGAR: Aug 19, 2025, 20:53 ET
- Period: 2025-03-31
- Accession: 0000950170-25-110164
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1964979/000095017025110164/alur-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1964979/000095017025110164/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.4m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $4.2m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $2.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$7.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $95.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$1.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.31 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.31 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 4,778,542 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$9.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $20.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $33.2m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $38.4m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $15.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $108.2m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $31.0m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-03-31 | −$69.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 60,266 characters.

The following discussion and analysis includes information that our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion and analysis should be read together with the unaudited consolidated financial statements as of and for the three months ended March 31, 2025 and March 31, 2024 included in this Quarterly Report on Form 10-Q/A, and the audited consolidated financial statements as of and for the years ended December 31, 2024 and December 31, 2023 that are included in our Annual Report on Form 10-K filed with the SEC on March 27, 2025, as amended by Amendment No. 1 to the Annual Report on Form 10-K filed with the SEC on August 19, 2025 (together, the "Annual Report on Form 10-K"). This discussion may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q/A. For purposes of this section, all references in this discussion and analysis to “Allurion,” the “Company”, “we,” “us,” or “our” refers to the business and operations of Allurion Technologies, Inc. and its consolidated subsidiaries following the consummation of the Business Combination and to Legacy Allurion and its consolidated subsidiaries prior to the consummation of the Business Combination. “Legacy Allurion” refers to Allurion Technologies, LLC, which was previously known as Allurion Technologies Opco, Inc. (formerly Allurion Technologies, Inc.) prior to the consummation of the Business Combination.

### Restatement of Previously Issued Financial Statements

As discussed in the Explanatory Note to this Form 10-Q/A, the Company is restating its previously issued unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025 and March 31, 2024. As a result, the previously reported financial information as of and for the three months ended March 31, 2025 and March 31, 2024 in this “*Management’s Discussion and Analysis of Financial Condition and Results of Operations”* has been amended and restated to reflect the restatement. See Note 2 “*Restatement of Previously Issued Financial Statements”* to the unaudited consolidated financial statements included in this Form 10-Q/A for further detail regarding the restatement, including descriptions of the adjustments and the impacts on our unaudited consolidated financial statements.

Other than the effect of the restatement noted above, this section has not been otherwise modified and does not reflect any information or events occurring after May 15, 2025, the filing date of the Original Form 10-Q, or modify or update those disclosures affected by events that occurred at a later date or facts that subsequently became known to the Company, except to the extent they are otherwise required to be included and discussed herein.

### Overview

Allurion is a leading medical device company that is focused on creating a best-in-class weight loss platform to treat obese and overweight patients. Our platform, the Allurion Program (the "Allurion Program"), features the world’s first and only swallowable, procedureless™ intragastric balloon for weight loss (the "Allurion Balloon") and offers artificial intelligence ("AI")-powered remote patient monitoring tools, a proprietary behavior change program, secure messaging and video telehealth that are delivered by the Allurion Virtual Care Suite ("VCS").

The Allurion Program was designed to achieve metabolically healthy weight loss, which entails losing weight, maintaining that weight loss, and maintaining or increasing muscle mass in the process. Unlike other options that lead to short-term weight loss and muscle wasting, the Allurion Program is intended to deliver longer lasting results while reducing fat and not muscle. We believe the Allurion Program is also synergistic in combination with other weight loss therapies, including glucagon-like peptide 1 ("GLP-1") receptor agonists.

Our proprietary intragastric balloon, the Allurion Balloon, is swallowed as a capsule under the guidance of a health care provider without surgery, endoscopy, or anesthesia for placement.

The Allurion VCS is comprised of tools to support patients’ weight loss experience, which we believe benefit both patients and health care providers:

1\. For Allurion Program patients: Every current Allurion Program patient receives an Allurion Connected Scale ("Allurion Connected Scale") and access to our mobile app (the "App"), which integrates data from the Allurion Connected Scale to conveniently monitor weight, muscle mass, body fat, activity, sleep, and several other critical metrics. The App can also enable secure messaging and video telehealth with the patient’s care team and can deliver content from Allurion’s proprietary behavior change program - and library of 100 weight loss actions related to diet, nutrition, exercise, mental health, sleep, goal setting, and a number of other topics - directly to the patient. The App is available in 15 languages.

2\. For Allurion Program providers: Our clinic dashboard, Allurion Insights, provides end-to-end remote patient monitoring powered by the Allurion Iris AI platform, which leverages machine learning to deliver key insights related to patient tracking data. Allurion Insights offers real-time access to patient data and AI-powered analytics, note functionality to keep track of patient encounters, and clinic-wide metrics that provide a snapshot of the clinic’s overall performance.

In addition to its use by Allurion Balloon patients, we believe the VCS can potentially be a platform for optimal long-term follow up after other medical and surgical weight loss interventions in the future. We have incorporated a Treatment Tracking and Clinic-Led Onboarding feature into the VCS that enables seamless onboarding and management of patients undergoing one or multiple weight loss treatments, including gastric balloons such as the Allurion Balloon, surgery, or medication, and in April 2024, launched the VCS in the United States for patients utilizing other weight loss treatments, including anti-obesity medications and bariatric surgery.

Our Allurion Program products are currently sold in Europe, the Middle East, Africa, Latin America, Canada and the Asia-Pacific region.

Since our inception, we have incurred significant operating losses. Our ability to generate revenue and achieve cost improvements sufficient to achieve profitability will depend on the successful further development and commercialization of our products and receipt and maintenance of regulatory approvals. We generated revenue of $5.6 million and $9.4 million for the three months ended March 31, 2025 and 2024, respectively, and incurred losses from operations of $7.3 million and $11.4 million for those same periods, respectively. We expect to continue to incur net losses for the foreseeable future as we focus on obtaining regulatory approvals for our products in new markets, refining our sales and marketing strategies, and continuing research and development efforts to further enhance our existing products. Further, following the closing of the Business Combination, we have incurred, and expect to continue to incur, additional costs associated with operating as a public company. As a result, we will need additional funding for expenses related to our operating activities, including selling, marketing, general and administrative, and research and development expenses.

Because of the numerous risks and uncertainties associated with obtaining and maintaining regulatory approval, market acceptance of our products, product development and enhancement, and commercialization, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Until such time, if ever, as we can generate substantial revenue sufficient to achieve profitability, we expect to finance our operations through a combination of equity offerings and debt financings. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we are unable to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations. See the subsection entitled — “*Liquidity and Capital Resources”* below.

### Recent Developments

### Reverse Stock Split

On January 3, 2025, our 1-for-25 reverse stock split (the "Reverse Stock Split") was effective following approval by stockholders at the Company's 2024 annual meeting in December 2024. As a result, every 25 shares of our issued Common Stock were combined into one share of our Common Stock. No fractional shares of our Common Stock were issued as a result of the Reverse Stock Split. Stockholders who would otherwise have held a fraction of a share of Common Stock of the Company automatically received an additional fraction of a share of Common Stock to round up to the next whole share. The shares of our Common Stock retained a par value of $0.0001 per share. Trading of the Common Stock on the NYSE commenced on a split-adjusted basis at market open on January 3, 2025 under the existing trading symbol “ALUR.”

### Omnibus Amendment

On January 7, 2025, we entered into an Omnibus Amendment (the “Omnibus Amendment”) by and among us, Allurion Technologies, LLC (“Allurion OpCo”), Allurion Australia Pty Ltd, Allurion France, and RTW Investments, LP (together with its affiliates, “RTW”) and certain of its affiliates, to amend (i) the Note Purchase Agreement, dated as of April 14, 2024 (as amended, the “Amended Note Purchase Agreement”), by and among us, RTW and Acquiom Agency Services LLC, the Revenue Interest Financing Agreement, dated as of February 9, 2023 (as amended, the “Revenue Interest Financing Agreement”), by and among us and RTW (such financing, the “Revenue Interest Financing”) and the additional Revenue Interest Financing Agreement, dated as of October 30, 2024 (as amended, the “New RIFA”), by and among us and RTW (collectively, the “Existing Documents”).

The Omnibus Amendment requires (i) us and Allurion OpCo to maintain certain minimum balances of unrestricted cash in controlled accounts in the United States in the amounts corresponding to the calculations set forth therein, and (ii) us to receive minimum trailing 12-month consolidated Revenue (as defined in the Existing Documents) at amounts designated in the Omnibus Amendment, tested quarterly beginning with the 12-month period ending September 30, 2025. The Omnibus Amendment also requires that (i) Allurion France shall have successfully regained marketing authorization from the Agence Nationale de Sécurité du Médicament (“ANSM”) to resume the Commercialization (as defined in the Existing Documents) of the Product (as defined in the

Existing Documents) in France on or prior to December 31, 2025, which occurred in February 2025 as discussed further below, and (ii) Allurion OpCo shall have received marketing authorization from the U.S. Food and Drug Administration (the “FDA”) for the commercialization of the Product in the United States no later than June 30, 2026.

Pursuant to the Omnibus Amendment, the purchasers shall receive a number of shares of the Common Stock, representing five percent of our fully-diluted shares outstanding (without regard to any beneficial ownership limitations) immediately after the closing of the offering and sale of Additional Shares (as defined in the Existing Documents) to be consummated no later than February 15, 2025, in connection with which we raised at least $12.0 million in aggregate net proceeds; *provided* that, in the event we cannot issue shares of Common Stock to the purchasers thereunder due to applicable law, we shall instead issue an equivalent (as-converted) number of shares of a newly created series of Series A-1 non-voting preferred stock, par value $0.0001 per share (the “Series A-1 Preferred Stock”), and will include a proposal in a definitive proxy statement on Schedule 14A seeking stockholder approval no later than December 31, 2025 to allow the conversion of Series A-1 Preferred Stock into Common Stock; *provided further* that, each share of Series A-1 Preferred Stock outstanding on December 31, 2026 shall, except to the extent prohibited by Delaware law governing distributions to stockholders (including the Delaware General Corporation Law), be redeemed by us for cash in an amount equal to the as-converted value of the underlying Common Stock.

The Omnibus Amendment also provides that we will ensure RTW shall have the right to designate one director to the Board, which director is currently Nicholas Lewin, and as of the Amendment Effective Date (as defined in the Omnibus Amendment), RTW has the right to designate a second director to the Board, which additional director is initially R. Jason Richey.

### Topline AUDACITY FDA Pivotal Trial Results

On January 8, 2025, we announced topline results from our AUDACITY pivotal trial evaluating the safety and efficacy of the Allurion Balloon. The AUDACITY trial was an open-label, multicenter, randomized, controlled trial and was the first FDA pivotal trial on an intragastric balloon for weight loss to report primary outcomes beyond nine months. The AUDACITY trial achieved its responder rate co-primary endpoint by demonstrating that more than 50% of Allurion Balloon subjects lost more than 5% of their total body weight at 48 weeks (58%; p-value = 0.0089). At 48 weeks, Allurion Balloon subjects exhibited substantially greater weight loss compared to control subjects with a 3.77% mean difference in total body weight loss, resulting in a 2.69% superiority margin. This margin was less than the pre-specified 3% superiority margin needed to meet the comparative co-primary endpoint (p-value=0.1616). At 40 weeks, the 4.22% mean difference in total body weight loss between groups exceeded a 3% superiority margin.

The rate of serious adverse events in Allurion Balloon subjects in the AUDACITY trial was 3.1%, the lowest reported in a pivotal FDA trial for a liquid-filled intragastric balloon indicated for weight loss.

Based on the results of the AUDACITY trial, we plan to submit the fourth and final module of the premarket approval application to the FDA.

### January 2025 RTW Private Placement

On January 14, 2025, we entered into a subscription agreement (the “January 2025 Subscription Agreement”) with funds affiliated with RTW, pursuant to which we agreed to issue and sell 841,751 shares of Common Stock for an aggregate purchase price of approximately $2.5 million at a purchase price of $2.97 per share (the “January 2025 RTW Private Placement”). The January 2025 RTW Private Placement closed on January 16, 2025.

### January 2025 Public Offering and Concurrent Private Placement

On January 24, 2025, we entered into a securities purchase agreement (the “January 2025 Securities Purchase Agreement”) with certain accredited investors named therein, pursuant to which we agreed to issue and sell 1,240,000 shares of Common Stock (the “January 2025 Offering”) and 1,240,000 accompanying common warrants (the “January 2025 Warrants”) to purchase up to 1,240,000 shares of Common Stock upon exercise of the January 2025 Warrants in a concurrent private placement (the “January 2025 Private Placement”), at an offering price of $6.00 per share and accompanying January 2025 Warrant. The January 2025 Offering and January 2025 Private Placement closed on January 27, 2025 with net proceeds of approximately $5.8 million, after deducting the placement agent fees and estimated offering expenses payable by the Company.

### February 2025 Public Offering and Concurrent Private Placement

On February 19, 2025, we entered into a securities purchase agreement (the “February 2025 Securities Purchase Agreement”) with certain accredited investors named therein, pursuant to which we agreed to issue and sell 900,000 shares of Common Stock (the “February 2025 Offering”), and 1,800,000 accompanying common warrants (the “February 2025 Warrants”) to purchase up to 1,800,000 shares of Common Stock upon exercise of the February 2025 Warrants in a concurrent private placement (the “February 2025 Private Placement”), at an offering price of $5.23 per share and accompanying February 2025 Warrant. The February 2025 Offering and February 2025 Private Placement closed on February 20, 2025, and resulted in net proceeds of approximately $3.9 million, after deducting the placement agent fees and estimated offering expenses payable by the Company.

### Leavitt Private Placement

On February 19, 2025, we entered into a subscription agreement (the “Leavitt Subscription Agreement”) with an accredited investor affiliated with Leavitt Equity Partners LLC (collectively, “Leavitt”), pursuant to which we agreed to issue and sell 267,686 shares of Common Stock (the “Private Placement Shares”) and common warrants to purchase up to 535,372 shares of Common Stock (the “Leavitt Private Placement Warrants” and together with the February 2025 Warrants, the “February 2025 Offering Warrants”), at a purchase price of $5.23 per share and accompanying Leavitt Private Placement Warrant (the “Leavitt Private Placement”). The Leavitt Private Placement closed on February 20, 2025 with net proceeds of $1.3 million after deducting placement agent fees of $0.1 million.

### Resumption of Sales in France

On February 13, 2025, we announced that we were relaunching the Allurion Balloon in France after the ANSM, the French regulatory authority, repealed its temporary suspension of sales of the device following our completion of the remediation plan we developed in cooperation with the agency and we were cleared to resume sales of the Allurion Balloon, effective immediately.

### Second Amendment to Note Purchase Agreement

On April 15, 2025, we entered into the Second Amendment to Note Purchase Agreement (the “Second Amendment to Note Purchase Agreement") with the purchasers of the RTW Convertible Notes (the "Purchasers") and RTW, as agent for the purchasers, which amended the Amended Note Purchase Agreement to reflect additional conversion and other provisions, including provisions permitting the conversion of a portion of the RTW Convertible Notes at reduced conversion prices, resulting in the potential issuance of additional shares, which was approved by our stockholders at the Special Meeting of Stockholders held on April 10, 2025.

The Second Amendment to Note Purchase Agreement provides for the mandatory conversion of $5.0 million of principal amount of the RTW Convertible Notes in the event our market capitalization, as determined in accordance with the rules of the NYSE or such other nationally recognized securities exchange upon which the Common Stock is then listed, is reasonably expected to fall below $15.0 million (the “Market Capitalization Condition”). In the event such Market Capitalization Condition is triggered, the Purchasers shall provide notice to the Company, and the Company shall accept such notice, to convert $5.0 million aggregate principal amount of the RTW Convertible Notes at the Floor Conversion Rate (defined below), and such amount shall be converted into 1,492,539 shares of our Common Stock.

On April 16, 2025, the Purchasers provided notice of conversion of $5.0 million of principal amount of the RTW Convertible Notes based on the closing price of the Common Stock on the immediately preceding trading day and resulting market capitalization of less than $15.0 million. The parties that it is reasonably expected that such market capitalization will remain below $15.0 million for the period of time that would result in delisting under NYSE rules and, accordingly, that the Market Capitalization Condition had been triggered and such mandatory conversion of $5.0 million of principal amount of the RTW Convertible Notes shall occur at the floor price of $3.35 per share. The Company subsequently issued an aggregate of 1,492,539 shares of Common Stock (subject to rounding for fractional shares) in accordance with the terms of the Second Amendment to Note Purchase Agreement.

In the event such Market Capitalization Condition is triggered, the Purchasers also have the right to provide us notice to convert up to an additional $5.0 million of aggregate principal amount of the RTW Convertible Notes into shares of Common Stock at an agreed conversion rate. We have the right to accept or reject such conversion in our sole discretion. The parties will mutually agree on the agreed conversion rate, *provided* that it is not more than 298.5075 shares of Common Stock per $1,000 principal amount of the RTW Convertible Notes, reflecting a floor conversion price of $3.35 per share of Common Stock (such rate, the “Floor Conversion Rate”).

In addition, without regard to the Market Capitalization Condition, the Purchasers may provide us notice to convert up to an additional $5.0 million aggregate principal amount of the RTW Convertible Notes into shares of Common Stock at the 5-Day VWAP Conversion Rate, which we may accept or reject in our sole discretion. The "5 Day VWAP Conversion Rate” is the lesser of (i) the quotient of $1,000 divided by the daily volume weighted average price of the Common Stock for the five consecutive trading day period ending on the trading day immediately preceding the date of the delivery of the notice, discounted by five percent and (ii) the Floor Conversion Rate.

Finally, during the one year period ending on April 15, 2026, the Purchasers in their sole discretion may provide us notice to convert up to an additional $1.0 million aggregate principal amount of the RTW Convertible Notes in any 30-day period into shares of Common Stock at the 5-Day VWAP Conversion Rate. If the Purchasers do not exercise their right to provide a notice to convert all or a portion of $1.0 million aggregate principal amount of the RTW Convertible Notes per month, any shortfall may be included in the amount to be converted in a subsequent 30-day period. The maximum principal amount of the RTW Convertible Notes that may be converted under such monthly conversion provision is $12.0 million. We may accept or reject any such monthly conversion in our sole discretion.

The Second Amendment to Note Purchase Agreement also contains an agreement by the Purchasers that, without our prior written consent, until the Voting Agreement Termination Date (defined below), at any meeting of our stockholders, including any postponement, recess or adjournment thereof, or in any other circumstance in which a vote, consent or other approval of stockholders is sought, the Purchasers will either, at their sole option (i) abstain from voting the shares of Common Stock issued pursuant to the new conversion provisions set forth in the Second Amendment to Note Purchase Agreement described above, or (ii) vote such shares in proportion to the votes cast on the applicable matter with respect to the shares of Common Stock beneficially owned by persons other than the Purchasers or any of their affiliates. Such voting agreement shall terminate upon the earlier of (i) the effective date of any Fundamental Change or Make-Whole Fundamental Change (as such terms are defined in the Amended Note Purchase Agreement) and (ii) the date on which the Purchasers and their affiliates collectively have the power to vote shares of Common Stock (including the shares issued upon conversion pursuant to the Second Amendment to Note Purchase Agreement) representing less than 9.9% of the voting power of the outstanding shares of the Company (such date, the “Voting Agreement Termination Date”).

### Key Factors Affecting Our Operating Results

We believe that our performance and future success depend on many factors that present significant opportunities but also pose risks and challenges, including those discussed below and in the “Risk Factors” section of our Annual Report on Form 10-K.

- *Market Acceptance*. The growth of our business depends on our ability to gain broader acceptance of our current products by continuing to make health care providers aware of the benefits of our products to generate increased demand and frequency of use, and thus increase our sales. Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets. Although we have increased the number of patients treated with our products through our established relationships and focused sales efforts, we cannot provide assurance that our efforts will continue to increase the use of our products.
- *Regulatory approval and timing and efficiency of new product introductions*. We must successfully obtain timely approvals, maintain regulatory approval, successfully implement any remediation programs required by regulators to resume sales of the Allurion Balloon, and introduce new products that gain acceptance with health care providers. For our sales to grow, we will also need to obtain regulatory approval of our existing product and any new products or modifications/enhancements to our existing products in the markets that we operate in and new markets as applicable.
- *Sales force size and effectiveness.* The speed at which newly hired salespeople become effective can impact our revenue growth or our costs incurred in anticipation of such growth. We intend to continue to improve and increase performance in our sales and marketing organization, and expand our international programs to help facilitate further adoption of our products as well as broaden awareness of our products to new customers.
- *Product and geographic mix; timing.* Our financial results, including our gross margins, may fluctuate from period to period based on the timing of orders, fluctuations in foreign currency exchange rates, and the number of available selling days in a particular period, which can be impacted by a number of factors, such as holidays or days of severe inclement weather in a particular geography, the mix of products sold, and the geographic mix of where products are sold.

### Operating Segments

We operate our business in a single segment and as one reporting unit, which is how our chief operating decision maker ("CODM"), our chief executive officer, reviews financial performance and allocates resources. The CODM reviews financial information presented on a regular basis at the consolidated level for purposes of allocating resources and evaluating financial performance. Since we operate as one operating segment, all required financial segment information can be found in the consolidated financial statements.

### Components of Our Results of Operations

### Revenue

We derive revenue from the sale of the Allurion Balloon to customers, which are either distributors or health care providers. The Allurion Balloon is the foundation of the Allurion Program, a holistic weight loss program that offers patients the opportunity to receive, and clinic and other health care providers the ability to deliver, behavior change assistance through their use of our remote patient support and monitoring tools.

### Cost of Revenue

Cost of revenue consists primarily of costs that are closely correlated or directly related to the delivery of our products, including material costs, labor costs, and depreciation expense for fixed assets.

### Operating Expenses

#### Sales and Marketing Expenses

Sales and marketing expenses consist primarily of salaries and related expenses (including commissions) for our sales and marketing personnel. Marketing programs consist of advertising, training events, brand building, product marketing activities, and shipping costs.

#### Research and Development Expenses

Our research and development expenses consist of costs associated with performing research and development activities such as registering our products in various jurisdictions and performing clinical trials. These costs include salaries and benefits, stock-based compensation, non-capitalizable software development costs, product development costs, materials and supplies, clinical trial activities, registration expenses, depreciation of equipment, and other outside services.

#### General and Administrative Expenses

General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, for our personnel in executive, information technology, finance and accounting, human resources and other administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional fees paid for accounting, auditing, consulting and tax services; insurance costs; travel expenses; office and information technology costs; and facilities, depreciation and other expenses related to general and administrative activities, which include direct or allocated expenses for rent and maintenance of facilities and utilities.

### Other Income (Expense)

#### Interest Expense

Interest expense consists of interest expense associated with outstanding borrowings under our debt obligations as well as the amortization of debt issuance costs and discounts associated with such borrowings.

#### Change in Fair Value of Warrants

The change in fair value of warrants consists of the expense recognized upon the mark to market of our warrant liabilities.

#### Change in Fair Value of Debt

The change in fair value of debt consists of the expense recognized upon the mark to market of our convertible debt.

#### Change in Fair Value of Revenue Interest Financing and PIPE Conversion Option

The change in fair value of Revenue Interest Financing and PIPE Conversion Option (as defined below) consists of the expense recognized upon the mark to market of the Revenue Interest Financing with RTW and the issuance and mark to market of the PIPE Conversion Option. See Note 11, *Fair Value Measurements* for further information.

#### Change in Fair Value of Earn-out Liabilities

The change in fair value of earn-out liabilities consists of the gain or loss recognized upon mark to market of the contingent earn-out consideration. See Note 11, *Fair Value Measurements* for further information.

#### Other Income, net

Other income, net consists of interest earned on our invested cash balances, which primarily consist of deposit accounts and money market funds, foreign currency transaction gains and losses, and expense associated with our Success Fee derivative liability and Share Obligation liability (as defined in Note 9, *Debt* in the accompanying notes to the condensed consolidated financial statements). See Note 11, *Fair Value Measurements* for further information.

### Results of Operations

### Comparison of the Three Months Ended March 31, 2025 and 2024 (unaudited)

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):

|  | Three Months Ended March 31, 2025 (Restated) | 2024 (Restated) | Change (Restated) |
| --- | ---: | ---: | ---: |
| Revenue | $5,580 | $9,386 | $(3,806) |
| Cost of revenue | 1,419 | 2,520 | (1,101) |
| Gross profit | 4,161 | 6,866 | (2,705) |
| Operating expenses: |  |  |  |
| Sales and marketing | 3,621 | 6,145 | (2,524) |
| Research and development | 2,624 | 5,725 | (3,101) |
| General and administrative | 5,198 | 6,386 | (1,188) |
| Total operating expenses: | 11,443 | 18,256 | (6,813) |
| Loss from operations | (7,282) | (11,390) | 4,108 |
| Other income (expense): |  |  |  |
| Interest expense | — | (1,931) | 1,931 |
| Changes in fair value of warrants | 5,669 | 3,131 | 2,538 |
| Changes in fair value of debt | 3,330 | — | 3,330 |
| Changes in fair value of Revenue Interest Financing and PIPE conversion option | (3,820) | (2,100) | (1,720) |
| Changes in fair value of earn-out liabilities | 910 | 14,190 | (13,280) |
| Other income (expense), net | (213) | 172 | (385) |
| Total other income (expense): | 5,876 | 13,462 | (7,586) |
| (Loss) income before income taxes: | (1,406) | 2,072 | (3,478) |
| Provision for income taxes: | (95) | (76) | (19) |
| Net (loss) income | $(1,501) | $1,996 | $(3,497) |

### Revenue

Revenue decreased $3.8 million, or 41%, to $5.6 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in revenue was primarily the result of not selling product in France during the three months ended March 31, 2025 compared to revenue of $1.7 million in the same period in 2024, as well as lower investment in sales and marketing as we move our strategy from business to business to customer and away from direct to customer.

### Cost of Revenue

Cost of revenue decreased $1.1 million, or 44%, to $1.5 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in cost of revenue was a direct result of decreased gastric balloon units sold coupled with operating efficiencies from the restructuring implemented during the fourth quarter of 2024.

### Gross Profit

Gross profit decreased $2.7 million, or 39%, to $4.2 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in gross profit was primarily the result of a decrease in revenue and sales volume of our gastric balloon system.

### Operating Expenses

#### Sales and Marketing Expenses

Sales and marketing expenses decreased $2.5 million, or 41%, to $3.6 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in sales and marketing expenses was primarily the result of a $1.6 million decrease in salaries and related benefits due to lower headcount as a result of the restructuring implemented during the fourth quarter of 2024 and a $1.1 million decrease in marketing expenditures driven by a reorganization of our selling and marketing spend focusing on more efficient channels and geographies. These decreases are partially offset by a $0.3 million increase in shipping and logistics expense.

#### Research and Development Expenses

Research and development expenses decreased $3.1 million, or 54%, to $2.6 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in research and development expenses was primarily the result of a $1.5 million decrease in costs related to the AUDACITY clinical trial as it nears completion, a $0.7 million decrease attributable to salaries and related benefit costs due to lower headcount as a result of the restructuring implemented during the fourth quarter of 2024, and a $0.2 million decrease in outside consulting costs.

#### General and Administrative Expenses

General and administrative expenses decreased $1.2 million, or 19%, to $5.2 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in general and administrative expenses was primarily the result of a $1.5 million decrease in salaries and related benefit costs due to lower headcount as a result of the restructuring implemented during the fourth quarter of 2024. This decrease was partially offset by a $0.4 million increase in legal and professional fees, primarily driven by $1.4 million of one-time financing costs during the three months ended March 31, 2025.

### Other income (expense)

#### Interest Expense

Interest expense decreased $1.9 million, or 100%, to zero for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in interest expense was due to the termination of our Fortress Term Loan in April 2024.

#### Change in Fair Value of Warrants

The $5.7 million gain attributable to the change in fair value of warrants for the three months ended March 31, 2025, compared to the same period in 2024, was due to mark to market fluctuations in our warrant liabilities due to the decline in value of our Common Stock during the applicable periods, as well as the issuance of the Public Offering Warrants, July 2024 Private Placement Warrants, January 2025 Warrants, and February 2025 Offering Warrants, for which there were no comparable mark to market fluctuations in the prior period.

#### Change in Fair Value of Debt

The $3.3 million gain (as restated) attributable to the change in fair value of debt for the three months ended March 31, 2025, compared to the same period in 2024, was due to mark to market fluctuations in our convertible debt during the period.

#### Change in Fair Value of Revenue Interest Financing and PIPE Conversion Option

The $3.8 million loss (as restated) attributable to the change in fair value of the Revenue Interest Financing and PIPE Conversion Option for the three months ended March 31, 2025, compared to the same period in 2024, was due to mark to market fluctuations in our Revenue Interest Financing during the period.

#### Change in Fair Value of Earn-Out Liabilities

The $0.9 million gain attributable to the change in the fair value of earn-out liabilities for the three months ended March 31, 2025 was due to the decrease in the Company's stock price during the period.

#### Other Income, Net

The change in Other income, net for the three months ended March 31, 2025, compared to the same period in 2024, was a loss of $0.2 million attributable to a $0.7 million loss related to the Share Obligation. This loss was partially offset by a $0.4 million gain related to fluctuations in exchange rates of foreign currencies and $0.2 million of interest income during the three months ended March 31, 2025.

### Provision for Income Taxes

We recorded a provision for income taxes of $0.1 million for the three months ended March 31, 2025. The provision for income taxes is due to net income in certain foreign jurisdictions.

### Liquidity and Capital Resources

Since our inception, we have primarily obtained cash to fund our operations through the sale of Common Stock and preferred stock, issuance of term loans, and issuance of convertible debt instruments. As of March 31, 2025, we had $20.4 million in cash and cash equivalents. We incurred operating losses of $7.3 million and $11.4 million for the three months ended March 31, 2025 and 2024, respectively. We incurred cash outflows from operating activities of $9.5 million and $8.6 million during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $223.7 million (as restated). We expect to continue to generate operating losses for the foreseeable future.

Our future capital requirements will depend on many factors, including:

- the emergence of competing innovative weight loss solutions and other adverse business developments;
- the timing and extent of our sales and marketing, and research and development, expenditures; and
- any investments or acquisitions we may choose to pursue in the future.

Our revenue for the three months ended March 31, 2025 was $5.6 million, which represented a year-over-year decrease of 41%. The decrease in revenue was primarily the result of the result of not selling product in France during the three months ended March 31, 2025 compared to revenue of $1.7 million in the same period in 2024, as well as lower investment in sales and marketing as we move our strategy from business to business to consumer and away from direct to consumer. If our current cash and anticipated revenue and resulting cash flows from operations are insufficient to satisfy our liquidity requirements, due to increased expenditures, lower demand for our sales of our gastric balloon system, the occurrence of other events, or the realization of the risks described in our Annual Report on Form 10-K under the heading "Risk Factors," we may be required to raise additional capital through the issuances of public or private equity or debt financing or other capital sources earlier than expected.

Until such time as we can generate sufficient revenue to fund operations, we expect to use proceeds from the issuance of equity, debt financings, or other capital transactions to fund our operations and satisfy our liquidity requirements, but the amount and timing of such financings are uncertain. We may be unable to increase our revenue, raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to increase our revenue, raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue our operations or the development and commercialization of one or more of our product candidates and other strategic initiatives. Based on our recurring losses from operations incurred since inception, the expectation of continuing operating losses for the foreseeable future, and the potential need to raise additional capital to finance our future operations and debt service payments, we have concluded that there is substantial doubt about our ability to continue as a going concern for a period of one year from the date that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q/A are issued.

### Financing Arrangements

#### Leavitt Private Placement

On February 20, 2025, we received net proceeds of $1.3 million from the issuance of 267,686 shares of Common Stock and 535,372 Leavitt Private Placement Warrants at an offering price of $5.23 per share and accompanying warrant.

#### February 2025 Public Offering and Concurrent Private Placement

On February 20, 2025, we received net proceeds of $3.9 million from the issuance of 900,000 shares of Common Stock and 1,800,000 February 2025 Warrants at an offering price of $5.23 per share and accompanying warrant.

#### January 2025 Public Offering and Concurrent Private Placement

On January 27, 2025, we received net proceeds of $5.8 million from the issuance of 1,240,000 shares of Common Stock and 1,240,000 January 2025 Warrants at an offering price of $6.00 per share and accompanying warrant.

#### January 2025 RTW Private Placement

On January 16, 2025, we received net proceeds of $2.5 million from the issuance of 841,751 shares of Common Stock to funds affiliated with RTW as a purchase price of $2.97 per share.

#### Public Offering and Concurrent Private Placement

On July 1, 2024, we received $15.2 million in net proceeds from the issuance of 576,261 shares of Common Stock and 662,701 Public Offering Warrants and $2.5 million in net proceeds from the sale and issuance of 2,260,159 shares of Series A Preferred Stock (as converted to 90,407 shares of Common Stock following the Series A Stockholder Approval and Reverse Stock Split) and 90,407 July 2024 Private Placement Warrants in the July 2024 Private Placement, in each case at an offering price of $30.00 per share and accompanying warrant. On July 5, 2024, the underwriters in the public offering partially exercised their option to purchase an additional 77,091 shares of Common Stock for additional net proceeds of $2.2 million.

#### Amended Note Purchase Agreement

On April 16, 2024, we received $48.0 million in gross proceeds from the Amended Note Purchase Agreement with RTW, which proceeds were used to repay all outstanding principal, accrued and unpaid interest, and other obligations with respect to the Fortress Term Loan.

As of March 31, 2025, $48.0 million of the RTW Convertible Notes remains outstanding and is included in convertible notes payable, net of discounts on our condensed consolidated balance sheets. See Note 9, *Debt*, in the notes to our unaudited interim condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 included within this Quarterly Report on Form 10-Q/A for additional details regarding the RTW Convertible Notes.

On April 15, 2025, we entered into the Second Amendment to Note Purchase Agreement with the Purchasers and RTW. On April 16, 2025, pursuant to the Second Amendment to Note Purchase Agreement, the Purchasers provided notice of conversion of

$5.0 million of principal amount of the RTW Convertible Notes based on the closing price of the Common Stock on the immediately preceding trading day and resulting market capitalization of less than $15.0 million. The parties agreed that the Market Capitalization Condition was triggered and such mandatory conversion of $5.0 million of principal amount of the RTW Convertible Notes shall occur at the floor price of $3.35 per share. We subsequently issued an aggregate of 1,492,539 shares of Common Stock (subject to rounding for fractional shares) in accordance with the terms of the Second Amendment to Note Purchase Agreement.

#### Chardan Purchase Agreement

On December 18, 2023, we entered into the Purchase Agreement with Chardan. Pursuant to the Purchase Agreement, we have the right from time to time at our option to sell to Chardan up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued shares of our Common Stock, and (ii) the Exchange Cap (379,299 shares of Common Stock), subject to certain conditions.

As of March 31, 2025, we have received $1.0 million in net proceeds from sales of shares of our Common Stock pursuant to the Purchase Agreement with Chardan.

#### Revenue Interest Financing Agreement

On August 1, 2023, we received $40.0 million in proceeds from the Revenue Interest Financing Agreement with RTW, which matures in December 2030. We entered into the Revenue Interest Financing Agreement on February 9, 2023 and received the proceeds at the closing of the Business Combination. On April 14, 2024, the Revenue Interest Financing Agreement was amended to, among other things, increase the rate of revenue interest payments to be paid to RTW. The Revenue Interest Financing Agreement is included in Revenue Interest Financing liability on our condensed consolidated balance sheet as of March 31, 2025. See Note 10, *Revenue Interest Financing, Side Letter, and PIPE Conversion Option* in the notes to our unaudited interim condensed consolidated financial statements for the three months ended March 31, 2024 and March 31, 2023 included within this Quarterly Report on Form 10-Q/A for additional details regarding the Revenue Interest Financing Agreement.

On October 22, 2024, funds affiliated with RTW provided notice of their election under the Amended and Restated RTW Side Letter to surrender 30,000 shares of Common Stock representing $7.5 million in consideration for an additional Revenue Interest Financing Agreement. Accordingly, on October 30, 2024, the Company and the funds affiliated with RTW entered into the New RIFA.

### Material Cash Requirements for Known Contractual and Other Obligations

#### Leases

We have entered into various non-cancellable operating leases for our corporate office, manufacturing facilities, research and development labs, management office space and certain equipment. The leases have varying terms expiring between 2025 and 2028. See Note 17, *Commitments and Contingencies* for additional details related to our noncancelable operating leases.

#### RTW Convertible Notes

On April 16, 2024, we received $48.0 million in gross proceeds from the Amended Note Purchase Agreement with RTW, which proceeds were used to repay all outstanding principal, accrued and unpaid interest and other obligations with respect to the Fortress Term Loan.

On April 15, 2025, we entered into the Second Amendment to Note Purchase Agreement. On April 16, 2025, pursuant to the Second Amendment to Note Purchase Agreement, the Purchasers provided notice of conversion of $5.0 million of principal amount of the RTW Convertible Notes based on the closing price of the Common Stock on the immediately preceding trading day and resulting market capitalization of less than $15.0 million. The parties agreed that the Market Capitalization Condition was triggered and such mandatory conversion of $5.0 million of principal amount of the RTW Convertible Notes shall occur at the floor price of $3.35 per share. We subsequently issued an aggregate of 1,492,539 shares of Common Stock (subject to rounding for fractional shares) in accordance with the terms of the Second Amendment to Note Purchase Agreement.

#### Revenue Interest Financing

We received $40.0 million in proceeds from the Revenue Interest Financing Agreement with RTW on August 1, 2023. In exchange, we are obligated to remit to RTW certain revenue interest payments on all current and future products, digital solutions and services developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by Allurion and its subsidiaries at certain specified rates. On April 14, 2024, the Revenue Interest Financing Agreement was amended to, among other things, increase the rate of revenue interest payments to be paid to RTW for net sales less than or equal to $100 million prior to December 31, 2026 from 6% to 12%, and increase the royalty rate on net sales less than or equal to $100 million on or after January 1, 2027 from 10% to 12%.

If RTW has not received aggregate revenue interest payments equal to at least 100% of the Investment Amount by December 31, 2027, we must make a cash payment in an amount sufficient to catch RTW up to 100% of the Investment Amount. If RTW has not received revenue interest payments equal to at least 240% of the Investment Amount by December 31, 2030, we must make a cash payment in an amount sufficient to catch RTW up to 240% of the Investment Amount.

Further, on October 22, 2024, funds affiliated with RTW provided notice of their election under the Amended and Restated RTW Side Letter to surrender 30,000 shares of our Common Stock representing $7.5 million in consideration for an additional Revenue Interest Financing Agreement. Accordingly, on October 30, 2024, the Company and the funds affiliated with RTW entered into the New RIFA. The New RIFA has substantially identical terms and conditions as the Revenue Interest Financing Agreement, as amended by the Omnibus Amendment, except that the amount of financing provided under the New RIFA is equal to the conversion amount of $7.5 million.

#### Research and Development Costs

We are nearing the completion of our AUDACITY clinical trial in the United States and expect our expenses to decrease significantly as we continue to make payments related to the obligations with each clinical trial site. Our clinical trial costs are dependent on, among other things, the size, number, and length of our clinical trial.

#### Other Capital Requirements

We enter into agreements in the normal course of business with various vendors, which are generally cancelable upon notice. Payments due upon cancellation typically consist only of payments for services provided or expenses incurred, including non-cancelable obligations of service providers, up to the date of cancellation.

### Cash Flows

The following table sets forth a summary of cash flows for the periods presented:

*(In thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(9,469) | $(8,636) |
| Net cash used in investing activities | — | (104) |
| Net cash provided by financing activities | 14,499 | 387 |
| Net increase (decrease) in cash and cash equivalents, and restricted cash | $5,030 | $(8,353) |

### Net Cash Used in Operating Activities (Restated)

#### Three Months Ended March 31, 2025

During the three months ended March 31, 2025, operating activities used $9.5 million of cash resulting from cash used from changes in our operating assets and liabilities of $4.8 million, non-cash income of $3.2 million (as restated), and a net loss of $1.5 million (as restated).

Non-cash income consisted of $5.7 million of income related mark to market adjustments related to our warrant liabilities, $3.3 million (as restated) of income related to the change in fair value of our convertible debt, $0.9 of income related to the change in fair value of our earn-out liabilities, and $0.3 million on unrealized gains. This non-cash income was partially offset by $3.8 million (as restated) of expense related to the change in fair value of our Revenue Interest Financing, $1.1 million of issuance costs associated with warrants recorded at fair value, $0.9 million of stock-based compensation expense, a $0.7 million loss on changes in fair value of the Share Obligation, $0.2 million of non-cash lease expense, and $0.2 million of depreciation and amortization expense.

Net cash used in our operating assets and liabilities consisted of a $3.9 million decrease in accounts payable, accrued expenses, and other current liabilities, a $0.9 million increase in accounts receivable, and a $0.2 million decrease in our lease liabilities, partially offset by a $0.1 million decrease in prepaid expenses, other current and long-term assets and a less than $0.1 million increase in inventory.

The net decrease in accounts payable, accrued expenses and other current liabilities was primarily related to decreased expenses resulting from the restructuring implemented during the fourth quarter of 2024 and timing of payments. The increase in accounts receivable was the result of an increase in revenue and decrease in cash collections.

#### Three Months Ended March 31, 2024

During the three months ended March 31, 2024, net income of $2.0 million (as restated) and net cash provided by changes in our operating assets and liabilities of $2.6 million was more than offset by non-cash income of $13.2 million (as restated), resulting in cash used from operating activities of $8.6 million.

Non-cash income consisted of $14.2 million of income related to the change in fair value of our earn-out liabilities and $3.1 million of mark to market adjustments related to our warrant liabilities. This non-cash income was partially offset by $2.1 million (as restated) of expense related to the change in fair value of the Revenue Interest Financing and PIPE Conversion Option, $0.6 million of stock-based compensation expenses, $0.4 million of depreciation and amortization expense, $0.3 million of non-cash interest expense primarily related to the accretion of debt discount associated with our Fortress Term Loan, $0.3 million of unrealized loss on foreign exchange, a $0.2 million provision for inventory, and $0.2 million of non-cash lease expense.

Net cash provided by changes in our operating assets and liabilities consisted of a $1.7 million decrease in accounts receivable, a $0.3 million decrease in inventory, a $0.2 million decrease in prepaid expenses, other current and long-term assets, and a net $0.6 million increase in accounts payable, accrued expenses and other current liabilities.

The decrease in accounts receivable was the result of an increase in cash collections. The decrease in inventory was primarily related to a decrease in raw materials and work in progress. The decrease in prepaid expenses, other current and long-term assets was primarily related to a decrease in payroll deposits. The net increase in accounts payable, accrued expenses and other current liabilities was primarily related to timing of payments.

### Net Cash Used in Investing Activities

#### Three Months Ended March 31, 2025 and 2024

During the three months ended March 31, 2025 and 2024, cash used in investing activities was zero and $0.1 million, respectively, consisting of purchases of property and equipment.

### Net Cash Provided by Financing Activities

#### Three Months Ended March 31, 2025 and 2024

During the three months ended March 31, 2025, cash provided by financing activities was $14.5 million, consisting of $14.5 million of net proceeds from the RTW Private Placement, January 2025 Offering, February 2025 Offering, and Leavitt Private Placement.

During the three months ended March 31, 2024, cash provided by financing activities was $0.4 million, consisting of $0.4 million of proceeds from our equity line financing.

### Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes in our critical accounting policies and significant judgments and estimates as compared to those disclosed in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. See Note 3, *Summary of Significant of Accounting Policies* in the accompanying notes to the condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q/A for additional details of our accounting policies.

### Recent Accounting Pronouncements

See Note 3, *Summary of Significant of Accounting Policies* in the accompanying notes to the condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q/A for a description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows.

### Emerging Growth Company and Smaller Reporting Company

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, which allows us to take advantage of certain exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of our Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, and (ii) our annual revenue exceeded $100 million during such completed fiscal year or the market value of the shares of our Common Stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

## Market risk

As filed, 2,728 characters.

#### Interest Rate Risk

We had cash and cash equivalents totaling $20.4 million at March 31, 2025. Cash equivalents were invested primarily in money market funds. Our investment policy is focused on the preservation of capital and supporting our liquidity needs. Under our investment policy, we invest in highly rated securities, issued by the U.S. government or liquid money market funds. We do not invest in financial instruments for trading or speculative purposes, nor do we use leveraged financial instruments. We utilize external investment managers who adhere to the guidelines of our investment policy. A hypothetical 10% change in interest rates would not have a material impact on the value of our cash, cash equivalents, net loss or cash flows.

As of March 31, 2025, we had no variable rate debt outstanding.

#### Foreign Currency Exchange Risk

We are exposed to foreign currency risks that arise from normal business operations. These risks include transaction gains and losses associated with transactions denominated in currencies other than a location’s functional currency and the remeasurement of foreign currencies to our U.S. dollar reporting currency. As such, we have exposure to adverse changes in exchange rates associated with operating expenses of our foreign operations. Transaction gains or losses are included in Other income (expense), net in the condensed consolidated statements of operations, as incurred.

We believe that a 10% increase or decrease in current exchange rates between the U.S. dollar and our foreign currencies could have a material impact on our business, financial condition or results of operations. Our primary exposures related to foreign currency denominated sales and expenses are in Europe and we also have exposure in the Middle East and the Asia-Pacific region, and are monitoring potential developing exposure in the Latin American, Canadian and African markets.

To date, we have not engaged in any foreign currency hedging activities. As our international operations grow, we will continue to reassess our approach to managing the risks relating to fluctuations in foreign currency exchange rates. During the three months ended March 31, 2025, the effect of an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts would have had an impact of approximately 5% on revenues and 3% on expenses and would have impacted our net income by approximately 1%. During the three months ended March 31, 2024, the effect of an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts would have had an impact of approximately 7% on revenues and 7% on expenses and would have impacted our net loss by approximately 6%.

## Controls and procedures

As filed, 5,351 characters.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

#### Evaluation of Disclosure Controls and Procedures

In connection with the filing of our Original Form 10-Q on May 15, 2025, our Chief Executive Officer, who is our principal executive officer and principal financial officer, reviewed and evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of March 31, 2025. Based on that review and evaluation, the Chief Executive Officer previously concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2025 as a result of the material weaknesses in our internal control over financial reporting discussed below. Subsequent to the original evaluation, and as described in the Explanatory Note to the Form 10-Q/A, the Company identified an Error which led to the restatement of certain of the Company’s historical consolidated financial statements. The Company's management determined that the Error and the related restatements were the result of the existing material weaknesses in the Company’s internal control over financial reporting. The Company determined that the Error originated from the lack of sufficient levels of staff with public company and technical accounting experience to maintain proper control activities and perform risk assessment and monitoring activities.

In connection with the audits of our consolidated financial statements as of and for the years ended December 31, 2024 and 2023, we identified material weaknesses in our internal control over financial reporting that we are currently working to remediate, which relate to: (a) insufficient segregation of duties in the financial statement close process; (b) a lack of sufficient levels of staff with public company and technical accounting experience to maintain proper control activities and perform risk assessment and monitoring activities; and (c) insufficient information systems controls, including access and change management controls. We have concluded that these material weaknesses in our internal control over financial reporting occurred because we did not have the necessary business processes, personnel and related internal controls to operate in a manner to satisfy the accounting and financial reporting timeline requirements prior to being a public company.

We are focused on designing and implementing effective internal controls measures to improve our evaluation of disclosure controls and procedures, including internal control over financial reporting, and remediating the material weaknesses. In order to remediate these material weaknesses, we have taken and plan to take the following actions:

- hired and planned continued hiring of additional accounting staff with public company experience,
- implemented a new enterprise resource planning system to replace the prior enterprise resource planning system,
- implementation of additional review controls and processes requiring timely account reconciliation and analyses of certain transactions and accounts, and
- hired a national accounting firm to assist in the design and implementation of controls and remediation of controls gaps.

While progress has been made to enhance our internal control over financial reporting, we are still in the process of building and enhancing our processes, procedures, and controls. Additional time is required to complete the remediation of these material weaknesses and the assessment to ensure the sustainability of these remediation actions. We believe the above actions, when complete, will be effective in the remediation of the material weaknesses described above.

#### Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

#### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

## Risk factors

As filed, 1,005 characters.

Information regarding risk factors appears in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K. There have been no material changes from the risk factors previously disclosed in such Annual Report on Form 10-K. In addition to the matters set forth herein, investors should review the risks factors and other information provided in the Annual Report on Form 10-K prior to making an investment in the Company. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report on Form 10-K, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.

Filed Aug 19, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-110164. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.