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Stock Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | 15. Stock Based Compensation Stock Incentive Plans The Company’s 2010 Stock Option Plan (the “2010 Plan”) provided for the grant of qualified incentive stock options, nonqualified stock options, and other awards to the Company’s employees, officers, directors, advisors, and outside consultants to purchase the Company’s Common Stock. On December 11, 2020, the Company’s Board of Directors adopted the 2020 Stock Option Plan (the “2020 Plan”), which provided for the grant of qualified incentive stock options, nonqualified stock options, and other awards to the Company’s employees, officers, directors, advisors, and outside consultants to purchase the Company’s Common Stock. Each stock option from the 2010 Plan and the 2020 Plan that was outstanding immediately prior to the Business Combination, whether vested or unvested, was canceled and exchanged for a stock option to purchase Allurion Common Stock based on the Exchange Ratio. The per share exercise price for each stock option was divided by the Exchange Ratio. In connection with the closing of the Business Combination, the Company adopted the 2023 Stock Option and Incentive Plan (the "2023 Plan"), which provides for the award of stock options (both incentive and non-qualified), stock appreciation rights, restricted stock units, restricted stock awards, cash-based awards, and dividend equivalent rights. As of December 31, 2024, a total of 242,752 shares of Allurion Common Stock were reserved for issuance under the 2023 Plan. The 2023 Plan provides that the number of shares reserved for issuance under the 2023 Plan will automatically increase each January 1, beginning January 1, 2024 and ending January 1, 2033, by 5% of the number of fully diluted outstanding shares of Allurion Common Stock as of the immediately preceding December 31 or such lesser amount as determined by the Board and the Compensation Committee. As of December 31, 2024, 370,272 options and RSUs were issued and outstanding under the 2010 Plan, 2020 Plan, and 2023 Plan. As of December 31, 2023, 181,186 options and RSUs were issued and outstanding under the 2010 Plan, 2020 Plan, and 2023 Plan. The stock options generally vest over a four-year period and expire 10 years from the date of grant. Stock-based compensation expense included in the consolidated statement of operations and comprehensive loss was as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Cost of revenue |  | $ | 30 |  |  | $ | 32 |
Selling, general, and administrative |  |  | 2,882 |  |  |  | 8,198 |
Research and development |  |  | 144 |  |  |  | 127 |
Total stock-based compensation expense |  | $ | 3,056 |  |  | $ | 8,357 |
Stock Options The following tables summarizes the option activity under the 2010 Plan, 2020 Plan, and the 2023 Plan during the year ended December 31, 2024:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term |  |  | Aggregate Intrinsic Value |
|  |  |  |  | (per option) |  |  | (in years) |  |  | (in thousands) |
Outstanding—January 1, 2024 |  |  | 155,441 |  |  | $ | 66.75 |  |  |  | 6.9 |  |  | $ | 5,565 |
Granted |  |  | 147,515 |  |  |  | 46.52 |  |  |  |  |  |  |
Cancellations and forfeitures |  |  | (36,535 | ) |  |  | 48.34 |  |  |  |  |  |  |
Exercised |  |  | (649 | ) |  |  | 34.26 |  |  |  |  |  |  |
Outstanding— December 31, 2024 |  |  | 265,772 |  |  |  | 58.19 |  |  |  | 7.4 |  |  |  | — |
Exercisable at December 31, 2024 |  |  | 120,965 |  |  | $ | 62.91 |  |  |  | 5.4 |  |  | $ | — |
Total stock compensation expense related to stock option awards during the year ended December 31, 2024 w as $1.9 million. As of December 31, 2024, there was approximately $4.4 m illion of unrecognized compensation costs related to unvested stock options granted under the 2010 Plan, 2020 Plan, and 2023 Plan, which is expected to be recognized over a weighted-average vesting term of 2.9 y ears. The weighted average grant-date fair value of the stock option awards granted during the years ended December 31, 2024 and 2023 w as $32.46 a nd $99.50 per option, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model and the assumptions noted in the table below. Expected volatility for the Company’s Common Stock was determined based on an average of the historical volatility of a peer group of public companies which are similar to the Company. The expected term of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted- average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The expected term of options granted to non-employees is the remaining contractual term of the award. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free rate for periods within the expected life of the option is based upon the U.S. Treasury yield curve in effect at the time of grant. The assumptions used in the Black-Scholes option-pricing model are as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Expected volatility |  |  | 71.2 | % |  |  | 85.8 | %
Risk-free interest rate |  |  | 4.4 | % |  |  | 4.5 | %
Expected dividend yield |  |  | — | % |  |  | — | %
Expected term (in years) |  | 6.1 |  |  |  | 5.8 |
Restricted Stock Units In December 2022, the Company issued RSUs under the 2020 Plan to a member of the Board of Directors with vesting subject to both a performance-based closing condition dependent on the successful Business Combination with Compute Health and time-based vesting conditions. See Note 4, Business Combination above for information about the closing of the Business Combination with Compute Health. Upon the satisfaction of the closing condition, 62.5% of the RSUs awarded vested. Thereafter, the remaining 37.5% of the RSUs vest monthly over a period of two years. In October 2023 and March 2024, the Company issued additional RSUs to Board of Director members with annual vesting over three years. In November 2024, additional RSUs were issued with annual vesting over two years. All RSUs are subject to forfeiture if the grantee’s continuous service relationship as a member of the Board of Directors or employee of the Company terminates prior to vesting. The following table summarizes the restricted stock unit activity under the 2020 Plan and 2023 Plan during the year ended December 31, 2024:
|  | Number of RSUs |  |  | Weighted Average Grant Date Fair Value |
|  |  |  |  | (per share) |
Outstanding—January 1, 2024 |  |  | 25,745 |  |  | $ | 111.25 |
Granted |  |  | 91,795 |  |  |  | 19.98 |
Cancellations and forfeitures |  |  | — |  |  |  | — |
Vested |  |  | (13,040 | ) |  |  | 111.65 |
Outstanding—December 31, 2024 |  |  | 104,500 |  |  | $ | 30.99 |
Total stock compensation expense related to RSUs for the year ended December 31, 2024 was $1.2 million. As of December 31, 2024, there wer e $2.3 million of unrecognized compensation costs related to nonvested RSUs granted under the 2020 Plan and 2023 Plan, which is expected to be recognized over a remaining weighted-average vesting term of 1.9 years. The weighted average grant-date fair value of time-vested restricted stock units granted during the years ended December 31, 2024 and 2023 was $19.98 and $108.00 per share, respectively. Employee Stock Purchase Plan In connection with the closing of the Business Combination, the Company adopted the 2023 Employee Stock Purchase Plan (the "2023 ESPP"). Under the 2023 ESPP plan, substantially all employees may voluntarily enroll to purchase the Company's Common Stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or end of the offering period. An employee's payroll deductions under the 2023 ESPP are limited to 15% of the employee's compensation. A total of 85,446 shares of the Company's Common Stock are reserved and authorized for issuance under the 2023 ESPP as of December 31, 2024. In addition, the number of shares of Common Stock available for issuance under the 2023 ESPP will automatically increase each January 1, beginning on January 1, 2024 and each January thereafter, by the lesser of (i) 1% of the fully diluted outstanding shares of our Common Stock as of the immediately preceding December 31, (ii) 64,000 shares of our Common Stock, or (iii) such lesser number of shares determined by the administrator of the 2023 ESPP. As of December 31, 2024, no shares have been issued under the 2023 ESPP.

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