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T2 Biosystems (TTOO) Stock Surged 22.7% on Loan Conversion

Analyst Team trader
Updated 7 Jul 2023

The T2 Biosystems Inc (NASDAQ: TTOO) stock price surged 15.7% after announcing the issuance of Series A Preferred shares and Series B preferred shares to entities related to affiliated with CRG Servicing for two distinct reasons.


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The company issued 1,000 Series A Preferred stock for a purchase price of $100.00. The Series A preferred shares represent an aggregate of 400,000,000 votes and are allowed to vote only on reverse stock splits in the same capacity as the company’s common stock.

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On the other hand, the company also issued an aggregate of 48,345,798 shares of Common Stock and an aggregate of 93,297.26 shares of newly designated Series B Convertible Preferred Stock in exchange for the lenders cancelling $10.0 million of its outstanding loan under the loan agreement. 

The conversion reduces the outstanding principal amount of the term loan by $10M, or ~20%, in exchange for 48.35M shares of T2 Biosystems common stock. Despite converting a substantial amount of its debt into stock, the Dec. 30, 2024, interest-only period end and maturity date of the term loan remained the same.

The Series A preferred stock was issued to give the holders the right to vote on any upcoming reverse stock splits, and because they are preferred shares, they do not get the right to vote on any other issues like the common stock. 

The lenders also agreed that their sole purpose in acquiring the new preferred shares was for investment purposes and that they would not sell them. Given the low prices at which its common stock trades, the company may have to do a reverse stock split. 

Investor interest in TTOO stock soared earlier today, as evidenced by the over 18.67 million shares that had changed hands at the time of writing. This is the second day that the company is attracting such buying interest. Whether the same shall turn into a sustained rally remains to be seen. 

*This is not investment advice. 

T2 Biosystems stock price. 

The T2 Biosystems (TTOO) stock price was trading up 22.65% at $0.1018 from Thursday’s closing price of $0.0830.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.