T2 Biosystems, Inc. (NASDAQ: TTOO) witnessed a notable surge in its stock value during the after-market trading session on Friday, marking a significant climb of 20.27% to reach $3.56. This impressive uptick in T2 Biosystems’ shares followed a relatively stable closure during the regular trading session at $2.96. Even though there was no big news, the stock seemed to be stable because of previous events.
T2 Biosystems (TTOO) revealed the results of the special stockholders’ meeting that took place on April 11, 2024, earlier this month. The conversion of $15 million of T2 Biosystems’ term loan with companies connected to CRG Servicing LLC into equity in the company was approved by the shareholders at this meeting.
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The special meeting’s high attendance and favorable vote result demonstrated the shareholders of T2 Biosystems’ ongoing support for the company’s strategic goals. TTOO hopes that the authorized debt conversion would strengthen its balance sheet by lowering its total debt load and its quarterly interest payments to CRG by 36%.
Furthermore, that decision is a big step in the right direction toward meeting Nasdaq’s listing standards. T2 Biosystems and CRG signed a Securities Purchase Agreement for the debt conversion deal on February 15, 2024. After stockholder approval, CRG will retire $15 million in loans from the CRG Term Loan Agreement in accordance with this agreement within 10 business days.
In exchange, CRG will receive $15 million worth of T2 Biosystems’ common stock, with the price per share determined as the lower of the average closing price of TTOO common stock on Nasdaq for the five days preceding issuance or the closing price on the day before issuance.
However, to ensure compliance with ownership thresholds, if the issuance would result in CRG owning more than 49.99% of the company’s outstanding shares (or 9.99% for a single CRG entity, excluding convertible securities held by CRG), T2 Biosystems will issue Convertible Preferred Stock for the surplus shares. Additionally, CRG has agreed to waive prepayment premiums and back-end fees associated with the converted loans, further facilitating the transaction.
