T2 Biosystems, Inc. (the “Company”) is considering amending and restating their (i) Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock to remove the beneficial ownership blocker that currently prohibits the conversion into common stock if it would result in the holder having beneficial ownership of more than 49.99% of the Company’s common stock outstanding and (ii) Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock to remove the beneficial ownership blocker that currently prohibits the conversion into common stock that would result in the holder having beneficial ownership of more than 19.99% of the Company’s common stock outstanding (collectively, the “Amendment”).
As a result of the Amendment, entities associated with CRG Partners III L.P., CRG Partners III - Parallel Fund “A” L.P., CRG Partners III (Cayman) Unlev AIV I L.P., CRG Partners III (Cayman) Lev AIV I L.P. and CRG Partners III Parallel Fund “B” (Cayman) L.P. (collectively, “CRG”) will be eligible to convert their remaining Shares of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock into an aggregate of 1,824,800 shares of common stock (the “Conversion”), which would result in CRG owning an aggregate of 10,677,973 shares, or approximately 69% of an expected 15,366,085 shares outstanding as of May 7, 2024.
Following the Conversion the Company expects to have 15,366,085 shares of common stock outstanding as of May 7, 2024. As reported previously, if the Company fails to regain compliance with Nasdaq Listing Rule 5550(b)(2)’s requirement to have a $35.0 million market value of listed securities for 10 business days before May 20, 2024, Nasdaq may delist the Company’s common stock.
Based on 15,366,085 shares of common stock expected to be outstanding following the Conversion, the closing price of the Company’s common stock on Nasdaq will need to be at least $2.28 to maintain a $35.0 million market value of listed securities for a minimum of ten consecutive business days prior to May 20, 2024.
Forward-Looking Statements
This current report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this current report that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the proposed Amendment and Conversion, as well as statements that include the words “expect,” “may,” “should,” “anticipate,” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, (i) any inability to (a) realize anticipated benefits from commitments, contracts or products; (b) successfully execute strategic priorities; (c) bring products to market; (d) expand product usage or adoption; (e) obtain customer testimonials; (f) accurately predict growth assumptions; (g) realize anticipated revenues; (h) incur expected levels of operating expenses; (i) continue as a going concern; or (i) increase the number of high-risk patients at customer facilities; (ii) failure of early data to predict eventual outcomes; (iii) failure to make or obtain anticipated FDA filings or clearances within expected time frames or at all; or (iv) the factors discussed under Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission, or SEC, on April 1, 2024, and other filings the Company makes with the SEC from time to time, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this current report. Any such forward-looking statements represent management’s estimates as of the date of this current report. While the Company may elect to update such forward-looking statements at some point in the future, unless required by law, it disclaims any obligation to do so, even if subsequent events cause its views to change. Thus, no one should assume that the Company’s silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this current report.