T2 Biosystems (NASDAQ:TTOO) stock is down by about 15% today after the healthcare diagnostics company filed a Form S-3. The filing documents the resale of up to 141.64 million shares from selling stockholders. The shares consist of 48.34 million shares of common stock and 93,297.26 shares of Series B convertible preferred stock.
Each share of convertible preferred stock can be converted into 1,000 shares of common stock upon the shareholder approval of a proposed TTOO reverse stock split. T2 has stated that it will not receive any proceeds from this resale.
CR Group L.P. and its funds were listed on the S-3 as the selling stockholders. Let’s get into the details.
T2 Files S-3 Documenting Resale of Up to 141.64 Million Shares of TTOO Stock
Upon completion of the resale, CR and its funds are expected to own zero shares of TTOO stock. CRG Partners III Parallel Fund “B” is eligible to resell 59.70 million shares, the most shares among the CR funds. CRG Partners III (Cayman) Lev AIV trails behind that and is eligible to resell 46.69 million shares.
“We do not know how long the selling stockholders will hold the shares before selling them, and, except as described in this prospectus, we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale or other disposition of any of the shares,” said T2 in the filing.
The investment firm received these shares as part of a securities purchase agreement that cancelled $10 million worth of outstanding borrowings on July 3.
Still, it’s interesting to note that T2’s Series B convertible preferred stock will not be convertible until shareholders approve a reverse split. The fate of the reverse split will be decided on Sept. 12 when T2 hold its annual meeting of stockholders. If approved, T2 will have the power to enact a reverse split in a ratio between 1-for-50 and 1-for-150. Shareholders will have until Sept. 11 at 11:59 p.m. Eastern to cast their votes.
Other proposals to be voted on during the meeting include the election of Jack Cumming and David Elsbree as Class III directors until at least 2026 and the compensation of named executive officers.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
