☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant of Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 4, 2023,~~May 2, 2024, the registrant had ~~333,580,010~~8,792,950 shares of common stock outstanding.


	June 30, 2023			December 31, 2022			March 31, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	16,084		$	10,329		$	6,208		$	15,689
Accounts receivable		1,349			2,163
Accounts receivable, net								1,588			1,420
Inventories		4,337			4,285			4,670			4,819
Prepaid expenses and other current assets		2,100			2,582			3,094			3,261
Total current assets		23,870			19,359			15,560			25,189
Property and equipment, net		4,572			4,533			1,611			1,658
Operating lease right-of-use assets		8,088			8,741			7,031			7,395
Restricted cash		551			1,551			551			551
Other assets		49			143			2			4
Total assets	$	37,130		$	34,327		$	24,755		$	34,797
Liabilities and stockholders’ deficit
Current liabilities:
Notes payable	$	50,571		$	—
Notes payable to related party							$	41,666		$	41,284
Accounts payable		2,234			1,296			1,887			1,527
Accrued expenses and other current liabilities		10,400			7,269			4,231			4,905
Accrued final payment fee on Term Loan with related party								4,767			4,807
Operating lease liability		1,480			1,352			1,651			1,616
Derivative liability related to Term Loan		836			—
Derivative liability related to Term Loan with related party								1,662			1,554
Warrant liabilities		270			39			207			235
Deferred revenue		265			172			185			224
Total current liabilities		66,056			10,128			56,256			56,152
Notes payable, net of current portion		—			49,651
Operating lease liabilities, net of current portion		7,433			8,214			6,180			6,598
Deferred revenue, net of current portion		64			52			92			83
Derivative liability related to Term Loan, net of current portion		—			1,088
Accrued interest on term loan		—			4,849
Total liabilities		73,553			73,982			62,528			62,833
Commitments and contingencies (see Note 13)
Commitments and contingencies (see Note 14)

Stockholders’ deficit
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 400,000,000 shares authorized; 241,849,922 and 7,716,519 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		242			8
Preferred stock, $0.001 par value; 10,000,000 shares authorized: Series B Convertible Preferred Stock, 10,875 shares designated on March 31, 2024, 10,875 and 93,297 shares issued and outstanding to related party on March 31, 2024 and December 31, 2023, respectively								—			—
Common stock, $0.001 par value; 400,000,000 shares authorized; 5,512,332 and 4,058,381 shares issued and outstanding on March 31, 2024 and December 31, 2023, respectively								6			4
Additional paid-in capital		521,866			494,556			560,051			556,256
Accumulated deficit		(558,531	)		(534,219	)		(597,830	)		(584,296	)
Total stockholders’ deficit		(36,423	)		(39,655	)		(37,773	)		(28,036	)
Total liabilities and stockholders’ deficit	$	37,130		$	34,327		$	24,755		$	34,797


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2023			2022			2023			2022			2024			2023
Revenue:
Product revenue	$	1,964		$	2,559		$	3,619		$	6,403		$	2,061		$	1,655
Contribution revenue		—			3,352			423			6,742			—			423
Total revenue		1,964			5,911			4,042			13,145			2,061			2,078
Costs and expenses:
Cost of product revenue		4,869			5,081			8,864			11,286			4,202			3,995
Research and development		3,850			8,025			8,321			14,681			3,721			4,471
Selling, general and administrative		6,296			7,824			13,595			17,054			6,738			7,299
Total costs and expenses		15,015			20,930			30,780			43,021			14,661			15,765
Loss from operations		(13,051	)		(15,019	)		(26,738	)		(29,876	)		(12,600	)		(13,687	)
Other income (expense):
Interest income		2			2			4			5
Interest expense		(1,541	)		(1,346	)		(3,063	)		(2,996	)
Change in fair value of derivative related to Term Loan		1,022			(1,675	)		252			(1,675	)
Interest expense to related party														(1,179	)		(1,522	)
Change in fair value of derivative related to Term Loan with related party														(108	)		(770	)
Change in fair value of warrant liabilities		7,192			—			5,888			—			28			(1,304	)
Other income		37			4			37			13
Other expense		—			—			(682	)		—
Other losses		(8	)		—			(10	)		—
Other, net														325			(682	)
Total other income (expense)		6,704			(3,015	)		2,426			(4,653	)		(934	)		(4,278	)
Net loss	$	(6,347	)	$	(18,034	)	$	(24,312	)	$	(34,529	)	$	(13,534	)	$	(17,965	)
Net loss per share — basic and diluted	$	(0.08	)	$	(5.10	)	$	(0.51	)	$	(9.96	)	$	(2.66	)	$	(131.77	)
Weighted-average number of common shares used in computing net loss per share — basic and diluted		80,916,888			3,535,763			47,460,986			3,466,816			5,094,809			136,333

Other comprehensive loss:
Net loss	$	(6,347	)	$	(18,034	)	$	(24,312	)	$	(34,529	)	$	(13,534	)	$	(17,965	)
Net unrealized gain on marketable securities arising during the period		—			9			—			2
Net realized loss on marketable securities included in net loss		—			2			—			2
Total other comprehensive income, net of taxes		—			11			—			4			—			—
Comprehensive loss	$	(6,347	)	$	(18,023	)	$	(24,312	)	$	(34,525	)	$	(13,534	)	$	(17,965	)

1. Nature of Business

T2 Biosystems, Inc. and its subsidiary (the “Company,” “we,” or “T2”) have operations based in Lexington, Massachusetts. T2 Biosystems, Inc. was incorporated on April 27, 2006 as a Delaware corporation. The Company is an in vitro diagnostics company that has developed an innovative and proprietary technology platform that offers a rapid, sensitive and simple alternative to existing diagnostic methodologies. The Company has developed a broad set of applications aimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier. The Company’s technology enables rapid detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum, cerebral spinal fluid and urine, and can detect cellular targets at limits of detection as low as one colony forming unit per milliliter (“CFU/mL”). We are currently targeting a range of critically underserved healthcare conditions, focusing initially on those for which a rapid diagnosis will serve an important dual role – saving lives and reducing costs. The Company’s current development efforts primarily target sepsis, bioterrorism and Lyme disease, which ~~represent~~are areas of significant unmet medical need in which ~~rapid detection and targeted treatment~~existing therapies could ~~lead to~~be more effective with improved ~~patient outcomes.~~diagnostics.

Liquidity and Going Concern

~~At June 30, 2023,~~On March 31, 2024, the Company had cash, ~~and~~ cash equivalents, and restricted cash of $~~16.1~~6.8 million, an accumulated deficit of $~~558.5~~597.8 million, stockholders’ deficit of $~~36.4~~37.8 million, and has experienced cash outflows from operating activities since its inception. The future success of the Company is dependent on its ability to successfully commercialize its products, obtain regulatory clearance for and successfully launch its future product candidates, obtain additional capital and ultimately attain profitable operations. ~~The~~Historically, the Company has ~~primarily~~ funded its operations primarily through public equity and private debt financings, including the Company's August 2014 initial public offering, the December 2015 public offering, the September 2016 private investment in public equity (“PIPE”) financing, the September 2017 public offering, the June 2018 public offering, the July 2019 establishment of an equity distribution agreement and equity purchase agreement, the March 2021 establishment of an Equity Distribution Agreement (Note 9), the February 2023 public offering (Note 8), private placements of redeemable convertible preferred stock and through debt financing arrangements.

The Company believes its cash position is insufficient to fund future operations without financings by the first half of 2024, which may include public or private equity or debt financings. These financings may not be successful, however, or on terms favorable to the Company or its stockholders, which would have a negative impact on the Company’s business, results of operations, financial condition and the Company’s ability to develop and commercialize its products and ultimately operate as a going concern.

The Company is subject to a number of risks similar to other early commercial stage life science companies, including, but not limited to commercially launching the Company’s products, development and market acceptance of the Company’s product candidates, development by its competitors of new technological innovations, protection of proprietary technology, and raising additional capital.

~~The Company’s T2Dx~~® ~~Instrument, the T2Candida~~® ~~Panel, and the T2Bacteria~~® ~~Panel are authorized for use in the United States by the Food and Drug Administration, or FDA.~~ In ~~June 2020 the FDA extended Emergency Use Authorization, or EUA, to~~September 2023, the Company’s ~~T2SARS-CoV-2™ Panel. In 2023, customers have significantly reduced their purchases of the Company’s COVID-19 test and the Company has not forecasted any COVID-19 test sales in 2023.~~

~~The Company has a~~ milestone-based product development contract with the Biomedical Advanced Research and Development Authority (“BARDA”) ~~(see Note 11 below) and should BARDA reduce, cancel or not exercise additional options,~~(Note 12) expired, which may impact the Company’s ability to continue to fund the development of its next-generation ~~products may~~products.

The Company’s T2Dx Instrument and T2Candida, T2Bacteria, and the T2Biothreat Panels are authorized for use in the United States by the U.S. Food and Drug Administration (“FDA”).

Pursuant to the requirements of Accounting Standards Codification 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASC 205-40”), management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be ~~hindered.~~effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company believes that its cash, ~~and~~ cash equivalents, and restricted cash of $~~16.1~~6.8 million ~~at June 30, 2023~~on March 31, 2024 will not be sufficient to fund its current operating plan ~~through the fourth quarter~~for at least one year from issuance of ~~2023. Certain~~these financial statements, as certain elements of ~~the Company’s~~its operating plan cannot be considered ~~probable, and~~probable. Absent any reductions in ~~order to support the business,~~current operating expenses, the Company ~~initiated a process to explore a range~~believes it will require additional financing during the first half of ~~strategic alternatives focused on maximizing values.~~2024, which may include public or private equity or debt financings. Under ASC 205-40, the future receipt of potential funding from co-development partners and other resources cannot be considered probable at this time because none of the plans are entirely within the Company’s control.

~~In May 2023, as part of~~The Company's Term Loan Agreement (the “Term Loan Agreement”) with certain entities managed by CR Group L.P., a ~~strategic restructuring program,~~Delaware limited partnership (each entity, a “CRG entity” and collectively, “CRG”) (Note 6) has a minimum liquidity covenant, which initially required the Company ~~initiated~~to maintain a ~~workforce reduction~~minimum cash balance of ~~nearly~~ $305.0~~%. Additionally, the Company is continuing to explore alternative strategic options, including an acquisition, merger, reverse merger, other business combination, sale of assets or licensing.~~ million. In May 2023, CRG reduced the minimum liquidity covenant under ~~its~~the Term Loan Agreement ~~with CRG~~ from $5.0 million to $500,000 until December 31, 2023. In July 2023, the Company also converted $1010.0 million of the outstanding debt ~~under its~~with CRG to equity. In October 2023, the Term Loan Agreement was amended to extend both the interest-only period and the maturity date by one year from December 30, 2024 to December 31, 2025, and permanently reduce the minimum liquidity covenant from $5.0 million to $500,000. There can be no assurances that the Company will continue to be in compliance with ~~CRG to equity (see Note 6 below).~~the cash covenant in future periods without additional funding.

On March 30, 2023, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) ~~has rules~~indicating that, ~~require all companies listed~~for the last thirty consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market ~~to maintain a $1.00~~ ~~minimum bid price~~under Nasdaq Listing Rule 555(a)(2) (the “Minimum Bid Price Rule”). On May 23, 2023, Nasdaq notified the Company that its securities were subject to delisting due to non-compliance with the Minimum Bid Price Rule and to maintain a minimum value of listed securities (the “MVLS Rule”) of at least $35 million.

On November 22, 2022, the Company received notice from the Nasdaq indicating that the Company was in violation of the MVLS Rule. The Company was provided 180 days, or until May 22, 2023, to regain compliance, which includes maintaining a closing market value of its listed securities of at least $35 million for a minimum of ten consecutive trading days. On March 30, 2023, the Company received notice from the Nasdaq indicating that the Company was in violation of the Minimum Bid Price Rule. On May 23, 2023, the Nasdaq notified the Company that its securities were subject to delisting due to non-compliance with Nasdaq’s MVLS Rule. The Company requested a hearing with ~~the~~ Nasdaq and, on July 6, 2023, appealed to the Nasdaq Hearings Panel for an extension to the time period in which to regain compliance with the MVLS Rule and the Minimum Bid Price Rule. On July 26, 2023, we filed a definitive proxy statement to effect a reverse stock split of our common stock in connection with our annual meeting that ~~will occur~~occurred in September 2023 as required by the Nasdaq Hearings Panel. On August 9, 2023, the Company received written notice from Nasdaq informing the Company that it had regained compliance with the MVLS Rule. On September 15, 2023, at the Company’s annual meeting of stockholders, the Company’s stockholders approved an amendment to ~~help~~the Company’s restated certificate of incorporation to effect a reverse stock split of the Company’s common stock. On October 12, 2023, the Company announced that its board of directors had approved the reverse stock split at the ratio of 1 post-split share for every 100 pre-split shares, which was effective as of October 12, 2023.

On October 31, 2023, the Company received written notice from Nasdaq informing the Company that it has regained compliance with the Minimum Bid Price Rule. The Company will be subject to a Mandatory Panel Monitor for a period of one year. If, within that one-year monitoring period, the Company fails to comply with the Minimum Bid Price Rule, the Company will not be permitted additional time to regain compliance with the Minimum Bid Price Rule. However, the Company will have an opportunity to request a new hearing with the Nasdaq ~~rules. However, there is~~Listing Qualifications Hearing Panel prior to the Company’s securities being delisted from Nasdaq.

On November 20, 2023, the Company received written notice from Nasdaq informing the Company that it no ~~assurance~~longer satisfied the MVLS Rule. In accordance with the terms of the Mandatory Panel Monitor, the Company was not granted a grace period but rather issued a delist determination, which will be stayed if the Company exercises its right to appeal by requesting a hearing and paying a non-refundable $20,000 fee. The Company paid the $20,000 applicable fee and requested a new hearing, which will stay any further action by Nasdaq at least pending the issuance of its decision and the expiration of any extension that may be granted to the ~~shareholder vote required~~Company as a result of the hearing. The Company’s common stock will remain listed and eligible to trade on Nasdaq pending the outcome of the hearing. On February 15, 2024, the Company appealed to the Nasdaq Hearings Panel for an extension to the ~~reverse stock split or that any other actions that we take~~time period in which to ~~restore our~~regain compliance with the ~~Nasdaq rules will be successful.~~MVLS Rule. On ~~July 27, 2023,~~March 11, 2024, the Company received notice from the Nasdaq Hearings Panel that it had granted the Company’s request for ~~an extension~~continued listing on Nasdaq, subject to ~~comply~~the Company demonstrating compliance with ~~applicable rules until November~~Nasdaq’s MVLS Rule on or before May 20, ~~2023.~~2024.

These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. ~~Management’s~~Management's plans to alleviate the conditions that raise substantial doubt include raising additional funding, delaying certain research projects and ~~maintaining reduced~~capital expenditures, and eliminating certain future operating expenses in order to fund operations at reduced levels for the Company to continue as a going concern for a period of 12 months from the date these ~~condensed~~audited consolidated financial statements are issued. Management has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or maintain reduced expenditures, while reasonably possible, is less than probable. Accordingly, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of issuance of these financial statements. ~~See Part II, Item 1A—“Risk Factors” in this Quarterly Report on Form 10-Q.~~

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, T2 Biosystems Securities Corporation. All intercompany balances and transactions have been eliminated.

On October 12, ~~2022,~~2023, the Company effected a 50 ~~for 1~~1-for-100 reverse stock split. One share of common stock was issued for every 50100 shares of issued and outstanding common stock, and fractional shares were settled in cash. All references to share and per share amounts (excluding authorized shares) in the condensed consolidated financial statements and accompanying notes have been retroactively restated to account for the reverse split.

Prior to this, on October 12, 2022, the Company effected a 1-for-50 reverse stock split. One share of common stock was issued for every 50 shares of issued and outstanding common stock, and fractional shares were settled in cash.

Unaudited Interim Financial Information

Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

The accompanying interim condensed consolidated balance sheet as of ~~June 30, 2023,~~March 31, 2024, the condensed consolidated statements of operations and comprehensive loss for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the condensed consolidated statements of stockholders’ deficit for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the condensed consolidated statements of cash flows for the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ and the related financial data and other information disclosed in these notes are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of ~~June 30, 2023,~~March 31, 2024, and the results of its operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ and its cash flows for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023. The results for the three ~~and six~~ months ended

~~June 30, 2023~~ March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2023,~~2024, any other interim periods, or any future year or period.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business of developing and, upon regulatory clearance, commercially launching ~~commercially~~ its diagnostic products aimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier.

~~Going Concern~~

~~Pursuant to the requirements of Accounting Standards Codification 205-40,~~ ~~Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern~~ (“ASC 205-40”), management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Geographic Information

The Company sells its products domestically and internationally. Total international sales were approximately $1.0 million, or 5049% of total revenue, and $~~1.0~~0.8 million, or 1736% of total revenue, for the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. ~~Total international sales were approximately $1.7~~ ~~million, or~~ 43~~% of total revenue, and $2.0~~ ~~million, or~~ 15~~% of total revenue, for the six months ended June 30, 2023 and 2022, respectively.~~

International sales to Italy were approximately $~~0.7~~0.4 million, or 3320% of total revenue, and $~~1.0~~0.4 million, or 2619% of total revenue, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, respectively. International sales to ~~any customer in a single country did not exceed~~ Austria were approximately $100.3 million, or 14% of total revenue, and $0.2 million, or 7% of total revenue, for the three ~~and six~~ months ended ~~June 30, 2022.~~March 31, 2024 and 2023, respectively.

The following table shows customers that represent greater than 10% of total revenue for the period presented:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2023			2022			2023			2022			2024			2023
Entity A														—	%		20	%
Customer A		—	%		57	%		10	%		51	%		20	%		19	%
Customer B		33	%		5	%		26	%		5	%		14	%		—	%
Customer C		11	%		4	%		9	%		3	%

~~Customer~~Entity A is a U.S. government ~~customer~~entity (BARDA). ~~Customer~~Customers A and B ~~is an~~are international ~~distributor. Customer C is a U.S. hospital.~~distributors.

The following table shows customers that represent greater than 10% of the accounts receivable balance for the period presented:

June 30,
2023

December 31,
2022

Customer A

—
%

32
%
Customer B

36
%

2
%


	March 31, 2024			December 31, 2023
Customer A		22	%		—	%
Customer B		10	%		—	%
Customer C		—	%		13	%
Customer D		—	%		16	%

Customers A and B are international distributors. Customer AC is a U.S. ~~government customer (BARDA).~~healthcare system comprised of multiple hospitals. Customer BD is ~~an international diagnostics solutions provider.~~a clinical laboratory company.

As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had outstanding receivables of $~~0.7~~0.9 million and $~~0.4~~0.3 million, respectively, from customers located outside of the U.S.

Net Loss Per Share

As discussed in Note 7, the Company issued 93,297 shares of Series B Convertible Preferred Stock on July 3, 2023. As of March 31, 2024, 10,875 shares of Series B Convertible Preferred Stock remain issued and outstanding. The Company has reviewed the terms of the Series B Convertible Preferred Stock and noted that such stock has no preferential rights and that the liquidation preference for the Series B Convertible Preferred Stock would be on parity with that of the Company’s common shares. Because the Series B Convertible Preferred Stock has the same level of subordination and, in substance, the same characteristics as the Company’s common shares, the Company included the Series B Convertible Preferred Stock, on an if-converted basis of 108,750 shares, in the basic and diluted net loss per share attributable to common stockholders calculation.

The Company has also issued certain securities that are participating ~~securities; therefore,~~securities. Therefore, the Company must apply the two-class method to determine basic and diluted earnings per share. ~~To the extent that a dividend or distribution is declared or paid during the period, the Company applies the~~The two-class method ~~to determine~~is an earnings allocation method under which net loss per share is calculated for each class of common stock and participating security considering both dividends declared, if any, and participation rights in undistributed earnings as if all such earnings had been distributed for the ~~allocation of the dividends or distributions between the common shareholders and the holders of the participating securities.~~period. The Company’s participating securities do not have an obligation to share in the losses of the ~~Company. To~~Company; therefore, to the extent that the Company remains in a net loss position, the ~~two-class method will not apply since the~~ entire net loss ~~would~~will be allocated to ~~the~~ common ~~shareholders.~~stockholders.

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, in-substance common stock, and potential common shares exercisable for little to no consideration, ~~without consideration for~~and does not consider other common stock equivalents.

Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding, in-substance common stock, and potential common shares exercisable for little to no consideration used to compute basic earnings per share for the dilutive effect of other common stock equivalents that were outstanding during the period, determined using either the if-converted method or the treasury-stock method.

Derivative Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC Topic 815, Derivatives and Hedging. Derivative instruments are measured at fair value at issuance and at each reporting date in accordance with ASC 820 with changes in fair value recognized in the period of change in the condensed consolidated statements of operations and comprehensive loss.

The Company determined that both the warrant issued in conjunction with the Series A ~~redeemable convertible preferred stock~~Redeemable Convertible Preferred Stock in August of 2022 and the Common Stock Warrants issued in February 2023 are derivative instruments. The warrant liabilities are classified on the condensed consolidated balance sheets as current because settlement of the warrant liability could be required by the holder within 12 months of the balance sheet date. Changes in fair value are recognized in change in fair value of warrant liabilities in the period of change in the condensed consolidated statements of operations and comprehensive loss. See Notes 3 and 7.8.

The Company has identified a ~~single compound~~ derivative liability related to its Term Loan Agreement with CRG that is classified as a current liability on the condensed consolidated balance sheets to match the classification of the related Term Loan Agreement. Changes in fair value are recognized in change in fair value of derivative related to Term Loan in the period of change in the condensed consolidated statements of operations and comprehensive loss. See Note 6.

The Company does not designate its derivative instruments as hedging instruments.

Guarantees

As permitted under Delaware law, the Company indemnifies its officers and directors for certain events or occurrences while each such officer or director is, or was, serving at the Company’s request in such a capacity. The term of the indemnification is the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ liability insurance coverage that limits its exposure and enables the Company to recover a portion of any future amounts paid.

The Company leases office, laboratory and manufacturing space under noncancelable operating leases. The Company has standard indemnification arrangements under the leases that require it to indemnify the landlords against all costs, expenses, fines, suits, claims, demands, liabilities, and actions directly resulting from any breach, violation or nonperformance of any covenant or condition of the Company’s leases. See Note 1314 for a discussion about the Billerica, Massachusetts lease.

In the ordinary course of business, the Company enters into indemnification agreements with certain suppliers and business partners where the Company has certain indemnification obligations limited to the costs, expenses, fines, suits, claims, demands, liabilities and actions directly resulting from the Company’s gross negligence or willful misconduct, and in certain instances, breaches, violations or nonperformance of covenants or conditions under the agreements.

As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had not experienced any material losses related to these indemnification obligations, and no material claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

Leases

Lessee

Pursuant to ASC Topic 842, Leases (“ASC 842”), at the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. The exercise of lease renewal options is at the Company’s discretion and the periods subject to renewal ~~option~~options are not included in the measurement of the Company’s right-of-use assets and lease liabilities as the renewal options are not reasonably certain of exercise. The Company will continue to evaluate the renewal options and when they are reasonably certain of exercise, the Company will include the renewal period in its lease term. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

The Company made the policy election to not separate lease and associated non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

Lessor

The Company derives revenue from leasing its T2-owned instruments through reagent rental agreements (see the Revenue Recognition section below). Customers typically have the right to cancel every twelve months, ~~but subject to penalty. As a result of the penalty, the customers are deemed reasonably certain of not exercising their termination rights~~ resulting in a lease term of generally ~~three years.~~one year. These lease agreements impose no requirement on the customer to purchase the instrument, and the instrument is not transferred to the customer at the end of the lease term. The short-term nature of the lease agreements does not result in lease payments accumulating to an amount that exceeds substantially all of the fair value of the instrument nor is the lease term for the majority of the remaining economic life of the instrument. Instrument leases are generally classified as operating leases as they do not meet any of the sales-type lease or direct financing lease criteria per ASC 842 and are recognized ratably over the duration of the lease. In accordance with these contracts, customers only make payments when consumables are ordered and delivered thus making these payments variable by nature. The Company estimates the expected volume of consumables to be purchased by each customer over the lease term to measure and recognize rental and consumables revenue.

Generally, lease arrangements include both lease and non-lease components. The lease component relates to the customer’s right-to-use the T2-owned instrument over the lease term. The non-lease components relate to (1) consumables and (2) maintenance services. Because the timing and pattern of transfer for the operating lease component, the T2-owned instrument, and maintenance components of a reagent rental agreement are recognized over the same time period and in the same pattern, the Company elected the practical expedient to aggregate non-lease components with the associated lease component and account for the combined component as an operating lease for all instrument leases. In the evaluation of whether the lease component (T2-owned instrument) or the non-lease component associated with the lease component (maintenance) is the predominant component, the Company determined that the lease component is predominant as we believe the customer would ascribe more value to the use of the T2-owned instrument than that of the maintenance services. The T2-owned instrument lease and maintenance service performance obligations are classified as a single category of instrument rental revenue within product revenue in the condensed consolidated statements of operations and comprehensive loss (see disaggregated revenue table below in Revenue Recognition section). The consumables non-lease component does not meet the requirements to elect the practical expedient because of its point-in-time pattern of transfer (versus over time for the combined lease component) and ~~thus~~therefore must apply ASC Topic 606, Revenue from Contracts with Customers, as described below in the Revenue Recognition section.

The Company considers the economic life of its T2-owned instruments to be five years. The Company believes five years is representative of the period during which the instrument is expected to be economically usable by one or more users, with normal service, for the purpose for which it is intended. The residual value is estimated to be the value at the end of the lease term based on the anticipated fair market value of the units. The Company mitigates residual value risk of its leased instrument by performing regular management and maintenance, as necessary.

Revenue Recognition

The Company generates revenue from the sale of instruments, consumable diagnostic tests, related services, reagent rental agreements and government contributions. For arrangements in the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company determines revenue recognition through the following steps:

•

Identification of a contract with a customer

•

Identification of the performance obligations in the contract

•

Determination of the transaction price

•

Allocation of the transaction price to the performance obligations

•

Recognition of revenue as a performance obligation is satisfied

The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these goods and services.

Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers either at a point in time, typically upon shipment, or over time, as services are performed. Contracts typically have net 30 payment terms in the U.S. and net 60 payment terms internationally.

Most of the Company’s contracts with distributors in geographic regions outside the United States contain only a single performance obligation, whereas most of the Company’s contracts with direct sales customers in the United States contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Excluded from the transaction price are sales tax and other similar taxes which are presented on a net basis.

Product revenue is generated by the sale of instruments and consumable diagnostic tests predominantly through the Company’s direct sales force in the United States and distributors in geographic regions outside the United States. The Company generally does not offer product returns or exchange rights (other than those relating to defective goods under warranty) or price protection allowances to its customers, including its distributors. Payment terms granted to distributors are the same as those granted to end-user customers and payments are not dependent upon the distributors’ receipt of payment from their end-user customers.

The Company either sells instruments to customers and international distributors or retains title and places the instrument at the customer site pursuant to a reagent rental agreement. When an instrument is purchased by a customer or international distributor, the Company recognizes revenue when the related performance obligation is satisfied (i.e., when the control of an instrument has passed to the customer; typically, at shipping point).

When the instrument is placed under a reagent rental agreement, the Company’s customers generally agree to fixed term agreements, which can be extended, and incremental charges on each consumable diagnostic test purchased. Revenue from the sale of consumable diagnostic tests (under a reagent rental agreement) is generally recognized upon shipment. The transaction price from consumables purchases is allocated between the lease and ~~nonlease~~non-lease components when related performance obligations are satisfied, as a component of lease and product revenue, and is included as Instrument Rentals in the below table. Revenue associated with reagent rental consumables purchases is currently classified as variable consideration and constrained until a purchase order is received and related performance obligations have been satisfied.

Revenue from the sale of consumable diagnostic tests (under instrument purchase agreements) is recognized when control has passed to the customer, typically at shipping point.

Shipping and handling costs billed to customers in connection with a product sale are recorded as a component of the transaction price and allocated to product revenue in the condensed consolidated statements of operations and comprehensive loss as they are incurred by the Company in fulfilling its performance obligations.

Direct sales of instruments include warranty, maintenance and technical support services typically for one year following the installation of the purchased instrument (“Maintenance Services”). Maintenance Services are separate performance obligations as they are service based warranties and are recognized on a straight-line basis over the service delivery period. After the completion of the initial Maintenance Services period, customers have the option to renew or extend the Maintenance Services typically for additional one-year periods in exchange for additional consideration. The extended Maintenance Services are also service based warranties that

represent separate purchasing decisions. The Company recognizes revenue allocated to the extended Maintenance Services performance obligation on a straight-line basis over the service delivery period.

Fees paid to member-owned group purchasing organizations (“GPOs”) are deducted from related product revenues.

The Company warrants that consumable diagnostic tests will be free from defects, when handled according to product specifications, for the stated life of the product. To fulfill valid warranty claims, the Company provides replacement product free of charge. Warranty expense is recognized based on the estimated defect rates of the consumable diagnostic tests.

Contribution Revenue

The government contract with BARDA iswas considered a government grant and not considered a contract with a customer and thus not subject to ASC 606. Revenue under the government BARDA contract iswas earned under a cost-sharing arrangement in which the Company iswas reimbursed for direct costs incurred plus allowable indirect costs. The government contract revenue iswas recognized as the related reimbursable expenses ~~are~~were incurred. The cost reimbursement that iswas reported as revenue iswas presented gross of the related reimbursable expenses in the Company’s condensed consolidated statements of operations and comprehensive loss; the related reimbursable expenses ~~are~~were expensed as incurred as research and development expense. The Company ~~accounts~~accounted for these contracts as a government grant by analogy to International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance.

The ~~Company has a milestone-based product development~~BARDA contract with BARDA and should BARDA reduce, cancel or not exercise additional options, the Company’s ability to continue to fund the development of its next-generation products may be hindered. Refer to Note 11 for further details regarding the development contract with BARDA.expired in September 2023.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by type of products and services, as it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table disaggregates our revenue by major source (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2023		2022		2023		2022		2024		2023
Product revenue
Instruments		550		587		872		1,233		464		322
Consumables		1,238		1,670		2,415		4,620		1,405		1,177
Instrument rentals		49		51		104		69		63		55
Service		127		251		228		481		129		101
Total product revenue		1,964		2,559		3,619		6,403		2,061		1,655
Contribution revenue		—		3,352		423		6,742		—		423
Total revenue	$	1,964	$	5,911	$	4,042	$	13,145	$	2,061	$	2,078

Remaining Performance Obligations

Under ASC 606, the Company is required to disclose the aggregate amount of the transaction price that is allocated to unsatisfied or partially satisfied performance obligations as of ~~June 30, 2023.~~March 31, 2024. However, the guidance provides certain practical expedients that limit this requirement, and therefore, the Company has elected to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The nature of the excluded unsatisfied performance obligations pursuant to the practical expedient include consumable shipments, service contracts, warranties and installation services that will be performed within one year. The amount of the transaction price that is allocated to unsatisfied or partially satisfied performance obligations, that has not yet been recognized as revenue and that does not meet the elected practical expedient is $~~0.1~~0.2 million as of ~~June 30, 2023.~~March 31, 2024. The Company expects to recognize 5461% of this amount as revenue within one year and the remainder within three years.

Judgments

Certain contracts with customers include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once the performance obligations are determined, the Company determines the transaction price, which includes estimating the amount of variable consideration, based on the most likely amount, to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on a relative standalone

selling price method. The corresponding revenue is recognized as the related performance obligations are satisfied as discussed in the revenue categories above.

Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as a range of selling prices, market conditions and the expected costs and margin related to the performance obligations.

Contract Assets and Liabilities

~~At June 30, 2023 and December 31, 2022, the Company recorded $0.2~~ ~~million and $0.1~~ ~~million, respectively, of contract assets within other assets on the balance sheet.~~ The Company's contract assets represent revenue recognized for performance obligations in advance of invoicing at the contract level based on the transaction price allocated to the respective performance obligations. The opening and closing balances of the Company's contract assets were $0.1 million and $0.1 million for the three months ended March 31, 2024, respectively, and $0.1 million and $0.2 million for the three months ended March 31, 2023, respectively.

The Company’s contract liabilities consist of upfront payments for ~~research and development contracts and~~ maintenance services on instrument sales. Contract liabilities are classified in deferred revenue as current or non-current based on the timing of when revenue is expected to be recognized. ~~At June 30, 2023~~The opening and ~~December 31, 2022,~~closing balances of the ~~Company had~~Company's contract liabilities ofwere $0.3 million and $0.3 million for the three months ended March 31, 2024, respectively, and $0.2 million and $0.2 million for the three months ended March 31, 2023, respectively. Revenue recognized during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 relating to contract liabilities aton December 31, ~~2022~~2023 was $0.1 million and related to straight-line revenue recognition associated with maintenance agreements.

Accounts Receivable, Net

The opening and closing balances of the Company's accounts receivable, net were $1.4 million and $1.6 million for the three months ended March 31, 2024, respectively, and $2.2 million and $1.3 million for the three months ended March 31, 2023, respectively.

Cost of Product Revenue

Cost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of consumable diagnostic tests sold to customers, related warranty and license and royalty fees. Cost of product revenue also includes depreciation on T2-owned revenue generating T2Dx Instruments that have been placed with customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs on the T2Dx Instruments sold to customers; and other costs such as customer support costs, royalties and license fees, warranty and repair and maintenance expense on the T2Dx Instruments that have been placed with customers under reagent rental agreements.

Research and Development Costs

Costs incurred in the research and development of the Company’s product candidates are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including activities associated with delivering products or services associated with contribution revenue, clinical trials to evaluate the clinical utility of product candidates, and costs associated with the enhancements of developed products. These costs include salaries and benefits, stock compensation, research related facility and overhead costs, laboratory supplies, equipment, depreciation on T2Dx Instruments used for research and development activities and contract services.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of costs for the Company’s sales and marketing, finance, legal, human resources, business development and general management functions, as well as professional services, such as legal, consulting and accounting services. Other selling, general and administrative expenses include commercial support activity, facility-related costs, fees and expenses associated with obtaining and maintaining patents, clinical and economic studies and publications, marketing expenses, and travel expenses. The Company expenses the majority of selling, general and administrative expenses as incurred.

Impairment of Long-lived Assets

The Company reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment is evaluated by comparing the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value, or the estimated discounted future cash flows, of the long-lived assets.

Recent Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that ~~the impact~~its adoption of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations ~~upon adoption.~~at the respective effective dates.

Accounting Standards Issued, To Be Adopted

~~On September 29, 2022,~~In November 2023, the FASB issued ASU ~~2022-04,~~2023-07, ~~Liabilities-Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations~~Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU ~~2022-04”~~2023-07”). This ASU ~~requires that~~was issued to improve the disclosures about a ~~buyer in a supplier finance program disclose additional~~public entity’s reportable segments and address requests from investors for more detailed information about ~~the program to allow financial statement users to better understand the effect of the programs on an entity’s working capital, liquidity, and cash flows.~~a reportable segment’s expenses. This update iswill be effective for the Company for fiscal years beginning after December 15, ~~2022, including~~2023 and interim periods within ~~those~~ fiscal ~~years, except for the amendment on roll forward information, which is effective for fiscal~~

years beginning after December 15, ~~2023.~~2024. Early adoption is permitted. The Company ~~adopted~~is currently assessing the impact of this update on its disclosures.

In December 2023, the FASB issued ASU ~~2022-04~~2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). This ASU was issued to enhance the transparency and decision usefulness of income tax disclosures. This update will be effective for the Company for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently assessing the impact of this update on ~~January 1, 2023. The adoption did not have a material impact on the Company’s financial statements.~~its disclosures.

3. Fair Value Measurements

The Company measures the following financial assets at fair value on a recurring basis. There were no transfers between levels of the fair value hierarchy during any of the periods presented. The following tables set forth the Company’s financial assets and liabilities carried at fair value categorized using the lowest level of input applicable to each financial instrument as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 (in thousands):


									Balance at March 31, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds									$	3,750	$	3,750	$	—	$	—
	Balance at June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		$	3,750	$	3,750	$	—	$	—
Liabilities:
Warrant liabilities	$	270	$	—	$	270	$	—	$	207	$	—	$	207	$	—
Derivative liability related to Term Loan		836		—		—		836
Derivative liability related to Term Loan with related party										1,662		—		—		1,662
	$	1,106	$	—	$	270	$	836	$	1,869	$	—	$	207	$	1,662


									Balance at December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds									$	8,500	$	8,500	$	—	$	—
	Balance at December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		$	8,500	$	8,500	$	—	$	—
Liabilities:
Warrant liabilities	$	39	$	—	$	39	$	—	$	235	$	—	$	235	$	—
Derivative liability related to Term Loan		1,088		—		—		1,088
Derivative liability related to Term Loan with related party										1,554		—		—		1,554
	$	1,127	$	—	$	39	$	1,088	$	1,789	$	—	$	235	$	1,554

The Company’s cash equivalents are comprised of money market funds and money market accounts as of March 31, 2024 and December 31, 2023. The Company also maintains money market accounts classified as restricted cash, which are Level 1 assets, for $0.6 million ~~at June 30, 2023~~on both March 31, 2024 and $~~1.6~~ ~~million at~~ December 31, ~~2022~~2023 (Note 4).

The Company estimated the fair value of the warrant issued in conjunction with the Series A ~~redeemable convertible preferred stock~~Redeemable Convertible Preferred Stock in August of 2022 (the “Series A Warrant”) (Note 7)8) using the Black-Scholes Model, which uses multiple inputs including the Company’s stock price, the exercise price of the warrant, volatility of the Company’s stock price, the risk-free interest rate and the expected term of the warrant.

The estimated fair value of the Series A Warrant ~~at June 30, 2023~~on March 31, 2024 was determined using the following assumptions:


Risk-free interest rate		~~4.20~~4.32	%
Expected dividend yield		0.00	%
Expected volatility		~~129.00~~144.00	%
Expected term	~~4.63~~3.88

The Company estimated the fair value of the Common Stock Warrant issued in February of 2023 (the “Common Stock Warrant”) (Note 7)8) using both the Black-Scholes Model and Monte Carlo simulation methods to model different potential settlement outcomes. These models use multiple inputs including the Company’s stock price, the exercise price of the warrant, volatility of the Company’s stock price, the risk-free interest rate and the expected term of the warrant. Such inputs may vary depending on the model applied and the underlying scenario assumptions. Key inputs included the warrant exercise price of $~~1.08~~108.00 per share, a risk-free interest rate of ~~4.20~~4.32%, expected volatility ranging from ~~129~~90% to ~~192~~219%, an expected dividend yield of 0.00%, a stock price of $~~0.08~~3.63 (adjusted to reflect volume weighting) and an expected term ranging from zero years ~~years~~ to ~~4.63~~3.88 years, depending on the simulation.

1314

The following table provides a roll-forward of the fair value of the Common Stock Warrants (in thousands):

Balance at December 31, 2022

$
—

Issuance of Common Stock Warrant

7,568

Settlement due to cashless exercise

(938
)
Change in fair value

1,326

Balance at March 31, 2023

$
7,956

Issuance of Common Stock Warrant

—

Settlement due to cashless exercise

(510
)
Change in fair value

(7,178
)
Balance at June 30, 2023

$
268


Balance on December 31, 2023	$	233
Change in fair value		(27	)
Balance on March 31, 2024	$	206

The Company has a single compound derivative instrument related to its Term Loan Agreement (Note 6) that requires the Company to pay additional interest of 4% per annum upon an event of default or if any obligation other than the unpaid principal amount of the Term Loan is not paid when due. Fair value is determined quarterly. The fair value ~~at June 30, 2023~~of the derivative on March 31, 2024 and December 31, ~~2022~~2023 is $~~0.8~~1.7 million and $~~1.1~~1.6 million, respectively, and is classified as a current liability on the condensed consolidated balance ~~sheet at June 30, 2023 and a non-current liability at December 31, 2022~~sheets to match the classification of the related Term Loan Agreement (Note 6).

The estimated fair value of the derivative ~~at June 30, 2023~~on March 31, 2024 was determined using a probability-weighted discounted cash flow model that includes contingent interest payments under the following scenarios:


	Probability
4%4% contingent interest beginning in ~~Q4 2023~~Q2 2024		50	%

Changes in assumptions regarding the probability of the 4% contingent interest feature being triggered and the timing of such a triggering event could significantly affect the estimated fair value of this derivative liability.

The following table provides a roll-forward of the fair value of the derivative liability ~~related to the Term Loan~~ (in thousands):

Balance at December 31, 2022

$
1,088

Change in fair value of derivative related to Term Loan

770

Balance at March 31, 2023

$
1,858

Change in fair value of derivative related to Term Loan

(1,022
)
Balance at June 30, 2023

$
836


Balance on December 31, 2023	$	1,554
Change in fair value of derivative related to Term Loan with related party		108
Balance on March 31, 2024	$	1,662

The Company is required to disclose the fair value and the level within the fair value hierarchy for financial instruments that are not measured at fair value on a recurring basis. For certain financial instruments, including accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, the carrying amounts approximate their fair values as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 because of their short-term nature. Cash and cash equivalents were classified as Level 1 and all other financial instruments were classified as Level 2 within the fair value hierarchy. The Company used Level 3 inputs to measure the fair value of its Term Loan Agreement. Based on these measurements, the Company concluded that the carrying value of the Term Loan Agreement approximates its fair value ~~at June 30, 2023.~~on March 31, 2024.

4. Restricted Cash

The Company is required to maintain security deposits for its office lease agreements. AtOn both March 31, 2024 and December 31, ~~2022,~~2023, the Company had lease security deposits, invested in money market accounts, aggregating $~~1.6~~0.6 million. In January 2023, one of ~~these~~the Company's deposits of $1.0 million was claimed by a landlord as compensation for a lease dispute (Note ~~13)~~14). The remaining collateral deposits aggregating $0.6 million ~~at June 30, 2023~~ were held at Silicon Valley Bank, which was taken over by the FDIC in March 2023. The Company’s full exposure was ultimately covered by the FDIC and no loss was incurred.

5. Supplemental Balance Sheet Information

Inventories

Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis and are comprised of the following (in thousands):


	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Raw materials	$	2,704	$	2,004	$	2,208	$	1,881
Work-in-process		1,090		1,176		1,725		1,441
Finished goods		543		1,105		737		1,497
Total inventories, net	$	4,337	$	4,285
Total inventories					$	4,670	$	4,819

Property and Equipment, net

Property and equipment, ~~consist~~net consists of the following (in thousands):


	June 30, 2023			December 31, 2022			March 31, 2024			December 31, 2023
Office and computer equipment	$	757		$	757		$	710		$	710
Software		783			783			778			778
Laboratory equipment		5,593			5,570			5,094			5,104
Furniture		210			197			198			198
Manufacturing equipment		1,668			1,454			1,127			1,109
Manufacturing tooling and molds		494			494			371			371
T2-owned instruments and components		4,259			4,052			3,709			3,549
Leased T2-owned instruments		967			1,014			899			1,059
Leasehold improvements		3,785			3,784			3,608			3,608
Construction in progress		669			685			21			23
		19,185			18,790			16,515			16,509
Less accumulated depreciation and amortization		(14,613	)		(14,257	)		(14,904	)		(14,851	)
Property and equipment, net	$	4,572		$	4,533		$	1,611		$	1,658

Construction in progress is primarily comprised of equipment that has not been placed in service. T2-owned instruments and components is primarily comprised of ~~raw materials and work-in-process inventory that are expected to be used or used to produce T2-owned instruments and completed~~ instruments that will be used for internal research and development, clinical studies and reagent rental agreement with customers. ~~At June 30, 2023 and December 31, 2022, there were $0.9~~ ~~million and $0.8~~ million of T2-owned instrument raw materials and work-in-process, respectively. Depreciation expense, a component of cost of product revenue, from instruments under the T2-owned reagent rental pool was immaterial for the three months ended June 30, 2023 and 2022. Depreciation expense, a component of cost of product revenue, from instruments under the T2-owned reagent rental pool was $0.1 million for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~immaterial for the three months ended March 31, 2023.

Total depreciation expense for T2-owned instruments used for internal research and development and clinical studies is recorded as a component of research and development expense. Depreciation and amortization expense of $0.1 million and $~~0.2~~0.3 million was charged to operations for the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. ~~Depreciation and amortization expense of $0.4~~ ~~million and $0.5~~ ~~million was charged to operations for the six months ended June 30, 2023 and 2022, respectively.~~

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Accrued payroll and compensation	$	2,771	$	2,930	$	1,760	$	2,705
Accrued clinical trial and development expenses		806		1,097		529		285
Accrued professional services		444		1,626		496		554
Accrued interest		1,016		1,009		838		839
Accrued final fee		4,979		—
Other accrued expenses		384		607		608		522
Total accrued expenses and other current liabilities	$	10,400	$	7,269	$	4,231	$	4,905

~~Accrued professional services at December 31, 2022 includes a $1.0~~ ~~million estimated liability related to the Billerica, Massachusetts lease (Note 13).~~

6. Notes Payable

~~Future principal payments on the notes payable are as follows (in thousands):~~

June 30,
2023

December 31,
2022

Term Loan Agreement including PIK interest,
before unamortized discount and issuance costs

$
53,453

$
53,453

Less: unaccrued paid-in-kind interest

(2,767
)

(3,647
)
Less: unamortized discount and deferred issuance costs

(115
)

(155
)
Total notes payable

$
50,571

$
49,651

The Term Loan Agreement with CRG is classified as a current liability at June 30, 2023. In May 2023, the Company received a modification and waiver reducing the term loan’s minimum cash covenant from $~~5.0~~ ~~million to $500,000~~ ~~until~~ ~~December 31, 2023~~. After considering the probability the Company may not comply with the covenant unless additional funds are raised during the period June 30, 2023, through June 30, 2024, the Company concluded the term loan and related liabilities are current liabilities. The Term Loan Agreement with CRG is classified as a non-current liability at December 31, 2022, as the Company amended the agreement in November 2022, extending the interest only period and principal maturity to ~~December 30, 2024. The warrants to purchase a total of~~ ~~21,944~~ ~~shares of the Company’s common stock remain outstanding at June 30, 2023.~~

The Term Loan Agreement includes a subjective acceleration clause whereby an event of default, including a material adverse change in the business, operations, or conditions (financial or otherwise), could result in the acceleration of the obligations under the Term Loan Agreement. Also, at CRG’s discretion, a default interest rate of an additional ~~4.0% per annum may apply during the occurrence and continuance of an event of default.~~

In January 2023, CRG waived certain specified events of default associated with the Company’s issuance of shares of Series A convertible preferred stock in August 2022 and the subsequent redemption. On May 19, 2023, the Company, the lenders party thereto and CRG entered into a waiver and consent with respect to the Term Loan Agreement, reducing the minimum liquidity covenant to $~~500,000~~ ~~until~~ ~~December 31, 2023. In July 2023, CRG converted $~~10 million of the loan to common and preferred stock. The preferred stock will convert to common stock upon shareholder approval. There were no other covenant violations during the three and six months ended June 30, 2023.

Term Loan Agreement

In December 2016, the Company entered into athe Term Loan Agreement with ~~CRG and~~CRG. The Company initially borrowed $40.0 ~~million. The~~million under the Term Loan Agreement ~~initially~~and had a the ability to borrow an additional $~~six-year~~10.0 ~~term, and provided~~million upon receiving specified clearance for ~~quarterly interest-only payments through December~~the marketing of T2Bacteria by April 30, ~~2020 and quarterly principal and interest payments thereafter through maturity.~~2018 (the “Approval Milestone”). The Company ~~issued warrants~~agreed to ~~CRG to purchase a total of~~ ~~10,579~~ ~~shares of the Company’s common stock, exercisable any time prior to December 30, 2026 at a price of $77.50~~ ~~per share. The Agreement has been subsequently amended as described below.~~

~~Interest on borrowings, as amended, accrue at~~ ~~11.50% per year,~~ 8~~% of which is payable in cash quarterly and~~ ~~3.5% of which is deferred and added to principal until maturity. The Company paid CRG~~pay (1) a financing fee based on the ~~loan~~amount of principal ~~amount~~ drawn and (2) a final payment fee based on the principal outstanding upon repayment. The debt discount related to the financing fee isand the fees paid to CRG are being amortized over the loan term as interest expense. Interest expense for the debt discount ~~interest expense. A~~was less than $0.1 million for both the three months ended March 31, 2024 and 2023. The final ~~fee~~ payment of 10~~% (initially~~ 8~~%, then amended)~~

~~is due at maturity based on the principal outstanding at maturity. The final~~ fee is accrued as interest expense and ~~recorded as a current liability~~is classified consistent with the classification of the ~~associated debt.~~

~~In connection with a 2019 amendment~~Term Loan. The effective interest rate of the Term Loan ~~Agreement, the Company issued to CRG warrants to purchase~~was ~~11,365~~10.2 ~~shares~~% as of ~~the Company’s common stock (“New Warrants”) exercisable any time prior to September 9, 2029 at an exercise price of $77.50~~ ~~per share.~~March 31, 2024.

The ~~Company may prepay~~Term Loan’s principal is prepayable at any time partially or in full without a prepayment penalty. Borrowings are collateralized by a lien on substantially all Company assets, including intellectual property. The Term Loan Agreement provides for

affirmative and negative covenants, including a requirement to maintain a minimum cash balance of $5.0 million. The Term Loan Agreement includes a subjective acceleration clause whereby an event of default, including a material adverse change in the business, operations, or conditions (financial or otherwise), could result, at CRG’s discretion, in the acceleration of the obligations under the Term Loan Agreement. ~~Also at CRG’s discretion,~~Under certain circumstances, a default interest rate of an additional 4.0% per annum may apply, at CRG’s discretion, on all outstanding obligations during the occurrence and continuance of an event of default.

The Term Loan originally had a six-year term, with three years of interest-only payments accruing at a fixed rate of 12.5%, of which 4.0% could be paid in-kind by increasing the principal balance. After achievement of the Approval Milestone, such rates would be reduced and a fourth year of interest-only payments would be granted, after which quarterly payments of principal and interest would be owed through the December 30, 2022 maturity date. Upon achievement of certain performance metrics, the loan would be converted to interest-only until its maturity, at which time all unpaid principal and interest would be due and payable.

In ~~January 2023, CRG waived certain specified events of default associated~~connection with the ~~Company’s issuance~~Term Loan Agreement, the Company issued warrants to CRG to purchase a total of105 shares of ~~Series A convertible preferred~~the Company’s common stock, ~~in August 2022 and the subsequent redemption.~~exercisable any time prior to December 30, 2026.

Amendments

~~In 2019,~~The Term Loan Agreement has been amended nine times as of March 31, 2024. As a result of those amendments, certain terms of the Term Loan ~~Agreement was amended~~have been revised as follows:

•

In 2018, upon the Company’s achievement of the Approval Milestone, interest on borrowings began accruing at 11.50% per year, 8% of which is payable in cash quarterly and 3.5% of which is deferred and added to ~~reduce minimum revenue targets, extend the interest-only period, extend the~~ principal ~~repayment period and to increase the~~until maturity.

•

In 2019:

▪

The final payment fee was increased from 8% to 10%. of the principal outstanding upon repayment.

▪

The Company issued ~~the New Warrants~~additional warrants to CRG to purchase 113 shares of its common stock, exercisable any time prior to September 9, 2029 at an exercise price of $7,750.00 per share, with provisions for termination upon a change of control or a sale of all or substantially all of the assets of the ~~Company.~~ Company (these warrants, along with the warrants to purchase 105 shares of common stock previously issued to CRG, are collectively referred to as the “CRG Warrants”).

▪

The Company ~~also~~ reduced the exercise price for the warrants previously issued to CRG to $7,750.00.

•

In 2022, the principal maturity date was extended to December 30, 2024, and the Term Loan’s interest-only payment period was extended until that maturity date.

•

In 2023:

▪

The Company and CRG entered into a waiver and consent that reduced the minimum liquidity covenant to $500,000 until December 31, 2023.

▪

CRG waived certain specified events of default associated with the Company’s issuance of shares of Series A Redeemable Convertible Preferred Stock in August 2022 and the subsequent redemption (Note 7).

▪

In July 2023, CRG canceled $10.0 million of the Term Loan’s principal in exchange for 483,457 shares of common stock and 93,297 shares of Series B Convertible Preferred Stock.

▪

In October 2023, the interest-only period and maturity of the Term Loan were extended to December 31, 2025 and the $500,000 liquidity covenant was made permanent.

The warrants to purchase ~~an aggregate of~~ ~~10,579~~218 shares of the Company’s common stock ~~to $77.50. The New Warrants are exercisable any time prior to September 9, 2029, and all of~~remain outstanding on March 31, 2024. There were no covenant violations during the ~~previously issued warrants are exercisable any time prior to December 30, 2026.~~three months ended March 31, 2024.

In January 2021, the Term Loan Agreement was amended to extend the interest-only payment period until December 30, 2022, extend the initial principal repayment until December 30, 2022, and to reduce the minimum product revenue target for the 24-month period beginning on January 1, 2020. The Company did not pay or provide any considerationAmendments made in ~~exchange for this amendment. The Company accounted for the January 2021 amendment as a modification to the Term Loan Agreement. In June 2021, the Company satisfied the remaining revenue covenant.~~

In February 2022, ~~the Term Loan Agreement was amended to extend the interest-only~~November 2022, October 2023, and the partial principal ~~maturity dates to~~ ~~December 30,~~cancellation in July 2023. The Company did not pay or provide any consideration in exchange for this amendment. As the effective borrowing rate under the amended agreement is less than the effective borrowing rate under the previous agreement, a concession was deemed granted as per ASC Topic 470-60, ~~Debt: Troubled Debt Restructurings by Debtors~~ ~~(“ASC 470-60”), and the amendment was~~ were accounted for as a troubled debt ~~restructuring. The~~restructurings. For all restructurings, at the time of the restructuring the future undiscounted cash outflows required under the amended agreement ~~exceed~~exceeded the carrying value of the debt and no gain was recognized as a result of the restructurings. The effects of each restructuring were accounted for prospectively.

Securities Purchase Agreement

stock results in CRG beneficially owning greater than 49.99% of the Company’s outstanding shares of common stock (or in the case of one of the affiliated entities, greater than 9.99% of the Company’s outstanding shares of common stock, determined without regard to any convertible securities held by CRG or affiliated entities), shares of newly designated convertible preferred stock, par value $0.001 per share, at a price per share of the lower of (a) the closing price for the Company’s common stock on Nasdaq on the date immediately prior to the ~~amendment~~closing of the transaction and (b) the ~~amendment did not result~~average closing price over the five business days prior to the closing of the transaction, in ~~a gain on restructuring.~~

~~In November 2022,~~exchange for CRG ~~amended~~surrendering for cancellation $15.0 million of outstanding borrowing under the Term Loan Agreement. The closing of the transaction was conditioned on the approval of the Company’s stockholders at a stockholder meeting held on April 11, 2024 and was expected to occur within 10 business days following the approval of the Company’s stockholders.

On April 11, 2024, the Company's stockholders voted for the approval of the conversion of $15.0 million of its Term Loan Agreement ~~extending~~with CRG into equity. On April 12, 2024, the ~~interest only~~Company issued an aggregate of 3,280,618 shares of Common Stock and an aggregate of 17,160.48 shares of Series A Convertible Preferred Stock, par value $0.001 per share to CRG in exchange for the cancellation of $15.0 million of outstanding loans under the Term Loan Agreement. Each share of Series A Convertible Preferred Stock is convertible into 100 shares of our common stock at the holder’s election following issuance, subject to beneficial ownership limitations.

Related Party

Upon the close of the July 2023 transaction in which CRG canceled $10.0 million of the Term Loan’s principal in exchange for 483,457 shares of common stock and 93,297 shares of Series B Convertible Preferred Stock, CRG became a holder of more than ten percent of our common stock outstanding, and therefore determined to be a principal owner and related party. As of December 31, 2023, CRG held no shares of common stock and 93,297 shares of Series B Convertible Preferred Stock, which was convertible into more than ten percent of our common stock outstanding as of December 31, 2023. In February 2024, CRG converted 82,422 shares of its Series B Preferred Stock into 824,220 shares of common stock, which represented more than ten percent of our common stock outstanding. As of March 31, 2024, CRG held 824,220 shares of common stock which represented more than ten percent of our common stock outstanding as of March 31, 2024. As of March 31, 2024, CRG held 10,875 shares of Series B Preferred Stock which was convertible into 108,750 shares of common stock.

Classification

The Term Loan Agreement with CRG was classified as a current liability on both March 31, 2024 and December 31, 2023. In May 2023, the Company received a modification and waiver reducing the Term Loan’s minimum cash covenant from $5.0 million to $500,000 until December 31, 2023. In addition, in October 2023, the interest-only period and ~~principal~~ maturity of the Term Loan were extended to December ~~30, 2024~~31, 2025, and the $500,000 liquidity covenant was made permanent. Because management believes it is probable that the Company will not be able to comply with the covenant unless additional funds are raised, the Company concluded that the Term Loan and related liabilities should be classified as current on the condensed consolidated balance sheets.

Future Payments

Future principal payments on the notes payable are as follows (in thousands):


	March 31, 2024			December 31, 2023
Term Loan Agreement due 2025 including PIK interest, before unamortized discount and issuance costs	$	44,457		$	44,457
Less: unaccrued paid-in-kind interest		(2,670	)		(3,037	)
Less: unamortized discount and deferred issuance costs		(121	)		(136	)
Total notes payable to related party	$	41,666		$	41,284

7. Preferred Stock

Series A Redeemable Preferred Stock

On July 5, 2023, the Company issued Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) to help effect a Reverse Stock Split Proposal. Subject to the terms and conditions of a Securities Purchase Agreement, the Company agreed to issue and sell to CRG 1,000 shares of newly designated Series A Preferred Stock, par value $0.001 per share, for a total purchase price of $100.00. A “Reverse Stock Split Proposal” means any proposal approved by the Company’s Board of Directors and submitted to the Company’s

stockholders to adopt an amendment(s) to the Company’s Amended and Restated Certificate of Incorporation to combine the outstanding shares of common stock into a smaller number of shares of common stock at a ratio to be specified.

Voting Rights

Shares of the Series A Preferred Stock had the right to vote only on any Reverse Stock Split Proposal and as may have been required by law. The Series A Preferred Stock represented an aggregate of 400,000,000 votes, and CRG agreed to vote in the same proportion as shares of common stock of the Company were voted on any Reverse Stock Split Proposal.

Redemption

The Series A Preferred Stock were redeemable (i) at any time if such redemption was ordered by the Board of Directors in its sole discretion, automatically and effective on such time and date specified by the Board of Directors in its sole discretion, or (ii) automatically immediately following the approval by the stockholders of the Company of a Reverse Stock Split Proposal at a redemption price of $100.00. On September 15, 2023, the Company’s stockholders voted to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock, par value $0.001 per share, at a reverse split ratio ranging from any whole number between and including 1-for-50 and 1-for-150, with the exact ratio to be determined at the discretion of the Board of Directors of the Company. As a result of that stockholder vote, the Series A Preferred Stock was redeemed on September 15, 2023, for $100. Upon its redemption, the Company’s Series A Preferred Stock ceased to be outstanding.

Series B Convertible Preferred Stock

On July 3, 2023, in conjunction with an agreement it reached with CRG to cancel $10.0 million of its Term Loan principal, the Company issued to CRG (i) an aggregate of 483,457 shares of common stock at a purchase price of $7.06 per share for a total purchase price of $3.4 million, and (ii) an aggregate of 93,297 shares of newly designated Series B Convertible Preferred Stock (the “Series B Preferred Stock”), par value $0.001 per share, at a purchase price of $70.60 per share (the “Stated Value”) for a total purchase price of $6.6 million.

Dividends

Holders of Series B Preferred Stock are entitled to receive dividends on such shares (other than common stock dividends) equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock. No ~~consideration was~~other dividends shall be paid on shares of Series B Preferred Stock. All declared but unpaid dividends on shares of Series B Preferred Stock will increase the Stated Value of such shares, but when such dividends are actually paid any such increase in the Stated Value will be rescinded.

Voting Rights

Except as may be required by law, the Series B Preferred Stock has no voting rights. However, as long as any shares of Series B Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, (i) alter or change adversely the powers, preferences or rights given ~~in exchange for the amendment. There were no costs paid~~ to the ~~lender~~Series B Preferred Stock, (ii) increase or ~~third parties in association~~decrease (other than by conversion) the number of authorized shares of Series B Preferred Stock, or (iii) enter into any agreement with respect to any of the foregoing.

Liquidation Preference

The Series B Preferred Stock ranks (i) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Series B Preferred Stock (collectively, the “Junior Securities”); (ii) on parity with the amendment. Because a concession was granted, the agreement was accounted for as a troubled debt restructuring under ASC 470-60. The future undiscounted cash outflows required under the amended agreement exceed the carrying valuecommon stock; (iii) on parity with any class or series of capital stock of the ~~debt immediately prior~~Company hereafter created specifically ranking by its terms on parity with the Series B Preferred Stock (together with the common stock, the “Parity Securities”); and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Series B Preferred Stock (“Senior Securities”), in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily (a “Liquidation”). No Junior Securities, Parity Securities or Senior Securities existed at March 31, 2024.

In a Liquidation, the Series B Preferred Stockholder will, subject to the ~~amendment~~prior and superior rights of the holders of any Senior Securities, be entitled to receive, in preference to any distributions of any of the assets or surplus funds of the Company to the holders of the Junior Securities and pari passu with any distribution to the holders of Parity Securities, an equivalent amount of any distributions as would be paid on the common stock underlying the Series B Preferred Stock, determined on an as-converted basis (without regard to

any limitations on conversion), plus an additional amount equal to any dividends declared but unpaid on such shares, before any payments shall be made or any assets distributed to holders of any class of Junior Securities.

Conversion Rights

Each share of Series B Preferred Stock is convertible, at any time and from time to time from and after the Reverse Split Amendment has been filed with the Secretary of State of the State of Delaware, at the option of the holder thereof, into a number of shares of common stock equal to the product of the Conversion Ratio (which is the $70.60 Stated Value of such shares divided by the $7.06 Conversion Price, subject to adjustment) and the ~~amendment did not result in a gain~~number of shares of Series B Preferred Stock to be converted. The Reverse Split Amendment was filed on ~~restructuring.~~October 12, 2023. The conversion feature is subject to certain beneficial ownership limitations. The Conversion Price also is subject to adjustment for stock dividends and stock splits.

In February 2024, CRG converted 82,422 shares of its Series B Preferred Stock into 824,220 shares of common stock.

7.8. Warrants

Series A Warrant

On August 15, 2022, the Company issued an aggregate of 3,000 shares of Series A Redeemable Convertible Preferred Stock with a par value of $0.001 per share and the Series A Warrant to purchase up to an aggregate of ~~42,857~~428 shares of common stock of the Company at an exercise price of $~~7.50~~750.00 per share (such number of shares and exercise price are adjusted for the reverse stock split described in Note 2) for an aggregate subscription amount equal to $0.3 million, before deducting estimated offering expenses payable by the Company. In the fourth quarter of 2022, the Series A Redeemable Convertible Preferred Stock was redeemed. The Series A Warrant became exercisable on February 15, 2023 and expires on February 15, 2028. The Series A Warrant contains certain anti-dilution provisions to protect the holder.

On February 17, 2023, the Company issued and sold shares of common stock, pre-funded warrants to purchase common stock and warrants to purchase common stock to an underwriter pursuant to an underwriting agreement (see discussion below). The terms of that offering triggered an adjustment to the exercise price of the Series A Warrant to $~~0.54~~54.00 effective as of February 17, 2023.

The Company is required to measure the Series A Warrant at fair value at inception and in subsequent reporting periods with changes in fair value recognized in change in fair value of warrant liabilities in the period of change in the condensed consolidated statements of operations and comprehensive loss. The fair value of the liability related to the Series A Warrant at inception was $0.4 million. The Series A Warrant was not exercised as of ~~June 30, 2023~~March 31, 2024 and remains outstanding. The change in fair value during the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 was immaterial.

Pre-Funded Warrants and Common Stock Warrants

On February 17, 2023, the Company sold ~~9,018,519~~90,185 shares of $0.001 par value common stock, ~~2,092,592~~20,925 Pre-Funded Warrants and ~~22,222,222~~222,222 Common Stock Warrants through an offering underwritten by Craig-Hallum Capital Group LLC. Each of the shares and Pre-Funded Warrants were sold in combination with an accompanying Common Stock Warrant to purchase two shares of the Company’s common stock. The combined purchase price for each share and accompanying Common Stock Warrant is $~~1.08~~108.00, and for each Pre-Funded Warrant and accompanying Common Stock Warrant is $~~1.079~~107.90, which was equal to the combined purchase price for each share and accompanying Common Stock Warrant sold in the offering, minus the Pre-Funded Warrant’s exercise price per share of $~~0.001~~0.10.

The total proceeds of $12.0 million from the February 17, 2023 offering were allocated between the common stock, Pre-Funded Warrants and Common Stock Warrants. Because the Common Stock Warrants are liability-classified, an amount of proceeds equal to the fair value of the liability were first allocated to the Common Stock Warrants. The remaining proceeds were allocated on a relative fair value basis to the common stock and the Pre-Funded Warrants and recognized in additional paid-in capital. Total issuance costs related to the offering of $1.1 million were allocated in a similar manner as the total proceeds. As a result, approximately $0.7 million of issuance costs were expensed at the issuance date and recognized as ~~other expenses~~Other, net in the condensed consolidated statements of operations and comprehensive loss. The remaining issuance costs were recognized within additional paid-in-capital as a reduction to the proceeds received for the common stock and Pre-Funded Warrants.

The Pre-Funded Warrants ~~have~~had (i) an exercise price per share of ~~Common Stock~~common stock equal to $~~0.001~~0.10 or (ii) a cashless exercise option, with the number of shares received determined according to the formula set forth in the Pre-Funded Warrant. The Pre-Funded Warrants ~~are~~were exercisable upon issuance and dodid not expire. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants iswas subject to adjustment in the event of certain stock dividends and distributions, splits, combinations, reclassifications or similar events affecting the common stock. Holders of Pre-Funded Warrants ~~will participate~~participated in any distributions to common stockholders as if the holders had exercised the Pre-Funded Warrants.

The Company determined that the Pre-Funded Warrants ~~are~~were indexed to the Company’s own stock and ~~meet~~met the requirements for equity classification. Proceeds allocated to such warrants totaled $0.8 million. ~~During the second quarter of 2023,~~ ~~351,852~~ ~~Pre-Funded Warrants were exercised for an equivalent number of shares of common stock and~~ ~~zero~~No Pre-Funded Warrants remain outstanding ~~at June 30, 2023.~~on March 31, 2024.

The Common Stock Warrants have (i) an exercise price per share of common stock equal to $~~1.08~~108.00 per share, (ii) a cashless exercise option if, at the time of exercise, there is no effective registration statement registering or the prospectus is not available for the issuance of the warrant shares to the holder, with the number of shares received determined according to the formula set forth in the Common Stock Warrant or (iii) an alternate cashless exercise option, which became exercisable on March 15, 2023, equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise and (y) 0.5. The Common Stock Warrants are exercisable upon issuance and expire on February 17, 2028. The exercise price and the number of shares of common stock issuable upon exercise of the Common Stock Warrants is subject to adjustment in the event of certain stock dividends and distributions, splits, combinations, reclassifications or similar events affecting the common stock. Holders of the Common Stock Warrants will participate in any distributions to common stockholders as if the holders had exercised the Common Stock Warrants. The Common Stock Warrants are redeemable upon the occurrence of a Fundamental Transaction (as defined in the Common Stock Purchase Warrant Agreement).

The Company determined that the Common Stock Warrants are not indexed to the Company’s own stock and therefore are precluded from equity classification. In addition, the Common Stock Warrant liability meets the definition of a derivative instrument. The Common Stock Warrants will be measured at fair value at inception and in subsequent reporting periods with changes in fair value recognized in income as change in fair value of warrant liabilities in the period of change in the condensed consolidated statements of operations and comprehensive loss. The fair value of the Common Stock Warrant liability at inception was $7.6 million. During the ~~second quarter of 2023,~~three months ended March 31, 2024, ~~13,026,296~~no Common Stock Warrants were ~~exercised pursuant to the cashless exercise option resulting in the issuance of~~exercised. On March 31, 2024, ~~6,513,148~~ ~~shares of Common Stock. At June 30, 2023,~~ ~~6,851,852~~66,665 Common Stock Warrants remain outstanding. The change in fair value after issuance consisted of a reduction of expense of $~~7.2~~ ~~million and $5.9~~0.1 million during the three ~~and six~~ months ended ~~June 30, 2023, respectively.~~ March 31, 2024.

The Company has also issued certain warrants in conjunction with its Term Loan Agreement. See Note 6.

8.9. Stockholders’ Deficit

Preferred Stock

The Company has authorized the issuance of up to 10,000,000 shares of $0.001 par value preferred stock. The Board of Directors will determine the preferred stock’s rights, preferences, privileges, restrictions, voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences.

Common Stock

The Company has authorized the issuance of 400,000,000 shares of $0.001 par value common stock. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding. As of March 31, 2024, a total of 1,532 shares, 8,295 shares, and 67,311 shares of common stock were reserved for issuance upon (i) the exercise of outstanding stock options, (ii) the issuance of stock awards, and (iii) the exercise of warrants, respectively, under the Company's 2014 Incentive Award Plan, Inducement Award Plan and 2014 Employee Stock Purchase Plan.

Equity Distribution Agreement

~~The~~On March 31, 2021, the Company entered into an Equity Distribution Agreement ~~with Canaccord Genuity~~ (the “Equity Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”), through which the Company may sell up to $75.0 million of gross proceeds of common stock. In July 2023, the Company filed an amendment to the prospectus supplement relating to the offer and sale of shares under the Equity Distribution Agreement to increase the maximum amount of shares that the Company may sell pursuant to its Equity Distribution Agreement with Canaccord by $65 million. At the time of the amendment, the Company had sold shares of its common stock for gross proceeds of $71.3 million.

Canaccord, as agent, sells shares at the Company’s request through “at the market” offerings, subject to shelf limitations, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions. Canaccord receives a fee of 3% of gross proceeds of common stock sold under the Equity Distribution Agreement for its services. Legal and accounting fees from sales under the Equity Distribution Agreement are charged to share capital. Under the Equity Distribution Agreement, the Company sold ~~214,606,459~~628,470 shares of common stock during the three months ended ~~June 30, 2023~~March 31, 2024 for net proceeds of $~~18.4~~2.2 million, and ~~25,868,356~~6,528 shares of common stock during the three months ended ~~June 30, 2022 for net proceeds of $4.5~~ ~~million. Under the Equity Distribution Agreement, the Company sold~~ ~~215,259,581~~ ~~shares of common stock during the six months ended June 30,~~March 31, 2023 for net proceeds of $~~19.3~~ ~~million, and~~ ~~29,417,716~~ ~~shares of common stock during the six months ended June 30, 2022 for net proceeds of $5.2~~0.9 million. ~~Prepaid expenses and other current assets at June 30, 2022 include $0.7~~ ~~million of proceeds receivable from the sales of shares sold under the Equity Distribution Agreement during the six months ended June 30, 2022, which were received in early July 2022.~~

Stock Incentive Plans

2006 Stock Incentive Plan

The Company’s Amended and Restated 2006 Employee, Director and Consultant Stock Plan ~~(“2006~~(the “2006 Plan”) was established for granting stock incentive awards to directors, officers, employees and consultants of the Company. Upon closing of the Company’s IPO in August 2014, the Company ceased granting stock incentive awards under the 2006 Plan. The 2006 Plan provided for the grant of incentive and non-qualified stock options and restricted stock grants as determined by the Company’s ~~board~~Board of ~~directors.~~Directors. Under the 2006 Plan, stock options were generally granted with exercise prices equal to or greater than the fair value of the common stock as determined by the ~~board~~Board of ~~directors,~~Directors, expired no later than 10 years from the date of grant, and ~~vested~~vest over various periods not exceeding 4 years.

2014 Stock Incentive Plan

The Company’s 2014 Incentive Award Plan ~~(“2014 Plan”,~~(the “2014 Plan,” and together with the 2006 Plan, the “Stock Incentive Plans”), which was amended and restated in ~~June 2021,~~October 2023, provides for the issuance of shares of common stock in the form of stock options, awards of restricted stock, awards of restricted stock units, performance awards, dividend equivalent awards, stock payment awards and stock appreciation rights to directors, officers, employees and consultants of the Company. Since the establishment of the 2014 Plan, the Company has primarily granted stock options and restricted stock units. Generally, stock options are granted with exercise prices equal to or greater than the fair value of the common stock on the date of grant, expire no later than 10 years from the date of grant, and vest over various periods not exceeding 4 years.

The number of shares reserved for future issuance under the 2014 Plan is the sum of (1) ~~16,470~~823,529 shares, (2) any shares that were granted under the 2006 Plan which are forfeited, lapse unexercised or are settled in cash subsequent to the effective date of the 2014 Plan and (3) an annual increase on the first day of each calendar year, beginning January 1, 2015 and ending on and including January 1, 2026, equal to the lesser of (A) 4% of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (B) such smaller number of shares determined by the Company’s ~~board~~Board of ~~directors;~~Directors; provided, however, no more than ~~700,000~~35 million shares may be issued upon the exercise of incentive stock options. As of ~~June 30, 2023,~~March 31, 2024, there were ~~186,916~~981,723 shares available for future grant under the 2014 Plan.

Inducement Award Plan

The Company’s ~~Amended and Restated~~ Inducement Award Plan ~~(“Inducement~~(the “Inducement Plan”), which was adopted in March 2018 without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq listing rules (“Rule 5635(c)(4)”) and most recently amended and restated in February 2023, provides for the grant of equity awards to new employees, including options, restricted stock awards, restricted stock units, performance awards, dividend equivalent awards, stock payment awards and stock appreciation rights. In accordance with Rule 5635(c)(4), awards under the Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s Board of Directors, or an employee who is being rehired following a bona fide period of non-employment by us as a material inducement to the employee’s entering into employment with us. The aggregate number of shares of common stock which may be issued or transferred pursuant to awards under the Inducement Plan is ~~692,500~~6,925 shares. Any awards that forfeit, expire, lapse, or are settled for cash without the delivery of shares to the holder are available for the grant of an award under the Inducement Plan. Any shares repurchased by or surrendered to the Company that are returned shall be available for the grant of an award under the Inducement Plan. The payment of dividend equivalents in cash in conjunction with any outstanding award shall not be counted against the shares available for issuance under the Inducement Plan. As of ~~June 30, 2023,~~March 31, 2024, there were ~~29,528~~5,061 shares available for future grant under the Inducement Plan.

Stock Options

There were no stock options granted in the three months ended March 31, 2024. The aggregate fair value of stock options granted during the ~~six~~three months ended ~~June 30,~~March 31, 2023 was ~~immaterial. During the six months ended June 30, 2022, the Company granted stock options with an aggregate fair value of $0.6~~ ~~million, which are~~immaterial and is being amortized into compensation expense over the vesting period of the options as the services are being provided.

The following is a summary of option activity under the Stock Incentive Plans and Inducement Plan (in thousands, except term, share and per share amounts):


	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (In years)		Aggregate Intrinsic Value		Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (In years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		179,641		$	145.09		5.93	$	—
Outstanding on December 31, 2023											1,573		$	12,371.09		6.08	$	—
Granted		39,370			0.31						—			—
Exercised		—			—		—	$	—		—			—
Forfeited		(13,929	)		24.03						(23	)		1,591.63
Cancelled		(16,289	)		145.77						(18	)		10,374.44
Outstanding at June 30, 2023		188,793		$	123.78		6.26	$	—
Exercisable at June 30, 2023		131,606		$	169.77		5.04	$	—
Vested or expected to vest at June 30, 2023		176,801		$	131.59		6.03	$	—
Outstanding on March 31, 2024											1,532		$	12,556.38		5.72	$	—
Exercisable on March 31, 2024											1,258		$	15,062.76		5.03	$	—
Vested or expected to vest on March 31, 2024											1,466		$	13,091.28		5.57	$	—

There were no options exercised in the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~ 2023. There were no stock options granted in the three months ended March 31, 2024. The weighted-average grant date fair values of stock options granted in the ~~six~~three months ended ~~June 30,~~March 31, 2023 ~~and 2022 were~~was $~~0.26~~134.00 per share ~~and $19.43~~ ~~per share, respectively,~~ and were calculated using the following estimated assumptions:


	Six Months Ended June 30,						Three Months Ended March 31,
	2023			2022			2024		2023
Weighted-average risk-free interest rate		3.87	%		2.18	%		—		3.65	%
Expected dividend yield		—	%		—	%		—		—	%
Expected volatility		118	%		106	%		—		111	%
Expected terms	6.0 years			6.0 years				—	6.0 years

The total fair values of stock options that vested during the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ were $~~0.5~~0.1 million and $~~1.0~~0.3 million, respectively.

As of ~~June 30, 2023,~~March 31, 2024, there was $~~0.8~~0.2 million of total unrecognized compensation cost related to non-vested stock options granted under the Stock Incentive Plans and Inducement Plan. Total unrecognized compensation cost will be adjusted for future changes in the estimated forfeiture rate. The Company expects to recognize that cost over a remaining weighted-average period of 1.3 years as of ~~June 30, 2023.~~March 31, 2024.

Restricted Stock Units

During the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, the Company awarded restricted stock units to certain employees and directors at no cost to them. The restricted stock units, excluding any restricted stock units with market conditions, vest through the passage of time, assuming continued service. Restricted stock units are not included in issued and outstanding common stock until the underlying shares are vested and released. The fair value of the restricted stock units, at the time of the grant, is expensed on a straight-line basis. The granted restricted stock units had an aggregate fair value of less than $~~0.2~~0.1 million, which are being amortized into compensation expense over the vesting period of the restricted stock units as the services are being provided.

The following is a summary of restricted stock unit activity under the 2014 Plan and Inducement Plan:


	Number of Shares			Weighted-Average Grant Date Fair Value Per Share		Number of Shares			Weighted-Average Grant Date Fair Value Per Share
Nonvested at December 31, 2022		201,998		$	44.47
Nonvested on December 31, 2023							3,691		$	1,202.65
Granted		339,950			0.67		6,369			6.28
Vested		(67,526	)		55.27		(1,549	)		2,175.68
Forfeited		(96,184	)		5.19		(216	)		196.75
Nonvested at June 30, 2023		378,238		$	13.16
Nonvested on March 31, 2024							8,295		$	127.45

As of ~~June 30, 2023,~~March 31, 2024, there was $~~3.9~~0.9 million of total unrecognized compensation cost related to nonvested restricted stock units granted. Total unrecognized compensation cost will be adjusted for future changes in the estimated forfeiture rate. The Company expects to recognize that cost over a remaining weighted-average period of ~~1.1~~0.9 years, as of ~~June 30, 2023.~~March 31, 2024.

Employee Stock Purchase Plan

Under the 2014 Employee Stock Purchase Plan (the “2014 ESPP”) participants may purchase the Company’s common stock during semi-annual offering periods at 85% of the lower of (i) the market value per share of common stock on the first day of the offering period or (ii) the market value per share of the common stock on the purchase date. Each participant can purchase up to a maximum of $25,000 per calendar year in fair market value as calculated in accordance with applicable tax rules. The first offering period began on August 7, 2014. Stock-based compensation expense from the 2014 ESPP was immaterial ~~and $0.1~~ ~~million~~ for both the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022, respectively. Stock-based compensation expense from the 2014 ESPP was~~ ~~immaterial~~ ~~and $0.2~~ ~~million for the six months ended June 30, 2023 and 2022, respectively.~~2023.

The 2014 ESPP, which was amended and restated effective ~~August 6, 2020,~~October 2023, provides for the issuance of up to ~~90,478~~400,000 shares of the Company’s common stock to eligible employees. ~~At June 30, 2023,~~On March 31, 2024, there were ~~12,849~~394,477 shares available for issuance under the 2014 ESPP.

Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense resulting from awards granted under Stock Incentive Plans, the Inducement Plan and the 2014 ESPP, that was recorded in the Company’s results of operations for the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2023		2022		2023		2022		2024		2023
Cost of product revenue	$	18	$	91	$	109	$	232	$	35	$	54
Research and development		121		202		402		617		249		280
Selling, general and administrative		768		1,228		2,229		3,226		1,296		1,462
Total stock-based compensation expense	$	907	$	1,521	$	2,740	$	4,075	$	1,580	$	1,796

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ stock-based compensation expense capitalized as part of inventory or ~~T2Dx Instruments~~T2-owned instruments and components was immaterial.

~~10.~~11. Net Loss Per Share

The Company applies the two-class method for computing earnings per share because its Series A Warrants, Pre-Funded Warrants and Common Stock Warrants are participating securities. Under the two-class method, net income for the period is allocated between common stockholders and holders of the participating securities according to dividends declared, if any, and participation rights in undistributed earnings. Because the Company incurred a net loss for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, and the holders of the participating securities do not have the contractual obligation to share in the losses of the Company, none of the net loss attributable to common stockholders was allocated to the participating securities when computing earnings per share. The ~~Company did not~~basic and diluted net loss per share calculation includes the Series B Convertible Preferred Shares, on an if-converted basis, given that these instruments have ~~any participating securities~~essentially the same economic rights and privileges as the currently outstanding ~~for the three and six months ended June 30, 2023.~~common stock.

The Pre-Funded Warrants ~~allow~~allowed the holders to acquire a specified number of common shares at a nominal exercise price of $~~0.001~~0.10 per share and ~~are~~were classified as equity. Since the shares underlying the Pre-Funded Warrants ~~are~~were exercisable for little or no consideration, the underlying shares ~~are~~were considered outstanding at the issuance of the Pre-Funded Warrants for purposes of calculating the weighted-average number of shares of common stock outstanding in basic and diluted earnings per ~~share.~~share for common stock. At March 31, 2024, none of the Pre-Funded Warrants were outstanding.

The following shares were excluded from the calculation of diluted net loss per share applicable to common stockholders, prior to the application of the treasury stock or if-converted methods, because their effect would have been anti-dilutive for the periods presented:

Three and Six Months Ended
June 30,

2023

2022

Options to purchase common shares

188,793

198,579

Restricted stock units

378,238

227,966

Term Loan Warrants

21,944

21,944

Series A Warrant

42,857

—

Common Stock Warrants

6,851,852

—

Total

7,483,684

448,489


	Three Months Ended March 31,
	2024		2023
Options to purchase common shares		1,532		1,674
Restricted stock units		8,295		4,699
Term Loan Warrants		218		218
Series A Warrant		428		428
Common Stock Warrants		66,665		198,781
Total		77,138		205,800

~~11.~~24

Note that all net loss per share computations for all periods presented reflect the changes in the number of shares resulting from the 1-for-100 reverse stock split that was approved by shareholders on September 15, 2023 and became effective as of October 12, 2023.

12. U.S. Government Contract

In September 2019, BARDA awarded the Company a milestone-based product development contract, with an initial value of $6.0 million, and a potential value of up to $69.0 million, which was amended with Option 3 to $62.0 million due to a change in scope, if BARDA exercises all contract options (the “U.S. Government Contract”). BARDA operates within the Office of the Assistant Secretary for Preparedness and Response (“ASPR”) at the U.S. Department of Health and Human Services (“HHS”). If BARDA exercises and the Company completes all options, the Company’s management believes it will enable a significant expansion of the Company’s current portfolio of diagnostics for sepsis-causing pathogen and antibiotic resistance genes. In September 2020, BARDA exercised the first contract option valued at $10.5 million. In September 2021, BARDA exercised an option valued at approximately $6.4 million.

In April 2021, BARDA agreed to accelerate product development by modifying the contract to advance future deliverables into the currently funded Option 1 of the BARDA contract for the ~~T2Biothreat™~~T2Biothreat Panel ~~the T2Resistance Panel, the T2NxT Instrument,~~ and the ~~T2AMR~~T2Resistance Panel. The modification ~~does~~did not change the overall total potential value of the BARDA contract.

On March 31, 2022, the Company announced that BARDA had exercised Option 2B under the existing multiple-year cost-share contract between BARDA and the Company and ~~is providing~~provided an additional $4.4 million in funding to the Company.

The option exercise occurred simultaneously on March 31, 2022 with a modification to the BARDA contract to make immaterial changes to, among other things, the statement of work.

In September 2022, BARDA exercised Option 3 and agreed to provide an additional $3.7 million in funding for the multiple-year cost-share contract. The additional funding under Option 3 ~~will be~~was used to advance the U.S. clinical trials for the T2Biothreat Panel and T2Resistance Panel, and to file submissions to the FDA for U.S. regulatory clearance.

The Company recorded nocontribution revenue ~~of $0.0~~ ~~million and $3.4~~ ~~million~~ for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022, respectively, under the BARDA contract. The Company recorded contribution revenue of~~ $0.4 million ~~and $6.7~~ ~~million~~of contribution revenue for the ~~six~~three months ended ~~June 30,~~March 31, 2023 ~~and 2022, respectively,~~ under the BARDA contract.

The Company had no outstanding accounts receivable ~~at June 30, 2023~~on March 31, 2024 and ~~unbilled accounts receivable of $0.7~~ ~~million at~~ December 31, ~~2022, respectively,~~2023 under the BARDA contract.

~~12.~~13. Leases

Operating Leases

The Company leases certain office space, laboratory space and ~~manufacturing space.~~equipment. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company does not recognize right-of-use assets or lease liabilities for leases determined to have a term of ~~twelve~~12 months or less. The Company has elected to account for the lease and associated non-lease components as a combined lease component.

In August 2010, the Company entered into an operating lease for office and laboratory space at its headquarters in Lexington, Massachusetts. The lease commenced in January 2011, with the Company providing a security deposit of $400,000. In accordance with the operating lease agreement, the Company reduced its security deposit to $160,000 in January 2018, which is recorded as restricted cash in the condensed consolidated balance sheets. In March 2017, the Company entered into an amendment to extend the term to December 2021. In October 2020, the Company entered into an amendment to extend the term to December 31, 2028. In accordance with the October 2020 amendment, the Company increased its security deposit to $420,438, which is classified as restricted cash ~~at June 30, 2023~~on March 31, 2024 and December 31, ~~2022.~~2023.

In May 2013, the Company entered into an operating lease for additional office, laboratory and manufacturing space in Wilmington, Massachusetts. In August 2018, the Company entered into an amendment to extend the term to December 2020. In October 2020, the Company entered into an amendment to extend the term to December 31, 2022. In September 2022, the Company entered into an amendment to extend the term to December 31, 2024.

In November 2014, the Company entered into a lease for additional laboratory space in Lexington, Massachusetts. The lease term commenced in April 2015 and extended for six years. The rent expense, inclusive of the escalating rent payments, is recognized on a

straight-line basis over the lease term. As an incentive to enter into the lease, the landlord paid approximately $1.4 million of the $2.2 million space build-out costs. The unamortized balance of the lease incentive as of January 1, 2019 was reclassified as a reduction to the initial recognition of the right-of-use asset related to this lease. In connection with this lease agreement, the Company paid a security deposit of $281,000, which was recorded as a component of both prepaid expenses and other current assets and other assets in the condensed consolidated balance sheets aton December 31, 2019. In October 2020, the Company entered into an amendment to extend the term of the lease to October 31, 2025. In accordance with this amendment, the Company paid a replacement security deposit of $130,977, which is classified as restricted cash ~~at June 30, 2023~~on March 31, 2024 and December 31, ~~2022~~2023 and received the initial $281,000 security deposit in return.

In September 2021, the Company entered into a lease for office, research, laboratory and manufacturing space in Billerica, Massachusetts. The lease ~~has~~had a term of 126 months from the commencement date. The Company opened a money market account for $1.0 million, which ~~represents~~represented collateral as a security deposit for this lease and iswas classified as restricted cash aton December 31, ~~2022 and 2021.~~2022. Occupancy of the building had been delayed due to disagreement between the Company and the landlord as to the parties’ obligations under the lease agreement. Included within accrued expenses and other current liabilities on the balance sheet aton December 31, 2022 iswas a $1.0 million estimated liability pertaining to this lease. ~~Subsequent to December 31, 2022,~~In January 2023, the Company was notified that the landlord terminated the lease because of the Company’s alleged failure to perform its obligations under the Lease in a timely manner and the Company’s alleged breach of the covenant of good faith and fair dealing and exercised its right to draw upon the $1.0 million security deposit. In addition, the landlord is seeking damages for unpaid rent, brokerage fees, transaction costs, attorney’s fees and court costs. The Company filed a response to the landlord’s complaint and a counterclaim alleging that the landlord breached its obligations under the contract and unlawfully drew on the security deposit, in addition to breaching its covenants of good faith and fair dealing, making fraudulent misrepresentations, and engaging in deceptive and unfair trade practices. The matter is in dispute (Note ~~13)~~14). The Company intends to pursue legal remedies available under applicable laws. The Company believes it will continue to meet its current manufacturing needs with its operations at its Lexington and Wilmington, Massachusetts facilities.

Operating leases are amortized over the lease term and included in costs and expenses in the condensed consolidated statement of operations and comprehensive loss. Variable lease costs are recognized in costs and expenses in the condensed consolidated statement of operations and comprehensive loss as incurred. Variable lease costs may include costs such as common area maintenance, utilities, real estate taxes or other costs. Expenses related to short-term leases were not material for the periods presented.

~~13.~~14. Commitments and Contingencies

Contingencies

In September 2021, the Company entered into a lease for office, research, laboratory and manufacturing space in Billerica, Massachusetts. The lease ~~has~~had a term of 126 months from the commencement date. The Company opened a money market account for $1.0 million, which ~~represents~~represented collateral as a security deposit for this lease and iswas classified as restricted cash aton December 31, ~~2022 and 2021.~~2022. Occupancy of the building had been delayed due to disagreement between the Company and the landlord as to the parties’ obligations under the lease agreement. Included within accrued expenses and other current liabilities on the balance sheet aton December 31, 2022 iswas a $1.0 million estimated liability pertaining to this lease. ~~Subsequent to December 31, 2022,~~In January 2023, the Company was notified that the landlord terminated the lease because of the Company’s alleged failure to perform its obligations under the Lease in a timely manner and the Company’s alleged breach of the covenant of good faith and fair dealing and exercised its right to draw upon the $1.0 million security deposit. In addition, the landlord is seeking damages for unpaid rent, brokerage fees, transaction costs, attorney’s fees and court costs. The Company filed a response to the landlord’s complaint and a counterclaim alleging that the landlord breached its obligations under the contract and unlawfully drew on the security deposit, in addition to breaching its covenants of good faith and fair dealing, making fraudulent misrepresentations, and engaging in deceptive and unfair trade practices. The Company intends to ~~vigorously defend itself and~~ pursue ~~all~~ legal remedies available under applicable laws. The Company believes it will continue to meet its current manufacturing needs with its operations at its Lexington and Wilmington, Massachusetts facilities.

License Agreement

In 2006, the Company entered into a license agreement with a third party, pursuant to which the third party granted the Company an exclusive, worldwide, sublicensable license under certain patent rights to make, use, import and commercialize products and processes for diagnostic, industrial and research and development purposes. The Company agreed to pay an annual license fee ranging from $5,000 to $25,000 for the royalty‑bearing license to certain patents. The Company also issued a total of ~~1,693~~16 shares of common stock pursuant to the agreement in 2006 and 2007, which were recorded at fair value at the date of issuance. The Company is required to pay royalties on net sales of products and processes that are covered by patent rights licensed under the agreement at a percentage ranging between 0.5% - 3.5%, subject to reductions and offsets in certain circumstances, as well as a royalty on net sales of products that the Company sublicenses at 10% of specified gross revenue. Royalties that became due under this agreement for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024, and 2023 ~~and 2022~~ were immaterial.

Letter Agreements

On March 31, 2024, the Company entered into letter agreements with Mr. Sprague and Mr. Gibbs that provide for the payment of a retention bonus in the total aggregate amount of $80,000, to be paid in two installments of $40,000. The first installment, in the amount of $40,000, shall be paid within five business days following June 30, 2024, and the second installment, in the amount of $40,000, shall be paid within five business days following November 15, 2024. Each such installment payment is subject to the applicable executive's continued employment through such payment date.

On March 30, 2023, the Company entered into agreements with Mr. Sprague, Mr. Giffin, and Mr. Gibbs that provide for the payment of retention bonuses, subject to the respective executive’s continued employment through such payment dates, of $80,000 each, to be paid in two installments of $40,000. The first installment, of $40,000 each, was paid in July 2023, and the second installment, of $40,000 each, ~~will be~~was paid in November 2023.

~~14.~~15. Subsequent Events

Issuances of Equity to CRG

On ~~July 3, 2023,~~April 11, 2024, the ~~Company entered into a Securities Purchase~~Company's stockholders voted for the approval of the conversion of $15.0 million of its Term Loan Agreement ~~(the “Series B Purchase Agreement”)~~ with CRG ~~and affiliated entities pursuant to which~~into equity. On April 12, 2024, the Company issued an aggregate of ~~48,345,798~~3,280,618 shares of Common Stock and ~~(ii)~~ an aggregate of ~~93,297.26~~17,160.48 shares of ~~newly designated~~ Series BA Convertible Preferred Stock, par value $0.001 per share ~~(“Series B Preferred”~~(the “Series A Convertible Preferred Stock”), to CRG in exchange for the ~~surrender for~~ cancellation of $~~10.0~~15.0 million of outstanding ~~borrowing~~loans under the Term Loan ~~Agreement.~~Agreement (the “Exchange”). The Exchange was completed pursuant to the Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of February 15, 2024, with CRG. Each share of Series BA Convertible Preferred Stock is convertible into ~~1,000~~100 shares of our common stock at the holder’s election following ~~the adoption of a reverse split amendment,~~issuance, subject to beneficial ownership limitations.

~~The~~On May 3, 2024, the Company ~~also sold~~entered into a Securities Purchase Agreement (the “May SPA”) with CRG pursuant to which the Company will issue to CRG in a private placement offering ~~1,000~~4,748,335 shares of ~~preferred stock to CRG entities for $100. The shares provide for super-voting rights of~~ ~~400,000~~ ~~votes per share, to be voted in proportion to the percentage of common shareholder votes actually cast and voted in favor and voted against on~~ the Company’s ~~reverse~~common stock ~~split proposal~~in exchange for the cancellation of $15.0 million of outstanding loans under the Term Loan Agreement (the "May Exchange").

Consents and ~~no other preferred rights.~~Amendments to Term Loan Agreement

On ~~July 27, 2023, the Nasdaq granted~~April 12, 2024, the Company ~~an extension~~entered into a Consent and Amendment No. 10 to the ~~time~~Term Loan Agreement (the “Consent”). The Consent provides for, among other things, (i) the consent of the Administrative Agent and CRG to the Exchange and (ii) the extension of the period in which ~~it is required to comply with the MVLS Rule and Minimum Bid Rule through November 20, 2023.~~

~~Equity Distribution Agreement~~

~~In July 2023, the Company filed a prospectus supplement to increase the maximum amount of shares that~~ the Company may ~~sell pursuant~~elect to ~~its Equity Distribution Agreement with Canaccord Genuity by $~~pay a portion of the accrued interest on the term loans in-kind to the earlier of (a) December 31, 2025 and (b) the date on which a default has occurred.65

~~million. Subsequent to June 30, 2023,~~On May 3, 2024, the Company ~~sold~~ ~~88,538,763~~entered into a Consent and Amendment No. 11 to the Term Loan Agreement (“Consent No. 11”). Consent No. 11 provides for, among other things, (i) the consent of the Administrative Agent and CRG to the May Exchange and (ii) an amendment to the “Change of Control” definition to allow CRG or their affiliates to acquire a majority of shares ~~for net proceeds~~in the Company without causing a Change of $~~17.1~~ ~~million~~Control under the ~~Equity Distribution~~Term Loan Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry within the meaning of the Private Securities Litigation Reform Act of ~~1955,~~1995, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding our future results of operations and financial position, business strategy, prospective products and product candidates, their expected performance and impact on healthcare costs, marketing clearance from the ~~FDA,~~U.S. Food and Drug Administration (“FDA”), reimbursement for our product candidates, research and development costs, timing of regulatory filings, timing and likelihood of success, plans and objectives of management for future operations, availability of raw materials and components for our products, availability of funding for such operations and future results of anticipated products, are forward-looking statements. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements are subject to numerous risks, including, without limitation, the following:

These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q. Unless required by U.S. federal securities laws, we do not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made or to conform these statements to actual results. The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q, and Part I, Item 1A "Risk Factors" and Part II, Item ~~7A, “Risk Factors”~~7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, as updated by Part II, Item 1A—“Risk Factors” in this Quarterly Report on Form 10-Q.

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

We are an in vitro diagnostics company and leader in the rapid detection of sepsis-causing pathogens and antibiotic resistance genes. We are dedicated to improving patient care and reducing the cost of care by helping clinicians effectively treat patients faster than ever before. We have developed innovative products that offer a rapid, sensitive and simple alternative to existing diagnostic methodologies. We are developing a broad set of applications aimed at improving patient outcomes, reducing the cost of healthcare, and lowering mortality rates by helping medical professionals make earlier targeted treatment decisions. Our technology enables rapid detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as low as one colony forming unit per milliliter, or CFU/mL. We are currently targeting what we believe to be a range of critically underserved healthcare conditions, focusing initially on those for which a rapid ~~diagnosis will serve an important dual role – saving lives~~detection may enable faster targeted antimicrobial treatment, improve patient outcomes, and ~~reducing costs.~~reduce cost. Our current ~~development efforts primarily target~~focus includes three areas – sepsis, bioterrorism, and Lyme disease – which we believe collectively represent ~~areas of significant unmet medical need in which rapid detection and targeted treatment could lead to improved patient outcomes.~~a multi-billion dollar market opportunity.

Our primary commercial products include the ~~T2Dx~~®T2Dx® Instrument, the ~~T2Candida~~®T2Bacteria® Panel, the ~~T2Bacteria~~®T2Candida® Panel, the T2Resistance® Panel, and the ~~T2Resistance~~®T2Biothreat™ Panel. Our sepsis products – including the T2Dx Instrument, the T2Bacteria Panel, and the T2Candida Panel – are FDA-cleared products able to detect sepsis-causing pathogens directly from blood. Where traditional diagnostics like blood cultures and post-culture diagnostics may take days to produce results, our products are designed to detect these pathogens in three to five hours. We believe our products provide a significant and sustainable competitive advantage compared to other products in our markets.

We have never been profitable and have incurred net losses in each year since inception. Our accumulated deficit ~~at June 30, 2023~~on March 31, 2024 was ~~$558.5~~$597.8 million and we have experienced cash outflows from operating activities ~~over the past years.~~since inception. Substantially all of our net losses resulted from costs incurred in connection with our research and development programs, ~~and~~ from selling, general and administrative costs associated with our ~~operations.~~operations, and costs of product revenue. We have incurred significant commercialization expenses related to product sales, marketing, manufacturing and distribution of our FDA-cleared products, the T2Dx Instrument, T2Candida Panel, T2Bacteria Panel, and ~~T2Bacteria~~T2Biothreat Panel. In addition, we will continue to incur significant costs and expenses as we continue to develop other product candidates, improve existing products and maintain, expand and protect our intellectual property portfolio. We may seek to fund our operations through public equity or private equity or debt financings, as well as other sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop, commercialize and drive adoption of the T2Dx Instrument and the T2Candida, T2Bacteria, T2Resistance, and T2Biothreat Panels and future products.

We are subject to a number of risks similar to other early commercial stage life science companies, including, but not limited to commercially launching our products, development and market acceptance of our product candidates, development by our competitors of new technological innovations, protection of proprietary technology, and raising additional capital.

We believe that our cash and cash equivalents of ~~$16.1~~$6.2 million ~~at June 30, 2023~~on March 31, 2024 will not be sufficient to fund our current operating plan through the ~~fourth~~third quarter of ~~2023.~~2024. Certain elements of our operating plan cannot be considered probable, and in order to support our business we initiated a process to explore a range of strategic alternatives focused on maximizing value.

As part of our strategic restructuring program, we initiated a workforce reduction of nearly 30% in May 2023. Additionally, we are continuing to explore alternative strategic options, including an acquisition, merger, reverse merger, other business combination, sale of assets or licensing. We converted approximately 20% of our outstanding indebtedness into ~~equity.~~equity in July 2023 and a further approximately 35% in April 2024.

The Term Loan Agreement with CRG ~~Servicing LLC (“CRG”), as administrative agent and collateral agent (Note~~(See Note 6) has a minimum liquidity covenant which ~~requires~~initially required us to maintain a minimum cash balance of $5.0 million. In ~~February 2022,~~May 2023, CRG reduced the ~~lenders party thereto and we amended~~minimum liquidity covenant under the Term Loan Agreement extending the interest only period and maturity to December 30, 2023. In November 2022, CRG amended the Term Loan Agreement, extending the interest only period and maturity to December 30, 2024. On May 15, 2023, we notified CRG that we were not in compliance with the minimum liquidity covenant as of May 12, 2023 and on May 19, 2023, we, the lenders party thereto and CRG entered into a waiver and consent with respect to the Term Loan Agreement, reducing the minimum liquidity covenantfrom $5.0 million to $500,000 until December 31, 2023.

On November 22, 2022, the Company received notice from the Nasdaq indicating that the Company was in violation of the MVLS Rule. The Company was provided 180 days, or until May 22, 2023, to regain compliance, which includes maintaining a closing market value of its listed securities of at least $35 million for a minimum of ten consecutive trading days. On March 30, In July 2023, the Company ~~received notice from the Nasdaq indicating that the Company was in violation~~also converted $10.0 million of the ~~Minimum Bid Price Rule. On May 23,~~outstanding debt with CRG to equity. In October 2023, the ~~Nasdaq notified~~Term Loan Agreement was amended to extend both the ~~Company that its securities were subject to delisting due to non-compliance with the MVLS Rule~~interest-only period and the ~~Minimum Bid Price Rule. The Company requested a hearing with~~maturity date by one year from December 30, 2024 to December 31, 2025, and permanently reduce the ~~Nasdaq and on July 6, 2023 appealed~~minimum liquidity covenant from $5.0 million to the Nasdaq Hearings Panel for an extension to the time period in which to regain compliance with the MVLS Rule and the Minimum Bid Price Rule. On July 26, 2023, we filed a definitive proxy statement to effect a reverse stock split of our common stock in connection with our annual meeting that will occur in$500,000.

In September 2023, to help regain compliance with the Nasdaq rules. However, there is no assurance that the shareholder vote required for the reverse stock split or that any other actions that we take to restore our compliance with the Nasdaq rules will be successful. On July 27, 2023, the Nasdaq granted the Company’s ~~request for an extension~~milestone-based product development contract with BARDA expired, which may impact the Company’s ability to ~~comply with~~continue to fund the ~~applicable Nasdaq rules until November 20, 2023.~~development of its next-generation products.

These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that ~~the~~these financial statements are issued. Management’s plans to alleviate the conditions that raise substantial doubt include raising additional funding, ~~earning payments pursuant to our contract with BARDA,~~ delaying certain research projects and capital expenditures and eliminating certain future operating expenses in order to fund operations at reduced levels for us to continue as a going concern for a period of 12 months from the date ~~the~~these financial statements are issued. Management has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or adequately reduce expenditures, while reasonably possible, is less than probable. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of these ~~condensed consolidated~~ financial statements. See Part II, Item 1A—“Risk Factors” in this Quarterly Report on Form 10-Q.

In September 2014, we received marketing authorization from the United States Food and Drug Administration, or FDA, for our first two products, the T2Dx Instrument and the T2Candida Panel, or T2Candida. T2Candida, which ~~have~~runs on the T2Dx Instrument, has the ability to rapidly identify the five most clinically relevant species of Candida, a fungal pathogen known to cause sepsis, directly from ~~whole~~ blood specimens. The T2Dx Instrument and T2Candida ~~Panel~~ were CE marked in the European Union, or the EU, in July 2014.

In May 2018, we received market clearance from the FDA for the T2Bacteria® Panel, or T2Bacteria, which runs on the T2Dx Instrument and has the ability to rapidly identify ~~five~~six of the most common and deadly sepsis-causing bacteria directly from ~~whole~~ blood specimens. ~~The~~ T2Bacteria ~~Panel~~ was CE marked in the EU in June 2017.

In February 2019, our T2Resistance® Panel, or T2Resistance, was granted FDA Breakthrough Device designation and, in November 2019, it was CE marked in the EU. In December 2021, we initiated a U.S. clinical trial for T2Resistance. The clinical trial is expected to be completed in 2024, and we believe the ~~T2Resistance Panel.~~data from this trial may enable submission of a marketing application to the FDA in 2024.

In September 2019, the Biomedical Advanced Research and Development Authority, or BARDA, an office of the U.S. Department of Health and Human Services, or HHS, awarded us a milestone-based contract ~~with an initial value of $6 million, and a potential value of up to $62 million,~~ for the development of a next-generation diagnostic instrument, a comprehensive sepsis panel and a multi-target biothreat panel. In September 2020, BARDA exercised the first contract option valued at $10.5 million. In April 2021, BARDA agreed to modify the contract to accelerate product development by advancing future deliverables and adding a U.S. T2Resistance Panel into Option 1 of the ~~BARDA~~ contract. In September 2021, BARDA exercised Option 2A valued at approximately $6.4 million to further advance the new product development initiatives. In ~~March 2022, BARDA~~

~~exercised Option 2B valued at approximately $4.4 million. In~~ December 2021, we initiated the U.S. clinical trials for ~~the~~ T2Resistance and the T2Biothreat ~~Panels.~~Panel, or T2Biothreat. In March 2022, BARDA exercised Option 2B valued at approximately $4.4 million. In May 2022, BARDA exercised Option 3 valued at approximately $3.7 million to complete the U.S. clinical trials for ~~the~~ T2Resistance® ~~Panel~~ and T2Biothreat ~~Panel~~ and subsequently submit applications to the FDA for U.S. regulatory clearance for those product candidates. In December 2022 the T2Biothreat clinical evaluation was completed. In May 2023, we submitted a 510(k) premarket notification to the FDA for T2Biothreat and in September 2023, we received 510(k) clearance from the FDA to market T2Biothreat. The BARDA contract expired in September 2023.

In June 2020, we launched ~~the T2SARS-CoV-2 Panel, our~~a COVID-19 molecular diagnostic test, the T2SARS-CoV-2 Panel, or T2SARS-CoV-2, after validation of the test pursuant to the FDA’s policy permitting COVID-19 tests to be marketed prior to receipt of an Emergency Use Authorization, or EUA, subject to certain prerequisites. In August 2020, the FDA granted an EUA to ~~the~~ T2SARS-CoV-2 ~~Panel~~ for the qualitative direct detection

of nucleic acid from SARS-CoV-2 in upper respiratory specimens ~~(such as nasal, mid-turbinate, nasopharyngeal, and oropharyngeal swab specimens)~~ and bronchoalveolar lavage specimens from individuals suspected of COVID-19 by their healthcare provider. We ~~expect to continue to experience a decline in COVID-19 product~~marketed and sold T2SARS-CoV-2 between 2020 and 2023, with peak sales tied to our T2SARS-CoV-2 Panel, and the focus of our go-to-market strategy continues to be increasing sales of our sepsis test panels, expanding the installed base of our T2Dx Instruments, and solidifying commercial plansoccurring during 2021. In 2023, we experienced decreased demand for the ~~T2Lyme™ Panel.~~product as the incidence of COVID-19 infections decreased significantly and, as a result, we have stopped marketing, selling and manufacturing T2SARS-CoV-2.

OnIn July 8, 2022, we received Breakthrough Device designation for the T2Lyme Panel, ~~was granted FDA Breakthrough Device Designation.~~

~~On May 8, 2023, we filed an FDA 510(k) submission for the T2Biothreat™ Panel,~~or T2Lyme, a product that we developed in collaboration with the U.S. Department of Health and Human Services, Administration for Strategic Preparedness and Response, Biomedical Advanced Research and Development Authority (BARDA). The T2Biothreat Panel is a fully-automated, direct-from-blood molecular diagnostic test designed to run on the ~~FDA-cleared~~ T2Dx® Instrument and ~~simultaneously detects six biothreat pathogens identified as threats by~~detect Borrelia burgdorferi, the ~~U.S. Centers for Disease Control and Prevention, or CDC, including the organisms~~bacteria that cause ~~anthrax, tularemia glanders, plague~~Lyme disease. T2Lyme is intended to test individuals with signs and ~~typhus.~~symptoms of Lyme disease and aid in the diagnosis of early Lyme disease. In November 2022, the HHS and the Steven & Alexandra Cohen Foundation, or Cohen Foundation, selected T2 Biosystems as a Phase 1 winner in the LymeX Diagnostics Prize, a LymeX Innovation Accelerator prize competition intended to accelerate the development of Lyme disease diagnostics. As a Phase 1 winner, we received $100,000 and an invitation to participate in a second phase. In February 2024, we were selected as a Phase 2 winner and received $265,000.

OnIn July ~~27,~~ 2023, ~~the FDA informed the Company that its application for~~we received Breakthrough Device Designation for ~~the Company’s~~our Candida auris (C. auris) test, a direct-from-blood molecular diagnostic test ~~had been granted. The~~ ~~Candida auris~~ ~~test is a fully-automated, direct-from-blood test~~ designed ~~to rapidly detect the~~ ~~Candida auris~~ ~~pathogen and~~ to run on the ~~FDA-cleared~~ T2Dx ~~Instrument.~~Instrument and detect ~~Candida~~C. auris ~~(C. auris)~~. C. auris is a multidrug-resistant fungal pathogen recognized as a serious global health threat with a mortality rate of up to 60% ~~that has been labeled as a serious global health threat by the Centers for Disease Control~~, and ~~Prevention (CDC) and the World Health Organization (WHO). The CDC has deemed C. auris as an urgent antimicrobial resistant threat, as it can be~~is difficult to identify with standard laboratory methods, ~~some strains are resistant~~which can lead to ~~all three available classes~~inappropriate treatment. We plan to expand the test menu on the T2Dx Instrument by seeking 510(k) clearance from the FDA to add C. auris detection to the FDA-cleared T2Candida Panel.

In October 2023, we submitted a 510(k) premarket notification to the FDA to expand the number of ~~antifungals, it spreads easily~~pathogens detected on the FDA-cleared T2Bacteria Panel to include the detection of Acinetobacter baumannii (A. baumannii). A. baumannii is a cause of bloodstream infections especially in ~~healthcare facilities, and~~critically ill patients, which can ~~cause severe infections with high death rates. The CDC estimates~~range from a benign transient bacteremia to septic shock.

In December 2023, we submitted a 510(k) premarket notification to the ~~costs associated with U.S. fungal diseases, in general, are as high as $48 billion annually, and has called on public health professionals~~FDA to ~~help lower~~expand the ~~burden of fungal disease by continuing to raise awareness~~use of the ~~life-saving benefits~~T2Candida Panel to include pediatric testing. Candida species are a major contributor to morbidity and mortality in hospitalized children.

On March 30, 2023, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the last thirty consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 555(a)(2) (the “Minimum Bid Price Rule”). On May 23, 2023, Nasdaq notified the Company that its securities were subject to delisting due to non-compliance with the Minimum Bid Price Rule and to maintain a minimum value of ~~early detection~~listed securities (the “MVLS Rule”) of at least $35 million. The Company requested a hearing with Nasdaq and, ~~proper treatment.~~on July 6, 2023, appealed to the Nasdaq Hearings Panel for an extension to the time period in which to regain compliance with the MVLS Rule and the Minimum Bid Price Rule. On July 26, 2023, we filed a definitive proxy statement to effect a reverse stock split of our common stock in connection with our annual meeting that occurred in September 2023 as required by the Nasdaq Hearings Panel. On August 9, 2023, the Company received written notice from Nasdaq informing the Company that it had regained compliance with the MVLS Rule. On September 15, 2023, at the Company’s annual meeting of stockholders, the Company’s stockholders approved an amendment to the Company’s restated certificate of incorporation to effect a reverse stock split of the Company’s common stock. On October 12, 2023, the Company announced that its board of directors had approved the reverse stock split at the ratio of 1 post-split share for every 100 pre-split shares, which was effective as of October 12, 2023.

On October 31, 2023, the Company received written notice from Nasdaq informing the Company that it has regained compliance with the Minimum Bid Price Rule. The Company will be subject to a Mandatory Panel Monitor for a period of one year. If, within that one-year monitoring period, the Company fails to comply with the Minimum Bid Price Rule, the Company will not be permitted additional time to regain compliance with the Minimum Bid Price Rule. However, the Company will have an opportunity to request a new hearing with the Nasdaq Hearings Panel prior to the Company’s securities being delisted from Nasdaq.

On November 20, 2023, the Company received written notice from Nasdaq informing the Company that it no longer satisfied the MVLS Rule. In accordance with the terms of the Mandatory Panel Monitor, the Company was not granted a grace period but rather issued a delist determination, which will be stayed if the Company exercises its right to appeal by requesting a hearing and paying a non-refundable $20,000 fee. The Company has paid the $20,000 applicable fee and requested a new hearing, which will stay any further action by Nasdaq at least pending the issuance of its decision and the expiration of any extension that may be granted to the Company as a result of the hearing. The Company’s common stock will remain listed and eligible to trade on Nasdaq pending the outcome of the hearing. On February 15, 2024, the Company appealed to the Nasdaq Hearings Panel for an extension to the time period in which to regain compliance with the MVLS Rule. On March 11, 2024, the Company received notice from the Nasdaq Hearings Panel that it had granted the Company’s request for continued listing on Nasdaq, subject to the Company demonstrating compliance with Nasdaq’s MVLS Rule on or before May 20, 2024.

We generate revenue from the sale of our products, related services, reagent rental agreements and government contributions.

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred.

Product revenue is generated by the sale of instruments and consumable diagnostic tests predominantly through our direct sales force in the United States and distributors in geographic regions outside the United States. We generally do not offer product returns or exchange rights (other than those relating to defective goods under warranty) or price protection allowances to our customers, including our distributors. Payment terms granted to distributors are the same as those granted to end-user customers and payments are not dependent upon the distributors’ receipt of payment from their end-user customers. We either sell instruments to customers and international distributors or retain title and place the instrument at the customer site pursuant to a reagent rental agreement. When the instrument is placed under a reagent rental agreement, our customers generally agree to fixed term agreements, which can be extended, and incremental charges on each consumable diagnostic test purchased. Shipping and handling costs are billed to customers in connection with a product sale.

Fees paid to member-owned group purchasing organizations (“GPOs”) are deducted from related product revenues.

We warrant that consumable diagnostic tests will be free from defects, when handled according to product specifications, for the stated life of the product. To fulfill valid warranty claims, we provide replacement product free of charge.

Our current sales strategy is to drive adoption of our test platform installed base in hospitals and to increase test use by our existing hospital ~~customers, and to convert T2SARS-CoV-2 customers to sepsis testing.~~customers. Accordingly, we expect the following to occur:

The ~~Company has a milestone-based product development~~BARDA contract ~~with the BARDA and should BARDA reduce, cancel or not exercise additional options, the Company’s ability to continue to fund the development of its next-generation products may be hindered.~~expired in September 2023.

Cost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of our consumable diagnostic tests sold to customers and related license and royalty fees. Cost of product revenue also includes depreciation on the revenue-generating T2Dx Instruments that have been placed with our customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs on the T2Dx Instruments sold to customers; and other costs such as customer support costs, warranty and repair and maintenance expense on the T2Dx Instruments that have been placed with our customers under reagent rental agreements. We manufacture the T2Dx Instruments and part of our consumable diagnostic tests in our facilities. We outsource the manufacturing of components of our consumable diagnostic tests to contract manufacturers. We expect cost of product revenue to decrease as a percentage of revenue as a result of the cost of product revenue improvement initiatives.

Our research and development expenses consist primarily of costs incurred for the development of our technology and product candidates, technology improvements and enhancements, clinical trials to evaluate the clinical utility of our product candidates, and laboratory development and expansion, and include salaries and benefits, including stock-based compensation, research related facility and overhead costs, laboratory supplies, equipment, depreciation on T2Dx Instruments used in research and development activities and

contract services. Research and development expenses also include costs of delivering products or services associated with contribution revenue. We expense all research and development costs as incurred.

We ~~anticipate our overall research and development expenses to remain consistent. We~~ expect to continue developing additional product candidates, improving existing products, and conducting ongoing and new clinical trials. We have a milestone-based product development contract with the BARDA and should BARDA reduce, cancel or not exercise additional options, the Company’s ability to continue to fund the development of its next-generation products may be hindered.

Selling, general and administrative expenses consist primarily of costs for our sales, marketing, service, medical affairs, finance, legal, human resources, information technology, and general management functions, as well as professional services, such as legal, consulting and accounting services. Other selling, general and administrative expenses include commercial support activity, facility-related costs, fees and expenses associated with obtaining and maintaining patents, clinical and economic studies and publications, marketing expenses, and travel expenses. We expense the majority of selling, general and administrative expenses as incurred. We expect selling, general and administrative expenses to decrease as a percentage of revenue in future periods.

~~Interest income consists of interest earned on our cash and cash equivalents.~~

~~Interest expense~~ to related party consists primarily of interest expense on our notes payable, the amortization of deferred financing costs and debt discount.

The change in fair value of derivative related to Term Loan with related party consists of the change in fair value of the derivative associated with the CRG Term Loan Agreement.

The change in fair value of warrant liabilities consists of the changes in fair value of the Common Stock Warrants, Pre-Funded Warrants and Series A Warrant.

Other, ~~income~~net consists of dividend ~~and~~income, other investment ~~income.~~

~~Other expense consists of~~income, interest income earned on our cash and cash equivalents, non-recurring expenses ~~including issuance costs allocated to the Common Stock Warrants.~~

~~Other losses consists of~~and non-recurring ~~losses, including the loss on disposal of property~~gains and ~~equipment.~~losses.

We have prepared our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States. Our preparation of these condensed consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures at the date of the condensed consolidated financial statements, as well as revenue and expenses recorded during those periods. We evaluated our estimates and judgments on an ongoing basis. We based our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.

The items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 remained materially consistent. For a description of those critical accounting policies, please refer to our Annual Report on Form 10-K filing for the year ended December 31, ~~2022.~~2023.

Results of Operations for the Three Months Ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~


	Three Months Ended June 30,									Three Months Ended March 31,
	2023			2022			Change			2024			2023			Change
	(in thousands)									(in thousands)
Revenue:
Product revenue	$	1,964		$	2,559		$	(595	)	$	2,061		$	1,655		$	406
Contribution revenue		—			3,352			(3,352	)		—			423			(423	)
Total revenue		1,964			5,911			(3,947	)		2,061			2,078			(17	)
Costs and expenses:
Cost of product revenue		4,869			5,081			(212	)		4,202			3,995			207
Research and development		3,850			8,025			(4,175	)		3,721			4,471			(750	)
Selling, general and administrative		6,296			7,824			(1,528	)		6,738			7,299			(561	)
Total costs and expenses		15,015			20,930			(5,915	)		14,661			15,765			(1,104	)
Loss from operations		(13,051	)		(15,019	)		1,968			(12,600	)		(13,687	)		1,087
Other income (expense):
Interest income		2			2			—
Interest expense		(1,541	)		(1,346	)		(195	)
Change in fair value of derivative related to Term Loan		1,022			(1,675	)		2,697
Interest expense to related party											(1,179	)		(1,522	)		343
Change in fair value of derivative related to Term Loan with related party											(108	)		(770	)		662
Change in fair value of warrant liabilities		7,192			—			7,192			28			(1,304	)		1,332
Other income		37			4			33
Other expense		—			—			—
Other gains (losses)		(8	)		—			(8	)
Other, net											325			(682	)		1,007
Total other expense		6,704			(3,015	)		9,719			(934	)		(4,278	)		3,344
Net loss	$	(6,347	)	$	(18,034	)	$	11,687		$	(13,534	)	$	(17,965	)	$	4,431

Product revenue was ~~$2.0~~$2.1 million for the three months ended ~~June 30, 2023~~March 31, 2024 compared to ~~$2.6~~$1.7 million for the three months ended ~~June 30, 2022, a decrease~~March 31, 2023, an increase of ~~$0.6~~$0.4 million, which was driven by ~~lower~~higher consumables sales of ~~$0.4~~$0.2 million ~~primarily due to a decrease in~~and higher instrument and service revenue sales of ~~T2SARS-CoV-2 tests.~~$0.2 million.

Contribution revenue relates to our BARDA agreement and ~~was $0.0~~we had no contribution revenue for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$3.3~~$0.4 million for the three months ended ~~June 30, 2022.~~March 31, 2023. The decrease of ~~$3.3~~$0.4 million was due to ~~timing of~~ the ~~contract activity and less option amount available under Option 3, which was available for the first quarter of 2023, compared to Option 2A, which was available for the first quarter of 2022.~~BARDA agreement expiring in September 2023.

Cost of product revenue was ~~$4.9~~$4.2 million for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$5.1~~$4.0 million for the three months ended ~~June 30, 2022, a decrease~~March 31, 2023, an increase of $0.2 million. The ~~decrease~~increase was driven by $0.5 million of costs related to higher instrument sales and $0.2 million of increased costs primarily related to higher consumable sales, partially offset by $0.4 million of ~~lower shipping and other costs, $0.2 million of lower service and repair costs, $0.1 million of~~ decreased ~~costs primarily related to lower consumable sales of T2SARS-CoV-2, offset by $0.4 million of~~ costs due to the effect of a change in build plan and manufacturing inefficiencies and $0.1 million of ~~costs related to~~ lower ~~instrument sales.~~service and repair costs.

Research and development expenses were ~~$3.9~~$3.7 million for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$8.0~~$4.5 million for the three months ended ~~June 30, 2022,~~March 31, 2023, a decrease of ~~$4.1~~$0.8 million. ~~Lab~~Payroll related and stock-based compensation expenses decreased by $0.9 million due to lower employee headcount, lab and facility expenses decreased by ~~$1.8~~$0.4 million ~~primarily due to the timing of BARDA Option 3 compared to Option 2A~~ due to lower employee headcount and material purchases, ~~payroll related and stock-based compensation expenses decreased by $1.0 million due to lower employee headcount,~~ clinical expenses decreased by ~~$0.5~~$0.2 million, ~~due to the conclusion of several clinical trials,~~and consulting expenses decreased by ~~$0.5~~$0.1 million, ~~for BARDA,~~partially offset by increased research and ~~R&D~~development project related expenses ~~decreased by $0.4~~of $0.8 million.

Selling, general and administrative expenses were ~~$6.3~~$6.7 million for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$7.8~~$7.3 million for the three months ended ~~June 30, 2022,~~March 31, 2023, a decrease of ~~$1.5~~$0.6 million. The decrease was driven by lower payroll related and stock-based compensation expenses of ~~$1.3~~$0.8 million primarily due to lower employee headcount ~~lower marketing expenses of $0.3 million,~~ and lower ~~travel~~other expenses of $0.1 million, partially offset by $0.2 million of increased costs related to IT support services and facilities and a ~~$0.2~~$0.1 million increase in consulting expenses and legal expenses.

Interest expense to related party was $1.2 million and $1.5 million for the three months ended ~~June 30,~~March 31, 2024 and 2023, compared to $1.3 million for the three months ended June 30, 2022. Interest expense increased by $0.2 million primarily due to the February 2022 and November 2022 amendments to the CRG Term Loan Agreement which extended the interest only period and maturity date.respectively.

The change in fair value of the derivative instrument associated with the CRG Term Loan Agreement (see Note 6 of the notes to our condensed consolidated financial statements) was ~~$1.0 million reduction of expense for the three months ended June 30, 2023, compared to $1.7~~$0.1 million of expense for the three months ended ~~June 30, 2022.~~March 31, 2024, compared to $0.8 million of expense for the three months ended March 31, 2023.

The change in fair value of ~~the~~ warrant liabilities consists of a ~~$7.2~~less than $0.1 million reduction of expense primarily associated with the Common Stock Warrants (See Note 78 of the notes to our condensed consolidated financial statements) for the three months ended ~~June 30, 2023. There was no change in fair value of warrant liabilities recorded during the three months ended June 30, 2022.~~

~~Other income was immaterial for the three months ended June 30, 2023 and 2022.~~

~~Other expense was not recorded for the three months ended June 30, 2023 and 2022.~~

~~Other losses were immaterial for the three months ended June 30, 2023 and were not recorded for the three months ended June 30, 2022.~~

Product revenue was $3.6 million for the six months ended June 30, 2023 compared to $6.4 million for the six months ended June 30, 2022, a decrease of $2.8 million, which was driven by lower consumables sales of $2.1 million primarily due to a decrease in sales of T2SARS-CoV-2 tests, lower T2Dx Instrument and related sales of $0.4 million and lower revenue under our service agreements of $0.3 million.

Contribution revenue relates to our BARDA agreement and was $0.4 million for the six months ended June 30, 2023, compared to $6.7 million for the six months ended June 30, 2022. The decrease of $6.3 million was due to timing of the contract activity and less option amount available under Option 3, which was available for the first quarter of 2023, compared to Option 2A, which was available for the first quarter of 2022.

Cost of product revenue was $8.9 million for the six months ended June 30, 2023, compared to $11.3 million for the six months ended June 30, 2022, a decrease of $2.4 million. The decrease was driven by $0.8 million of lower shipping and other costs, $0.8 million of decreased costs primarily related to lower consumable sales of T2SARS-CoV-2, $0.7 million of lower service and repair costs, and $0.4 million of costs related to lower instrument sales, offset by $0.3 million of costs due to the effect of a change in build plan and manufacturing inefficiencies.

Research and development expenses were $8.3 million for the six months ended June 30, 2023, compared to $14.7 million for the six months ended June 30, 2022, a decrease of $6.4 million. Lab and facility expenses decreased by $3.0 million primarily due to the timing of BARDA Option 3 compared to Option 2A due to lower employee headcount, material purchases, payroll related and stock-based compensation expenses decreased by $1.4 million due to lower employee headcount, consulting expenses decreased by $1.1 million for BARDA, R&D project related expenses decreased by $0.5 million , and clinical-related expenses decreased by $0.4 million due to the conclusion of several clinical trials.

Selling, general and administrative expenses were $13.6 million for the six months ended June 30, 2023, compared to $17.1 million for the six months ended June 30, 2022, a decrease of $3.5 million. The decrease was driven by lower payroll related and stock-based compensation expenses of $3.1 million primarily due to lower employee headcount, a $0.3 million decrease in other expense primarily due to less IT support services and less facilities costs, lower marketing expenses of $0.3 million, a decrease in travel expenses of $ 0.1 million, and a decrease in consulting expenses of $0.1 million, partially offset by a $0.4 million increase in legal expenses.

~~Interest expense was $3.1 million and $3.0 million for six months ended June 30, 2023 and 2022, respectively.~~

The change in fair value of the derivative instrument associated with the CRG Term Loan Agreement (see Note 6 of the notes to our condensed consolidated financial statements) was $0.2 million reduction of expense for the six months ended June 30, 2023, compared to $1.7 million of expense for the six months ended June 30, 2022.

March 31, 2024. The change in fair value of the warrant liabilities consists of $1.3 million of expense during the three months ended March 31, 2023.

Other, net was a ~~$5.9 million~~ reduction of expense ~~primarily associated with the Common Stock Warrants and Pre-Funded Warrants (See Note 7~~ of ~~the notes to our condensed consolidated financial statements)~~$0.3 million for the ~~six~~three months ended ~~June 30, 2023. There~~March 31, 2024, primarily consisting of a $0.3 million cash prize received for the Phase 2 LymeX Diagnostics Prize and $0.1 million of dividend income. Other, net was ~~no change in fair value~~an expense of ~~warrant liabilities recorded during~~$0.7 million for the ~~six~~three months ended ~~June 30, 2022.~~

~~Other income was immaterial for six months ended June 30,~~March 31, 2023, ~~and 2022.~~

~~Other expense relates to the~~consisting of issuance costs allocated to the Common Stock ~~Warrants and was $0.6 million for the six months ended June 30, 2023. Other expense was not recorded for the six months ended June 30, 2022.~~

~~Other losses were immaterial for the six months ended June 30, 2023 and were not recorded for the six months ended June 30, 2022.~~Warrants.

We have incurred losses and cumulative negative cash flows from operations since our inception, and as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, we had an accumulated deficit of ~~$558.5~~$597.8 million and ~~$534.2~~$584.3 million, respectively. We have incurred significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We may seek to continue to fund our operations through public equity or private equity or debt financings, as well as other sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements if and when needed would have a negative impact on our business, results of operations and financial condition.

Historically, the Company has primarily funded its operations through public equity and private debt financings. The Company believes its cash position is insufficient to fund future operations ~~through~~without financings by the ~~second quarter~~first half of ~~2023~~2024. Financings may include public or private equity or debt financings. These financings may not be successful, however, or on terms favorable to the Company or its stockholders which would have a negative impact on the Company’s business, results of operations, financial condition and ~~in order~~the Company’s ability to ~~support our business, we initiated~~develop and commercialize its products and ultimately operate as a ~~process to explore a range of alternatives focusing on maximizing value.~~

On March 31, 2021, the Company entered into an Equity Distribution Agreement (“Equity Distribution Agreement”) with Canaccord Genuity LLC, as agent (“Canaccord”), pursuant to which the Company may offer and sell shares of common stock, for aggregate gross sale proceeds of up to $75.0 million from time to time from the effective date of the respective registration statement through Canaccord. In July 2023, the Company filed an amendment to the prospectus supplement relating to the offer and sale of shares under the Equity Distribution Agreement to increase the maximum amount of shares that the Company may sell pursuant to its Equity Distribution Agreement with Canaccord Genuity by $65 million. At the time of the amendment, the Company had sold shares of its common stock for gross proceeds of $71.3 million. Under the Equity Distribution Agreement, the Company sold ~~214,606,459~~628,470 shares of common stock during the three months ended ~~June 30, 2023~~March 31, 2024 for net proceeds of ~~$18.4~~$2.2 million, and ~~25,868,356~~6,528 shares of common stock during the three months ended ~~June 30, 2022 for net proceeds of $4.5 million. Under the Equity Distribution Agreement, the Company sold 215,259,581 shares of common stock during the six months ended June 30,~~March 31, 2023 for net proceeds of ~~$19.3 million, and 29,417,716 shares of common stock during the six months ended June 30, 2022 for net proceeds of $5.2~~$0.9 million. Prepaid expenses and other current assets at June 30, 2022 include $0.7 million of proceeds receivable from the sales of shares sold under the Equity Distribution Agreement during the six months ended June 30, 2022, which were received in early July 2022.

We pay Canaccord for its services of acting as agent 3% of the gross proceeds from the sale of the shares pursuant to the Equity Distribution Agreement. Legal and accounting fees are reclassified to share capital upon issuance of shares under the Equity Distribution Agreement.

In July 2023, the Company filed a prospectus supplement to increase the maximum amount of shares that the Company may sell pursuant to its Equity Distribution Agreement with Canaccord Genuity by $65 million.

As of ~~June 30, 2023,~~March 31, 2024, we had unrestricted cash and cash equivalents of approximately ~~$16.1~~$6.2 million. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, costs related to our products, clinical trials, laboratory and related supplies, supplies and materials used in manufacturing, legal and other regulatory expenses and general overhead costs.

Until such time as we can generate substantial product revenue, we expect to finance our cash needs, beyond what is currently available or on hand, through a combination of equity offerings, debt financings and revenue from existing and potential research and development and other collaboration agreements. If we raise additional funds in the future, we may need to relinquish valuable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us.

The COVID-19 pandemic has impacted and may continue to impact the Company’s operations as the pandemic shifts to an endemic health threat. Customers have significantly reduced their purchases of the Company’s COVID-19 tests and the Company believes this trend will continue.

We believe that our cash and cash equivalents of ~~$16.1~~$6.2 million ~~at June 30, 2023~~on March 31, 2024 will not be sufficient to fund our current operating plan ~~through~~at least a year from issuance of these condensed consolidated financial statements unless additional funds are raised in the ~~fourth quarter~~first half of ~~2023.~~2024. Certain elements of our operating plan cannot be considered ~~probable, and in order to support our business we initiated a process to explore a range of strategic alternatives focused on maximizing value.~~probable.

~~In May 2023, as part~~The Company's Term Loan Agreement (See Note 6 of the notes to our ~~strategic restructuring program, we initiated~~condensed consolidated financial statements) has a ~~workforce reduction~~minimum liquidity covenant, which initially required the Company to maintain a minimum cash balance of ~~nearly 30%. Additionally, we are continuing to explore alternative strategic options, including an acquisition, merger, reverse merger, other business combination, sale of assets or licensing.~~$5.0 million. In May 2023, CRG reduced the minimum liquidity covenant under the Term Loan Agreement from $5.0 million to ~~$500,000.~~$500,000 until December 31, 2023. In July 2023, the Company also converted ~~$10~~$10.0 million of the outstanding debt with CRG to ~~equity (see Note 6).~~

The Term Loan Agreement with CRG Servicing LLC, as administrative agent and collateral agent (“CRG”) (Note 6) has a minimum liquidity covenant which requires us to maintain a minimum cash balance of $5.0 million.equity. In ~~February 2022, CRG, the lenders party thereto and we amended~~October 2023, the Term Loan Agreement ~~extending~~was amended to extend both the ~~interest only~~interest-only period and the maturity date by one year from December 30, 2024 to December ~~30, 2023. In November 2022, CRG amended~~31, 2025, and permanently reduce the ~~Term Loan Agreement, extending~~minimum liquidity covenant from $5.0 million to $500,000. There can be no assurances that the ~~interest only period and maturity~~Company will continue to ~~December 30, 2024. On May 15, 2023, we notified CRG that we were not~~be in compliance with the ~~minimum liquidity~~cash covenant as of May 12, 2023 and on May 19, 2023, we, the lenders party thereto and CRG entered into a waiver and consent with respect to the Term Loan Agreement, reducing the minimum liquidity covenant to $500,000 until December 31, 2023.in future periods without additional funding.

On November 22, 2022, we received notice from the Nasdaq indicating that we were in violation of the MVLS Rule. We had 180 days, or until May 22, 2023, to regain compliance, which includes maintaining a closing market value of listed securities of at least $35 million for a minimum of ten consecutive trading days. On March 30, 2023, the Company received notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the last thirty consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq ~~indicating that the Company was in violation of the Minimum~~Capital Market under Nasdaq Listing Rule 555(a)(2) (the “Minimum Bid Price ~~Rule.~~Rule”). On May 23, 2023, ~~the~~ Nasdaq notified the Company that its securities were subject to delisting due to non-compliance with ~~Nasdaq’s MVLS Rule and~~the Minimum Bid Price ~~Rule.~~Rule and to maintain a minimum value of listed securities (the “MVLS Rule”) of at least $35 million. The Company requested a hearing with ~~the~~ Nasdaq and, on July 6, 2023, appealed to the Nasdaq Hearings Panel for an extension to the time period in which to

regain compliance with the MVLS Rule and the Minimum Bid Price Rule. On July 26, 2023, we filed a definitive proxy statement to effect a reverse stock split of our common stock in connection with our annual meeting that ~~will occur~~occurred in September 2023 as required by the Nasdaq Hearings Panel. On August 9, 2023, the Company received written notice from Nasdaq informing the Company that it had regained compliance with the MVLS Rule. On September 15, 2023, at the Company’s annual meeting of stockholders, the Company’s stockholders approved an amendment to ~~help~~the Company’s restated certificate of incorporation to effect a reverse stock split of the Company’s common stock. On October 12, 2023, the Company announced that its board of directors had approved the reverse stock split at the ratio of 1 post-split share for every 100 pre-split shares, which was effective as of October 12, 2023.

On October 31, 2023, the Company received written notice from Nasdaq informing the Company that it has regained compliance with the Minimum Bid Price Rule. The Company will be subject to a Mandatory Panel Monitor for a period of one year. If, within that one-year monitoring period, the Company fails to comply with the Minimum Bid Price Rule, the Company will not be permitted additional time to regain compliance with the Minimum Bid Price Rule. However, the Company will have an opportunity to request a new hearing with the Nasdaq ~~rules. However, there is~~Hearings Panel prior to the Company’s securities being delisted from Nasdaq.

On November 20, 2023, the Company received written notice from Nasdaq informing the Company that it no ~~assurance~~longer satisfied the MVLS Rule. In accordance with the terms of the Mandatory Panel Monitor, the Company was not granted a grace period but rather issued a delist determination, which will be stayed if the Company exercises its right to appeal by requesting a hearing and paying a non-refundable $20,000 fee. The Company has paid the $20,000 applicable fee and requested a new hearing, which will stay any further action by Nasdaq at least pending the issuance of its decision and the expiration of any extension that may be granted to the ~~shareholder vote required~~Company as a result of the hearing. On February 15, 2024, the Company appealed to the Nasdaq Hearings Panel for an extension to the ~~reverse stock split or that any other actions that we take~~time period in which to ~~restore our~~regain compliance with the ~~Nasdaq rules will be successful.~~MVLS Rule. On ~~July 27, 2023,~~March 11, 2024, the Company received notice from the Nasdaq Hearings Panel that it had granted the Company’s request for ~~an extension~~continued listing on Nasdaq, subject to ~~comply~~the Company demonstrating compliance with ~~the applicable rules until November~~Nasdaq’s MVLS Rule on or before May 20, ~~2023.~~2024.

These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that ~~the~~these financial statements are issued. Management's plans to alleviate the conditions that raise substantial doubt include raising additional funding and ~~reducing~~maintaining reduced operating expenses in order to continue as a going concern for a period of 12 months from the date ~~the~~these financial statements are issued. Management has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or ~~adequately reduce~~maintain reduced expenditures, while reasonably possible, is less than probable. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of these ~~condensed consolidated~~ financial statements. ~~See Part II, Item 1A—“Risk Factors” in this Quarterly Report on Form 10-Q.~~

The following is a summary of cash flows for each of the periods set forth below:

Net cash used in operating activities was approximately ~~$25.3~~$11.7 million for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and consisted of a net loss of ~~$24.3~~$13.5 million adjusted for non-cash items including stock-based compensation expense of ~~$2.7~~$1.6 million, non-cash lease expense of $0.4 million, non-cash interest expense to related party of $0.3 million, a change in fair value of warrant liabilities of less than $0.1 million, depreciation and amortization expense of $0.1 million, a change in fair value of the derivative related to Term Loan with related party of ~~$0.3~~$0.1 million, and a net change in operating assets and liabilities of $0.6 million. The net change in operating assets and liabilities was primarily driven by a decrease in accrued expenses of $0.7 million, a decrease in operating lease liabilities of $0.4 million, and an increase in accounts receivable of $0.2 million due to the timing and volume of instrument and consumable sales, partially offset by an increase in accounts payable of $0.4 million due to the timing of invoices and payments, a decrease in prepaid expenses and other assets of $0.2 million due to the timing of deposits for goods and services, and a decrease in inventory of $0.1 million due to the timing of purchases and shipments.

Net cash used in operating activities was approximately $12.9 million for the three months ended March 31, 2023 and consisted of a net loss of $18.0 million adjusted for non-cash items including stock-based compensation expense of $1.8 million, a change in fair value of the derivative related to Term Loan with related party of $0.8 million, non-cash interest expense to related party of ~~$1.1~~$0.5 million, non-cash lease expense of ~~$0.7~~$0.3 million, depreciation and amortization expense of ~~$0.5~~$0.3 million, a change in fair value of warrant liabilities of ~~$5.9~~$1.3 million, issuance costs related to Common Stock Warrants of $0.7 million, and a net change in operating assets and liabilities of ~~$0.5~~$0.7 million. The net change in operating assets and liabilities was primarily driven by a decrease in accrued expenses of ~~$1.9~~$2.2 million primarily due to the payout of 2022 bonuses, and $0.1 million reduction to legal fees due to expensing of the $0.1 million rent deposit for the Billerica lease, a decrease in operating lease liabilities of $0.6 million, an increase in inventory of $0.4 million due to market increases for securing raw materials and bulk materials purchases, partially offset by an increase in accounts payable of $0.9 million due to timing of invoices and payments, a decrease in accounts receivable of $0.8 million due to payment from BARDA and the timing and volume of instrument and consumable sales, a decrease in ~~prepaid expenses and other assets of $0.6 million due to timing of deposits for goods and services, and an increase in deferred revenue of $0.1 million.~~

~~Net cash used in~~ operating activities was approximately $24.4 million for the six months ended June 30, 2022, and consisted of a net loss of $34.5 million adjusted for non-cash items including stock-based compensation expense of $4.1 million, a change in fair value of the derivative of $1.7 million, non-cash interest expense of $1.1 million, non-cash lease ~~expense of $0.6 million, depreciation and amortization expense of $0.5 million and a net change in operating assets and~~ liabilities of ~~$2.2 million. The net change in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $2.4~~$0.3 million, due to BARDA payments and the timing and volume of instrument and consumable sales, an increase in accounts payable of $2.4 million primarily due to timing of invoices and payments and increased spend on inventory, a decrease in prepaid expenses and other assets of ~~$0.7~~$0.1 million due to ~~timing~~expensing of ~~proceeds receivable under~~ the ~~Equity Distribution Agreement,~~$0.1 million rent deposit for the Billerica lease, partially offset by an increase in ~~inventory~~accounts payable of ~~$1.9~~$1.8 million due to the timing of invoices and payments and an increase in inventory of $0.9 million due to market increases for securing raw materials and bulk materials purchases for favorable pricing, a decrease in accrued expenses of $0.6 million primarily from bonus payouts, a decrease in operating lease liabilities of $0.5 million, and a decrease in deferred revenue of $0.3 million due to ratably recognized service agreements.

There was no net cash provided by or used in investing activities for the three months ended March 31, 2024.

Net cash used in investing activities was ~~$0.2~~$0.1 million for the ~~six~~three months ended ~~June 30,~~March 31, 2023, and consisted of equipment purchases.

Net cash provided by investing activities was $9.8 million for the six months ended June 30, 2022, and primarily consisted of proceeds from sales of marketable securities of $10.0 million, partially offset by equipment purchases of $0.2 million.

Net cash provided by financing activities was approximately ~~$30.2~~$2.2 million for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, and consisted ~~primarily~~ of proceeds from sales of our common stock under the Equity Distribution Agreement, net of issuance costs, of ~~$19.3 million and proceeds from our February public offering, net of issuance costs, of $10.9~~$2.2 million.

Net cash provided by financing activities was approximately ~~$5.1~~$11.8 million for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, and consisted primarily of proceeds from public offering, net of issuance costs, of $10.9 million and proceeds from sales of our common stock under the Equity Distribution Agreement, net of issuance costs, of ~~$5.2 million and proceeds from issuance of shares under our 2014 Employee Stock Purchase Plan of $0.1 million, offset by payment of employee restricted stock tax withholdings of $0.2~~$0.9 million.

In December 2016, we entered into athe Term Loan Agreement with CRG. We initially borrowed $40.0 million pursuant to the Term Loan Agreement, which has a six-year term with three years (through December 30, 2019) of interest-only payments, which period was extended to four years (through December 30, 2020) upon achieving the Approval Milestone, after which quarterly principal and interest payments would be due through the December 30, 2022 maturity date. In February 2022, we amended our agreement with CRG to extend the maturity date from December 30, 2022 to December 30, 2023. In November 2022, CRG amended the Term Loan Agreement, extending the interest only period and maturity to December 30, 2024. Interest on the amounts borrowed under the Term Loan Agreement ~~accrues at~~and had the ability to borrow an ~~annual fixed rate~~additional $10.0 million upon receiving specified clearance for the marketing of ~~(a) prior to the Approval Milestone, 12.50%, 4.0% of which may be deferred during the interest-only period~~T2Bacteria by adding such amount to the aggregate principal loan amount and (b) following the Approval Milestone, 11.50%, 3.5% of which may be deferred during the interest-only period by adding such amount to the aggregate principal loan amount. In addition, if we achieve certain financial performance metrics, the loan will convert to interest-only until the DecemberApril 30, ~~2024 maturity, at which time all unpaid principal and accrued unpaid interest will be due and payable.~~2018 (the “Approval Milestone”). We ~~are required~~agreed to pay ~~CRG~~(1) a financing fee based on the ~~loan~~amount of principal ~~amount drawn. We are also required to pay~~drawn and (2) a final payment fee ~~of 8%, subsequently amended to 10%, of~~based on the principal outstanding upon repayment. WeThe debt discount related to the financing fee and the fees paid to CRG are ~~accruing~~being amortized over the loan term as interest expense. The final payment fee is accrued as interest expense and it is ~~included as a current liability at June 30, 2023 and December 31, 2022 on the balance sheet to conform to~~classified consistent with the classification of the ~~associated debt in those periods.~~Term Loan.

The Term ~~Loan Agreement with CRG~~Loan’s principal is classified as a current liability at June 30, 2023. In May 2023, the Company received a modification and waiver reducing the term loan’s minimum cash covenant from $5.0 million to $500,000 through December 31, 2023. After considering the probability the Company may not comply with the covenant unless additional funds are raised during the period June 30, 2023, through June 30, 2024, the Company concluded the term loan and related liabilities are current liabilities. The Term Loan Agreement with CRG is classified as a non-current liability at December 31, 2022, as the Company amended the agreement in November 2022, extending the interest only period and principal maturity to December 30, 2024. We have assessed the classification of the note payable as current based on facts and circumstances as of the date of this filing. Management continues to reassess at each balance sheet and filing date based on facts and circumstances and can provide no assurances regarding the probability of meeting its minimum liquidity covenant in future periods.

~~We may prepay all or a portion of the outstanding principal and accrued unpaid interest under the Term Loan Agreement~~prepayable at any time ~~upon prior notice subject to~~partially or in full without a ~~certain~~ prepayment fee during the first five years of the term and no prepayment fee thereafter. As security for our obligations under the Term Loan Agreement, we entered into a security agreement with CRG whereby we grantedpenalty. Borrowings are collateralized by a lien on substantially all of ~~its~~our assets, including intellectual property. The Term Loan Agreement ~~also contains customary~~provides for affirmative and negative covenants, ~~for a credit facility of this size and type,~~ including a requirement to maintain a minimum cash balance of $5.0 million.

In 2019, the Term Loan Agreement was amended to reduce minimum revenue targets, extend the interest-only period and extend the principal repayment. The final payment fee was increased from 8% to 10% of the principal amount outstanding upon repayment. We issued to CRG warrants to purchase 11,365 shares of the Company’s common stock (“New Warrants”) (See Note 6 of the notes to our condensed consolidated financial statements) at an exercise price of $77.50, with typical provisions for termination upon a change of control or a sale of all or substantially all of our assets. We also reduced the exercise price for the warrants previously issued to CRG to purchase an aggregate of 10,579 shares of our common stock to $77.50. All of the New Warrants are exercisable any time prior to September 9, 2029, and all of the previously issued warrants are exercisable any time prior to December 30, 2026.

In January 2021, the Term Loan Agreement was amended to extend the interest-only payment period through December 30, 2022, to extend the initial principal repayment to December 30, 2022, and to significantly reduce the revenue covenant for the 24-month period beginning on January 1, 2020. We did not pay or provide any consideration in exchange for this amendment. We accounted for the January 2021 amendment as a modification to the Term Loan Agreement. In June 2021, the Company satisfied the only remaining revenue covenant which was for the 24-month period beginning on January 1, 2020.

In February 2022, the Term Loan Agreement was amended to extend the interest-only payment period through December 30, 2023, and to extend the initial principal repayment to December 30, 2023. In November 2022, CRG amended the Term Loan, extending the interest only period and maturity to December 30, 2024. On May 19, 2023, we, the lenders party thereto and CRG entered into a waiver and consent with respect to the Term Loan Agreement, reducing the minimum liquidity covenant to $500,000 until December 31, 2023.

We did not pay or provide any consideration in exchange for these amendments. As the effective borrowing rate under the amended agreements was less than the effective borrowing rate under the previous agreement, a concession was deemed to have been granted under ASC 470-60. As a concession was granted, the agreements were accounted for as troubled debt restructurings under ASC 470-60. The amendments did not result in a gain on restructuring as the future undiscounted cash outflows required under the amended agreements exceed the carrying value of the debt immediately prior to the amendment.

The Term Loan Agreement includes a subjective acceleration clause whereby an event of default, including a material adverse change in the business, operations, or conditions (financial or otherwise), could result, at CRG’s discretion, in the acceleration of the obligations under the Term Loan Agreement. Under certain circumstances, a default interest rate of an additional 4.0% per annum ~~will~~may apply, at ~~the election of CRG~~CRG’s discretion, on all outstanding obligations during the occurrence and continuance of an event of default. ~~CRG has not exercised its right under this clause.~~

~~We assessed the terms and features of the~~The Term Loan ~~Agreement, including~~originally had a six-year term, with three years of interest-only payments accruing at a fixed rate of 12.5%, of which 4.0% could be paid in-kind by increasing the ~~interest-only period dependent on the~~principal balance. After achievement of the Approval Milestone, such rates would be reduced and a fourth year of interest-only payments would be granted, after which quarterly payments of principal and interest would be owed through the December 30, 2022 maturity date. Upon achievement of certain performance metrics, the loan would be converted to interest-only until its maturity, at which time all unpaid principal and interest would be due and payable.

In connection with the Term Loan Agreement, we issued warrants to CRG to purchase a total of 105 shares of our common stock, exercisable any time prior to December 30, 2026.

The Term Loan Agreement has been amended eleven times. As a result of those amendments, certain terms of the Term Loan have been revised as follows:

The warrants to purchase 218 shares of our common stock remain outstanding on March 31, 2024. There were no covenant violations during the three months ended March 31, 2024.

Amendments made in February 2022, November 2022, October 2023, and the partial principal cancellation in July 2023 were accounted for as troubled debt restructurings. For all restructurings, at the time of the restructuring the future undiscounted cash outflows required under the amended agreement exceeded the carrying value of the debt and no gain was recognized as a result of the restructurings. The effects of each restructuring were accounted for prospectively.

On February 15, 2024, the Company entered into a Securities Purchase Agreement with CRG and affiliated entities pursuant to which the Company will issue (i) shares of the Company’s common stock and (ii) to the extent that the issuance of the shares common stock results in CRG beneficially owning greater than 49.99% of the Company’s outstanding shares of common stock (or in the case of one of the affiliated entities, greater than 9.99% of the Company’s outstanding shares of common stock, determined without regard to any convertible securities held by CRG or affiliated entities), shares of newly designated convertible preferred stock, par value $0.001 per share, at a price per share of the lower of (a) the closing price for the Company’s common stock on Nasdaq on the date immediately prior to the closing of the transaction and (b) the average closing price over the five business days prior to the closing of the transaction, in exchange for CRG surrendering for cancellation $15.0 million of outstanding borrowing under the Term Loan Agreement. The closing of the transaction was conditioned on the approval of the Company’s stockholders at a stockholder meeting held on April 11, 2024 and was expected to occur within 10 business days following the approval of the Company’s stockholders.

On April 11, 2024, the Company's stockholders voted for the approval of the conversion of $15.0 million of its Term Loan Agreement with CRG into equity. On April 12, 2024, the Company issued an aggregate of 3,280,618 shares of Common Stock and an aggregate of 17,160.48 shares of Series A Convertible Preferred Stock, par value $0.001 per share to CRG in exchange for the cancellation of $15.0 million of outstanding loans under the Term Loan Agreement. Each share of Series A Convertible Preferred Stock is convertible into 100 shares of our common stock at the holder’s election following issuance, subject to beneficial ownership limitations.

On May 3, 2024, the Company entered into a Securities Purchase Agreement with CRG pursuant to which the Company will issue to CRG in a private placement offering 4,748,335 shares of the Company’s common stock in exchange for the cancellation of $15.0 million of outstanding loans under the Term Loan Agreement.

On April 12, 2024, the Company entered into a Consent and Amendment No. 10 to the Term Loan Agreement. The Consent provides for, among other things, (i) the consent of the Administrative Agent and CRG to the Exchange and (ii) the extension of the period in which the Company may elect to pay a portion of the accrued interest on the term loans in-kind to the earlier of (a) December 31, 2025 and (b) the date on which a default has occurred.

On May 3, 2024, the Company entered into a Consent and Amendment No. 11 to the Term Loan Agreement. Consent No. 11 provides for, among other things, (i) the consent of the Administrative Agent and CRG to the May Exchange and (ii) an amendment to the “Change of Control” definition to allow CRG or their affiliates to acquire a majority of shares in the Company without causing a Change of Control under the Term Loan Agreement.

The Term Loan Agreement with CRG was classified as a current liability both March 31, 2024 and December 31, 2023. In May 2023, we received a modification and waiver reducing the Term Loan’s minimum cash covenant from $5.0 million to $500,000 until December 31, 2023. In addition, in October 2023, the interest-only period and maturity of the Term Loan were extended to December 31, 2025, and the $500,000 liquidity covenant was made permanent. Because management believes it is probable that we will not be able to comply with the covenant unless additional funds are raised, we concluded that the Term Loan and related liabilities should be classified as current.

We have a single compound derivative instrument related to our Term Loan Agreement that requires us to pay additional interest of 4% per annum upon an event of default or if any obligation other than the unpaid principal amount of the Term Loan Agreement in order to identify any potential embedded features that would require bifurcation. In addition, under certain circumstances, a default interest rate of an additional 4.0% per annum will apply at the election of CRG on all outstanding obligations during the occurrence and continuance of an event of default, we concluded that the features of the Term Loan Agreement areis not ~~clearly and closely related to the host instrument, and represent a single compound derivative that~~paid when due. Fair value is ~~required to be re-measured at fair value on a quarterly basis.~~

determined quarterly. The fair value of the derivative ~~at June 30,~~was $1.7 million and $1.6 million as of March 31, 2024 and December 31, 2023, ~~is $0.8 million~~respectively, and is classified as a current liability on the condensed consolidated balance sheet at June 30, 2023 to match the classification of the related Term Loan Agreement. The fair value of the derivative at December 31, 2022 is $1.1 million and is classified as a non-current liability on the balance sheet at December 31, 2022sheets to match the classification of the related Term Loan Agreement.

There were no other material changes to our contractual obligations and commitments from those described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, we are not required to provide this information.

Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of ~~June 30, 2023.~~March 31, 2024. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported on a timely basis and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

Based on the evaluation of our disclosure controls and procedures as of ~~June 30, 2023,~~March 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, the Company’s disclosure controls and procedures were not effective due to a material ~~weakness~~weaknesses in our internal control over and accounting conclusions reached in classifying the Company’s term loan and related liabilities as of June 30, 2023. In May 2023, the Company received a modification and waiver reducing the term loan’s minimum cash covenant from $5.0 million to $500,000 through December 31, 2023. The probability of the Company not complying with the covenant for a period of 12-months from June 30, 2023, through June 30, 2024, was not initially assessed and the term loan and related liabilities were initially classified as long-term liabilities. After considering the probability the Company may not comply with the covenant unless additional funds are raised during the period June 30, 2023, through June 30, 2024, the Company concluded the term loan and related liabilities are current liabilities as of June 30, 2023. The Company will establish enhanced evaluation considerations including the timely use of third-party experts to prevent future occurrences.

Previously our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective due to a material weakness in our internal control over(1) the timeliness of assumptions and accounting conclusions reached for unusual transactions, (2) the accounting impact of changes in ~~valuing~~our sales demand forecast, (3) our year-end reagent inventory count process, and (4) the ~~common stock warrants sold~~review of the year-end tax provision and 382 study prepared by third-party experts. Each of these material weaknesses were included in the ~~Company’s February 17,~~Form 10-K for the year ended December 31, 2023 ~~public offering. Management determined that assumptions~~ and ~~valuation methodologies used~~remain unremediated as of March 31, 2024.

The Company took actions to ~~initially value~~remediate the deficiencies in its internal controls over financial reporting and ~~classify~~implemented additional processes designed to address the ~~warrants sold in the Company’s February 17, 2023, public offering were inconsistent~~underlying causes associated with the recent generally accepted accounting principles and the time required to refine the assumptions and methodologies and reach appropriate accounting and disclosure conclusions prevented the Company from filing its Form 10-Q timely and required an extension. The Company establishedabove-mentioned material weaknesses. These include (1) enhanced evaluation considerations of unusual transactions including the timely use of third-party experts, (2) enhanced evaluation procedures to ~~prevent future occurrences.~~consider the effect of changes in our sales demand forecast, (3) enhanced physical inventory count procedures, and (4) enhanced review procedures of the year-end tax provision and 382 study prepared by third-party experts.

Management will monitor the progress of the remediation plan and report regularly to the audit committee on the progress and results of the remediation plan, including the identification, status and resolution of internal control deficiencies. As the Company continues to evaluate and work to improve its internal control over financial reporting, management may determine to take additional measures to address the material weaknesses or determine to modify the remediation plans described above. Until the remediation steps set forth above are fully implemented and operating for a sufficient period of time, the material weaknesses described above will continue to exist.

Except as noted above, there have been no changes to the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

On September 8, 2021, the Company entered into a 10-year lease agreement (the “Lease”) with Farley White Concord Road, LLC (the “Landlord”), pursuant to which the Company leased approximately 70,125 square feet for its occupancy and use as office, laboratory and commercial manufacturing space at 290 Concord Road, Billerica, Massachusetts (the ~~“Premises”~~“Premises").

On January 17, 2023, the Landlord sent a Notice of Termination (the “Notice”) of the Lease to the Company. The Notice provides that the Landlord terminated the Lease because of the Company’s alleged failure to perform its obligations under the Lease in a timely manner and the Company’s alleged breach of the covenant of good faith and fair dealing. In connection with the Notice, on January 18, 2023, the Landlord filed a complaint in the Massachusetts Superior Court and has unilaterally deducted the Company’s $1,000,000 security deposit for its alleged damages. In addition, the Landlord is seeking damages for unpaid rent, brokerage fees, transaction costs, attorney's fees and court costs.

On March 1, 2023, the Company filed a response to the Landlord’s complaint and a counterclaim alleging that the Landlord breached its obligations under the contract and unlawfully drew on the security deposit, in addition to breaching its covenants of good faith and fair dealing, making fraudulent misrepresentations, and engaging in deceptive and unfair trade practices.

~~We believe the Landlord's claims are without merit and we intend~~The Company intends to ~~vigorously contest the claim.~~pursue legal remedies available under applicable laws.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern.

As of ~~June 30, 2023,~~March 31, 2024, we had ~~$16.1~~$6.2 million in unrestricted cash and cash equivalents which, without additional funding, will not be sufficient to meet our obligations within the next twelve months from the date of issuance of this Quarterly Report. Based on their assessment, our management has raised concerns about our ability to continue as a going concern. As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through equity ~~financings~~financing or otherwise could be impaired. Our ability to fund working capital, make capital expenditures, and service our debt depends on our ability to generate cash from operating activities, which is subject to its future operating success, and obtain financing on reasonable terms, which is subject to factors beyond our control, including general economic, political, and financial market conditions. The capital markets have in the past experienced, are currently experiencing, and may in the future experience, periods of upheaval that could impact the availability and cost of financing and there can be no assurances that such financing will be available to the Company on satisfactory terms, or at all. Management continues to explore raising additional capital through equity financing to supplement the Company’s capitalization and liquidity, but there can be no assurance that such financing will be available on terms commercially acceptable to the Company, or at all.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

† Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 406 under the Securities Act of 1933, or the Securities Act.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	20-4827488
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

101 Hartwell Avenue Lexington, Massachusetts	02421
(Address of principal executive offices)	(Zip Code)


		Page

	PART I FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Balance Sheets as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~	2

	Condensed Consolidated Statements of Stockholders’ Deficit for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~	3

	Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022~~2023	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2528

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3840

Item 4.	Controls and Procedures	3940

	PART II OTHER INFORMATION	4041

Item 1.	Legal Proceedings	4041

Item 1A.	Risk Factors	4041

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	4041

Item 3.	Defaults Upon Senior Securities	4041

Item 4.	Mine Safety Disclosures	4041

Item 5.	Other Information	4142

Item 6.	Exhibits, Financial Statement Schedules	4243

SIGNATURES		4445


	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities
Net loss	$	(13,534	)	$	(17,965	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		64			256
Non-cash lease expense		364			321
Stock-based compensation expense		1,595			1,833
Change in fair value of derivative related to Term Loan with related party		108			770
Change in fair value of warrant liabilities		(28	)		1,304
Issuance costs related to Common Stock Warrants		—			682
Loss on disposal of property and equipment		—			3
Non-cash interest expense to related party		341			526
Changes in operating assets and liabilities:
Accounts receivable		(168	)		840
Prepaid expenses and other assets		156			138
Inventories		149			(949	)
Accounts payable		358			1,833
Accrued expenses and other liabilities		(675	)		(2,211	)
Deferred revenue		(30	)		(1	)
Operating lease liabilities		(383	)		(320	)
Net cash used in operating activities		(11,683	)		(12,940	)
Cash flows from investing activities
Purchases and manufacture of property and equipment		—			(120	)
Net cash used in investing activities		—			(120	)
Cash flows from financing activities
Payment of employee restricted stock tax withholdings		(1	)		—
Proceeds from public offering, net of issuance costs					10,918
Proceeds from secondary offering, net of issuance costs		2,203			930
Net cash provided by financing activities		2,202			11,848
Net change in cash, cash equivalents and restricted cash		(9,481	)		(1,212	)
Cash, cash equivalents and restricted cash at beginning of period		16,240			11,880
Cash, cash equivalents and restricted cash at end of period	$	6,759		$	10,668


	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(24,312	)	$	(34,529	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		523			532
Non-cash lease expense		653			597
Stock-based compensation expense		2,746			4,086
Change in fair value of derivative related to Term Loan		(252	)		1,675
Loss on sales of marketable securities		—			2
Change in fair value of warrant liabilities		(5,888	)		—
Issuance costs related to Common Stock Warrants		682			—
Loss on disposal of property and equipment		3			—
Non-cash interest expense		1,050			1,054
Changes in operating assets and liabilities:
Accounts receivable		814			2,413
Prepaid expenses and other assets		574			711
Inventories		(374	)		(1,882	)
Accounts payable		938			2,392
Accrued expenses and other liabilities		(1,936	)		(563	)
Deferred revenue		105			(316	)
Operating lease liabilities		(653	)		(569	)
Net cash used in operating activities		(25,327	)		(24,397	)
Cash flows from investing activities
Proceeds from sales of marketable securities		—			9,998
Purchases and manufacture of property and equipment		(153	)		(177	)
Net cash (used in) provided by investing activities		(153	)		9,821
Cash flows from financing activities
Payment of employee restricted stock tax withholdings		—			(242	)
Proceeds from issuance of shares from employee stock purchase plan and stock option exercises		2			139
Proceeds from public offering, net of issuance costs		10,918			5,226
Proceeds from secondary offering, net of issuance costs		19,315			—
Net cash provided by financing activities		30,235			5,123
Net change in cash, cash equivalents and restricted cash		4,755			(9,453	)
Cash, cash equivalents and restricted cash at beginning of period		11,880			23,796
Cash, cash equivalents and restricted cash at end of period	$	16,635		$	14,343
Supplemental disclosures of cash flow information
Cash paid for interest	$	2,005		$	1,936
Supplemental disclosures of noncash activities
Transfer of T2 owned instruments and components from inventory	$	(322	)	$	(118	)
Cashless exercise of Common Stock Warrants	$	(1,448	)	$	—
Purchases of property and equipment included in accounts payable and accrued expenses	$	131		$	60


	Six Months Ended June 30,						Three Months Ended March 31,
	2023			2022			2024			2023
	(in thousands)						(in thousands)
Net cash (used in) provided by:
Operating activities	$	(25,327	)	$	(24,397	)	$	(11,683	)	$	(12,940	)
Investing activities		(153	)		9,821			—			(120	)
Financing activities		30,235			5,123			2,202			11,848
Net change in cash, cash equivalents and restricted cash	$	4,755		$	(9,453	)	$	(9,481	)	$	(1,212	)


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

Emerging growth company	☐


	Common					Additional						Accumulated Other			Total
	Stock					Paid-In			Accumulated			Comprehensive			Stockholders’
	Shares			Amount		Capital			Deficit			Loss			Deficit
Balance at December 31, 2021		3,328,017		$	3	$	459,314		$	(472,216	)	$	(4	)	$	(12,903	)
Stock-based compensation expense		—			—		2,552			—			—			2,552
Issuance of common stock from vesting of restricted stock		40,028			—		—			—			—			—
Surrender of shares due to tax withholding		(10,781	)		—		(230	)		—			—			(230	)
Issuance of common stock from secondary offering, net		70,981			—		1,432			—			—			1,432
Unrealized loss on marketable securities		—			—		—			—			(7	)		(7	)
Net loss		—			—		—			(16,495	)		—			(16,495	)
Balance at March 31, 2022		3,428,245		$	3	$	463,068		$	(488,711	)	$	(11	)	$	(25,651	)
Stock-based compensation expense		—			—		1,534			—			—			1,534
Issuance of common stock from vesting of restricted stock, exercise of stock options and employee stock purchase plan		23,386			—		139			—			—			139
Surrender of shares due to tax withholding		—			—		(12	)		—			—			(12	)
Issuance of common stock from secondary offering, net		517,352			1		4,493			—			—			4,494
Unrealized gain on marketable securities		—			—		—			—			11			11
Net loss		—			—		—			(18,034	)		—			(18,034	)
Balance at June 30, 2022		3,968,983		$	4	$	469,222		$	(506,745	)	$	—		$	(37,519	)


	Series B Convertible				Common				Additional					Accumulated Other		Total
	Preferred Stock				Stock				Paid-In		Accumulated			Comprehensive		Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Loss		Deficit
Balance on December 31, 2022		—	$	—		77,165	$	—	$	494,564	$	(534,219	)	$	—	$	(39,655	)
Stock-based compensation expense		—		—		—		—		1,833		—			—		1,833
Issuance of common stock from vesting of restricted stock, exercise of stock options and employee stock purchase plan		—		—		643		—		—		—			—		—
Issuance of common stock from secondary offering, net		—		—		6,528		—		930		—			—		930
Issuance of common stock and Pre-Funded Warrant from public offering, net		—		—		90,173		—		4,031		—			—		4,031
Issuance of common stock upon Common Stock Warrant cashless exercises		—		—		11,718		—		938		—			—		938
Issuance of common stock upon Pre-Funded Warrant exercises		—		—		17,406		—		2		—			—		2
Net loss		—		—		—		—		—		(17,965	)		—		(17,965	)
Balance on March 31, 2023		—	$	—		203,633	$	—	$	502,298	$	(552,184	)	$	—	$	(49,886	)


	June 30, 2023		June 30, 2022
Reconciliation of cash, cash equivalents and restricted cash at end of period
Cash and cash equivalents	$	16,084	$	13,212
Restricted cash		551		1,131
Total cash, cash equivalents and restricted cash	$	16,635	$	14,343


Balance at December 31, 2022	$	—
Issuance of Common Stock Warrant		7,568
Settlement due to cashless exercise		(938	)
Change in fair value		1,326
Balance at March 31, 2023	$	7,956
Issuance of Common Stock Warrant		—
Settlement due to cashless exercise		(510	)
Change in fair value		(7,178	)
Balance at June 30, 2023	$	268


	June 30, 2023			December 31, 2022
Term Loan Agreement including PIK interest, before unamortized discount and issuance costs	$	53,453		$	53,453
Less: unaccrued paid-in-kind interest		(2,767	)		(3,647	)
Less: unamortized discount and deferred issuance costs		(115	)		(155	)
Total notes payable	$	50,571		$	49,651


	Three and Six Months Ended June 30,
	2023		2022
Options to purchase common shares		188,793		198,579
Restricted stock units		378,238		227,966
Term Loan Warrants		21,944		21,944
Series A Warrant		42,857		—
Common Stock Warrants		6,851,852		—
Total		7,483,684		448,489


Exhibit Number		Exhibit Description

3.1		Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 001-36571) filed on August 12, 2014)

3.2		Certificate of Amendment of Restated Certificate of Incorporation of the Company dated July 23, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 001-36571) filed on July 23, 2021)

3.3		Certificate of Amendment of Restated Certificate of Incorporation of the Company dated October 12, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 001-36571) filed on October 12, 2022)

3.4		Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 001-36571) filed on July 6, 2023)

3.5		Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K (File No. 001-36571) filed on July 6, 2023)

3.6		Certificate of Amendment of Restated Certificate of Incorporation of the Company dated October 12, 2023 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 001-36571) filed on October 12, 2023)

3.7		Third Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.4 of the Company’s Form 10-Q (File No. 001-36571) filed on August 16, 2022)

4.1		Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014)

4.2		Fourth Amended and Restated Investors’ Rights Agreement, dated as of March 22, 2013, as amended (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014)

4.3		Registration Rights Agreement dated as of July 29, 2019 by and between T2 Biosystems Inc. and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K (File No. 001-36571) filed on July 30, 2019)

4.4		Form of Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 10-Q (File No. 001-36571) filed on August 16, 2022)

4.5		Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K (File No. 001-36571) filed on February 16, 2023)

4.6		Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K (File No. 001-36571) filed on February 16, 2023)

~~10.1†~~10.1		~~Amendment of Solicitation/Modification of Contract,~~Securities Purchase Agreement, dated ~~as of May 1, 2023~~February 15, 2024 by and between the Company and ~~Biomedical Advanced Research and Development Authority of~~ the ~~U.S. Department of Health and Human Services~~Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Form ~~10-Q~~8-K (File No. 001-36571) filed on ~~May 22, 2023)~~

~~10.2~~		~~Waiver and Consent to Term Loan Agreement with CRG Servicing LLC, dated May 19, 2023 (incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q (File No. 001-36571) filed on May 22, 2023)~~February 15, 2024)

31.1*		Certification of principal executive officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of principal financial officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document


Exhibit Number		Exhibit Description

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	T2 BIOSYSTEMS, INC.

Date: ~~August 8, 2023~~May 6, 2024	By:	/s/ JOHN SPERZEL
		John Sperzel
		President, Chief Executive Officer and Chairman of the Board
		(Principal Executive Officer)

Date: ~~August 8, 2023~~May 6, 2024	By:	/s/ JOHN M. SPRAGUE
		John M. Sprague
		Chief Financial Officer
		(Principal Accounting Officer and Principal Financial Officer)