When can we expect the conversion to common stock to occur and what catalysts might trigger it?

Timing of the conversion

Convertible preferreds are rarely converted on a day‑by‑day basis; the terms usually embed a conversion window that runs from the close of the financing up to 12‑24 months later, or until a pre‑set trigger is met. In TNF’s private placement the 7,000 preferred shares can be turned into 1.4 million common shares at the “initial conversion price.” Because the transaction was just closed, the earliest practical conversion date is likely within the next 3‑6 months – the company will need to file the amendment to its charter and obtain shareholder approval, both of which are routinely filed shortly after a private placement. If the preferred‐stock agreement includes a “automatic conversion” clause, the event will kick‑in the moment the common‑stock price reaches the conversion price, which is normally set at a modest premium to the market price at issuance.

Catalysts that could trigger conversion

1. Share‑price rally to the conversion price – The most common trigger is the common‑stock price touching the conversion price (usually a ~10‑15 % premium to the closing price at the time of the placement). Any upward momentum – e.g., positive trial data, a favorable FDA advisory meeting, or an earnings beat that lifts the stock toward the $X‑per‑share threshold – will accelerate conversion pressure.
   
2. Liquidity‑or‑capital‑raising events – A secondary equity offering, a strategic partnership, or a merger‑‑and‑acquisition announcement can prompt the preferred holder (the “largest strategic stockholder”) to convert, especially if they wish to increase voting power in the next capital‑raising round.
   
3. Corporate‑governance or deadline dates – The preferred agreement often contains a “forced conversion” after 18‑24 months or upon a change‑of‑control. Watch for any SEC filing that amends the charter or any M&A rumor – both can serve as a catalyst.
   

Trading implication

From a technical standpoint, the stock is now defending the $[conversion‑price] level; a breakout above it could draw significant conversion‑induced supply (up to ~1.4 M additional shares), which historically leads to short‑term price compression. Until the conversion window lapses, the upside is capped, while the downside is amplified by the dilution risk. Actionable play: hold a cautious long position with a tight stop just below the current support (~$Y) and monitor for any news that would push the price toward the conversion price, especially upcoming FDA or earnings releases. If the price consistently stagnates below the conversion threshold, consider a short‑side hedge to pre‑empt a forced conversion event later in the fiscal year.