UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________

FORM 10-Q

____________________________________________


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

For the quarterly period ended March 31, 2024


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

For the transition period from ___________ to ___________

Commission File Number 001-40363

__________________________________________

TRANSCODE THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

__________________________________________

Delaware

(State or Other Jurisdiction of

Incorporation or Organization)

81-1065054

(I.R.S. Employer

Identification No.)

6 Liberty Square, #2382

Boston, Massachusetts

(Address of Principal Executive Offices)

02109

(Zip Code)

(857) 837-3099

(Registrant’s Telephone Number, Including Area Code)

__________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share	RNAZ	The Nasdaq Stock Market LLC

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, 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.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

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 to 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 ☒

At May 10, 2024, the registrant had 6,622,053 shares of Common Stock, $0.0001 par value per share, outstanding.

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TRANSCODE THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

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		PAGE NUMBER

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS		5
BALANCE SHEETS AS OF MARCH 31, 2024 (UNAUDITED) AND DECEMBER 31, 2023		5
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)		6
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)		7
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)		8
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)		9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		45
ITEM 4. CONTROLS AND PROCEDURES		46

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS		47
ITEM 1A. RISK FACTORS		47
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		47
ITEM 3. DEFAULTS UPON SENIOR SECURITIES		48
ITEM 4. MINE SAFETY DISCLOSURES		48
ITEM 5. OTHER INFORMATION		48
ITEM 6. EXHIBITS		49
SIGNATURES		51

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms, or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

●

our cash position, our estimates and expectations regarding our capital requirements, cash and expense levels, liquidity sources, our need for additional financing and our ability to obtain, on satisfactory terms or at all, the financing required to support operations, research, development, clinical trials, and commercialization of products;

●

a potential delisting of our common stock from trading on the Nasdaq Capital Market;

●

our ability to continue as a going concern;

●

the results and timing of our preclinical and clinical trial activities, including but not limited to our ability to enroll a sufficient number of patients timely to advance our clinical trials;

●

our ability to expand our therapeutic candidate portfolio through internal research and development or the acquisition or in-licensing of intellectual property assets;

●

the therapeutic benefits, effectiveness and safety of our therapeutic candidates;

●

our ability to receive regulatory approval for our therapeutic candidates in the United States, Europe and other geographies;

●

the expected regulatory approval pathway for our therapeutic candidates;

●

potential changes in regulatory requirements, and delays or negative outcomes from the regulatory approval process;

●

our reliance on third parties for the planning, conduct and monitoring of clinical trials, for the manufacture of clinical drug supplies and drug product meeting our specifications, and for other requirements;

●

our estimates of the size and characteristics of the markets that may be addressed by our therapeutic candidates;

●

market acceptance of our therapeutic candidates that are approved for marketing in the United States or other countries;

●

our ability to successfully commercialize our therapeutic candidates, if approved for marketing;

●

the safety and efficacy of therapeutics marketed by our competitors that are targeted to indications which our therapeutic candidates have been developed to treat;

●

our ability to utilize our proprietary technological approach to develop and commercialize our therapeutic candidates;

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●

our heavy dependence on licensed intellectual property, including our ability to source and maintain licenses from third-party owners;

●

our ability to protect our own or in-licensed intellectual property and operate our business without infringing the intellectual property rights of others;

●

our ability to attract, retain and motivate key personnel;

●

our ability to generate revenue and become profitable;

●

our dependance on contract research organizations and other institutions to manage our clinical trials;

●

the impact of natural disasters, global pandemics (including further outbreaks of existing strains of COVID-19 or new variants of the virus), armed conflicts and wars, labor disputes, lack of raw materials or other supplies, issues with facilities and equipment, or other forms of disruption to business operations at our manufacturing or laboratory facilities or those of our vendors;

●

potential collaborations to license and commercialize any therapeutic candidates which receive regulatory approval in the future in or outside of the United States; and

●

other risks and uncertainties, including those listed under the caption “Risk Factors” in our Annual Report on Form 10-K and in our other regulatory filings, including in this Quarterly Report on Form 10-Q.

The risks set forth above are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in or implied by any forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events and with respect to our business and future financial performance, and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under “Risk Factors” in our Annual Report on Form 10-K and in our other regulatory filings and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You are advised, however, to consult any further disclosure we make in our reports filed with the United States Securities and Exchange Commission, or SEC.

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This Quarterly Report on Form 10-Q may include data that we obtained from industry publications and third-party research, surveys and studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. This Quarterly Report on Form 10-Q also may include data based on our own internal estimates and research, including estimates regarding the impact of the COVID-19 pandemic (or related pandemic caused by coronavirus variants) on our financial performance and business operations. Our internal estimates have not been verified by any independent source and, while we believe any data obtained from industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data. Such third-party data, as well as our internal estimates and research, are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” in our Annual Report on Form 10-K and in our other regulatory filings and elsewhere in this Quarterly Report on Form 10-Q. These and other factors could cause our results to differ materially from those expressed in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may contain trademarks, service marks and trade names of third-parties which are the property of their respective owners. Our use or display of third-parties’ trademarks, service marks, trade names or products in this Quarterly Report on Form 10-Q is not intended to, and does not, imply a relationship with such parties, or any endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ®, TM or SM symbols, but the omission of such symbols is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.

For purposes of this Quarterly Report on Form 10-Q, TransCode Therapeutics® is referred to as TransCode. Additionally, “we,” “our,” “us” and the “Company” refer to TransCode.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRANSCODE THERAPEUTICS, INC.

BALANCE SHEETS


	March 31,		December 31,
	2024		2023
	(Unaudited)
Assets
Current assets:
Cash	$	4,913,676	$	2,767,598
Prepaid expenses and other current assets		1,800,346		1,687,846
Total current assets		6,714,022		4,455,444
Property and equipment, net of depreciation		92,379		120,707
Right-of-use asset, net of amortization		372,210		481,694
Security deposit		111,856		111,856
Total assets	$	7,290,467	$	5,169,701
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	2,366,764	$	3,051,259
Deferred grant income		—		27,057
Short-term lease liability		339,408		412,280
Total current liabilities		2,706,172		3,490,596
Long-term lease liability		—		38,291
Total liabilities		2,706,172		3,528,887
Stockholders’ equity:
Preferred stock – $0.0001 par value; 10,000,000 shares authorized at March 31, 2024, and December 31, 2023; -0- shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Common stock – $0.0001 par value, 290,000,000 shares authorized at March 31, 2024, and December 31, 2023; 5,808,053 and 627,448 shares issued and outstanding at March 31, 2024, and December 31, 2023, respectively		581		63
Additional paid-in capital		54,326,870		48,057,095
Accumulated deficit		(49,743,156)		(46,416,344)
Total stockholders’ equity		4,584,295		1,640,814
Total liabilities and stockholders’ equity	$	7,290,467	$	5,169,701

The accompanying notes are an integral part of these unaudited financial statements.

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TRANSCODE THERAPEUTICS, INC.

STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	March 31,
	2024		2023
Operating expenses
Research and development	$	1,759,020	$	2,591,350
General and administrative		1,529,962		2,296,334
Total operating expenses		3,288,982		4,887,684
Operating loss		(3,288,982)		(4,887,684)

Other income (expense)
Grant income		27,057		79,409
Currency exchange gain/(loss)		(55,349)		—
Interest income		168		4,770
Interest expense		(9,706)		(13,429)
Total other income (expense)		(37,830)		70,750
Net loss	$	(3,326,812)	$	(4,816,934)

Basic and diluted loss per share
Net loss	$	(3,326,812)	$	(4,816,934)
Weighted-average common shares outstanding		5,142,398		18,593
Net loss per share	$	(0.65)	$	(259.07)

The accompanying notes are an integral part of these unaudited financial statements.

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TRANSCODE THERAPEUTICS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)


								Total
				Additional				Stockholders’
	Common Stock			Paid-In		Accumulated		Equity
	Shares	Amount		Capital		Deficit		(Deficit)
Three months ended March 31, 2024
Balance, December 31, 2023	627,448	$	63	$	48,057,095	$	(46,416,344)	$	1,640,814
Net loss	—		—		—		(3,326,812)		(3,326,812)
Issuances of common stock, net	5,180,605		518		6,086,623		—		6,087,141
Share based compensation	—		—		183,152		—		183,152
Balance, March 31, 2024 (unaudited)	5,808,053	$	581	$	54,326,870	$	(49,743,156)	$	4,584,295

Three months ended March 31, 2023
Balance, December 31, 2022	16,222	$	2	$	31,110,943	$	(27,870,249)	$	3,240,696
Net loss	—		—		—		(4,816,934)		(4,816,934)
Issuances of common stock, net	3,558		—		1,180,686		—		1,180,686
Share based compensation	—		—		158,760		—		158,760
Balance, March 31, 2023 (unaudited)	19,780	$	2	$	32,450,389	$	(32,687,183)	$	(236,792)

The accompanying notes are an integral part of these unaudited financial statements.

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TRANSCODE THERAPEUTICS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
	March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(3,326,812)	$	(4,816,934)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		32,164		29,640
Amortization of right-of-use asset		109,483		70,559
Share-based compensation expense		183,152		158,760
Changes in assets and liabilities:
Prepaid expenses and other current assets		(112,500)		(673,207)
Accounts payable and accrued expenses		(684,493)

SEC Form 10-Q filed by TransCode Therapeutics Inc.