Transcode Therapeutics, Inc S-1/A, filed Sep 11, 2023

Transcode Therapeutics, Inc. (RNAZ)

S-1/A 2023-09-11

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	Delaware			2834			81-1065054
	(State or other jurisdiction of incorporation or organization)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification No.)

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

	TRADEMARKS, SERVICE MARKS AND TRADE NAMES					i
	WHERE YOU CAN OBTAIN MORE INFORMATION					ii
	INCORPORATION BY REFERENCE					iii
	PROSPECTUS SUMMARY					1
	THE OFFERING					16
	SUMMARY FINANCIAL DATA					19
	RISK FACTORS					21
	CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS					31
	INDUSTRY AND OTHER DATA					33
	USE OF PROCEEDS					34
	DIVIDEND POLICY					35
	CAPITALIZATION					36
	DILUTION					38
	DESCRIPTION OF CAPITAL STOCK AND SECURITIES WE ARE OFFERING					40
	MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS					46
	UNDERWRITING					52
	LEGAL MATTERS					58
	EXPERTS					58

	Six Months Ended June 30,						Years Ended December 31,
	2023			2022			2022			2021
	Unaudited
Statement of Operations Data
Operating expenses
Research and development		$	5,557,260		$	4,501,604		$	10,232,366		$	2,753,966
General and administrative			4,474,688			3,683,191			8,433,448			3,397,169
Total operating expenses			10,031,948			8,184,795			18,665,814			6,151,135
Operating loss			(10,031,948)			(8,184,795)			(18,665,814)			(6,151,135)
Other income (expense)
Change in fair value of derivative liabilities			—			—			—			(867,000)
Change in fair value of warranty liability			—			—			—			(6,109)
Grant income			868,345			41,720			1,080,436			278,333
Loss on sale of equipment			—			—			—			(3,082)
Interest expense			—			—			—			(95,070)
Interest income			5,017			1,773			20,410			664
Total other income (expense)			873,362			43,493			1,100,846			(692,264)
Loss before income taxes			(9,158,586)			(8,141,302)			(17,564,968)			(6,843,399)
Income tax expense (benefit)			—			—			—			—
Net loss		$	(9,158,586)		$	(8,141,302)		$	(17,564,968)		$	(6,843,399)
Basic and diluted loss per common share(1)		$	(8.97)		$	(12.55)		$	(27.07)		$	(16.24)
Weighted average number of common shares outstanding, basic and diluted(1)			1,020,644			648,862			648,861			421,294

				December 31,
	June 30, 2023			2022			2021
	Unaudited
Balance Sheet Data
Cash		$	3,572,475		$	4,968,418		$	20,825,860
Current assets			4,892,937			7,379,405			22,732,175
Total assets			5,881,545			7,587,986			22,938,443
Current liabilities			3,523,430			4,347,290			2,534,097
Total liabilities			3,789,082			4,347,290			2,534,097
Total stockholders’ equity			2,092,463			3,240,696			20,404,346

	June 30, 2023
	(unaudited)
	Actual			As Adjusted
Cash		$	3,572,475		$	12,232,703
Stockholders’ equity
Preferred stock – $0.0001 par value; 10,000,000 shares authorized actual and as adjusted; no shares issued or outstanding actual or as adjusted			—			—
Common stock – $0.0001 par value; 290,000,000 shares authorized; 1,950,674 shares issued and outstanding actual; 10,650,674 shares issued and outstanding as adjusted		$	195		$	1,065
Additional paid-in capital			39,121,104			47,780,462
Accumulated deficit			(37,028,836)			(37,028,836)
Total stockholders’ equity		$	2,092,463		$	10,752,691
Total capitalization		$	2,092,463		$	10,752,691

Assumed public offering price per share			$	1.15
Net tangible book value per share at June 30, 2023	$	1.07
Decrease in book value per share attributable to new investors	$	0.06
As adjusted net tangible book value per share after this offering			$	1.01
Dilution per share to new investors			$	0.14

Description	Number of Shares		Exercise Price Per Share
IPO Underwriter Warrants		15,625		$	100.00
February 2023 Placement Agent Warrants		9,962			13.18
Consultant Warrants		6,250			10.00
Series A-1 Warrants		2,000,000			3.25
Series A-2 Warrants		2,000,000			3.25
June 2023 Placement Agent Warrants		140,000			4.38
June 2023 Pre-funded Warrants		950,000			0.01

Underwriter	Number of Shares	Number of Pre-Funded Warrants
ThinkEquity
Total

	Amount paid or to be paid
SEC registration fee		$	1,347
FINRA filing fee			2,333
Printing and mailing			40,000
Legal fees and expenses			250,000
Accounting fees and expenses			30,000
Miscellaneous			171,320
Total		$	495,000


	Exhibit number			Description
	1.1*			Form of Underwriting Agreement.
	3.1			Amended and Restated Certificate of Incorporation of TransCode Therapeutics, Inc. (Incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1, filed on February 26, 2021 (File No. 333-253599)).
	3.2			Certificate of Amendment to Amended and Restated Certificate of Incorporation of TransCode Therapeutics, Inc. (Incorporated by Reference to Exhibit 1.1 to the Registrant’s Quarterly Report on Form 10-Q, filed on August 14, 2023).
	3.3			Amended and Restated Bylaws of TransCode Therapeutics, Inc. (Incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-1, filed on February 26, 2021 (File No. 333-253599)).
	4.1			Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, filed on April 8, 2021 (File No. 333-253599)).
	4.2*			Form of Pre-funded Warrant.
	4.3*			Form of Underwriter’s Warrant (Included as Exhibit B to Exhibit 1.1 hereto).
	4.4			Form of Underwriter Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599)).
	4.5			Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed on February 17, 2023 (File No. 001-40363)).
	4.6			Form of Common Stock Purchase Warrant (Incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1, filed on June 6, 2023 (File No. 333-272082)).
	4.7			Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.3 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on June 5, 2023 (File No. 333-272082)).
	4.8			Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.4 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on June 5, 2023 (File No. 333-272082)).
	5.1*			Opinion of Goodwin Procter LLP.
	10.1#			2020 Stock Option and Incentive Plan and form of award agreements thereunder (Incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1, filed on February 26, 2021 (File No. 333-253599).
	10.2#			2021 Stock Option and Incentive Plan and form of award agreements thereunder (Incorporated by reference to Exhibit 10.2 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599).


	Exhibit number			Description
	10.3#			Senior Executive Cash Incentive Bonus Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599).
	10.4#			Form of Indemnification Agreement between the Registrant and each of its executive officers (Incorporated by reference to Exhibit 10.4 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599).
	10.5#			Form of Indemnification Agreement between the Registrant and each of its directors (Incorporated by reference to Exhibit 10.5 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599)).
	10.6			Exclusive Patent License Agreement by and between TransCode Therapeutics, Inc. and The General Hospital Corporation, d/b/a Massachusetts General Hospital, dated as of October 26, 2018 (Incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, filed on February 26, 2021 (File No. 333-253599)).
	10.7#			First Amendment to Exclusive Patent License Agreement by and between TransCode Therapeutics, Inc. and The General Hospital Corporation, d/b/a Massachusetts General Hospital, dated as of October 30, 2020 (Incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, filed on February 26, 2021 (File No. 333-253599)).
	10.8#			2021 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, filed on March 24, 2021 (File No. 333-253599)).
	10.9#			Employment Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Robert Michael Dudley (Incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1, filed on April 8, 2021 (File No. 333-253599)).
	10.10#			Letter Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Robert Michael Dudley (Incorporated by reference to Exhibit 10.10 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1, filed on April 8, 2021 (File No. 333-253599)).
	10.11#			Employment Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Thomas A. Fitzgerald (Incorporated by reference to Exhibit 10.11 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1, filed on April 8, 2021 (File No. 333-253599)).
	10.12#			Letter Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Thomas A. Fitzgerald (Incorporated by reference to Exhibit 10.12 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1, filed on April 8, 2021 (File No. 333-253599)).
	10.13			Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on February 17, 2023).
	10.14			Common Stock Purchase Agreement, dated April 13, 2023, by and between TransCode Therapeutics, Inc. and White Lion Capital LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on April 13, 2023).
	10.15			Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 8-K, filed on June 6, 2023 (File No. 001-40363))
	21.1**			List of Subsidiaries of the Registrant.
	23.1*			Consent of Withum Smith+Brown, PC, independent registered public accounting firm.
	23.2*			Consent of Goodwin Procter LLP (included in Exhibit 5.1).
	24.1**			Power of Attorney (included on signature page).
	107*			Filing Fee Table.


NAME	TITLE	DATE
/s/ Robert Michael Dudley Robert Michael Dudley	Director and Chief Executive Officer (Principal Executive Officer)	September 8, 2023
/s/ Thomas A. Fitzgerald Thomas A. Fitzgerald, MBA	Director and Chief Financial Officer (Principal Financial and Accounting Officer)	September 8, 2023
* Philippe P. Calais, PhD	Director	September 8, 2023
* Erik Manting, PhD	Director	September 8, 2023
* Magda Marquet, PhD	Director	September 8, 2023
By: /s/ Robert Michael Dudley Robert Michael Dudley Attorney-in-Fact

	Attn:	Stephen Older, Esq.
		Rakesh Gopalan, Esq.

	Email:	solder@mcguirewoods.com
		rgopalan@mcguirewoods.com

Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule 1 hereto:

THINKEQUITY LLC

By:
	Name:
	Title:

	Very truly yours,

	TRANSCODE THERAPEUTICS, INC.

	By:
		Name:
		Title:

Number of Firm Shares:			[·]
Number of Firm Pre-funded Warrants:			[·]
Number of Option Shares:			[·]
Number of Option Pre-funded Warrants:			[·]
Public Offering Price per Share:			$[·]
Public Offering Price per Pre-funded Warrant:			$[·]
Underwriting Discount per Share:			$[·]
Underwriting Discount per Pre-funded Warrant:			$[·]
Proceeds to Company per Share (before expenses):			$[·]
Proceeds to Company per Pre-funded Warrant (before expenses):			$[·]

(B)	=	the Exercise Price of this Warrant, as adjusted hereunder; and

(X)	=	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

	TRANSCODE THERAPEUTICS, INC.


	By:
		Name:
		Title:

	1.	R. Michael Dudley
	2.	Thomas A. Fitzgerald
	3.	Philippe P. Calais
	4.	Erik Manting
	5.	Magda Marquet
	6.	Zdravka Medarova

	Very truly yours,


	(Name - Please Print)


	(Signature)


	(Name of Signatory, in the case of entities - Please Print)


	(Title of Signatory, in the case of entities - Please Print)

Warrant Shares: _______
	Issue Date:	___, 2023

	Initial Exercise Date:	___, 2023

Name:
			(Please Print)

Address:
			(Please Print)

Phone Number:

Email Address:

Dated: _____________________ __, ______

Holder’s Signature:

Holder’s Address: