TransCode Therapeutics, Inc. Announces Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

TransCode Therapeutics (NASDAQ: RNAZ) has announced a registered direct offering of 10,250,000 shares of common stock and warrants at $0.98 per share. The offering includes warrants to purchase up to 10,250,000 additional shares at an exercise price of $0.86, exercisable for five years upon issuance.

The offering, expected to close on March 25, 2025, aims to raise approximately $10 million in gross proceeds. The funds will support product development activities, including clinical trials for TTX-MC138 (their lead therapeutic candidate), IND-enabling studies, working capital, and general corporate purposes. ThinkEquity serves as the exclusive placement agent for this at-the-market offering under Nasdaq rules.

Positive

• Secured $10 million in gross proceeds for product development
• Funding secured for clinical trials of lead candidate TTX-MC138
• 5-year warrant coverage provides potential additional capital

Negative

• Significant shareholder dilution with 10.25 million new shares
• Offering price at market indicates premium
• Additional dilution possible from 10.25 million warrant shares

Insights

Financial Analyst

TransCode Therapeutics' $10 million registered direct offering represents a significant dilutive event for current shareholders. The company is selling 10,250,000 shares at $0.98 per share, a 12.5% discount to the current market price of $1.12. Additionally, the accompanying warrants to purchase an equal number of shares at an even lower $0.86 exercise price creates potential for substantial future dilution.

When analyzing the financing terms in context, the structure raises concerns. The below-market pricing combined with the warrant sweeteners typically indicates weak investor demand. For a company with a current market cap of only $862,583, this $10 million offering is actually larger than the entire existing market value of the company, representing extreme dilution for existing shareholders.

While the capital will fund crucial development activities for TTX-MC138, their lead RNA therapeutic candidate for cancer treatment, the financing terms suggest TransCode faced significant challenges in securing this capital. The at-the-market designation under Nasdaq rules doesn't mitigate the dilutive impact or the implications of the pricing structure. Though biotech companies often require substantial capital for clinical development, the size, pricing, and structure of this particular offering signal serious financial pressure rather than a strategic growth investment.

BOSTON, March 23, 2025 /PRNewswire/ -- TransCode Therapeutics, Inc. (NASDAQ: RNAZ), the RNA oncology company committed to more effectively treating cancer using RNA therapeutics, today announced that it has agreed to sell an aggregate of 10,250,000 shares of its common stock and warrants to purchase up to 10,250,000 shares of common stock priced at-the-market under Nasdaq rules, at a purchase price of $0.98 per share and associated warrant. The warrants will have an exercise price of $0.86 per share and will be immediately exercisable upon issuance for a period of five years following the date of issuance. All of the shares of common stock and associated warrants are being offered by the Company. The offering is expected to close on March 25, 2025, subject to satisfaction of customary closing conditions.

The gross proceeds to the Company from the offering are expected to be approximately $10 million, before deducting the placement agent's fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for product development activities, including one or more clinical trials with TTX-MC138, its lead therapeutic candidate, including related IND-enabling studies, and for working capital and other general corporate purposes.

ThinkEquity is acting as the exclusive placement agent for the offering.

The securities will be offered and sold pursuant to a shelf registration statement on Form S-3 (File No. 333- 268764), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the "SEC") on December 13, 2022, and declared effective on December 16, 2022. The offering of such securities in the registered direct offering is being made only by means of a prospectus supplement that forms a part of the effective registration statement. A final prospectus supplement and the accompanying base prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC's website at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may also be obtained, when available, from the offices of ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About TransCode Therapeutics, Inc.
TransCode is a clinical-stage oncology company focused on treating metastatic disease. The company is committed to defeating cancer through the intelligent design and effective delivery of RNA therapeutics based on its proprietary TTX nanoparticle platform. The company's lead therapeutic candidate, TTX-MC138, is focused on treating metastatic tumors which overexpress microRNA-10b, a unique, well-documented biomarker of metastasis. In addition, TransCode has a portfolio of other first-in-class RNA therapeutic candidates designed to overcome the challenges of RNA delivery and thus unlock therapeutic access to a variety of novel genetic targets that could be relevant to treating a variety of cancers.

Forward Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements concerning the timing, conduct and results of the TransCode's clinical trials, statements about microRNAs and their involvement in cancer, and statements concerning the therapeutic potential of TransCode's TTX-MC138. Any forward-looking statements in this press release are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the ability of TransCode to satisfy the closing conditions related to the offering and the overall timing and completion of such closing; the risks associated with drug discovery and development; the risk that the results of clinical trials will not be consistent with TransCode's pre-clinical studies or expectations or with results from previous clinical trials; risks associated with the conduct of clinical trials; risks associated with TransCode's financial condition and its need to obtain additional funding to support its business activities, including TransCode's ability to continue as a going concern; risks associated with the timing and outcome of TransCode's planned regulatory submissions; risks associated with obtaining, maintaining and protecting intellectual property; risks associated with TransCode's ability to enforce its patents against infringers and defend its patent portfolio against challenges from third parties; risks of competition from other companies developing products for similar uses; risks associated with TransCode's dependence on third parties; and risks associated with geopolitical events and pandemics, including military conflicts. For a discussion of these and other risks and uncertainties, and other important factors, any of which could cause TransCode's actual results to differ from those contained in or implied by the forward-looking statements, see the section entitled "Risk Factors" in TransCode's Annual Report on Form 10-K for the year ended December 31, 2023, as well as discussions of potential risks, uncertainties and other important factors in any subsequent TransCode filings with the Securities and Exchange Commission. All information in this press release is as of the date of this release; TransCode undertakes no duty to update this information unless required by law.

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SOURCE TransCode Therapeutics, Inc.

FAQ

How much is TransCode Therapeutics (RNAZ) raising in their March 2025 offering?

TransCode Therapeutics is raising approximately $10 million in gross proceeds through their registered direct offering of shares and warrants.

What is the share price and warrant structure for RNAZ's March 2025 offering?

The offering price is $0.98 per share with associated warrants at $0.86 exercise price, exercisable for 5 years upon issuance.

How will RNAZ use the proceeds from their March 2025 offering?

The proceeds will fund product development, clinical trials for TTX-MC138, IND-enabling studies, working capital, and general corporate purposes.

When is RNAZ's March 2025 registered direct offering expected to close?

The offering is expected to close on March 25, 2025, subject to customary closing conditions.