| Delaware (State or other jurisdiction of incorporation or organization) | | | 2834 (Primary Standard Industrial Classification Code Number) 6 Liberty Square, #2382 Boston, MA 02109 (857) 837-3099 | | | 81-1065054 (I.R.S. Employer Identification No.) | |
| Michael Bison, Esq. Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 (617) 570-1000 | | | Thomas A. Fitzgerald Chief Financial Officer TransCode Therapeutics, Inc. 6 Liberty Square, #2382 Boston, MA 02109 (857) 837-3099 | | | Stephen Older, Esq. Rakesh Gopalan, Esq. McGuireWoods LLP 1251 Avenue of the Americas, 20th Floor New York, NY 10020 (212) 548-2122 | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | | Smaller reporting company ☒ | |
| | | | | | | | | | Emerging growth company ☒ | |
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Title of Each Class of Securities to be Registered | | | | Proposed Maximum Aggregate Offering Price(1) | | | | Amount of Registration Fee(2) | | ||||||
Common Stock, par value $0.0001 per share | | | | | $ | 28,750,000.00 | | | | | | $ | 3,137.00 | | |
Representative Warrant(3) | | | | | | ― | | | | | | | ― | | |
Common Stock issuable upon exercise of Representative Warrant(4) | | | | | $ | 1,562,500.00 | | | | | | $ | 171.00 | | |
Total | | | | | $ | 30,312,500.00 | | | | | | $ | 3,308.00(5) | | |
| | | Per Share | | | Total | | ||||||
Initial public offering price | | | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1) | | | | $ | | | | | $ | | | ||
Proceeds to us, before expenses | | | | $ | | | | | $ | | | |
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| DILUTION | | | | | | | |
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| BUSINESS | | | | | | | |
| MANAGEMENT | | | | | | | |
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| UNDERWRITING | | | | | | | |
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| EXPERTS | | | | | | | |
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| | Years Ended December 31, | | | Years Ended December 31, | | ||||||||||||||||||||
| | 2020 | | 2019 | | | 2020 | | 2019 | | ||||||||||||||||
Statement of Operations Data | | | | | | | | | | | | | | | | | | | | | | | ||||
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | ||||
Research and development | | | $ | 284,459 | | | | $ | 226,309 | | | | | $ | 284,459 | | | | $ | 226,309 | | | ||||
General and administrative | | | | 442,145 | | | | | 230,556 | | | | | | 442,145 | | | | | 230,556 | | | ||||
Total operating expenses | | | | 726,604 | | | | | 456,865 | | | | | | 726,604 | | | | | 456,865 | | | ||||
Operating loss | | | | (726,604) | | | | | (456,865) | | | | | | (726,604) | | | | | (456,865) | | | ||||
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | ||||
Change in fair value of derivative liabilities | | | | (1,208,000) | | | | | 4,000 | | | | | | (1,208,000) | | | | | 4,000 | | | ||||
Change in fair value of warranty liability | | | | (14,852) | | | | | 2,584 | | | | | | (14,852) | | | | | 2,584 | | | ||||
Interest expense | | | | (394,573) | | | | | (156,965) | | | | | | (394,573) | | | | | (156,965) | | | ||||
Interest income | | | | 136 | | | | | 34 | | | | | | 136 | | | | | 34 | | | ||||
Total other income (expense) | | | | (1,617,289) | | | | | (150,347) | | | | | | (1,617,289) | | | | | (150,347) | | | ||||
Loss before income taxes | | | | (2,343,893) | | | | | (607,212) | | | | | | (2,343,893) | | | | | (607,212) | | | ||||
Income tax expense (benefit) | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Net loss | | | $ | (2,343,893) | | | | $ | (607,212) | | | | | $ | (2,343,893) | | | | $ | (607,212) | | | ||||
Basic and diluted loss per common share | | | $ | (0.51) | | | | $ | (0.13) | | | | | $ | (0.51) | | | | $ | (0.13) | | | ||||
Weighted average number of common shares outstanding, basic and diluted (1) | | | | 4,636,216 | | | | | 4,636,216 | | | | | | 4,636,216 | | | | | 4,636,216 | | | ||||
Pro forma net loss per common share – basic and diluted (unaudited)(2) | | | $ | (0.31) | | | | $ | (0.09) | | | | | $ | (0.32) | | | | $ | (0.09) | | | ||||
Pro forma weighted average common shares outstanding (unaudited)(2) | | | | 6,318,828 | | | | | 5,126,193 | | | | | | 6,040,735 | | | | | 5,126,193 | | |
| | December 31, 2020 | | | December 31, 2020 | | ||||||||||||||||||||||||||||||||
| | Actual | | Pro Forma(3) | | Pro Forma As Adjusted(4) | | | Actual | | Pro Forma(3) | | Pro Forma As Adjusted(4) | | ||||||||||||||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Current assets | | | $ | 831,215 | | | | $ | 831,215 | | | | $ | 22,856,217 | | | | | $ | 831,215 | | | | $ | 831,215 | | | | $ | 22,856,215 | | | ||||||
Deferred offering costs | | | | 224,153 | | | | | 224,153 | | | | | — | | | | | | 224,153 | | | | | 224,153 | | | | | — | | | ||||||
Total assets | | | | 1,055,368 | | | | | 1,055,368 | | | | | 22,856,217 | | | | | | 1,055,368 | | | | | 1,055,368 | | | | | 22,856,215 | | | ||||||
Current liabilities | | | | 404,862 | | | | | 404,862 | | | | | 404,862 | | | | | | 404,862 | | | | | 404,862 | | | | | 404,862 | | | ||||||
Convertible promissory notes, net of unamortized debt issuance costs and debt discount | | | | 2,086,675 | | | | | — | | | | | — | | | | | | 2,086,675 | | | | | — | | | | | — | | | ||||||
Derivative liabilities | | | | 1,751,000 | | | | | — | | | | | — | | | | | | 1,751,000 | | | | | — | | | | | — | | | ||||||
Total liabilities | | | | 4,463,600 | | | | | 404,862 | | | | | 404,862 | | | | | | 4,463,600 | | | | | 404,862 | | | | | 404,862 | | | ||||||
Total stockholders’ equity (deficit) | | | | (3,408,232) | | | | | 650,506 | | | | | 22,451,355 | | | | | | (3,408,232) | | | | | 650,506 | | | | | 22,451,353 | | |
| | | December 31, 2020 | | |||||||||||||||
| | | Actual | | | Pro Forma | | | Pro Forma As Adjusted | | |||||||||
Cash and cash equivalents | | | | $ | 828,016 | | | | | $ | 828,016 | | | | | $ | 22,853,018 | | |
Convertible promissory notes, net of unamortized debt issuance costs and debt discount | | | | $ | 2,086,675 | | | | | $ | — | | | | | $ | — | | |
Accrued interest — convertible promissory notes | | | | | 191,687 | | | | | | — | | | | | | — | | |
Derivative liabilities | | | | | 1,751,000 | | | | | | — | | | | | | — | | |
| | | | | 4,029,362 | | | | | | — | | | | | | — | | |
Stockholders’ equity (deficit) | | | | | | | | | | | | | | | | | | | |
Preferred stock — $0.0001 par value; 5,000,000 shares authorized actual; 10,000,000 shares authorized pro forma, no shares issued or outstanding pro forma; and 10,000,000 shares authorized pro forma as adjusted, no shares issued or outstanding pro forma as adjusted | | | | | — | | | | | | — | | | | | | — | | |
Common stock — $0.0001 par value; 20,000,000 shares authorized and 4,636,216 shares issued and outstanding actual; 290,000,000 shares authorized pro forma, 5,707,306 shares issued and outstanding pro forma; and 290,000,000 shares authorized pro forma as adjusted, 8,485,084 shares issued and outstanding pro forma as adjusted | | | | | 464 | | | | | | 571 | | | | | | 849 | | |
Additional paid-in capital | | | | | 65,950 | | | | | | 9,705,653 | | | | | | 31,506,224 | | |
Subscription receivable | | | | | (12,763) | | | | | | (12,763) | | | | | | (12,763) | | |
Accumulated deficit | | | | | (3,461,882) | | | | | | (9,402,954) | | | | | | (9,402,954) | | |
Total stockholders’ equity (deficit) | | | | | (3,408,232) | | | | | | 650,506 | | | | | | 22,451,355 | | |
Total capitalization | | | | $ | 621,130 | | | | | $ | 650,506 | | | | | $ | 22,451,355 | | |
| | | December 31, 2020 | | |||||||||||||||
| | | Actual | | | Pro Forma | | | Pro Forma As Adjusted | | |||||||||
Cash and cash equivalents | | | | $ | 828,016 | | | | | $ | 828,016 | | | | | $ | 22,853,016 | | |
Convertible promissory notes, net of unamortized debt issuance costs and debt discount | | | | $ | 2,086,675 | | | | | $ | — | | | | | $ | — | | |
Accrued interest — convertible promissory notes | | | | | 191,687 | | | | | | — | | | | | | — | | |
Derivative liabilities | | | | | 1,751,000 | | | | | | — | | | | | | — | | |
| | | | | 4,029,362 | | | | | | — | | | | | | — | | |
Stockholders’ equity (deficit) | | | | | | | | | | | | | | | | | | | |
Preferred stock — $0.0001 par value; 5,000,000 shares authorized actual; 10,000,000 shares authorized pro forma, no shares issued or outstanding pro forma; and 10,000,000 shares authorized pro forma as adjusted, no shares issued or outstanding pro forma as adjusted | | | | | — | | | | | | — | | | | | | — | | |
Common stock — $0.0001 par value; 20,000,000 shares authorized and 4,636,216 shares issued and outstanding actual; 290,000,000 shares authorized pro forma, 5,707,303 shares issued and outstanding pro forma; and 290,000,000 shares authorized pro forma as adjusted, 11,957,303 shares issued and outstanding pro forma as adjusted | | | | | 464 | | | | | | 571 | | | | | | 1,196 | | |
Additional paid-in capital | | | | | 65,950 | | | | | | 4,350,190 | | | | | | 26,150,412 | | |
Subscription receivable | | | | | (12,763) | | | | | | (12,763) | | | | | | (12,763) | | |
Accumulated deficit | | | | | (3,461,882) | | | | | | (3,687,492) | | | | | | (3,687,492) | | |
Total stockholders’ equity (deficit) | | | | | (3,408,232) | | | | | | 650,506 | | | | | | 22,451,353 | | |
Total capitalization | | | | $ | 621,130 | | | | | $ | 650,506 | | | | | $ | 22,451,353 | | |
| Assumed public offering price per share | | | | | | | | | | $ | 9.00 | | |
| Net tangible book value per share at December 31, 2020 | | | | $ | (0.74) | | | | | | | | |
| Pro forma increase attributable to the pro forma adjustments | | | | | 0.85 | | | | | | | | |
| Pro forma net tangible book value per share at December 31, 2020 | | | | | 0.11 | | | | | | | | |
| Increase in book value per share attributable to new investors | | | | | 2.53 | | | | | | | | |
| Pro forma as adjusted net tangible book value per share after this offering | | | | | | | | | | | 2.65 | | |
| Dilution per share to new investors | | | | | | | | | | $ | 6.35 | | |
| Assumed public offering price per share | | | | | | | | | | $ | 4.00 | | |
| Net tangible book value per share at December 31, 2020 | | | | $ | (0.74) | | | | | | | | |
| Pro forma increase attributable to the pro forma adjustments | | | | | 0.85 | | | | | | | | |
| Pro forma net tangible book value per share at December 31, 2020 | | | | | 0.11 | | | | | | | | |
| Increase in book value per share attributable to new investors | | | | | 1.77 | | | | | | | | |
| Pro forma as adjusted net tangible book value per share after this offering | | | | | | | | | | | 1.88 | | |
| Dilution per share to new investors | | | | | | | | | | $ | 2.12 | | |
| | | Shares Purchased | | | Total Consideration | | | Average Price Per Share | | |||||||||||||||||||||
| | | Number | | | % | | | Amount | | | % | | | | | | | | ||||||||||||
Existing Shareholders | | | | | 5,707,306 | | | | | | 67% | | | | | $ | 2,509,894 | | | | | | 9% | | | | | $ | 0.44 | | |
New Investors | | | | | 2,777,778 | | | | | | 33% | | | | | $ | 25,000,002 | | | | | | 91% | | | | | $ | 9.00 | | |
Total | | | | | 8,485,084 | | | | | | 100% | | | | | $ | 27,509,896 | | | | | | 100% | | | | | $ | 3.24 | | |
| | | Shares Purchased | | | Total Consideration | | | Average Price Per Share | | |||||||||||||||||||||
| | | Number | | | % | | | Amount | | | % | | | | | | | | ||||||||||||
Existing Shareholders | | | | | 5,707,303 | | | | | | 48% | | | | | $ | 2,509,778 | | | | | | 9% | | | | | $ | 0.44 | | |
New Investors | | | | | 6,250,000 | | | | | | 52% | | | | | $ | 25,000,000 | | | | | | 91% | | | | | $ | 4.00 | | |
Total | | | | | 11,957,303 | | | | | | 100% | | | | | $ | 27,509,778 | | | | | | 100% | | | | | $ | 2.30 | | |
| | | Year ended December 31, | | | | | | | | |||||||||
| | | 2020 | | | 2019 | | | Change | | |||||||||
| | | (in thousands) | | |||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Research and development | | | | $ | 284 | | | | | $ | 226 | | | | | $ | 58 | | |
General and administrative | | | | | 442 | | | | | | 231 | | | | | | 212 | | |
Total operating expenses | | | | | 726 | | | | | | 457 | | | | | | 269 | | |
Loss from operations | | | | | (726) | | | | | | (457) | | | | | | (269) | | |
Interest expense | | | | | (395) | | | | | | (157) | | | | | | (238) | | |
Change in fair value of derivative liabilities | | | | | (1,208) | | | | | | 4 | | | | | | (1,212) | | |
Change in fair value of warrant liability | | | | | (15) | | | | | | 3 | | | | | | (17) | | |
Total other income (expense), net | | | | | (1,617) | | | | | | (150) | | | | | | (1,467) | | |
Net loss | | | | $ | (2,344) | | | | | $ | (607) | | | | | $ | (1,737) | | |
| | | Year ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (in thousands) | | |||||||||
Net cash used in operating activities | | | | $ | (493) | | | | | $ | (509) | | |
Net cash provided by (used in) investing activities | | | | | — | | | | | | — | | |
Net cash provided by financing activities | | | | | 1,117 | | | | | | 500 | | |
Net increase (decrease) in cash and cash equivalents | | | | $ | 624 | | | | | $ | (9) | | |
Grant Date | | | Number of shares subject to award | | | Per share purchase price of restricted stock | | | Per share estimated fair value of award on grant date | | |||||||||
February 1, 2016 | | | | | 3,245,082 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
April 1, 2016 | | | | | 36,393 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
August 17, 2016 | | | | | 139,508 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 1, 2017 | | | | | 812,787 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 1, 2017(1) | | | | | (594,426) | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
June 12, 2017 | | | | | 600,491 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
July 15, 2017 | | | | | 211,991 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
August 28, 2017 | | | | | 184,393 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
December 11, 2017(1) | | | | | (1,024,778) | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
January 22, 2018 | | | | | 670,246 | | | | | $ | 0.0001 | | | | | $ | 0.0001 | | |
July 1, 2018(2) | | | | | 127,377 | | | | | $ | 0.0001 | | | | | $ | 0.0400 | | |
October 1, 2018 | | | | | 49,889 | | | | | $ | 0.0400 | | | | | $ | 0.0400 | | |
October 7, 2018 | | | | | 177,266 | | | | | $ | 0.0400 | | | | | $ | 0.0400 | | |
| Name | | Age | | Position | | Committees * | | Name | | Age | | Position | | Committees | | ||||||
| Executive Officers and Key Employees | | | | | | | | Executive Officers | | | | | | | | ||||||
| Robert Michael Dudley | | 70 | | Co-Founder, President, Chief Executive Officer, Director | | 3 | | Robert Michael Dudley | | 71 | | Co-Founder, President, Chief Executive Officer, Director | | 3 | | ||||||
| Zdravka Medarova, PhD | | 46 | | Co-Founder and Vice President Drug Discovery | | | | Thomas A. Fitzgerald, MBA | | 70 | | Vice President, Chief Financial Officer, Director | | | | ||||||
| Thomas A. Fitzgerald, MBA | | 69 | | Vice President, Chief Financial Officer, Director | | | | Key Employees and Advisors | | | | | | | | ||||||
| Judy Carmody, PhD | | 54 | | Vice President of Operations | | | | Zdravka Medarova, PhD | | 46 | | Co-Founder and Vice President Drug Discovery | | | | ||||||
| Qiyong Peter Liu, PhD | | 57 | | Chief Scientist | | | | Judy Carmody, PhD | | 54 | | Vice President of Operations | | | | ||||||
| Anna Moore, PhD | | 59 | | Co-Founder, Scientific Advisor | | | | Qiyong Peter Liu, PhD | | 57 | | Chief Scientist | | | | ||||||
| Non-Employee Directors | | | | | | | | Anna Moore, PhD | | 59 | | Co-Founder, Scientific Advisor | | | | ||||||
| Philippe P. Calais, PhD | | 61 | | Independent Director, Chairman of the Board of Directors | | 1, 2 | | Non-Employee Directors | | | | | | | | ||||||
| Erik Manting, PhD | | 49 | | Independent Director | | 1, 2, 3 | | Philippe P. Calais, PhD | | 61 | | Independent Director, Chairman of the Board of Directors | | 1, 2 | | ||||||
| Magda Marquet, PhD | | 61 | | Independent Director | | 1, 2, 3 | | Erik Manting, PhD | | 49 | | Independent Director | | 1, 2, 3 | | ||||||
| Magda Marquet, PhD | | 61 | | Independent Director | | 1, 2, 3 | |
| | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | Option Awards | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | | Grant Date | | Vesting Commencement Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Grant Date | | Vesting Commencement Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert Michael Dudley (1) Co-Founder, President and Chief Executive Officer | | | | | 2/01/2016 | | | | | 2/1/2016 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | 2/01/2016 | | | | | 2/1/2016 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||||||||||
| | | 8/17/2016 | | | | | 8/17/2016 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | 8/17/2016 | | | | | 8/17/2016 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | |||||||||||||||||||
| | | 6/12/2017 | | | | | 6/12/2017 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | 6/12/2017 | | | | | 6/12/2017 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | |||||||||||||||||||
| | | | 6/19/2020 | | | | | 1/1/2020 | | | | | 272,950(2) | | | | | 545,901(2) | | | | | 545,901 | | | | $ | 0.09 | | | | | 6/18/2025 | | | | | — | | | | | — | | | | | | 6/19/2020 | | | | | 1/1/2020 | | | | | 272,950(2) | | | | | 545,901(2) | | | | | 545,901 | | | | $ | 0.09 | | | | | 6/18/2025 | | | | | — | | | | | — | | | ||||||||||||||||||
Thomas A. Fitzgerald Vice President and Chief Financial Officer | | | | | 7/01/2018 | | | | | 7/1/2018 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 21,229 | | | | $ | 191,061 | | | | | | | 7/01/2018 | | | | | 7/1/2018 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 21,229 | | | | $ | 84,916 | | | ||||||||||||||||
| | | 6/19/2020 | | | | | 1/1/2020 | | | | | 80,874(2) | | | | | 161,749(2) | | | | | 161,749 | | | | $ | 0.08 | | | | | 6/18/2030 | | | | | — | | | | | — | | | | | | 6/19/2020 | | | | | 1/1/2020 | | | | | 80,874(2) | | | | | 161,749(2) | | | | | 161,749 | | | | $ | 0.08 | | | | | 6/18/2030 | | | | | — | | | | | — | | |
Name | | | Fees Earned or Paid in Cash ($) | | | Option Awards ($)(1) | | | Total ($) | | |||||||||
Philippe P. Calais(2) | | | | | — | | | | | | 109,490.25 | | | | | | 109,490.25 | | |
Erik Manting(2) | | | | | — | | | | | | 109,490.25 | | | | | | 109,490.25 | | |
| | Shares Beneficially Owned Prior to Offering | | Shares Beneficially Owned After Offering | | | | Shares Beneficially Owned Prior to Offering | | Shares Beneficially Owned After Offering | | | ||||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(*) | | Number | | Percent | | Number | | Percent | | | | Number | | Percent | | Number | | Percent | | | ||||||||||||||||||||||||||||||||||||
5% of Greater Stockholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Anna Moore, PhD, Co-Founder, Advisor(1) | | | | 1,571,741 | | | | | 21.6% | | | | | 1,571,741 | | | | | 18.5% | | | | | | | 1,576,796 | | | | | 27.5% | | | | | 1,576,796 | | | | | 13.2% | | | | ||||||||||||
Judy and Patrick Carmody(2) | | | | 505,068 | | | | | 8.1% | | | | | 505,068 | | | | | 6.0% | | | | | | | 517,705 | | | | | 9.0% | | | | | 517,705 | | | | | 4.3% | | | | ||||||||||||
Named Executive Officers and Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Robert Michael Dudley, Chief Executive Officer, President, and Director (3) | | | | 1,184,302 | | | | | 17.2% | | | | | 1,184,302 | | | | | 14.0% | | | | | | | 1,273,352 | | | | | 20.7% | | | | | 1,273,352 | | | | | 10.3% | | | | ||||||||||||
Zdravka Medarova, PhD, Vice President, Drug Discovery(4) | | | | 1,590,696 | | | | | 21.8% | | | | | 1,590,696 | | | | | 18.7% | | | | | | | 1,600,806 | | | | | 27.8% | | | | | 1,600,806 | | | | | 13.3% | | | | ||||||||||||
Thomas A. Fitzgerald, Vice President, Chief Financial Officer (5) | | | | 228,469 | | | | | 3.8% | | | | | 228,469 | | | | | 2.7% | | | | | | | 254,855 | | | | | 4.4% | | | | | 254,855 | | | | | 2.1% | | | | ||||||||||||
Philippe Calais, PhD, Director(6) | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | 127,377 | | | | | 2.2% | | | | | 127,377 | | | | | 1.1% | | | | ||||||||||||
Erik Manting, PhD, Director | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||
Magda Marquet, PhD, Director | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||
All Directors and Named Executive Officers as a group (6 persons) | | | | 3,003,467 | | | | | 52.6% | | | | | 3,003,467 | | | | | 35.4% | | | | | | | 3,256,390 | | | | | 51.6% | | | | | 3,256,390 | | | | | 25.9% | | | |
Underwriters | | | Number of Shares | | |||
ThinkEquity, a division of Fordham Financial Management, Inc. | | | | | | | |
Total | | | | | | |
| | | Per Share | | | With No Over-Allotment | | | With Full Over-Allotment | | |||||||||
Public offering price | | | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount (7%) | | | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us | | | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%) | | | | $ | | | | | $ | | | | | $ | | | |
| | | Page | | |||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | |
| | | 2020 | | | 2019 | | ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 828,016 | | | | | $ | 204,471 | | |
Prepaid expenses and other current assets | | | | | 3,199 | | | | | | — | | |
Total current assets | | | | | 831,215 | | | | | | 204,471 | | |
Deferred offering costs | | | | | 224,153 | | | | | | — | | |
Total assets | | | | $ | 1,055,368 | | | | | $ | 204,471 | | |
Liabilities and Stockholders’ Equity (Deficit) | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses | | | | $ | 369,177 | | | | | $ | 27,257 | | |
Due to related parties | | | | | 35,685 | | | | | | 35,685 | | |
Total current liabilities | | | | | 404,862 | | | | | | 62,942 | | |
Convertible promissory notes, net of debt issuance costs and debt discount | | | | | 2,086,675 | | | | | | 927,810 | | |
Accrued interest – convertible promissory notes | | | | | 191,687 | | | | | | 69,978 | | |
Derivative liabilities | | | | | 1,751,000 | | | | | | 239,000 | | |
Warrant liability | | | | | 29,376 | | | | | | 14,524 | | |
Total liabilities | | | | | 4,463,600 | | | | | | 1,314,254 | | |
Stockholders’ equity (deficit): | | | | | | | | | | | | | |
Preferred stock – $0.0001 par value; 5,000,000 and -0- shares authorized at December 31, 2020 and 2019, respectively; -0- shares issued or outstanding at December 31, 2020 | | | | | — | | | | | | — | | |
Common stock – $0.0001 par value, 20,000,000 shares authorized at December 31, 2020 and 2019; 4,636,216 shares issued and outstanding at December 31, 2020 and 2019 | | | | | 464 | | | | | | 464 | | |
Additional paid-in capital | | | | | 65,949 | | | | | | 20,014 | | |
Subscription receivable | | | | | (12,763) | | | | | | (12,272) | | |
Accumulated deficit | | | | | (3,461,882) | | | | | | (1,117,989) | | |
Total stockholders’ equity (deficit) | | | | | (3,408,232) | | | | | | (1,109,783) | | |
Total liabilities and stockholders’ equity (deficit) | | | | $ | 1,055,368 | | | | | $ | 204,471 | | |
| | | 2020 | | | 2019 | | ||||||
Operating expenses: | | | | | | | | | | | | | |
Research and development | | | | $ | 284,459 | | | | | $ | 226,309 | | |
General and administrative | | | | | 442,145 | | | | | | 230,556 | | |
Total operating expenses | | | | | 726,604 | | | | | | 456,865 | | |
Operating loss | | | | | (726,604) | | | | | | (456,865) | | |
Other income (expense): | | | | | | | | | | | | | |
Change in fair value of derivative liabilities | | | | | (1,208,000) | | | | | | 4,000 | | |
Change in fair value of warrant liability | | | | | (14,852) | | | | | | 2,584 | | |
Interest expense | | | | | (394,573) | | | | | | (156,965) | | |
Interest income | | | | | 136 | | | | | | 34 | | |
Total other income (expense) | | | | | (1,617,289) | | | | | | (150,347) | | |
Loss before income taxes | | | | | (2,343,893) | | | | | | (607,212) | | |
Income tax expense (benefit) | | | | | — | | | | | | — | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Basic and diluted loss per common share | | | | $ | (0.51) | | | | | $ | (0.13) | | |
Weighted average number of common shares outstanding, basic and diluted | | | | | 4,636,216 | | | | | | 4,636,216 | | |
| | | Common Stock | | | Additional Paid-In Capital | | | Subscription Receivable | | | Accumulated Deficit | | | Total Stockholders’ Equity (Deficit) | | |||||||||||||||||||||
| | | Shares | | | Amount | | ||||||||||||||||||||||||||||||
Balance, December 31, 2018 | | | | | 4,636,216 | | | | | $ | 464 | | | | | $ | 18,145 | | | | | $ | (11,800) | | | | | $ | (510,777) | | | | | $ | (503,968) | | |
Interest on subscription receivable | | | | | — | | | | | | — | | | | | | 472 | | | | | | (472) | | | | | | — | | | | | | — | | |
Share-based compensation expense | | | | | — | | | | | | — | | | | | | 1,397 | | | | | | — | | | | | | — | | | | | | 1,397 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (607,212) | | | | | | (607,212) | | |
Balance, December 31, 2019 | | | | | 4,636,216 | | | | | $ | 464 | | | | | $ | 20,014 | | | | | $ | (12,272) | | | | | $ | (1,117,989) | | | | | $ | (1,109,783) | | |
Interest on subscription receivable | | | | | — | | | | | | — | | | | | | 491 | | | | | | (491) | | | | | | — | | | | | | — | | |
Share-based compensation expense | | | | | — | | | | | | — | | | | | | 45,444 | | | | | | — | | | | | | — | | | | | | 45,444 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,343,893) | | | | | | (2,343,893) | | |
Balance, December 31, 2020 | | | | | 4,636,216 | | | | | $ | 464 | | | | | $ | 65,949 | | | | | $ | (12,763) | | | | | $ | (3,461,882) | | | | | $ | (3,408,232) | | |
| | | 2020 | | | 2019 | | ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Share-based compensation expense | | | | | 45,444 | | | | | | 1,397 | | |
Change in fair market value of derivative liabilities | | | | | 1,208,000 | | | | | | (4,000) | | |
Change in fair market value of warrant liability | | | | | 14,852 | | | | | | (2,584) | | |
Non-cash interest expense | | | | | 272,864 | | | | | | 108,595 | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | (3,199) | | | | | | 1,667 | | |
Accounts payable and accrued expenses | | | | | 191,253 | | | | | | (54,741) | | |
Accrued interest on convertible promissory notes | | | | | 121,709 | | | | | | 48,370 | | |
Net cash used in operating activities | | | | | (492,971) | | | | | | (508,508) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from convertible promissory notes | | | | | 1,190,000 | | | | | | 500,000 | | |
Payments of deferred offering costs | | | | | (73,484) | | | | | | — | | |
Net cash provided by financing activities | | | | | 1,116,516 | | | | | | 500,000 | | |
Net change in cash and cash equivalents | | | | | 623,545 | | | | | | (8,508) | | |
Cash and cash equivalents, beginning of year | | | | | 204,471 | | | | | | 212,979 | | |
Cash and cash equivalents, end of year | | | | $ | 828,016 | | | | | $ | 204,471 | | |
Supplemental disclosure of cash flow | | | | | | | | | | | | | |
Cash paid during the year for | | | | | | | | | | | | | |
Interest | | | | $ | — | | | | | $ | — | | |
Income taxes | | | | $ | — | | | | | $ | — | | |
Supplemental disclosure of non-cash investing and financing activities | | | | | | | | | | | | | |
Accrued interest on subscriptions receivable | | | | $ | (491) | | | | | $ | (472) | | |
Debt discounts associated with derivative liabilities of convertible promissory notes | | | | $ | 304,000 | | | | | $ | 117,000 | | |
Deferred offering costs included in accounts payable and accrued expenses | | | | $ | 150,669 | | | | | $ | — | | |
| | | Fair value measurements as of December 31, 2019, using: | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 239,000 | | | | | $ | 239,000 | | |
Warrant liability | | | | | — | | | | | | — | | | | | | 14,524 | | | | | | 14,524 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 253,524 | | | | | $ | 253,524 | | |
| | | Fair value measurements as of December 31, 2020, using: | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative liabilities | | | | $ | — | | | | | $ | — | | | | | | 1,751,000 | | | | | | 1,751,000 | | |
Warrant liability | | | | | — | | | | | | — | | | | | | 29,376 | | | | | | 29,376 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 1,780,376 | | | | | | 1,780,376 | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Professional fees | | | | $ | 193,281 | | | | | $ | 1,650 | | |
Consulting fees | | | | | 80,013 | | | | | | — | | |
Research and development billings | | | | | 51,806 | | | | | | — | | |
State filing and other fees | | | | | 1,778 | | | | | | 607 | | |
Accrued license payments | | | | | 42,300 | | | | | | 25,000 | | |
| | | | $ | 369,178 | | | | | $ | 27,257 | | |
Milestone Event | | | Amount | | |||
Enrollment of first patient in a phase II clinical trial of a therapeutic product or process | | | | $ | 100,000 | | |
Enrollment of first patient in a phase III clinical trial of a therapeutic product or process | | | | $ | 200,000 | | |
First commercial sale of a therapeutic product or process | | | | $ | 1,000,000 | | |
Filing of an application for regulatory approval of a clinical diagnostic product or process | | | | $ | 100,000 | | |
First regulatory approval of a clinical diagnostic product or process | | | | $ | 150,000 | | |
Note Identifier | | | Issue Date | | | Principal Amount | | | Accrued Interest at December 31, 2020 | | | Accrued Interest at December 31, 2019 | | |||||||||
Note One | | | May 2, 2018 | | | | $ | 500,000 | | | | | $ | 80,137 | | | | | $ | 50,055 | | |
Note Two | | | June 26, 2018 | | | | $ | 50,000 | | | | | $ | 7,562 | | | | | $ | 4,553 | | |
Note Three | | | March 2, 2019 | | | | $ | 100,000 | | | | | $ | 10,767 | | | | | $ | 4,751 | | |
Note Four | | | March 5, 2019 | | | | $ | 50,000 | | | | | $ | 5,466 | | | | | $ | 2,458 | | |
Note Five | | | March 8, 2019 | | | | $ | 50,000 | | | | | $ | 5,384 | | | | | $ | 2,375 | | |
Note Six | | | March 15, 2019 | | | | $ | 50,000 | | | | | $ | 5,326 | | | | | $ | 2,318 | | |
Note Seven | | | March 20, 2019 | | | | $ | 50,000 | | | | | $ | 5,293 | | | | | $ | 2,285 | | |
Note Eight | | | November 7, 2019 | | | | $ | 100,000 | | | | | $ | 6,723 | | | | | $ | 723 | | |
Note Nine | | | November 7, 2019 | | | | $ | 100,000 | | | | | $ | 6,460 | | | | | $ | 460 | | |
Note Ten | | | February 17, 2020 | | | | $ | 1,000,000 | | | | | $ | 50,984 | | | | | | — | | |
Note Eleven | | | April 3, 2020 | | | | $ | 40,000 | | | | | $ | 1,790 | | | | | | — | | |
Note Twelve | | | May 8, 2020 | | | | $ | 50,000 | | | | | $ | 1,951 | | | | | | — | | |
Note Thirteen | | | May 8, 2020 | | | | $ | 50,000 | | | | | $ | 1,951 | | | | | | — | | |
Note Fourteen | | | May 15, 2020 | | | | $ | 50,000 | | | | | $ | 1,893 | | | | | | — | | |
| | | 2020 | | | 2019 | | ||||||
Principal amount of convertible promissory notes | | | | $ | 2,240,000 | | | | | $ | 1,050,000 | | |
Less unamortized debt issuance costs | | | | | (8,002) | | | | | | (18,540) | | |
Less unamortized debt discounts | | | | | (145,323) | | | | | | (103,650) | | |
Convertible promissory notes, net | | | | $ | 2,086,675 | | | | | $ | 927,810 | | |
| Unvested restricted common stock at December 31, 2018 | | | | | 1,395,815 | | |
| Shares issued | | | | | — | | |
| Shares vested | | | | | (809,122) | | |
| Unvested restricted common stock at December 31, 2019 | | | | | 586,693 | | |
| Shares issued | | | | | — | | |
| Shares vested | | | | | (440,209) | | |
| Unvested restricted common stock at December 31, 2020 | | | | | 146,483 | | |
| | | Warrant Liability | | |||
Fair value at December 31, 2018 | | | | $ | 17,108 | | |
Change in fair value | | | | | (2,584) | | |
Fair value at December 31, 2019 | | | | | 14,524 | | |
Change in fair value | | | | | 14,852 | | |
Fair value at December 31, 2020 | | | | $ | 29,376 | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Fair value per share of Company’s common stock | | | | $ | 3.91 | | | | | $ | 0.08 | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Dividend yield | | | | | 0.0% | | | | | | 0.0% | | |
Expected volatility | | | | | 84.0% | | | | | | 79.0% | | |
Risk Free interest rate | | | | | 0.3% | | | | | | 1.7% | | |
Expected life (years) | | | | | 4.67 | | | | | | 4.73 | | |
Fair value of warrants | | | | $ | 29,376 | | | | | $ | 14,524 | | |
| | | Number of shares | | | Weighted average exercise price per share | | | Weighted average remaining contractual term (years) | | |||||||||
Outstanding at December 31, 2019 | | | | | — | | | | | | — | | | | | | — | | |
Granted | | | | | 1,756,279 | | | | | $ | 0.25 | | | | | | 6.4 | | |
Exercised | | | | | — | | | | | | — | | | | | | — | | |
| | | Number of shares | | | Weighted average exercise price per share | | | Weighted average remaining contractual term (years) | | |||||||||
Forfeited | | | | | — | | | | | | — | | | | | | — | | |
Outstanding at December 31, 2020 | | | | | 1,756,279 | | | | | $ | 0.25 | | | | | | 6.4 | | |
|
| | | Year ended December 31, 2020 | |
Risk-free interest rate | | | 0.25% - 0.55% | |
Expected term (in years) | | | 3.5 - 6.25 | |
Expected volatility | | | 95.83% - 97.20% | |
Expected dividend yield | | | 0% | |
Fair value of underlying stock | | | $0.08 - $3.91 | |
| | | Years Ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Numerator | | | | | | | | | | | | | |
Net loss | | | | $ | (2,343,893) | | | | | $ | (607,212) | | |
Denominator | | | | | | | | | | | | | |
Weighted-average common shares outstanding, basic and diluted | | | | | 4,636,216 | | | | | | 4,636,216 | | |
Net loss per share attributable to common stockholders, basic and diluted | | | | $ | (0.51) | | | | | $ | (0.13) | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Shares issuable on conversion of Promissory Notes | | | | | 1,038,309 | | | | | | 471,757 | | |
Shares issuable on exercise of Warrants | | | | | 12,385 | | | | | | 11,584 | | |
Shares issuable on exercise of vested Options | | | | | 353,824 | | | | | | — | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Federal income tax benefit at statutory rate | | | | | 21.0% | | | | | | 21.0% | | |
State and local tax, net of federal benefit | | | | | 1.9% | | | | | | 4.9% | | |
Permanent differences | | | | | (14.8)% | | | | | | (4.8)% | | |
Change in valuation allowance | | | | | (7.5)% | | | | | | (21.1)% | | |
Effective Income Tax rate | | | | | 0.0% | | | | | | 0.0% | | |
| | | December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net operating loss carryforwards | | | | $ | 421,000 | | | | | $ | 243,000 | | |
Capitalized research and development costs, start-up costs and amortization | | | | | 14,000 | | | | | | 17,000 | | |
Total deferred tax assets | | | | | 435,000 | | | | | | 260,000 | | |
Less valuation allowance | | | | | (435,000) | | | | | | (260,000) | | |
Net deferred taxes | | | | $ | — | | | | | $ | — | | |
| | | Amount Paid or to Be Paid | | |||
SEC registration fee | | | | $ | 3,675 | | |
FINRA filing fee | | | | $ | 4,800 | | |
Printing and mailing | | | | $ | 125,000 | | |
Legal fees and expenses | | | | $ | 475,000 | | |
Accounting fees and expenses | | | | $ | 175,000 | | |
Transfer agent and registrar fees and expenses | | | | $ | 4,000 | | |
Miscellaneous | | | | $ | 187,525 | | |
Total | | | | $ | 975,000 | | |
Exhibit number | | | Description | |
1.1** | | | | |
3.1** | | | | |
3.2** | | | | |
3.3** | | | | |
3.4** | | | | |
3.5** | | | | |
4.1** | | | | |
| | | | |
5.1 | | | | |
10.1**# | | | | |
| | | ||
| | | ||
| | | ||
| | | ||
10.6**† | | | | |
10.7**† | | | | |
| | | ||
10.9**# | | | Employment Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Robert Michael Dudley. | |
10.10**# | | | Letter Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Robert Michael Dudley. | |
10.11**# | | | Employment Agreement, dated as of March 24, 2021, by and Between TransCode Therapeutics, Inc. and Thomas A. Fitzgerald. | |
10.12**# | | | | |
23.1 | | | | |
23.2 | | | | |
24.1** | | | |
| NAME | | | TITLE | | | DATE | |
| /s/ Robert Michael Dudley Robert Michael Dudley | | | Director and Chief Executive Officer (Principal Executive Officer) | | | | |
| /s/ Thomas A. Fitzgerald Thomas A. Fitzgerald, MBA | | | Director and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | |
| * Philippe P. Calais, PhD | | | Director | | | | |
| * Erik Manting, PhD | | | Director | | | | |
| * Magda Marquet, PhD | | | Director | | | | |
| *Pursuant to Power of Attorney By: /s/ Thomas A. Fitzgerald Attorney-in-Fact | | | |