BOSTON - TransCode Therapeutics, Inc. (NASDAQ:RNAZ), a clinical-stage oncology company, has announced a private placement agreement with institutional investors to raise approximately $8 million in gross proceeds. The funds are earmarked for general corporate purposes and working capital.
The transaction involves the issuance of over 21 million shares of common stock or pre-funded warrants, along with Series C and D warrants to purchase additional shares. The purchase price per share and accompanying warrants is set at $0.377, adhering to Nasdaq's at-the-market rules.
Series C warrants, exercisable post-stockholder approval, will be valid for five years with an exercise price of $0.475, or 125% of the unit price. Series D warrants share the same exercise price but have a shorter term of 2.5 years. Adjustments to the exercise price and share count may occur due to future dilutive issuances and stock splits, with a stipulated floor price.
The closing of the private placement is anticipated on or around November 29, 2024, contingent on customary closing conditions. The Benchmark Company, LLC is serving as the exclusive agent for this placement.
These securities are being sold through a private placement, exempt from the registration requirements of the Securities Act of 1933. As such, they are not registered under the Act or state securities laws and cannot be offered or sold in the U.S. without an effective registration statement or an exemption from registration requirements.
In line with a registration rights agreement, TransCode has committed to filing registration statements with the SEC for the resale of the common stock sold in the placement and the common stock issuable upon exercise of the warrants.
This private placement announcement does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offer and sale of these securities would be illegal prior to registration or qualification under the securities laws of any state or jurisdiction.
TransCode Therapeutics is focused on the development of RNA therapeutics, particularly for treating metastatic cancer. The company's lead candidate, TTX-MC138, targets metastatic tumors that overexpress the microRNA-10b biomarker. This recent funding initiative is part of the company's efforts to advance its proprietary TTX nanoparticle platform and expand its portfolio of RNA therapeutic candidates.
The information provided is based on a press release statement from TransCode Therapeutics.
In other recent news, TransCode Therapeutics has made noteworthy strides in its operations. The company received approval from stockholders on several matters, including a reverse stock split and the ratification of its prior issuance and sale of securities in a public offering managed by ThinkEquity LLC. TransCode's lead therapeutic candidate, TTX-MC138, has advanced to the next stage of its Phase 1 cancer trial, backed by a $2 million grant from the National Institutes of Health.
Despite these positive developments, TransCode is facing potential delisting from Nasdaq due to non-compliance with minimum bid price and equity requirements. The company's Board of Directors has approved a 1-for-33 reverse stock split to address this issue.
TransCode has also announced plans for a public stock offering, with ThinkEquity acting as the sole placement agent. H.C. Wainwright, an analyst firm, has maintained a Buy rating on the company's shares, reflecting confidence in the ongoing development of TTX-MC138. These recent developments underscore TransCode's commitment to advancing its drug development program while navigating regulatory challenges.
InvestingPro Insights
TransCode Therapeutics' recent private placement agreement comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of just $6.51 million, RNAZ is operating in a challenging financial environment. The company's stock has experienced significant volatility, with a 36.59% return over the last three months, but a stark -95.95% return over the past year.
Two key InvestingPro Tips shed light on TransCode's financial situation. First, the company is "quickly burning through cash," which underscores the importance of this $8 million fundraising effort. Second, RNAZ "holds more cash than debt on its balance sheet," suggesting that the company has maintained some financial flexibility despite its challenges.
The company's financial metrics further illustrate its current state. With an adjusted P/E ratio of -0.44 and an EBITDA of -$14.54 million for the last twelve months as of Q3 2024, TransCode is not yet profitable. This aligns with another InvestingPro Tip stating that "analysts do not anticipate the company will be profitable this year."
These insights from InvestingPro provide valuable context to TransCode's private placement announcement, highlighting the company's need for capital to support its ongoing operations and development of RNA therapeutics. Investors considering RNAZ may find additional value in exploring the full set of 14 InvestingPro Tips available for a more comprehensive analysis of the company's financial health and market position.
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