TransCode Therapeutics, Inc. today released an open letter to stockholders regarding the upcoming special meeting to be held April 21. Stockholders are asked to approve a Reverse Split should it become necessary to maintain its NASDAQ listing.
April 16, 2025
Dear Fellow Shareholders,
We have been fortunate to complete two financings in recent months. We believe that these two financings together have provided enough capital to support TTX-MC138’s Phase I clinical trial and company operations into the fourth quarter of 2025. However, and despite the success of those two financings, to continue through the fourth quarter and beyond will require, as we have disclosed, additional capital.
Raising additional capital in a highly challenging environment
Many biotech companies across the industry have experienced unprecedented challenges in obtaining the capital needed to advance their development programs. One of the most important challenges has been the continued decline in the market values of many companies, including that of our company, TransCode.
In addition, a large number of companies continue to report sizable lay-offs and reductions in operations; a significant number have closed completely. In anticipation of this downward trend, we reduced and optimized our workforce over a year ago. In parallel we also focused on advancing execution of the clinical trial of our lead asset, TTX-MC138, that is now well into its fourth dosing cohort.
When many biotechs have had to make difficult decisions to survive, our careful and cautious strategy has allowed us to raise approximately $18M in an extraordinarily difficult economic environment. While we are conscious that this capital was expensive, we note that a sizable number of companies were unable to raise new capital at any cost.
The Board of Directors and management unanimously believe that maintaining our Nasdaq listing is critical to the future of our company. While our share price trades well below $1.00 per share, the Nasdaq minimum, our clinical program is moving forward as planned. We now risk losing our Nasdaq listing unless we achieve a closing bid price of $1.00 or above by May 5, 2025.
In the current financial turmoil, the loss of our Nasdaq listing would make it even more difficult to raise the necessary capital for the reasons set forth in the proxy statement for the April 21, 2025, special meeting of shareholders.
Proposed Reverse Stock Split
Consequently, our board of directors has put a proposal before shareholders for a reverse stock split. As board members and managers, we are also shareholders and are fully aware of the pain such a decision causes. With our company’s future in mind, we are carrying forward this difficult decision to request your approval of the reverse stock split.
Our investment bankers advised us to take this approach now to meet the $1.00 per share or more closing bid price requirement. To do this, the reverse split needs to be approved on April 21. We believe that the reverse split approval is essential to enable us to remain listed with NASDAQ, giving us a better chance of raising the additional capital we will need to continue to advance our clinical trial program.
Obviously, should our stock close above $1.00 in the timeframe required and continues trading above $1.00, the Board does not intend to effect the split even if it has been approved.
What About Grants or Partnerships to Raise Capital?
In parallel with market financings, we have also continuously pursued nondilutive funding. In 2024, the NIH granted us $2M. We also have submitted additional applications for nondilutive government funding and are awaiting funding decisions. At the same time, we also continue to aggressively pursue partnering opportunities.
We assure you that we do everything we possibly can to minimize the cost of obtaining the capital needed. Our streamlined operations have extended our cash runway to continue to pursue our most significant and potentially valuable milestones, including further clinical development progress with our lead therapeutic candidate.
