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| PART I. FINANCIAL INFORMATION | | |
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| ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS | | 4 |
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| CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2026 (UNAUDITED) AND DECEMBER 31, 2025 | | 4 |
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| CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) | | 5 |
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| CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) | | 6 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) | | 7 |
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| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | | 8 |
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| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | | 40 |
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| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | | 60 |
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| ITEM 4. CONTROLS AND PROCEDURES | | 61 |
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| PART II. OTHER INFORMATION | | |
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| ITEM 1. LEGAL PROCEEDINGS | | 62 |
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| ITEM 1A. RISK FACTORS | | 62 |
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| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | | 63 |
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| ITEM 3. DEFAULTS UPON SENIOR SECURITIES | | 63 |
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| ITEM 4. MINE SAFETY DISCLOSURES | | 63 |
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| ITEM 5. OTHER INFORMATION | | 64 |
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| ITEM 6. EXHIBITS | | 64 |
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| SIGNATURE | | 66 |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “will,” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| Ø | our ability to obtain stockholder approvals allowing for (i) the issuance of common stock upon the conversion of our Series A Non-Voting Convertible Preferred Stock, par value $0.0001 per share, and Series B Non-Voting Convertible Preferred Stock, par value $0.0001 per share, in connection with our acquisition of ABCJ, LLC, the parent company of Polynoma, LLC ("Polynoma") pursuant to a Membership Interest Purchase Agreement, dated October 8, 2025, (ii) the issuance of common stock upon the conversion of our Series C Non-Voting Convertible Preferred Stock, par value $0.0001 per share, issued pursuant to our licensing agreement with Unleash Immuno Oncolytics, Inc. ("Unleash"), dated March 2, 2026, and the respective timing thereof, and (iii) the potential issuance of shares of common stock pursuant to a Standby Equity Purchase Agreement (the “SEPA”) by and between us and YA II PN, LTD (“Yorkville”); |
| Ø | our cash position, our estimates and expectations regarding our capital requirements, cash and expense levels, liquidity sources, our need for additional financing and our ability to obtain, on satisfactory terms or at all, the financing required to support operations, research, development, clinical trials, and commercialization of products; |
| Ø | a potential delisting of our common stock from trading on the Nasdaq Capital Market; |
| Ø | our ability to continue as a going concern; |
| Ø | the results and timing of our preclinical and clinical trial activities, including but not limited to our ability to enroll timely a sufficient number of patients to advance our clinical trials; |
| Ø | our ability to expand our therapeutic candidate portfolio through internal research and development or the acquisition or in-licensing of intellectual property assets; |
| Ø | the therapeutic benefits, effectiveness and safety of our therapeutic candidates; |
| Ø | our ability to receive regulatory approval for our therapeutic candidates in the United States, Europe and other geographies; |
| Ø | the expected regulatory approval pathway for our therapeutic candidates; |
| Ø | potential changes in regulatory requirements, and delays or negative outcomes from the regulatory approval process; |
| Ø | our ability to maintain adequate quality processes and oversight of vendors; |
| Ø | our ability to secure raw materials to support continued drug substance and drug product manufacturing; |
| Ø | our reliance on third-parties for the planning, conduct, management and monitoring of clinical trials, for the manufacture of clinical drug supplies and drug product meeting our specifications, and for other requirements; |
| Ø | our estimates of the size and characteristics of the markets that may be addressed by our therapeutic candidates; |
| Ø | market acceptance of our therapeutic candidates that are approved for marketing in the United States or other countries; |
| Ø | our ability to successfully commercialize our therapeutic candidates, if approved for marketing; |
| Ø | the safety and efficacy of therapeutics marketed by our competitors that are targeted to indications which our therapeutic candidates have been developed to treat; |
| Ø | our ability to utilize our proprietary technological approach to develop and commercialize our therapeutic candidates; |
| Ø | our heavy dependence on licensed intellectual property, including our ability to source and maintain licenses from third-party owners; |
| Ø | our ability to protect our own or in-licensed intellectual property and operate our business without infringing the intellectual property rights of others; |
| Ø | our ability to attract, retain and motivate key personnel; |
| Ø | our ability to generate revenue and become profitable; |
| Ø | the outcome of our Phase Ia clinical trial with TTX-MC138, which commenced in the third quarter of 2024, and our Phase IIa clinical trial, which we expect to commence in the first half 2026, and our ability to complete these trials; |
| Ø | the impact of natural disasters, global pandemics, armed conflicts and wars, labor disputes, lack of raw materials or other supplies, issues with facilities and equipment, or other forms of disruption to business operations at our manufacturing or laboratory facilities or those of our vendors; |
| Ø | potential collaborations to license and commercialize any therapeutic candidates for which we receive regulatory approval in the future in or outside the United States; and |
| Ø | other risks and uncertainties, including those listed under the caption “Risk Factors” in this Quarterly Report on Form 10-Q and in our other regulatory filings. |
The risks set forth above are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events and with respect to our business and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You are advised, however, to consult any further disclosure we make in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”).
This Quarterly Report on Form 10-Q may include data that we obtained from industry publications and third-party research, surveys and studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. This Quarterly Report on Form 10-Q also may include data based on our own internal estimates and research, including estimates regarding our consolidated financial statements and business operations. Our internal estimates have not been verified by any independent source and, while we believe any data obtained from industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data. Such third-party data, as well as our internal estimates and research, are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. These and other factors could cause our results to differ materially from those expressed in or suggested by this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may contain trademarks, service marks and trade names of third parties which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this Quarterly Report on Form 10-Q is not intended to, and does not, imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ®, TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.
For purposes of this Quarterly Report on Form 10-Q, TransCode Therapeutics® is referred to as TransCode. Additionally, “we,” “our,” “us” and the “Company” refer to TransCode.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
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| · · March 31, · · December 31, |
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| · · 2026 · · 2025 |
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| Assets · · (Unaudited) · · · |
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| Current assets: | | | | | | |
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| Cash | | | $12,835,454 | | | $17,813,521 |
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| Grant receivable | | | — | | | 952,460 |
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| Reimbursement right | | | 2,297,806 | | | 2,297,806 |
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| Due from related party | | | 638 | | | 638 |
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| Prepaid expenses and other current assets | | | 1,615,096 | | | 919,440 |
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| Total current assets | | | 16,748,994 | | | 21,983,865 |
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| Property and equipment, net of depreciation | | | 346,745 | | | 370,681 |
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| Goodwill | | | 25,744,143 | | | 25,744,143 |
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| Intangible assets | | | 114,300,000 | | | 114,300,000 |
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| Deferred offering costs | | | 25,000 | | | — |
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| Total assets | | | $157,164,882 | | | $162,398,689 |
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| Liabilities, Series A Non-Voting Convertible Preferred Stock, and Stockholders’ Equity | | | | | | |
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| Current liabilities: | | | | | | |
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| Accounts payable and accrued expenses | | | $5,293,308 | | | $3,494,220 |
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| Deferred grant income | | | 85,262 | | | — |
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| Total current liabilities | | | 5,378,570 | | | 3,494,220 |
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| Long-term liabilities: | | | | | | |
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| Warrant liability - Series C | | | 559,747 | | | 434,399 |
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| Contingent consideration | | | 6,248,000 | | | 6,364,000 |
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| Deferred tax liability | | | 457,377 | | | 226,068 |
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| Long-term liabilities | | | 7,265,124 | | | 7,024,467 |
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| Total liabilities | | | 12,643,694 | | | 10,518,687 |
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| Commitments and contingencies | | | | | | |
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| Series A Non-Voting Convertible Preferred Stock – $0.0001 par value per share; 1,242.0718 shares authorized at March 31, 2026, and December 31, 2025; 1,212.1822 shares issued and outstanding at March 31, 2026, and December 31, 2025 | | | 143,269,761 | | | 141,544,536 |
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| Stockholders’ equity: | | | | | | |
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| Series B Non-Voting Convertible Preferred Stock – $0.0001 par value per share; 223.7337 shares authorized at March 31, 2026, and December 31, 2025; 223.7337 shares issued and outstanding at March 31, 2026, and December 31, 2025 | | | — | | | — |
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| Series C Non-Voting Convertible Preferred Stock – $0.0001 par value per share; 1,214,204 and -0- shares authorized at March 31, 2026, and December 31, 2025, respectively; 1,214,204 and -0- shares issued and outstanding at March 31, 2026, and December 31, 2025, respectively | | | 121 | | | — |
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| Common stock – $0.0001 par value per share; 290,000,000 shares authorized at March 31, 2026, and December 31, 2025; 916,968 shares issued and outstanding at March 31, 2026, and December 31, 2025 | | | 92 | | | 92 |
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| Additional paid-in capital | | | 116,899,277 | | | 108,198,366 |
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| Accumulated deficit | | | (115,648,063) | | | (97,862,992) |
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| Total stockholders’ equity | | | 1,251,427 | | | 10,335,466 |
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| Total liabilities, Series A Non-Voting Convertible Preferred Stock and stockholders' equity | | | $157,164,882 | | | $162,398,689 |
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