Transcode Therapeutics Inc

Current report

In the third quarter 2024, the Company received three letters from the Nasdaq Stock Market (“Nasdaq”) Staff notifying the Company that it was not in compliance with Nasdaq Listing Rules 5550(a)(2) (the “Bid Price Rule”), 5550(b)(1) (the “Equity Rule”) or any of the alternative requirements in Listing Rule 5550(b), and 5635(d) (the “Shareholder Approval Rule”). As a result, the shares of the Company’s common stock are subject to delisting from The Nasdaq Capital Market. On October 1, 2024, the Company appealed the Staff’s determination to a Nasdaq Hearings Panel (the “Panel”) and, on November 4, 2024, the Company was informed that the Panel granted the Company a formal extension to regain compliance with the Nasdaq Listing Rules.

Current report

In order to regain compliance with the Nasdaq Listing Rules, the Company must, (i) on or before November 22, 2024, obtain approval for a reverse stock split in a ratio sufficient to regain compliance with the Bid Price Rule; (ii) on or before November 22, 2024, obtain shareholder ratification of the July 2024 Offering; (iii) on or before December 31, 2024, demonstrate compliance with the Bid Price Rule; (iv) on or before December 31, 2024, have filed a public disclosure describing the transactions undertaken by the Company to achieve compliance and demonstrate long-term compliance with the Equity Rule and provide an indication of its equity following those transactions; and (v) on or before December 31, 2024, have provided the Panel with income projections for the next twelve months, with all underlying assumptions clearly stated and evidence compliance with all other applicable criteria for continued listing on the Nasdaq Capital Market. There can be no assurance that the Company will successfully regain compliance with the Nasdaq Listing Rules.

Current report

As further described elsewhere in this Quarterly Report on Form 10-Q, in light of our financial position and our need to raise additional capital, delisting of our common stock from the Nasdaq Capital Market would materially limit our ability to obtain additional equity capital. We may need to seek an in-court or out-of-court restructuring of our liabilities. In the event of such restructuring activities, holders of our common stock and other securities will likely suffer a total loss of their investment.

Previous report

Nasdaq Listing Rule 5550(b)(1) requires that companies listed on the Nasdaq Capital Market, or the Exchange, maintain stockholders’ equity of at least $2,500,000, or the Stockholders’ Equity Requirement. We had not met this requirement until January 22, 2024, but there is no assurance that we will be able to continue to meet this requirement in the future. Our stockholders’ equity at June 30, 2024, was approximately $1.3 million but adding the approximate $2.4 million of net proceeds from our July 2024 Offering results in apro forma stockholders’ equity of approximately $3.7 million. There is no assurance that Nasdaq will assess our stockholders’ equity on apro forma basis.

Previous report

Additionally, on August 13, 2024, we received a letter from the Staff notifying us that for the 30 consecutive business day period prior to that date, our common stock had not maintained a minimum closing bid price of $1.00 per share, or the Minimum Bid Price Requirement, required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). As a result, our shares are subject to delisting from The Nasdaq Capital Market. Normally, a company would be afforded a 180-calendar day period to demonstrate compliance with the Minimum Bid Price Requirement. However, pursuant to Listing Rule 5810(c)(3)(A)(iv), we are not eligible for any compliance period specified in Rule 5810(c)(3)(A) because we effected two reverse stock splits over the prior two-year period with a cumulative ratio of more than 250 shares to one. We have the right until August 20, 2024, to appeal the Staff’s determination to a Hearings Panel (the “Panel”). A hearing request will stay the suspension of our shares and we expect that our stock would remain listed pending the Panel’s decision. There can be no assurance that, if we do appeal the Staff’s determination to the Panel, such appeal would be successful.

Previous report

The continued listing of our common stock on the Nasdaq Capital Market also depends on our compliance with other Nasdaq requirements including but not limited to Market Place Rule 5635, or the shareholder approval rule. The shareholder approval rule prohibits the issuance of shares of common stock (or derivatives) in excess of 20% of our outstanding shares of common stock without shareholder approval, unless those shares are sold at a price that equals or exceeds the Minimum Price, as defined in the shareholder approval rule, or are sold in what Nasdaq deems a Public Offering, as defined in the shareholder approval rule. The securities sold in our recent offerings were at a significant discount to the Minimum Price and we did not obtain stockholder approval for those issuances. We have sought to conduct these offerings as Public Offerings, but that determination is a qualitative analysis based on several factors as determined by Nasdaq. Nasdaq has also published guidance that an offering of securities sold at a price that is “deeply discounted” to the Minimum Price (for example, a discount of 50% or more) will typically preclude a determination that the offering qualifies as Public Offering for purposes of the shareholder approval rule. If Nasdaq determines that any of our offerings was not conducted in compliance with the shareholder approval rule, Nasdaq may cite a deficiency and move to delist our securities from the Nasdaq Capital Market.

Current report — wording carried from elsewhere

In the event of a delisting from the Nasdaq Capital Market, we may seek to have our stock traded in the over-the-counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market, or, together, Exchange-listed stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed stocks. Accordingly, our stock would be less liquid than it would be otherwise. Also, the prices of OTC stocks are often more volatile than Exchange-listed stocks. Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital.

Current report — wording carried from elsewhere

creditors may have a material adverse effect on our business, results of operations and financial condition and jeopardize our ability to continue operations in the near-term. We will likely need to consider additional cost reduction strategies, which may include, among others, amending, delaying, limiting, reducing, or terminating our development programs, and we may need to seek an in-court or out-of-court restructuring of our liabilities. In the event of such future restructuring activities, holders of our common stock and other securities will likely suffer a total loss of their investment.