Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________ FORM 10-Q ____________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-40363 TR ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Unaudited Q1 2023 financial statements detail a $4.8 million net loss, $1.6 million cash, a $0.2 million stockholders' deficit, and going concern uncertainty [Balance Sheets](index=5&type=section&id=BALANCE%20SHEETS) The balance sheet as of March 31, 2023, shows reduced cash and assets, increased liabilities, and a $236,792 stockholders' deficit, down from $3.2 million equity Balance Sheet Summary (Unaudited) | Account | March 31, 2023 (USD) | December 31, 2022 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $1,622,657 | $4,968,418 | | Total Current Assets | $4,346,623 | $7,379,405 | | Total Assets | $5,590,510 | $7,587,986 | | **Liabilities & Equity** | | | | Total Current Liabilities | $5,449,489 | $4,347,290 | | Total Liabilities | $5,827,302 | $4,347,290 | | Total Stockholders' Equity (Deficit) | ($236,792) | $3,240,696 | [Statements of Operations](index=6&type=section&id=STATEMENTS%20OF%20OPERATIONS) Q1 2023 net loss increased to $4.8 million ($0.33/share) from $3.5 million ($0.27/share) in Q1 2022, driven by higher R&D and G&A expenses Statements of Operations Summary (Unaudited) | Account | Three Months Ended March 31, 2023 (USD) | Three Months Ended March 31, 2022 (USD) | | :--- | :--- | :--- | | Research and development | $2,591,350 | $1,881,576 | | General and administrative | $2,309,763 | $1,595,926 | | **Operating loss** | **($4,901,113)** | **($3,477,502)** | | **Net loss** | **($4,816,934)** | **($3,470,070)** | | Net loss per share | ($0.33) | ($0.27) | [Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY%20%28DEFICIT%29) Stockholders' equity shifted from $3.2 million at year-end 2022 to a $0.2 million deficit by March 31, 2023, due to a $4.8 million net loss, partially offset by $1.2 million from stock issuance - Stockholders' equity decreased from **$3,240,696** at the end of 2022 to a deficit of **($236,792)** at March 31, 2023[24](index=24&type=chunk) - This was mainly due to the net loss of **$4,816,934**, which was partially offset by **$1,180,686** from the net issuance of common stock and **$158,760** in share-based compensation[24](index=24&type=chunk) [Statements of Cash Flows](index=8&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) Q1 2023 saw $4.5 million net cash used in operations, a $3.3 million decrease in cash to $1.6 million, partially offset by $1.2 million from financing activities Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 (USD) | Three Months Ended March 31, 2022 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,513,551) | ($3,948,566) | | Net cash used in investing activities | ($12,896) | ($30,657) | | Net cash provided by financing activities | $1,180,686 | $5,989 | | **Net change in cash** | **($3,345,761)** | **($3,973,234)** | | Cash, end of period | $1,622,657 | $16,852,626 | [Notes to Financial Statements (Unaudited)](index=9&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS%20%28UNAUDITED%29) Notes detail substantial doubt about going concern due to recurring losses and insufficient cash, alongside accounting policies, collaboration commitments, stock-based compensation, and recent equity financing - The company has concluded there is substantial doubt about its ability to continue as a going concern[34](index=34&type=chunk) - Current cash is sufficient to fund operations into the second quarter of 2023, but not for a full 12 months from the financial statement issuance date[34](index=34&type=chunk)[38](index=38&type=chunk) - In February 2023, the company completed a registered direct offering (RDO) of **2,846,300** shares of common stock at **$0.527** per share, generating net proceeds of approximately **$1.2 million**[104](index=104&type=chunk) - The company has a five-year strategic collaboration agreement with The University of Texas M. D. Anderson Cancer Center, with a commitment to fund up to **$10 million** over the term[95](index=95&type=chunk) - Subsequent to the quarter end, in April 2023, the company entered into a Common Stock Purchase Agreement with White Lion Capital to sell up to **$1,081,307** in common stock[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the TTX oncology platform and TTX-MC138's FDA Phase 0 authorization, highlighting increased operating expenses and critical liquidity, with $1.6 million cash only sufficient into Q2 2023, raising going concern doubt - The company's lead therapeutic candidate, TTX-MC138, received authorization from the FDA in December 2022 to conduct a Phase 0 clinical trial[133](index=133&type=chunk) - The company received IRB approval in April 2023 to commence the trial[133](index=133&type=chunk) - Management states that cash of approximately **$1.6 million** at March 31, 2023, plus subsequent receipts, will be sufficient to fund operations into but not through the second quarter of 2023, raising substantial doubt about the company's ability to continue as a going concern[164](index=164&type=chunk)[191](index=191&type=chunk) Comparison of Operating Expenses (Q1 2023 vs Q1 2022) | Expense Category | Q1 2023 (in thousands USD) | Q1 2022 (in thousands USD) | Change (in thousands USD) | | :--- | :--- | :--- | :--- | | Research and development | $2,591 | $1,882 | $709 | | General and administrative | $2,310 | $1,596 | $714 | | **Total operating expenses** | **$4,901** | **$3,478** | **$1,423** | - The increase in R&D expenses was primarily due to increased consulting, purchased services, and personnel costs[184](index=184&type=chunk) - The increase in G&A expenses was mainly from higher personnel costs, legal and accounting services, and other public company costs[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risks are interest rate sensitivity on cash and Euro-denominated foreign currency exchange, neither of which is expected to materially affect financial results due to current scale - The company's primary market risk exposures are interest rate sensitivity on cash holdings and foreign currency exchange risk, mainly from the Euro[223](index=223&type=chunk)[225](index=225&type=chunk) - Management states that an immediate **10%** change in interest rates or a **5%** change in the Euro exchange rate would not materially affect the company's financial results[223](index=223&type=chunk)[225](index=225&type=chunk) [Controls and Procedures](index=41&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were ineffective as of March 31, 2023, due to material weaknesses, with ongoing remediation efforts including hiring finance personnel and engaging consultants - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2023, due to an existing material weakness[229](index=229&type=chunk) - Ongoing remediation efforts include hiring more finance and accounting personnel, documenting policies and procedures, and assessing significant accounting transactions with the help of an independent consulting firm engaged in September 2022[230](index=230&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any material legal proceedings, nor is it aware of any pending or threatened litigation with a material adverse effect - As of the reporting date, the company is not a party to any material legal proceedings[235](index=235&type=chunk) [Risk Factors](index=43&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, TransCode is not required to update its risk factors in this quarterly report on Form 10-Q - The company is not required to disclose information under this item as it qualifies as a smaller reporting company[236](index=236&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In Q1 2023, the company issued unregistered warrants to a consultant for up to 250,000 common shares at $0.50 per share, exempt under Section 4(a)(2) - In Q1 2023, the company issued warrants to a consultant to purchase up to **250,000** shares of common stock at **$0.50** per share[237](index=237&type=chunk) - The issuance was exempt from registration requirements[237](index=237&type=chunk) [Defaults Upon Senior Securities](index=43&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported during the period - None[240](index=240&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's business - Not applicable[241](index=241&type=chunk) [Other Information](index=43&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information required to be disclosed under this item was reported - None[242](index=242&type=chunk) [Exhibits](index=43&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with Form 10-Q, including various agreements like the Placement Agent Warrant, Securities Purchase Agreement, Common Stock Purchase Agreement, and officer certifications - Exhibits filed with the report include the Form of Placement Agent Warrant, a Securities Purchase Agreement, the Common Stock Purchase Agreement with White Lion Capital LLC, and officer certifications[243](index=243&type=chunk)[244](index=244&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO ___________ | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | --- | --- | --- | | Common S ...

RNA Delivery and Therapeutics - The company has developed the TTX platform, an RNA delivery system utilizing an iron oxide nanoparticle, aimed at improving the delivery of RNA therapeutics to tumors [121]. - The lead therapeutic candidate, TTX-MC138, targets microRNA-10b and is expected to enter a Phase 0 clinical trial to demonstrate delivery to metastatic lesions in patients with advanced solid tumors [124]. - The company received orphan drug designation for TTX-siPDL1 for pancreatic cancer, which provides seven years of marketing exclusivity upon FDA approval, along with tax credits and fee exemptions estimated to save over $3 million [133]. - The company plans to conduct a microdosing Phase 0 trial with TTX-MC138, enrolling up to 12 patients to measure drug delivery using PET-MRI [132]. - The TTX platform is designed to overcome stability, efficiency, and immunogenicity issues faced by existing delivery systems, optimizing accumulation in tumor cells [123]. - The proprietary delivery mechanism aims to significantly improve outcomes for cancer patients by enhancing the effectiveness of RNA-based therapies [126]. - The company intends to optimize a diagnostic test for detecting miR-10b in blood samples, potentially leading to FDA approval for screening metastasis in various tumor types [128]. - The research published in Cancer Nanotechnology supports the efficacy of the TTX platform in delivering therapeutic candidates to metastatic lesions, indicating a promising path for clinical evaluation [129]. Financial Performance and Projections - As of September 30, 2022, the company had cash of approximately $8.8 million and expects to receive up to an additional $1.8 million under the SBIR Award [142]. - The net losses for the nine months ended September 30, 2022, were approximately $12.4 million, with an accumulated deficit of approximately $22.7 million [138]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future [146]. - The company anticipates incurring significant operating expenses as it transitions to a public company, including legal, accounting, and investor relations costs [139]. - The company has received gross proceeds of approximately $31.5 million from its IPO and borrowings under convertible promissory notes [137]. - The company may need to raise additional capital to support ongoing operations and business strategy, which cannot be assured [140]. - The company has incurred significant operating losses and does not expect to generate revenue from product sales for several years [171]. - The company expects to require additional capital for research, development, and clinical trials, as well as for operations and potential acquisitions [175]. Research and Development Expenses - Research and development expenses are expected to increase substantially as the company commences planned clinical trials for TTX-MC138 and other product candidates [150]. - Research and development expenses increased by $2,051 thousand (approximately 206% increase) for the three months ended September 30, 2022, and by $6,077 thousand (approximately 414% increase) for the nine months ended September 30, 2022, compared to the same periods in 2021 [164]. - The company anticipates significant increases in expenses related to ongoing and planned activities, particularly for clinical trials of TTX-MC138 [173]. Collaboration and Funding - A Fast-Track Small Business Innovation Research award from the National Cancer Institute is expected to provide up to $2,392,845 for a research partnership with Massachusetts General Hospital, with funding milestones achieved in previous years [134]. - The company has committed to fund up to $10 million over five years for a strategic collaboration with MD Anderson, with $500,000 payable in the first year [152]. - The company has budgeted funds for research and development to meet future payment obligations under the collaboration agreement, which do not represent additional spending [187]. - The agreement with MD Anderson is for a term of five years or until the studies are completed, whichever is later, unless terminated for a material breach [187]. Operational Challenges - The impact of the COVID-19 pandemic has affected the timeline for preclinical studies and planned clinical trials [145]. - The company relies significantly on third parties for preclinical studies and clinical trial services, with accrued research and development expenses estimated based on progress towards project completion [191]. - The company has not completed any clinical trials or obtained regulatory approvals for its product candidates [137]. Expenses and Losses - General and administrative expenses rose by $543 thousand (approximately 40% increase) for the three months ended September 30, 2022, and by $3,897 thousand (approximately 229% increase) for the nine months ended September 30, 2022, compared to the same periods in 2021 [165]. - The net loss for the three months ended September 30, 2022, was $4,290 thousand, compared to a net loss of $2,329 thousand for the same period in 2021, representing an increase of $1,961 thousand (approximately 84% increase) [163]. - Cash used in operating activities was $11,743 thousand for the nine months ended September 30, 2022, compared to $3,666 thousand for the same period in 2021, reflecting an increase of $8,077 thousand (approximately 220% increase) [181]. - The total cash decrease for the nine months ended September 30, 2022, was $12,036 thousand, compared to an increase of $21,672 thousand for the same period in 2021 [180]. Market and Risk Factors - The company is classified as an "emerging growth company" and a "smaller reporting company," with annual revenue less than $100 million during the most recently completed fiscal year [202][204]. - The company has identified material weaknesses in its internal control over financial reporting prior to its IPO, which remain unremediated [201]. - The company has taken steps to enhance cybersecurity defenses in response to increasing threats, including phishing attacks [205]. - The company’s primary exposure to market risk is foreign exchange rate sensitivity to the Euro, impacting major purchases [208]. - The company has not recognized foreign currency transaction losses for the nine months ended September 30, 2022, and an immediate 5% change in the Euro exchange rate would not materially affect results [208]. - The company has not entered into any foreign currency hedging contracts to mitigate exposure to foreign currency exchange risk [209]. - An immediate 10% change in U.S. interest rates would not materially affect the fair market value of the company's investments [206]. - The company’s cash is held in checking and savings accounts at major U.S. banks [206].

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements subject to risks and uncertainties, covered under safe harbor provisions - The report contains forward-looking statements covered by safe harbor provisions, identifiable by terms like **'may,' 'will,' 'expects,' 'plans,' 'intends,' 'anticipates,' 'believes,' 'estimates,' 'predicts,' 'potential,' or 'continue'**[7](index=7&type=chunk) - These statements include estimates and expectations regarding capital requirements, R&D activities, regulatory approvals, and reliance on third parties[8](index=8&type=chunk)[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on these statements due to inherent risks detailed in the 'Risk Factors' section[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited interim financial statements and management's analysis of the company's financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents unaudited interim financial statements, highlighting operating losses and liquidity challenges that raise going concern doubts [Balance Sheets](index=7&type=section&id=BALANCE%20SHEETS%20AS%20OF%20JUNE%2030%2C%202022%2C%20(UNAUDITED)%20AND%20DECEMBER%2031%2C%202021) The balance sheets show a significant decrease in cash, total assets, and stockholders' equity during the first half of 2022 Balance Sheet Summary | Metric | June 30, 2022 (Unaudited) | December 31, 2021 | | :-------------------------------- | :-------------------------- | :------------------ | | **Assets** | | | | Cash | $13,438,385 | $20,825,860 | | Total current assets | $13,920,783 | $22,732,175 | | Total assets | $14,155,456 | $22,938,443 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $1,727,251 | $2,534,097 | | Total liabilities | $1,727,251 | $2,534,097 | | Total stockholders' equity (deficit) | $12,428,205 | $20,404,346 | | Accumulated deficit | $(18,446,583) | $(10,305,281) | - Cash decreased by approximately **$7.39 million** from December 31, 2021, to June 30, 2022[14](index=14&type=chunk) - Total assets decreased by approximately **$8.78 million**, and total stockholders' equity decreased by approximately **$7.98 million** during the six-month period[14](index=14&type=chunk) [Statements of Operations](index=8&type=section&id=STATEMENTS%20OF%20OPERATIONS%20FOR%20THE%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202022%20AND%202021%20(UNAUDITED)) The company's net loss widened significantly due to substantial increases in R&D and G&A expenses Statement of Operations Summary | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,620,028 | $211,752 | $4,501,604 | $475,511 | | General and administrative | $2,087,265 | $143,776 | $3,683,191 | $329,482 | | Total operating expenses | $4,707,293 | $355,528 | $8,184,795 | $804,993 | | Operating loss | $(4,707,293) | $(355,528) | $(8,184,795) | $(804,993) | | Net income (loss) | $(4,671,232) | $2,770,904 | $(8,141,302) | $(1,714,434) | | Basic earnings (loss) per share | $(0.36) | $0.60 | $(0.63) | $(0.37) | | Diluted earnings (loss) per share | $(0.36) | $0.51 | $(0.63) | $(0.37) | - **Net loss significantly increased** for the three and six months ended June 30, 2022, compared to the prior year, primarily due to substantial increases in R&D and G&A expenses[17](index=17&type=chunk) - Research and development expenses increased by **$2.41 million** (YoY for Q2) and **$4.03 million** (YoY for H1), reflecting expanded R&D activities[17](index=17&type=chunk)[162](index=162&type=chunk) - General and administrative expenses increased by **$1.94 million** (YoY for Q2) and **$3.35 million** (YoY for H1), driven by public company costs and personnel expenses[17](index=17&type=chunk)[163](index=163&type=chunk) [Statements of Stockholders' Equity (Deficit)](index=9&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)%20FOR%20THE%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202022%20AND%202021%20(UNAUDITED)) Stockholders' equity decreased substantially, driven by a growing accumulated deficit from ongoing net losses Stockholders' Equity Summary | Metric | December 31, 2021 | June 30, 2022 | | :-------------------------------- | :------------------ | :------------------ | | Common Stock Shares | 12,904,574 | 12,977,234 | | Common Stock Amount | $1,291 | $1,298 | | Additional Paid-In Capital | $30,708,336 | $30,873,490 | | Accumulated Deficit | $(10,305,281) | $(18,446,583) | | Total Stockholders' Equity (Deficit) | $20,404,346 | $12,428,205 | - The accumulated deficit increased significantly from **$10.31 million** at December 31, 2021, to **$18.45 million** at June 30, 2022, reflecting ongoing net losses[20](index=20&type=chunk) - Total stockholders' equity decreased by approximately **$7.98 million** during the six months ended June 30, 2022, primarily due to the net loss[20](index=20&type=chunk) - Share-based compensation contributed **$159,172** to additional paid-in capital for the six months ended June 30, 2022[20](index=20&type=chunk)[104](index=104&type=chunk) [Statements of Cash Flows](index=10&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202022%20AND%202021%20(UNAUDITED)) Cash used in operating activities increased dramatically, leading to a significant reduction in the company's cash position Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(7,320,760) | $(598,152) | | Net cash used in investing activities | $(72,704) | $(97,541) | | Net cash provided by (used in) financing activities | $5,989 | $(52,756) | | Net change in cash | $(7,387,475) | $(748,449) | | Cash, beginning of period | $20,825,860 | $828,016 | | Cash, end of period | $13,438,385 | $79,567 | - Net cash used in operating activities increased significantly to **$7.32 million** for the six months ended June 30, 2022, from $0.60 million in the prior year, primarily due to increased net loss and changes in working capital[23](index=23&type=chunk)[177](index=177&type=chunk) - Cash at the end of the period decreased to **$13.44 million** as of June 30, 2022, from $20.83 million at the beginning of the period[23](index=23&type=chunk) [Notes to Financial Statements](index=11&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The notes detail the company's early-stage operations, going concern uncertainty, and key agreements and accounting policies - The company is an early-stage biopharmaceutical company focused on developing drugs and diagnostics for metastatic disease, with its lead candidate **TTX-MC138** targeting microRNA-10b[26](index=26&type=chunk)[123](index=123&type=chunk) - TransCode has not generated revenue, incurred substantial losses, and has negative cash flows from operations, leading to **substantial doubt about its ability to continue as a going concern** without additional capital[28](index=28&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Current cash is projected to fund operations only into the **first quarter of 2023**, necessitating additional financing[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Research and development expenses are expensed as incurred; R&D payables to CROs/CMOs were **$752,067** at June 30, 2022, up from $386,057 at December 31, 2021[44](index=44&type=chunk) - Grant income is recognized as earned from awards like the National Cancer Institute's SBIR Award, which is expected to provide **$2,392,845** over three years[48](index=48&type=chunk)[70](index=70&type=chunk) - The company has license agreements with Massachusetts General Hospital for intellectual property, including minimum annual fees and potential milestone payments up to **$1,550,000**[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[79](index=79&type=chunk) - Share-based compensation expense for the six months ended June 30, 2022, was **$159,172**, with approximately **$2,044,859** remaining to be recognized over 2.3 years[104](index=104&type=chunk) - A strategic collaboration agreement was signed with The University of Texas M. D. Anderson Cancer Center on July 29, 2022, committing up to **$10 million** over five years[114](index=114&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses operational results, the TTX delivery platform, significant operating losses, and the critical need for additional funding [Company Overview](index=28&type=section&id=Company%20Overview) The company is an RNA oncology firm developing therapeutics with its proprietary TTX delivery platform, led by candidate TTX-MC138 - TransCode Therapeutics is an RNA oncology company developing RNA therapeutics using its proprietary **TTX delivery platform**, which leverages an iron oxide nanoparticle[120](index=120&type=chunk)[121](index=121&type=chunk) - The TTX platform is **modular**, allowing for adaptation to various therapeutic loads and is designed to overcome stability and efficiency issues[122](index=122&type=chunk) - The lead therapeutic candidate, **TTX-MC138**, targets microRNA-10b, a regulator of metastatic cell viability in various cancers[123](index=123&type=chunk) - Other preclinical programs include **TTX-siPDL1**, **TTX-siLIN28B**, **TTX-RIGA**, **TTX-CRISPR**, and **TTX-mRNA**[124](index=124&type=chunk) - Research published in Cancer Nanotechnology demonstrated that radiolabeled TTX-MC138 **accumulates in metastatic lesions** in murine models, supporting a microdosing PET-MRI approach for human trials[128](index=128&type=chunk)[129](index=129&type=chunk) [Orphan Drug Designation](index=32&type=section&id=Orphan%20Drug%20Designation) The FDA granted Orphan Drug Designation for TTX-siPDL1, providing potential marketing exclusivity and financial benefits - In June 2022, the FDA granted **Orphan Drug Designation (ODD)** for TTX-siPDL1 for the treatment of pancreatic cancer[132](index=132&type=chunk) - ODD status provides potential benefits including **seven years of marketing exclusivity**, tax credits for R&D, and exemption from the PDUFA filing fee[132](index=132&type=chunk) [SBIR Award](index=32&type=section&id=SBIR%20Award) The company received a multi-year SBIR Award from the National Cancer Institute to fund IND-enabling studies for TTX-MC138 - The company received a Fast-Track Small Business Innovation Research (SBIR) Award from the National Cancer Institute, expected to provide **$2,392,845** over three years[133](index=133&type=chunk) - First-year funding of **$308,861** was received in May 2021, and second-year funding of **$1,129,316** was made available in May 2022[133](index=133&type=chunk) - The SBIR Award aims to fund **IND-enabling studies** and imaging studies for TTX-MC138[134](index=134&type=chunk)[135](index=135&type=chunk) [Financial Operations Overview](index=32&type=section&id=Financial%20Operations%20Overview) The company has a history of net losses and requires substantial additional funding, with current cash lasting only into Q1 2023 - The company has not generated product revenue and incurred net losses of **$8.1 million** for the six months ended June 30, 2022, with an accumulated deficit of **$18.4 million**[137](index=137&type=chunk) - **Substantial additional funding is required** to support ongoing operations, preclinical and clinical trials, and public company costs[138](index=138&type=chunk)[139](index=139&type=chunk) - As of June 30, 2022, cash was **$13.4 million**, expected to fund operations into **Q1 2023**, raising substantial doubt about going concern[141](index=141&type=chunk)[172](index=172&type=chunk) [Impact of the Novel Coronavirus (COVID-19) Pandemic](index=35&type=section&id=Impact%20of%20the%20Novel%20Coronavirus%20(COVID-19)%20Pandemic) The COVID-19 pandemic has caused and may continue to cause disruptions and delays to the company's development timelines - The COVID-19 pandemic has caused global disruptions which have affected and are expected to continue to affect the timeline for **preclinical studies and planned clinical trials**[142](index=142&type=chunk) - The full extent of the pandemic's impact on operations, expenses, and development timelines **remains uncertain**[142](index=142&type=chunk) [Components of our results of operations](index=35&type=section&id=Components%20of%20our%20results%20of%20operations) The company's financial results are primarily driven by R&D and G&A expenses, with no product revenue to date - The company has not generated any revenue from product sales and does not expect to in the foreseeable future[143](index=143&type=chunk) - **Research and development expenses** include costs for drug discovery, preclinical/clinical development, CROs/CMOs, materials, and personnel[144](index=144&type=chunk) - **General and administrative expenses** cover staffing, insurance, professional fees, and corporate costs, expected to increase as a public company[154](index=154&type=chunk)[155](index=155&type=chunk) - Other income (expense) includes interest income on cash balances and grant income from government programs[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20operations) Operating expenses and net loss increased significantly year-over-year due to expanded R&D and public company costs Comparison of Operating Results (in thousands) | Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | Change (3 Months) | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | Change (6 Months) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------ | :--------------------------- | :--------------------------- | :------------------ | | Research and Development | $2,620 | $212 | $2,408 | $4,502 | $476 | $4,026 | | General and Administrative | $2,087 | $144 | $1,943 | $3,683 | $329 | $3,354 | | Total Operating Expenses | $4,707 | $356 | $4,351 | $8,185 | $805 | $7,380 | | Operating Loss | $(4,707) | $(356) | $(4,351) | $(8,185) | $(805) | $(7,380) | | Net income (loss) | $(4,671) | $2,771 | $(7,442) | $(8,141) | $(1,714) | $(6,427) | - R&D expenses increased by **$2.41 million** (QoQ) and **$4.03 million** (YoY H1) due to material purchases, compensation, and regulatory/purchased services[162](index=162&type=chunk) - G&A expenses increased by **$1.94 million** (QoQ) and **$3.35 million** (YoY H1) due to D&O insurance, personnel costs, and public company expenses[163](index=163&type=chunk) - Grant income decreased by **$22 thousand** (QoQ) and **$15 thousand** (YoY H1) as recognition was tied to work completion under the NIH grant[164](index=164&type=chunk) - Derivative and warrant liabilities, and interest expense, were **$0** for the three and six months ended June 30, 2022, as these were extinguished or converted in connection with the IPO[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20capital%20resources) Operations are funded by IPO proceeds and grants, but current cash is only sufficient into Q1 2023, necessitating future financing - The company has funded operations primarily through convertible promissory notes, IPO proceeds, and SBIR Award funds, totaling approximately **$31 million** in gross cash proceeds through June 30, 2022[168](index=168&type=chunk) - As of June 30, 2022, cash was **$13.4 million**, with an expected additional $2 million from the SBIR Award, projected to fund operations into **Q1 2023**[169](index=169&type=chunk)[172](index=172&type=chunk) - Future funding requirements are **substantial** and depend on the progress of clinical development, manufacturing, regulatory approvals, and commercialization efforts[171](index=171&type=chunk)[173](index=173&type=chunk) - The company anticipates financing future operations through **equity offerings, debt financings, governmental funding, collaborations, and strategic partnerships**[173](index=173&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(7,321) | $(598) | | Net cash used in investing activities | $(73) | $(98) | | Net cash provided by (used in) financing activities | $6 | $(53) | | Net decrease in cash | $(7,388) | $(749) | - Net cash used in operating activities increased to **$7.32 million** in H1 2022, primarily due to the net loss and changes in working capital[177](index=177&type=chunk) - A strategic collaboration with MD Anderson, signed July 29, 2022, commits up to **$10 million** over five years for clinical and preclinical work[182](index=182&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=47&type=section&id=Critical%20accounting%20policies%20and%20significant%20judgments%20and%20estimates) Management makes significant estimates for accrued R&D expenses, share-based compensation, and historical common stock valuations - The preparation of financial statements requires management to make estimates and assumptions, particularly for **accrued R&D expenses, share-based compensation, and the fair value of common stock**[183](index=183&type=chunk)[185](index=185&type=chunk) - Accrued R&D expenses are estimated based on progress towards completion of tasks by third-party service providers (CROs, CMOs)[186](index=186&type=chunk)[187](index=187&type=chunk) - Share-based compensation expense is measured at grant-date fair value and recognized over the vesting period[190](index=190&type=chunk)[191](index=191&type=chunk) - Prior to IPO, the fair value of common stock was determined by the Board with input from third-party appraisals[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [Factors that May Affect Future Results](index=51&type=section&id=Factors%20that%20May%20Affect%20Future%20Results) Important factors that could affect future results are detailed in the 'Risk Factors' section of the Annual Report on Form 10-K - Readers are directed to the **'Risk Factors' section** in the Annual Report on Form 10-K for a discussion of important factors that may affect future results[198](index=198&type=chunk) [Off-Balance Sheet Arrangements](index=51&type=section&id=Off-balance%20sheet%20arrangements) The company had no off-balance sheet arrangements during the reporting periods - The company did not have any **off-balance sheet arrangements** during the periods presented[199](index=199&type=chunk) [Recently Issued Accounting Pronouncements](index=51&type=section&id=Recently%20issued%20accounting%20pronouncements) A description of recently issued accounting pronouncements can be found in Note 2 to the financial statements - A description of recently issued accounting pronouncements is provided in **Note 2** to the financial statements[200](index=200&type=chunk) [Internal Control Over Financial Reporting](index=51&type=section&id=Internal%20control%20over%20financial%20reporting) Material weaknesses in internal control over financial reporting identified prior to the IPO have not yet been remediated - **Material weaknesses** in internal control over financial reporting existed prior to the IPO and remain unremediated, as detailed in the Annual Report on Form 10-K[201](index=201&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=51&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) The company qualifies as an emerging growth and smaller reporting company, allowing for reduced reporting requirements - The company is an **'emerging growth company' (EGC)** and **'smaller reporting company,'** allowing it to take advantage of certain exemptions from reporting requirements[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) [Information Technology Risks](index=53&type=section&id=Information%20Technology%20Risks) The company faces cybersecurity risks, evidenced by a 2021 phishing attack, and is implementing mitigation measures - The company's systems are subject to cyber-attacks; a phishing attack in July 2021 resulted in a temporary loss of **$526,435**, which was subsequently recovered[88](index=88&type=chunk)[205](index=205&type=chunk) - Steps are being taken to mitigate cyberattack risks, including enhanced email screening, computer support, and security protocols[205](index=205&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=53&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's exposure to interest rate and foreign currency risks is currently immaterial but may increase with business development - The company's primary market risk exposure is **interest income sensitivity**, but an immediate 10% change in interest rates would not materially affect its financial position[206](index=206&type=chunk) - As of June 30, 2022, there was **no outstanding debt**, eliminating interest rate risk related to debt[207](index=207&type=chunk) - **Foreign currency exchange risk** primarily relates to the Euro for certain major purchases but is not currently material[208](index=208&type=chunk) - The company has not entered into foreign currency hedging contracts but expects foreign currency fluctuations to have a greater impact as the business develops[209](index=209&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=55&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were ineffective as of June 30, 2022, due to unremediated material weaknesses - Management concluded that the company's disclosure controls and procedures were **not effective** as of June 30, 2022, due to material weaknesses in internal control over financial reporting[213](index=213&type=chunk) - No material changes in internal control over financial reporting occurred during the six months ended June 30, 2022[215](index=215&type=chunk) [PART II. OTHER INFORMATION](index=56&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, securities sales, and other required disclosures [ITEM 1. LEGAL PROCEEDINGS](index=56&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently party to any material legal proceedings - The company is not currently involved in any legal proceedings and is unaware of any pending or threatened legal actions that could have a material adverse effect[218](index=218&type=chunk) [ITEM 1A. RISK FACTORS](index=56&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section highlights risks from current economic uncertainty, rising inflation, and interest rate hikes - Current economic circumstances, including **increased economic uncertainty**, reduced credit availability, and volatility in financial markets, may adversely affect the business[220](index=220&type=chunk) - **Rising inflation rates** have increased operating costs and could negatively impact liquidity and access to capital[221](index=221&type=chunk) - Increases in interest rates by the Federal Reserve, coupled with economic uncertainty, may further heighten these risks[221](index=221&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=57&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reports no unregistered sales of equity securities or use of IPO proceeds during the period - There were **no unregistered sales** of equity securities during the period[222](index=222&type=chunk) - There was **no use of proceeds** from the initial public offering of common stock during the period[223](index=223&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=57&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports no defaults upon senior securities - There were **no defaults** upon senior securities[225](index=225&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=57&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Mine safety disclosures are **not applicable** to the company[226](index=226&type=chunk) [ITEM 5. OTHER INFORMATION](index=57&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reports no other information required under this item - There is **no other information** to report under this item[227](index=227&type=chunk) [ITEM 6. EXHIBITS](index=58&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the report, including officer certifications and XBRL documents - Exhibits include certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[230](index=230&type=chunk) [SIGNATURES](index=59&type=section&id=SIGNATURES) The report is duly signed by the CEO and CFO on August 15, 2022 - The report is signed by R. Michael Dudley, Chief Executive Officer, and Thomas A. Fitzgerald, Chief Financial Officer, on **August 15, 2022**[234](index=234&type=chunk)

RNA Delivery Platform and Therapeutics - The company has developed an RNA delivery platform, the TTX platform, utilizing an iron oxide nanoparticle approved for clinical use, aimed at improving the delivery of RNA therapeutics to tumors [125]. - The lead therapeutic candidate, TTX-MC138, targets microRNA-10b and aims to submit an exploratory IND application for a Phase 0 clinical trial in patients with Stage IV breast cancer [128]. - The TTX platform is designed to overcome stability, efficiency, and immunogenicity issues faced by existing delivery systems, optimizing accumulation in tumor cells [127]. - The TTX platform allows for a modular approach, enabling the adaptation of therapeutic loads for various RNA-based therapies, including RNAi and CRISPR technologies [127]. - The company is exploring LIN28B as a potential target for pancreatic cancer and plans to negotiate licensing if evaluation results meet criteria [131]. - The TTX-MC138 study results suggest effective delivery to metastatic lesions, supporting further clinical evaluation and potential FDA authorization for additional studies [133]. - The company plans to conduct a microdosing Phase 0 trial with TTX-MC138, enrolling 10 patients to measure delivery to metastatic lesions using PET-MRI [137]. - The SBIR Phase II milestone includes the development of a qRT-PCR test for measuring miR-10b expression, which is critical for patient inclusion in the Phase 0 study [142]. - The company plans to continue preclinical studies and initiate clinical trials for TTX-MC138 and other product candidates [145]. - The company aims to expand its proprietary TTX platform to identify additional product candidates and acquire new intellectual property [151]. Financial Performance and Funding - As of March 31, 2022, the company had received gross proceeds of $31.0 million primarily from its IPO and convertible promissory notes, with no products approved for sale or revenue generated from product sales [143]. - The company incurred net losses of $3.5 million and $6.8 million for the three months ended March 31, 2022, and the year ended December 31, 2021, respectively, with an accumulated deficit of $13.8 million as of March 31, 2022 [144]. - The company has not generated any revenue from product sales to date and does not expect to do so in the foreseeable future [153]. - The company expects to receive an additional $2 million under the SBIR Award, although there is no guarantee of receipt, and believes current cash of $16.9 million will fund operations into Q1 2023 [150]. - The company may need substantial additional funding to support ongoing operations and pursue its business strategy, relying on equity sales, debt financing, or collaborations [148]. - The company expects to require additional capital for research, development, and commercialization efforts, raising substantial doubt about its ability to continue as a going concern [183]. - The company has incurred significant operating losses and does not expect to generate revenue from product sales for several years [178]. Expenses and Operational Costs - Research and development expenses are anticipated to increase significantly as the company commences planned clinical trials for TTX-MC138 and other product candidates [158]. - General and administrative expenses are expected to rise as the company increases headcount and prepares for potential commercial activities, including partnerships for product development [165]. - Research and development expenses increased by $1,618 thousand for the three months ended March 31, 2022, compared to the same period in 2021, primarily due to purchases of materials and personnel costs [172]. - General and administrative expenses rose by $1,410 thousand for the three months ended March 31, 2022, compared to the same period in 2021, mainly due to increased costs for liability insurance and personnel [173]. - The company anticipates substantial increases in expenses related to ongoing and planned activities, particularly for clinical trials of TTX-MC138 [180]. Operational Challenges and Impact - The COVID-19 pandemic has impacted the timeline for preclinical studies and clinical trials, contributing to operational disruptions [152]. - The company has engaged a European CMO for the manufacturing of TTX-MC138 and a CRO for IND-enabling studies, indicating progress in product development [159]. Internal Controls and Compliance - The company has identified material weaknesses in its internal control over financial reporting prior to its IPO, which remain unremediated [214]. - The company is classified as an "emerging growth company" and will remain so until it exceeds $1.07 billion in annual revenue or meets other specified criteria [215]. Cash Flow and Investments - Cash used in operating activities was $3,949 thousand for the three months ended March 31, 2022, compared to $522 thousand in the same period of 2021 [190]. - The net cash used in investing activities was $31 thousand for the three months ended March 31, 2022, a decrease from $75 thousand in the same period of 2021 [192]. - As of March 31, 2022, all shares of restricted stock have vested, resulting in no further compensation expense related to restricted stock [203]. Market and Risk Factors - The fair value of derivative liabilities was $0 for the three months ended March 31, 2022, compared to $3,936 thousand in the same period of 2021, as these liabilities were extinguished at the IPO [175]. - The company had no debt outstanding as of March 31, 2022, and therefore is not subject to interest rate risk related to outstanding debt [223]. - There were no foreign currency transaction gains or losses recognized for the three months ended March 31, 2022, and 2021 [224]. - An immediate 10% change in U.S. interest rates would not materially affect the fair market value of the company's investments [222]. - The company has not entered into any foreign currency hedging contracts to mitigate exposure to foreign currency exchange risk [225]. - The company intends to enhance its cybersecurity defenses in response to increasing threats from cyber-attacks [221]. - The company’s financial position and results of operations may be affected by fluctuations in foreign currency exchange rates as it continues to develop its business [225].

TransCode Therapeutics, Inc. (NASDAQ:RNAZ) Q4 2021 Earnings Conference Call April 7, 2022 4:30 PM ET Company Participants Alan Freidman - Vice President, Investor Relations Michael Dudley - Co-Founder, Chief Executive Officer, and Director Thomas Fitzgerald - Vice President and Chief Financial Officer Zdravka Medarova - Chief Technology Officer Conference Call Participants Operator Hello, thank you for standing by and welcome to the TransCode Therapeutics Conference Call. At this time, all participants are ...

PART I [Item 1. Business](index=17&type=section&id=Item%201.%20Business) TransCode Therapeutics is an RNA oncology company developing RNA therapeutics and diagnostics for metastatic disease using its proprietary TTX platform for targeted delivery of oligonucleotides [Overview](index=17&type=section&id=Overview) TransCode Therapeutics focuses on RNA oncology, utilizing its TTX platform with iron oxide nanoparticles for safe, effective, and targeted delivery of synthetic RNAs to tumors - The TTX platform uses an iron oxide nanoparticle, already approved as a clinical cancer imaging agent and for iron deficiency anemia, as a physical carrier for RNA therapeutics[28](index=28&type=chunk) - The TTX delivery system minimizes kidney and liver clearance, resulting in a long circulation half-life and efficient accumulation in tumor cells and metastatic sites, with low toxicity and immunogenicity[29](index=29&type=chunk) - The nanoparticles' small hydrodynamic size, positive charge, and dextran coating facilitate infiltration into tumor microvasculature and rapid uptake by cancer cells, enhancing access to genetic targets[30](index=30&type=chunk)[31](index=31&type=chunk) [Advancing New RNA Therapeutic Candidates Through a Modular Approach](index=19&type=section&id=Advancing%20new%20RNA%20therapeutic%20candidates%20through%20a%20modular%20approach) TransCode's modular TTX platform enables customization of nanoparticles and therapeutic loads for diverse RNA therapeutic approaches, overcoming stability and efficiency challenges - The TTX platform is modular, allowing tuning of nanoparticle size, charge, and surface chemistry, and adaptation of therapeutic loads (siRNAs, antisense oligonucleotides, mRNA vaccines, CRISPR, RIG-I agonists) for specific targets[32](index=32&type=chunk) - The platform aims to overcome stability, efficiency, and immunogenicity issues common with existing lipid and liposomal nanoparticle platforms, while optimizing tumor targeting and accumulation[32](index=32&type=chunk) - This approach is expected to enable targeting of previously 'undruggable' genes crucial for cancer treatment[33](index=33&type=chunk) [Our Lead Product Candidate](index=19&type=section&id=Our%20Lead%20Product%20Candidate) TTX-MC138, TransCode's lead candidate, targets microRNA-10b for metastatic disease, demonstrating successful delivery and complete regression in preclinical breast cancer models - TTX-MC138 targets microRNA-10b, a well-validated biomarker for metastatic cancer, which has been historically 'undruggable' due to delivery challenges[36](index=36&type=chunk)[37](index=37&type=chunk) - Preclinical animal studies showed TTX-MC138 successfully delivered to metastatic lesions in lymph nodes, lungs, and bones, with non-invasive imaging confirming delivery[38](index=38&type=chunk) - In a Stage II/III breast cancer model, TTX-MC138 combined with low-dose doxorubicin achieved complete regression of lymph node metastases without recurrence in 100% of treated subjects over 12 weeks[40](index=40&type=chunk)[41](index=41&type=chunk) - In an aggressive Stage IV breast cancer model, TTX-MC138 led to regression of distant metastases and complete regression without recurrence in 65% of treated subjects[42](index=42&type=chunk) [Modular Design Toolbox](index=21&type=section&id=Modular%20Design%20Toolbox) TransCode's modular drug design integrates a tunable nanocarrier, flexible oligonucleotide therapeutics, genetic code knowledge, and image-guided monitoring for optimized delivery - The nanocarrier delivery mechanism uses a nanoparticle similar to approved imaging agents, tunable for specific RNA targets in tumors and metastases, offering advantages over liver-targeting competitive approaches[44](index=44&type=chunk) - Modular design allows for diverse therapeutic oligonucleotides (antagomirs, mimics, siRNAs, etc.) and tunable nanocarrier properties (size, coating, charge, antigen-targeting) to create tailored agents[45](index=45&type=chunk)[47](index=47&type=chunk) - The approach utilizes genetic code knowledge to design specific oligonucleotides corresponding to disease-causing RNA targets, aiming to 'rewrite the story on cancer'[48](index=48&type=chunk) - Image-guided capabilities via MRI allow non-invasive monitoring of drug delivery, bioavailability, and optimization of drug design, schedule, route, and dose[49](index=49&type=chunk) [Our Team](index=23&type=section&id=Our%20Team) TransCode is led by an experienced team of scientists and executives with expertise in RNA, drug development, imaging, and corporate strategy - The management team includes co-founder and CEO Michael Dudley (40+ years executive leadership), co-founder and CTO Dr. Zdravka Medarova (geneticist, cancer biologist, TTX inventor), and co-founder Dr. Anna Moore (imaging expert)[50](index=50&type=chunk) - The team also comprises Tom Fitzgerald (CFO), Dr. Peter Liu (VP of R&D and Chief Scientist), Susan Duggan (VP of Clinical Operations), Dustan Bonnin (VP of Corporate Strategy), and Alan Freidman (VP of Investor Relations), bringing diverse expertise[50](index=50&type=chunk)[52](index=52&type=chunk) [Our Pipeline](index=25&type=section&id=Our%20Pipeline) TransCode's pipeline features lead candidate TTX-MC138 for metastatic cancers, alongside preclinical programs like TTX-siPDL1, TTX-siLIN28B, TTX-RIGA, TTX-CRISPR, and TTX-mRNA TransCode Therapeutics Development Pipeline Summary | Drug Candidate | Target | RNA Type | Disease Indication | Discovery | Preclinical | Phase O | Phase | Phose 2 | Phase 3 | Key Anticipated Milestones | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TTX-MC138 (Metastasis focus) | miR-10b | RNAi | Metastatic Breast Cancer, Pancreatic Cancer, Glioblastoma (GBM), SCLC, & Osteosarcoma | | ☒ | ☒ | | | | Rat Tox 1H '22; FIH Clinical 2H '22; Complete Preclinical Study 1H '22; Completed In vitro Study 2H '21; Complete In vivo Studies 2H '22 | | TTX-siPDL1 | PD-L1 | RNAi | PDAC | | ☒ | | | | | Complete Preclinical Study 1Q '22 | | TTX-siLIN28B | Lin28b | RNAi | PDAC | | ☒ | | | | | Complete Preclinical Study 1H '22 | | TTX-RIGA | Multiple | RIGI | Cancer Agnostic | | ☒ | | | | | Complete Preclinical Study 1Q '22 | | TTX-CRISPR | Multiple | CRISPR | Cancer Agnostic | | | | | | | Initiate Preclinical Studies 2H '22 | | TTX-mRNA | Cancer Vaccine | mRNA | Cancer Agnostic | | | | | | | Initiate Preclinical Studies 2H '22 | - The company intends to seek various FDA designations, including Breakthrough Therapy, Accelerated Approval, Priority Review, and Orphan Drug Designation, for its product candidates[53](index=53&type=chunk) - TransCode has an exclusive license for TTX-siPDL1 and an exclusive option to license TTX-siLIN28B from MGH, expanding its solid tumor programs[53](index=53&type=chunk) [Our Strategy](index=25&type=section&id=Our%20Strategy) TransCode aims to be a leading RNA oncology company by advancing lead programs, expanding its TTX platform, building a diverse pipeline, protecting IP, and seeking strategic partnerships - The company aims to advance TTX-MC138 and TTX-siPD-L1 programs to deliver transformative therapies and diagnostics, focusing on previously inaccessible, clinically and genetically validated targets[55](index=55&type=chunk)[56](index=56&type=chunk) - Key strategic components include expanding the TTX delivery platform to additional RNA targets, building a broad pipeline of novel oncology candidates with a precision medicine approach, and protecting intellectual property[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - TransCode plans to pursue strategic partnerships for complementary capabilities in clinical studies, tumor indications outside its core interest, and assistance in manufacturing, distribution, and commercialization[60](index=60&type=chunk) [Background of RNA](index=27&type=section&id=Background%20of%20RNA) RNA holds therapeutic potential for 'undruggable' targets, but delivery challenges have limited clinical success, though recent drug approvals indicate accelerating advancements - RNA is an attractive therapeutic modality due to rational drug design, high target selectivity, and ability to engage 'undruggable' targets[61](index=61&type=chunk) - Historical clinical success for RNA therapeutics has been limited by three delivery-related challenges: protecting oligonucleotides from the immune system, maintaining stability, and penetrating target organs and cells[61](index=61&type=chunk) - Recent FDA approvals of RNA-targeting drugs (e.g., nusinersen in 2016, patisiran in 2018) validate the clinical utility and accelerate advancements in the field[62](index=62&type=chunk) [TTX Design](index=29&type=section&id=TTX%20Design) The TTX delivery system uses tunable iron-oxide nanoparticles for optimized, image-guided delivery to primary and metastatic tumors, ensuring long circulation and efficient cellular uptake - The TTX delivery system uses iron-oxide nanoparticles, similar to clinically approved products like Feraheme, designed for optimized delivery to primary and metastatic tumors[65](index=65&type=chunk)[67](index=67&type=chunk) - Key advantages include small size (20nm+/-) for tumor access and long circulation half-life (17-24 hours), low immunogenicity risk, and quantitative non-invasive imaging via MRI for monitoring drug bioavailability[67](index=67&type=chunk)[71](index=71&type=chunk) - The dextran coating protects oligonucleotides from degradation, improves stability and cell uptake, and facilitates accumulation in tumors based on the Warburg effect[65](index=65&type=chunk)[67](index=67&type=chunk)[71](index=71&type=chunk) [Our Programs](index=32&type=section&id=Our%20Programs) TransCode's programs identify and engage microRNA targets in cancer, with TTX-MC138 advancing to Phase 0/I clinical trials and other preclinical candidates like TTX-siPDL1 and TTX-RIGA [Target Identification](index=32&type=section&id=Target%20Identification) TransCode identifies therapeutic microRNA targets in cancer by analyzing differential expression in models and validating clinical actionability via genomic databases - miRNAs are important post-transcriptional regulators of gene expression, critically involved in cancer emergence, progression, and therapy response, making them attractive therapeutic targets[73](index=73&type=chunk) - Target identification involves differential expression analysis in cancer cell lines and animal models, followed by validation using genomic databases like The Cancer Genome Atlas (TCGA) to correlate expression with patient outcomes[74](index=74&type=chunk) [Target Engagement](index=34&type=section&id=Target%20Engagement) Preclinical studies confirmed TTX-MC138 delivery and microRNA-10b elimination in metastatic lesions, supported by clinical data showing Ferumoxytol accumulation in brain metastases - Preclinical studies with fluorescently labeled TTX-MC138 showed uptake by metastatic lesions in lymph nodes, lungs, and bone in murine breast cancer models, confirming delivery and target engagement (miRNA-10b elimination)[75](index=75&type=chunk)[76](index=76&type=chunk) - Clinical proof of delivery is supported by studies using the approved agent Ferumoxytol, which demonstrated accumulation in brain metastases in patients, suggesting robust target engagement at clinically acceptable doses of TTX[77](index=77&type=chunk) [TTX-MC138](index=34&type=section&id=TTX-MC138) TTX-MC138, TransCode's lead candidate for metastatic cancer, targets microRNA-10b, demonstrating complete regression in preclinical Stage II/III and Stage IV models - The global metastatic cancer treatment market size was **$63.03 billion in 2019** and is expected to reach **$111.16 billion in 2027**, with a CAGR of **7.3%**[79](index=79&type=chunk) - TTX-MC138 targets microRNA-10b, a validated critical driver of metastatic progression, with the potential to improve outcomes over current treatments focused on primary cancer[79](index=79&type=chunk) - Preclinical studies demonstrated TTX-MC138's ability to eliminate metastasis and achieve complete regression without recurrence in 100% of subjects in a Stage II/III cancer model and 65% in an aggressive Stage IV model[79](index=79&type=chunk) [MicroRNA-10b (miR-10b)](index=36&type=section&id=MicroRNA-10b%20(miR-10b)) MicroRNA-10b is a validated metastasis-promoting factor across 18 cancer types, critical for metastatic cell survival, and TTX-MC138 targets it with a hormone receptor-independent mechanism - MiR-10b is a well-validated metastasis-promoting factor, with over 200 peer-reviewed publications across 18 cancer types, and is considered critical for the survival of metastatic cells[81](index=81&type=chunk)[83](index=83&type=chunk) - Targeting miR-10b is believed to achieve persistent therapeutic responses by altering fundamental molecular pathways of oncogenesis, making evasion by mutation less likely due to its central role in tumor cell phenotypes[81](index=81&type=chunk) - TTX-MC138's mechanism of action is hormone receptor independent and has shown efficacy in treating metastatic breast cancer in rodents regardless of hormone receptor type[85](index=85&type=chunk) [Mechanism of Action of TTX-MC138](index=38&type=section&id=Mechanism%20of%20Action%20of%20TTX-MC138) TTX-MC138 inhibits microRNA-10b to arrest tumor dissemination and induce persistent regression of metastatic lesions, potentially without co-treatment in humans - TTX-MC138 inhibits microRNA-10b, leading to the arrest of tumor cell dissemination and potentially complete and persistent regression of existing metastatic lesions[89](index=89&type=chunk) - In preclinical studies with aggressive metastatic tumor models, low-dose doxorubicin was used to slow cell division, allowing TTX-MC138 to fully inhibit microRNA-10b; this may be unnecessary in humans due to slower metastatic growth[89](index=89&type=chunk) - Mechanistic studies suggest TTX-MC138 affects HOXD10 and c-JUN pathways, which are involved in tumor cell migration, invasion, and proliferation[89](index=89&type=chunk) [Results](index=39&type=section&id=Results) Preclinical studies of TTX-MC138 showed complete and persistent regression of metastatic cancer with no recurrence or systemic toxicity, achieving high survival rates in breast cancer models - In preclinical studies, TTX-MC138 combined with low-dose doxorubicin achieved complete and persistent regression of pre-existing metastatic cancer, with no recurrence and no systemic toxicity[91](index=91&type=chunk) - A Stage II/III breast cancer model showed **100% survival** with eliminated metastatic burden after four weekly treatments, with no recurrence observed over 12 weeks[92](index=92&type=chunk) - In a Stage IV breast cancer model, **65% survival** was achieved with regression of distant metastases by week six, and no elevation in serum biochemistry markers or gross tissue abnormalities were observed[93](index=93&type=chunk)[94](index=94&type=chunk) [Clinical Development Plan](index=39&type=section&id=Clinical%20Development%20Plan) TransCode plans a Phase 0 FIH trial for TTX-MC138 to confirm delivery and pharmacokinetics in metastatic lesions, followed by a Phase I/II trial to assess safety and efficacy [Phase 0 - First-in-Human Clinical Study (Exploratory IND)](index=40&type=section&id=Phase%200%20-%20First-in-Human%20Clinical%20Study%20(Exploratory%20IND)) The Phase 0 FIH trial for TTX-MC138 aims to quantify delivery to metastatic lesions, measure pharmacokinetics, inform dosing, and validate the TTX pipeline - The Phase 0 trial aims to demonstrate quantifiable delivery of TTX-MC138 to metastatic lesions in advanced solid tumors[100](index=100&type=chunk) - It will measure pharmacokinetics and biodistribution in vital organs and other tissues to inform Phase I/II clinical trials and therapeutic dose levels[100](index=100&type=chunk) - The study is also intended to validate delivery for the TTX pipeline more broadly, potentially opening up additional previously undruggable RNA targets[100](index=100&type=chunk) [Anticipated Phase I Clinical Trial](index=40&type=section&id=Anticipated%20Phase%20I%20Clinical%20Trial) The Phase I trial for TTX-MC138 will assess safety, determine MED/MTD, evaluate preliminary anti-tumor activity, and confirm tumor delivery and microRNA-10b inhibition - The Phase I trial will assess safety, determine Minimum Effective Dose (MED) and Maximum Tolerated Dose (MTD) of TTX-MC138 in metastatic cancer patients expressing microRNA-10b[98](index=98&type=chunk) - Primary objectives include assessing anti-tumor activity and preliminary efficacy using Objective Response Rate (ORR) and clinical benefit rate (CR, PR, SD)[101](index=101&type=chunk) - Secondary objectives involve confirming tumor delivery with MRI, measuring pharmacokinetics, and confirming target engagement via microRNA-10b inhibition using PCR[101](index=101&type=chunk) [Accelerated Regulatory Programs](index=42&type=section&id=Accelerated%20Regulatory%20Programs) The FDA offers various programs to expedite drug development and review for serious conditions, which TransCode anticipates seeking for its candidates - The FDA offers Fast Track, Breakthrough Therapy, Priority Review, Accelerated Approval, and Orphan Drug Designations to expedite drug development and review for serious or life-threatening diseases with unmet medical needs[103](index=103&type=chunk) - TransCode anticipates seeking one or more of these qualifications for its product candidates, though there is no assurance of obtaining them[103](index=103&type=chunk) [Orphan Drug Designation Status](index=42&type=section&id=Orphan%20Drug%20Designation%20Status) The Orphan Drug Act provides incentives for rare disease drugs, and TransCode plans to seek designation for TTX-MC138 and TTX-siPDL1 in specific cancer indications - The Orphan Drug Act offers benefits such as seven-year marketing exclusivity, **25% tax benefits** for R&D, and PDUFA fee waivers for drugs treating rare diseases (affecting <200,000 individuals in the U.S.)[104](index=104&type=chunk) - TransCode plans in vivo studies to support Orphan Drug Designation for TTX-MC138 in pancreatic cancer, osteosarcoma, and SCLC, and has submitted a request for TTX-siPDL1 in pancreatic cancer[105](index=105&type=chunk)[106](index=106&type=chunk) [TTX-siPDL1](index=42&type=section&id=TTX-siPDL1) TTX-siPDL1 targets PD-L1 for pancreatic cancer, demonstrating significant tumor growth inhibition and improved survival in preclinical studies, potentially more efficiently than antibodies - Pancreatic cancer is the fourth-leading cause of cancer-related death in the U.S., with a **5-year survival rate of 8%**, and is resistant to conventional drugs and initial immunotherapy approaches[108](index=108&type=chunk) - TTX-siPDL1 uses an siRNA to inhibit PD-L1 expression at the post-transcriptional level, aiming for greater efficiency in T-cell recognition and killing of tumor cells compared to antibody-based checkpoint inhibitors[111](index=111&type=chunk) - Preclinical studies combining TTX-siPDL1 with gemcitabine in a murine pancreatic cancer model showed a **90% reduction in tumor volume**, significantly lower morbidity, and improved survival (**67% survival at 12 weeks** for high dose)[112](index=112&type=chunk)[115](index=115&type=chunk) [TTX-RIGA](index=48&type=section&id=TTX-RIGA) TTX-RIGA is an early-stage candidate designed to activate the RIG-I signaling pathway, triggering an immune response and tumor cell death across multiple cancer types - TTX-RIGA aims to activate the RIG-I signaling pathway, a Pattern Recognition Receptor of the innate immune system, to trigger an immune response targeting cancer[119](index=119&type=chunk)[121](index=121&type=chunk) - RIG-I activation has been reported to induce tumor cell death and activate innate/adaptive immune systems in various cancers, including pancreatic, prostate, head and neck, gastric, breast, and glioblastoma[120](index=120&type=chunk) [TTX-siLIN28B](index=48&type=section&id=TTX-siLIN28B) TTX-siLIN28B is an siRNA technology inhibiting LIN28B, a critical oncogene in various cancers, with preclinical studies initiated under an MGH license option - TTX-siLIN28B is a siRNA technology targeting LIN28B, an RNA-binding protein and critical oncogene implicated in various cancers (pancreatic, hepatocellular, breast, colon, gastric)[122](index=122&type=chunk)[123](index=123&type=chunk) - TransCode has an exclusive option from MGH to license this technology and initiated preclinical studies in 2022, with plans to consider adding it to its MGH license agreement based on test results[123](index=123&type=chunk)[124](index=124&type=chunk) [TRANSCODE DIAGNOSTIC PROGRAM (TCDx)](index=48&type=section&id=TRANSCODE%20DIAGNOSTIC%20PROGRAM%20(TCDx)) TransCode's TCDx diagnostic program applies its technology for early cancer detection and personalized therapy, including a microRNA nanosensor and TCD-miR10b assay [CDx Mechanism of Action](index=48&type=section&id=CDx%20Mechanism%20of%20Action) TransCode is developing a microRNA nanosensor (CDx) to measure microRNA expression in single cells, tissues, and serum for optimal therapy identification and early cancer detection - TransCode is developing diagnostic product candidates to identify the right therapy for particular patients and reduce cancer mortality through early detection[125](index=125&type=chunk) - The microRNA nanosensor (CDx) is designed to measure microRNA expression in single intact live cells, tissues, and serum, allowing for the capture of heterogeneity and observation of rare cells like cancer stem cells[127](index=127&type=chunk)[128](index=128&type=chunk) [TCD-MiRNA Screening and Diagnostic Assays](index=50&type=section&id=TCD-MiRNA%20Screening%20and%20Diagnostic%20Assays) The microRNA nanosensor assay offers inexpensive, rapid, highly specific, and sensitive microRNA measurement in various samples, enabling tumor cell phenotype monitoring - The nanosensor assay is inexpensive, rapid, highly specific, and has nanomolar sensitivity, allowing microRNA expression measurement in biopsies, serum, and circulating tumor cells[129](index=129&type=chunk) - It permits measurement in single, intact, live cells, enabling longitudinal studies to monitor tumor cell phenotype evolution[128](index=128&type=chunk)[161](index=161&type=chunk) [TCD-miR10b](index=50&type=section&id=TCD-miR10b) TCD-miR10b is an assay using microRNA-10b as a biomarker for diagnosing metastases, predicting survival, informing treatment, and monitoring TTX-MC138 therapy response - TCD-miR10b assay is designed to use microRNA-10b expression as a biomarker for diagnosing metastases and predicting overall/disease-free survival in cancer[130](index=130&type=chunk) - It aims to stratify tumors by aggressiveness, inform therapeutic decisions (e.g., correlation with 5-FU sensitivity and tamoxifen resistance), and monitor response to TTX-MC138 therapy in clinical trials[130](index=130&type=chunk)[132](index=132&type=chunk) - Preclinical studies and a small pilot study using human serum have validated TCD-miR10b's performance in detecting miR-10b, showing specificity, reproducibility, dynamic range, and detection limit comparable to qRT-PCR[131](index=131&type=chunk)[133](index=133&type=chunk) [INTELLECTUAL PROPERTY](index=51&type=section&id=INTELLECTUAL%20PROPERTY) TransCode's IP portfolio covers therapeutic and diagnostic candidates, including issued patents and pending applications for TTX-MC138 and biomarker tests, with active expansion efforts - TransCode's IP portfolio includes issued patents and pending applications for therapeutic and diagnostic candidates, their targeted use, and development in specific patient populations[134](index=134&type=chunk) - Patents for TTX-MC138 and the biomarker test have issued in the U.S. and U.K. under the MGH License, with plans to pursue new patents for broader coverage[134](index=134&type=chunk) - A recent patent application was filed for TTX-RIGA, an invention designed to trigger a targeted immune response against cancer, intended to be cancer agnostic[134](index=134&type=chunk) [Therapeutic Patent Rights Assigned to TransCode](index=52&type=section&id=Therapeutic%20Patent%20Rights%20Assigned%20to%20TransCode) TransCode holds assigned patent rights for 'Template Directed Immunomodulation for Cancer Therapy,' originating from a December 2020 provisional application - TransCode has assigned patent rights for 'Template Directed Immunomodulation for Cancer Therapy,' originating from a provisional application filed on December 30, 2020, and converted into an International PCT Application (PCT/US21/65580)[135](index=135&type=chunk) [Therapeutic Patent Rights (Covered under MGH License)](index=52&type=section&id=Therapeutic%20Patent%20Rights%20(Covered%20under%20MGH%20License)) TransCode licenses multiple therapeutic patent rights from MGH, covering nanoparticles, immune checkpoint inhibition, pancreatic carcinoma treatment, and radiolabeled nanoparticles - Licensed therapeutic patent rights from MGH include 'Therapeutic Nanoparticles and Methods of Use Thereof' (PCT/US 2020/63635, expires 2039) and 'Compositions and Methods for Immune Checkpoint Inhibition' (PCT/US 2019/050003, expires 2038, with national stage filings pending in multiple countries)[136](index=136&type=chunk) - Other licensed therapeutic patents cover 'Agents and Methods for Treating Pancreatic Ductal Carcinoma' (US 10,588,920, granted March 2020, expires 2035) and 'Radiolabeled Therapeutic Nanoparticles and Methods of Using the Same' (Provisional 63/109,298, filed November 2020)[136](index=136&type=chunk) [Biomarker Patent Requests (Diagnostic test) (Covered under MGH License)](index=52&type=section&id=Biomarker%20Patent%20Requests%20(Diagnostic%20test)%20(Covered%20under%20MGH%20License)) TransCode licenses MGH biomarker patent rights for 'miRNA Profiling Compositions and Methods of Use,' including several granted U.S. and European patents - Licensed biomarker patent rights from MGH for 'miRNA Profiling Compositions and Methods of Use' include U.S. patents US 9,763,891, US 9,629,812, US 10,463,627 (all expiring 2031), and US 10,086,093 (expiring 2033)[138](index=138&type=chunk)[139](index=139&type=chunk) - A European patent, EP 2961386, for 'miRNA Profiling Compositions and Methods of Use' was granted in July 2019 and expires in 2033[139](index=139&type=chunk) [EXCLUSIVE LICENSE AGREEMENT](index=52&type=section&id=EXCLUSIVE%20LICENSE%20AGREEMENT) TransCode holds an exclusive, worldwide, royalty-bearing license agreement with MGH for intellectual property, including tiered royalties, annual fees, and milestone payments - TransCode holds an exclusive, worldwide, royalty-bearing, sub-licensable license from MGH for certain intellectual property (Licensed Patents), established in November 2018[137](index=137&type=chunk) - The agreement includes tiered royalties (low to middle single-digit percentage) on annual net sales and minimum annual license fees (**$25 thousand pre-commercial, $50 thousand post-commercial sale**)[138](index=138&type=chunk) - Milestone payments up to an aggregate of **$1.55 million** are due upon certain events, none of which had been achieved as of December 31, 2021[140](index=140&type=chunk) - The license expires upon the latest of patent expiration, regulatory exclusivity, or 10 years after the first commercial sale, with termination clauses for default, bankruptcy, or failure to maintain insurance/payments[141](index=141&type=chunk)[142](index=142&type=chunk) [Amendment to License Agreement](index=53&type=section&id=Amendment%20to%20License%20Agreement) The MGH License was amended in November 2020, categorizing IP into two families with increased annual fees, while other terms remained consistent - The MGH License was amended in November 2020, categorizing existing IP as 'Patent Family 1' (with a new nanoparticle provisional patent) and creating 'Patent Family 2' for PD-L1 targeting intellectual property[143](index=143&type=chunk) - Minimum annual license fees increased to **$30,000** for Patent Family 1 and **$50,000** for Patent Family 2, with all other terms (milestones, royalties, sublicense income) remaining the same[144](index=144&type=chunk) - Upon expiration, the licenses granted to TransCode will be considered fully paid and royalty-free[145](index=145&type=chunk) [COMPETITION](index=53&type=section&id=COMPETITION) TransCode operates in a highly competitive pharmaceutical industry, differentiating itself with a unique RNA delivery system and broad RNA technology pipeline for oncology - The pharmaceutical industry is intensely competitive, with TransCode facing larger competitors with greater capital and human resources, established market positions, and expertise in sales, marketing, and regulatory matters[146](index=146&type=chunk) - Competitors in RNA therapeutics for oncology include Arrowhead Pharmaceuticals, Ionis, Moderna, Alnylam, BioNTech, Dicerna, and Siranomics[152](index=152&type=chunk) - TransCode believes its competitive advantage lies in its delivery systems' ability to target genes inside tumors and metastases, and its pipeline spanning various RNA technologies (ncRNAs, RNA vaccines, CRISPR, immunostimulatory RNAs) solely for oncology, unlike competitors often limited to single RNA technologies[152](index=152&type=chunk) [Targeted therapy](index=55&type=section&id=Targeted%20therapy) Targeted cancer therapies block specific molecular targets, representing a major focus in drug development, with TransCode focusing on therapies like TTX-MC138 for metastatic progression - Targeted cancer therapies block cancer growth by interfering with specific molecular targets involved in cancer progression, differing from standard chemotherapy by acting on specific molecules, being deliberately designed, and often being cytostatic[153](index=153&type=chunk)[154](index=154&type=chunk) - Targeted therapies represent **48% of total oncology spending**, up from **36% in 2010**, indicating rapid growth and intense development focus[154](index=154&type=chunk) - TransCode focuses on targeted therapies with novel therapeutics like TTX-MC138, which has shown success in animals by targeting microRNA-10b, a master regulator of metastatic progression[154](index=154&type=chunk) [Immunotherapy](index=55&type=section&id=Immunotherapy) Immunotherapy, including checkpoint inhibitors and CAR T cells, is a significant cancer treatment pillar, with ongoing research focusing on combination approaches and new tumor entities - Immunotherapy, particularly checkpoint inhibitors (CPIs) and CAR T cells, is a major cancer treatment approach, improving prognosis for hematological and solid malignancies[155](index=155&type=chunk) - The Nobel Prize in 2018 recognized discoveries of CTLA-4 and PD-1/PD-L1 pathways, which malignant tumors exploit to evade the immune system, leading to durable remissions in various cancer types[156](index=156&type=chunk) [Tyrosine kinase inhibitors](index=57&type=section&id=Tyrosine%20kinase%20inhibitors) Tyrosine kinase inhibitors are targeted cancer therapies, with Lapatinib being the sole FDA-approved option for HER2-positive metastatic breast cancer - Lapatinib (Tykerb) is the only FDA-approved tyrosine kinase inhibitor for HER2-positive metastatic breast cancer[157](index=157&type=chunk) [PARP inhibitors](index=57&type=section&id=PARP%20inhibitors) PARP inhibitors, targeting DNA repair enzymes, show promise for metastatic breast cancer patients with BRCA1/2 mutations and are currently in clinical trials - PARP inhibitors, which target DNA repair enzymes, are under study for many cancer types, including metastatic breast cancer[158](index=158&type=chunk) - These inhibitors show the most promise for metastatic breast cancer patients with BRCA1 or BRCA2 gene mutations and are currently offered in clinical trials[158](index=158&type=chunk) [Cyclin dependent kinase 4 and 6 (CDK4/6) inhibitors](index=57&type=section&id=Cyclin%20dependent%20kinase%204%20and%206%20(CDK4%2F6)%20inhibitors) CDK4/6 inhibitors interrupt cancer cell growth by targeting cell division enzymes, with Palbociclib approved for hormone receptor-positive, HER2-negative metastatic breast cancers - CDK4/6 inhibitors are a new class of drugs that interrupt cancer cell growth by targeting enzymes crucial for cell division[159](index=159&type=chunk) - Palbociclib (Ibrance), a CDK4/6 inhibitor, is FDA-approved in combination with hormone therapy for hormone receptor-positive, HER2-negative metastatic breast cancers[159](index=159&type=chunk) [PI3 kinase inhibitors](index=57&type=section&id=PI3%20kinase%20inhibitors) PI3 kinase inhibitors are a new class of drugs under study for metastatic breast cancer, designed to interrupt PI3 kinase signals and halt tumor growth - PI3 kinase inhibitors are a new class of drugs under study for metastatic breast cancer, designed to interrupt PI3 kinase signals and stop cancer cell growth[160](index=160&type=chunk) - These inhibitors target the PI3 kinase enzyme, whose activity can be affected by mutations in the PIK3CA gene, which drives tumor growth[160](index=160&type=chunk) [Diagnostics](index=57&type=section&id=Diagnostics) TransCode's diagnostic approach aims to overcome limitations of existing microRNA detection by enabling sensitive, rapid, and inexpensive single-cell and serum analysis in live cells - TransCode's diagnostics aim to permit microRNA measurement in single cells (e.g., from biopsy or circulating tumor cells) and serum samples, allowing for accurate capture of heterogeneity and observation of rare cells[161](index=161&type=chunk) - The diagnostics are designed to be applicable in intact, live cells for longitudinal studies, highly sensitive (uptake of over **1x10^6 nanoparticles per cell**), inexpensive, and rapid, using fluorescence readouts[161](index=161&type=chunk) - This approach contrasts with existing methods like PCR and northern blotting, which analyze tissue in bulk, or high-affinity hybridization probes with cumbersome protocols[161](index=161&type=chunk) [MANUFACTURING](index=59&type=section&id=MANUFACTURING) TransCode relies on third-party CMOs in Germany and the Netherlands for cGMP-compliant manufacturing of its nanodrugs, including TTX-MC138, addressing extensive CMC requirements [Manufacturing: Chemistry, Manufacturing and Controls (CMC)](index=59&type=section&id=Manufacturing%3A%20Chemistry%2C%20Manufacturing%20and%20Controls%20(CMC)) TransCode's nanodrugs, like TTX-MC138, undergo extensive R&D optimization and are manufactured by CMOs in Germany and the Netherlands, adhering to GxP requirements - TransCode's nanodrugs, such as TTX-MC138, are based on dextran-coated iron oxide nanoparticles conjugated to LNA-modified antisense oligonucleotides[163](index=163&type=chunk) - The oligonucleotide drug substance is manufactured by a CMO in Germany, and the final drug product is produced by a second CMO in the Netherlands, both expected to meet GxP (GMP/GLP) requirements[163](index=163&type=chunk)[164](index=164&type=chunk) - The dextran-coated iron oxide particles are analogous in structure and size to those used in the FDA-approved iron replacement therapy, Ferraheme®[164](index=164&type=chunk) [COMMERCIALIZATION](index=59&type=section&id=COMMERCIALIZATION) TransCode retains worldwide commercialization rights but plans to pursue partnerships or out-licensing for sales, marketing, and distribution of its therapeutic and diagnostic candidates - TransCode retains worldwide commercialization rights for its key therapeutic and diagnostic candidates but currently lacks internal sales, marketing, or product distribution capabilities[165](index=165&type=chunk) - The company plans to explore partnerships with larger pharmaceutical organizations or out-license drug candidates as they get closer to FDA approval[165](index=165&type=chunk) - TransCode also intends to license certain technologies to other oncology-focused companies, with commercial plans subject to change based on program advancement, market conditions, and clinical data[166](index=166&type=chunk) [GOVERNMENT REGULATION](index=59&type=section&id=GOVERNMENT%20REGULATION) TransCode's drug development and commercialization are extensively regulated by global authorities, involving rigorous testing, submissions, and compliance with healthcare laws, with potential for expedited programs - Drug products are extensively regulated by the FDA and other authorities across research, development, testing, manufacturing, approval, marketing, and post-approval monitoring[167](index=167&type=chunk) - The U.S. regulatory process involves preclinical studies (GLP), IND application, IRB approval, multi-phase clinical trials (GCP), NDA submission, FDA review, manufacturing facility inspections (cGMP), and user fees[170](index=170&type=chunk)[171](index=171&type=chunk)[186](index=186&type=chunk) - TransCode anticipates seeking expedited regulatory programs such as Fast Track, Breakthrough Therapy, Priority Review, Accelerated Approval, and Orphan Drug Designations to facilitate development and review[103](index=103&type=chunk)[199](index=199&type=chunk) - Post-approval, products are subject to ongoing requirements including recordkeeping, adverse event reporting, promotion/advertising compliance, and potential Phase 4 studies or REMS plans[208](index=208&type=chunk)[209](index=209&type=chunk) - The company's operations are also subject to various healthcare laws (Anti-Kickback, False Claims, HIPAA, Sunshine Act) and evolving global data protection regulations (GDPR, CCPA), with potential for significant penalties for non-compliance[215](index=215&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[227](index=227&type=chunk)[263](index=263&type=chunk) [Preclinical and clinical trials for drugs](index=61&type=section&id=Preclinical%20and%20clinical%20trials%20for%20drugs) Drug development involves rigorous preclinical testing and multi-phase clinical trials (including Phase 0 exploratory studies) under IND, GCP, and IRB requirements, with adaptive designs expediting oncology development - Preclinical studies, including laboratory evaluations and animal studies (GLP), are required before human testing, with results submitted to the FDA as part of an Investigational New Drug (IND) application[171](index=171&type=chunk) - Clinical trials are conducted in phases: Phase 1 (safety, dosage, pharmacokinetics), Phase 2 (preliminary efficacy, optimal dosages), and Phase 3 (statistically significant efficacy, overall risk/benefit)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) - Exploratory IND (Phase 0) studies involve limited human exposure to determine mechanism of action, pharmacokinetics, or biodistribution, without therapeutic intent[179](index=179&type=chunk) - The FDA's 'Expansion Cohorts' guidance allows adaptive trial designs in early oncology development to compress traditional phases into continuous trials, potentially reducing costs and time[180](index=180&type=chunk)[182](index=182&type=chunk) [U.S. marketing approval for drugs](index=64&type=section&id=U.S.%20marketing%20approval%20for%20drugs) U.S. marketing approval requires an NDA submission to the FDA, demonstrating safety and efficacy, followed by review, facility inspection, and potential post-approval requirements like REMS - U.S. marketing approval requires submitting an NDA to the FDA, containing preclinical and clinical data to establish drug safety and efficacy for one or more indications[186](index=186&type=chunk) - The FDA conducts an in-depth review, may refer the application to an advisory committee, and inspects manufacturing facilities for cGMP compliance[190](index=190&type=chunk)[191](index=191&type=chunk) - Approval may be subject to limitations on indications, warnings, post-approval studies (Phase 4), or a Risk Evaluation and Mitigation Strategy (REMS) to ensure benefits outweigh risks[189](index=189&type=chunk)[193](index=193&type=chunk) [Orphan drug designation and exclusivity](index=66&type=section&id=Orphan%20drug%20designation%20and%20exclusivity) Orphan drug designation provides incentives and seven years of marketing exclusivity for drugs treating rare diseases, with specific conditions for maintaining or losing exclusivity - Orphan drug designation is for drugs treating rare diseases (<200,000 U.S. patients or unrecoverable development costs), offering incentives like tax credits and application fee waivers[194](index=194&type=chunk) - The first FDA-approved orphan-designated product receives seven years of marketing exclusivity for that indication, generally precluding approval of similar products[195](index=195&type=chunk) - Exclusivity can be lost if designation was defective, the manufacturer cannot assure sufficient supply, or a subsequent product demonstrates clinical superiority[195](index=195&type=chunk)[197](index=197&type=chunk) [Rare pediatric disease designation and priority review vouchers](index=68&type=section&id=Rare%20pediatric%20disease%20designation%20and%20priority%20review%20vouchers) The FDA incentivizes drugs for rare pediatric diseases with Priority Review Vouchers, which can be used or transferred for expedited review of subsequent drug applications - The FDA incentivizes drugs for rare pediatric diseases (serious/life-threatening, primarily affecting 0-18 years, <200,000 U.S. patients or unrecoverable costs) with Priority Review Vouchers (PRVs)[198](index=198&type=chunk) - A PRV can be used to obtain priority review for a subsequent human drug application and is transferable. The program is extended through September 30, 2026[198](index=198&type=chunk) [Expedited development and review programs for drugs](index=68&type=section&id=Expedited%20development%20and%20review%20programs%20for%20drugs) The FDA offers Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval programs to expedite drug development and review for serious conditions, without altering scientific standards - FDA programs like Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval expedite development and review for drugs addressing serious conditions or unmet medical needs[199](index=199&type=chunk) - Fast Track and Breakthrough Therapy designations offer increased FDA interaction and potential for rolling review, with Breakthrough Therapy providing intensive guidance and expedited development commitment[200](index=200&type=chunk) - Priority Review shortens FDA review to six months, and Accelerated Approval allows approval based on surrogate endpoints, contingent on post-approval confirmatory trials[201](index=201&type=chunk)[202](index=202&type=chunk) [Pediatric information and pediatric exclusivity](index=70&type=section&id=Pediatric%20information%20and%20pediatric%20exclusivity) PREA requires pediatric safety and efficacy data in NDAs, with sponsors submitting a Pediatric Study Plan, and voluntary pediatric studies may grant six months of exclusivity - PREA requires NDAs to include pediatric safety and efficacy data for relevant subpopulations, with sponsors submitting an initial Pediatric Study Plan (PSP) early in development[206](index=206&type=chunk) - Pediatric exclusivity, granted for voluntary pediatric studies in response to an FDA 'Written Request,' adds six months to existing exclusivity periods and patent terms[207](index=207&type=chunk) [U.S. post-approval requirements for drugs](index=70&type=section&id=U.S.%20post-approval%20requirements%20for%20drugs) Post-FDA approval, drugs face ongoing regulation, including surveillance, adverse event reporting, and cGMP/cGCP compliance, with non-compliance leading to severe penalties - Approved drugs are subject to pervasive and continuing FDA regulation, including post-marketing surveillance, adverse event reporting, and compliance with cGMPs and cGCPs for clinical trials[208](index=208&type=chunk)[209](index=209&type=chunk)[372](index=372&type=chunk)[374](index=374&type=chunk) - Manufacturers must register with the FDA and state agencies, undergoing periodic unannounced inspections for cGMP compliance and product tracking/tracing requirements[210](index=210&type=chunk) - Later discovery of problems or non-compliance can result in product recalls, marketing restrictions, withdrawal of approval, fines, injunctions, or criminal prosecution[213](index=213&type=chunk)[378](index=378&type=chunk) [Other healthcare laws](index=72&type=section&id=Other%20healthcare%20laws) Commercialization activities are subject to federal and state healthcare laws like Anti-Kickback, False Claims, HIPAA, and Sunshine Act, with non-compliance leading to significant penalties - The federal Anti-Kickback Statute prohibits knowingly offering or receiving remuneration to induce referrals or purchases under federal healthcare programs, with violations leading to civil/criminal fines and exclusion[216](index=216&type=chunk)[217](index=217&type=chunk) - The federal civil and criminal False Claims Act (FCA) prohibits presenting false claims to the government, with manufacturers liable for 'causing' such claims, leading to treble damages and penalties[218](index=218&type=chunk) - HIPAA and HITECH impose criminal/civil liability for healthcare fraud and strict requirements on privacy and security of individually identifiable health information, with new tiers of penalties[220](index=220&type=chunk)[221](index=221&type=chunk) - The Physician Payments Sunshine Act (ACA) requires annual reporting of payments and 'transfers of value' to physicians and teaching hospitals, expanding to non-physician providers from January 1, 2022[222](index=222&type=chunk) [Insurance Coverage and Reimbursement](index=76&type=section&id=Insurance%20Coverage%20and%20Reimbursement) Product sales depend on adequate third-party payor coverage and reimbursement, a costly and uncertain process, with insufficient rates materially impacting sales and profitability - Sales of approved products depend on coverage and adequate reimbursement from third-party payors, including government programs (Medicare, Medicaid) and commercial insurers[229](index=229&type=chunk)[406](index=406&type=chunk) - CMS decisions on Medicare coverage and reimbursement significantly influence private payors. Obtaining coverage requires demonstrating medical necessity and cost-effectiveness through expensive studies[229](index=229&type=chunk)[230](index=230&type=chunk) - Lack of coverage or insufficient reimbursement rates can materially and adversely affect sales, operations, and financial condition, as payors increasingly challenge prices and impose cost controls[230](index=230&type=chunk)[232](index=232&type=chunk)[408](index=408&type=chunk) [Current and future healthcare reform legislation](index=78&type=section&id=Current%20and%20future%20healthcare%20reform%20legislation) Healthcare reform, including the ACA and drug pricing proposals, creates uncertainty and downward pressure on pharmaceutical pricing and reimbursement, impacting the U.S. healthcare system - The Affordable Care Act (ACA) introduced changes including annual fees on branded drugs, expanded Medicaid eligibility, revised Medicaid rebate calculations, and established the Medicare Part D coverage gap discount program[234](index=234&type=chunk)[235](index=235&type=chunk) - Ongoing judicial, administrative, and legislative challenges to the ACA, along with other legislative changes like the Budget Control Act of 2011 (Medicare payment reductions) and various drug pricing proposals, create significant uncertainty[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - These reforms and initiatives are expected to continue downward pressure on pharmaceutical pricing, increase regulatory burdens, and may adversely affect reimbursement for approved products[236](index=236&type=chunk)[238](index=238&type=chunk) [Compliance with other federal and state laws or requirements; changing legal requirements](index=82&type=section&id=Compliance%20with%20other%20federal%20and%20state%20laws%20or%20requirements%3B%20changing%20legal%20requirements) Pharmaceutical products are subject to extensive federal and state regulations, with non-compliance leading to severe legal actions and changes in regulations impacting business operations - Pharmaceutical product distribution is subject to extensive record-keeping, licensing, storage, and security requirements to prevent unauthorized sales[245](index=245&type=chunk) - Failure to comply with these laws or regulatory requirements can result in criminal prosecution, fines, injunctions, product recalls, and suspension or withdrawal of product approvals[246](index=246&type=chunk) - Changes in regulations, statutes, or their interpretation could adversely affect business operations by requiring manufacturing changes, labeling modifications, product recalls, or additional record-keeping[247](index=247&type=chunk) [Other U.S. environmental, health and safety laws and regulations](index=82&type=section&id=Other%20U.S.%20environmental%2C%20health%20and%20safety%20laws%20and%20regulations) TransCode's R&D activities involving hazardous materials are subject to environmental, health, and safety laws, with compliance being expensive and carrying risks of substantial liabilities - TransCode is subject to environmental, health, and safety laws governing the handling, use, storage, treatment, and disposal of hazardous materials and wastes in its R&D activities[248](index=248&type=chunk) - The company faces risks of contamination or injury, potentially leading to liability for damages, civil/criminal fines, and operational disruptions, with no environmental liability or toxic tort claims insurance[250](index=250&type=chunk)[251](index=251&type=chunk) - Compliance with current and future environmental laws is expensive and may impair research, development, or production efforts[252](index=252&type=chunk) [Government regulation of drugs outside of the United States](index=84&type=section&id=Government%20regulation%20of%20drugs%20outside%20of%20the%20United%20States) Marketing products outside the U.S. requires compliance with diverse foreign regulations, with the EEA offering data and market exclusivity for new and orphan medicinal products - Marketing products outside the U.S. necessitates compliance with varying foreign regulatory requirements for safety, efficacy, clinical trials, manufacturing, and marketing authorization[253](index=253&type=chunk) - In the EEA, marketing authorization can be obtained through centralized or national procedures, with new products qualifying for eight years of data exclusivity and ten years of market exclusivity[254](index=254&type=chunk)[256](index=256&type=chunk) - Orphan medicinal products in the EEA receive financial incentives and ten years of market exclusivity for approved indications, which can be reduced or lost under certain conditions[257](index=257&type=chunk) [Brexit and the Regulatory Framework in the United Kingdom](index=88&type=section&id=Brexit%20and%20the%20Regulatory%20Framework%20in%20the%20United%20Kingdom) Brexit introduces uncertainty into the U.K.'s medicinal product regulatory framework, with potential divergence from EU legislation despite mutual GMP recognition in the TCA - Brexit has created uncertainty in the U.K.'s regulatory framework for medicinal products, with Great Britain's regime currently aligning with EU legislation but potential for future divergence[266](index=266&type=chunk) - The EU-United Kingdom Trade and Cooperation Agreement (TCA) includes mutual recognition of GMP but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations[266](index=266&type=chunk) [EMPLOYEES AND HUMAN CAPITAL RESOURCES](index=88&type=section&id=EMPLOYEES%20AND%20HUMAN%20CAPITAL%20RESOURCES) As of December 31, 2021, TransCode had nine employees, supplemented by consultants, with human capital objectives focused on recruiting, retaining, and incentivizing staff for cancer treatment goals - As of December 31, 2021, TransCode had nine employees (one part-time, three with Ph.D.s), with five in R&D/clinical/quality and four in business/finance/management[267](index=267&type=chunk) - The company supplements employee efforts with consultants and advisors[267](index=267&type=chunk) - Human capital objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, with equity incentive plans used to motivate staff[267](index=267&type=chunk) [CORPORATE INFORMATION](index=90&type=section&id=CORPORATE%20INFORMATION) TransCode Therapeutics, incorporated in Delaware in 2016, completed its IPO in July 2021, raising $25.4 million net proceeds, and operates as an 'emerging growth company' - TransCode Therapeutics, Inc. was incorporated in Delaware in January 2016, with its principal executive office in Boston, Massachusetts[268](index=268&type=chunk) - The company completed its IPO in July 2021, selling 7,187,500 shares of common stock at **$4.00 per share**, generating approximately **$25.4 million in net proceeds**[269](index=269&type=chunk) - TransCode is an 'emerging growth company' (EGC) under the JOBS Act, allowing it to take advantage of reduced reporting requirements for up to five years or until certain financial/market capitalization thresholds are met[270](index=270&type=chunk) [AVAILABLE INFORMATION](index=90&type=section&id=AVAILABLE%20INFORMATION) TransCode Therapeutics provides free access to its SEC filings (10-K, 10-Q, 8-K) on its website and through the SEC's EDGAR system - TransCode's SEC filings (10-K, 10-Q, 8-K, etc.) are available free of charge on its website (www.transcodetherapeutics.com) under 'Media & Investors' and through the SEC's EDGAR system (www.sec.gov)[271](index=271&type=chunk) - Information on the company's website is not incorporated by reference into the 10-K unless specifically stated[271](index=271&type=chunk) - The company's code of conduct, corporate governance guidelines, and committee charters are available on its website under 'Governance'[272](index=272&type=chunk) [Item 1A. Risk Factors](index=90&type=section&id=Item%201A.%20Risk%20Factors) Investing in TransCode's common stock involves significant risks due to early-stage development, financial losses, funding needs, high failure rates, regulatory hurdles, and internal control weaknesses - TransCode has incurred significant losses since inception (**$10.3 million accumulated deficit** as of Dec 31, 2021) and expects to continue incurring losses, raising substantial doubt about its ability to continue as a going concern without additional funding[274](index=274&type=chunk)[276](index=276&type=chunk)[295](index=295&type=chunk) - The company's business is highly dependent on the success of its lead candidate, TTX-MC138, which is in early preclinical development and has not yet entered clinical trials, carrying a high risk of failure[296](index=296&type=chunk)[301](index=301&type=chunk)[305](index=305&type=chunk) - Clinical development is a lengthy, complex, and expensive process with uncertain outcomes; preclinical and early-stage results may not predict later-stage success, and product candidates can fail at any stage[308](index=308&type=chunk)[309](index=309&type=chunk) - TransCode faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and established market positions, potentially developing more successful products sooner[146](index=146&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk) - The company has no marketing and sales organization and relies heavily on third parties for manufacturing and clinical trials, which introduces risks related to performance, supply, and regulatory compliance[405](index=405&type=chunk)[422](index=422&type=chunk)[427](index=427&type=chunk) - Protecting intellectual property is difficult and costly, with risks of patent challenges, infringement claims, and inadequate protection in foreign jurisdictions, which could prevent or delay commercialization[463](index=463&type=chunk)[475](index=475&type=chunk)[477](index=477&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting, which could affect accurate financial reporting and investor confidence[509](index=509&type=chunk)[510](index=510&type=chunk)[515](index=515&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=90&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) TransCode's history of losses and negative cash flow, with limited existing funds, necessitates substantial additional capital, risking dilution or relinquishing technology rights - TransCode has incurred significant net losses since inception, with an accumulated deficit of **$10.3 million** as of December 31, 2021, and expects these losses to increase substantially with ongoing R&D and public company operations[276](index=276&type=chunk)[277](index=277&type=chunk) - The company has never generated revenue from product sales and may never be profitable, with success dependent on achieving numerous goals including successful clinical development, regulatory approvals, and commercialization[278](index=278&type=chunk) - Existing cash is only sufficient to fund operations into the first quarter of 2023, requiring substantial additional funding. Failure to raise capital when needed would force delays, scale-backs, or discontinuation of development programs[285](index=285&type=chunk)[290](index=290&type=chunk)[295](index=295&type=chunk) - Quarterly operating results may fluctuate significantly due to factors like clinical trial outcomes, regulatory approvals, R&D costs, and market conditions, potentially causing stock price volatility[294](index=294&type=chunk) [Risks Related to Research and Development and the Biopharmaceutical Industry](index=99&type=section&id=Risks%20Related%20to%20Research%20and%20Development%20and%20the%20Biopharmaceutical%20Industry) As a preclinical-stage company, TransCode faces high risks in product development, particularly for TTX-MC138, with uncertain outcomes in clinical trials, manufacturing, and regulatory approval - As a preclinical-stage company with a limited operating history, TransCode faces a high risk of failure in developing marketable products, with no assurance that any product candidates will be successfully developed, approved, or profitable[296](index=296&type=chunk)[301](index=301&type=chunk) - The business is highly dependent on TTX-MC138, its lead candidate, which is in early development and requires substantial investment, preclinical and clinical development, and regulatory approval before commercialization[305](index=305&type=chunk) - Clinical development is a lengthy, complex, and expensive process with uncertain outcomes; preclinical and early-stage results may not predict later-stage success, and product candidates can fail at any stage due to lack of efficacy, unacceptable side effects, or regulatory hurdles[308](index=308&type=chunk)[309](index=309&type=chunk)[312](index=312&type=chunk) - Difficulties in patient enrollment, undesirable side effects, or changes in manufacturing methods/formulations could delay or halt clinical development, prevent regulatory approval, or limit commercial potential[319](index=319&type=chunk)[323](index=323&type=chunk)[335](index=335&type=chunk)[341](index=341&type=chunk) [Risks Related to Our Business and Industry](index=111&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) TransCode faces significant business risks from critical quality control and FDA compliance requirements, alongside new challenges posed by social media in adverse event reporting and reputation management - Quality control is critical for product development and regulatory approval; failure to meet existing or future quality standards (e.g., 21 CFR Part 312, 50, 56, ICH Guidelines) could materially and adversely affect commercialization[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk) - The increasing use of social media platforms presents new risks, including challenges in monitoring and complying with adverse event reporting, potential for litigation related to off-label marketing, and reputational harm from negative or inaccurate posts[343](index=343&type=chunk) [Risks Related to Regulatory Approval, Healthcare Regulations and Ongoing Regulatory Compliance](index=114&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%2C%20Healthcare%20Regulations%20and%20Ongoing%20Regulatory%20Compliance) TransCode's early-stage candidates face unpredictable regulatory approval, ongoing compliance burdens, and complex healthcare laws, with reform and economic volatility further complicating the landscape - The regulatory approval process is unpredictable and lengthy, especially for new drug classes like TransCode's, with potential for delays or rejections due to disagreements on trial design, safety/efficacy concerns, or manufacturing deficiencies[344](index=344&type=chunk)[345](index=345&type=chunk)[347](index=347&type=chunk) - Even if approved, products are subject to ongoing regulatory requirements, post-marketing surveillance, and compliance with cGMPs, cGCPs, and potential REMS plans, incurring significant additional expense[372](index=372&type=chunk)[374](index=374&type=chunk)[377](index=377&type=chunk) - Relationships with customers and third-party payors are subject to anti-kickback, fraud and abuse, and other healthcare laws (e.g., False Claims Act, HIPAA, Sunshine Act), with violations potentially leading to criminal sanctions, civil penalties, and exclusion from government programs[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) - Obtaining approval in one jurisdiction does not guarantee approval elsewhere, and foreign regulatory processes vary, potentially causing delays and increased costs[383](index=383&type=chunk)[384](index=384&type=chunk) - Ongoing healthcare legislative and regulatory reforms (e.g., ACA, drug pricing initiatives) and evolving global data protection laws (e.g., GDPR, CCPA) create uncertainty, increase compliance costs, and may adversely affect pricing and reimbursement[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk)[541](index=541&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) [Risks Related to Commercialization](index=135&type=section&id=Risks%20Related%20to%20Commercialization) TransCode lacks commercialization capabilities, requiring significant investment or partnerships, with product sales dependent on market acceptance, competition, and uncertain reimbursement policies - TransCode has no sales, marketing, or distribution capabilities and no experience commercializing products, requiring significant resources to build these or reliance on third-party partnerships[405](index=405&type=chunk) - Failure to establish effective sales and marketing capabilities, either internally or through collaborations, or inability to secure favorable terms with third parties, could prevent the generation of product revenue[405](index=405&type=chunk)[420](index=420&type=chunk) - Commercial success depends on adequate coverage and reimbursement from third-party payors, which is uncertain and can be limited, making profitable sales difficult[406](index=406&type=chunk)[408](index=408&type=chunk) - Sales of approved products are expected to involve a lengthy sales cycle, influenced by market conditions, perceived product value, competing technologies, and insurance/prior authorization requirements, potentially affecting market acceptance[421](index=421&type=chunk) [Risks Related to Third Parties and Suppliers](index=140&type=section&id=Risks%20Related%20to%20Third%20Parties%20and%20Suppliers) TransCode's reliance on third-party manufacturers and CROs for R&D and clinical trials poses risks of supply interruptions, quality issues, regulatory non-compliance, and potential liabilities - TransCode relies on third-party manufacturers for product candidates, facing risks of limited/interrupted supply, unsatisfactor

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and an assessment of internal controls and procedures [Financial Statements](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The unaudited financial statements for the period ended September 30, 2021, reflect improved financial position post-IPO, with increased cash and equity, despite widened operating losses due to R&D and G&A expenses - The company completed its IPO on July 13, 2021, raising approximately **$25.4 million** in net proceeds from issuing 7,187,500 common shares[37](index=37&type=chunk) - The IPO led to the conversion of all outstanding convertible promissory notes and accrued interest into 1,068,135 common shares, eliminating this debt[37](index=37&type=chunk)[97](index=97&type=chunk) [Selected Balance Sheet Data (Unaudited)](index=7&type=section&id=BALANCE%20SHEETS) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,499,856 | $828,016 | | Total assets | $25,359,852 | $1,055,368 | | Total liabilities | $2,204,732 | $4,463,600 | | Total stockholders' equity (deficit) | $23,155,120 | $(3,408,232) | [Statements of Operations Highlights (Unaudited)](index=8&type=section&id=STATEMENTS%20OF%20OPERATIONS) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Research and development expense | $1,468,457 | $132,636 | | General and administrative expense | $1,696,444 | $214,967 | | **Operating loss** | **$(3,164,901)** | **$(347,603)** | | **Net loss** | **$(4,044,140)** | **$(1,542,362)** | | Net loss per share | $(0.58) | $(0.33) | [Statements of Stockholders' Equity (Deficit)](index=9&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)) [Statements of Cash Flows](index=10&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) [Notes to Financial Statements (Unaudited)](index=11&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's RNA therapeutics strategy, focusing on lead candidate TTX-MC138 and plans for a Phase 0 trial, while noting increased operating expenses and sufficient cash post-IPO to fund operations through December 2022 - The lead therapeutic candidate, TTX-MC138, targets microRNA-10b (miR-10b), a key driver of metastasis in various solid tumors[139](index=139&type=chunk) - The company is shifting TTX-MC138's First-in-Human clinical strategy to a microdosing Phase 0 trial, targeting eIND submission in the first half of 2022 for precise drug delivery data[144](index=144&type=chunk)[145](index=145&type=chunk) - As of September 30, 2021, the company held **$22.5 million** in cash and equivalents, deemed sufficient to fund operations through December 2022[159](index=159&type=chunk)[198](index=198&type=chunk) [Comparison of Operating Expenses (in thousands)](index=187&type=chunk) | Expense Category | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Research and development | $1,468 | $133 | +$1,335 | | General and administrative | $1,696 | $215 | +$1,481 | | **Total operating expenses** | **$3,165** | **$348** | **+$2,817** | - Increased R&D expenses resulted from material purchases, compensation, license fees, and lab costs, while G&A expenses rose due to D&O insurance, compensation, and public company costs[188](index=188&type=chunk)[189](index=189&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's market risk exposure is limited, with minimal interest rate risk due to cash holdings and no debt post-IPO, and immaterial foreign currency risk primarily from Euro-denominated purchases - Primary market risk is interest income sensitivity on cash balances, but a 10% interest rate change would not materially affect results due to short-term instruments[233](index=233&type=chunk) - The company is not subject to interest rate risk from debt, as all convertible promissory notes converted to common stock upon IPO[234](index=234&type=chunk) - Foreign exchange rate sensitivity exists, primarily with the Euro for certain purchases, but a 5% change would not materially affect results[235](index=235&type=chunk) [Controls and Procedures](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2021, due to an unremediated material weakness in internal control over financial reporting, with steps taken to mitigate cybersecurity risks - Disclosure controls and procedures were deemed ineffective as of September 30, 2021, due to an unremediated material weakness in internal control over financial reporting[240](index=240&type=chunk) - Following a July 2021 phishing attack, enhanced cybersecurity measures were implemented, including email screening, employee training, two-factor authentication, and revised payment verification[241](index=241&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section details the company's legal proceedings, comprehensive risk factors, and a list of exhibits filed with the quarterly report [Legal Proceedings](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently involved in any legal proceedings deemed to have a material adverse effect on its financial condition or operations - Management believes no pending claims or actions would materially adversely affect the company's results of operations or financial condition[242](index=242&type=chunk) [Risk Factors](index=44&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks including a history of losses, substantial funding needs for early-stage programs, high clinical development risks for TTX-MC138, reliance on third parties, intense competition, intellectual property challenges, and operational risks as a new public company with internal control weaknesses - The company has a history of significant losses, expects continued losses, and requires substantial additional funding to advance product candidates[244](index=244&type=chunk)[250](index=250&type=chunk) - Business success is highly dependent on the early-stage lead candidate, TTX-MC138, which faces significant preclinical and clinical development risks and potential failure[270](index=270&type=chunk) - Reliance on third parties for manufacturing, preclinical studies, and clinical trials poses risks, as their failure to perform could significantly delay or prevent product development and commercialization[370](index=370&type=chunk)[378](index=378&type=chunk) - Identified material weaknesses in internal control over financial reporting could hinder accurate or timely financial condition and results reporting[457](index=457&type=chunk) - Executive officers, directors, and principal stockholders hold significant influence, beneficially owning approximately **32.6%** of outstanding common stock as of November 12, 2021, potentially limiting other shareholders' influence[446](index=446&type=chunk) [Exhibits](index=98&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, officer certifications, and XBRL-formatted financial statements - The report includes key corporate governance documents and officer certifications required under the Securities Exchange Act of 1934[514](index=514&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________ FORM 10-Q ____________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-40363 TR ...