SCHEDULE: TransCode Acquires ABCJ, Secures $25M Investment

TransCode Therapeutics, Inc. completed the acquisition of ABCJ, LLC from DEFJ, LLC and secured a $25 million private placement, issuing common and preferred stock, and contingent value rights.

Summary

• TransCode Therapeutics, Inc. (the "Company") acquired 100% of the membership interests of ABCJ, LLC from DEFJ, LLC, an indirect wholly-owned subsidiary of CK Life Sciences Int'l., (Holdings) Inc., on October 8, 2025.
• In exchange for ABCJ, the Company issued DEFJ 83,285 shares of Common Stock (representing 9.99% of outstanding shares prior to closing) and 1,152.9568 shares of Series A Non-Voting Convertible Preferred Stock.
• The Company also agreed to make up to $95,000,000 in contingent milestone payments to DEFJ upon the achievement of certain milestones.
• Concurrently, DEFJ, LLC agreed to purchase 223.7337 shares of Series B Non-Voting Convertible Preferred Stock from the Company for approximately $25 million in a private placement.
• This $25 million investment consisted of approximately $20 million in cash and a promissory note from DEFJ, LLC for approximately $5 million, accruing interest at 4% per annum and due January 1, 2026.
• Each share of Series A and Series B Preferred Stock is convertible into 10,000 shares of Common Stock, subject to stockholder approval and Nasdaq listing rules, and an initial 9.99% beneficial ownership limitation.
• Holders of Common Stock as of October 20, 2025, will receive one contractual contingent value right (CVR) per share, entitling them to 50% of Net Proceeds from any Upfront Payment or Milestone Payment received by the Company, with a seven-year term.
• The Company is required to hold a stockholders' meeting to approve the conversion of Preferred Stock and a 'change of control' under Nasdaq rules.
• Elizabeth Czerepak was elected as a director of the Company, effective October 8, 2025, nominated by DEFJ pursuant to the Purchase Agreement.
• DEFJ, LLC and CK Life Sciences Int'l., (Holdings) Inc. collectively beneficially own 83,285 shares of Common Stock, representing approximately 9.1% of the 916,968 shares outstanding as of October 13, 2025.

Sentiment

Score: 8

Explanation: The acquisition of ABCJ, LLC and the significant capital infusion of approximately $25 million, coupled with the potential for up to $95 million in contingent milestone payments, represent a strong strategic move and financial bolstering for TransCode Therapeutics. While there are complexities related to preferred stock conversion and shareholder approvals, the overall transaction is highly favorable for the company's growth and development.

Positives

• The acquisition of ABCJ, LLC expands the Company's asset base and strategic capabilities.
• Secured approximately $25 million in new capital through the private placement, including approximately $20 million in cash and a $5 million promissory note from DEFJ, LLC.
• Potential for significant future value creation with up to $95,000,000 in contingent milestone payments.
• The appointment of Elizabeth Czerepak to the Board of Directors, nominated by a significant investor, may bring valuable expertise and oversight.
• Existing shareholders will receive Contingent Value Rights (CVRs), providing them with a share of future milestone payments.

Negatives

• The conversion of preferred stock into common stock is subject to stockholder approval, introducing a potential hurdle.
• The preferred stock grants holders certain protective veto rights over adverse changes to preferred stock, further preferred stock issuance, and certain fundamental transactions, which could limit the Company's future flexibility.
• The initial 9.99% beneficial ownership limitation on preferred stock conversion may delay full conversion and impact market perception of the investor's stake.
• The CVRs are generally non-transferable, limiting liquidity for holders.

Risks

• Failure to obtain stockholder approval for the conversion of Preferred Stock into Common Stock could impact the full realization of the transaction's benefits and potentially violate Nasdaq listing rules.
• Failure to obtain stockholder approval for a 'change of control' under Nasdaq Listing Rules 5110 and 5635(b) could lead to compliance issues.
• The beneficial ownership limitation of 9.99% on preferred stock conversion may restrict the investor's immediate voting power and influence.
• The Company's Common Stock could be delisted from Nasdaq if certain conditions, such as stockholder approval, are not met.
• The contingent milestone payments of up to $95,000,000 are not guaranteed and depend on the achievement of specific, undefined milestones.

Future Outlook

The Company plans to hold a stockholders' meeting to seek approval for the conversion of the Preferred Stock into Common Stock in accordance with Nasdaq rules and for a 'change of control' under Nasdaq Listing Rules. Additionally, the Company is required to prepare and file a resale registration statement with the SEC within 75 calendar days following the closing of the Acquisition and Investment, aiming for it to be declared effective as soon as practicable. The Reporting Persons intend to review their investment in the Company periodically and may consider various alternative courses of action, including acquiring or disposing of shares.

Industry Context

This transaction represents a strategic move within the biotechnology sector, where companies often engage in acquisitions to expand their pipeline or technology base, and secure private placements for capital-intensive research and development. The use of contingent milestone payments is a common mechanism in biotech M&A, aligning the seller's future value with the acquired asset's performance. The investment from CK Life Sciences, a company focused on biotechnology products, suggests a strategic alignment and potential for synergistic growth.

Comparison to Industry Standards

• The structure of contingent milestone payments (up to $95 million) is a common practice in biotech acquisitions, similar to deals seen with companies like Gilead Sciences acquiring Kite Pharma or Bristol-Myers Squibb acquiring Celgene, where significant portions of the deal value are tied to regulatory approvals or sales targets of acquired assets.
• The private placement of convertible preferred stock is a standard financing mechanism for growth-stage biotech companies, often used by firms like Moderna or BioNTech in their earlier stages to raise substantial capital from institutional investors without immediate public market dilution.
• The beneficial ownership limitation (initially 9.99%) and the requirement for shareholder approval for preferred stock conversion are typical provisions designed to comply with exchange listing rules (e.g., Nasdaq) and prevent immediate 'change of control' without investor consent, similar to terms in investments by funds like Orbimed or RA Capital in other emerging biotech firms.

Management Changes

Corporate Governance

Related Party Transactions

• The acquisition of ABCJ, LLC was from DEFJ, LLC, which was a wholly-owned subsidiary of DEFJ and an indirect wholly-owned subsidiary of CK Life Sciences.
• The Investment Agreement, Registration Rights Agreement, and Repurchase Agreement were all entered into between TransCode Therapeutics, Inc. and DEFJ, LLC.
• Elizabeth Czerepak, a new director, was nominated to the Board by DEFJ pursuant to the terms of the Purchase Agreement.

Stakeholder Impact

• **Shareholders**: Potential for significant dilution upon conversion of preferred stock, but also potential upside from CVRs tied to future milestone payments. Required to vote on key aspects of the transaction, including preferred stock conversion and change of control.
• **Company (TransCode Therapeutics)**: Strengthened financial position through a $25 million capital infusion, expanded asset base and strategic capabilities through the ABCJ acquisition, and potential for substantial future contingent payments. New board member brings additional expertise.
• **DEFJ, LLC / CK Life Sciences Int'l., (Holdings) Inc.** (Reporting Persons): Increased ownership stake in TransCode Therapeutics (common and preferred stock), potential for significant contingent milestone payments, and a board seat, indicating a strategic long-term investment.
• **Employees (of ABCJ, LLC)**: Implied integration into TransCode Therapeutics, potentially leading to new opportunities or changes in operational structure.

Next Steps

• The Company will hold a stockholders' meeting to submit for consideration the approval of the conversion of Preferred Stock into Common Stock and the approval of a 'change of control' under Nasdaq Listing Rules.
• The Company is required to prepare and file a resale registration statement with the SEC within 75 calendar days following the closing of the Acquisition and Investment.
• The Company will use commercially reasonable efforts to cause the resale registration statement to be declared effective by the SEC as soon as practicable.
• The principal and accrued but unpaid interest on the Promissory Note are due and payable on January 1, 2026.
• Elizabeth Czerepak is expected to stand for election by the Company's stockholders at the annual meeting in 2026.

Key Dates

Recommendation

The acquisition of ABCJ, LLC and the substantial capital infusion of approximately $25 million, including a $5 million promissory note from DEFJ, LLC, significantly strengthen TransCode Therapeutics' financial position and strategic capabilities. The potential for up to $95 million in contingent milestone payments provides a clear path for future value creation. While shareholder approval for preferred stock conversion and change of control is required, the overall transaction represents a strong vote of confidence from a major investor and positions the company for growth, making it an attractive 'buy' for investors.

Keywords

TransCode Therapeutics, ABCJ LLC, DEFJ LLC, CK Life Sciences, Acquisition, Private Placement, Preferred Stock, Convertible Stock, Contingent Value Rights, SEC Filing, Schedule 13D, Biotechnology, Investment, Corporate Governance, Nasdaq Listing Rules