UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 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: 001-35570 SONNET BIOTHERAPEUTICS HOLDINGS, INC. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 20-2 ...

Group 1: Hong Kong Stock Market Highlights - Yunfeng Financial (00376) surged over 21% as the company plans to strategically invest in digital currency and AI sectors [1] - China Merchants Securities (06099) opened nearly 15% higher and is currently up over 4% after receiving approval for a virtual asset license [1] - GDS Holdings (09698) rose over 7% as its Southern GDS data center REIT concluded public investor fundraising ahead of schedule [1] - Hillstone Technology (01478) increased nearly 6% with positive earnings expectations, and Citigroup anticipates a favorable market reaction [1] - Sunny Optical Technology (02382) briefly rose over 3% and is currently up over 1% as its lithography equipment successfully entered Shanghai, indicating a shift to mass production [1] - Kintor Pharmaceutical (02171) saw an early gain of over 3% after achieving positive results in the European patent opposition process [1] - Bilibili (09626) rose over 5% as HSBC expressed optimism about its gaming and advertising business, with new games planned for 2025 [1] - Solar stocks experienced a decline, with institutions citing electricity prices affecting the stable profitability of new energy projects [1] Group 2: U.S. Stock Market Highlights - The U.S. nuclear sector saw gains, with NuScale Power (SMR.US) up 12.38% and Oklo Inc (OKLO.US) up 11.29%, following comments from the U.S. Energy Secretary about a nuclear revival [3] - Autodesk (ADSK.US) rebounded 5.05% after a period of decline, expressing confidence in its cloud and AI business strategies [3] - Sonnet BioTherapeutics (SONN.US) surged 86.46% due to a merger announcement, forming a cryptocurrency financial company valued at $888 million [3] - Quantum stocks rose, with D-Wave Quantum (QBTS.US) up 6.89% and Quantum Computing (QUBT.US) up 8.66% [3] - Hims & Hers Health (HIMS.US) increased 8.64% as it plans to enter the Canadian market with a generic drug following the expiration of a patent [4] - Rocket Lab (RKLB.US) rose 10.71% after Citigroup raised its target price, noting a significant increase in global space technology investments [4] - Nvidia-related stocks mostly strengthened as Jensen Huang made his third visit to China this year [5] - Cryptocurrency stocks collectively rose, with Bitcoin surpassing $120,000, driven by upcoming legislative reviews in the U.S. [5] - Tesla (TSLA.US) gained 1.08% amid investor speculation regarding a stake in xAI [5] - Netflix (NFLX.US) rose 1.35% ahead of its upcoming earnings report, with analysts projecting significant revenue growth [6]

Core Viewpoint - Monteverde & Associates PC is investigating Sonnet BioTherapeutics, Inc. regarding its merger with Rorschach I LLC, questioning the fairness of the deal where Sonnet shareholders will own approximately 1% of the combined company [1]. Group 1: Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has recovered millions for shareholders [1]. - The firm is headquartered in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Group 2: Legal Investigation - The investigation focuses on the merger between Sonnet BioTherapeutics, Inc. and Rorschach I LLC, raising concerns about the equity of the transaction for Sonnet shareholders [1]. - The proposed transaction will result in Sonnet shareholders owning only about 1% of the new entity, prompting questions about the fairness of the deal [1].

Core Viewpoint - Sonnet BioTherapeutics is pivoting into the cryptocurrency sector through a significant business combination valued at $888 million, leading to a substantial increase in its stock price [1][2]. Group 1: Business Combination Details - Sonnet has entered into an agreement with Rorschach I LLC to form Hyperliquid Strategies Inc. (HSI), which will focus on cryptocurrency treasury operations [2]. - The transaction includes HSI holding approximately 12.6 million HYPE tokens valued at around $583 million and at least $305 million in cash at closing [3]. - The total valuation of the transaction is $888 million [3]. Group 2: Market Reaction - Following the announcement, Sonnet's stock price surged by 265%, reaching a pre-market high of $18.68, up from a closing price of $5.17 [1]. - Year-to-date, SONN shares have gained over 220% [1]. Group 3: Investor Participation - The transaction has attracted notable participation from prominent crypto investors, including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital [4]. Group 4: Leadership Structure - HSI's leadership will include Bob Diamond as Chairman of the Board and David Schamis as CEO, with additional board members including Eric Rosengren, former President of the Boston Federal Reserve [5]. Group 5: Future Plans - HSI plans to utilize its capital to acquire more HYPE tokens, aiming to become one of the largest strategic holders of the asset [6]. - The transaction is expected to close in the coming months, pending regulatory and shareholder approvals [6].

Business Combination & Launch - Sonnet BioTherapeutics (SONN) announced an $888 million business combination to launch a HYPE treasury [1] - The new entity is expected to launch with 12.6 million HYPE, valued at $583 million, and rebrand to Hyperliquid Strategies Inc [1]

Nasdaq-listed Sonnet BioTherapeutics agrees to $888 million merger to become Hyperliquid Strategies, launch HYPE treasury https://t.co/nP2nswBM17 ...

Financial Performance - Total assets increased to $3,836,434 as of March 31, 2025, compared to $2,771,030 as of September 30, 2024, representing a 38.4% growth[10] - Collaboration revenue for the six months ended March 31, 2025, was $1,000,000, a decrease from $18,626 in the same period of 2024[12] - Total operating expenses for the three months ended March 31, 2025, were $4,229,420, up 9.3% from $3,868,561 in the same period of 2024[12] - Net loss for the three months ended March 31, 2025, was $(3,491,122), compared to a net income of $365,425 for the same period in 2024[12] - For the six months ended March 31, 2025, Sonnet reported a net loss of $6.65 million, compared to a net loss of $803,084 for the same period in 2024, indicating a significant increase in losses[16] - Net cash used in operating activities for the six months ended March 31, 2025, was $5.38 million, up from $2.37 million in the prior year, reflecting increased operational expenditures[16] - The company reported a net loss of $3.49 million for the three months ended March 31, 2025, compared to a net income of $0.37 million for the same period in 2024[50] - Basic net loss per share for the three months ended March 31, 2025, was $(0.89), while for the same period in 2024, it was $0.63[50] - Net loss for the six months ended March 31, 2025, was $6.7 million, compared to a net loss of $0.8 million for the same period in 2024, indicating a substantial increase in operational losses[157] Cash and Liquidity - Cash balance increased significantly to $2,059,284 as of March 31, 2025, from $149,456 as of September 30, 2024[10] - The company had cash of $2.06 million at the end of the period, down from $3.79 million at the end of the same period in 2024, highlighting liquidity challenges[16] - The company reported a net increase in cash of $1.9 million for the six months ended March 31, 2025, compared to $1.5 million in 2024, primarily due to financing activities[159] - The company expects to continue incurring significant operational expenses and net losses in the upcoming 12 months and beyond, with cash of $2.1 million projected to fund operations into July 2025[157][158] Research and Development - The FDA accepted the IND for the Phase 1b/Phase 2a study (SB221) of SON-1010 in combination with atezolizumab in August 2023, with interim data reported in April 2025[20] - The company is advancing SON-080 for Chemotherapy-Induced Peripheral Neuropathy (CIPN) and has put the SB211 study on hold pending partnering activity[23] - Sonnet's lead asset, SON-1010, is in clinical development for solid tumors, with interim safety data reported in March 2025 following successful dose escalation[19] - The company is pursuing clinical development of its lead asset, SON-1010, for solid tumor indications, including ovarian cancer, with FDA clearance received for its IND application in March 2022[19] - A collaboration agreement with Roche was announced in January 2023 to evaluate SON-1010 in combination with atezolizumab for platinum-resistant ovarian cancer[20] - The Phase 1 SB101 clinical study of SON-1010 has been expanded to evaluate its effect in combination with trabectedin, following successful monotherapy dose escalation[102] - The Data Safety Monitoring Board cleared the Phase 1b/2a study of SON-080 for Chemotherapy-Induced Peripheral Neuropathy, with initial safety data announced following the review[23] - SON-1210 is being developed for solid tumors, with a Phase 1b/2a study in pancreatic cancer initiated through a collaboration with the Sarcoma Oncology Center[24] Expenses and Liabilities - General and administrative expenses for the six months ended March 31, 2025, were $4,307,859, compared to $2,354,728 in the same period of 2024, reflecting an increase of 83.5%[12] - Total operating expenses increased to $8,078,842 for the six months ended March 31, 2025, from $5,166,058 in 2024, representing a 56.5% increase[12] - As of March 31, 2025, accrued expenses and other current liabilities totaled $1,338,552, an increase from $942,489 on September 30, 2024, with significant increases in research and development expenses from $617,545 to $956,083[57] - The company has incurred recurring losses and negative cash flows since inception, raising substantial doubt about its ability to continue as a going concern[27] Financing Activities - The company raised net proceeds of $3.9 million from a public offering on October 26, 2023, through the issuance of 163,281 shares and pre-funded warrants[77] - The committed equity facility allows the company to sell up to $25.0 million in common stock, with $24.8 million available as of March 31, 2025[78] - During the six months ended March 31, 2025, the company sold 98,846 shares under the Purchase Agreement for net proceeds of approximately $0.1 million[78] - The company closed a public offering on November 7, 2024, raising net proceeds of $4.2 million through the issuance of 155,000 shares and pre-funded warrants[79] - A registered direct offering on December 10, 2024, raised approximately $3.4 million from the issuance of 768,000 shares and pre-funded warrants[83] - The company recorded share-based compensation expense of $60,395 for the three months ended March 31, 2025[90] Collaboration Agreements - The Company has entered into multiple collaboration agreements, including the New Life Agreement in May 2021 and the Alkem Agreement in October 2024, which may include various revenue components[42] - The New Life Agreement generated $1.0 million in non-refundable upfront cash payments, fully recognized as collaboration revenue by December 31, 2023[70] - The Alkem Agreement includes $1.0 million in upfront payments and up to an additional $1.0 million in milestone payments, with royalties in the low double digits on net sales of the product in India[72] - As of March 31, 2025, the company has an outstanding balance of $0.5 million related to the Alkem Agreement included in accounts receivable[75] Intellectual Property and Regulatory - The European Patent Office granted a patent covering the FHAB technology, effective until February 20, 2038, enhancing the company's intellectual property portfolio[126] - The company is currently evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-07 and ASU 2023-09, which will affect future financial disclosures[53][54] Miscellaneous - The company has employment agreements that provide for severance and continuation of benefits in the event of termination, including provisions for stock options upon a change in control[69] - The company has no minimum purchase commitments in contracts with CROs and CMOs, allowing for flexibility in operational expenditures[175]

Core Insights - Sonnet BioTherapeutics Holdings, Inc. is set to present at the 6th Annual Cytokine-Based Drug Development Summit on May 15-16, 2025, focusing on managing toxicity related to cytokine overexpression to enhance therapeutic windows [1][2]. Company Overview - Sonnet is an oncology-focused biotechnology company that utilizes a proprietary platform called FHAB (Fully Human Albumin-Binding) for developing targeted biologic drugs [3]. - The FHAB technology employs a fully human single chain antibody fragment that binds to human serum albumin for targeted transport to tumor and lymphatic tissues, aiming to improve the safety and efficacy of immune-modulating biologic drugs [3]. Lead Programs - The lead program, SON-1010 (IL-12-FHAB), is in development for treating solid tumors, certain sarcomas, and ovarian cancer, currently undergoing a Phase 1/2a study in collaboration with Roche [4]. - A second program, SON-1210 (IL12-FHAB-IL15), is being evaluated for solid tumors, with plans for an investigator-initiated Phase 1/2a study for pancreatic cancer in collaboration with the Sarcoma Oncology Center [4]. Presentation Details - Dr. Richard Kenney, Chief Medical Officer, will discuss strategies for managing cytokine toxicity and optimizing therapeutic indices during the presentation [1][7]. - Key topics include receptor bias to reduce toxicity, optimizing cytokine potency, and examining factors influencing the therapeutic window [7].

Core Insights - Sonnet BioTherapeutics Holdings, Inc. announced positive safety results for SON-1010 in a Phase 1b/2a clinical trial for advanced solid tumors and platinum-resistant ovarian cancer [2][5] - The management team, including Interim CEO Raghu Rao and Chief Medical Officer Dr. Richard Kenney, discussed the implications of these results in a Virtual Investor segment [1][2] Company Overview - Sonnet is a clinical-stage biotechnology company focused on developing immunotherapeutic drugs targeting the tumor microenvironment (TME) [1][4] - The company utilizes a proprietary FHAB (Fully Human Albumin-Binding) platform for creating targeted biologic drugs, enhancing safety and efficacy [4] Product Development - SON-1010 (IL-12-FHAB) is the lead program aimed at treating solid tumors, certain sarcomas, and ovarian cancer, currently in a Phase 1/2a study in collaboration with Roche [5] - The company is also developing SON-1210 (IL12-FHAB-IL15) for solid tumors, with plans for an investigator-initiated Phase 1/2a study for pancreatic cancer [5]

Core Insights - Sonnet BioTherapeutics Holdings, Inc. announced positive safety results for SON-1010 in a Phase 1b/2a clinical trial for advanced solid tumors and platinum-resistant ovarian cancer [2][5] - The management team, including Interim CEO Raghu Rao and Chief Medical Officer Dr. Richard Kenney, discussed the implications of these results and future steps for the program [2] Company Overview - Sonnet is a clinical-stage biotechnology company focused on developing immunotherapeutic drugs targeting the tumor microenvironment (TME) [1][4] - The company utilizes a proprietary FHAB (Fully Human Albumin-Binding) platform designed to enhance the safety and efficacy of biologic drugs by targeting tumor and lymphatic tissues [4] Product Development - SON-1010 (IL-12-FHAB) is the lead program aimed at treating solid tumors, certain sarcomas, and ovarian cancer, currently in a Phase 1/2a study in collaboration with Roche [5] - The company is also developing SON-1210 (IL12-FHAB-IL15) for solid tumors, with plans for an investigator-initiated Phase 1/2a study for pancreatic cancer [5]