Sonnet BioTherapuetics(SONN) - 2025 Q1 - Quarterly Report

Financial Performance - Total assets increased to $7,182,027 as of December 31, 2024, compared to$ 2,771,030 as of September 30, 2024, representing a growth of 159%[12] - Collaboration revenue for the three months ended December 31, 2024, was $1,000,000, a significant increase from$ 18,626 in the same period of 2023[14] - Total operating expenses rose to $3,849,422 for the three months ended December 31, 2024, compared to$ 1,297,497 in the prior year, marking an increase of 196%[14] - Net loss for the three months ended December 31, 2024, was $3,160,706, compared to a net loss of$ 1,168,509 for the same period in 2023, reflecting a 170% increase in losses[14] - Cash at the end of the period increased to $4,861,503 from$ 149,456 at the beginning of the period, indicating a net increase of $4,712,047[18] - The company recorded total liabilities of$ 3,145,458 as of December 31, 2024, compared to $3,256,769 as of September 30, 2024, showing a decrease of approximately 3.4%[12] - For the three months ended December 31, 2024, the net loss was$ 3.16 million, compared to a net loss of $1.17 million for the same period in 2023, representing a 170% increase in losses[18] - Net cash used in operating activities was$ 2.91 million for Q4 2024, slightly improved from $3.09 million in Q4 2023[18] - The company raised$ 7.71 million from the issuance of common stock in Q4 2024, compared to $3.84 million in Q4 2023, indicating a 101% increase in financing activities[18] - Cash at the end of the period was$ 4.86 million, up from $3.02 million at the end of Q4 2023, reflecting a 61% increase in cash reserves[18] Shareholder Information - The company reported a weighted average of 2,022,818 shares outstanding for the three months ended December 31, 2024, compared to 474,699 shares in the same period of 2023[14] - The number of shares outstanding increased to 3,007,431 as of December 31, 2024, from 650,284 at the end of September 2024[12][16] - The weighted-average number of shares for diluted net loss per share remains the same as for basic net loss per share due to the anti-dilutive effect of dilutive securities[51] - The Company has a total of 5,161,565 potentially dilutive securities excluded from the computation of diluted shares as of December 31, 2024, compared to 805,931 in 2023[54] - As of December 31, 2024, the Company had a total of 5,789,600 outstanding warrants[91] Clinical Development - The company initiated a U.S. clinical trial (SB101) for its lead asset SON-1010 in oncology patients with solid tumors in Q2 2022[21] - Sonnet BioTherapeutics received FDA clearance for its Investigational New Drug (IND) application for SON-1010 in March 2022, allowing clinical development to proceed[21] - The company created a wholly-owned Australian subsidiary for conducting clinical trials, with an Australian study (SB102) of SON-1010 initiated in Q3 2022[21] - In January 2023, Sonnet announced a collaboration with Roche to evaluate SON-1010 with atezolizumab for platinum-resistant ovarian cancer, with the trial approved in June 2023[22] - Sonnet expanded its Phase 1 SB101 clinical study of SON-1010 in January 2025 to include a new cohort with trabectedin, which was approved as a second-line treatment in early 2024[23] - The Data Safety Monitoring Board cleared the Phase 1b/2a study of SON-080 in chemotherapy-induced peripheral neuropathy to proceed to Part 2 in early 2024[26] - Sonnet entered into a License Agreement with Alkem Laboratories in October 2024 to develop SON-080 for diabetic peripheral neuropathy in India[26] - SON-1210, a lead bifunctional construct, is being developed for solid tumors, with a Phase 1b/2a study in pancreatic cancer initiated by the Sarcoma Oncology Center[27] - SON-080 is advancing in clinical trials for Chemotherapy-Induced Peripheral Neuropathy and Diabetic Peripheral Neuropathy, with a Phase 1b/2a study approved in Q3 2022[26] Financing and Capital Structure - The Company has a committed equity facility allowing it to sell up to$ 25.0 million in common stock, with $24.9 million available as of December 31, 2024[84] - The Company closed a public offering on October 26, 2023, raising net proceeds of$ 3.9 million through the sale of 163,281 shares and warrants[81] - A subsequent public offering on November 7, 2024, generated net proceeds of $4.2 million from the sale of 155,000 shares and warrants[85] - The Company raised approximately$ 3.5 million from a registered direct and PIPE offering completed on December 10, 2024[90] - The Company recorded a contract asset of $0.5 million related to the Alkem Agreement, representing unbilled collaboration revenue[80] - The New Life Agreement generated$ 1.0 million in non-refundable upfront cash payments, fully recognized by December 31, 2023[72] - Under the Alkem Agreement, the Company will receive $1.0 million in upfront payments and up to an additional$ 1.0 million in milestone payments, along with low double-digit royalties on net sales in India[75] Expenses and Liabilities - Total accrued expenses and other current liabilities as of December 31, 2024, amounted to $1,394,520, an increase from$ 942,489 as of September 30, 2024, with research and development expenses rising to $969,684 from$ 617,545[59] - The company has contingent milestone payments totaling $3.8 million to XOMA upon achieving certain development milestones related to product commercialization[61] - The company incurred a$ 0.1 million technology access fee upon execution of the Navigo Agreement, with additional contingent milestone payments of up to $1.0 million based on evaluation and development milestones[70] - The company has a one-time fee obligation of$ 1.5 million or 5% of the first upfront payment received from a third-party partnership under the SOC Agreement for the development of SON-1210[67] - The Company incurred $12,000 in license fees under the Brink Agreement during the three months ended December 31, 2024 and 2023[65] Management and Governance - The company appointed Donald Griffith as Chief Financial Officer effective February 21, 2025, following the resignation of Jay Cross[100] - Stephen McAndrew was appointed as Chief Business Officer, with an annual base salary of$ 330,000 and eligibility for a performance-based cash bonus of up to 35%[101]