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]
Sonnet BioTherapuetics(SONN) - 2025 Q2 - Quarterly Report