Company: SION
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001193125-25-018825
Chunk: 332

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-03
Form: S-1/A
Chunk 332
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 milestone payments related to IPR&D with no alternative
future use are charged to expense when the related milestone is achieved and becomes payable. For the years ended December 31, 2023 and 2022, the Company did not recognize any milestones or IPR&D expense in connection with the consideration
due under its license agreements (see Note 9).

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications such as direct application fees, and legal and consulting
expenses are expensed as incurred due to the uncertainty about the recovery of the expenditure. Patent-related costs are classified as general and administrative expenses within the Company’s consolidated statements of operations and
comprehensive loss.

Convertible Preferred Stock

The Company’s convertible preferred stock is classified as temporary equity in the accompanying consolidated balance sheets and excluded from
stockholders’ deficit as the potential redemption of such stock is outside the Company’s control and would require the redemption of the then-outstanding convertible preferred stock. The convertible preferred stock is not redeemable except
for in the event of a liquidation, dissolution or winding up of the Company (see Note 11). Costs incurred in connection with the issuance of convertible preferred stock are recorded as a reduction of gross proceeds from issuance. Subsequent
adjustments of the carrying values to the ultimate redemption values will be made only when it becomes probable that these events will occur.

Stock-Based Compensation

The Company measures all stock options and other stock-based awards granted to employees,
non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the
respective award. The Company’s stock-based payments include stock options and grants of restricted common stock awards. Generally, the Company issues stock-based awards with only service-based vesting conditions. The measurement date for
employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the employees’ requisite service period, which is the vesting period, on a straight-line basis. The Company’s policy is to account for
forfeitures when they occur. Stock-based compensation expense is classified in the accompanying consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in
which the award recipients service payments are classified.

Restricted common stock awards are subject to repurchase rights until such awards meet
all vesting conditions. Accordingly, the Company has recorded the proceeds from the issuance of restricted stock awards as