Company: SION
Filing Date: 2025-01-24
Form Type: CORRESP
Source: 0001193125-25-012256
Chunk: 3

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-01-24
Form: CORRESP
Chunk 3
---
200 |     | $         | 5.53 |     | $               | 5.53 |     | $                | 4.03 |
| 11/14/2024 |     |         | Option |     |                |    64,991 |     | $         | 7.07 |     | $               | 7.07 |     | $                | 5.14 |
| 11/22/2024 |     |         | Option |     |                |    28,150 |     | $         | 7.07 |     | $               | 7.07 |     | $                | 5.15 |

| (1) | The per share estimated fair value of options reflects the fair value of options granted on each grant date 
 determined using the Black-Scholes option-pricing model.                                                    |

Valuation Methodologies The third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation(the “ Practice Aid”). As disclosed in the Registration Statement, the Company’s equity value valuations were prepared using either an option pricing method (“ OPM”), a market-adjusted equity approach based on a recent arms-length transaction, or a hybrid method, which is a combination of an OPM scenario and one or more scenarios using a probability-weighted expected return method (“ PWERM”), with a near-term IPO scenario, a base case IPO scenario and a trade sale scenario. The OPM treats common stock and redeemable convertible preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the redeemable convertible preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. A discount for lack of marketability (“ DLOM”) of the common stock is then applied to arrive at an indication of value for the common stock. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for the Company, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of