Company: SION
Filing Date: 2025-01-24
Form Type: CORRESP
Source: 0001193125-25-012256
Chunk: 8

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-01-24
Form: CORRESP
Chunk 8
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 The principal factor that contributed to the increase in the fair value of the Common Stock from February 13, 2024 to August 9, 2024 include the following:

Between August 9, 2024 and September 11, 2024, the Company continued to operate its business in the ordinary course and there were no significant developments in its business. As a result, the Company determined in good faith that no developments that would affect the valuation occurred from August 9, 2024 to September 11, 2024. October 29, 2024 Valuation The fair value of the Common Stock of $7.07 per share at October 29, 2024 was determined with the assistance of an independent third-party valuation firm and approved by the Board on November 14, 2024. This valuation was used to support the fair market value of the Common Stock in accordance with Section 409A of the IRC with respect to options granted on November 14, 2024 and November 22, 2024, along with other factors determined by the Board to be relevant at the time of such grant of options. The October 29, 2024 valuation utilized the hybrid method of both an OPM and a PWERM approach, which included three scenarios that were probability weighted based on their expected likelihoods of occurring. The scenarios identified included a near-term IPO scenario, a base case IPO scenario and a trade sale scenario. The IPO near-term scenario was assigned a probability weight of 25.0% and the IPO base case scenario was assigned a probability weight of 25.0%. Both IPO scenarios considered guideline IPO transactions identified within the last several years and the Company’s progress toward an IPO, as adjusted by a DLOM of 8.0% for the near-term scenario and 10.0% for the base case scenario. The Company’s trade sale scenario under an OPM to allocate the fair value of the Company’s equity to various securities within the Company’s capital structure was assigned a probability weight of 50.0% and reflected the market adjustment to the Company’s equity value since August 9, 2024 based on consideration given to the performance of guideline public companies and the biotechnology indices as well as the Company’s entity-specific factors. A DLOM of 28.0% was then applied to arrive at an indication of value for the Common Stock under the trade sale scenario. The principal factors that contributed to the increase in the fair value of the Common Stock from