Company: SION
Filing Date: 2025-02-07
Form Type: 424B4
Source: 0001193125-25-022709
Chunk: 149

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-07
Form: 424B4
Chunk 149
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 with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under the OPM, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the convertible preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. The hybrid method is a probability-weighted expected return method (“PWERM”) where the equity value in one or more of the scenarios is calculated using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for us, 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 each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. A discount for lack of marketability of the common stock is then applied to arrive at an indication of value for the common stock. These third-party valuations were performed at various dates, which resulted in valuation of our common stock of $6.11 per share as of February 2024, $8.08 per share as of August 2024 and $10.33 per share as of October 2024. The fair value of our common stock was determined by our board of directors, with input from management and considering the independent third-party valuations and various objective and subjective factors as of each grant date, including:

| • |     | the prices at which we sold preferred stock and the superior rights and preferences of the preferred stock relative to our 
 common stock at the time of each grant;                                                                                    |

| • |     | our ability to raise future financings; |

| • |     | the progress of our research and development efforts, including the status of clinical trials for our product candidates; |

| • |     | the lack of liquidity of our equity as a private company; |

| • |     | our stage of development and business strategy and the material risks related to our business and industry; |

| • |     | the achievement of enterprise milestones, including entering into collaboration and license agreements; |

| • |     | the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed 
 mergers and acquisitions of peer companies;                                                                              |