Company: SION
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001193125-25-018825
Chunk: 333

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-03
Form: S-1/A
Chunk 333
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 a liability in the consolidated balance sheets. The restricted stock liability is reclassified into stockholders’ equity
as the restricted stock vests.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing
model. The Board of Directors of the Company (the “Board”) determines the fair value of the Company’s common stock, par value $0.001 per share (“common stock”), taking into consideration its most recently available
third-party valuations of common stock as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through grant date. Due to the lack of company-specific historical and implied volatility
information, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own
traded stock price. The Company uses the simplified method as prescribed by the

F-12

Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees and non-employees as
the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of
grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero because the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the
foreseeable future.

Income Taxes

The
Company’s provision for income taxes, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated future taxes to be paid. Significant judgments and estimates based on interpretations
of existing tax laws or regulations in the United States are required in determining our provision for income taxes. Changes in tax laws, statutory tax rates, and estimates of our future taxable income could impact the deferred tax assets and
liabilities provided for in the consolidated financial statements and would require an adjustment to the provision for income taxes.

The Company
accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial
statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets