Company: SION
Filing Date: 2025-01-17
Form Type: S-1
Source: 0001193125-25-008474
Chunk: 341

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-01-17
Form: S-1
Chunk 341
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As of December 31, 2023 and 2022, the Company had federal net operating loss carryforwards of approximately $48.2 million and $35.9 million, respectively, which may be available to offset future income tax liabilities. The 2017 Tax Cuts and Jobs Act (“TCJA”) will generally allow losses incurred after 2017 to be carried over indefinitely but will generally limit the net operating loss deduction to the lesser of the net operating loss carryover or 80% of a corporation’s taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)). Also, there are no carryback for losses incurred after 2017. All net operating loss carryforwards were generated after 2017. F-26

In addition, the Company has state net operating loss carryforwards of $47.1 million and
$34.3 million as of December 31, 2023 and 2022, respectively, which will expire at various dates through 2043.

As of December 31,
2023 and 2022, the Company had federal research and development tax credit (“Federal R&D Tax Credit”) carryforwards of $1.5 million and $0.8 million, respectively, available to reduce future tax liabilities, which will expire
at various dates through 2043.

As of December 31, 2023 and 2022, the Company had state research and development credit (“State R&D
Tax Credit”) carryforwards of approximately $1.4 million and $0.8 million, respectively, available to reduce future tax liabilities, which will expire at various dates through 2038.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily
of net operating loss carryforwards, the capitalization of research and experimental expenditures, and tax credits. Management has considered the Company’s history of cumulative net losses in the United States, estimated future taxable income
and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation allowance of
$34.3 million and $20.1 million has been established against these net deferred tax assets as of December 31, 2023 and 2022, respectively.