Company: SION
Filing Date: 2025-01-17
Form Type: S-1
Source: 0001193125-25-008474
Chunk: 324

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-01-17
Form: S-1
Chunk 324
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 readily determinable. Therefore, the Company utilizes its incremental borrowing rate to discount lease payments. The incremental
borrowing rate reflects the fixed rate at which the Company could borrow, on a collateralized basis, the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Leases generally provide for payments
of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for non-lease
components together with lease components. Variable lease payments, such as periodic adjustments for inflation, reimbursement of real estate taxes, and variable common area maintenance are expensed as incurred as variable lease costs and are not
recorded on the consolidated balance sheets.

Sublease income is recognized on a straight-line basis over the term of the sublease agreement and is
recorded within Other Income on the consolidated statements of operations and comprehensive loss.

Research and Development Expenses and Accruals

Research and development costs include (i) employee-related expenses, including salaries, benefits, and stock-based compensation expense;
(ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CRO”) agreements, contract development and manufacturing organizations (“CDMOs”),
consultants and scientific advisors; (iii) costs associated with preclinical and clinical activities and (iv) lab supplies, lab expenses and an allocation of rent, depreciation, and infrastructure.

The Company enters into contracts in the normal course of business with CROs, CDMOs, and other vendors to assist in research and development
activities.These contracts generally provide for termination at any time upon a certain amount of prior notice and payment of costs incurred.

The
Company recognizes research and development costs in the periods in which they are incurred. Typically, external expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to the Company
by their service providers as of each reporting date. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses, which are expensed as the related goods are
delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered. Significant judgments and estimates are made in determining the accrued, or prepaid expense balances at the end of
any reporting period.

Asset Acquisitions and Acquired In-ProcessResearch and Development Expense

The Company accounts for acquisitions of assets or a group of assets that