Company: SION
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001193125-25-018825
Chunk: 327

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-03
Form: S-1/A
Chunk 327
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 the accounting for stock-based awards. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances and facts. Changes in estimates are recorded in the
period in which they become known. Actual results may differ from those estimates or assumptions.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of ninety days or less at the time of purchase to be cash equivalents.
Cash and cash equivalents typically include cash held in deposit accounts and money market funds.

Cash accounts with any type of restriction are
classified as restricted cash. For the years ended December 31, 2023 and 2022, the Company had restricted cash of $1.0 million held to secure a letter of credit associated with the Company’s leased corporate headquarters. The
restricted funds are maintained in a certificate of deposit account. The Company classified this amount as restricted cash in the accompanying consolidated balance sheets within non-current assets based on the
release date of the restrictions.

Marketable Securities

The Company classifies marketable securities with a remaining maturity greater than three months at the time of purchase and less than one year from the
balance sheet date as current. Marketable securities would be classified as long-term assets on the consolidated balance sheets if the maturity exceeded one year, and the Company did not intend to utilize the marketable securities to fund current
operations.

The Company classifies all of its investments as
available-for-sale securities. Accordingly, these investments are recorded at fair value. Realized gains and losses and amortization and accretion of discounts and
premiums are included in interest income, which is a component of other income. Unrealized gain and losses on available-for-sale securities are included in
“Accumulated other comprehensive loss” as a component of stockholders’ deficit until realized.

F-8

At each balance sheet date, the Company assesses available-for-sale debt securities in an unrealized loss position to determine whether the unrealized loss or any potential credit losses should be recognized. The Company evaluates whether it intends to
sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. The Company also evaluates whether the decline in fair value has resulted from credit losses or other