Filed
Pursuant to Rule 424(b)(3)
Registration No. 333-280705
PROSPECTUS
5,770,140
Shares of Common Stock
Issuable
Upon Exercise of Outstanding Warrants
This
prospectus relates to the resale of up to 5,770,140 shares of Sonnet BioTherapeutics Holdings, Inc. (the “Company,” “we,”
“our” or “us”) common stock, $0.0001 par value per share (the “Common Stock”), by the Selling Stockholders
listed in this prospectus or their permitted transferees (the “Selling Stockholders”). The shares of Common Stock registered
for resale pursuant to this prospectus consist of (i) 5,657,000 shares of Common Stock (the “Common Warrant Shares”) issuable
upon the exercise of warrants (the “Common Warrants”), and (ii) 113,140 shares of Common Stock (the “Placement Agent
Warrant Shares” and together with the Common Warrant Shares, the “Warrant Shares”) issuable upon the exercise of certain
warrants issued to our placement agent (the “Placement Agent Warrants” and together with the Common Warrants, the “Warrants”).
The Warrants were issued to the Selling Stockholders and our placement agent in a private placement offering (the “Private Placement”)
which closed on June 21, 2024.
For
additional information about the Private Placement, see “Private Placement.”
The
Common Warrants have an exercise price of $1.55 per share and will be exercisable until the five-year anniversary of the date of issuance.
The Placement Agent Warrants have substantially the same terms as the Common Warrants, except that the Placement Agent Warrants have
an exercise price of $1.86.
The
Selling Stockholders may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Common Stock or interests
in their shares of Common Stock on any stock exchange, market or trading facility on which the shares of Common Stock are traded or in
private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. See “Plan of Distribution”
in this prospectus for more information. We will not receive any proceeds from the resale or other disposition of the shares of Common
Stock by the Selling Stockholders. However, we will receive the proceeds of any cash exercise of the Warrants. See “Use of Proceeds”
beginning on page 9 and “Plan of Distribution” beginning on page 10 of this prospectus for more information.
Our
Common Stock is listed on The Nasdaq Capital Market under the symbol “SONN.” On July 3, 2024, the last reported sale
price of our Common Stock as reported on The Nasdaq Capital Market was $0.898.
You
should read this prospectus, together with additional information described under the headings “Incorporation of Certain Information
by Reference” and “Where You Can Find More Information,” carefully before you invest in any of our securities.
An
investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider
carefully the risks and uncertainties described in the section captioned “Risk Factors” contained in our Annual Report
on Form 10-K for the fiscal year ended September 30, 2023, filed with the Securities and Exchange Commission, or the SEC, on December
14, 2023 and our other filings we make with the Securities and Exchange Commission from time to time, which are incorporated by reference
herein in their entirety, together with other information in this prospectus and the information incorporated by reference herein.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is July 15, 2024
TABLE
OF CONTENTS
PROSPECTUS
SUMMARY
This
summary highlights information about our company, this offering and information contained in greater detail in other parts of this prospectus
or incorporated by reference into this prospectus from our filings with the Securities and Exchange Commission (“SEC”) listed
in the section entitled “Information Incorporated by Reference.” Because it is only a summary, it does not contain all of
the information that you should consider before purchasing our securities in this offering and it is qualified in its entirety by, and
should be read in conjunction with, the more detailed information appearing elsewhere or incorporated by reference into this prospectus.
You should read the entire prospectus, the registration statement of which this prospectus is a part, and the information incorporated
by reference into this prospectus in their entirety, including the “Risk Factors” and our financial statements and the related
notes incorporated by reference into this prospectus, before purchasing our securities in this offering.
Except
as otherwise indicated herein or as the context otherwise requires, references in this prospectus to “the Company,” “we,”
“us” and “our” refer to Sonnet BioTherapeutics Holdings, Inc. and our consolidated subsidiaries.
On
August 31, 2023, we effected a reverse stock split of our issued and outstanding Common Stock at a ratio of 1-for-22 and on September
16, 2022, we effected a reverse stock split of our issued and outstanding Common Stock at a ratio of 1-for-14. All of our historical
share and per share information related to issued and outstanding Common Stock and outstanding options and warrants exercisable for Common
Stock included in this prospectus have been adjusted, on a retroactive basis, to reflect the reverse stock splits. See “Corporate
Information.”
Corporate
Overview
Sonnet
BioTherapeutics Holdings, Inc. (“we,” “us,” “our” or the “Company”), is a clinical stage,
oncology-focused biotechnology company with a proprietary platform for innovating biologic medicines of single- or bi-specific action.
Known as FHAB™ (Fully Human Albumin Binding), the technology utilizes a fully human single chain antibody fragment that binds to
and “hitch-hikes” on human serum albumin for transport to target tissues. We designed the construct to improve drug accumulation
in specific tissues, as well as to extend the duration of activity in the body. FHAB development candidates are produced in a mammalian
cell culture, which enables glycosylation, thereby reducing the risk of immunogenicity. We believe our FHAB technology, for which we
received a U.S. patent in June 2021, is a distinguishing feature of our biopharmaceutical platform that is well suited for future drug
development across a range of human disease areas, including in oncology, autoimmune, pathogenic, inflammatory, and hematological conditions.
Corporate
Information
We
were organized on October 21, 1999, under the name Tulvine Systems, Inc., under the laws of the State of Delaware. On April 25, 2005,
Tulvine Systems, Inc. formed a wholly owned subsidiary, Chanticleer Holdings, Inc., and on May 2, 2005, Tulvine Systems, Inc. merged
with, and changed its name to, Chanticleer Holdings, Inc. On April 1, 2020, we completed our business combination with Sonnet BioTherapeutics,
Inc. (“Sonnet”), in accordance with the terms of the Agreement and Plan of Merger, dated as of October 10, 2019, as amended,
by and among us, Sonnet and Biosub Inc., a wholly-owned subsidiary of the Company (“Merger Sub”) (the “Merger Agreement”),
pursuant to which Merger Sub merged with and into Sonnet, with Sonnet surviving as a wholly owned subsidiary of us (the “Merger”).
Under the terms of the Merger Agreement, we issued shares of Common Stock to Sonnet’s stockholders at an exchange rate of 0.106572
shares for each share of Sonnet common stock outstanding immediately prior to the Merger. In connection with the Merger, we changed our
name from “Chanticleer Holdings, Inc.” to “Sonnet BioTherapeutics Holdings, Inc.,” and the business conducted
by us became the business conducted by Sonnet.
On
August 31, 2023, we effected a reverse stock split of our issued and outstanding Common Stock at a ratio of 1-for-22 (the “2023
Reverse Stock Split”), and on September 16, 2022, we effected a reverse stock split of our issued and outstanding Common Stock
at a ratio of 1-for-14 (the “2022 Reverse Stock Split” and, together with the 2023 Reverse Stock Split, the “Reverse
Stock Splits”). Shares of Common Stock underlying outstanding stock options and other equity instruments convertible into Common
Stock were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with
the terms of the agreements governing such securities in connection with the Reverse Stock Splits. No fractional shares were issued in
connection with the Reverse Stock Splits. Stockholders who would otherwise be entitled to a fractional share of Common Stock instead
receive a proportional cash payment. All of our historical share and per share information related to issued and outstanding Common Stock
and outstanding options and warrants exercisable for Common Stock included in this prospectus have been adjusted, on a retroactive basis,
to reflect the Reverse Stock Splits.
Our
principal executive offices are located at 100 Overlook Center, Suite 102, Princeton, New Jersey 08540, and our telephone number is (609)
375-2227. Our website is www.sonnetbio.com. Our website and the information contained on, or that can be accessed through, our website
shall not be deemed to be incorporated by reference in, and are not considered part of, this prospectus supplement or the accompanying
prospectus. You should not rely on any such information in making your decision whether to purchase our Common Stock.
THE
OFFERING
| Shares
of Common Stock offered by the Selling Stockholders |
|
Up
to 5,770,140 shares of Common Stock issuable upon exercise of the Warrants. |
| |
|
|
| Use
of Proceeds |
|
We
will not receive any proceeds from the shares of Common Stock offered by the Selling Stockholders pursuant to this prospectus. However,
we will receive the proceeds of any cash exercise of the Warrants. We intend to use the net proceeds from any cash exercise of the
Warrants, if any, for research and development, including clinical trials, working capital, the repayment of all or a portion of
our liabilities, and general corporate purposes. Please see the section entitled see “Use of Proceeds” on page
9 of this prospectus for a more detailed discussion. |
| |
|
|
| National
Securities Exchange Listing |
|
Our
Common Stock is currently listed on The Nasdaq Capital Market under the symbol “SONN.” |
| |
|
|
| Risk
Factors |
|
An
investment in our securities involves a high degree of risk. Please see the section entitled “Risk Factors” beginning
on page 4 of this prospectus. In addition before deciding whether to invest in our securities, you should consider carefully the
risks and uncertainties described in the section captioned “Risk Factors” contained in our Annual Report on Form
10-K for the fiscal year ended September 30, 2023 filed with the SEC on December 14, 2023, and other filings we make with the SEC
from time to time, which are incorporated by reference herein in their entirety, together with other information in this prospectus
and the information incorporated by reference herein. |
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider
carefully the risks and uncertainties described in the section captioned “Risk Factors” contained in our Annual Report
on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on December 14, 2023, and our other filings we make with
the Securities and Exchange Commission from time to time, which are incorporated by reference herein in their entirety, together with
other information in this prospectus and the information incorporated by reference herein. If any of these risks actually occurs, our
business, financial condition, results of operations or cash flow could suffer materially. In such an event, the trading price of our
shares of Common Stock could decline, and you might lose all or part of your investment.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided
by the Private Securities Litigation Reform Act of 1995. All statements contained in this prospectus other than statements of historical
fact, including statements regarding our strategy, future operations, future financial position, liquidity, future revenue, projected
expenses, results of operations, expectations concerning the timing and our ability to commence and subsequently report data from planned
non-clinical studies and clinical trials, prospects, plans and objectives of management are forward-looking statements. The words “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“plan,” “expect,” “predict,” “potential,” “opportunity,” “goals,”
or “should,” and similar expressions are intended to identify forward-looking statements. Such statements are based on management’s
current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected
in the forward-looking statements as a result of many factors.
We
based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe
may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives,
and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those
described in “Risk Factors” in this prospectus, and under a similar heading in any other annual, periodic or current
report incorporated by reference into this prospectus or that we may file with the SEC in the future. These factors include, but are
not limited to:
| ● |
our
lack of operating history and history of operating losses; |
| ● |
our
need for significant additional capital and our ability to satisfy our capital needs; |
| ● |
our
ability to complete required clinical trials of our products and obtain approval from the U.S. Food and Drug Administration or other
regulatory agencies in different jurisdictions; |
| ● |
our
ability to maintain the listing of our common stock on The Nasdaq Capital Market; |
| ● |
our
ability to maintain or protect the validity of our patents and other intellectual property; |
| ● |
our
ability to retain key executive members; |
| ● |
our
ability to internally develop new inventions and intellectual property; |
| ● |
interpretations
of current laws and the passages of future laws; |
| ● |
acceptance
of our business model by investors; |
| ● |
the
emergence and effect of competing or complementary products, including the ability of our future products to compete effectively; |
| ● |
the
accuracy of our estimates regarding expenses and capital requirements; and |
| ● |
our
ability to adequately support growth. |
Moreover,
we operate in a very competitive and rapidly changing environment. New risks emerge quickly and from time to time. It is not possible
for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may
make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus may not occur
and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We undertake
no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking
statements are qualified in their entirety by this cautionary statement.
You
should also read carefully the factors described in the “Risk Factors” section of this prospectus, and under a similar
heading in any other annual, periodic or current report incorporated by reference into this prospectus, to better understand the risks
and uncertainties inherent in our business and underlying any forward-looking statements. You are advised to consult any further disclosures
we make on related subjects in our future public filings.
PRIVATE
PLACEMENT
On
June 19, 2024, we entered into inducement offer letter agreements (collectively, the “Inducement Letters”) with certain holders
(the “Holders”) of certain of our existing warrants to purchase up to an aggregate of 2,828,500 shares of Common Stock, issued
to the Holders on October 27, 2023 (the “Existing Warrants”). The Existing Warrants had an exercise price of $1.60 per share.
Pursuant to the Inducement Letters, the Holders agreed to exercise for cash their Existing Warrants at a reduced exercise price of $1.20
per share in consideration for our agreement to issue in a private placement the Common Warrants to the Holders. In connection with the
Private Placement, we also agreed to (i) reduce the exercise price of the Existing Warrants to purchase an aggregate of 2,824,000 shares
of Common Stock for all holders of the Existing Warrants not participating in the Private Placement to $1.20 per share, (ii) reduce the
exercise price of certain outstanding warrants to purchase up to an aggregate of 227,272 shares of Common Stock issued by us on June
30, 2023 (the “June Warrants”) to $1.55 per share, and (iii) extend the term of the June Warrants to the term of the Common
Warrants. The Common Warrants were issued on June 21, 2024 (the “Closing Date”). We received aggregate gross proceeds of
approximately $3.4 million from the exercise of the Existing Warrants, before deducting placement agent fees and other offering expenses
payable by us.
Pursuant
to the Inducement Letters, we agreed to file a registration statement on Form S-3 providing for the resale of the Common Warrant Shares
within 15 days after the Closing Date, and to use commercially reasonable efforts to cause such registration statement to be declared
effective by the SEC within 60 days (or 90 days if the SEC notifies the Company that it will “review” such registration statement)
following the date of the Inducement Letters and to keep such registration statement effective until the earlier of (i) the Holders no
longer own any Common Warrants or Common Warrant Shares or (ii) the Delegend Date (as defined in
the Inducement Letters). We have filed the registration statement of which this prospectus forms a part pursuant to the Inducement
Letters.
Further,
pursuant to the Inducement Letters, we agreed not to issue any shares of Common Stock or Common Stock equivalents or to file any other
registration statement with the SEC (in each case, subject to certain exceptions) until 60 days after the Closing Date. We have also
agreed not to effect or agree to effect any Variable Rate Transactions (as defined in the Inducement Letters) until 6 months after the
Closing Date (subject to certain exceptions).
We
engaged Ladenburg Thalmann & Co. Inc. (the “Placement Agent”) to act as our exclusive placement agent in connection with
the transactions summarized above and paid the Placement Agent a cash fee equal to 8.0% of the gross proceeds received from the Holders’
exercise of their Existing Warrants, as well as a management fee equal to 0.5% of the total gross proceeds from the Private Placement.
We also agreed to reimburse the Placement Agent for its expenses in connection with the Private
Placement in an amount up to $65,000. In addition, in connection with the transactions summarized above, we issued the Placement
Agent or its designees the Placement Agent Warrants.
SELLING
STOCKHOLDERS
This
prospectus covers the resale or other disposition by the Selling Stockholders identified in the table below of up to an aggregate 5,770,140
shares of our Common Stock issuable upon the exercise of the Warrants. The Selling Stockholders acquired their securities in the transactions
described above under the heading “Private Placement.”
The
Warrants held by the Selling Stockholders contain limitations which prevent the holders from exercising such Warrants if such exercise
would cause the Selling Stockholder, together with certain related parties, to beneficially own a number of shares of Common Stock which
would exceed 4.99% of our then outstanding shares of Common Stock following such exercise, excluding for purposes of such determination,
shares of Common Stock issuable upon exercise of the Warrants which have not been exercised.
The
table below sets forth, as of July 2, 2024, the following information regarding the Selling Stockholders:
| ● |
the
names of the Selling Stockholders; |
| |
|
| ● |
the
number of shares of Common Stock owned by the Selling Stockholders prior to this offering, without regard to any beneficial ownership
limitations contained in the Warrants; |
| |
|
| ● |
the
number of shares of Common Stock to be offered by the Selling Stockholders in this offering; |
| |
|
| ● |
the
number of shares of Common Stock to be owned by the Selling Stockholders assuming the sale of all of the shares of Common Stock covered
by this prospectus; and |
| |
|
| ● |
the
percentage of our issued and outstanding shares of Common Stock to be owned by Selling Stockholders assuming the sale of all of the
shares of Common Stock covered by this prospectus based on the number of shares of Common Stock issued and outstanding as of July
2, 2024. |
Except
as described above, the number of shares of Common Stock beneficially owned by the Selling Stockholder has been determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and includes, for such purpose,
shares of Common Stock that the Selling Stockholder has the right to acquire within 60 days of July 2, 2024.
All
information with respect to the Common Stock ownership of the Selling Stockholders has been furnished by or on behalf of the Selling
Stockholders. We believe, based on information supplied by the Selling Stockholders, that except as may otherwise be indicated in the
footnotes to the table below, the Selling Stockholder has sole voting and dispositive power with respect to the shares of Common Stock
reported as beneficially owned by the Selling Stockholders. Because the Selling Stockholders identified in the table may sell some or
all of the shares of Common Stock beneficially owned by them and covered by this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares of Common Stock, no estimate can be given as to the number
of shares of Common Stock available for resale hereby that will be held by the Selling Stockholders upon termination of this offering.
In addition, the Selling Stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose
of, at any time and from time to time, the shares of Common Stock they beneficially own in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”), after the date on which they provided the
information set forth in the table below. We have, therefore, assumed for the purposes of the following table, that the Selling Stockholders
will sell all of the shares of Common Stock owned beneficially by it that are covered by this prospectus, but will not sell any other
shares of Common Stock that they presently own. Except as set forth below, the Selling Stockholders have not held any position or office,
or have otherwise had a material relationship, with us or any of our subsidiaries within the past three years other than as a result
of the ownership of our shares of Common Stock or other securities.
| Name of Selling Stockholders | |
Shares Owned prior to Offering (1) | | |
Shares Offered by this Prospectus (1) | | |
Shares Owned after Offering | | |
Percentage
of Shares Beneficially Owned after Offering
(2) | |
| The 1993 Shukla Family Trust, U/D/T December 27, 1993 | |
| 6,972,974 | (3) | |
| 3,000,000 | | |
| 3,972,974
| | |
| 4.99 | % |
| Armistice Capital, LLC | |
| 1,170,015 | (4) | |
| 750,000 | | |
| 420,015 | | |
| 6.3 | % |
| District 2 Capital Fund LP | |
| 279,000 | (5) | |
| 250,000 | | |
| 29,000 | | |
| * | % |
| Bigger Capital Fund, LP | |
| 279,000 | (6) | |
| 250,000 | | |
| 29,000 | | |
| * | % |
| Sabby Volatility Warrant Master Fund, Ltd. | |
| 1,715,667 | (7) | |
| 1,250,000 | | |
| 465,667 | | |
| 4.99 | % |
| BJI Financial Group | |
| 235,532 | (8) | |
| 157,000 | | |
| 78,532 | | |
| 1.5 | % |
| Ladenburg Thalmann & Co. Inc. | |
| 66,584 | (9)(10) | |
| 45,256 | | |
| 21,328 | | |
| * | % |
| David Coherd | |
| 7,920 | (10) | |
| 7,920 | | |
| - | | |
| - | % |
| Nicholas Stergis | |
| 56,570 | (10) | |
| 56,570 | | |
| - | | |
| - | % |
| Marc Weinberger | |
| 3,394 | (10) | |
| 3,394 | | |
| - | | |
| - | % |
*
Less than 1.0%.
| (1) |
Includes
the Warrant Shares, although the Warrants are subject to 4.99% (or, at the election of the
holder, 9.99%) beneficial ownership limitations, as applicable. |
| (2) |
Percentages
are based on 5,218,505 shares of Common Stock outstanding as of July 2, 2024. |
| (3) |
Contains (i) 250,020 shares of Common Stock, (ii) 1,250,000 shares of Common Stock issuable pursuant to the Inducement Letter underlying Existing Warrants, subject
to a beneficial ownership blocker of 4.99%, (iii) warrants
to purchase up to 42,087 shares of Common Stock issued in the Company’s offering from February 2023 subject to a beneficial
ownership blocker of 4.99%, (iv) pre-funded warrants to purchase up to 797,500 shares of Common Stock issued in the Company’s
offering from October 2023 subject to a beneficial ownership blocker of 4.99%, (v) warrants to purchase up to 1,625,000 shares of Common Stock issued
in the Company’s offering from October 2023 subject to a beneficial ownership blocker of 4.99%, and (vi) Series 3 super voting preferred
warrants to purchase up to 8,367 issued in August 2022 subject to a beneficial ownership blocker of 4.99%. |
| (4) |
Contains (i) 375,000 shares of Common Stock, (ii) warrants to purchase up to 27,922 shares of Common Stock issuable
pursuant to the Company’s offering from August 2021 subject to a beneficial ownership blocker of 4.99%, and (iii) Series C warrants
to purchase up to 17,093 shares of Common Stock issued in the Company’s offering from August 2020 subject to a beneficial ownership
blocker of 4.99%. The
securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (the “Master
Fund”), and may be deemed to be beneficially owned by: (i) Armistice Capital, LLC (“Armistice Capital”), as the
investment manager of the Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. The address of Armistice
Capital Master Fund Ltd. is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY 10022. |
| (5) |
Contains 29,000 shares of Common Stock. |
| (6) |
Contains 29,000 shares of Common Stock. |
| (7) |
Contains
(i) 238,395 shares of Common Stock and (ii) warrants to purchase up to 227,272 shares of Common Stock issued in the
Company’s private placement from June 2023 subject to a beneficial ownership blocker of 4.99%. Sabby Management, LLC,
in its capacity as the investment manager of Sabby Volatility Warrant Master Fund, Ltd., has the power to vote and the power to direct
the disposition of all securities held by Sabby Volatility Warrant Master Fund, Ltd. Hal Mintz is the Managing Member of Sabby Management,
LLC. Each of Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC and Mr. Mintz disclaim beneficial ownership of these
securities, except to the extent of any pecuniary interest therein. |
| (8) |
Contains
78,500 shares of Common Stock and warrants to purchase up to 32 shares of Common Stock issued in the Company’s offering
from August 2021. |
| (9) |
Contains warrants to purchase up
to 21,328 shares of Common Stock issued in the Company’s offering from October 2023
subject to a beneficial ownership blocker of 4.99%. |
| (10) |
Mr.
Coherd, Mr. Stergis and Mr. Weinberger are affiliated with Ladenburg Thalmann & Co. Inc., a registered broker dealer with a registered
address of 640 Fifth Avenue, 4th Floor, New York, NY 10019, and has sole voting and dispositive power over the securities held. The
number of shares beneficially owned prior to this offering consist of shares of Common Stock issuable upon exercise of the Placement
Agent Warrants and other warrants received as compensation in connection with an offering consummated by us in October 2023. The
Selling Stockholder acquired the Placement Agent Warrants in the ordinary course of business and, at the time the Placement Agent
Warrants were acquired, the Selling Stockholder had no agreement or understanding, directly or indirectly, with any person to distribute
such securities. |
USE
OF PROCEEDS
The
Common Stock to be offered and sold using this prospectus will be offered and sold by the Selling Stockholders named in this prospectus.
Accordingly, we will not receive any proceeds from any sale of shares of Common Stock in this offering. We will pay all of the fees and
expenses incurred by us in connection with this registration. However, we will receive the proceeds of any cash exercise of the Warrants.
We intend to use the net proceeds from any cash exercise of the Warrants for research and development, including clinical trials, working
capital, the repayment of all or a portion of our liabilities, and general corporate purposes.
PLAN
OF DISTRIBUTION
Each
Selling Stockholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of their securities covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading facility on which
the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use
any one or more of the following methods when selling securities:
| ● |
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| |
|
| ● |
block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
| |
|
| ● |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| |
|
| ● |
an
exchange distribution in accordance with the rules of the applicable exchange; |
| |
|
| ● |
privately
negotiated transactions; |
| |
|
| ● |
settlement
of short sales; |
| |
|
| ● |
in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated
price per security; |
| |
|
| ● |
through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| |
|
| ● |
a
combination of any such methods of sale; or |
| |
|
| ● |
any
other method permitted pursuant to applicable law. |
The
Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available,
rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in
excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or
markdown in compliance with FINRA Rule 2121.
In
connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the securities.
We
are required to pay certain fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We
agreed to keep this registration statement effective until the earlier of (i) the Holders no longer
own any Common Warrants or Common Warrant Shares or (ii) the Delegend Date. The resale securities will be sold only through registered
or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities
covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
Common Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
Our
Common Stock is quoted on The Nasdaq Capital Market under the symbol “SONN.”
DESCRIPTION
OF SECURITIES
The
following summary of the rights of our capital stock is not complete and is subject to and qualified in its entirety by reference to
our certificate of incorporation, as amended (“Certificate of Incorporation’), our amended and restated bylaws (“Bylaws”),
form of Common Warrant, and form of Placement Agent Warrant, copies of which are filed as exhibits to the registration statement of which
this prospectus forms a part, which are incorporated by reference herein.
General
Our
authorized capital stock consists of 125,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.0001 per
share. As of close of business on July 2, 2024, 5,218,505 shares of Common Stock were issued and outstanding and no
shares of preferred stock were issued and outstanding.
The
additional shares of our authorized stock available for issuance may be issued at times and under circumstances so as to have a dilutive
effect on earnings per share and on the equity ownership of the holders of our Common Stock. The ability of our board of directors to
issue additional shares of stock could enhance the board’s ability to negotiate on behalf of the stockholders in a takeover situation
but could also be used by the board to make a change-in-control more difficult, thereby denying stockholders the potential to sell their
shares at a premium and entrenching current management. The following description is a summary of the material provisions of our capital
stock. You should refer to our Certificate of Incorporation and Bylaws, both of which are filed as exhibits to the registration statement
of which this prospectus forms a part, which are incorporated by reference herein. The summary below is qualified by provisions of applicable
law.
Common
Stock
Holders
of our Common Stock are each entitled to cast one vote for each share held of record on all matters presented to stockholders. Cumulative
voting is not allowed; the holders of a majority of our outstanding shares of Common Stock may elect all directors. Holders of our Common
Stock are entitled to receive such dividends as may be declared by our board out of funds legally available and, in the event of liquidation,
to share pro rata in any distribution of our assets after payment of liabilities. Our directors are not obligated to declare a dividend.
It is not anticipated that we will pay dividends in the foreseeable future. Holders of our Common Stock do not have preemptive rights
to subscribe to any additional shares we may issue in the future. There are no conversion, redemption, sinking fund or similar provisions
regarding the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable.
The
rights, preferences and privileges of holders of Common Stock are subject to the rights of the holders of any outstanding shares of preferred
stock.
Transfer
Agent and Registrar
The
transfer agent and registrar for our Common Stock is Securities Transfer Corporation. The transfer agent address is Securities Transfer
Corporation, 2901 N Dallas Parkway, Suite 380, Plano, TX 75093, (469) 633-0101.
Anti-Takeover
Effects of Delaware law and Our Certificate of Incorporation and Bylaws
Our
Certificate of Incorporation and Bylaws contain provisions that could have the effect of discouraging potential acquisition proposals
or tender offers or delaying or preventing a change of control. These provisions are as follows:
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they
provide that special meetings of stockholders may be called by the president, the board of directors or at the request by stockholders
of record owning at least 33 1/3% percent of the issued and outstanding voting shares of our Common Stock; |
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they
do not include a provision for cumulative voting in the election of directors. Under cumulative voting, a minority stockholder holding
a sufficient number of shares may be able to ensure the election of one or more directors. The absence of cumulative voting may have
the effect of limiting the ability of minority stockholders to effect changes in our board of directors; and |
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they
allow us to issue, without stockholder approval, up to 5,000,000 shares of preferred stock that could adversely affect the rights
and powers of the holders of our Common Stock. |
We
are subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), an anti-takeover law.
Subject to certain exceptions, the statute prohibits a publicly held Delaware corporation from engaging in a “business combination”
with an “interested stockholder” for a period of three years after the date of the transaction in which the person became
an interested stockholder unless:
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prior
to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder; |
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upon
consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding those shares owned (i) by persons who are directors and also officers and (ii) by
employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer; or |
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is
not owned by the interested stockholder. |
Generally,
for purposes of Section 203, a “business combination” includes a merger, asset or stock sale, or other transaction resulting
in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates
and associates, owns or, within 3 years prior to the determination of interested stockholder status, owned 15% or more of a corporation’s
outstanding voting securities.
Potential
Effects of Authorized but Unissued Stock
We
have shares of Common Stock and preferred stock available for future issuance without stockholder approval. We may utilize these additional
shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions
or payment as a dividend on the capital stock.
The
existence of unissued and unreserved Common Stock and preferred stock may enable our board of directors to issue shares to persons friendly
to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to
obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management.
In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges and restrictions, including
voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock,
all to the fullest extent permissible under the DGCL and subject to any limitations set forth in our Certificate of Incorporation. The
purpose of authorizing the board of directors to issue preferred stock and to determine the rights and preferences applicable to such
preferred stock is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while
providing desirable flexibility in connection with possible financings, acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third-party to acquire, or could discourage a third-party from acquiring, a majority of our outstanding
voting stock.
Nasdaq
Listing
Our
Common Stock is traded on The Nasdaq Capital Market under the symbol “SONN.”
LEGAL
MATTERS
The
validity of the shares of Common Stock offered hereby will be passed upon for us by Lowenstein Sandler LLP, New York, New York.
EXPERTS
The
consolidated financial statements of Sonnet BioTherapeutics Holdings, Inc. as of September 30, 2023 and 2022 and for the years then ended
have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the September
30, 2023 consolidated financial statements contains an explanatory paragraph that states that Sonnet BioTherapeutics Holdings, Inc. has
incurred recurring losses and negative cash flows from operations since inception and will require substantial additional financing to
continue to fund its research and development activities that raise substantial doubt about its ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the shares of Common Stock offered
by this prospectus. This prospectus, which is part of the registration statement, omits certain information, exhibits, schedules and
undertakings set forth in the registration statement. For further information pertaining to us and our securities, reference is made
to our SEC filings and the registration statement and the exhibits and schedules to the registration statement. Statements contained
in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily complete, and
in each instance where a copy of the document has been filed as an exhibit to the registration statement, reference is made to the exhibit
for a more complete description of the matters involved.
In
addition, registration statements and certain other filings made with the SEC electronically are publicly available through the SEC’s
web site at http://www.sec.gov. The registration statement, including all exhibits and amendments to the registration statement, has
been filed electronically with the SEC.
We
are subject to the information and periodic reporting requirements of the Exchange Act, and, in accordance with such requirements, will
file periodic reports, proxy statements, and other information with the SEC. These periodic reports, proxy statements, and other information
will be available for inspection and copying at the web site of the SEC referred to above. We also maintain a website at https://www.sonnetbio.com,
at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or
furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of, and is not incorporated
into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information into this document, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
We
incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d)
of the Exchange Act made subsequent to the date of this prospectus until the termination of the offering of the securities described
in this prospectus (other than information in such filings that was “furnished,” under applicable SEC rules, rather than
“filed”). We incorporate by reference the following documents or information that we have filed with the SEC:
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our
Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on December 14, 2023; |
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|
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our
Quarterly Report on Form 10-Q for the fiscal quarters ended December 31, 2023 and March 31, 2024 filed with the SEC on February 12,
2024 and on May 14, 2024, respectively; and |
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|
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our
Current Reports on Form 8-K filed with the SEC on December
15, 2023, December
27, 2023, January 29, 2024, February
1, 2024, March
6, 2024, March
11, 2024, May
3, 2024, May
14, 2024, May
20, 2024, May
22, 2024, June 13, 2024, June 14, 2024 and June 20, 2024 (other than any portions thereof deemed furnished and not
filed). |
Any
statement contained in this prospectus or contained in a document incorporated or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or any subsequently filed supplement
to this prospectus, or document deemed to be incorporated by reference into this prospectus, modifies or supersedes such statement. Any
statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You
may request a copy of these filings at no cost, by writing or telephoning us at the following address:
Sonnet
BioTherapeutics Holdings, Inc.
Attn:
Pankaj Mohan, Ph.D., CEO and Chairman
100
Overlook Center, Suite 102
Princeton,
New Jersey 08540
Telephone:
(609) 375-2227
You
may also access these filings on our website at www.sonnetbio.com. You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to provide different or additional information on our behalf. An offer
of these securities is not being made in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
in this prospectus is accurate as of any date other than the date of those respective documents.
5,770,140
Shares of Common Stock
Issuable
Upon Exercise of Outstanding Warrants
PROSPECTUS
July
15, 2024
Sonnet BioTherapeutics (NASDAQ:SONN)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024
Sonnet BioTherapeutics (NASDAQ:SONN)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024
