6. Stockholders’ Equity (Deficit)

The Company entered into an At-the-Market Sales Agreement with BTIG, LLC (“BTIG”) on August 15, 2022 (the “2022 Sales Agreement”). Pursuant to the 2022 Sales Agreement, the Company may offer and sell, from time to time, through BTIG, as sales agent and/or principal, shares of its common stock having an aggregate offering price of up to $25.0 million, subject to certain limitations on the amount of common stock that may be offered and sold by the Company set forth in the 2022 Sales Agreement. Due to the offering limitations applicable to the Company, the Company filed prospectus supplements for the sale of shares of its common stock for an aggregate offering price of up to $7.8 million pursuant to the 2022 Sales Agreement. During the nine months ended June 30, 2023, the Company sold an aggregate of 3,007,429 shares of common stock pursuant to the 2022 Sales Agreement with BTIG for gross proceeds of $5.8 million and net proceeds of $5.4 million. No shares were sold during the three months ended June 30, 2023. As of June 30, 2023, there are no registered shares remaining to be sold under the 2022 Sales Agreement.

On February 10, 2023, the Company closed a public offering of common stock and certain warrants through Chardan Capital Markets, LLC and EF Hutton, division of Benchmark Investments LLC as underwriters, for gross proceeds of $15.0 million and net proceeds of $13.6 million through the issuance and sale of 11,664,888 shares of its common stock and, to certain investors, pre-funded warrants to purchase 2,224,000 shares of common stock, and accompanying common warrants to purchase up to an aggregate of 27,777,776 shares of its common stock (the “February Offering”). Each share of common stock and pre-funded warrant to purchase one share of common stock was sold together with a common warrant to purchase two shares of common stock. The public offering price of each share of common stock and accompanying common warrant was $1.08 and the public offering price of each pre-funded warrant and accompanying common warrant was $1.0799.

Sonnet BioTherapeutics Holdings, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

The common stock warrants are immediately exercisable at a price of $1.08 per share of common stock, expire five years from the date of issuance and contain an alternative cashless exercise provision whereby, subject to certain conditions, a warrant may be exercised in a cashless transaction for shares of common stock at the rate of half a share of common stock per full share otherwise issuable upon a cash exercise. The pre-funded warrants are immediately exercisable at any time, until exercised in full, at a price of $0.0001 per share of common stock.

In addition, warrants to purchase 972,222 shares of common stock were issued to the underwriters as compensation for their services related to the offering. These common stock warrants have an exercise price of $1.35 per share and expire five years from the date of issuance.

On June 30, 2023, the Company closed a registered direct offering of common stock (and common stock equivalents in lieu thereof) and a concurrent private placement of certain common stock warrants through Chardan Capital Markets, LLC as placement agent, for gross proceeds of $2.3 million and net proceeds of $1.9 million through the issuance and sale of 3,660,000 shares of its common stock, pre-funded warrants to purchase 1,340,000 shares of common stock and accompanying common warrants to purchase up to an aggregate of 5,000,000 shares of its common stock (the “June Offering”). Each share of common stock and pre-funded warrant to purchase one share of common stock was sold together with a common warrant to purchase one share of common stock. The effective offering price of each share of common stock (or common stock equivalent) and accompanying common warrant was $0.45.

The common stock warrants are exercisable beginning December 30, 2023 at a price of $0.6749 per share of common stock and expire three and half years from the date of issuance. The pre-funded warrants are immediately exercisable at any time, until exercised in full, at a price of $0.0001 per share of common stock. All of the pre-funded warrants were exercised as of June 30, 2023.

In addition, warrants to purchase 150,000 shares of common stock were issued to the placement agent as compensation for its services related to the offering. These common stock warrants have an exercise price of $0.6749 per share, are exercisable beginning December 30, 2023 and expire three and a half years from the date of issuance.

Common stock warrants

As of June 30, 2023, the following equity-classified warrants and related terms were outstanding:

Schedule of Warrants Outstanding 

Sonnet BioTherapeutics Holdings, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

During the three months ended June 30, 2023, 21,861,332 of common stock warrants were net share settled, resulting in the issuance of 11,194,493 shares of common stock.

During the nine months ended June 30, 2023, 22,324,294 of common stock warrants were net share settled, resulting in the issuance of 11,425,974 shares of common stock.

During the three and nine months ended June 30, 2023, 3,036,000 of the pre-funded warrants were exercised on a cash basis. The Company received de minimus proceeds in exchange for the issuance of 3,036,000 shares of common stock.

During the nine months ended June 30, 2023, 3,026 of Series B warrants were net share settled, resulting in the issuance of 3,026 shares of common stock.

During the nine months ended June 30, 2023, 7,549 of private warrants expired.