Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 11, 2023 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity File Number | 001-35570 | ||
Entity Registrant Name | SONNET BIOTHERAPEUTICS HOLDINGS, INC. | ||
Entity Central Index Key | 0001106838 | ||
Entity Tax Identification Number | 20-2932652 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 100 Overlook Center | ||
Entity Address, Address Line Two | Suite 102 | ||
Entity Address, City or Town | Princeton | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 08540 | ||
City Area Code | (609) | ||
Local Phone Number | 375-2227 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Trading Symbol | SONN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7.3 | ||
Entity Common Stock, Shares Outstanding | 3,069,516 | ||
Documents Incorporated by Reference [Text Block] | None | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 185 | ||
Auditor Name | KPMG LLP | ||
Auditor Location | Philadelphia, Pennsylvania |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,274,259 | $ 3,052,879 |
Prepaid expenses and other current assets | 1,677,396 | 1,643,743 |
Incentive tax receivable | 786,574 | 717,305 |
Total current assets | 4,738,229 | 5,413,927 |
Property and equipment, net | 33,366 | 46,211 |
Operating lease right-of-use asset | 193,689 | 256,594 |
Deferred offering costs | 49,988 | 113,280 |
Other assets | 414,206 | |
Total assets | 5,429,478 | 5,830,012 |
Current liabilities: | ||
Accounts payable | 2,201,999 | 4,752,340 |
Accrued expenses and other current liabilities | 3,230,922 | 3,193,972 |
Current portion of operating lease liability | 73,048 | 51,328 |
Deferred income | 18,626 | 166,431 |
Total current liabilities | 5,524,595 | 8,164,819 |
Operating lease liability, net of current portion | 130,863 | 203,912 |
Total liabilities | 5,655,458 | 8,368,731 |
Commitments and contingencies (Note 4) | ||
Stockholders’ deficit: | ||
Common stock, $0.0001 par value: 125,000,000 shares authorized; 1,750,426 and 251,955 issued and outstanding at September 30, 2023 and 2022, respectively | 175 | 25 |
Additional paid-in capital | 110,017,598 | 88,872,315 |
Accumulated deficit | (110,243,753) | (91,411,059) |
Total stockholders’ deficit | (225,980) | (2,538,719) |
Total liabilities and stockholders’ deficit | 5,429,478 | 5,830,012 |
Related Party [Member] | ||
Current liabilities: | ||
Related party notes | $ 748 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 1,750,426 | 251,955 |
Common stock, shares outstanding | 1,750,426 | 251,955 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Collaboration revenue | $ 147,805 | $ 349,943 |
Operating expenses: | ||
Research and development | 11,814,690 | 21,444,019 |
General and administrative | 7,125,732 | 8,575,283 |
Total operating expense | 18,940,422 | 30,019,302 |
Loss from operations | (18,792,617) | (29,669,359) |
Foreign exchange loss | (40,077) | (52,482) |
Net loss | $ (18,832,694) | $ (29,721,841) |
Per share information: | ||
Net loss per share, basic | $ (18.14) | $ (150.52) |
Net loss per share, diluted | $ (18.14) | $ (150.52) |
Weighted average shares outstanding, basic | 1,038,188 | 197,462 |
Weighted average shares outstanding, diluted | 1,038,188 | 197,462 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Sep. 30, 2021 | $ 19 | $ 83,949,046 | $ (61,689,218) | $ 22,259,847 | |
Balance, shares at Sep. 30, 2021 | 195,579 | ||||
Sale of preferred stock and common stock warrants, net of issuance costs | $ 1,540,640 | 597,574 | 2,138,214 | ||
Sale of preferred stock and common stock warrants, net of issuance costs, shares | 22,500 | ||||
Conversion of preferred stock into common stock | $ (1,540,640) | $ 3 | 1,540,637 | ||
Conversion of preferred stock into common stock, shares | (22,500) | 25,101 | |||
Sale of common stock, net of issuance costs | $ 3 | 1,908,690 | 1,908,693 | ||
Sale of common stock, net of issuance costs, shares | 30,206 | ||||
Issuance of common stock on vesting of restricted stock units | |||||
Issuance of common stock on vesting of restricted stock units, shares | 1,087 | ||||
Share-based compensation | 876,368 | 876,368 | |||
Net loss | (29,721,841) | (29,721,841) | |||
Balance at Sep. 30, 2022 | $ 25 | 88,872,315 | (91,411,059) | (2,538,719) | |
Balance, shares at Sep. 30, 2022 | 251,973 | ||||
Sale of common stock, net of issuance costs | $ 83 | 20,895,875 | 20,895,958 | ||
Sale of common stock, net of issuance costs, shares | 833,287 | ||||
Issuance of common stock on vesting of restricted stock units | $ 1 | (1) | |||
Issuance of common stock on vesting of restricted stock units, shares | 7,676 | ||||
Share-based compensation | 248,626 | 248,626 | |||
Net loss | (18,832,694) | (18,832,694) | |||
Net share settlement of warrants | $ 52 | (52) | |||
Net share settlement of warrants, shares | 519,492 | ||||
Exercise of warrants | $ 14 | 835 | 849 | ||
Exercise of warrants, shares | 137,998 | ||||
Balance at Sep. 30, 2023 | $ 175 | $ 110,017,598 | $ (110,243,753) | $ (225,980) | |
Balance, shares at Sep. 30, 2023 | 1,750,426 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (18,832,694) | $ (29,721,841) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Acquired in-process research and development | 282,000 | 971,477 |
Depreciation | 12,845 | 12,845 |
Amortization of operating lease right-of-use asset | 62,905 | 80,412 |
Share-based compensation | 248,626 | 876,368 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (33,653) | (454,269) |
Income tax receivable | (69,269) | (717,305) |
Other assets | (414,206) | |
Accounts payable | (2,631,215) | 971,041 |
Accrued expenses and other current liabilities | 231,953 | 641,372 |
Operating lease liability | (51,329) | (83,685) |
Deferred income | (147,805) | (349,943) |
Net cash used in operating activities | (21,341,842) | (27,773,528) |
Cash flows from investing activities: | ||
Purchases of in-process research and development | (443,250) | (810,227) |
Net cash used in investing activities | (443,250) | (810,227) |
Cash flows from financing activities: | ||
Proceeds from sale of preferred stock and common stock warrants, net of issuance costs | 2,172,649 | |
Proceeds from sale of common stock, net of issuance costs | 21,006,371 | 1,841,918 |
Proceeds from exercise of warrants, net of issuance costs | 849 | |
Repayments of related party notes | (748) | |
Net cash provided by financing activities | 21,006,472 | 4,014,567 |
Net decrease in cash | (778,620) | (24,569,188) |
Cash, beginning of year | 3,052,879 | 27,622,067 |
Cash, end of year | 2,274,259 | 3,052,879 |
Supplemental disclosure of non-cash operating, investing and financing activities: | ||
Change in operating lease right-of-use asset and liability due to amended lease | 213,793 | |
Deferred offering costs charged against proceeds from sale of common stock | 32,340 | |
Deferred offering costs in accounts payable and accrued expenses | 49,988 | 80,940 |
Net settlement of warrants | 52 | |
In-process research and development in accrued expenses | 161,250 | |
Common stock issuance costs in accounts payable and accrued expenses | $ 78,073 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Description of business Sonnet BioTherapeutics, Inc. (“Prior Sonnet”) was incorporated as a New Jersey corporation on April 6, 2015. Prior Sonnet completed a merger with publicly-held Chanticleer Holdings, Inc. (“Chanticleer”) on April 1, 2020. After the merger, Chanticleer changed its name to Sonnet BioTherapeutics Holdings, Inc. (“Sonnet” or the “Company”). Sonnet is a clinical stage, oncology-focused biotechnology company with a proprietary platform for innovating biologic medicines of single or bifunctional action. Known as F H Sonnet’s lead proprietary asset, SON-1010, is a fully human version of Interleukin 12 (“IL-12”), covalently linked to the F H In January 2023, Sonnet announced a collaboration agreement with Roche for the clinical evaluation of SON-1010 with atezolizumab (Tecentriq®). The companies have entered into a Master Clinical Trial and Supply Agreement (“MCSA”), along with ancillary Quality and Safety Agreements, to study the safety and efficacy of the combination of SON-1010 and atezolizumab in a platinum-resistant ovarian cancer (“PROC”) patient setting. Further, the companies will provide SON-1010 and atezolizumab, respectively, for use in the Phase 1b/Phase 2a combination safety, dose-escalation, and efficacy study (SB221). Part 1 of this 2-part study was approved in June 2023 by the local Human Research Ethics Committee in Australia under CT-2023-CTN-01399-1 and the Therapeutic Goods Administration has been notified. In August 2023, the FDA accepted the IND for SB221. The trial consists of a modified 3+3 dose-escalation design in Part 1 to establish the maximum tolerated dose (MTD) of SON-1010 with a fixed dose of atezolizumab. Clinical benefit in PROC will be confirmed in an expansion group to establish the recommended Phase 2 dose (RP2D). Part 2 of the study will then investigate SON-1010 monotherapy, its use in combination with atezolizumab, or the standard of care (SOC) for PROC in a randomized comparison to show proof-of-concept (POC). As part of the ongoing cost-cutting evaluations, all antiviral development with SON-1010 has been suspended. The Company acquired the global development rights to its most advanced compound, SON-080, a fully human version of Interleukin 6 (“IL-6”), in April 2020 through its acquisition of the outstanding shares of Relief Therapeutics SA. Sonnet is advancing SON-080 in target indications of Chemotherapy-Induced Peripheral Neuropathy (“CIPN”) and Diabetic Peripheral Neuropathy (“DPN”). Sonnet received approval to initiate an ex-U.S. Phase 1b/2a study with SON-080 in CIPN during the third quarter of 2022. The Data Safety Monitoring Board (“DSMB”) overseeing the study is expected to meet during the first calendar quarter of 2024. Following the completion of the DSMB review, Sonnet anticipates announcing initial safety data from the CIPN study. Pursuant to a license agreement the Company entered into with New Life Therapeutics Pte, Ltd. (“New Life”) of Singapore in May 2021, Sonnet and New Life will be jointly responsible for developing SON-080 in DPN. The objective will be to analyze the data and to consider initiating a Phase 2 study once the CIPN safety data has been evaluated. SON-1210 (IL12-F H H Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements SON-1410 (IL18-F H The Company has completed sequence confirmation for SON-3015 (anti-IL6-F H in vivo Liquidity The Company has incurred recurring losses and negative cash flows from operations since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its potential product candidates. The Company believes its cash of $ 2.3 4.1 0.8 4.8 On October 26, 2023, the Company closed a public offering of common stock and certain warrants through Chardan Capital Markets, LLC and Ladenburg Thalmann & Co. Inc. as underwriters, for net proceeds of $ 4.1 1,306,250 1,537,500 5,687,500 1.60 1.5999 1.60 0.0001 85,312 2.00 The Company plans to secure additional capital in the future through equity or debt financings, partnerships, collaborations, or other sources to carry out the Company’s planned development activities. If additional capital is not available when required, the Company may need to delay or curtail its operations until such funding is received. Various internal and external factors will affect whether and when the Company’s product candidates become approved for marketing and successful commercialization. The regulatory approval and market acceptance of the Company’s product candidates, length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the approval process will materially affect the Company’s financial condition and future operations. Operations since inception have consisted primarily of organizing the Company, securing financing, developing technologies through research and development and conducting preclinical studies. The Company faces risks associated with companies whose products are in development. These risks include the need for additional financing to complete its research and development, achieving its research and development objectives, defending its intellectual property rights, recruiting and retaining skilled personnel, and dependence on key members of management. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies a. Basis of presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). b. Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. c. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in these consolidated financial statements include the accrual of research and development expenses. Estimates and assumptions are periodically reviewed in-light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from management’s estimates. d. Reclassifications Certain amounts from the prior period have been reclassified to conform with the current period presentation. e. Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company views its operations and manages its business in one segment. f. Fair value of financial instruments Management believes that the carrying amounts of the Company’s financial instruments, including accounts payable, approximate fair value due to the short-term nature of those instruments. g. Property and equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance that do not extend the estimated useful life or improve an asset are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is included in the consolidated statement of operations. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements h. Impairment of long-lived assets The Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the estimated fair value of the asset. There were no i. Deferred offering costs Legal and other costs incurred in relation to equity offerings are capitalized as deferred offering costs and charged against the proceeds from equity offerings when received. If a financing is abandoned, deferred offering costs are expensed. As of September 30, 2023, the Company had $ 49,988 0.1 j. Incentive tax receivable Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by Subsidiary in Australia. The cash refund is available to eligible companies with annual aggregate revenues of less than $20.0 million (Australian) during the reimbursable period. The Company estimates the amount of cash refund it expects to receive related to the Australian research and development tax incentive program and records the incentive when it is probable (i) the Company will comply with relevant conditions of the program and (ii) the incentive will be received. As of both September 30, 2023 and 2022, the Company’s estimate of the amount of cash refund it expects to receive for eligible spending related to the Australian research and development tax incentive program was $ 0.8 million. For each of the years ended September 30, 2023 and 2022, $ 0.8 million for the expected net cash refund related to the tax incentive program was included in research and development expenses. In January 2023, the Company received $ 1.1 million from the Australian government related to eligible research and development expenses for the year ended September 30, 2022. In April 2023, the Company refunded the Australian government for $ 0.2 million due to new information on the Company’s clinical trial studies. k. Collaboration revenue Collaboration arrangements may contain multiple components, which may include (i) licenses; (ii) research and development activities; and (iii) the manufacturing and supply of certain materials. Payments pursuant to these arrangements may include non-refundable payments, upfront payments, milestone payments upon the achievement of significant regulatory and development events, sales milestones and royalties on product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under a collaboration arrangement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as the Company satisfies each performance obligation. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The Company applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, and assessing the recognition of variable consideration. When consideration is received prior to the Company completing its performance obligation under the terms of a contract, a contract liability is recorded as deferred income. Deferred income expected to be recognized as revenue within the twelve months following the balance sheet date is classified as a current liability. In May 2021, the Company entered into a License Agreement (the “New Life Agreement”) with New Life. See Note 6 for further discussion of the New Life Agreement. l. Research and development expense Research and development expenses include all direct and indirect costs associated with the development of the Company’s biopharmaceutical products. These expenses include personnel costs, consulting fees, and payments to third parties for research, development, and manufacturing services. These costs are charged to expense as incurred. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the related project, based on the measure of progress as defined in the contract. Factors the Company considers in preparing the estimates include costs incurred by the service provider, milestones achieved, and other criteria related to the efforts of its service providers. Such estimates are subject to change as additional information becomes available. Depending on the timing of payment to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company will record a prepaid expense or accrued liability relating to these costs. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. Contingent development or regulatory milestone payments are recognized upon the related resolution of such contingencies. m. Foreign currency Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the U.S. dollar are included in operations in the period in which the transaction occurs and reported within the foreign exchange loss line item in the consolidated statements of operations. n. Share-based compensation The Company measures equity classified share-based awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognizes compensation expense on a straight-line basis over the service period. The Company classifies share-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements o. Income taxes The Company uses the asset-and-liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return if such a position is more likely than not to be sustained. p. Reverse stock split On August 31, 2023, the Company filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, which effected a 1-for -22 reverse stock split q. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period (and potential shares of common stock that are exercisable for little or no consideration). Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities such as common stock warrants and stock options which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The following potentially dilutive securities have been excluded from the computation of diluted shares of common stock outstanding as they would be anti-dilutive: Schedule of Potentially Dilutive Securities 2023 2022 September 30, 2023 2022 Common stock warrants August 2021 128,500 128,500 Underwriter warrants August 2021 2,287 2,287 Private warrants — 332 Chanticleer warrants 57 57 Series C warrants 36,778 36,778 Series 3 warrants 12,548 12,548 Unvested restricted stock units and awards 2,326 2,162 Common stock warrants February 2023 271,883 — Underwriter warrants February 2023 44,190 — Common stock private placement warrants June 2023 227,272 — Placement agent warrants June 2023 6,818 — Total anti-dilutive weighted average shares 732,659 182,664 r. Recent accounting pronouncements Recently adopted In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In November 2021, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, or ASU 2021-10, which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for financial statements issued for annual periods beginning after 15 December 2021. The adoption of the guidance on October 1, 2022 did not have a material impact on our consolidated financial statements. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 3. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: Schedule of Accrued Expenses and Other Current Liabilities 2023 2022 September 30, 2023 2022 Compensation and benefits $ 2,091,196 $ 1,218,530 Research and development 913,145 1,593,922 Professional fees 224,031 378,890 Other 2,550 2,630 Accrued expenses and other current liabilities $ 3,230,922 $ 3,193,972 |
Leases
Leases | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 4. Leases In December 2019, the Company entered into a 36-month lease for office space in Princeton, New Jersey, which commenced February 1, 2020. In May 2022, the Company amended the existing lease agreement in order to increase the lease term by approximately three years, which has been accounted for as a lease modification. The operating lease right-of-use asset and liability were remeasured at the modification date, resulting in an increase to both balances of $ 0.2 The components of lease expense for the years ended September 30, 2023 and 2022 are as follows: Schedule of Lease Expenses Lease expense 2023 2022 Operating lease expense $ 90,837 $ 94,828 Variable lease expense 5,978 5,339 Total lease cost $ 96,815 $ 100,167 At September 30, 2023, the weighted average remaining lease term was 2.6 12 Cash flow information related to operating leases for the years ended September 30, 2023 and 2022 is as follows: Schedule of Operating Lease Liabilities Cash paid for amounts included in the measurement of lease liabilities: 2023 2022 Operating cash flows from operating leases $ 79,259 $ 98,101 Future minimum lease payments under non-cancellable leases at September 30, 2023 are as follows: Schedule of Future Minimum Lease Payments Fiscal year 2024 $ 93,614 2025 95,487 2026 48,216 Total undiscounted lease payments 237,317 Less: imputed interest (33,406 ) Total lease liabilities $ 203,911 Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Legal proceedings From time to time, the Company is a party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of its business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. License agreements In July 2012, the Company entered into a Discovery Collaboration Agreement (the “Collaboration Agreement”) with XOMA (US) LLC (“XOMA”), pursuant to which XOMA granted to the Company a non-exclusive, non-transferable license and/or right to use certain materials, technologies and related information related to discovery, optimization and development of antibodies and related proteins and to develop and commercialize products thereunder. The Company is obligated to make contingent milestone payments to XOMA totaling $ 3.8 0.5 No In August 2015, the Company entered into a License Agreement (the “ARES License Agreement”) with Ares Trading, a wholly-owned subsidiary of Merck KGaA (“ARES”). Under the terms of the ARES License Agreement, ARES has granted the Company a sublicensable, exclusive, worldwide, royalty-bearing license on proprietary patents to research, develop, use and commercialize products using atexakin alfa (“Atexakin”), a low dose formulation of human IL-6 in peripheral neuropathies and vascular complications. Pursuant to the ARES License Agreement, the Company will pay ARES high single-digit royalties on net sales of products sold by the Company. Royalties are payable on a product-by-product and country-by-country basis until the later of (i) a specified period of time after the first commercial sale in such country, and (ii) the last date on which such product is covered by a valid claim in such country. In January 2019, the Company entered into a Frame Services and License Agreement (the “Cellca Agreement”) with Sartorius Stedim Cellca GMBH (“Cellca”), pursuant to which Cellca has granted the Company a worldwide, non-exclusive, perpetual, non-transferable license to develop, manufacture or have manufactured, use, sell, import, export and/or otherwise commercialize product based on Cellca’s work to generate a specified transfected cell line and develop an upstream production process for such cell line. The Cellca Agreement is effective unless terminated by either party by giving six months notice, or by giving 14 days notice if terminated for good cause. The Company is obligated to make milestone payments to Cellca totaling up to $ 0.7 0.1 0.6 0.6 0.1 No Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements In October 2021, the Company entered into a Non-Exclusive License Agreement (the “Brink Agreement”) with Brink Biologics Inc. (“Brink”), pursuant to which Brink has granted the Company a non-exclusive, non-transferable license and limited right to sublicense certain materials and related information to develop cell-based assays for batch, quality control, stability, efficacy, potency or any other type of assay required for production and commercialization of products. During the product development phase, the Company was obligated to make annual product development license fee payments of approximately $ 0.1 12,000 0.1 0.1 12,000 0.2 In February 2022, the Company entered into a Biological Materials License Agreement (the “InvivoGen Agreement”) with InvivoGen SAS (“InvivoGen”), pursuant to which InvivoGen has granted the Company a worldwide, non-exclusive license to use certain reporter cells for research, development and/or quality control purposes. The InvivoGen Agreement has an initial term of three years and may be extended for two additional three-year periods upon written notice by the Company and payment of an approximately € 0.1 0.1 0.1 No In March 2022, the Company entered into a Material Transfer and License Agreement (the “ProteoNic Agreement”) with ProteoNic B.V. (“ProteoNic”), pursuant to which ProteoNic has granted to the Company a non-exclusive, non-transferable, non-sublicensable (except as provided for in the ProteoNic Agreement) license for certain materials, including plasmids and DNA sequences used to generate the vectors used in the Company’s cell lines, for the Company’s use in research, development and commercialization of product. The license will continue until terminated by either party. The Company incurred a $ 24,600 1.2 1.3 24,600 No Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements Research and development agreement In December 2021, the Company entered into a Research and Development Agreement (the “Navigo Agreement”) with Navigo Proteins GmbH (“Navigo”), pursuant to which Navigo will perform specified evaluation and development procedures to evaluate certain materials to determine their commercial potential. Under the terms of the Navigo Agreement, the Company has granted Navigo a royalty-free, non-exclusive, worldwide, non-sublicensable, non-transferable right and license to use certain technology to perform the evaluation and development activities, and Navigo has granted the Company (i) an exclusive, worldwide, perpetual, irrevocable, sublicensable, transferable, royalty-free right and license to research, develop, use, sell, have sold, distribute, import or otherwise commercially exploit certain materials, and (ii) a non-exclusive, worldwide, perpetual, sublicensable, non-transferable right and license to make or have made such materials. The Company incurred a $ 0.1 1.0 0.3 Employment agreements The Company has entered into employment contracts with its officers and certain employees that provide for severance and continuation of benefits in the event of termination of employment either by the Company without cause or by the employee for good reason, both as defined in the contract. In addition, in the event of termination of employment following a change in control, as defined, either by the Company without cause or by the employee for good reason, any unvested portion of the employee’s initial stock option grant becomes immediately vested. |
Collaboration Revenue
Collaboration Revenue | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration Revenue | 6. Collaboration Revenue Under the New Life Agreement, the Company granted New Life an exclusive license (with the right to sublicense) to develop and commercialize pharmaceutical preparations containing a specific recombinant human IL-6, SON-080 (the “Compound”) (such preparations, the “Products”) for the prevention, treatment or palliation of diabetic peripheral neuropathy in humans (the “DPN Field”) in Malaysia, Singapore, Indonesia, Thailand, Philippines, Vietnam, Brunei, Myanmar, Lao PDR and Cambodia (the “Exclusive Territory”). New Life had the option to expand (1) the field of the exclusive license to include the prevention, treatment or palliation of chemotherapy-induced peripheral neuropathy in humans (the “CIPN Field”), which option was non-exclusive and expired on December 31, 2021; and/or (2) the territorial scope of the license to include the People’s Republic of China, Hong Kong and/or India, which option was exclusive and expired on December 31, 2021. The Company will retain all rights to manufacture Compounds and Products anywhere in the world. The Company and New Life shall enter into a follow-on supply agreement pursuant to which the Company shall supply to New Life Products for development and commercialization thereof in the DPN Field in the Exclusive Territory on terms to be negotiated by the parties. The Company will also assist in transferring certain preclinical and clinical development know-how that is instrumental in New Life’s ability to benefit from the license. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements New Life will bear the cost of, and be responsible for, among other things, conducting clinical studies and additional non-clinical studies and other developmental and regulatory activities for and commercializing Products in the DPN Field in the Exclusive Territory. New Life paid the Company a $ 0.5 0.5 New Life is also obligated to pay a non-refundable deferred license fee of an additional $ 1.0 19.0 12% 30% The New Life Agreement will remain in effect on a Product-by-Product, country-by-country basis and will expire upon the expiration of the Royalty Term for the last-to-expire Product in the last-to-expire country, subject to (i) each party’s early termination rights including for material breach or insolvency or bankruptcy of the other party and (ii) the Company’s Buy Back Right and New Life’s Give Back Right (as defined below). In addition, New Life granted to the Company an exclusive option to buy back the rights granted by the Company to New Life and the Company granted New Life the right to give back the rights with respect to Products in the DPN Field in one or more countries in the Exclusive Territory on terms to be agreed upon, which options will expire upon the initiation of a Phase III Trial for the applicable Product. Revenue recognition The Company first assessed the New Life Agreement under ASC 808, Collaborative Arrangements Revenue from Contracts with Customers The Company determined the initial transaction price of the single performance obligation to be $ 1.0 Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements Collaboration revenue from the single performance obligation is being recognized over the estimated performance of the R&D services. The Company recognized $ 0.1 0.3 |
Stockholders_ Deficit
Stockholders’ Deficit | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders’ Deficit | 7. Stockholders’ Deficit 2023 events 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 could 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 7.8 136,702 5.7 5.5 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 13.6 530,222 101,090 1,262,618 23.76 23.7578 The common stock warrants are immediately exercisable at a price of $ 23.76 0.0022 In addition, warrants to purchase 44,190 29.70 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 1.9 166,363 60,909 227,272 9.90 Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The common stock warrants are exercisable beginning December 30, 2023 at a price of $ 14.8478 0.0022 In addition, warrants to purchase 6,818 14.8478 2022 events In August 2022, the Company entered into a securities purchase agreement (the “Preferred SPA”) with several accredited investors for the issuance and sale of (i) an aggregate of 22,275 100 225 100 12,548 2.3 0.1 2.1 24,850 251 89.628 89.628 The shares of the Series 3 and Series 4 Convertible Preferred Stock had no voting rights other than the right to vote with common stockholders, as a single class, on a proposed amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse split of the outstanding shares of common stock. Each share of Series 3 Convertible Preferred Stock was entitled to vote on an as-converted basis, and each share of Series 4 Convertible Preferred Stock was entitled to 811,688 votes per share The private placement closed on August 15, 2022, and the stockholders voted to approve a 1-for-14 reverse stock split 25,101 no During the year ended September 30, 2022, the Company sold an aggregate of 30,206 2.0 1.9 Also during the year ended September 30, 2022, the Company issued 1,087 Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements Common stock warrants As of September 30, 2023, the following equity-classified warrants and related terms were outstanding: Schedule of Warrants Outstanding Warrants Outstanding Exercise Price Expiration Date Common stock warrants August 2021 128,500 $ 261.80 August 24, 2024 Underwriter warrants August 2021 2,287 $ 327.25 August 19, 2024 Chanticleer warrants 57 18,018.00 28,028.00 April 30, 2027 December 17, 2028 Series C warrants 36,778 $ 982.52 October 16, 2025 Series 3 warrants 12,548 $ 89.628 August 15, 2027 Common stock warrants February 2023 271,883 $ 23.76 February 10, 2028 Underwriter warrants February 2023 44,190 $ 29.70 February 8, 2028 Common stock private placement warrants June 2023 227,272 $ 14.8478 December 30, 2026 Placement agent warrants June 2023 6,818 $ 14.8478 December 30, 2026 Total 730,333 During the year ended September 30, 2023, 1,014,872 519,492 During the year ended September 30, 2023, 137,999 137,998 During the year ended September 30, 2023, 332 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 8. Share-Based Compensation In April 2020, the Company adopted the 2020 Omnibus Equity Incentive Plan (the “Plan”). On January 1, 2023, the total number of shares authorized under the Plan increased to 14,480 14,480 Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements Restricted stock units and awards In July of 2020, 2,115 In March of 2021, an additional 152 In December of 2021, 2,103 In December of 2022, 7,840 In January 2023, 5,514 38,837 Any unvested RSUs or RSAs will be forfeited upon termination of services. The fair value of an RSU or RSA is equal to the fair market value of the Company’s common stock on the date of grant. RSU and RSA expense is amortized straight-line over the vesting period. The Company recorded share-based compensation expense associated with the RSUs and RSAs in its accompanying consolidated statements of operations as follows: Schedule of Share-based Compensation Expense 2023 2022 Years ended September 30, 2023 2022 Research and development $ 121,265 $ 437,921 General and administrative 127,361 438,447 Share Based Compensation $ 248,626 $ 876,368 The following table summarizes RSU activity under the Plan: Schedule of Restricted Stock Units Activity Weighted Average Grant RSU Date Fair Value Unvested balance at October 1, 2021 1,179 $ 1,068.32 Granted 2,103 $ 155.54 Vested (1,096 ) $ 1,091.20 Forfeited (24 ) $ 1,118.04 Unvested balance at October 1, 2022 2,162 $ 175.56 Granted 7,840 $ 21.47 Vested (2,162 ) $ 12.55 Forfeited (5,514 ) $ 21.34 Unvested balance at September 30, 2023 2,326 $ 21.78 As of September 30, 2023, total unrecognized compensation expense relating to unvested RSUs granted was $ 12,194 three months The following table summarizes RSA activity under the Plan: Schedule of Restricted Stock Awards Activity Weighted Average Grant RSA Date Fair Value Unvested balance at October 1, 2022 — — Granted 5,514 $ 28.27 Unvested balance at September 30, 2023 5,514 $ 28.27 As of September 30, 2023, total unrecognized compensation expense relating to unvested RSAs granted was $ 37,812 three months Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes As of September 30, 2023, the Company had $ 103.6 69.5 8.9 expire in 2027 2.4 0.8 5.8 8.3 Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carryforwards may be subject to annual limitations, against taxable income in future periods, which could substantially limit the eventual utilization of such carryforwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carryforwards are subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there would be a reduction in the deferred tax assets with an offsetting reduction in the valuation allowance. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely-than-not be realized. The determination as to whether the tax benefit will more-likely-than-not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes interest and penalties accrued on any unrecognized tax benefits within the provision for income taxes in its consolidated statements of operations. No unrecognized tax benefits have been recorded. The tax effects of the temporary differences that gave rise to deferred taxes were as follows: Schedule of Deferred Tax Assets and Liabilities 2023 2022 September 30, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 27,996,751 $ 25,858,311 Research and development credit carryforwards 3,106,675 2,151,942 Amortization 4,692,227 2,897,388 Share-based compensation 226 66,832 Operating lease liability 57,319 71,748 Accrued expenses and other 546,612 314,210 Section 163(j) disallowed interest expense 763,172 — Property and equipment — 4,790 Gross deferred tax assets 37,162,982 31,365,221 Less: valuation allowance (37,100,582 ) (31,293,092 ) Deferred tax assets 62,400 72,129 Deferred tax liabilities: Property and equipment (7,954 ) — Operating lease right-of-use asset (54,446 ) (72,129 ) Net deferred tax assets $ — $ — Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The Company recorded no income tax expense or benefit for the years ended September 30, 2023 and 2022. A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements is as follows: Schedule of Effective Income Tax Rate Reconciliation 2023 2022 Years ended September 30, 2023 2022 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes, net of federal benefit (7.1 ) (6.0 ) Change in valuation allowance 30.8 28.1 Research and development credit (5.1 ) (3.0 ) Permanent differences (1.6 ) 0.7 Foreign tax rate differential 0.3 0.8 State NOLs 3.7 — Other 0.0 0.4 Effective income tax rate — % — % In August 2022, the U.S. enacted the Inflation Reduction Act of 2022 (“IRA”). The IRA contains a number of tax-related provisions that will be effective for tax years beginning after December 31, 2022, including a corporate alternative minimum tax of 15% 1% |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events The Company has evaluated subsequent events from the balance sheet date through December 14, 2023, the date at which the consolidated financial statements were available to be issued. Refer to Note 1 for information regarding the October Offering. In December 2023, the Company received preliminary approval of its application to sell up to $ 4.8 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | a. Basis of presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). |
Consolidation | b. Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | c. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in these consolidated financial statements include the accrual of research and development expenses. Estimates and assumptions are periodically reviewed in-light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from management’s estimates. |
Reclassifications | d. Reclassifications Certain amounts from the prior period have been reclassified to conform with the current period presentation. |
Segment information | e. Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company views its operations and manages its business in one segment. |
Fair value of financial instruments | f. Fair value of financial instruments Management believes that the carrying amounts of the Company’s financial instruments, including accounts payable, approximate fair value due to the short-term nature of those instruments. |
Property and equipment | g. Property and equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance that do not extend the estimated useful life or improve an asset are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is included in the consolidated statement of operations. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Impairment of long-lived assets | h. Impairment of long-lived assets The Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the estimated fair value of the asset. There were no |
Deferred offering costs | i. Deferred offering costs Legal and other costs incurred in relation to equity offerings are capitalized as deferred offering costs and charged against the proceeds from equity offerings when received. If a financing is abandoned, deferred offering costs are expensed. As of September 30, 2023, the Company had $ 49,988 0.1 |
Incentive tax receivable | j. Incentive tax receivable Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by Subsidiary in Australia. The cash refund is available to eligible companies with annual aggregate revenues of less than $20.0 million (Australian) during the reimbursable period. The Company estimates the amount of cash refund it expects to receive related to the Australian research and development tax incentive program and records the incentive when it is probable (i) the Company will comply with relevant conditions of the program and (ii) the incentive will be received. As of both September 30, 2023 and 2022, the Company’s estimate of the amount of cash refund it expects to receive for eligible spending related to the Australian research and development tax incentive program was $ 0.8 million. For each of the years ended September 30, 2023 and 2022, $ 0.8 million for the expected net cash refund related to the tax incentive program was included in research and development expenses. In January 2023, the Company received $ 1.1 million from the Australian government related to eligible research and development expenses for the year ended September 30, 2022. In April 2023, the Company refunded the Australian government for $ 0.2 million due to new information on the Company’s clinical trial studies. |
Collaboration revenue | k. Collaboration revenue Collaboration arrangements may contain multiple components, which may include (i) licenses; (ii) research and development activities; and (iii) the manufacturing and supply of certain materials. Payments pursuant to these arrangements may include non-refundable payments, upfront payments, milestone payments upon the achievement of significant regulatory and development events, sales milestones and royalties on product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under a collaboration arrangement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as the Company satisfies each performance obligation. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The Company applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, and assessing the recognition of variable consideration. When consideration is received prior to the Company completing its performance obligation under the terms of a contract, a contract liability is recorded as deferred income. Deferred income expected to be recognized as revenue within the twelve months following the balance sheet date is classified as a current liability. In May 2021, the Company entered into a License Agreement (the “New Life Agreement”) with New Life. See Note 6 for further discussion of the New Life Agreement. |
Research and development expense | l. Research and development expense Research and development expenses include all direct and indirect costs associated with the development of the Company’s biopharmaceutical products. These expenses include personnel costs, consulting fees, and payments to third parties for research, development, and manufacturing services. These costs are charged to expense as incurred. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the related project, based on the measure of progress as defined in the contract. Factors the Company considers in preparing the estimates include costs incurred by the service provider, milestones achieved, and other criteria related to the efforts of its service providers. Such estimates are subject to change as additional information becomes available. Depending on the timing of payment to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company will record a prepaid expense or accrued liability relating to these costs. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. Contingent development or regulatory milestone payments are recognized upon the related resolution of such contingencies. |
Foreign currency | m. Foreign currency Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the U.S. dollar are included in operations in the period in which the transaction occurs and reported within the foreign exchange loss line item in the consolidated statements of operations. |
Share-based compensation | n. Share-based compensation The Company measures equity classified share-based awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognizes compensation expense on a straight-line basis over the service period. The Company classifies share-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements |
Income taxes | o. Income taxes The Company uses the asset-and-liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return if such a position is more likely than not to be sustained. |
Reverse stock split | p. Reverse stock split On August 31, 2023, the Company filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, which effected a 1-for -22 reverse stock split |
Net loss per share | q. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period (and potential shares of common stock that are exercisable for little or no consideration). Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities such as common stock warrants and stock options which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. Sonnet BioTherapeutics Holdings, Inc. Notes to Consolidated Financial Statements The following potentially dilutive securities have been excluded from the computation of diluted shares of common stock outstanding as they would be anti-dilutive: Schedule of Potentially Dilutive Securities 2023 2022 September 30, 2023 2022 Common stock warrants August 2021 128,500 128,500 Underwriter warrants August 2021 2,287 2,287 Private warrants — 332 Chanticleer warrants 57 57 Series C warrants 36,778 36,778 Series 3 warrants 12,548 12,548 Unvested restricted stock units and awards 2,326 2,162 Common stock warrants February 2023 271,883 — Underwriter warrants February 2023 44,190 — Common stock private placement warrants June 2023 227,272 — Placement agent warrants June 2023 6,818 — Total anti-dilutive weighted average shares 732,659 182,664 |
Recent accounting pronouncements | r. Recent accounting pronouncements Recently adopted In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In November 2021, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, or ASU 2021-10, which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for financial statements issued for annual periods beginning after 15 December 2021. The adoption of the guidance on October 1, 2022 did not have a material impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Securities | The following potentially dilutive securities have been excluded from the computation of diluted shares of common stock outstanding as they would be anti-dilutive: Schedule of Potentially Dilutive Securities 2023 2022 September 30, 2023 2022 Common stock warrants August 2021 128,500 128,500 Underwriter warrants August 2021 2,287 2,287 Private warrants — 332 Chanticleer warrants 57 57 Series C warrants 36,778 36,778 Series 3 warrants 12,548 12,548 Unvested restricted stock units and awards 2,326 2,162 Common stock warrants February 2023 271,883 — Underwriter warrants February 2023 44,190 — Common stock private placement warrants June 2023 227,272 — Placement agent warrants June 2023 6,818 — Total anti-dilutive weighted average shares 732,659 182,664 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: Schedule of Accrued Expenses and Other Current Liabilities 2023 2022 September 30, 2023 2022 Compensation and benefits $ 2,091,196 $ 1,218,530 Research and development 913,145 1,593,922 Professional fees 224,031 378,890 Other 2,550 2,630 Accrued expenses and other current liabilities $ 3,230,922 $ 3,193,972 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expenses | The components of lease expense for the years ended September 30, 2023 and 2022 are as follows: Schedule of Lease Expenses Lease expense 2023 2022 Operating lease expense $ 90,837 $ 94,828 Variable lease expense 5,978 5,339 Total lease cost $ 96,815 $ 100,167 |
Schedule of Operating Lease Liabilities | Cash flow information related to operating leases for the years ended September 30, 2023 and 2022 is as follows: Schedule of Operating Lease Liabilities Cash paid for amounts included in the measurement of lease liabilities: 2023 2022 Operating cash flows from operating leases $ 79,259 $ 98,101 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancellable leases at September 30, 2023 are as follows: Schedule of Future Minimum Lease Payments Fiscal year 2024 $ 93,614 2025 95,487 2026 48,216 Total undiscounted lease payments 237,317 Less: imputed interest (33,406 ) Total lease liabilities $ 203,911 |
Stockholders_ Deficit (Tables)
Stockholders’ Deficit (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Warrants Outstanding | As of September 30, 2023, the following equity-classified warrants and related terms were outstanding: Schedule of Warrants Outstanding Warrants Outstanding Exercise Price Expiration Date Common stock warrants August 2021 128,500 $ 261.80 August 24, 2024 Underwriter warrants August 2021 2,287 $ 327.25 August 19, 2024 Chanticleer warrants 57 18,018.00 28,028.00 April 30, 2027 December 17, 2028 Series C warrants 36,778 $ 982.52 October 16, 2025 Series 3 warrants 12,548 $ 89.628 August 15, 2027 Common stock warrants February 2023 271,883 $ 23.76 February 10, 2028 Underwriter warrants February 2023 44,190 $ 29.70 February 8, 2028 Common stock private placement warrants June 2023 227,272 $ 14.8478 December 30, 2026 Placement agent warrants June 2023 6,818 $ 14.8478 December 30, 2026 Total 730,333 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | The Company recorded share-based compensation expense associated with the RSUs and RSAs in its accompanying consolidated statements of operations as follows: Schedule of Share-based Compensation Expense 2023 2022 Years ended September 30, 2023 2022 Research and development $ 121,265 $ 437,921 General and administrative 127,361 438,447 Share Based Compensation $ 248,626 $ 876,368 |
Schedule of Restricted Stock Units Activity | The following table summarizes RSU activity under the Plan: Schedule of Restricted Stock Units Activity Weighted Average Grant RSU Date Fair Value Unvested balance at October 1, 2021 1,179 $ 1,068.32 Granted 2,103 $ 155.54 Vested (1,096 ) $ 1,091.20 Forfeited (24 ) $ 1,118.04 Unvested balance at October 1, 2022 2,162 $ 175.56 Granted 7,840 $ 21.47 Vested (2,162 ) $ 12.55 Forfeited (5,514 ) $ 21.34 Unvested balance at September 30, 2023 2,326 $ 21.78 |
Schedule of Restricted Stock Awards Activity | The following table summarizes RSA activity under the Plan: Schedule of Restricted Stock Awards Activity Weighted Average Grant RSA Date Fair Value Unvested balance at October 1, 2022 — — Granted 5,514 $ 28.27 Unvested balance at September 30, 2023 5,514 $ 28.27 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of the temporary differences that gave rise to deferred taxes were as follows: Schedule of Deferred Tax Assets and Liabilities 2023 2022 September 30, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 27,996,751 $ 25,858,311 Research and development credit carryforwards 3,106,675 2,151,942 Amortization 4,692,227 2,897,388 Share-based compensation 226 66,832 Operating lease liability 57,319 71,748 Accrued expenses and other 546,612 314,210 Section 163(j) disallowed interest expense 763,172 — Property and equipment — 4,790 Gross deferred tax assets 37,162,982 31,365,221 Less: valuation allowance (37,100,582 ) (31,293,092 ) Deferred tax assets 62,400 72,129 Deferred tax liabilities: Property and equipment (7,954 ) — Operating lease right-of-use asset (54,446 ) (72,129 ) Net deferred tax assets $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | The Company recorded no income tax expense or benefit for the years ended September 30, 2023 and 2022. A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements is as follows: Schedule of Effective Income Tax Rate Reconciliation 2023 2022 Years ended September 30, 2023 2022 U.S. federal statutory rate (21.0 )% (21.0 )% State taxes, net of federal benefit (7.1 ) (6.0 ) Change in valuation allowance 30.8 28.1 Research and development credit (5.1 ) (3.0 ) Permanent differences (1.6 ) 0.7 Foreign tax rate differential 0.3 0.8 State NOLs 3.7 — Other 0.0 0.4 Effective income tax rate — % — % |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Oct. 26, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Cash | $ 2,300,000 | $ 2,300,000 | ||
Proceeds from sale of common stock | 21,006,371 | $ 1,841,918 | ||
Cash refund expected to be received | 800,000 | 800,000 | $ 800,000 | |
Net operating losses | $ 4,800,000 | 4,800,000 | ||
October Offering [Member] | Underwriters [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from sale of common stock | $ 4,100,000 | |||
Purchase of warrants | 85,312 | |||
Exercisable price | $ 2 | |||
October Offering [Member] | Underwriters [Member] | Common Stock [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of common stock, shares | 1,306,250 | |||
Exercisable price | $ 0.0001 | |||
October Offering [Member] | Underwriters [Member] | Prefunded Warrant [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Purchase of warrants | 1,537,500 | |||
Exercisable price | $ 1.5999 | |||
October Offering [Member] | Underwriters [Member] | Common Warrant [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Purchase of warrants | 5,687,500 | |||
Exercisable price | $ 1.60 | |||
October Offering [Member] | February 2024 [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from sale of common stock | $ 4,100,000 |
Schedule of Potentially Dilutiv
Schedule of Potentially Dilutive Securities (Details) - shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 732,659 | 182,664 |
Common Stock Warrants August 2021 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 128,500 | 128,500 |
Underwriter Warrants August 2021 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 2,287 | 2,287 |
Private Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 332 | |
Chanticleer Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 57 | 57 |
Series C Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 36,778 | 36,778 |
Series 3 Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 12,548 | 12,548 |
Unvested Restricted Stock Units and Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 2,326 | 2,162 |
Common Stock Warrants February 2023 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 271,883 | |
Underwriter Warrants February 2023 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 44,190 | |
Common Stock Private Placement Warrants June 2023 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 227,272 | |
Placement Agent Warrants June 2023 [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 6,818 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 31, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Impairment charges | $ 0 | $ 0 | ||||
Refund Received Related to Revenue from Different Year, Year Revenue Recognized | The cash refund is available to eligible companies with annual aggregate revenues of less than $20.0 million (Australian) during the reimbursable period. | |||||
Expected net cash refund | $ 800,000 | $ 800,000 | 800,000 | |||
Proceeds from Income Tax Refunds | $ 1,100,000 | |||||
Cash paid to government | $ 200,000 | |||||
Stockholders equity reverse stock split | 1-for -22 reverse stock split | |||||
Research and Development Tax Incentive Program [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Expected net cash refund | 800,000 | 800,000 | ||||
2022 Sales Agreement [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Deferred offering costs | $ 100,000 | |||||
October Offering [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Deferred offering costs | $ 49,988 | $ 49,988 |
Schedule of Accrued Expenses an
Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Payables and Accruals [Abstract] | ||
Compensation and benefits | $ 2,091,196 | $ 1,218,530 |
Research and development | 913,145 | 1,593,922 |
Professional fees | 224,031 | 378,890 |
Other | 2,550 | 2,630 |
Accrued expenses and other current liabilities | $ 3,230,922 | $ 3,193,972 |
Schedule of Lease Expenses (Det
Schedule of Lease Expenses (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 90,837 | $ 94,828 |
Variable lease expense | 5,978 | 5,339 |
Total lease cost | $ 96,815 | $ 100,167 |
Schedule of Operating Lease Lia
Schedule of Operating Lease Liabilities (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flow from operating lease | $ 79,259 | $ 98,101 |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments (Details) | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 93,614 |
2025 | 95,487 |
2026 | 48,216 |
Total undiscounted lease payments | 237,317 |
Less: imputed interest | (33,406) |
Total lease liabilities | $ 203,911 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Millions | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Leases [Abstract] | |
Change in operating lease right-of-use asset and liability due to amended lease | $ 0.2 |
Weighted-average remaining lease term | 2 years 7 months 6 days |
Weighted average discount rate | 12% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) € in Millions | 1 Months Ended | 12 Months Ended | |||||||
Apr. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 EUR (€) | Apr. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Jan. 31, 2019 USD ($) | Jul. 31, 2012 USD ($) | |
Loss Contingencies [Line Items] | |||||||||
Payment to acquire in process research and development | $ 443,250 | $ 810,227 | |||||||
Discovery Collaboration Agreements [Member] | XOMA [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Milestone payment | $ 3,800,000 | ||||||||
Discovery Collaboration Agreements [Member] | XOMA [Member] | In Process Research and Development [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fee | $ 500,000 | ||||||||
License fees | $ 0 | ||||||||
Cellca Agreement [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Description of milestone payments | The Company is obligated to make milestone payments to Cellca totaling up to $0.7 million upon the achievement of certain development and approval milestones if the Buy-Out Option is not exercised. | ||||||||
Cellca Agreement [Member] | Maximum [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Milestone payment | $ 700,000 | ||||||||
The Cellca Agreement [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Milestone payment | $ 600,000 | ||||||||
The Cellca Agreement [Member] | Maximum [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Payment for annual license fee obligation | 600,000 | ||||||||
The Cellca Agreement [Member] | Minimum [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Payment for annual license fee obligation | 100,000 | ||||||||
The Cellca Agreement [Member] | In Process Research and Development [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fees | 0 | ||||||||
Commercial product license fee payment obligation | $ 100,000 | ||||||||
The Brink Agreement [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Commercial product license fee payment obligation | 100,000 | ||||||||
Payment of annual license fee | $ 12,000 | ||||||||
The Brink Agreement [Member] | In Process Research and Development [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fee | 12,000 | 200,000 | |||||||
Commercial product license fee payment obligation | 100,000 | ||||||||
InvivoGen Agreement [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fees | 0 | ||||||||
Payment for annual license fee obligation | 100,000 | € 0.1 | |||||||
InvivoGen Agreement [Member] | In Process Research and Development [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fees | 100,000 | ||||||||
ProteoNic Agreement [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Milestone payment | 1,300,000 | € 1.2 | |||||||
License fees | 0 | ||||||||
ProteoNic Agreement [Member] | In Process Research and Development [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
License fees | $ 24,600 | 24,600 | |||||||
Navigo Agreement [Member] | Navigo Proteins GmbH [Member] | Technology Service [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Milestone payment | $ 300,000 | $ 1,000,000 | |||||||
Payment to acquire in process research and development | $ 100,000 |
Collaboration Revenue (Details
Collaboration Revenue (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 31, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Collavorative arrangement right and obligation | New Life is also obligated to pay a non-refundable deferred license fee of an additional $1.0 million at the time of the satisfaction of certain milestones, as well as potential additional milestone payments to the Company of up to $19.0 million subject to the achievement of certain development and commercialization milestones. In addition, during the Royalty Term (as defined below), New Life is obligated to pay the Company tiered double-digit royalties ranging from 12% to 30% based on annual net sales of Products in the Exclusive Territory. The “Royalty Term” means, on a Product-by-Product and a country-by-country basis in the Exclusive Territory, the period commencing on the date of the first commercial sale (subject to certain conditions) of such Product in such country in the Exclusive Territory and continuing until New Life ceases commercialization of such Product in the DIPN Field | |||
Performance obligation | $ 1,000,000 | |||
Collaboration revenue | 147,805 | $ 349,943 | ||
License Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Proceeds for negotiate license agreement | $ 500,000 | |||
New Life Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Proceeds for negotiate license agreement | $ 500,000 | |||
Future milestone payments | 1,000,000 | |||
Milestone payments | $ 19,000,000 | |||
New Life Agreement [Member] | Minimum [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalties, percentage | 12% | |||
New Life Agreement [Member] | Maximum [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalties, percentage | 30% |
Schedule of Warrants Outstandin
Schedule of Warrants Outstanding (Details) | Sep. 30, 2023 $ / shares shares |
Common Stock Warrants August 2021 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 128,500 |
Exercise Price | $ / shares | $ 261.80 |
Expiration date | Aug. 24, 2024 |
Underwriter Warrants August 2021 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 2,287 |
Exercise Price | $ / shares | $ 327.25 |
Expiration date | Aug. 19, 2024 |
Chanticleer Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 57 |
Chanticleer Warrants [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price | $ / shares | $ 18,018 |
Expiration date | Apr. 30, 2027 |
Chanticleer Warrants [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price | $ / shares | $ 28,028 |
Expiration date | Dec. 17, 2028 |
Series C Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 36,778 |
Exercise Price | $ / shares | $ 982.52 |
Expiration date | Oct. 16, 2025 |
Series 3 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 12,548 |
Exercise Price | $ / shares | $ 89.628 |
Expiration date | Aug. 15, 2027 |
Common Stock Warrants February 2023 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 271,883 |
Exercise Price | $ / shares | $ 23.76 |
Expiration date | Feb. 10, 2028 |
Underwriter Warrants February 2023 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 44,190 |
Exercise Price | $ / shares | $ 29.70 |
Expiration date | Feb. 08, 2028 |
Common Stock Private Placement Warrants June 2023 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 227,272 |
Exercise Price | $ / shares | $ 14.8478 |
Expiration date | Dec. 30, 2026 |
Placement Agent Warrants June 2023 [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 6,818 |
Exercise Price | $ / shares | $ 14.8478 |
Expiration date | Dec. 30, 2026 |
Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants, outstanding | shares | 730,333 |
Stockholders_ Deficit (Details
Stockholders’ Deficit (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2023 | Jun. 30, 2023 | Feb. 10, 2023 | Sep. 30, 2022 | Sep. 15, 2022 | Aug. 15, 2022 | Jun. 30, 2023 | Aug. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Offering price for common stock | $ 20,895,958 | $ 1,908,693 | |||||||||
Net proceeds from issuance of common stock | $ 21,006,371 | 1,841,918 | |||||||||
Stockholders' equity, reverse stock split | 1-for -22 reverse stock split | ||||||||||
Conversion of convertible securities | |||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||
Warrant expirations | 332 | ||||||||||
Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Offering price for common stock | $ 83 | $ 3 | |||||||||
Sale of common stock, net of issuance costs, shares | 833,287 | 30,206 | |||||||||
Number of convertible shares | 25,101 | ||||||||||
Conversion of convertible securities | $ 3 | ||||||||||
Shares issued upon vesting | 1,087 | ||||||||||
Net share settlement of warrants, shares | 519,492 | ||||||||||
Prefunded Warrant [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of common stock, net of issuance costs, shares | 137,998 | ||||||||||
Warrants exercised | 137,999 | ||||||||||
Common Stock Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of common stock, net of issuance costs, shares | 519,492 | ||||||||||
Net share settlement of warrants, shares | 1,014,872 | ||||||||||
Chardan Capital Markets LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of common stock, net of issuance costs, shares | 166,363 | ||||||||||
Warrants to purchase shares | 227,272 | 227,272 | |||||||||
Exercisable price | $ 9.90 | $ 9.90 | |||||||||
Net proceeds from issuance of private placement | $ 1,900,000 | $ 2,300,000 | |||||||||
2022 Sales Agreement [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Offering price for common stock | $ 7,800,000 | ||||||||||
Gross proceeds from sale agreement | $ 15,000,000 | ||||||||||
Net proceeds from issuance of common stock | $ 13,600,000 | ||||||||||
2022 Sales Agreement [Member] | Underwriter Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants to purchase shares | 44,190 | 6,818 | |||||||||
Exercisable price | $ 29.70 | ||||||||||
2022 Sales Agreement [Member] | Underwriter Warrants [Member] | Forecast [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Exercisable price | $ 14.8478 | ||||||||||
2022 Sales Agreement [Member] | Common Stock [Member] | Investors [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of common stock, net of issuance costs, shares | 530,222 | ||||||||||
2022 Sales Agreement [Member] | Prefunded Warrant [Member] | Investors [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants to purchase shares | 101,090 | ||||||||||
Exercisable price | $ 0.0022 | ||||||||||
Warrants issue price per share | $ 23.7578 | ||||||||||
2022 Sales Agreement [Member] | Prefunded Warrant [Member] | Chardan Capital Markets LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants to purchase shares | 60,909 | 60,909 | |||||||||
2022 Sales Agreement [Member] | Common Warrant [Member] | Investors [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants to purchase shares | 1,262,618 | ||||||||||
Exercisable price | $ 23.76 | ||||||||||
2022 Sales Agreement [Member] | Common Warrant [Member] | Chardan Capital Markets LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Exercisable price | $ 0.0022 | ||||||||||
2022 Sales Agreement [Member] | Common Warrant [Member] | Chardan Capital Markets LLC [Member] | Forecast [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Exercisable price | $ 14.8478 | ||||||||||
2022 Sales Agreement [Member] | BTIG, LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Offering price for common stock | $ 25,000,000 | ||||||||||
Sale of stock, number of shares issued | 136,702 | ||||||||||
Gross proceeds from sale agreement | $ 5,700,000 | ||||||||||
Net proceeds from issuance of common stock | $ 5,500,000 | ||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stockholders' equity, reverse stock split | 1-for-14 reverse stock split | ||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series 3 Convertible Preferred Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of stock, number of shares issued | 22,275 | ||||||||||
Preferred stock, par value | $ 100 | ||||||||||
Conversion of convertible securities | $ 25,101 | ||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series 4 Convertible Preferred Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of stock, number of shares issued | 225 | ||||||||||
Preferred stock, par value | $ 100 | ||||||||||
Number of convertible shares | 251 | ||||||||||
Equity instrument conversion price | $ 89.628 | ||||||||||
Voting rights per share | each share of Series 4 Convertible Preferred Stock was entitled to 811,688 votes per share | ||||||||||
Conversion of convertible securities | $ 25,101 | ||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series 3 Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants to purchase shares | 12,548 | ||||||||||
Net proceeds from issuance of private placement | $ 2,100,000 | ||||||||||
Gross proceeds from issuance of private placement | $ 2,300,000 | ||||||||||
Number of convertible shares | 24,850 | ||||||||||
Equity instrument conversion price | $ 89.628 | ||||||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series 3 Warrants [Member] | Private Placement [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Issuance costs | $ 100,000 | ||||||||||
2022 Sales Ageement [Member] | BTIG [Member] | Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Sale of stock, number of shares issued | 30,206 | ||||||||||
Net proceeds from issuance of common stock | $ 1,900,000 | ||||||||||
Gross proceeds from issuance of common stock | $ 2,000,000 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share Based Compensation | $ 248,626 | $ 876,368 |
Restricted Stock Units (RSUs) [Member] | Research and Development Expense [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share Based Compensation | 121,265 | 437,921 |
Restricted Stock Units (RSUs) [Member] | General and Administrative Expense [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share Based Compensation | $ 127,361 | $ 438,447 |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unvested beginning balance | 2,162 | 1,179 |
Unvested weighted average grant fair value, beginning balance | $ 175.56 | $ 1,068.32 |
Restricted stock unit, granted | 7,840 | 2,103 |
Weighted average grant fair value, granted | $ 21.47 | $ 155.54 |
Restricted stock unit, Vested | (2,162) | (1,096) |
Weighted average grant fair value, Vested | $ 12.55 | $ 1,091.20 |
Restricted stock unit, Forfeited | (5,514) | (24) |
Weighted average grant fair value, Forfeited | $ 21.34 | $ 1,118.04 |
Unvested ending balance | 2,326 | 2,162 |
Unvested weighted average grant fair value, ending balance | $ 21.78 | $ 175.56 |
Schedule of Restricted Stock Aw
Schedule of Restricted Stock Awards Activity (Details) - Restricted Stock Awards (RSA) [Member] | 12 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unvested beginning balance | shares | |
Unvested weighted average grant fair value, beginning balance | $ / shares | |
Restricted stock unit, granted | shares | 5,514 |
Weighted average grant fair value, granted | $ / shares | $ 28.27 |
Unvested ending balance | shares | 5,514 |
Unvested weighted average grant fair value, ending balance | $ / shares | $ 28.27 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Jul. 31, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Jan. 01, 2023 | |
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Restricted stock units and vesting rights, description | In December of 2022, 7,840 RSUs were granted, 100% of which vest on January 1, 2024 | In December of 2021, 2,103 RSUs were granted, 100% of which vested on January 1, 2023 | In March of 2021, an additional 152 RSUs were granted, 50% of which vested on March 25, 2022 and the remaining 50% vested on March 25, 2023 | In July of 2020, 2,115 restricted stock units (“RSUs”) were granted, 50% of which vested on April 2, 2021 and the remaining 50% vested on April 2, 2022 | ||||
Number of shares granted | 7,840 | 2,103 | 152 | 2,115 | ||||
Restricted stock, shares issued | 5,514 | |||||||
Stock compensation modification, incremental expense | $ 38,837 | |||||||
Unrecognized compensation expense | $ 12,194 | |||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Weighted average period | 3 months | |||||||
Restricted Stock Awards (RSA) [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense | $ 37,812 | |||||||
Restricted Stock Awards (RSA) [Member] | Maximum [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Weighted average period | 3 months | |||||||
Common Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Restricted stock, shares issued | 1,087 | |||||||
2020 Omnibus Equity Incentive Plan [Member] | Common Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares available for issuance | 14,480 | 14,480 |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 27,996,751 | $ 25,858,311 |
Research and development credit carryforwards | 3,106,675 | 2,151,942 |
Amortization | 4,692,227 | 2,897,388 |
Share-based compensation | 226 | 66,832 |
Operating lease liability | 57,319 | 71,748 |
Accrued expenses and other | 546,612 | 314,210 |
Section 163(j) disallowed interest expense | 763,172 | |
Property and equipment | 4,790 | |
Gross deferred tax assets | 37,162,982 | 31,365,221 |
Less: valuation allowance | (37,100,582) | (31,293,092) |
Deferred tax assets | 62,400 | 72,129 |
Property and equipment | (7,954) | |
Operating lease right-of-use asset | (54,446) | (72,129) |
Net deferred tax assets |
Schedule of Effective Income Ta
Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | (21.00%) | (21.00%) |
State taxes, net of federal benefit | (7.10%) | (6.00%) |
Change in valuation allowance | 30.80% | 28.10% |
Research and development credit | (5.10%) | (3.00%) |
Permanent differences | (1.60%) | 0.70% |
Foreign tax rate differential | 0.30% | 0.80% |
State NOLs | 3.70% | |
Other | 0% | 0.40% |
Effective income tax rate |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Aug. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | $ 4,800,000 | ||
Tax credit carryforwards | 3,106,675 | $ 2,151,942 | |
Increase in valuation allowance | 5,800,000 | $ 8,300,000 | |
Excise tax | 1% | ||
Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Corporate alternative tax | 15% | ||
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 103,600,000 | ||
Tax credit carryforwards | 2,400,000 | ||
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 69,500,000 | ||
Tax credit carryforwards | 800,000 | ||
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | $ 8,900,000 | ||
Expiration period | expire in 2027 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) $ in Millions | 1 Months Ended |
Dec. 31, 2023 USD ($) | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
State of net operating losses | $ 4.8 |