Sonnet BioTherapeutics Holdings (NASDAQ:), Inc., a pharmaceutical company, has been granted an extension until October 15, 2024, to execute a reverse stock split and meet the Nasdaq’s minimum bid price requirement.

Failure to comply with this requirement by the deadline may lead to the delisting of the company’s common stock from The Nasdaq Capital Market.

The Nasdaq Hearings Panel provided the extension after reviewing the company’s plan to regain compliance with the $1.00 minimum bid price rule, as outlined in the Expedited Review Questionnaire submitted on August 19, 2024.

Sonnet BioTherapeutics initially received a notice of non-compliance from Nasdaq on August 5, 2024, and subsequently appealed for a hearing.

In other recent news, Sonnet BioTherapeutics has made notable strides in its clinical trials and financial endeavors. The company has advanced SON-1210, a novel immunotherapeutic for metastatic pancreatic cancer, in collaboration with the Sarcoma Oncology Center. The agreement will facilitate a Phase 1/2a clinical trial, combining SON-1210 with chemotherapy agents. The drug has completed two IND-enabling toxicology studies in non-human primates, indicating its potential.

Sonnet has also reported positive outcomes from its Phase 1b clinical trial of SON-080, a treatment candidate for chemotherapy-induced peripheral neuropathy. The treatment was well-tolerated at both tested doses and showed promise in improving related symptoms. This paves the way for advancing SON-080 into a Phase 2 study for diabetic peripheral neuropathy.

In financial developments, Sonnet has entered an agreement for the immediate exercise of warrants issued in October 2023, allowing the purchase of up to 2,828,500 shares of common stock at a reduced price. Additionally, the company will issue new unregistered warrants for the purchase of up to 5,657,000 shares.

The anticipated gross proceeds from the exercise of the existing warrants are projected to be around $3.4 million, which Sonnet aims to allocate towards research and development efforts.

InvestingPro Insights

As Sonnet BioTherapeutics Holdings, Inc. navigates the challenges of meeting Nasdaq’s minimum bid price requirement, real-time data from InvestingPro offers a clearer picture of the company’s financial health. With a current market capitalization of just $3.69 million and a negative price-to-earnings (P/E) ratio reflecting its lack of profitability, the company’s financial position is precarious. The stark revenue decline of nearly 67.76% in the last twelve months as of Q3 2024, coupled with a gross profit margin that has plunged deep into the negative, emphasizes the company’s struggles.

InvestingPro Tips highlight several critical points for investors to consider. Sonnet BioTherapeutics holds more cash than debt, which is a positive sign in terms of liquidity. However, analysts foresee a sales decline in the current year and do not expect the company to be profitable. Moreover, the stock price has suffered significantly, with an 88.44% drop over the past year. It’s also noteworthy that the company does not pay a dividend, which might deter income-focused investors.

For those considering the potential impact of the reverse stock split on Sonnet’s stock price, it’s important to note that there are over 11 additional InvestingPro Tips available at https://www.investing.com/pro/SONN. These tips could provide further insights into the company’s performance and prospects, helping investors make more informed decisions.

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