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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark
One)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended September 30, 2025

 Or

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from to

 Commission
file number: 001-35570

 SONNET
BIOTHERAPEUTICS HOLDINGS, INC.

 (Exact
name of registrant as specified in its charter)

 Delaware

 20-2932652

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 Overlook Center, Suite 102

 Princeton,
 NJ

 08540

 (Address
 of principal executive offices)

 (Zip
 Code)

 Registrant's
telephone number, including area code: (609) 375-2227

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Stock, $0.0001 par value per share

 SONN

 The
 Nasdaq Capital Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $ 4,150,174 on March 31, 2025,
the last business day of the registrant's most recently completed second fiscal quarter, based on the closing price of $1.34 on
that date.

the number of shares outstanding of each of the registrant's classes of common equity, as of December 12, 2025:

 Class

 Number
 of Shares

 Stock, $ 0.0001 par value

 Documents
incorporated by reference

 None.

 TABLE
OF CONTENTS

 PART
 I

 1.

 Business

 1A.

 Risk Factors

 1B.

 Unresolved Staff Comments

 1C.

 Cybersecurity

 2.

 Properties

 3.

 Legal Proceedings

 4.

 Mine Safety Disclosures

 PART
 II

 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 6.

 [Reserved]

 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 8.

 Financial Statements and Supplementary Data

 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 9A.

 Controls and Procedures

 9B.

 Other Information

 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 10.

 Directors, Executive Officers and Corporate Governance

 11.

 Executive Compensation

 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 13.

 Certain Relationships and Related Transactions, and Director Independence

 14.

 Principal Accounting Fees and Services

 PART
 IV

 15.

 Exhibits, Financial Statement Schedules

 16.

 Form 10-K Summary

 Except
as otherwise indicated herein or as the context otherwise requires, references in this Annual Report on Form 10-K to "the Company,"
"we," "us" and "our" refer to Sonnet BioTherapeutics Holdings, Inc. and our consolidated subsidiaries.

 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms
such as "may," "will," "should," "could," "would," "expects,"
"plans," "anticipates," "believes," "estimates," "projects," "predicts,"
"potential," or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking
statements. These statements reflect the Company's current views with respect to future events and are based on assumptions and
subject to risks and uncertainties including those set forth below and under Part I, Item 1A, "Risk Factors" in this Annual
Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking
statements represent the Company's estimates and assumptions only as of the date of this Annual Report on Form 10-K and, except
as required by law, the Company undertakes no obligation to update or review publicly any forward-looking statements, whether as a result
of new information, future events or otherwise after the date of this Annual Report on Form 10-K. You should read this Annual Report
on Form 10-K and the documents referenced in this Annual Report on Form 10-K and filed as exhibits completely and with the understanding
that the Company's actual future results may be materially different from what the Company expects. The Company qualifies all of
its forward-looking statements by these cautionary statements. Such statements may include, but are not limited to, statements concerning
the following:

 our lack of operating history and history of operating losses;

 our
need for significant additional capital and our ability to satisfy our capital needs;

 our
 ability to complete required clinical trials of our products and obtain approval from the
 FDA or other regulatory agencies in different jurisdictions;

 our
 ability to maintain the listing of our common stock on The Nasdaq Capital Market;

 our
 ability to maintain or protect the validity of our patents and other intellectual property;

 our
 ability to retain key executive members;

 our
 ability to internally develop new inventions and intellectual property;

 interpretations
 of current laws and the passages of future laws;

 acceptance
 of our business model by investors;

 The
 emergence and effect of competing or complementary products, including the ability of our
 future products to compete effectively;

 the
 accuracy of our estimates regarding expenses and capital requirements; and

 our
 ability to adequately support growth.

 PART
I

 Item
1. Business.

 Overview

BioTherapeutics Holdings, Inc. ("we," "us," "our," or the "Company"), is a clinical stage,
oncology-focused biotechnology company with a proprietary platform for innovating biologic medicines of single- or bifunctional action.
Known as F H AB (Fully Human Albumin Binding), the technology utilizes a fully human single chain antibody fragment that
binds to and "hitch-hikes" on human serum albumin (HSA) for transport to target tissues. We designed the F H AB
construct to improve drug accumulation in tumors, as well as to extend the duration of activity in the body. F H AB development
candidates are produced in a mammalian cell culture, which enables glycosylation and a biological structure similar to the natural cytokines
 in vivo. We believe our F H AB technology, for which we received a U.S. patent in June 2021, is a distinguishing feature
of our biopharmaceutical platform that is well suited for future drug development across a range of human disease areas, including oncology,
autoimmune, pathogenic, inflammatory, and hematological conditions.

 Our
current internal pipeline development activities are focused on cytokines, a class of cell signaling proteins that, among other important
functions, serve as potent immunomodulatory agents. Working both independently and synergistically, specific cytokines have shown the
ability to modulate the activation and maturation of immune cells that fight cancer and pathogens. However, cytokines on their own do
not preferentially accumulate in specific tissues and are quickly eliminated from the body. The conventional approach to achieving a
treatment effect with cytokine therapy typically requires the administration of high and frequent doses. This can result in a reduced
treatment effect accompanied by the potential for systemic toxicity, which poses challenges to the therapeutic application of this class
of drugs.

 We
have built an efficient R&D platform that includes a network of outsourced vendors to help remediate expenses and improve execution
timelines. Most of the vendors are strategic collaborators that offer us a preferred status with negotiated costs. The major advantages
of this approach include optimized direct investment into projects with expenses that can be rapidly scaled up or down depending on the
number of projects. The cost advantages of our platform start with the vendor network selection process, with CMC being one of the most
expensive components of the initial drug development step. We have chosen a strategic CMC collaborator in India and have negotiated the
cost to be significantly less than the expense incurred from a similar US- or European-based vendor. We have conducted three of our four
clinical trials in Australia, one of which is ongoing (SB221). Running clinical trials there offers a substantial cost reduction relative
to US trials via the Australian government's R&D tax credit program. We are also coordinating the Indian and Australian execution
of various aspects of our programs with top R&D vendors from the US, England, Germany, and Switzerland, with the objective of directing
the bulk of our operating expense infrastructure towards our drug development pipeline.

 Pipeline

 We
have a pipeline of therapeutic compounds focused primarily on oncology indications of high unmet medical need.

 Our
 lead proprietary asset, SON-1010, is a fully human single-chain version of Interleukin 12
 (IL-12), covalently linked to the F H AB construct, for which we are pursuing clinical
 development in solid tumors. We have completed a non-human primate (NHP) toxicity study,
 conducted under current Good Laboratory Practices (cGLP), and have successfully manufactured
 both liquid and lyophilized forms of the drug product for clinical use. In March 2022, the
 FDA cleared our Investigational New Drug (IND) application for SON-1010. This allowed us
 to initiate a U.S. clinical trial (SB101) in oncology patients with solid tumors during the
 second calendar quarter of 2022. In September 2021, we created a wholly-owned Australian
 subsidiary, SonnetBio Pty Ltd ("Subsidiary"), for the purpose of conducting certain
 clinical trials. We received approval and initiated a clinical study (SB102) of SON-1010
 in Australian healthy volunteers during the third calendar quarter of 2022. Interim safety
 and tolerability data from the SB101 and SB102 studies were reported in April 2023 and the
 data from SB102 was published in February 2024. We announced the topline safety data from
 SB101 and completion of dose escalation in December 2024, at the maximum administered dose
 to date as 1200 ng/kg. Clinical benefit, defined as stable disease (SD) for at least 4 months,
 was seen in 48% of the patients overall and in 83% at the highest dose, including one patient
 with sarcoma who had a partial response (PR) to SON-1010. On February 13, 2025, we announced
 the addition of an expansion cohort in SB101 that uses SON-1010 with trabectedin (Yondelis),
 and on March 26, 2025, the successful completion of the first safety review of that cohort.
 We expect to report topline efficacy data from this combination in the second half of calendar
 year 2025.

 In
 January 2023, we announced a collaboration agreement with Roche for the clinical evaluation
 of SON-1010 in combination with atezolizumab (Tecentriq). We have entered into a Master
 Clinical Trial and Supply Agreement (MCSA) with Roche, 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, we and Roche will
 provide SON-1010 and atezolizumab, respectively, for use in the Phase 1b/ 2a combination
 safety, dose-escalation, and preliminary efficacy study (SB221). That trial consists of a
 modified 3+3 design in Part 1 that combines dose-escalation of SON-1010 in six steps with
 a fixed dose of atezolizumab. One patient in the highest dose group had a PR and one had
 a CR. Clinical benefit in PROC is being studied in an expansion group to help establish the
 recommended Phase 2 dose (RP2D). On August 4, 2025, we announced the addition of a seventh
 dose level cohort using SON-1010 at a 50% higher dose combined with the same fixed dose of
 atezolizumab in PROC to consider using that dose as the RP2D. Part 2 of the study will be
 used to investigate SON-1010 in combination with atezolizumab versus the standard of care
 (SOC) for PROC in a randomized comparison to show proof-of-concept (POC) in a larger population.
 Overall, we have dosed 103 patients and healthy volunteers with SON-1010 to date in these
 three Phase 1 studies. As part of our ongoing cost-cutting strategy, all antiviral development
 with SON-1010 has been suspended.

 We
 acquired the global development rights to a fully human version of Interleukin 6 (IL-6),
 in April 2020. We refer to this candidate as SON-080, for its target indications of Chemotherapy-Induced
 Peripheral Neuropathy (CIPN) and Diabetic Peripheral Neuropathy (DPN). Our CIPN Phase 1b/2a
 clinical trial, SB211, was started in October 2022 but has been terminated. Enrollment of
 the first nine randomized patients in the first portion of SB211 study was completed, which
 allowed the DSMB to complete its review of the preliminary blinded safety data during the
 first calendar quarter of 2024. In May 2021, we entered into a license agreement with New
 Life Therapeutics Pte., Ltd ("New Life") of Singapore (the "New Life Agreement"),
 pursuant to which we agreed to be jointly responsible with New Life for developing SON-080
 in DPN with the objective of evaluating an ex-US pilot efficacy study after analyzing the
 CIPN safety data. On December 2, 2024, New Life provided written notice to us of New Life's
 intention to exercise its Give Back Option (as defined herein) under the New Life Agreement,
 subject to the negotiation and mutual agreement of the terms of such Give Back Option by
 us and New Life, as the latter elected to move its business in a different direction. In
 addition, on October 8, 2024, we signed a licensing agreement with an India-based company,
 Alkem Laboratories Limited ("Alkem"), providing it with the right to develop
 and commercialize SON-080 in DPN and/or CIPN in India (the "Alkem Agreement").

 SON-1210
 (IL12-F H AB-IL15), our lead bifunctional compound, combines the F H AB
 construct with single-chain IL-12 and fully human Interleukin 15 (IL-15). This compound is
 being developed for solid tumor indications, including pancreatic and colorectal cancer.
 In February 2023, we announced the successful completion of two IND-enabling toxicology studies
 with SON-1210 in NHPs. In August 2024, we announced a clinical collaboration agreement to
 commence an investigator-initiated and funded Phase 1/2a study of SON-1210 in combination
 with chemotherapy for the treatment of pancreatic ductal adenocarcinoma (PDAC). We are prepared
 to initiate commercial development of SON-1210, pending the outcome of any partnering activity.

 In
our discovery pipeline, we are investigating:

 June
 13, 2024, we announced the generation and in vitro characterization of two novel drug candidates,
 SON-1411 (IL18 BPR -F H AB-IL12) and SON-1400 (IL18 BPR -F H AB),
 each containing a modified version of recombinant human interleukin-18 (IL-18 BPR
 = Binding Protein Resistant) linked to the F H AB domain. SON-1411 is a proprietary
 bifunctional fusion protein consisting of IL-18BPR combined with single-chain wild-type IL-12,
 each linked to our F H AB platform, which will replace SON-1410 as a development
 candidate. SON-1400 is a monofunctional fusion protein comprising the same IL-18BPR domain,
 also linked to the F H AB domain. IL-18 can regulate both innate and adaptive immune
 responses through its effects on natural killer (NK) cells, monocytes, dendritic cells, T
 cells, and B cells. IL-18 acts synergistically with other pro-inflammatory cytokines to promote
 interferon- (IFN-) production by NK cells and T cells. Systemic administration
 of IL-18 has been shown to have anti-tumor activity in several animal models. Moreover, tumor-infiltrating
 lymphocytes (TILs) express more IL-18 receptors than other T cells. However, IL-18 clinical
 trials have shown that, although it is well tolerated, IL-18 has poor efficacy in the treatment
 of cancers, most likely due in large part to the high co-expression of IL-18 binding protein
 (IL-18BP) in the TME. In particular, IL-18BP serves as a "decoy receptor" that
 binds to IL-18 with much higher affinity, compared with the IL-18Rc complex, thereby causing
 a negative feedback loop with IL-18 and inhibiting IL-18-mediated TIL activation. Thus, there
 exists potential for the discovery of IL-18 variant compositions that could harness the therapeutic
 promise of IL-18 for the treatment of cancers. Our strategy for amino acid modifications
 to rIL-18 was based on a compilation of literature review, 3D X-ray crystallography structures,
 and computer modeling analysis. Subsequently, certain IL-18 variant sequences were synthesized,
 engineered into expression constructs and manufactured at small scale in either CHO cell
 culture or E. coli. Highly purified milligram quantities of SON-1411 or SON-1400 were analyzed
 in vitro for IL-18Rc or IL-18BP binding activities, respectively, using the HEK-Blue
 and Bright-Glo Luciferase IL-18Rc reporter assays. In vitro results for at least one
 variant of IL-18 showed equivalent binding to the IL-18 Rc, compared to the wild-type IL-18
 reference molecule, concomitant with no or reduced binding to IL-18BP. We elected to place
 the SON-1400 program on hold for expense reduction purposes.

 The
 SON-1411 program is in cell line development, and has also been placed on hold for the time
 being.

 We
face numerous challenges and uncertainties with respect to the development and commercialization of our therapeutic compounds, including
our F H AB technology. Please see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K for more information.

 Lead
Clinical Programs Update

 SON-1010:
Targeted Immune Activation Cancer Therapy, Turning 'Cold' Tumors 'Hot', Initially Targeting Solid Tumors and
PROC

 Phase
1 Trial (SB101 Trial): Advanced Solid Tumors (Monotherapy) and Combination with Trabectedin

 This
first-in-human study is primarily designed to evaluate the safety, tolerability, PK, and PD of multiple ascending doses of SON-1010 in
cancer patients and is being conducted at several sites across the United States. We recently completed dose escalation in the Phase
1 SB101 clinical trial of SON-1010 (IL12-F H AB) in adult patients with advanced solid tumors and are expanding that study using
SON-1010 monotherapy with trabectedin in certain types of soft-tissue sarcoma (STS). We reported that results of SON-1010 at the highest
dose have been formally evaluated by the Safety Review Committee. We announced topline safety data and the completion of dose escalation
in December 2024, at a dose of 1200 ng/kg. Clinical benefit, defined as stable disease for at least 4 months, was seen in 48% of the
patients overall and in 83% at the highest dose, including one patientwith sarcoma who had a partial response to SON-1010.

 Phase
1b/2a Trial (SB221 Trial): Advanced Solid Tumors and PROC (Combo with Atezolizumab)

 A
global Phase 1b/2a multicenter, dose-escalation and randomized proof-of-concept study is being performed to assess the safety, tolerability,
PK, PD, and efficacy of SON-1010 administered subcutaneously (SC) in combination with atezolizumab given intravenously (IV) (in collaboration
with Genentech, a member of the Roche Group). This study was recently expanded to add a higher dose of SON-1010 in combination with atezolizumab.
Enrollment remains ongoing and an update on safety and topline efficacy in that trial is expected in the second half of calendar year
2025.

 Program
Highlights:

 PK
 data reveals about 10-fold extended half-life for SON-1010 compared with rhIL-12 and suggests
 tumor targeting by the F H AB domain based on target-mediated drug disposition analysis.

 A
 controlled, dose-related, and sustained IFN response to SON-1010 has been seen that
 may allow improved efficacy, compared to the many studies that have used rhIL-12 since the
 late 1990's.

 The
 SON-1010 trials have collectively dosed 103 subjects, with 5 of 6 patients at the highest
 dose (83%) achieving clinical benefit with SON-1010 monotherapy (defined as stable disease
 at 4 months). Two patients with PROC had a partial response to SON-1010 at the highest dose
 used to date in combination with atezolizumab, and another SB221 cohort is currently being
 enrolled at a 50% higher dose of SON-1010.

 Patients
 have received up to 24 cycles of SON-1010 as monotherapy and up to 19 cycles of SON-1010
 with atezolizumab without dose-limiting toxicity at any dose level.

 Toxicity
 is minimized in both trials with the use of a 'desensitizing' first dose that
 takes advantage of the known tachyphylaxis associated with rhIL-12, which allows higher maintenance
 doses and potential improvements in efficacy.

 A
 favorable safety profile has been seen in every context with no dose-related safety signals.

 Dose
 escalation has been evaluated up to 1200 ng/kg; a 50% higher dose cohort is currently being
 enrolled to help prepare for Phase 2.

 Upcoming
Milestones:

 Phase
 1: Solid Tumors (Monotherapy)

 H2
 calendar year 2025: Topline efficacy data in STS with trabectedin

 Phase
 1b/2a: PROC (Combo with Atezolizumab)

 H2
 calendar year 2025: Safety & topline efficacy data

 SON-080:
Low dose of rhIL-6 for CIPN and DPN

 Phase
1b/2a Trial (SB211 Trial): CIPN

 The
completed SB211 study was a double-blind, randomized, controlled trial of SON-080 conducted at two sites in Australia in patients with
persistent CIPN using a new proprietary version of recombinant human Interleukin-6 (rhIL-6) that builds upon previous work with atexakin
alfa. The goal of the Phase 1b portion of the SB211 study was to confirm safety and tolerability before continued development in Phase
2. As announced in March 2024, a DSMB reviewed the unblinded safety and tolerability of SON-080 in the first nine patients and concluded
that the symptoms were tolerable in the initial patients and the study could proceed to Phase 2 in neuropathy including CIPN and/or DPN.

 In
October 2024, we entered into the Alkem Agreement for the research, development, manufacturing, marketing, and commercialization of our
SON-080 molecule for the treatment of DPN in India as well as the manufacturing, marketing, and commercialization of SON-080 for CIPN
and autonomic neuropathy in India. Alkem will conduct all clinical trials it believes appropriate to obtain regulatory approval in India
of SON-080 for the treatment of DPN.

 Phase
1b Data Highlights:

 was demonstrated to be well-tolerated in a small group of patients with CIPN at both 20 g
 and 60 g/dose, which was about 10-fold lower than the therapeutic MTD for IL-6 established
 in previous clinical evaluations.

 Pain
 and quality of life survey results suggest the potential for rapid improvement of peripheral
 neuropathy symptoms and post-dosing durability with both doses, compared to placebo controls.

 Upcoming
Milestones:

 Subsequent
 to the partnership established with Alkem, preparations are being made in support of their
 initiation of a Phase 2 clinical trial in DPN, a mechanistically synergistic and larger,
 high-value indication with unmet medical need.

 SON-1210:
Proprietary, Bifunctional Version of Human Interleukins 12 (IL-12) and 15 (IL-15), Configured Using Our F H AB Platform, in
Combination with Chemotherapy for the Treatment of Advanced Solid Tumors and Metastatic Pancreatic Cancer

 As
previously announced, we successfully completed two IND-enabling toxicology studies of SON-1210 in non-human primates (NHPs), which demonstrated
no overt toxicity in the GLP study apart from the expected and mild, on-target changes in hematology and clinical chemistry parameters
that resolved completely within 14 to 21 days post-dosing. A significant increase in interferon gamma (IFN), which was controlled
and prolonged, was noted as early as one day following administration, with no apparent increase in other proinflammatory cytokines.
IFN is a well-known pharmacodynamic biomarker that is required for anti-tumor efficacy in preclinical models. Other signs of cytokine
imbalance, or uncontrolled increase of pro-inflammatory cytokines (including TNF-, IL-1, and IL-6) were notably absent from
all dose levels tested in the study.

 In
August 2024, we entered into the Sarcoma Agreement with the Sarcoma Oncology Center to conduct an investigator-initiated Phase 1/2a clinical
study to evaluate SON-1210 in combination with several chemotherapeutic agents including but not limited to NALIRIFOX
(the combination of liposomal irinotecan, 5-fluorouracil/leucovorin, and oxaliplatin) for the specific treatment of metastatic PDAC.
The NALIRIFOX regimen is U.S. FDA-approved for the treatment of metastatic pancreatic cancer in the front-line and refractory settings.

 Overall
Corporate Strategy

 Our
goal is to advance our pipeline and leverage our therapeutic F H AB platform to become a leader in the discovery, development,
and commercialization of biologic drugs. Since our founding, we have remained focused on rapidly progressing pipeline candidates towards
the clinic, while also working to establish collaborations with suitable partners. As partnership conversations evolve, we intend to
prioritize our expense allocation on assets with the greatest strategic interest. To this end, we reduced operating expenses during fiscal
year 2024 and intend to negotiate a licensing deal that will help fund future pipeline expansion. As one example of a project in its
early stages that was announced in April 2022, SON-1010 is currently being studied as monotherapy with trabectedin in STS and as an immunotherapy
in combination with atezolizumab in patients with PROC, both representing indications with significant unmet medical need.

 F H AB
program advancement: SON-1010 is being used as monotherapy or in combination with trabectedin in STS and has entered Phase 1b/2a
clinical development to establish the RP2D and to assess clinical benefit in PROC. Regarding our first bifunctional candidate, SON-1210,
two IND-enabling toxicology studies in NHPs have been successfully completed. Subsequent to raising adequate funding expected in 1H 2026,
we expect to initiate the first clinical trial to study dose escalation of SON-1210 monotherapy.

 Progress
SON-080 into the next phase of clinical development: SON-080 is a fully human version of low dose IL-6 being studied for chemotherapy-induced
peripheral neuropathy (CIPN). IL-6 has successfully been studied in Phase 1 and Phase 2 clinical trials in cancer patients and we initiated
a pilot efficacy Phase 1b/2a study in CIPN patients during the second half of 2022 (SB211). The first portion of SB211 to assess primarily
the safety of SON-080 administration was successfully completed.

 Manufacturing
platform: Our compounds are produced using an industry standard mammalian cell (Chinese Hamster Ovary (CHO)) host cell line that
allows for rapid scale-up and commercial manufacturing using state-of-the-art manufacturing processes and technologies. The mammalian
cell culture system enables glycosylation and a similar biological structure to the natural cytokines in vivo, which reduces the
chance of immunogenicity. The manufacture of cytokines for clinical applications, namely their production and purification, poses distinct
technical challenges. To this end, we have developed a proprietary continuous intensive perfusion manufacturing process, including a
proprietary F H AB-binding ligand for efficient down-stream processing, as well as stable lyophilized formulations, for which
we have secured intellectual property protection for certain of these manufacturing and downstream process development steps.

 Regulatory
strategy: We believe that our drug candidates are significantly differentiated from existing cytokine therapies and represent potential
breakthroughs in biopharmaceutical drug development. We will endeavor to seek breakthrough therapy designations with regulatory agencies,
which could potentially lead to accelerated clinical development timelines.

 Pipeline
licensing opportunities: We are pursuing partnering opportunities with leading biopharmaceutical companies for the development and
commercialization of our pipeline assets.

 F H AB
technology expansion: We are exploring F H AB technology licenses with external partners interested in expanding its therapeutic
deployment in these and other indications. We believe the platform has potential applications in other areas, such as vaccines, antibody
drug conjugates (ADC's), and as a supplement to chimeric antigen receptor (CAR) T-cell technology in vivo. As soon as supportive
data are available, provisional patents will be filed to secure exclusivity with F H AB in these fields.

 The
F H AB Technology

 Our
proprietary F H AB technology was engineered to address several important shortcomings of existing approaches to biopharmaceutical
drug development. We designed the F H AB domain as a plug-and-play, modular construct for innovating new chemical entities that
could be readily reconfigured for different therapeutic payloads. As is the case with all biologic drugs, dose level and frequency of
administration are critical variables that often times present barriers to the development process. After injection, large molecule therapeutics,
including peptides, proteins, fusion proteins, antibodies, and the like, must remain intact and be capable of reaching their designated
targets inside the body, without exceeding specific toxicity thresholds. Finally, they must also be produced using commercially attractive
means.

 Our
platform technology was designed to harness HSA as a therapeutic shuttling molecule. HSA is naturally present in the bloodstream and
is the predominant protein in blood plasma. Albumin is a source of energy for inflamed, hypermetabolic tissues, including tumors. Due
to the active need for nutrients, cancer cells overexpress albumin-binding proteins such as the 'Secreted Protein Acidic and Rich
in Cysteine' (SPARC) and gp60 (albondin glycoprotein).

to a Discovery Collaboration Agreement, dated July 23, 2012, and to an Amendment of Discovery Collaboration Agreement, dated May 7, 2019
(together, the "Collaboration Agreement"), XOMA (US) LLC ("XOMA") granted us a non-exclusive, non-transferrable
license and/or right to use certain materials, technologies and information related to the discovery, optimization, and development of
antibody fragments and related proteins and to develop and commercialize products thereunder (each, a "Product"). The Collaboration
Agreement included a license to use a fully human bacteriophage library that was designed to generate fully human single-chain antibody
variable fragments (scFv) comprising a full repertoire of human heavy and light chains for use in panning biological sequences for specific
functions. Applying stringent criteria, we panned millions of scFv binders to HSA to generate our F H AB, which binds to HSA,
a globular protein having three major functional domains. It is known that albumin domains 1 and 3 are involved in the binding to FcRn.
This allowed us to select and characterize scFv binders that are specific to domain 2, a foundational aspect of our F H AB platform.

 We
are obligated to make contingent milestone payments to XOMA totaling $3.75 million on a Product-by-Product basis upon the achievement
of certain development and approval milestones related to a Product. The next projected clinical development milestone of $750K is expected
to be due upon initiation of enrollment of a Product (i.e., SON-1010) in a Phase 2 Trial. We have also agreed to pay XOMA low single-digit
royalties on net sales of Products sold by us. Royalties on each Product are payable on a country-by-country basis until the later of
(i) twelve (12) years after the First Commercial Sale (as defined in the Collaboration Agreement), and (ii) the date of expiration of
the last valid claim in the last-to-expire of the issued patents covered by the Collaboration Agreement. The Collaboration Agreement
may be terminated by either party for cause and contains customary indemnification provisions.

 Our
F H AB has demonstrated a high binding affinity to serum albumin across species (human, mouse and cynomolgus monkey), with little-to-no
immunogenicity, and retains the benefits of neonatal FcRn-mediated recycling of albumin for extending serum half-life. Unlike monoclonal
antibodies (mAbs), this binding occurs without invoking ADCC (antibody-dependent cellular cytotoxicity) or CDC (complement-dependent
cytotoxicity). The F H AB construct physically binds serum albumin (Figure 1) through an ionic, hydrophobic mechanism, which
we believe offers a distinct advantage over technologies that rely on chemical, covalent binding. Once broken, a covalent bond cannot
reform, whereas our F H AB is designed with the ability to bind, unbind and rebind to albumin in dynamic equilibrium. As albumin
also binds to the albumin receptors gp60 and SPARC, F H AB leverages innate biological mechanisms for targeted delivery to and
accumulation of the therapeutic payload in the tumor microenvironment.

 Preclinical
radiolabeling studies have validated the tumor targeting attributes of the F H AB construct, where accumulation was demonstrated
in tumors compared to the same construct without F H AB, and was transient in liver, kidney, and other organs, as expected.
Importantly, radiolabeled F H AB also demonstrated measurable accumulation in the draining lymph nodes. These findings have
important implications for therapeutic applications of any mono- (ILx-F H AB) or bifunctional (ILx-F H AB-ILy) molecules
demonstrating enhanced tumor targeting and accumulation, as well as the potential for improved efficacy.

 Another
unique advantage of our F H AB is its linker design (Figure 1) that is used for attaching one or two large molecule therapeutic
payloads for single or bifunctional activity. Our G4S (glycine, serine) peptide linkers are flexible, while being long enough to prevent
steric hindrance and can assume a rod-like configuration for enhanced penetration of tight tissue matrices. In addition to maintaining
distance between the therapeutic functional domains, our linkers are fully human and non-immunogenic across the linker structure, including
at the payload binding region. In bifunctional constructs, the orientation of the therapeutic payloads can be manipulated to improve
potential treatment effects as well as potential production levels in mammalian cell culture.

1: Our F H AB binds to a unique site on albumin without interfering with its physiologic functions. Albumin is the most abundant
protein in human serum, primarily due to binding to the FcRn, which extends the half-life. Tumor vessels have abundant FcRn and GP60
receptors that provide targeting of the F H AB. SPARC is present in the tumor microenvironment of many solid tumors, enhancing
the retention of the F H AB complex in the tumor.

 As
a final key design component, F H AB is produced in mammalian cell culture, specifically Chinese Hamster Ovary (CHO) cells,
which enables glycosylation for reducing or potentially eliminating immunogenicity. Using CHO, we have created several different genetic
fusion constructs with various low molecular weight therapeutic proteins (e.g., recombinant cytokines or antibodies, such as IL-12, IL-15,
IL-18, anti-IL-6, and anti-TGF). Recombinant therapeutic proteins, including cytokines, have shown great therapeutic potential
and are quite potent but can lack tissue specificity, which can lead to toxicity. Due to their small size (< 50 kDa), cytokines also
suffer from a shorter circulation half-life (minutes-to-hours versus 21 days for albumin) compared to monoclonal antibodies. In mouse
and NHP models, F H AB-derived compounds have demonstrated substantially greater serum half-lives, improved tissue accumulation,
and have marked tumor reduction activity when compared to their respective naked recombinant cytokines.

 In
summary, our F H AB technology underpins a modular, versatile scaffold that can be customized to yield a broad array of multi-targeted
therapeutic candidates. Relative to existing albumin binding technologies, F H AB is differentiated by possessing a linear,
rod-like shape designed for better target tissue penetration, a fully human design to reduce immunogenicity, mammalian glycosylation,
and FcRn binding for longer serum half-life. Importantly, F H AB-derived therapeutics have the potential for targeted delivery
to tumor and lymphatic tissue, reduced toxicity, and wider therapeutic windows, with the added benefit of utilizing a tailored single-
or bifunctional mechanism of action.

 Expanded
Applications of the F H AB Technology:

 Immunotherapy:
 We believe that our F H AB platform can innovate biologic drugs that target specific tissues while also increasing therapeutic
half-life. As the F H AB construct is designed to enable the simultaneous deployment of two synergistic immunotherapy compounds,
we envision a path to previously untapped immunotherapeutic advancements.

 Drug
Conjugation: With the F H AB technology, various drug compounds can be linked to the F H AB scaffold in combinations
that extend beyond our first-wave pipeline of cytokines, which presents opportunities for development across myriad disease areas.

 Vaccines:
 Vaccine developers are seeking to improve vaccine efficiency by conjugating vaccines to natural carriers, such as albumin. We believe
the F H AB platform, with its modular scaffold structure, could be an efficient vehicle for delivering vaccines to lymph nodes,
improving penetration and presentation, and extending half-life.

 CAR
T-cell Therapy: CAR T-cell therapy involves genetically modifying a patient's own T cells to recognize cancer cells for more
effectively targeting and killing tumors. We believe our targeted constructs utilizing interleukins could be systemically co-administered
to enhance CAR T-cell efficacy.

 Pipeline
Overview

 The
following table summarizes information about pipeline programs where we have disclosed specific target indications:

 SON-1010

 IL-12
is a circulating cytokine that has been shown to exert multiple effects on innate and adaptive immunity. These immune functions are critical
in attacking cancer cells and pathogens. IL-12 is a heterodimeric cytokine produced by dendritic cells, monocytes, and macrophages, also
known as antigen presenting cells (APCs). IL-12 has been shown to induce interferon gamma (IFN-) secretion by T cells and natural
killer (NK) cells, promote the expansion and survival of activated T and NK cells, supplement the cytolytic activity of cytotoxic T cells,
support the differentiation of Th1 helper-effector cells and enhance antibody dependent cellular cytotoxicity (ADCC). IL-12 has also
been shown to stimulate in vitro antitumor activity of lymphocytes from patients with cancer and in vivo anti-tumor activity
in murine tumor models of melanoma, colon carcinoma, mammary carcinoma, and sarcoma.

 Preclinical
Studies in Mice

 Initially,
the murine version of SON-1010 (mIL12-F H AB) demonstrated a larger reduction of tumor growth preclinically compared to recombinant
mIL-12 without F H AB (naked/standalone IL-12) in a mouse model of melanoma. Figure 2, from this mouse melanoma study, illustrates
a 30-to-50-fold increase in tumor reduction with mIL12-F H AB compared to standalone mIL-12.

 Furthermore,
in the same model, mIL12-F H AB accumulated in tumors in higher concentrations and remained in the serum, spleen, and tumor
significantly longer than mIL-12 without F H AB, potentially enabling less frequent administration and at lower doses.

2: The molar equivalent for IL-12 (0.9 g) is IL12-F H AB (1.3 g) and they have similar bioactivity in vitro; however,
in vivo, IL12- F H AB is approximately 35-fold more potent than IL-12 (at day 10, 1.3 g IL12-F H AB > IL-12
30 g).

 In
another preclinical study using the B16F10 tumor model, mIL12-F H AB demonstrated an improved dose response versus recombinant
murine IL-12, along with increased survival duration (Figure 3 and Figure 4). Results from this study suggest that mIL12-F H AB
may have a greater effect on reducing tumor volume and extending survival versus standalone mIL-12.

3: Analysis of tumor volumes shows dose-dependent decreases in tumors in both m IL-12 and m IL12-F H AB-treated
mice, as compared to vehicle control. IL12-F H AB-treated mice showed statistically significant decreases in tumor volumes when
analyzed against equimolar-dosed, m IL-12-treated mice. Results suggest IL-12 anti-tumor activity is potentially enhanced with
the extension of serum half-life by F H AB linkage.

 In
Figure 4, a Kaplan-Meier analysis was performed to compare survival between animals treated with either mIL12-F H AB
or mIL-12. These data illustrate a correlation between the decrease in tumor growth (Figure 3) and an increase in survival duration (Figure
4). In this study, the slower growth of tumors in animals treated with mIL12-F H AB
correlated with a longer survival time, as compared to more rapid tumor growth observed with naked mIL-12 treatment. Survivability at
the lowest doses of mIL12-F H AB (3 g) was equivalent to the highest dose
of mIL-12 (30 g). All doses of mIL12-F H AB showed a 50% survival increase
over vehicle at 14 and 17.5 days.

4: Kaplan-Meier evaluation of mouse B16F tumor survivability shows an increase in survival with IL12- F H AB treatment. Doses
of 10 g and 20 g of standalone mIL-12 exhibited 50% survival at 2 and 4 days over vehicle control (10 days). All doses of
IL12- F H AB showed 50% survival over vehicle at 14 and 17.5 days. Survivability at the lowest doses of IL12- F H AB
were equivalent to highest dose standalone IL-12

 Nonhuman
Primate Studies of SON-1010

 We
have completed in vitro pharmacology studies of affinity and binding kinetics that demonstrate species cross-reactivity of SON-1010
in serum albumin for hamster, rat, cynomolgus monkey and human. The results show that SON-1010 displays species specificity to cynomolgus
monkey and human subjects, which will guide species selection for further preclinical toxicology work. A humanized mouse model (SCID)
study designed to evaluate PK/PD and dose response was completed. This work informed our decision about dosing in a nonhuman primate
(NHP) study.

 In
February 2021, we announced the successful completion of a NHP non-GLP repeat-dose toxicology study of SON-1010, the data from which
were used to inform the design of the cGLP toxicity study in preparation for IND submission. The objectives of the non-GLP study were
to evaluate the toxicity of SON-1010 in a repeat dose regimen at several dose levels and to gather critical data for the design of further
IND-enabling safety and toxicity studies. The study included both intravenous (IV) and SC routes of administration with a total of two
injections given 14 days apart. The highest dosage rate utilized in this study was greater than 50 times the anticipated clinical level
of exposure to patients. Study results included:

 Repeat
 dosing by IV and SC routes of administration was tolerated at both dose levels examined.
 As is typically observed with IL-12 administration, the white blood cell count dropped, and
 liver enzymes (ALT and AST) were elevated. These were transient effects that returned to
 baseline within 7 days following the second dose.

 SON-1010-related
 changes in the physiological observations, body weight, pathology, cytokines and immunophenotyping
 were seen, all of which were consistent with those on-target effects previously observed
 in single dose studies.

 A
 significant increase in IFN- levels, a key pleiotropic cytokine associated with anti-tumor
 activity, was observed following the initial dose of SON-1010 with lower IFN- levels
 observed following the second dose. This trend follows the published data from other studies
 of IL-12 in both humans and NHPs. Signs of cytokine imbalance, or uncontrolled increase of
 pro-inflammatory cytokines, including TNF-, IL-1, and IL-6 were notably absent
 from all dose levels tested in the study.

 Pharmacokinetic
 analysis indicated a mean serum half-life of approximately 40 hours in animals administered
 SON-1010 via SC injection. This is consistent with data from the previously conducted dose
 escalation phase of the study, which demonstrates a substantial improvement in half-life
 compared to the 13-19-hour half-life of naked, recombinant human IL-12.

 These
 results build on those from the work with the B16F10 mouse model of melanoma, where the mouse
 version of SON-1010 showed a 30-fold reduction in the dosage required to achieve a similar
 therapeutic effect compared to mouse IL-12. Taken together, we believe the observed extended
 half-life, improved therapeutic window and reduced dosing requirement, made possible by our
 F H AB technology, represent key advantages of SON-1010 as a potential immune oncology
 therapeutic.

 In
May 2021, we announced the successful completion of a cGLP repeat-dose study of SON-1010 in NHPs. The objectives of the study were to
evaluate the toxicity of SON-1010 in NHP using a subcutaneous (SC), repeat-dose regimen at three different dose levels versus untreated
controls and to evaluate the potential reversibility of any adverse findings. Study results included:

 The
 No Observed Adverse Event Level (NOAEL) following repeated administration in NHP was more
 than 50 times the anticipated equivalent human clinical dose with no evidence of cytokine
 release syndrome.

 Pharmacokinetic
 (PK) analysis of serum samples confirmed an enhanced profile of IL12-F H AB over
 recombinant human IL-12, with a half-life around 40 hours in NHP.

 A
 significant increase in IFN-, a key pleiotropic cytokine associated with anti-tumor
 mechanisms, was observed following dosing with IL12-F H AB.

 SON-1010
 related changes in clinical observations, body weight, clinical pathology, cytokines, and
 immunophenotyping were seen, all of which were consistent with on-target effects previously
 observed in nonhuman primates.

 By
 Day 38, all study subjects recovered to baseline (pre-study) laboratory values.

 Repeat
 dosing administration was tolerated at all dose levels examined.

 Biodistribution
Studies

 In
September 2023, we announced the completion of two independent in vivo proof-of-concept (POC) studies to show the biodistribution
of interleukin-F H AB molecules to the tumor microenvironment (TME), using labs with expertise in radiolabeling biologics and
 in vivo biodistribution analysis. The labs employed different radiolabeling methodologies ( 99m Tc or 89 Zr)
for mIL-12 and mIL12-F H AB, either with or without a polyhistidine tag (His-Tag). The two studies were completed using the
B16F10 mouse melanoma model to measure the accumulation of radiolabeled product and tumor volume inhibition over various time points.
Both studies indicated that mIL12-F H AB had significantly higher tumor accumulation, 2.5-4.7 times higher on average at the
longer time points, and increased retention when compared to mIL-12. Accumulation was demonstrated in tumors compared to normal mice,
and was transient in liver, kidney, and other organs, as expected. Importantly, radiolabeled mIL12-F H AB also demonstrated
measurable accumulation in the draining lymph nodes. Overall, these findings have important implications for therapeutic applications
of any mono- (ILx-F H AB) or bi-functional (ILx-F H AB-ILy) molecules demonstrating enhanced tumor targeting and accumulation,
as well as the potential for improved efficacy that could lead to a variety of drug candidates.

 Manufacturing
Development

 Manufacturing
work on the master cell bank expressing SON-1010, formulation development, and process development activities have all been completed,
in addition to drug product presentation (liquid and lyophilized). Multiple cGMP drug product lots have been successfully manufactured
and provide inventory for ongoing clinical trials.

 SON-1010
in the Clinic

 We
initiated the first-in-human (FIH), Phase 1 trial (SB101) to assess maximum dose for adult patients with advanced solid tumors and platinum-resistant
ovarian cancer (PROC) in April 2022 and we presented initial data from the study at AACR in April 2023. More patients will be enrolled
in the expansion portion of the study to confirm a recommended Phase 2 dose (RP2D). The very first patient dosed, with an aggressive
endometrial sarcoma, had substantial tumor shrinkage with complete resolution of her ascites at one point, and was clinically and radiographically
stable for nearly two years. Dosing in the first 3 cohorts was initially performed every 4 weeks but was subsequently done every 3 weeks
in the latter cohorts to enhance safety at higher doses. On September 18, 2024, we announced the completion of dose-escalation enrollment
in our Phase 1 SB101 clinical trial of SON-1010 in adult patients with advanced solid tumors. We went on to add an expansion cohort using
SON-1010 with trabectedin in STS and announced the first safety review on March 26, 2025. We expect to report topline efficacy data from
this trial in the second half of calendar year 2025.

 We
started a single-ascending dose (SAD) Phase 1 clinical study (SB102) in Australian healthy volunteers in July 2022 to carefully study
the PK and PD without interference from the impact of chemotherapy. Data from the SB102 study were reported during the calendar first
quarter of 2023 and were published in February 2024. Typical dose-related increases were seen with SON-1010 in the serum using a validated
electrochemiluminescence assay (Meso Scale Diagnostics (MSD)) after SC administration. Between the SON-1010 lowest- (50 ng/kg) and highest-
(300 ng/kg) dose cohorts (a 6x escalation in dose), the serum Cmax increased by 4.5x, and the time to reach that (Tmax) was approximately
11 h. This was associated with a corresponding 4.5 increase in the exposure area under the concentration time curve (AUC) from
time zero to the time of last observable concentration (AUC0-t), and the shape of the curves indicated typical two-compartment elimination
kinetics (Figure 5). The mean T across all dose cohorts was 104 h, and the serum concentrations for the majority of the participants
remained above the lower limit of quantitation (LLOQ) for 336 h. The mean Cmax value increased in a less than proportional manner between
dose cohorts, yielding nonlinear PK.

 The
MSD assay was also used to study repeat dosing in patients with advanced solid tumors in study SB101, including dose escalation up to
the same maximum dose used in SB102. Interestingly, the SON-1010 concentration curves, compared with a single dose in healthy volunteers
showed an atypically dissimilar contour (Figure 5). Single-compartment elimination kinetics were noted in patients with cancer, compared
to the two-compartment elimination kinetics observed in the healthy volunteers. The unusual PK results comparing these two clinical studies
suggest the potential for an improved local immune response due to targeting of the drug in the TME in patients, which could make SON-1010
more effective than prior efforts with systemic immunotherapy using rIL-12. The dose relationship also suggests target-mediated drug
disposition (TMDD), perhaps due to the retention of SON-1010 caused by albumin binding to SPARC in the TME and its slow release from
the tumor tissue.

5: SON-1010 levels were assessed frequently after dosing, then followed at the times indicated in each study. Subjects in study SB102
received a single dose, while patients in study SB101 were administered a fixed dose of SON-1010 (in the first two groups) or a desensitizing
first dose followed by a higher maintenance dose (in the last two groups) in the next cycle. Error bars (geometric mean CV%) are shown
for the lowest and highest groups, respectively.

 Among
the cytokine PD responses, the observed increases in IFN- were most pronounced and were dose-related, controlled, and prolonged.
SON-1010 induced IFN- in all active-drug subjects, which peaked at 24 to 48 hours then returned to baseline after 2 weeks (Figure
6). IFN- was the most prominent cytokine responding. The mean C max value disproportionately increased between the wide
range of doses tested, peaking at 977 pg/mL in the highest dose cohort (300 ng/kg). The time taken to achieve maximal IFN- blood
concentrations varied greatly between cohorts and did not correlate with the dose, with the mean time required to peak ranging from 28.8
to 85.0 hours. The AUC 0-t also increased disproportionately following the cohort doses and rose to 106,000 h*pg/mL in the
highest-dose cohort. However, the partial areas under the concentration-time curve from time zero to 24 h, 48 h, and 168 h increased
in a dose-dependent manner. The C max and AUC PK parameters in SB101 were similar after the second dose compared to the first
dose in SB102, while the IFN- PD parameters of C max and AUC were suppressed in SB101, presumably by induction of the
intracellular suppressors of cytokine signaling (SOCS) proteins.

 There
were small transient increases in IL-6, IL-8, IL-10, and TNF- after dosing but no consistent pattern was seen with IL-1,
IL-2, or IL-4, and there was no evidence of cytokine release syndrome (CRS). Safety was consistent with what has been reported previously;
adverse events have generally been mild/moderate, transient in nature, and have all been tolerable.

6: Cytokine levels were assessed frequently after dosing for PD, then followed on the days indicated for the rest of the SB102 study.

 A
Phase 1b/2a trial (SB221) of SON-1010 in combination with atezolizumab is in progress. This trial is a multicenter, dose-escalation,
and randomized proof-of-concept study being conducted in the US and Australia that targets platinum-resistant ovarian cancer (PROC).
The goal is to assess the safety, tolerability, PK, PD, and efficacy of SON-1010 administered subcutaneously (SC) in combination with
atezolizumab given intravenously (IV). SON-1010 has been safe and tolerable at all doses tested to date and a higher dose cohort (E7)
was recently added. Adverse events have generally been mild/moderate and transient in nature, with no study discontinuations for safety
reasons. In addition, adverse effects have been less numerous and less intense with subsequent doses.

 Safety
in both of the active cancer trials has been reviewed by their respective Safety Review Committees at each step during dose escalation.
Both trials use a 'desensitizing' first dose to take advantage of the known tachyphylaxis with rhIL-12, which minimizes toxicity
and allows higher maintenance doses. No dose-limiting toxicities or related serious adverse events have occurred to date. The safety
and toxicity profile that has developed is typical for a Phase 1 oncology trial, with the majority of adverse events (AEs) being reported
as mild. All have been transient, with no evidence of cytokine release syndrome. Of the 77 cancer patients dosed to date and evaluable
for follow-up at the latest cutoff overall, 41 (53%) had stable disease at their first follow-up scan, 32 of whom were progressing at
study entry. At four months follow-up, 33 of 73 evaluable patients remained stable at the second CT scan, suggesting clinical benefit
of SON-1010 in 45% of the patients overall, including 2 with PRs and 1 with a CR. A total of 19 of the 23 evaluable patients with sarcoma
(83%) had clinical benefit at the 1200 ng/kg dose.

for Chemotherapy Induced Peripheral Neuropathy

 Through
our pipeline expansion efforts, we have identified IL-6 as a cytokine with important biological properties when delivered as a standalone
molecule. Our lead clinical stage asset, SON-080, is the native human version of IL-6 that is manufactured in Chinese Hamster Ovary (CHO)
cells. A previous version of recombinant IL-6 has been studied in Phase 1 and Phase 2 clinical trials in cancer patients with thrombocytopenia
and in healthy volunteers. Our comparable version has advanced to the next stage of development in chemotherapy-induced peripheral neuropathy
(CIPN), a common side effect of treatment with antineoplastic agents in cancer. CIPN is a debilitating condition that manifests itself
as pain, numbness and tingling in the extremities. It has been reported in as many as 70% of patients undergoing specific cancer regimens
and is a leading cause of patients prematurely aborting chemotherapy. In animal experiments designed to replicate the clinical symptoms
of CIPN, recombinant IL-6 presented disease-modifying characteristics, including the potential to repair damaged nerves.

 Based
on the preclinical work, we believe that SON-080 can potentially regenerate damaged nerves, thereby addressing not only the pain-related
symptoms, but also the profound discomfort and motor disability CIPN patients often experience. In the nervous system, IL-6 has exhibited
neurotrophic-like properties, inducing anti-apoptotic gene expression, protecting neurons from toxic injuries, and promoting nerve regeneration
and remyelination. IL-6 has demonstrated the potential to elicit nerve regrowth and to re-establish both normal nerve function (Figure
7) and sensations (Figure 8) in various preclinical models of CIPN induced by cisplatin, taxol, or vincristine. Activity from treatment
with SON-080 was also observed in preclinical models of type 2 diabetic neuropathy, outlining the potential for benefit in DPN, and other
diseases affecting the nervous system or other organs. This broad activity suggests that the SON-080 mechanism of action might not be
restricted to a given class of chemotherapeutic drugs and could elicit a universal neuroprotective-neurorestorative response. Additionally,
preclinical data point to the potential of SON-080 to elicit both preventive and curative activity in neuropathies (Figure 8). This introduces
the possibility of treating cancer survivors who still suffer from neuropathies, a population representing between 10% and 60% of the
14 million cancer survivors in the US.

7: Activity of IL-6 on neuropathy induced by
taxol or cisplatin in rats measured at the histological (IENFD) or physiological (SNCV) levels.

8: Data show preventive and curative activity potentiating restoration of normal sensitivity (here, using a behavioral response to hot
stimulus in cisplatin-induced peripheral neuropathy).

 IL-6
has been studied in Phase 1 and Phase 2 studies in over 200 cancer patients with chemotherapy-induced thrombocytopenia. Trial enrollees
received SC doses ranging from 0.25 to 32 g/kg, either daily or thrice weekly. In these trials, where solid tumor cancers were
present in more than 75% of the patients treated, the cumulative doses of IL-6 averaged in the 8000 g range (122 - 54880 g),
and the mean duration of treatment equaled 28 days. One of the trials covered six chemotherapy cycles, with an IL-6 treatment period
extending to 203 days. An exacerbation of either cancer or neuropathy was not observed in any of these trials.

 The
therapeutic MTD of SON-080 was determined in four studies by means of cohort dose escalations of sequential IL-6 dose groups utilizing
established common toxicity criteria. When administered daily, the MTD following daily SC injection was determined to be between 3 and
8 g/kg; when given 3 times per week, the MTD was estimated to be > 10 g/kg. The most clinically relevant toxicities that defined
the treatment-limiting dose in these studies were flu-like symptoms and neurocortical toxicity, manifested by somnolence, restlessness,
confusion, hallucination, and disorientation. We anticipate using a dose of SON-080 that is 10- to 50-fold less than the prior IL-6 MTD
and expect a more benign adverse event profile going forward.

 These
data form the basis for our clinical trials in CIPN conducted in Australia. We defined the two doses used to be significantly below the
MTD, as supported by preclinical studies. For comparison, our target dose was to provide a cumulative dose that is 25 times below the
mean cumulative dose reached for a similar period of dosing. We also believe that SON-080 has significant potential for treating other
neuropathies, including DPN, as well as other diseases of the nervous system, and we are currently evaluating forward development paths
for these opportunities. We initiated an ex-US Phase 1b/2a pilot-scale efficacy study with SON-080 in CIPN in July 2022. The Data Safety
Monitoring Board (DSMB) reviewed the initial safety findings after enrollment was completed in Part 1. Data from that study was announced
in July 2024, showing safety, tolerability and preliminary evidence of improvement in symptoms.

for Diabetic Peripheral Neuropathy

 In
addition to our CIPN program with SON-080, our DPN program will explore the clinical utility of IL-6 in diabetic peripheral neuropathy
(DPN) through execution of the Alkem Agreement. DPN is currently diagnosed in 50%-80% of the diabetic patient population. According to
World Health Organization (WHO) projections, the prevalence of diabetes is estimated to exceed 350 million people in 2030. Neuropathy
is progressive and develops over the continuum of diabetes. The condition involves intractable pain with no obvious origin, as well as
non-pain-related symptoms such as loss of balance, lack of sensation, and autonomic dysfunctions, among others. These deficits impair
quality of life and lead to a reduction of life expectancy. Diabetic foot ulcers are a major cost associated with diabetic medical care
and are also directly linked to the development of DPN.

 Notwithstanding
the seriousness of the condition, current treatments only address the pain component of DPN, leaving disease progression and non-pain-related
symptoms unaddressed. Furthermore, the few drugs currently used to reduce pain (i.e. Cymbalta, Lyrica, cannabinoids, opioids) are only
partially efficacious and are associated with major side effects, which typically delays their introduction into a patient's care.
For these reasons, DPN remains a substantial unmet medical need with high commercial market potential.

 Exercise
has long been recognized by WHO and caregivers as an effective means of treating and potentially preventing diabetes and several pilot
studies have provided evidence to support its role in improving DPN. However, a majority of diabetic patients are physically unable to
perform exercise. Regular exercise is known to improve diabetes-associated markers such as HbA1c and glucose homeostasis, to ameliorate
heart rate variability and to stimulate recovery of both nerve function and blood flow. Recent evidence demonstrates that IL-6 is released
during exercise and mediates some of the beneficial effects of physical activity. We have completed preclinical work in animal models
of DPN in which exogenous administration of IL-6 exhibited restorative activity in epidermal nerve density, nerve function, blood flow,
and reactions to painful or disturbing stimuli. In this context, SON-080 may become a future pivotal disease-modifying therapy for the
treatment of DPN.

 In
vitro data on oligodendrocytes or organotypic cultures have shown that IL-6 potentially induces myelin gene expression by Schwann
cells or oligodendrocytes (Figure 9).

9: Illustration of survival (A) and differentiation of oligodendrocytes as assessed by myelin basic protein (MBP), proteolipid protein
(PLP) and its spliced variant expression (B).

 Valerio
et al, Mol Cell Neurosci 21 (2002) 602-615.

 Pizzi
et al, Mol Cell Neurosci 25 (2004) 301-311.

 The
neuroprotective activity of IL-6 has been evaluated in various paradigms, including excitotoxicity. As well as protecting neurons, IL-6
potentially promotes axonal regeneration and restoration of functional synapses (Figure 10).

10: Axonal regeneration activity in hemi-sectioned slices of the hippocampus (A), with increased expression of growth-associated protein
43 (GAP43) in injured slices but not in normal slices (NL) (B). Axonal regeneration activity across the lesion (C) and functional recovery
(D) of suppressed (A) excitatory postsynaptic potential (EPSP). Hakkoum et al, J Neurochem 100 (2007) 747-757.

 The
activity of IL-6 in preclinical models of DPN has been evaluated by three independent laboratories. This work has shown that IL-6 exhibits
positive activity in neuropathy in a dose-dependent manner and may also help restore normal physiological parameters after neuropathy
is well established (i.e. four weeks after the induction of diabetes and consequential neuropathy). The beneficial activity is observed
on motor (Figure 11A) and sensory (Figure 11B) nerve function (conduction velocity), and behaviorally by measuring thermal and tactile
perceptions. In addition to the direct effects on myelin and axons previously observed in vitro, IL-6 has also been observed to
have activity in restoring microvascular blood flow in the nerve in vivo (Figure 11C-E), which is a major driver of diabetic neuropathies.
Histological analyses of nerves in animals receiving preventive treatment with IL-6 during the development of neuropathy suggest that
IL-6 exhibits protective activity on myelin and may play a role in preserving nerve fiber integrity, as well as nerve conduction velocity
and the perception of sensations.

11: Curative treatment with IL-6 in rats with established diabetic neuropathy induced by streptozotocin. Cameron et al, Exp Neurol 207
(2007) 23-29.

 Beyond
the oncology indication, 15 pilot studies totaling 167 subjects, including 27 patients with type 2 diabetes, were conducted by independent
academic groups not affiliated with us to evaluate the role of IL-6 in exercise and metabolism. The peer-reviewed results suggest that
low dose IL-6 mimics several beneficial aspects of exercise, including expression of anti-inflammatory molecules, increased lipid metabolism,
decreased insulin secretion, and activation of the STAT3 signaling pathway in muscle.

 We
believe these data provide strong support for the clinical development of IL-6 in DPN. Through its mechanism of action and potential
disease modifying activity, low dose IL-6 may offer a therapeutic solution for neuropathic symptoms, as well as for cardiac autonomic
neuropathies (CAN), in diabetic patients. We intend to use data collected from our CIPN studies with SON-080 to inform our decision about
potential next development steps for SON-080 in DPN.

 SON-080:
Alkem Agreement

 In
October 2024, we announced the execution of the Alkem Agreement for the treatment of DPN in India as well as the manufacturing, marketing
and commercialization of SON-080 for the treatment of CIPN and autonomic neuropathy in India. Pursuant to the terms of the Alkem Agreement,
Alkem will bear the cost of certain expenses, including conducting clinical studies, preparing and filing regulatory applications and
undertaking other developmental and regulatory activities for commercializing SON-080 for DPN in India. Alkem has agreed to pay us, within
12 weeks of the Effective Date of the Alkem Agreement, a $1.0 million upfront non-refundable cash payment, of which $0.5 million was
paid in October 2024 and another $0.5 million was paid in May, 2025, which after tax withholdings resulted in a net payment of $0.8 million.
Pursuant to the licensing agreement with ARES Trading, we will pay a sublicensing fee corresponding to 14% of the aggregate upfront amount
received from Alkem. In addition, Alkem has agreed to pay Sonnet potential additional milestone payments totaling up to $1.0 million,
subject to the achievement of certain development and regulatory milestones. Furthermore, Alkem is obligated to pay us a royalty equal
to a percentage in the low double digits of net sales less Alkem's actual cost of goods sold and Alkem's sales and marketing
and related expenses of SON-080 in India until the first commercial sale of a competitive Intermittent Low Dose IL-6 compound as set
forth in the Alkem Agreement.

 SON-080:
New Life Therapeutics Agreement

 In
May 2021, we announced the execution of the New Life Agreement, described in detail below, which resulted in the out-license of our IL-6
(SON-080) asset for DPN to New Life. The licensed territory includes the 10 ASEAN countries of Singapore, Malaysia, Indonesia, Thailand,
The Philippines, Cambodia, Brunei, Vietnam, Myanmar, and Lao PDR. In June and July of 2021, we amended the New Life Agreement to make
Sonnet BioTherapeutics, CH SA (rather than Sonnet BioTherapeutics, Inc.) the party to the New Life Agreement (First Amendment) and we
also made Sonnet BioTherapeutics, Inc. the Guarantor of performance under the New Life Agreement (Second Amendment), respectively. In
addition to the initial $0.5 million received by us upon signing of the LOI in August 2020, an additional $0.5 million non-refundable
upfront payment was received by us upon execution of the New Life Agreement. These payments were not subject to the sublicensing fee
obligations owed Merck KGaA as set forth in the ARES License Agreement and subsequent amendments (see 'ARES' below). According
to the terms of the New Life Agreement, we could receive a $1.0 million deferred license fee within 30 days of the achievement of an
early commercial sales milestone, a total of up to $19.0 million in milestone payments and a tiered royalty ranging from 12% to 30% on
commercial sales. On December 2, 2024, New Life provided us with written notice of its intention to exercise its Give Back Option pursuant
to the New Life Agreement. We were informed by New Life that it has elected to move its business in a different direction. We are negotiating
the terms of the Give Back Option with New Life. If we and New Life are unable to reach a mutual agreement on such terms prior to initiation
of a Phase III Trial, the Give Back Option will expire unexercised, and New Life will retain the rights granted subject to the terms
and conditions of the New Life Agreement. Furthermore, the New Life Agreement will remain in effect unless otherwise terminated by either
us or New Life pursuant to the terms and conditions of the New Life Agreement.

 SON-1210

 SON-1210,
our lead bifunctional construct, combines IL-12 and IL-15 conjugated to F H AB. These cytokines were selected based on synergistic
biologic activity. IL-12 is known to increase IL-15R receptor and IFN-, activate NK and T H 1 (tumor killing) cells,
and decreases Tregs. IL-15 acts through its specific receptor, IL15R, which is expressed on antigen-presenting dendritic cells
(APC), monocytes, and macrophages. In addition to the potential antitumor properties of IL-12 described above, we believe IL-15 can potentially
add the following complementary activity:

 Induce
 differentiation and proliferation of T, natural killer (NK), and B cells

 Enhance
 cytolytic activity of CD8+ T cells

 Induce
 long-lasting CD8+ memory T cells enhancing immune surveillance against cancer for month/years

 Stimulate
 differentiation and immunoglobulin synthesis by B cells

 Induce
 maturation of dendritic cells

 Upregulate
 IL-12 1 receptor expression

 We
have conducted a number of preclinical studies with SON-1210 and the murine version (mIL12-F H AB-hIL15), and this work was
published in December 2023. Mice injected once or three times with the doses indicated had suppressed tumor growth in the B16F10 melanoma
model compared to controls (Figure 12). Compared to placebo-treated mice, mIL12-F H AB-hIL15 mice showed slower tumor growth
in a dose-dependent manner. A single dose of 5 g was fully effective, whereas a single dose of 10 g did not further slow the
tumor volume increase. The 3x group showed an even more effective response, with tumor growth delayed until day 14. All groups treated
with mono- or bifunctional cytokine(s) linked to F H AB showed significant growth inhibition, starting on day 4. A time-to-event
efficacy approach in the mice revealed an increase in survival following mIL12-F H AB-hIL15 treatment, with 1 g inducing
12-day median survival, whereas 10 g induced 19-day survival, compared to 10 days in the tumor-bearing placebo mice. The median survival
with a single mIL12-F H AB-hIL15 dose of 5 g was 18.5 days, which was prolonged to 21 days after 3 doses. Thus, there was
a clear dose-dependent effect of mIL12-F H AB-hIL15 treatment on survival (p < 0.01).

12: These data show an enhanced reduction in tumor growth with mIL12-F H AB-hIL15 compared to concomitantly administered,
naked mIL-12 and hIL-15 in a mouse model of melanoma.

 Analysis
of PD cytokine response 3 days after dosing (Figure 13) showed that mIL12-F H AB-hIL15 increased IFN-, IL-10, IL-12, IL-6,
and TNF levels in a dose-dependent manner compared to the tumor-bearing placebo group, with no evidence of cytokine release syndrome.
There was a substantial increase in IFN- levels with a single dose of mIL12-F H AB-hIL15 to over 2000 pg/mL at 3 days,
whereas mild increases were observed in other cytokines. Two doses of 5 g increased the peak response to almost 9000 pg/mL. By day
8, the cytokine response pattern was sustained but generally dampened, with maximal IFN- levels returning to 500 pg/mL after a
single dose or 2100 pg/mL after three doses of mIL12-F H AB-hIL15 at 5 g. However, TNF levels remained elevated.

13: The combination of IL-12 and IL-15 in cis linked to the F H AB displayed synergistic activity, leading to enhanced
IFN- activity versus the combined cytokines or IL12-F H AB alone in a mouse model of melanoma.

 In
February 2023, we announced the successful completion of two IND-enabling toxicology studies with SON-1210 in NHPs. A NHP non-GLP dose
escalation study of SON-1210 was completed in September 2022, and a GLP repeat dose NHP study was completed in the fourth calendar quarter
of 2022. The cGMP manufacturing for bulk drug is complete, and a lyophilized formulation of drug product was manufactured in early 2023
to support the FIH clinical study. The initial tox material supported the non-GLP study, while the GLP study was being performed on the
same lot of GMP drug as intended for the Phase 1 clinical study. The regulatory authorization process for SON-1210 is scheduled to commence
with the Sarcoma Oncology Center as they plan to conduct an investigator-initiated Phase 1/2a clinical study to evaluate SON-1210 in
combination with NALIRIFOX (the combination of liposomal irinotecan, 5-fluorouracil/leucovorin, and oxaliplatin), which
is licensed for the treatment of front line metastatic PDAC.

 SON-1210:
Sarcoma Oncology Center Agreement

 On
August 19, 2024, we announced that we had entered into a Master Clinical Collaboration Agreement (the "Sarcoma Agreement")
with the Sarcoma Oncology Center, to advance the development of SON-1210, our bifunctional IL12-F H AB-IL15 asset. Preclinical
data published on December 20, 2023 demonstrated the potential of SON-1210 for solid tumor immunotherapy. An Innovative Immuno-Oncology
Consortium ("IIOC") led by oncology experts funded by the Sarcoma Oncology Center will conduct an investigator-initiated
Phase 1b/2a study of SON-1210. Under the terms of the Sarcoma Agreement, the IIOC, in collaboration with us, will prepare a protocol
and conduct clinical study to evaluate SON-1210 in combination with several chemotherapeutic agents for the specific treatment of metastatic
pancreatic cancer. We will provide the study drug, SON-1210, and support operational services for the planned Phase 1b/2a study.

 Discovery
Assets: SON-1410 (IL18-F H AB-IL12), SON-1411 (IL18 BPR -F H AB-IL12) and SON-1400 (IL18 BPR -F H AB)

 In
August 2021, we announced the selection of a novel development candidate after completing comparative studies in a mouse melanoma model.
The candidate represents our second bifunctional compound integrating IL-12 and IL-18 with our F H AB platform. IL-18 can regulate
both innate and adaptive immune responses through its effects on natural killer (NK) cells, monocytes, dendritic cells, T cells, and
B cells. IL-18 acts synergistically with other pro-inflammatory cytokines to promote interferon- (IFN-) production by NK
cells and T cells. Systemic administration of IL-18 has been shown to have anti-tumor activity in several animal models. Moreover, tumor-infiltrating
lymphocytes (TILs) express more IL-18 receptors than other T cells.

 IL18-F H AB-IL12
(SON-1410) showed statistically significant tumor size reduction in a mouse melanoma study compared with the placebo, as well as a dose
response. The data demonstrated:

 Compound

 Day 0, Single Dose
 Tumor @ 100 mm 3

 Day 8 Tumor Volume (mm 3 +/- SEM), N=8

 Day 8 Percentage Tumor Shrinkage

 Placebo

 NA

 1747 +/- 301

 —
 %

 IL18-F H AB-IL12

 1 g

 918 +/- 130

 %

 IL18-F H AB-IL12

 5 g

 619 +/- 141

 %

 A
separate mouse study was also performed comparing the selected version of IL18-F H AB-IL12 with two other candidates, GMCSF-F H AB-IL18
and GMCSF-F H AB-IL12. The comparison data indicated significantly greater reduction in tumor volume, along with higher IFN-
levels and immune cell responses (NK, NKT, Th1, and cytotoxic CD8 T cells) using IL18-F H AB-IL12, compared with GMCSF-F H AB-IL12
or GMCSF-F H AB-IL18. However, published IL-18 clinical trials have shown that while it is well tolerated, IL-18 has shown poor
efficacy in the treatment of cancers, most likely due, in large part, to the high co-expression of IL-18 binding protein (IL-18BP) in
the TME. In particular, IL-18BP serves as a "decoy receptor" that binds to IL-18 with much higher affinity, compared with
the IL-18 receptor (IL-18Rc) complex, thereby causing a negative feedback loop with IL-18 and inhibiting IL-18-mediated TIL activation.
Thus, there exists potential for the discovery of IL-18 variant compositions that could harness the therapeutic potential of IL-18 for
the treatment of cancers. Our strategy for amino acid modifications to rIL-18 was based on a compilation of literature review, 3D X-ray
crystallography structures, and computer modeling analysis. Subsequently, certain IL-18 variant sequences were synthesized, engineered
into expression constructs and manufactured at small scale in either CHO cell culture or E. coli. Highly purified milligram quantities
of SON-1411 or SON-1400 were analyzed in vitro for IL-18Rc or IL-18BP binding activities, respectively, using the HEK-Blue
and Bright-Glo Luciferase IL-18Rc reporter assays. In vitro results for at least one variant of IL-18 showed equivalent
binding to the IL-18Rc, compared to the wild-type IL-18 reference molecule, concomitant with no or reduced binding to IL-18BP.

 We
face numerous challenges and uncertainties with respect to the development and commercialization of our therapeutic compounds, including
our F H AB technology. Please see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K for more information.

 Competition

 The
pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis
on proprietary products. While we believe that our technology, development experience and scientific knowledge provide us with competitive
advantages, we face potential competition from many different sources, including large pharmaceutical and biotechnology companies, academic
institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and
establish collaborative arrangements for the research, development, manufacturing and commercialization of cancer immunotherapies. Any
product candidates that we successfully develop and commercialize will compete with new immunotherapies that may become available in
the future.

 We
compete in the segments of the pharmaceutical, biotechnology and other related markets that develop immuno-oncology treatments. There
are many other companies that have commercialized and/or are developing immuno-oncology treatments for cancer including large pharmaceutical
and biotechnology companies, such as Amgen, AstraZeneca/MedImmune, Bristol-Myers Squibb, Merck, Novartis, Pfizer and Roche/Genentech.

 We
face significant competition from pharmaceutical and biotechnology companies that target the use of specific cytokines or other large
molecules as immunomodulating therapies in the cancer setting. These generally include, single- or bi-specific antibodies, fusion proteins,
antibody drug conjugates and targeted vaccines.

 With
respect to SON-080, we are aware of other companies developing products to treat CIPN, including but not limited to Kyorin Pharmaceuticals
and Trevana; however, we believe we are the only company studying the use of a disease-modifying cytokine for the indication. Regarding
DPN, there are several companies selling commercially approved drugs, including but not limited to Eli Lilly, Ono Pharmaceuticals, Pfizer,
Collegium Pharmaceuticals and Daiichi Sankyo, as well as a number of companies with compounds in clinical development, including but
not limited to Avanir Pharmaceuticals, Pfizer, Vertex Pharmaceuticals, Applied Therapeutics, and Helixsmith.

 With
respect to our first F H AB-derived candidate, SON-1010, we are aware of other competing IL-12 programs, which include, but
are not limited to those being developed by Xilio Therapeutics, Werewolf Therapeutics, Dragonfly Therapeutics, Krystal Biotech and Precigen.
We believe that our F H AB integrated IL-12 is tumor-targeted with an enhanced PK profile that differentiates it from the competition.

 With
respect to our earlier stage pipeline F H AB product candidates SON-1210 and SON-1411, we are not aware of any other competing
companies working on these specific bifunctional programs.

 Many
of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources
and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals
and marketing approved drugs than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may
result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also
prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors
also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites
and enrolling subjects for our clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

 We
could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer,
more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we or our collaborators
may develop. Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval
for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter
the market. The key competitive factors affecting the success of all our product candidates, if approved, are likely to be their efficacy,
safety, convenience, price, the effectiveness of companion diagnostics, if required, the level of biosimilar or generic competition and
the availability of reimbursement from government and other third-party payors.

 Manufacturing

 We
rely on contract development and manufacturing organizations, or CDMOs, to produce our drug candidates in accordance with the FDA's
current Good Manufacturing Practices, or cGMP, regulations for use in our clinical trials. The manufacture of biopharmaceuticals is subject
to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of record keeping,
production processes and controls, personnel and quality control. Our pipeline molecules are manufactured using the standard industrial
Chinese Hamster Ovary (CHO) platform with common bio-chemical engineering from readily available raw materials.

 To
meet our projected needs for clinical supplies to support our activities through regulatory approval and commercial manufacturing, the
one of the CDMOs with whom we currently work has increased their scale of production, and is building a cGMP manufacturing site in the
United States, available by Q3 calendar year 2024. The landscape for CDMOs is strong and there are multiple potential sources for contract
manufacturing. We have not yet engaged alternate suppliers since our current CDMO is able to scale production and continues to successfully
manufacture our pipeline. Our relationships with CDMOs are managed by internal personnel with extensive experience in pharmaceutical
development and manufacturing.

and Other Commercial Arrangements

 Janssen
Pharmaceuticals (Johnson & Johnson)

 In
October 2022, we announced a collaboration agreement with Janssen Biotech, Inc. (Janssen), one of the Janssen Pharmaceutical Companies
of Johnson & Johnson, where in vitro and in vivo efficacy of SON-1010 (IL12-FHAB), SON-1210 (IL12-F H AB-IL15)
and SON-1410 (IL18-F H AB-IL12) will be evaluated in combination with certain Janssen proprietary cell therapy assets. The agreement
was facilitated by Johnson & Johnson Innovation. Under the terms of the agreement, we will supply the three referenced compounds
for use in head-to-head in vitro and in vivo CAR-T efficacy studies. If successful and subject to provisions of the agreement,
Janssen could exercise its option and we could then seek a license and/or an expanded collaboration.

 Alkem
Laboratories Limited

 On
October 8, 2024, we entered into the Alkem Agreement with Alkem. Pursuant to the Alkem Agreement, we granted Alkem an exclusive license
(with the right to sublicense) to research, develop, manufacture, import, export, market, use and commercialize pharmaceutical products
containing our IL-6 (SON-080) asset (or any derivatives, fragments or conjugates thereof) (the "Compounds") (such products,
the "Products") for the treatment of diabetic peripheral neuropathy (DPN) (the "DPN Field") and to manufacture,
import, export, market, use and commercialize Products for the treatment of chemotherapy-induced peripheral neuropathy (CIPN) and autonomic
neuropathy (together with the DPN Field, collectively, the "Fields") in India (the "Exclusive Territory"). Except
as provided for in the Alkem Agreement, we agreed not to develop, use, sell, offer or otherwise commercialize any Compounds or Products
for use in the DPN Field in the Exclusive Territory during the term of the Alkem Agreement. We retain all rights to manufacture Compounds
and Products anywhere in the world. We will enter into a follow-on supply agreement with Alkem pursuant to which we will manufacture
for Alkem Compounds and Products for development and commercialization thereof, in accordance with the Alkem Agreement on terms to be
negotiated by the parties. Pursuant to the terms of the Alkem Agreement, Alkem will bear the cost of, and be responsible for, among other
things, conducting clinical studies and additional non-clinical studies (if any, subject to both parties' approval), preparing
and filing applications for regulatory approval and undertaking other developmental and regulatory activities for commercializing Products
in the DPN Field in the Exclusive Territory. Alkem will own and maintain all regulatory filings and approvals for Products in the Exclusive
Territory. Upon payment of a Clinical Data Access Fee (as defined in the Alkem Agreement), we will have rights to access and use the
data generated by the clinical trials conducted in connection with the Alkem Agreement.

 In
consideration of the license and other rights granted by us, Alkem agreed to pay us, within 12 weeks of the effective date of the License
Agreement, a $1.0 million upfront non-refundable cash payment, of which two $0.5 million payments were paid in October 2024 and April
2025, which after tax withholdings resulted in a net payment of $0.8 million, as well as potential additional milestone payments totaling
up to $1.0 million subject to the achievement of certain development and regulatory milestones. In addition, during the Royalty Term
(as defined below), Alkem is obligated to pay us a royalty equal to a percentage in the low double digits of net sales less Alkem's
actual cost of goods sold and Alkem's sales and marketing and related expenses of Products in the Exclusive Territory. The "Royalty
Term" means, on a Product-by-Product basis in the Exclusive Territory, the period commencing on the date of the First Commercial
Sale (as defined in the License Agreement) of such Product in the Exclusive Territory and continuing until Alkem ceases Commercialization
(as defined in the Alkem Agreement) of such Product in the DPN Field. The Royalty Term will expire upon the first commercial sale of
a competitive Intermittent Low-Dose IL6 compound as set forth in the Alkem Agreement.

 We
retain the sole responsibility to pay our third party licensors to the extent such obligations are applicable to the rights granted to
Alkem with respect to the Products and will remain liable for all obligations under the license related to the Compounds and Products
between us and ARES Trading SA. The Alkem Agreement will remain in effect in perpetuity until terminated as a result of breach, bankruptcy
or upon 90 days prior written notice, in each case as set forth in the Alkem Agreement. Pursuant to the Alkem Agreement, the parties
agreed to form a joint development committee to provide strategic oversight of the parties' collaboration activities under the
Alkem Agreement, including to coordinate the development of Products in the Exclusive Territory. The Alkem Agreement also contains customary
representations, warranties and covenants by both parties, as well as customary provisions relating to indemnification, confidentiality
and other matters.

 Sarcoma
Oncology Center

 On
August 19, 2024, we announced that we had entered into a Master Clinical Collaboration Agreement (the "Sarcoma Agreement")
with the Sarcoma Oncology Center, to advance the development of SON-1210, our bifunctional IL12-F H AB-IL15 asset. Preclinical
data published on December 20, 2023 has demonstrated the potential of SON-1210 for solid tumor immunotherapy. An Innovative Immuno-Oncology
Consortium ("IIOC") led by oncology experts funded by the Sarcoma Oncology Center will conduct an investigator-initiated
Phase 1b/2a study of SON-1210 in pancreatic cancer, an indication with significant unmet medical need. Under the terms of the
Sarcoma Agreement, the IIOC, led by Dr. Sant Chawla, Director of the Sarcoma Oncology Center, in collaboration with us, will prepare
a protocol and conduct an investigator-initiated Phase 1b/2a clinical study to evaluate SON-1210 in combination with several chemotherapeutic
agents including but not limited to the combination of liposomal irinotecan, 5-fluorouracil/leucovorin, and oxaliplatin ("NALIRIFOX")
for the specific treatment of metastatic pancreatic cancer. NALIRIFOX is the U.S. FDA regimen approved for the treatment of metastatic
pancreatic cancer in the front-line setting. We will provide the study drug, SON-1210, and support operational services for the planned
Phase 1b/2a study.

 Roche

 In
January 2023, we announced a collaboration agreement with Roche for the clinical evaluation of SON-1010 with atezolizumab (Tecentriq).
We have entered into a Master Clinical Trial and Supply Agreement ("MCSA") with Roche, 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, we and Roche will provide SON-1010 and atezolizumab, respectively, for use in the Phase 1b/Phase 2a combination
safety, dose-escalation, and efficacy study (SB221).

 New
Life

 In
May 2021, we entered into the New Life Agreement with New Life. Under the New Life Agreement, we 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 ability to exercise an 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 is 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 is exclusive and expired on December 31,
2021. In June and July of 2021, we amended the New Life Agreement to make Sonnet BioTherapeutics CH SA (rather than Sonnet BioTherapeutics,
Inc.) the party to the New Life Agreement (First Amendment) and we also made Sonnet BioTherapeutics, Inc. the Guarantor of performance
under the New Life Agreement (Second Amendment), respectively.

 We
will retain all rights to manufacture Compounds and Products anywhere in the world. New Life and us will enter into a follow-on supply
agreement pursuant to which we will supply to New Life Products for development and commercialization thereof in the DPN Field (if applicable)
(and the CIPN Field, if applicable) in the Exclusive Territory on terms to be negotiated by the parties. We 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.

 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 commercializing Products in the DPN Field (if applicable) (and the CIPN Field,
if applicable) in the Exclusive Territory.

 New
Life paid us a $0.5 million non-refundable upfront cash payment in August 2020 upon executing a letter of intent to negotiate a license
agreement and a $0.5 million non-refundable upfront cash payment in June 2021 in connection with the execution of the New Life Agreement.
These payments were not subject to the sublicensing fee obligations owed Merck KGaAas set forth in the ARES License Agreement and subsequent
amendments(see below under'ARES'). 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 us 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 us 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 DPN Field (or
CIPN Field, if applicable).

 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) our Buy Back Option and New Life's Give Back
Option (as defined below).

 In
addition, New Life granted to us an exclusive option to buy back the rights granted by us to New Life (the "Buy Back Option")
and we granted New Life the right to give back the rights with respect to Products in the DPN Field and/or the CIPN Field (if applicable)
in one or more countries in the Exclusive Territory on terms to be agreed upon (the "Give Back Option"), which options will
expire upon the initiation of a Phase III Trial for the applicable Product. On December 2, 2024, New Life provided us with written notice
of its intention to exercise its Give Back Option pursuant to the New Life Agreement. We were informed by New Life that it has elected
to move its business in a different direction. We are negotiating the terms of the Give Back Option with New Life. If we and New Life
are unable to reach a mutual agreement on such terms prior to the initiation of a Phase III Trial, the Give Back Option will expire unexercised,
and New Life will retain the rights granted subject to the terms and conditions of the New Life Agreement. Furthermore, the New Life
Agreement will remain in effect unless otherwise terminated by either us or New Life pursuant to the terms and conditions of the New
Life Agreement.

 XOMA

 We
(as successor-in-interest to Oncobiologics, Inc. ("Oncobiologics"), after Oncobiologics spun-off certain assets into us and
concurrently distributed all of its shares in us on a pro rata basis to Oncobiologics's stockholders on April 6, 2015) and XOMA
(US) LLC ("XOMA") are party to a Discovery Collaboration Agreement, dated July 23, 2012 and an Amendment of Discovery Collaboration
Agreement, dated May 7, 2019 (together, the "Collaboration Agreement") pursuant to which XOMA granted us a non-exclusive,
non-transferrable 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 (each, a "Product").
We are obligated to make contingent milestone payments to XOMA totaling $3.75 million on a Product-by-Product basis upon the achievement
of certain development and approval milestones related to a Product. To that point, we have paid $0.5 million for initiation of enrollment
of a Product ( i.e., SON-1010) in a Phase 1 Trial. We have also agreed to pay XOMA low single-digit royalties on net sales of Products
sold by us. Royalties on each Product are payable on a country-by-country basis until the later of (i) a specified period of time after
the First Commercial Sale (as defined in the Collaboration Agreement), and (ii) the date of expiration of the last valid claim in the
last-to-expire of the issued patents covered by the Collaboration Agreement. The Collaboration Agreement may be terminated by either
party for cause and contains customary indemnification provisions.

 ARES

 On
August 28, 2015, Relief, now one of our wholly owned subsidiaries, signed 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 us a sublicensable, exclusive, worldwide, royalty-bearing license on proprietary patents to research, develop, use and commercialize
products (each, a "Product") using atexakin alfa ("Atexakin"), a low dose formulation of human IL-6 in peripheral
neuropathies and vascular complications. Three patents are included in the ARES License Agreement that protect the use of Atexakin to
treat i) diabetic neuropathy, ii) chemotherapy-induced peripheral neuropathy and iii) vascular complications.

to the ARES License Agreement, we will pay ARES high single-digit royalties on net sales of Products sold by us. 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
(as defined in the ARES License Agreement) in such country, and (ii) the last date on which such product is covered by a valid claim
in such country. If a Product is not covered by a valid claim in a country or such valid claim has expired or been invalidated before
the twelfth (12th) anniversary of the date of the First Commercial Sale of such Product in such country, then the royalty rate will be
reduced by fifty percent (50%). We will also pay ARES a sublicensing fee that is a percentage of the proceeds received from a sublicensing
event ("Sublicensing Receipts") using a sliding scale (which percentage decreases at later stages of clinical development
at which the sublicensing event occurs) that starts in the low double digits and decreases to the high single digits. The ARES License
Agreement may be terminated by us for convenience at any time or by either party upon a breach by the other party. The Ares License agreement
contains customary indemnification provisions.

 The
Ares License Agreement was amended effective November 1, 2021, in order to clarify the application of some of the terms and conditions
contained therein related to sublicensing. In particular:

 We
 are now authorized to grant sublicenses to third parties without the prior written consent
 of ARES, providing that the financial condition of any such sublicenses reflects fair market
 value as determined by us in good faith.

 the initial conditions by which we would remunerate ARES out of Sublicensing Receipts were
 unclear, the ARES License Agreement was clarified such that we will now have to pay ARES
 a percentage of all Sublicensing Receipts in case the relevant sublicense agreement is signed
 before or after completion of the first Phase 1 clinical trial (as opposed to payment only
 in case the relevant sublicense agreement is signed after completion of the first Phase 1
 clinical trial, as was set in the original ARES License Agreement).

 It
 was agreed that the foregoing clarification would only apply to future sublicensing agreements,
 and with respect to the royalties (but not the milestone payments) that may be generated
 from the New Life Agreement.

 Intellectual
Property

 With
respect to our patent portfolio, we have five issued patents (U.S., Japan, China, New Zealand and Russia), and we have filed patent applications
in nine (9) other major markets which are directed to numerous fusion proteins that include the Fully Human Albumin Binding (F H AB)
domain. If granted, these resulting patents would expire on dates ranging from 2038 to 2041, subject to patent term extensions under
certain circumstances. The patent application filings include:

 National
 filings corresponding to WO/2018/151868 (PCT/US2018/00085) - This application is directed
 to fully human "Albumin Binding Domain (F H AB) Fusion Proteins," including
 fusion proteins with scFv's (e.g., anti-TGF, PD-L1, TNF, IL-1, IL-6, IL-7, IL-8,
 etc.), fusion proteins with cytokines (e.g., IL-2-F H AB, IL-12-F H AB,
 IL-15-F H AB, IL-7-F H AB, etc.) and combinations of two cytokines, such
 as IL-12-F H AB-IL-15, GM-CSF-F H AB-IL-18, and IL-18-F H AB-IL-12;
 and methods of treatments using such F H AB fusion proteins. A patent was issued
 in the United States on June 8, 2021, as U.S. Patent No. 11,028,166. A patent was issued
 in Japan on December 23, 2022, as Japanese Patent No. 7200138. A patent was issued in Russia
 on December 21, 2022, as Russian Patent No. 2786444. A patent was issued in New Zealand on
 October 3, 2023, as New Zealand Patent No. 756674. A patent was issued in China on April
 26, 2024, as Chinese Patent No. ZL201880016019.1. U.S. Patent No. 11,028,166 is currently
 estimated to expire on March 26, 2039, while Japanese Patent No. 7200138, Russian Patent
 No. 2786444, Chinese Patent No. ZL201880016019.1 and New Zealand Patent No. 756674 are estimated
 to expire on February 20, 2038. As of October 22, 2024, the European Patent Office sent a
 Communication under Rule 71(3) EPC indicating that their office intends to grant this major
 territory patent in those European countries selected by us. Thus, we have opted to pursue
 EP patent validation using the classic national EP validation procedure whereby countries
 that we wish to have validated (i.e., patent filings and requisite foreign patent translations)
 are selected and the necessary documentation submitted to the EU patent office. Applications
 are also pending in Australia, Brazil, Canada, Europe, Hong Kong, and India. Continuation
 and divisional applications are pending in the United States and Japan, respectively.

 U.S.
 Patent No. 11,028,166 and the PCT patent application (PCT/US2018/00085), titled "Albumin
 Binding Domain Fusion Proteins" originally received an application filing date of February
 20, 2018, which is four days after the one-year anniversary of the filing date of U.S. provisional
 patent applications U.S. 62/459,975 and U.S. 62/459,981 to which both the U.S. patent and
 the PCT patent application claim a priority benefit. A request to restore the priority benefit
 to the filing date of U.S. provisional patent applications U.S. 62/459,975 and U.S. 62/459,981
 was granted for the U.S. patent and PCT patent application. Subsequently, national phase
 patent applications were filed from the PCT patent application in Australia, Brazil, Canada,
 Europe, India, Japan, New Zealand and Russia. However, due to differences in the patent laws
 in these jurisdictions, the priority claims to U.S. 62/459,975 and U.S. 62/459,981 have thus
 far only been accepted in Australia, Europe, India, Japan, New Zealand, and Russia.

 On
 June 11, 2024, the U.S. Patent and Trademark Office granted our patent No. 12,006,361, titled,
 "Albumin Binding Domain Fusion Proteins," covering composition of matter for
 our product candidate SON-1210, our proprietary, bifunctional version of IL-12 and IL-15,
 configured using our F H AB platform. The granted patent is a Continuation of Patent
 No. 11,028,166 issued in June 2021.

 U.S.
 provisional application directed to anti-IL6-F H AB fusion proteins, including anti-IL6-F H AB,
 anti-IL6-F H AB-anti-TGF, and anti-IL6-F H AB-anti-IL8 fusion proteins;
 and methods of treatments using such fusion proteins was re-filed as U.S. 63/245,702 on September
 22, 2021. However, due in large part to scientific challenges, the supportive data was not
 obtained within the one-year period after filing the provisional patent, and therefore, the
 patent was abandoned.

 U.S.
 provisional application directed to Antigen/Albumin Binding Domain Conjugates, and methods
 of treatments using such conjugates was re-filed as U.S. 63/187,278 on May 11, 2021. Data
 in support of the provisional patent claims was not generated, and therefore, this patent
 was abandoned.

 U.S.
 provisional application directed to Method of Treating Age-Related Frailty with Interleukin-6
 was filed June 4, 2021, as Application no. 63/197,097 and converted to a PCT application
 (PCT/US22/32215; Publication No. WO2022/25688) on June 3, 2022, then to a U.S. National Stage
 application (U.S. Pat. Application No. 18/566,029) on November 30, 2023.

 U.S.
 provisional application directed to Antibody-Based Drug Conjugates was filed December 7,
 2021, as Application no. 63/286,996. This provisional patent was abandoned due to insufficient
 supportive data within the one-year timeframe.

 U.S.
 provisional patent application directed to IL-12-Albumin-Binding Domain Fusion Protein Formulations
 and Methods of Use Thereof filed on May 27, 2022, as Application no. 63/346,368. This provisional
 patent was converted to a PCT application (PCT/US2023/067566) on May 26, 2023.

 U.S.
 provisional patent application directed to Low Dose IL-6 Formulations and Methods of Use
 Thereof was filed on September 30, 2022, as Application no. 63/377,971. This provisional
 patent was converted to a PCT application (PCT/US2023/075593; Publication No. WO02024/073718)
 on September 29, 2023.

 U.S.
 provisional patent application directed to Methods for the Treatment of Cancer with Recombinant
 IL-12 Albumin Binding Domain Fusion Proteins filed on November 2, 2022, as Application no.
 63/421,846. This provisional patent was converted to a PCT application (PCT/US2023/078366;
 Publication No. WO2024/097767) on November 1, 2023.

 U.S.
 provisional patent application directed to Methods of Making Recombinant IL-12/IL-15 Albumin
 Binding Domain Fusion Proteins was filed on April 12, 2024 as Application no. 63/633,641.

 U.S.
 provisional patent application directed to Methods of Making Recombinant IL-12 Albumin Binding
 Domain Fusion Proteins was filed on March 14, 2023, as Application no. 63/490,202, and converted
 to a PCT application (PCT/US2024/19798; Publication No. WO2024-192171) on March 13, 2024.

 U.S.
 provisional patent application directed to Antibody-Based Drug Conjugates was filed October
 21, 2024, as Application no. 63/709,765.

 U.S.
 provisional patent applications directed to Interleukin 18 (IL-18) Variants and Fusion Proteins
 Comprising Same were filed December 29, 2023, as Application no. 63/616,148, and June 10,
 2024, as Application no. 63/658,322. A patent titled "Interleukin 18 (IL-18) Variants
 and Fusion Proteins Comprising Same" was issued in the United States on November 5,
 2024, as U.S. Patent No. 12134635.

 U.S.
 provisional patent application directed to Methods For The Treatment Of Diabetes-Associated
 Autonomic Neuropathy was filed March 6, 2024, as Application no. 63/561,924.

 With
respect to our trademark portfolio, we received international registrational approval with the World Intellectual Property Office (WIPO)
for the Sonnet BioTherapeutics and F H AB marks, each having an Effective Date of September 17, 2020. Further, both marks were
published by the European Union Intellectual Property Office (EUIPO), having Effective Dates of November 30, 2020 and December 6, 2020,
respectively. In 2021, the USPTO issued Notices of Allowance for both marks, indicating that both applications have successfully completed
the opposition period and have matured to registration with the submission acceptable Statements of Use. To that end, the USPTO issued
a Notice of Allowance of the Statement of Use for each of the Sonnet BioTherapeutics and F H AB applications and the Sonnet
BioTherapeutics mark already received a Certificate of Registration under Registration no. 6,790,475.

 The
 Switzerland Trademark Office granted protection to the Sonnet BioTherapeutics and F H AB
 marks on September 14, 2021, and October 26, 2021, respectively, and are protected under
 International Trademark Registration nos. 1558330 and 1558471.

 The
 Canadian Intellectual Property Office granted protection to the Sonnet BioTherapeutics mark
 on June 8, 2022 and is protected under International Trademark Registration no. 1558330 while
 the F H AB mark is protected under International Trademark Registration no. 15584471,
 for which the 18-month opposition period began on November 16, 2022.

 In
 addition to Switzerland and Canada, the Sonnet BioTherapeutics mark was also granted protection
 in Australia, European Union, Japan, Mexico, South Korea and the United Kingdom, in each
 case having a Registration no. of 1558330, an Effective Registration date of September 17,
 2020 and a renewal date of September 17, 2030. Likewise, the F H AB mark was granted
 protection in Australia, China, European Union, Japan, Mexico, South Korea and the United
 Kingdom, in each case having a Registration no. of 1558471, a Granted Protection Date of
 September 17, 2020 and renewal date of September 17, 2030.

 Although
 the Sonnet BioTherapeutics mark was initially rejected in China due to potential non-use
 claims directed to certain competing companies, our intellectual property law firm is quite
 confident that since the initial Class 42 rejection was successfully cancelled, two new trademark
 applications for this same mark were also registered and/or published in 2021 could also
 be overcome; however, we won't be able to initiate non-use cancellation filings against
 these marks until 2025, which is the anticipated timeframe by which these pending class 42
 applications are likely to become registered in China.

 Employees

 As
of September 30, 2025, we had 9 full-time employees. None of our employees are represented by a labor union or covered by a collective
bargaining agreement, and we believe our relationship with our employees is good. Additionally, we utilize independent contractors and
other third parties to assist with various aspects of its business.

 Government
Regulation

 The
research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion,
distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products, including biological
products, are extensively regulated by government authorities in the United States, at the federal, state and local level, and other
countries and jurisdictions. Some jurisdictions also regulate the pricing of pharmaceutical products. The processes for obtaining marketing
approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes
and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

 Licensure
and Regulation of Biologics in the United States

 In
the United States, biological products, or biologics, are regulated under the Public Health Service Act, or PHSA, and the Federal Food,
Drug, and Cosmetic Act, or FDCA, and their implementing regulations. The failure to comply with the applicable requirements at any time
during the product development process may subject an applicant to delays in the conduct of a study, regulatory review and approval,
and/or administrative or judicial sanctions. These sanctions may include, without limitation, the FDA's refusal to allow an applicant
to proceed with clinical testing, refusal to approve pending applications, license suspension or revocation, withdrawal of an approval,
product recalls, product seizures, suspension of production or distribution, injunctions, fines, investigations and civil and criminal
penalties. Biological product candidates must be granted a biological license by the FDA before they may be legally marketed in the United
States.

 The
process required by the FDA to obtain a biological license in the United States generally involves the following:

 Completion
 of extensive nonclinical, or preclinical, laboratory tests and preclinical animal trials
 and applicable requirements for the humane use of laboratory animals and formulation studies
 in accordance with applicable regulations, including good laboratory practices, or GLPs;

 Submission
 to the FDA of an investigational new drug, or IND, application prior to initiation of any
 human clinical trials. Permission to proceed must be received before the beginning of such
 trials;

 Performance
 of adequate and well-controlled human clinical trials to establish the safety, potency and
 purity of the product candidate for each proposed indication, in accordance with the FDA's
 regulation generally referred to as the good clinical practices, or GCP and any additional
 requirements for the protection of human research subjects and their health information,
 to establish the safety and efficacy of the proposed biological product for its intended
 use. The FDA may also impose clinical holds on biological product candidate at any time before
 or during our clinical trials due to safety concerns or non-compliance. If the FDA imposes
 a clinical hold, trials may not recommence without FDA authorization and then only under
 terms authorized by the FDA;

 Preparation
 and submission to the FDA of a Biologic License Application, or BLA, for a biologic product
 requesting marketing for one or more proposed indications, including submission of detailed
 information on the manufacture and composition of the product in clinical development and
 proposed labeling;

 Review
 of the product by an FDA advisory committee, as determined by the FDA review division;

 Satisfactory
 completion of one or more FDA inspections of the manufacturing facility or facilities, including
 those of third parties, at which the product, or components thereof, are produced to assess
 compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure
 that the facilities, methods and controls are adequate to preserve the product's identity,
 strength, quality and purity;

 Satisfactory
 completion of one or more FDA audits of the clinical study sites to assure compliance with
 GCPs, and the integrity of clinical data in support of the BLA;

 Payment
 of user fees and securing FDA approval of the BLA and licensure of the new biologic product;

 Compliance
 with any post-approval requirements, including the potential requirement to implement a Risk
 Evaluation and Mitigation Strategy, or REMS, and any post-approval studies required by the
 FDA.

 Nonclinical
Studies and Investigational New Drug Application

 Each
product candidate must undergo nonclinical testing before testing in humans. These tests include laboratory evaluations of product chemistry,
formulation and stability, as well as animal studies to evaluate the potential for activity and toxicity and must be conducted in compliance
with applicable regulations. The results of the nonclinical tests, together with manufacturing information and analytical data, are submitted
to the FDA as part of an IND application. The IND automatically becomes effective 30 days after receipt by the FDA, unless before that
time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human
research subjects will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding
FDA concerns before the clinical trial can begin.

 Submission
of the IND may result in the FDA not allowing the trial to commence or on the terms originally specified by the sponsor in the IND. If
the FDA raises concerns or questions, it may choose to impose clinical holds on biological product candidates at any time before or during
clinical trials due to safety concerns or non-compliance. If the FDA imposes a clinical hold, trials may not recommence without FDA authorization
and only under terms authorized by the FDA.

 Human
Clinical Trials in Support of a BLA

 Clinical
trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease to be treated
under the supervision of a qualified principal investigator in accordance with GCP requirements. A protocol for each clinical trial and
any subsequent protocol amendments must be submitted to the FDA as part of the IND. A sponsor who wishes to conduct a clinical trial
outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical
trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of the BLA so long as
the clinical trial is well-designed and well-conducted in accordance with GCP, including review and approval by an independent ethics
committee, and the FDA is able to validate the study data through an onsite inspection, if necessary.

 Further,
each clinical trial must be reviewed and approved by an institutional review board, or IRB, either centrally or individually at each
institution at which the clinical trial will be conducted or, for trials conducted outside of the United States, by an independent ethics
committee referred to above. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors
and the safety of human subjects. An IRB must operate in compliance with FDA regulations. The FDA, IRB, or the clinical trial sponsor
may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being
conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk. Clinical
testing also must satisfy extensive GCP rules and the requirements for informed consent. Additionally, some clinical trials are overseen
by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.
This group may recommend continuation of the study as planned, changes in study conduct, or cessation of the study at designated check
points based on access to certain data from the study.

 Clinical
trials typically are conducted in three sequential phases that may overlap or be combined. Additional studies may be required after approval.

 Phase
 1: The biological product candidate is initially introduced into healthy human volunteers
 and tested for safety. In the case of some products for severe or life-threatening diseases,
 especially when the product may be too inherently toxic to ethically administer to healthy
 volunteers, the initial human testing is often conducted in patients, such as cancer patients.

 Phase
 2: The biological product candidate is evaluated in a limited patient population to identify
 possible adverse effects and safety risks, preliminary evaluate the efficacy of the product
 for specific targeted diseases and determine dosage tolerance, optimal dosage and dosing
 schedule.

 Phase
 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency
 and safety in an expanded patient population and geographically dispersed clinical study
 sites. These trials are intended to establish the overall risk/benefit ratio of the product
 and provide adequate basis for product labelling.

 Phase
 4: Post-approval clinical trials, or Phase 4 clinical trials, may be conducted after
 initial marketing approval. They provide additional experience for the treatment of patients
 in the intended therapeutic indication, particularly for long-term safety follow-up. If the
 FDA approves a product while a company has ongoing clinical trials that were not necessary
 for approval, a company may be able to use the data from these clinical trials to meet all
 or part of any Phase 4 clinical trial requirement or to request a change in the product labeling.
 Failure to exhibit due diligence with regard to conducting required Phase 4 clinical trials
 could result in withdrawal of approval for products.

 Compliance
with cGMP Requirements

 Before
approving a BLA, the FDA will typically inspect the facility(ies) where the product is manufactured to ensure full compliance of the
manufacturing processes and facilities with cGMP requirements and consistent production with required specifications. Manufacturers and
others involved in the manufacture and distribution of products must also register their establishments with the FDA and certain state
agencies. Both domestic and foreign manufacturing establishments must register and provide additional information to the FDA upon their
initial participation in the manufacturing process. Any product manufactured by or imported from a facility that has not registered is
deemed misbranded under the FDCA. Establishments may be subject to periodic unannounced inspections by government authorities. Manufacturers
may have to provide records regarding their establishments.

 Review
and Approval of a BLA

 Results
of product candidate development, nonclinical testing and clinical trials are submitted to the FDA as part of a BLA requesting a license
to market the product. The BLA must contain extensive and detailed information on the manufacturing and composition of the product and
proposed labeling as well as payment of a user fee. The FDA has 60 days after submission of the application to conduct an initial review
to determine whether the BLA is sufficient to accept for filing. Once the submission has been accepted for filing, the FDA begins its
in-depth review. The FDA has twelve months in which to complete its initial review of a standard application (or six months for a priority
review) and respond to the applicant. The FDA does not always meet its goal dates and the review process may be significantly extended
by FDA requests for additional information or clarification. The review process and the goal date may be extended by three months if
the FDA requests or if the applicant otherwise provides additional information or clarification regarding information already provided
in the submission within the last three months before the goal date.

 On
the basis of the FDA's evaluation of the application and accompanying information, the FDA may issue an approval letter, denial
letter, or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information
for specific indications. Under the PHSA, the FDA may approve a BLA if it determines that the product is safe, pure and potent and the
facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure and potent. If
the application is not approved, the FDA may issue a complete response letter, which will contain the conditions that must be met in
order to secure final approval of the application, and when possible, will outline recommended actions the sponsor might take to obtain
approval of the application. Sponsors that receive a complete response letter may submit to the FDA information that represents a complete
response to the issues identified by the FDA. Such resubmissions are classified under the Prescription Drug User Fee Act, or PDUFA, as
either Class 1 or Class 2, based on the information submitted by an applicant in response to an action letter. Under the goals and policies
agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission.
The FDA will not approve an application until issues identified in the complete response letter have been addressed. The FDA issues a
denial letter if it determines that the establishment or product does not meet the agency's requirements.

 The
FDA may also refer the application to an advisory committee for review, evaluation and non-binding recommendation as to whether the application
should be approved. In particular, the FDA may refer applications for novel biologic products or biologic products that present difficult
questions of safety or efficacy to an advisory committee.

 If
the FDA approves a new product, the FDA may limit its approved indications for use as well as require that contraindications, warnings
or precautions be included in the product labeling. In addition, the FDA may call for post-approval studies, including Phase 4 clinical
trials, to further assess the product's safety after approval. The FDA may also require testing and surveillance programs to monitor
the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms,
including REMS, to help ensure that the benefits of the product outweigh the potential risks. The FDA may prevent or limit further marketing
of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved
product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements
and FDA review and approval.

 Fast
Track, Breakthrough Therapy and Priority Review Designations

 The
FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment
of a serious or life-threatening disease or condition. These programs are referred to as (i) fast track designation, (ii) breakthrough
therapy designation and (iii) priority review designation.

 Fast
 Track Review: The FDA may designate a product for fast track review if it is intended
 (alone or in combination with one or more other products) for the treatment of a serious
 or life-threatening disease or condition, and it demonstrates the potential to address unmet
 medical needs for such a disease or condition. Sponsors may have greater interactions with
 the FDA and the FDA may initiate review of sections of a fast track product's application
 before the application is complete. The sponsor must also provide, and the FDA must approve,
 a schedule for the submission of the remaining information and the sponsor must pay applicable
 user fees. However, the FDA's time period goal for reviewing a fast track application
 does not begin until the last section of the application is submitted. Fast track designation
 may be withdrawn by the FDA.

 Breakthrough
 Therapy: A product may be designated as a breakthrough therapy and be eligible for expedited
 review if it is intended, alone or in combination with one or more other products, to treat
 a serious or life-threatening disease or condition and preliminary clinical evidence indicates
 that the product may demonstrate substantial improvement over existing therapies on one or
 more clinically significant endpoints, such as substantial treatment effects observed early
 in clinical development. The FDA may take certain actions with respect to breakthrough therapies.

 Priority
 Review: The FDA may designate a product for priority review if such product treats a
 serious condition and, if approved, would provide a significant improvement in safety or
 effectiveness when compared with other available therapies. This assessment is made by the
 FDA on a case-by-case basis. A priority designation is intended to direct overall attention
 and resources to the evaluation of such applications, and to shorten the FDA's goal
 for taking action on a marketing application from 10 to six months.

 Accelerated
Approval Pathway

 The
FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage
to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably
likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on
an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that
is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of
the condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory
standards for safety and effectiveness as those granted traditional approval.

 For
the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical
sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints
can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic
effect that is considered reasonably likely to predict the clinical benefit of a product, such as an effect on IMM. The accelerated approval
pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure
the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus,
accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which
the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy
and sometimes large trials to demonstrate a clinical or survival benefit.

 The
accelerated approval pathway is usually contingent on a sponsor's agreement to conduct, in a diligent manner, additional post-approval
confirmatory studies to verify and describe the product's clinical benefit. As a result, a product candidate approved on this basis
is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to
confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during
post-marketing studies, would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials
for product candidates approved under accelerated regulations are subject to prior review by the FDA.

 Post-Approval
Regulation

 Even
if regulatory approval is granted, a marketed product is subject to continuing comprehensive requirements under federal, state and foreign
laws and regulations, including requirements and restrictions regarding adverse event reporting, recordkeeping, marketing, and compliance
with cGMP. Adverse events reported after approval of a drug can result in additional restrictions on the use of a marketed product or
requirements for additional post-marketing studies or clinical trials.

 Maintaining
substantial compliance with applicable federal, state and local statutes and regulations requires the expenditure of substantial time
and financial resources. Rigorous and extensive FDA regulation of biological products continues after approval, particularly with respect
to cGMP requirements. Biological product manufacturers and other entities involved in the manufacture and distribution of approved biological
products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP requirements and other laws. We will rely, and expect to continue
to rely, on third parties for the production of clinical and commercial quantities of any products that we may commercialize. Manufacturers
of our products are required to comply with applicable requirements in the cGMP regulations, including quality control and quality assurance
and maintenance of records and documentation. Other post-approval requirements applicable to biological products include record-keeping
requirements, reporting of adverse effects and reporting updated safety and efficacy information.

 Discovery
of previously unknown problems or the failure to comply with the applicable regulatory requirements relating to the manufacturer or promotion
of an approved product may result in restrictions on the marketing of a product or withdrawal of the product from the market as well
as significant administrative, civil or criminal sanctions.

 Orphan
Drug Designation

 Orphan
drug designation in the United States is designed to encourage sponsors to develop products intended for rare diseases or conditions.
In the United States, a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in
the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation
that the cost of developing and making available the product for the disease or condition will be recovered from sales of the product
in the United States.

 Orphan
drug designation qualifies a company for tax credits and market exclusivity for seven years following the date of the product's
marketing approval if granted by the FDA. An application for designation as an orphan product can be made any time prior to the filing
of an application for approval to market the product. A product may be designated as an orphan drug by the FDA Office of Orphan Products
Development, or OOPD, based on an acceptable application. The product must then go through the review and approval process like any other
product. Orphan drug designations may be revoked based on a change in the incidence of the disease.

 A
sponsor may request orphan drug designation of a previously unapproved product or a new orphan indication for an already marketed product.
In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan
drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its
product may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation for the same product
for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation.

 The
period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for
which the product has been designated. The FDA may approve a second application for the same product for a different use or a second
application for a clinically superior version of the product for the same use. The FDA cannot, however, approve the same product made
by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the
sponsor is unable to provide sufficient quantities.

 Pediatric

 Under
the Pediatric Research Equity Act, certain applications for approval must include an assessment, generally based on clinical study data,
of the safety and effectiveness of the subject drug in relevant pediatric populations. The FDA may waive or defer the requirement for
a pediatric assessment, either at the company's request or by the FDA's initiative. The FDA may determine that a Risk Evaluation
and Mitigation Strategy are necessary to ensure that the benefits of a new product outweigh its risks. REMS may include various elements,
ranging from a medication guide or patient package insert to limitations on who may prescribe or dispense the drug, depending on what
the FDA considers necessary for the safe use of the drug. Sponsors are required to submit an initial pediatric study plan to their IND
after their end-of-phase 2 meeting with the FDA.

 Regulation
and Procedures Governing Approval of Medicinal Products in the European Union

 In
order to market any product outside of the United States, a company also must comply with numerous regulatory requirements of other countries
and jurisdictions. Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by
the comparable foreign regulatory authorities before it can initiate clinical trials or marketing of the product in those countries or
jurisdictions.

 Clinical
Trial Approval

to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on GCP, a system for the approval of clinical
trials in the European Union has been implemented through national legislation of the Member States. Under this system, an applicant
must obtain approval from the competent national authority of a European Union Member State in which the clinical trial is to be conducted
or in multiple Member States if the clinical trial is to be conducted in a number of Member States. Furthermore, the applicant may only
start a clinical trial at a specific study site after the independent ethics committee has issued a favorable opinion. The clinical trial
application, or CTA, must be accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive
2001/20/EC and Directive 2005/28/EC and corresponding national laws of the Member States and further detailed in applicable guidance
documents.

 In
April 2014, the European Union adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical
Trials Directive 2001/20/EC. It is expected that the new Clinical Trials Regulation will apply in 2019 or 2020. It will overhaul the
current system of approvals for clinical trials in the European Union. Specifically, the new regulation, which will be directly applicable
in all Member States, aims at simplifying and streamlining the approval of clinical trials in the European Union. For instance, the new
Clinical Trials Regulation provides for a streamlined application procedure using a single entry point and strictly defined deadlines
for the assessment of clinical trial applications.

 Marketing
Authorization

 To
obtain a marketing authorization for a product under the European Union regulatory system, an applicant must submit an MAA, either under
a centralized procedure administered by the EMA or one of the procedures administered by competent authorities in European Union Member
States (decentralized procedure, national procedure, or mutual recognition procedure). A marketing authorization may be granted only
to an applicant established in the European Union. An applicant must demonstrate compliance with all measures included in an EMA-approved
Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific
waiver, class waiver, or a deferral for one or more of the measures included in the PIP.

 The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European
Union Member States. It is compulsory for specific products, including for medicines produced by certain biotechnological processes,
products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated for the
treatment of certain diseases, including products for the treatment of cancer. For products with a new active substance indicated for
the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients,
the centralized procedure may be optional.

 Under
the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established at the EMA is responsible for
conducting the assessment of a product to define its risk/benefit profile. Under the centralized procedure, the maximum timeframe for
the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided
by the applicant in response to questions of the CHMP. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a
medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic
innovation.

 Periods
of Authorization and Renewals

 A
marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation
of the risk benefit balance by the EMA or by the competent authority of the authorizing Member State. Once renewed, the marketing authorization
is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to
pharmacovigilance, to proceed with one additional five-year renewal period. Any authorization that is not followed by the placement of
the drug on the European Union market (in the case of the centralized procedure) or on the market of the authorizing Member State within
three years after authorization ceases to be valid.

 Regulatory
Requirements after Marketing Authorization

 Following
approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing,
marketing, promotion and sale of the medicinal product. These include compliance with the European Union's stringent pharmacovigilance
or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition,
the manufacturing of authorized products, for which a separate manufacturer's license is mandatory, must also be conducted in strict
compliance with the EMA's GMP requirements and comparable requirements of other regulatory bodies in the European Union, which
mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity.
Finally, the marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising
directed toward the prescribers of drugs and/or the general public, are strictly regulated in the European Union under Directive 2001/83EC,
as amended.

 Orphan
Drug Designation and Exclusivity

 Regulation
(EC) No. 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission
if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically
debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or (2)
a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely
that the marketing of the drug in the European Union would generate sufficient return to justify the necessary investment. For either
of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of
the condition in question that has been authorized in the European Union or, if such method exists, the drug has to be of significant
benefit compared to products available for the condition. An orphan drug designation provides benefits such as fee reductions, regulatory
assistance and the possibility to apply for a centralized European Union marketing authorization. Marketing authorization for an orphan
drug leads to a ten-year period of market exclusivity. The market exclusivity period may however be reduced to six years if, at the end
of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation.

 Combination
Products in the United States

 Certain
products, the combination products, may be comprised of components that would normally be regulated under different types of regulatory
authorities and frequently by different centers at the FDA. A combination product may be (i) a product comprised of two or more regulated
components that are physically, chemically, or otherwise combined or mixed and produced as a single entity; (ii) two or more separate
products packaged together in a single package or as a unit and comprised of drug and device products, device and biological products,
or biological and drug products; (iii) drug, or device, or biological product packaged separately that according to its investigational
plan or proposed labeling is intended for use only with an approved individually specified drug, or device, or biological product where
both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of
the approved product would need to be changed, e.g., to reflect a change in intended use, dosage form, strength, route of administration,
or significant change in dose; or (iv) any investigational drug, device, or biological product packaged separately that according to
its proposed labeling is for use only with another individually specified investigational drug, device, or biological product where both
are required to achieve the intended use, indication, or effect. The FDA is charged with assigning a center with primary jurisdiction,
or a lead center, for review of a combination product, this determination being based on the "primary mode of action" of
the combination product. Sponsors may request a jurisdiction determination by submitting a Request for Designation to the office of Combination
Drug Products.

 Merger
with Chanticleer and Acquisition of Relief

 Until
March 31, 2020, the Company was in the business of owning, operating and franchising fast casual dining concepts domestically and internationally.
As previously disclosed, on April 1, 2020, the Company completed its merger transaction with BioTherapeutics, Inc. ("former Sonnet"),
pursuant to which former Sonnet became a wholly-owned subsidiary of the Company (the "Merger"). On April 1, 2020, in connection
with the Merger, the Company changed its name to "Sonnet BioTherapeutics Holdings, Inc." Former Sonnet was incorporated as
a New Jersey corporation on April 6, 2015.

 The
Merger was treated by the Company as a reverse merger and accounted for as a reverse recapitalization in accordance with U.S. generally
accepted accounting principles ("U.S. GAAP"). For accounting purposes, Sonnet is considered to have acquired the Company.

 In
connection with and prior to the Merger, the Company contributed and transferred to Amergent Hospitality Group, Inc. ("Amergent"),
a newly formed, wholly owned subsidiary of the Company, all of the assets and liabilities relating to the Company's restaurant
business. The dividend, which together with the contribution and transfer of the Company's restaurant business described above,
is referred to as the "Spin-Off." Prior to the Spin-Off, Amergent engaged in no business or operations.

 As
a result of the Spin-Off and the Merger, since April 1, 2020, the Company has operated through former Sonnet and its direct and indirect
subsidiaries and the ongoing business of the Company is the former Sonnet business.

 In
addition, in connection with and prior to the Merger, on April 1, 2020, former Sonnet completed its acquisition of the global development
rights for Atexakin Alfa (low dose formulation of Interleukin-6, IL-6, now "SON-080") from Relief Therapeutics Holding SA
("Relief Holding") through its acquisition of Relief Holding's wholly-owned subsidiary, Relief Therapeutics SA ("Relief"),
in exchange for the issuance to Relief Holding of shares of former Sonnet common stock that converted into an aggregate of 307 shares
of Company common stock in the Merger.

 Recent
Developments

 Business
Combination with Hyperliquid Strategies Inc and Rorschach I LLC

 On
December 2, 2025 (the "Closing Date"), we completed our previously announced business combination (the "Closing"),
pursuant to the Business Combination Agreement, dated as of July 11, 2025 (as amended on September 22, 2025, the "BCA"),
by and among the Company, Hyperliquid Strategies Inc ("HSI"), Rorschach I LLC ("Rorschach"), TBS Merger Sub Inc.
("Sonnet Merger Sub") and Rorschach Merger Sub, LLC ("Rorschach Merger Sub"). The common stock of HSI, par value
$0.01 per share ("HSI Common Stock") began trading on the Nasdaq Capital Market under the symbol "PURR" on December
3, 2025. The BCA, among other things, provided for (i) the merger of Rorschach Merger Sub with and into Rorschach (the "Rorschach
Merger"), with Rorschach surviving the Rorschach Merger as a direct wholly owned subsidiary of HSI, and (ii) immediately following
the Rorschach Merger, the merger of Sonnet Merger Sub with and into Sonnet (the "Sonnet Merger" and, together with the Rorschach
Merger, the "Mergers" or "Business Combination"), with Sonnet surviving the Sonnet Merger as a direct wholly
owned subsidiary of HSI.

 In
addition, as previously disclosed, concurrently with the execution of the BCA, certain accredited investors (the "Subscribers")
entered into subscription agreements with us and HSI (the "Subscription Agreements"), pursuant to which we agreed to issue,
and the Subscribers agreed to purchase, immediately prior to the Closing, an aggregate of 239,921,355 shares of our common stock at a
purchase price of $1.25 per share, pursuant to a private placement in accordance with Section 4(a)(2) of the Securities Act (the "Closing
PIPE"). The Closing PIPE was consummated on the Closing Date immediately prior to the Closing and we issued 239,921,355 shares
of our common stock to the Subscribers pursuant to the Subscription Agreements.

 In
connection with the Business Combination and pursuant to the terms of the BCA, Donald Giffith, Nailesh Bhatt, Albert Dyrness and Lori
McNeill resigned and ceased to serve as directors of Sonnet as of the Closing Date. As a result, our board of directors currently consists
of one member, Raghu Rao, our Chief Executive Officer. In addition, pursuant to the terms of the BCA, Donald Griffith, John K. Cini,
Susan Dexter, Richard Kenney and Stephen McAndrew resigned and ceased to serve as Chief Financial Officer, Chief Scientific Officer,
Chief Technical Officer, Chief Medical Officer and President and Chief Business Officer, respectively, of Sonnet as of the Closing Date.

 As
a result of the Closing, Nasdaq filed a notification of removal from listing and deregistration of our common stock on Form 25 with the
SEC on December 2, 2025. After the Form 25 becomes effective, we intend to file with the SEC a Form 15 to request deregistration of our
common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and suspension of
our reporting obligations under Sections 13 and 15(d) of the Exchange Act.

 Exercise
of Warrants

 In
the fourth quarter of 2025, holders exercised outstanding warrants to purchase 3,744,624 shares of our common stock, from which we received
gross proceeds of $11.2 million. In accordance with the BCA, we may not spend any cash proceeds in excess of $3.0 million received from
the exercise of warrants without the prior written consent of Rorschach.

 July
2025 Convertible Notes and Warrants

 In
July 2025, we completed a private placement of zero-interest convertible notes (the "Convertible Notes"), raising an aggregate
of $2.0 million in gross proceeds. The Convertible Notes were scheduled to mature on June 30, 2026, and were convertible at any time
into an aggregate of up to 1,730,104 shares of common stock at a fixed price of $1.156 per share. If, at any time while the Convertible
Notes remained outstanding, we issued shares of common stock or common stock equivalents in an offering for gross proceeds of at least
$5.0 million (a "Subsequent Issuance"), the entire unpaid principal amount of the Convertible Notes would convert automatically
into the same securities issued pursuant to the Subsequent Issuance. In connection with the Convertible Notes, investors also received
five-year warrants to purchase an aggregate of 865,052 shares of common stock at the same $1.156 exercise price, providing approximately
$0.1 million in additional cash proceeds. The Convertible Notes were converted into shares of Series 5 Preferred Stock (as defined below)
and warrants in connection with the PIPE described below.

 July
2025 Preferred Stock and Warrant Private Placements

 We
raised an aggregate of $5.5 million in a private placement (the "PIPE") to accredited investors through the issuance and
sale of an aggregate of 5,500 shares of Series 5 Convertible Preferred Stock (the "Series 5 Preferred Stock"), stated value
$1,000 per share, initially convertible at a conversion price of $1.25 per share, or 4,400,000 shares of common stock, and warrants to
purchase up to an aggregate of 8,800,000 shares of common stock. At the closing of the PIPE, the $2.0 million principal amount of the
Convertible Notes automatically converted into an aggregate of 2,000 shares of Series 5 Preferred Stock and warrants to purchase up to
3,200,000 shares of common stock, on the same terms as the PIPE investors.

 December
2024 Registered Direct and PIPE Offering

 On
December 9, 2024, we entered into a securities purchase agreement for a registered direct offering, pursuant to which we sold an aggregate
of (i) 768,000 shares of common stock, and (ii) pre-funded warrants to purchase up to an aggregate of 317,325 shares of common stock.
Pursuant to the registered direct purchase agreement, in a concurrent private placement, we also sold warrants to purchase up to 1,085,325
shares of common stock. Each registered direct share (or registered direct pre-funded warrant in lieu thereof) was sold in the registered
direct offering together with one registered direct common warrant at a combined offering price of $2.23, priced at-the-market under
the rules of the Nasdaq Stock Market. The registered direct pre-funded warrants had an excise price of $0.0001 per share, were immediately
exercisable and were exercised in full on December 10, 2024. The registered direct common warrants have an exercise price of $2.10 per
share, are immediately exercisable and will expire five years from the date of issuance.

 In
addition, on December 9, 2024, we also entered into a securities purchase agreement for a concurrent private placement with an existing
securityholder, pursuant to which we sold an aggregate of (i) 127,500 shares of common stock, (ii) pre-funded warrants to purchase up
to an aggregate of 545,500 shares of common stock, and (iii) common warrants to purchase up to an aggregate of 673,000 shares of common
stock. Each private placement share (or private placement pre-funded warrant in lieu thereof) was sold in the private placement together
with one private placement common warrant at a combined offering price of $2.23, priced at-the-market under the rules of the Nasdaq Stock
Market. The private placement pre-funded warrants have an excise price of $0.0001 per share, are immediately exercisable and may be exercised
at any time from the closing date of the private placement until all of the private placement pre-funded warrants are exercised in full.
The private placement common warrants have an exercise price of $2.10 per share, are immediately exercisable and will expire five years
from the date of issuance.

 The
registered direct offering and the concurrent private placement closed on December 10, 2024 for aggregate gross proceeds to us of approximately
$3.9 million, before deducting the placement agent fees and estimated offering expenses paid by us.

 November
2024 Underwritten Public Offering

 On
November 6, 2024, we entered into an underwriting agreement with Chardan, as the underwriter, pursuant to which we agreed to sell to
Chardan, in a firm commitment underwritten public offering, an aggregate of (i) 155,000 shares of common stock, (ii) pre-funded warrants
to purchase up to 956,111 shares of common stock, and (iii) accompanying warrants to purchase up to 2,222,222 shares of common stock
at the combined public offering price of $4.50 per share and accompanying common warrant and $4.4999 per pre-funded warrant and accompanying
common warrant, in each case less underwriting discounts and commissions. The offering closed on November 7, 2024. Pursuant to the underwriting
agreement, we agreed to pay Chardan (i) a commission of 7.0% of the gross proceeds of the offering, (ii) all reasonable out-of-pocket
expenses of Chardan relating to the offering, including a maximum of $125,000 for the fees and disbursements of counsel to Chardan, and
(iii) a non-accountable expense allowance equal to 1% of the gross proceeds of the offering. The net proceeds to us from the offering
were approximately $4.2 million, after deducting underwriting discounts and commissions and estimated offering expenses. We expect to
use the proceeds from the offering for research and development, including clinical trials, working capital, the repayment of all or
a portion of our liabilities, and general corporate purposes.

 Nasdaq
Letters

 On
May 30, 2025, we received notice (the "Notice") from the Listing Qualifications Staff (the "Staff") of The Nasdaq
Stock Market LLC ("Nasdaq") advising that we were not in compliance with the minimum stockholders' equity requirement
for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires companies listed on The Nasdaq Capital Market
to maintain stockholders' equity of at least $2.5 million (the "Minimum Stockholders' Equity Rule"). In our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2025, we reported stockholders' equity of $0.7 million, which is below the
Minimum Stockholders' Equity Rule for continued listing. Additionally, as of May 30, 2025, we did not meet the alternative Nasdaq
compliance standards relating to the market value of listed securities of at least $35.0 million or net income of $0.5 million from continuing
operations in the most recently completed fiscal year, or in two of the last three most recently completed fiscal years. Pursuant to
the Notice, Nasdaq had given us 45 calendar days, or until July 14, 2025, to submit to Nasdaq a plan to regain compliance.

 On
July 15, 2025, we closed the PIPE for gross proceeds of $5.5 million (the "PIPE Proceeds"). In addition to the PIPE Proceeds,
as of July 18, 2025, we received proceeds of approximately $10.5 million in connection with the exercise of outstanding warrants (the
"Warrant Proceeds" and together with the PIPE Proceeds, the "Proceeds"). On July 18, 2025, we filed a Current
Report on Form 8-K stating that as of the date of the Form 8-K, we believed that we had stockholders' equity in excess of the $2.5
million required pursuant to the Minimum Stockholders' Equity Rule as a result of the Proceeds. On July 23, 2025, we received a
letter from Nasdaq stating that based on the Form 8-K, the Staff determined that we complied with the Minimum Stockholders' Equity
Rule. The letter also stated that Nasdaq will continue to monitor our ongoing compliance with the Minimum Stockholders' Equity
Rule and, if at the time of our next periodic report we do not evidence compliance, we may be subject to delisting. At that time, the
Staff will provide written notification to us, and we may then appeal the Staff's determination to a Hearings Panel.

 Corporate
and Available Information

 We
were organized on October 21, 1999, under our original name, Tulvine Systems, Inc., under the laws of the State of Delaware. On April
25, 2005, Tulvine Systems, Inc. formed a wholly owned subsidiary, Chanticleer Holdings, Inc., and on May 2, 2005, Tulvine Systems, Inc.
merged with, and changed its name to, Chanticleer Holdings, Inc. As described above, on April 1, 2020, we completed our business combination
with former Sonnet, with former Sonnet surviving as a wholly owned subsidiary of us (the "Merger"). In connection with the
Merger, we changed our name from "Chanticleer Holdings, Inc." to "Sonnet BioTherapeutics Holdings, Inc.," and
the business conducted by us became the business conducted by former Sonnet.

 Our
principal executive offices are located at 100 Overlook Center, Suite 102, Princeton, New Jersey 08540. Our telephone number is (609)
375-2227 and the corporate website address is  We included the website address in this Annual Report on Form
10-K only as an inactive textual reference and do not intend it to be an active link to our website. The information on the website is
not incorporated by reference in this Annual Report on Form 10-K.

 Our
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, as well
as other documents we file with the SEC, are available free of charge through the Investors section of our website as soon as reasonably
practicable after such material is electronically filed with or furnished to the SEC. The public can obtain documents that we file with
the SEC at www.sec.gov.

 Item
1A. Risk Factors

 An
investment in our securities involves a high degree of risk including the risk of a loss of your entire investment. You should carefully
consider the risks and uncertainties described below and the other information contained in this report and the other reports filed by
us with the Securities and Exchange Commission (the "SEC"). The risks set forth below are not the only ones facing us. Additional
risks and uncertainties may exist that could also adversely affect our business, operations and financial condition. If any of the following
risks actually materialize, our business, financial condition and/or operations could suffer. In such event, the value of our common
stock could decline, and you could lose all or a substantial portion of the money that you pay for our securities.

 Summary
of Risk Factors

 We
 have a history of significant operating losses and expect to incur significant and increasing
 losses for the foreseeable future, and we may never achieve or maintain profitability.

 Our
 recurring losses from operations have raised substantial doubt regarding our ability to continue
 as a going concern.

 We
 will need significant additional capital, and if we are unable to raise capital when needed,
 we could be forced to delay, reduce or eliminate our product discovery and development programs
 or commercialization efforts.

 We
 are substantially dependent on the success of our internal development programs and our product
 pipeline candidates may not successfully complete clinical trials, receive regulatory approval
 or be successfully commercialized.

 We
 are at an early stage in our development efforts, our product candidates represent a new
 category of medicines and may be subject to heightened regulatory scrutiny until they are
 established as a therapeutic modality.

 Even
 if we complete the necessary preclinical studies and clinical trials, the marketing approval
 process is expensive, time consuming and uncertain and may prevent us or any collaborators
 from obtaining approvals for the commercialization of some or all of our product candidates.
 As a result, we cannot predict when or if, and in which territories, we, or any collaborators,
 will obtain marketing approval to commercialize a product candidate.

 We
 face significant competition and if our competitors develop and market products that are
 more effective, safer or less expensive than the product candidates we develop, our commercial
 opportunities will be negatively impacted.

 The
 commercial success of any current or future product candidate will depend upon the degree
 of market acceptance by physicians, patients, payors and others in the medical community.

 For
 certain product candidates, we may depend on development and commercialization collaborators
 to develop and conduct clinical trials with, obtain regulatory approvals for, and if approved,
 market and sell product candidates. If such collaborators fail to perform as expected, the
 potential for us to generate future revenue from such product candidates would be significantly
 reduced and our business would be harmed.

 We
 will rely on third parties, including independent clinical investigators and CROs, to conduct
 and sponsor some of the clinical trials of our product candidates. Any failure by a third
 party to meet its obligations with respect to the clinical development of our product candidates
 may delay or impair our ability to obtain regulatory approval for our product candidates.

 If
 we are unable to obtain and maintain patent and other intellectual property protection for
 our products and product candidates, or if the scope of the patent and other intellectual
 property protection obtained is not sufficiently broad, our competitors could develop and
 commercialize products similar or identical to ours, and our ability to successfully commercialize
 our products and product candidates may be adversely affected.

 We
 expect to expand our organization, and as a result, we may encounter difficulties in managing
 our growth, which could disrupt our operations.

 We
 do not expect to pay cash dividends in the foreseeable future and therefore investors should
 not anticipate cash dividends on their investment.

 Risks
Related to Our Financial Position and Need for Additional Capital

 We
have a history of significant operating losses and expect to incur significant and increasing losses for the foreseeable future, and
we may never achieve or maintain profitability.

 We
do not expect to generate revenue or profitability that is necessary to finance our operations in the short term. Our net losses for
the fiscal years ended September 30, 2025 and 2024 were approximately $16.0 million and $7.4 million, respectively. As of September 30,
2025, we had an accumulated deficit of approximately $133.7 million.

 To
date, we have not commercialized any products or generated any revenues from the sale of products, and absent the realization of sufficient
revenues from product sales, we may never attain profitability in the future. We have devoted substantially all of our financial resources
and efforts to research and development, including preclinical studies and our clinical trials. Our net losses may fluctuate significantly
from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on
our stockholders' equity (deficit) and working capital.

 We
anticipate that our expenses will increase if and as we:

 continue
 to develop and conduct clinical trials with respect to our lead product candidate, SON-080,
 and our other product candidates;

 initiate
 and continue research, preclinical and clinical development efforts for any future product
 candidates;

 seek
 to discover and develop additional product candidates and further expand our clinical product
 pipeline;

 seek
 marketing and regulatory approvals for any product candidates that successfully complete
 clinical trials;

 require
 the manufacture of larger quantities of product candidates for clinical development and,
 potentially, commercialization;

 maintain,
 expand and protect our intellectual property portfolio;

 expand
 our research and development infrastructure, including hiring and retaining additional personnel,
 such as clinical, quality control and scientific personnel;

 establish
 sales, marketing, distribution and other commercial infrastructure in the future to commercialize
 products for which we obtain marketing approval, if any;

 add
 operational, financial and management information systems and personnel, including personnel
 to support our product development and commercialization and help us comply with our obligations
 as a public company; and

 add
 equipment and physical infrastructure to support our research and development.

 Our
ability to become and remain profitable depends on our ability to license our products and generate revenue. Generating product revenue
will depend on our ability to obtain marketing approval for, and successfully commercialize, one or more of our product candidates.

 Successful
commercialization will require achievement of key milestones, including completing clinical trials of our product candidates, obtaining
marketing approval for these product candidates, manufacturing, marketing and selling those products for which we, or any collaborators,
may obtain marketing approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance
or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately predict the
timing and amount of revenues, and if or when we might achieve profitability. We and any collaborators may never succeed in these activities
and, even if we do, or any collaborators do, we may never generate revenues that are large enough for us to achieve profitability. Even
if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

 Our
failure to become and remain profitable would depress the market price of our common stock and could impair our ability to raise capital,
expand our business, diversify our product offerings or continue our operations. If we continue to suffer losses, investors may not receive
any return on their investment and may lose their entire investment.

 Our
limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

 Our
business commenced operations in 2015. Our operations to date have been limited to financing and staffing our company, developing our
technology, conducting preclinical research and early-stage clinical trials for our product candidates and pursuing strategic collaborations
to advance our product candidates. We have not yet demonstrated an ability to successfully conduct late-stage clinical trials, obtain
marketing approvals, manufacture a commercial-scale product, or arrange for a third party to do so on our behalf, or conduct sales and
marketing activities necessary for successful product commercialization. Accordingly, you should consider our prospects in light of the
costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development, especially clinical-stage
biopharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they
would be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

 We
may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.
We will eventually need to transition from a company with a development focus to a company capable of supporting commercial activities.
We may not be successful in such a transition.

 We
expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year
due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly
or annual periods as indications of future operating performance.

 Our
recurring losses from operations have raised substantial doubt regarding our ability to continue as a going concern.

 We
have incurred recurring losses and negative cash flows from operations activities since inception and we expect to generate losses and
negative cash flows from operations for the foreseeable future primarily due to research and development costs for our potential product
candidates. As of September 30, 2025, we had cash and cash equivalents of $5.1 million and stockholders' equity of $10.8 million.
We believe our cash and cash equivalents at September 30, 2025 will fund our projected operations into February 2026.

 Substantial
additional financing will be needed by us to fund our operations. These factors raise substantial doubt about our ability to continue
as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates
the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do
not include any adjustments that might result from the outcome of this uncertainty.

 We
will require additional capital in the future through equity or debt financings, partnerships, collaborations, or other sources to carry
out our planned development activities. If additional capital is not secured when required, we may need to delay or curtail our operations
until such funding is received. Various internal and external factors will affect whether and when our product candidates become approved
for marketing and successful commercialization. The regulatory approval and market acceptance of our products 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 our financial condition and future operations.

 Operations
since inception have consisted primarily of organizing us, securing financing, developing its technologies through performing research
and development and conducting preclinical studies. We face 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.

 Our
ability to continue as a going concern is dependent on our ability to raise additional equity or debt capital or spin-off non-core assets
to raise additional cash. Should we be unable to raise sufficient additional capital, we may be required to undertake cost-cutting measures
including delaying or discontinuing certain clinical activities.

 The
source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the
progress of our clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to us. Lack of
necessary funds may require us, among other things, to delay, scale back or eliminate some or all of our planned clinical trials. These
factors among others create a substantial doubt about our ability to continue as a going concern.

 We
will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate
our product discovery and development programs or commercialization efforts.

 Developing
pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain
process that takes years to complete. For example, for the fiscal years ended September 30, 2025 and 2024, we used $12.8 million and
$8.6 million, respectively, in net cash for our operating activities, substantially all of which related to research and development
activities. We expect our expenses to increase in connection with our ongoing activities, particularly as we initiate new clinical trials
of, initiate new research and preclinical development efforts for and seek marketing approval for, our current product candidates or
any future product candidates. In addition, if we obtain marketing approval for any of our product candidates, we may incur significant
commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing,
manufacturing and distribution are not the responsibility of a collaborator. Accordingly, we will need to obtain substantial additional
funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we may be
forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

 We
will be required to expend significant funds in order to advance the development of the product candidates in our pipeline, as well as
other product candidates we may seek to develop. In addition, while we may seek one or more collaborators for future development of our
product candidates, we may not be able to enter into a collaboration for any of our product candidates for such indications on suitable
terms, on a timely basis or at all. In any event, our existing cash will not be sufficient to fund all of the efforts that we plan to
undertake or to fund the completion of development of any of our product candidates. Accordingly, we will be required to obtain further
funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. We do
not have any committed external source of funds. Adequate additional financing may not be available to us on acceptable terms, or at
all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue
our business strategy.

 Our
estimate may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances,
some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we
may need to seek additional funds sooner than planned. Our future funding requirements, both short-term and long-term, will depend on
many factors, including:

 the
 scope, progress, timing, costs and results of clinical trials of, and research and preclinical
 development efforts for, our current and future product candidates;

 our
 ability to enter into, and the terms and timing of, any collaborations, licensing or other
 arrangements;

 our
 ability to identify one or more future product candidates for our pipeline;

 the
 number of future product candidates that we pursue and their development requirements;

 the
 outcome, timing and costs of seeking regulatory approvals;

 the
 costs of commercialization activities for any of our product candidates that receive marketing
 approval to the extent such costs are not the responsibility of any collaborators, including
 the costs and timing of establishing product sales, marketing, distribution and manufacturing
 capabilities;

 the
 receipt of marketing approval, revenue, if any, received from commercial sales of our current
 and future product candidates;

 our
 headcount growth and associated costs as we expand our research and development and establish
 a commercial infrastructure;

 the
 costs of preparing, filing and prosecuting patent applications, maintaining and protecting
 our intellectual property rights including enforcing and defending intellectual property
 related claims; and

 the
 costs of operating as a public company.

 Risks
Related to the Discovery, Development and Regulatory Approval of Our Product Candidates

 We
are substantially dependent on the success of our internal development programs and our product pipeline candidates may not successfully
complete clinical trials, receive regulatory approval or be successfully commercialized.

 Our
future success will depend heavily on the success of our internal development programs and of product candidates from our pipeline program.

 Our
ability to successfully commercialize our pipeline and our other product candidates will depend on, among other things, our ability to:

 successfully
 complete preclinical studies and clinical trials;

 receive
 regulatory approvals from the U.S. Food and Drug Administration ("FDA"), the
 European Medicines Agency ("EMA") and other similar regulatory authorities;

 establish
 and maintain collaborations with third parties for the development and/or commercialization
 of our product candidates, or otherwise build and maintain strong development, sales, distribution
 and marketing capabilities that are sufficient to develop products and launch commercial
 sales of any approved products;

 obtain
 coverage and adequate reimbursement from payors such as government health care systems and
 insurance companies and achieve commercially attractive levels of pricing;

 secure
 acceptance of our product candidates from physicians, health care payors, patients and the
 medical community;

 produce,
 through a validated process, in manufacturing facilities inspected and approved by regulatory
 authorities, including the FDA, sufficiently large quantities of our product candidates to
 permit successful commercialization;

 manage
 our spending as expenses increase due to clinical trials and commercialization; and

 obtain
 and enforce sufficient intellectual property rights for any approved products and product
 candidates.

 Of
the large number of drugs in development in the pharmaceutical industry, only a small percentage result in the submission of a new drug
application, or NDA, or biologics licensing application, or BLA, to the FDA and even fewer are approved for commercialization. Furthermore,
even if we do receive regulatory approval to market our product candidates, any such approval may be subject to limitations on the indicated
uses or patient populations for which we may market the product. Accordingly, even if we are able to obtain the requisite financing to
continue to fund our development programs, we cannot assure you that our product candidates will be successfully developed or commercialized.
If we are unable to develop, or obtain regulatory approval for, or, if approved, to successfully commercialize our product candidates,
we may not be able to generate sufficient revenue to continue our business.

 We
are at an early stage in our development efforts, our product candidates represent a new category of medicines and may be subject to
heightened regulatory scrutiny until they are established as a therapeutic modality.

 Our
pipeline product candidates represent a new therapeutic modality of including engaging a Fully Human Albumin Binding Domain to deliver
therapeutic products. Our product candidates may not demonstrate in patients any or all of the pharmacological benefits we believe they
may possess. We have not yet succeeded and may never succeed in demonstrating efficacy and safety for these or any other product candidates
in clinical trials or in obtaining marketing approval thereafter.

 Regulatory
authorities do not have experience with our product candidate and may require evidence of safety and efficacy that goes beyond what we
have included in our development plans. In such a case, development of our product candidates may be more costly or time-consuming than
expected, and our candidate products may not prove to be viable.

 If
we are unsuccessful in our development efforts, we may not be able to advance the development of our product candidates, commercialize
products, raise capital, expand our business or continue our operations.

 Our
product candidates and those of any collaborators will need to undergo preclinical and clinical trials that are time-consuming and expensive,
the outcomes of which are unpredictable, and for which there is a high risk of failure. If preclinical or clinical trials of our or their
product candidates fail to satisfactorily demonstrate safety and efficacy to the FDA, the EMA and any other comparable regulatory authority,
additional costs may be incurred or delays experienced in completing, the development of these product candidates, or their development
may be abandoned.

 The
FDA in the United States, the EMA in the European Union and the European Economic Area, and other comparable regulatory authorities in
other jurisdictions must approve new product candidates before they can be marketed, promoted or sold in those territories. We have not
previously submitted an IND or BLA to the FDA or similar drug approval filings to comparable foreign regulatory authorities for any of
our product candidates. We must provide these regulatory authorities with data from preclinical studies and clinical trials that demonstrate
that our product candidates are safe and effective for a specific indication before they can be approved for commercial distribution.
We cannot be certain that our clinical trials for our product candidates will be successful or that any of our product candidates will
receive approval from the FDA, the EMA or any other comparable regulatory authority.

 Preclinical
studies and clinical trials are long, expensive and unpredictable processes that can be subject to extensive delays. We cannot guarantee
that any clinical trials will be conducted as planned or completed on schedule, if at all. It may take several years and require significant
expenditures to complete the preclinical studies and clinical trials necessary to commercialize a product candidate, and delays or failure
are inherently unpredictable and can occur at any stage. We may also be required to conduct additional clinical trials or other testing
of our product candidates beyond the trials and testing that we contemplate, which may lead to us incurring additional unplanned costs
or result in delays in clinical development. In addition, we may be required to redesign or otherwise modify our plans with respect to
an ongoing or planned clinical trial, and changing the design of a clinical trial can be expensive and time consuming. An unfavorable
outcome in one or more trials would be a major setback for our product candidates and for us. An unfavorable outcome in one or more trials
may require us to delay, reduce the scope of or eliminate one or more product development programs, which could have a material adverse
effect on our business, financial position, results of operations and future growth prospects.

 Many
of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial
of marketing approval for our product candidates. The FDA, EMA or any other comparable regulatory authority may disagree with our clinical
trial design and our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed
and commented on the design for our clinical trials.

 In
connection with clinical trials of our product candidates, we face a number of risks, including risks that:

 a
 product candidate is ineffective or inferior to existing approved products for the same indications;

 a
 product candidate causes or is associated with unacceptable toxicity or has unacceptable side effects;

 patients
 may die or suffer adverse effects for reasons that may or may not be related to the product candidate being tested;

 the
 results may not confirm the positive results of earlier trials;

 the
 results may not meet the level of statistical significance required by the FDA, the EMA or other relevant regulatory agencies to
 establish the safety and efficacy of our product candidates for continued trial or marketing approval; and

 our
 collaborators may be unable or unwilling to perform under their contracts.

 Furthermore,
we sometimes estimate for planning purposes the timing of the accomplishment of various scientific, clinical, regulatory and other product
development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies,
clinical trials, the submission of regulatory filings or commercialization objectives. From time to time, we may publicly announce the
expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical programs,
the receipt of marketing approval or a commercial launch of a product. The achievement of many of these milestones may be outside of
our control. All of these milestones are based on a variety of assumptions, which may cause the timing of achievement of the milestones
to vary considerably from our estimates. If we fail to achieve milestones in the timeframes we expect, the commercialization of our product
candidates may be delayed, we may not be entitled to receive certain contractual payments, which could have a material adverse effect
on our business, financial position, results of operations and future growth prospects.

 We
may find it difficult to enroll patients in our clinical trials, which could delay or prevent us from proceeding with clinical trials
of our product candidates.

 Identifying
and qualifying patients to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical
trials depends on our ability to recruit patients to participate as well as the completion of required follow-up periods. Patients may
be unwilling to participate in our clinical trials because of negative publicity from adverse events related to novel therapeutic approaches,
competitive clinical trials for similar patient populations, the existence of current treatments or for other reasons. Enrollment risks
are heightened with respect to certain indications that we may target for one or more of our product candidates that may be rare diseases,
which may limit the pool of patients that may be enrolled in our planned clinical trials. The timeline for recruiting patients, conducting
trials and obtaining regulatory approval of our product candidates may be delayed, which could result in increased costs, delays in advancing
our product candidates, delays in testing the effectiveness of our product candidates or termination of the clinical trials altogether.

 We
may not be able to identify, recruit and enroll a sufficient number of patients, or those with the required or desired characteristics,
to complete our clinical trials in a timely manner. For example, due to the nature of the indications that we are initially targeting,
patients with advanced disease progression may not be suitable candidates for treatment with our product candidates and may be ineligible
for enrollment in our clinical trials. Therefore, early diagnosis in patients with our target diseases is critical to our success. Patient
enrollment and trial completion is affected by factors including the:

 size
 of the patient population and process for identifying subjects;

 design
 of the trial protocol;

 eligibility
 and exclusion criteria;

 safety
 profile, to date, of the product candidate under study;

 perceived
 risks and benefits of the product candidate under study;

 perceived
 risks and benefits of our approach to treatment of diseases;

 availability
 of competing therapies and clinical trials;

 severity
 of the disease under investigation;

 degree
 of progression of the subject's disease at the time of enrollment;

 proximity
 and availability of clinical trial sites for prospective subjects;

 ability
 to obtain and maintain subject consent;

 risk
 that enrolled subjects will drop out before completion of the trial;

 patient
 referral practices of physicians; and

 ability
 to monitor subjects adequately during and after treatment.

 In
addition, clinical development for pilot scale feasibility study of SON-080 is currently planned to take place outside of the U.S. Our
ability to successfully initiate, enroll and complete a clinical trial in any foreign country is subject to numerous risks unique to
conducting business in foreign countries, including:

 difficulty
 in establishing or managing relationships with academic partners or contract research organizations, or CROs, and physicians;

 different
 standards for the conduct of clinical trials;

 the
 absence in some countries of established groups with sufficient regulatory expertise for review of protocols related to our novel
 approach;

 our
 inability to locate qualified local consultants, physicians and partners; and

 the
 potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation
 of pharmaceutical and biotechnology products and treatment.

 If
we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit or
terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business, financial condition, results
of operations and prospects.

 Results
of preclinical studies and early clinical trials may not be predictive of results of future clinical trials.

 The
outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results
of clinical trials do not necessarily predict success in the results of completed clinical trials. Many companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier
development, and we could face similar setbacks. For example, the Phase IIa trial of SON-080 was conducted outside of the U.S., and the
findings may not be replicated in future trials at global clinical trial sites in a later stage clinical trial conducted by us or our
collaborators. The design of a clinical trial can determine whether its results will support approval of a product and flaws in the design
of a clinical trial may not become apparent until the clinical trial is well advanced. We may be unable to design and execute a clinical
trial to support marketing approval.

 Preclinical
and clinical data are often susceptible to varying interpretations and analyses. Many companies that believed their product candidates
performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for the product
candidates. Even if we, or any collaborators, believe that the results of clinical trials for our product candidates warrant marketing
approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of our product candidates.

 In
some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product
candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of
the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among
clinical trial participants. If we fail to receive positive results in clinical trials of our product candidates, the development timeline
and regulatory approval and commercialization prospects for our most advanced product candidates, and, correspondingly, our business
and financial prospects would be negatively impacted.

 Our
current or future product candidates may cause undesirable side effects or have other properties when used alone or in combination with
other approved products or investigational new drugs that could halt their clinical development, prevent their marketing approval, limit
their commercial potential or result in significant negative consequences.

 Undesirable
or clinically unmanageable side effects could occur and cause us or regulatory authorities to interrupt, delay or halt clinical trials
and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory
authorities. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

 If
unacceptable side effects arise in the development of our product candidates, we, the FDA or comparable foreign regulatory authorities,
the Institutional Review Boards, or IRBs, or independent ethics committees at the institutions in which our studies are conducted, or
the Data Safety Monitoring Board, or DSMB, could suspend or terminate our clinical trials or the FDA or comparable foreign regulatory
authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related
side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial, or result in potential
product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff.
We may be required to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials
and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects
of our product candidates could result in patient injury or death. Any of these occurrences may prevent us from achieving or maintaining
market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly.

 Moreover,
clinical trials of our product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical
trials. Consequently, it is possible that our clinical trials may indicate an apparent positive effect of a product candidate that is
greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects. If, following approval of
a product candidate, we, or others, discover that the product is less effective than previously believed or causes undesirable side effects
that were not previously identified, any of the following consequences could occur:

 regulatory
 authorities may withdraw their approval of the product or seize the product;

 we,
 or any collaborators, may need to recall the product, or be required to change the way the product is administered or conduct additional
 clinical trials;

 additional
 restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular product;

 we
 may be subject to fines, injunctions or the imposition of civil or criminal penalties;

 regulatory
 authorities may require the addition of labeling statements, such as a boxed warning or a contraindication;

 we,
 or any collaborators, may be required to create a medication guide outlining the risks of the previously unidentified side effects
 for distribution to patients;

 we,
 or any collaborators, could be sued and held liable for harm caused to patients;

 the
 product may become less competitive; and

 our
 reputation may suffer.

 If
any of our current or future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain marketing approval,
we will not be able to generate revenue and our business will be harmed. Any of these events could harm our business and operations,
and could negatively impact the price of our common stock.

 We
may not be successful in our efforts to identify or discover additional product candidates.

 Although
we intend to explore other therapeutic opportunities in addition to the product candidates that we are currently developing, we may fail
to identify other product candidates for clinical development for a number of reasons. For example, our research methodology may not
be successful in identifying potential product candidates or those we identify may be shown to have harmful side effects or other characteristics
that make them unmarketable or unlikely to receive regulatory approval. Additional product candidates will require additional, time-consuming
development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable
foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product
development. If we fail to identify and develop additional potential product candidates, we may be unable to grow our business and our
results of operations could be materially harmed.

 We
may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates
or indications that may be more profitable or for which there is a greater likelihood of success.

we have limited financial and managerial resources, we intend to focus on developing product candidates for specific indications that
we identify as most likely to succeed, in terms of both their potential for marketing approval and commercialization. As a result, we
may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial
potential.

 Our
resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our
spending on current and future research and development programs and product candidates for specific indications may not yield any commercially
viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate,
we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in
which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.

 We
face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs. If
the use of our product candidates harms patients, or is perceived to harm patients even when such harm is unrelated to our product candidates,
our regulatory approvals could be revoked or otherwise negatively impacted and we could be subject to costly and damaging product liability
claims.

 The
use of our product candidates in clinical trials and the sale of any products for which we obtain marketing approval expose us to the
risk of product liability claims. Product liability claims might be brought against us by patients, healthcare providers, pharmaceutical
companies or others selling or otherwise coming into contact with our products. There is a risk that our product candidates may induce
adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. In
addition, regardless of merit or eventual outcome, product liability claims may result in:

 the
 impairment of our business reputation;

 the
 withdrawal of clinical trial participants;

 substantial
 monetary awards to patients or other claimants;

 costs
 due to related litigation;

 the
 distraction of management's attention from our primary business;

 the
 inability to commercialize our product candidates; and

 decreased
 demand for our product candidates, if approved for commercial sale.

 We
intend to acquire product liability insurance coverage in light of our current clinical programs; however, we may not be able to maintain
insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. We intend to expand our
insurance coverage each time we commercialize an additional product; however, we may be unable to obtain product liability insurance
on commercially reasonable terms or in adequate amounts. On occasion, large judgments have been awarded in class action lawsuits based
on drugs or medical treatments that had unanticipated adverse effects. A successful product liability claim or series of claims brought
against us could cause our stock price to decline and, if judgments exceed our insurance coverage, could adversely affect our results
of operations and business.

 Patients
with the diseases targeted by certain of our product candidates, such as our lead indications in oncology, are often already in severe
and advanced stages of disease and have both known and unknown significant pre-existing and potentially life-threatening health risks.
During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to our product candidates.
Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively
impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon
our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our products, the
investigation into the circumstance may be time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay
our regulatory approval process, or impact and limit the type of regulatory approvals our product candidates receive or maintain. As
a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business,
financial condition or results of operations.

 We
may seek designations for our product candidates with the FDA and other comparable regulatory authorities that are intended to confer
benefits such as a faster development process or an accelerated regulatory pathway, but there can be no assurance that we will successfully
obtain such designations. In addition, even if one or more of our product candidates are granted such designations, we may not be able
to realize the intended benefits of such designations.

 The
FDA and other comparable regulatory authorities offer certain designations for product candidates that are intended to encourage the
research and development of pharmaceutical products addressing conditions with significant unmet medical need. These designations may
confer benefits such as additional interaction with regulatory authorities, a potentially accelerated regulatory pathway and priority
review. There can be no assurance that we will successfully obtain such designation for any of our other product candidates. In addition,
while such designations could expedite the development or approval process, they generally do not change the standards for approval.
Even if we obtain such designations for one or more of our product candidates, there can be no assurance that we will realize their intended
benefits.

 For
example, we may seek a Breakthrough Therapy Designation for one or more of our product candidates. A breakthrough therapy is defined
as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease
or condition, if preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies
on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies
that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help
to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
Therapies designated as breakthrough therapies by the FDA are also eligible for accelerated approval. Designation as a breakthrough therapy
is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation
as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough
Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to therapies
considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one
or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer
meet the conditions for qualification.

 We
may also seek Fast Track Designation for some of our product candidates. If a therapy is intended for the treatment of a serious or life-threatening
condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply
for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular
product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it. Even if we do receive
Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures,
and receiving a Fast Track Designation does not provide assurance of ultimate FDA approval. The FDA may withdraw Fast Track Designation
if it believes that the designation is no longer supported by data from our clinical development program.

 We
may seek priority review designation for one or more of our product candidates, but we might not receive such designation, and even if
we do, such designation may not lead to a faster regulatory review or approval process.

 If
the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a
significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. A priority review
designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months.
We may request priority review for our product candidates. The FDA has broad discretion with respect to whether or not to grant priority
review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status,
in particular if such product candidate has received a Breakthrough Therapy Designation, the FDA may decide not to grant it. Moreover,
a priority review designation does not result in expedited development and does not necessarily result in expedited regulatory review
or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority
review from the FDA does not guarantee approval within the six-month review cycle or at all.

 Obtaining
and maintaining marketing approval of our current and future product candidates in one jurisdiction does not mean that we will be successful
in obtaining marketing approval of our current and future product candidates in other jurisdictions.

 Obtaining
and maintaining marketing approval of our current and future product candidates in one jurisdiction does not guarantee that we will be
able to obtain or maintain marketing approval in any other jurisdiction, while a failure or delay in obtaining marketing approval in
one jurisdiction may have a negative effect on the marketing approval process in others. For example, even if the FDA grants marketing
approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing
and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements
and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies
or clinical trials as clinical studies conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for
sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. We do not
have experience in obtaining reimbursement or pricing approvals in international markets.

 Obtaining
marketing approvals and compliance with regulatory requirements could result in significant delays, difficulties and costs for us and
could delay or prevent the introduction of our products in certain countries outside of the United States. If we fail to comply with
the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced
and our ability to realize the full market potential of our product candidates will be harmed.

 The
widespread outbreak of communicable diseases could materially and adversely affect our business, financial condition and results of operations.

 We
face risks related to health epidemics or outbreaks of communicable diseases, for example, the outbreak around the world of the highly
transmissible and pathogenic coronavirus COVID-19. The outbreak of such communicable diseases could result in a widespread health crisis
that could adversely affect general commercial activity and the economies and financial markets of many countries. Many countries around
the world may impose quarantines and restrictions on travel and mass gatherings to slow the spread of communicable diseases and close
non-essential businesses. Such events may result in a period of business, supply and drug product manufacturing disruption, and in reduced
operations, any of which could materially affect our business, financial condition and results of operations.

 A
pandemic or outbreak could result in difficulty securing clinical trial site locations, CROs, and/or trial monitors and other critical
vendors and consultants supporting the trial. In addition, outbreaks or the perception of an outbreak near a clinical trial site location
could impact our ability to enroll patients. These situations could cause delays in our clinical trial plans and could increase expected
costs, all of which could have a material adverse effect on our business and its financial condition. In particular, manufacturing of
our pipeline products may be delayed by related supply chain issues, specifically supply of raw materials, including media, resins, and
analytical kits, compounded by international shipping delays.

 While
the potential economic impact brought by, and the duration of the widespread outbreak of communicable diseases may be difficult to assess
or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access
capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the
spread of any communicable disease could materially affect our business and the value of our common stock.

 An
outbreak may also affect the ability of our staff and the parties we work with to carry out our non-clinical, clinical, and drug manufacturing
activities. We rely or may in the future rely on clinical sites, investigators and other study staff, consultants, independent contractors,
contract research organizations and other third-party service providers to assist us in managing, monitoring and otherwise carrying out
our nonclinical studies and clinical trials. We also rely or may in the future rely on consultants, independent contractors, contract
manufacturing organizations, and other third-party service providers to assist us in managing, monitoring and otherwise carrying out
our Active Pharmaceutical Ingredients (APIs) production, formulation, and drug manufacturing activities. A widespread pandemic would
affect the ability of any of these external people, organizations, or companies to devote sufficient time and resources to our programs
or to travel to perform work for us.

 Potential
negative impacts of the widespread outbreak of communicable diseases on the conduct of current or future clinical studies include delays
in gaining feedback from regulatory agencies, starting new clinical studies, and recruiting subjects to studies that are enrolling. The
potential negative impacts also include inability to have study visits at study sites, incomplete collection of safety and efficacy data,
and higher rates of drop-out of subjects from ongoing studies, delays in site entry of study data into the data base, delays in monitoring
of study data because of restricted physical access to study sites, delays in site responses to queries, delays in data-base lock, delays
in data analyses, delays in time to top-line data, and delays in completing study reports. New communicable disease disruptions or restrictions
could have the potential to negatively impact our non-clinical studies, clinical trials, and drug manufacturing activities.

 Risks
Related to Commercialization of Our Product Candidates and Other Regulatory Compliance Matters

 Even
if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time consuming and
uncertain and may prevent us or any collaborators from obtaining approvals for the commercialization of some or all of our product candidates.
As a result, we cannot predict when or if, and in which territories, we, or any collaborators, will obtain marketing approval to commercialize
a product candidate.

 The
process of obtaining marketing approvals, both in the United States and abroad, is lengthy, expensive and uncertain. It may take many
years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and
novelty of the product candidates involved. Securing marketing approval requires the submission of extensive preclinical and clinical
data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate's
safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process
to, and inspection of manufacturing facilities by, the regulatory authorities. The FDA or other regulatory authorities may determine
that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities
or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use. Any marketing approval we
ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially
viable.

 In
addition, changes in marketing approval policies during the development period, changes in or the enactment or promulgation of additional
statutes, regulations or guidance or changes in regulatory review for each submitted product application, may cause delays in the approval
or rejection of an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any
application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.
Varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of
a product candidate. We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product
candidate. Even if our product candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies may not complete
their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA
Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience
delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory
agency policy during the period of product development, clinical trials and the review process. Any marketing approval we ultimately
obtain may be limited or subject to restrictions or post-approval commitments that render the approved product commercially unviable.

 Moreover,
principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation
in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or
other regulatory authority. The FDA or other regulatory authority may conclude that a financial relationship between us and a principal
investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA or other regulatory authority
may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial
itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or other
regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

 In
addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization
of our product candidates. For example, regulatory agencies may approve a product candidate for fewer or more limited indications than
requested or may grant approval subject to the performance of post-marketing studies. Regulators may approve a product candidate for
a smaller patient population, a different drug formulation or a different manufacturing process, than we are seeking. If we are unable
to obtain necessary regulatory approvals, or more limited regulatory approvals than we expect, our business, prospects, financial condition
and results of operations may suffer.

 Any
delay in obtaining or failure to obtain required approvals could negatively impact our ability to generate revenue from the particular
product candidate, which likely would result in significant harm to our financial position and adversely impact the price of our common
stock.

 We
currently have no marketing, sales or distribution infrastructure with respect to our product candidates. If we are unable to develop
our sales, marketing and distribution capability on our own or through collaborations with marketing partners, we will not be successful
in commercializing our product candidates.

 We
currently have no marketing, sales or distribution capabilities and have limited sales or marketing experience within our organization.
If one or more of our product candidates is approved, we intend either to establish a sales and marketing organization with technical
expertise and supporting distribution capabilities to commercialize that product candidate, or to outsource this function to a third
party. There are risks involved with either establishing our own sales and marketing capabilities and entering into arrangements with
third parties to perform these services.

 Recruiting
and training an internal commercial organization is expensive and time consuming and could delay any product launch. Some or all of these
costs may be incurred in advance of any approval of any of our product candidates. If the commercial launch of a product candidate for
which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely
or unnecessarily incurred these commercialization expenses. This may be costly and our investment would be lost if we cannot retain or
reposition our sales and marketing personnel. In addition, we may not be able to hire a sales force in the United States or other target
market that is sufficient in size or has adequate expertise in the medical markets that we intend to target.

 Factors
that may inhibit our efforts to commercialize our product candidates on our own include:

 the
 inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

 the
 inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future product
 that we may develop;

 the
 lack of complementary treatments to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies
 with more extensive product lines; and

 unforeseen
 costs and expenses associated with creating an independent sales and marketing organization.

 If
we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenue or the profitability
to us from these revenue streams is likely to be lower than if we were to market and sell any product candidates that we develop ourselves.
In addition, we may not be successful in entering into arrangements with third parties to sell and market our product candidates or may
be unable to do so on terms that are favorable to us. We likely will have little control over such third parties and any of them may
fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales
and marketing capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing
our product candidates.

 The
market opportunities for any current or future product candidate we develop, if and when approved, may be limited to those patients who
are ineligible for established therapies or for whom prior therapies have failed, and therefore may be small.

 Cancer
therapies are sometimes characterized as first-line, second-line, or third-line, and the FDA often approves new therapies initially only
for third-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation
therapy, immunotherapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second- and
third-line therapies are administered to patients when prior therapy is not effective. We may initially seek approval of our product
candidates we develop as a therapy for patients who have received one or more prior treatments. Subsequently, for those products that
prove to be sufficiently beneficial, if any, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee
that product candidates we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we
may have to conduct additional clinical trials.

 The
number of patients who have the cancers we are targeting may turn out to be lower than expected. Additionally, the potentially addressable
patient population for our current programs or future product candidates may be limited, if and when approved. Even if we obtain significant
market share for any product candidate, if and when approved, if the potential target populations are small, we may never achieve profitability
without obtaining marketing approval for additional indications, including use as first- or second-line therapy.

 Even
if we receive marketing approval of a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory
review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements
or experience unanticipated problems with our products, if approved.

 Any
marketing approvals that we receive for any current or future product candidate may be subject to limitations on the approved indicated
uses for which the product may be marketed or the conditions of approval, or contain requirements for potentially costly post-market
testing and surveillance to monitor the safety and efficacy of the product candidate. The FDA may also require a Risk Evaluation and
Mitigation Strategy, or REMS, as a condition of approval of any product candidate, which could include requirements for a medication
guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries
and other risk minimization tools. If the FDA or a comparable foreign regulatory authority approves a product candidate, the manufacturing
processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import and export and record
keeping for the product candidate will be subject to extensive and ongoing regulatory requirements. These requirements include, among
others, prohibitions on the promotion of an approved product for uses not included in the product's approved labeling, submissions
of safety and other post-marketing information and reports, registration, as well as continued compliance with current Good Manufacturing
Practice, or cGMP, and Good Clinical Practice, or GCP, for any clinical trials that we conduct post-approval. Later discovery of previously
unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party
manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

 restrictions
 on the labeling, distribution, marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls;

 untitled
 and warning letters, or holds on clinical trials;

 refusal
 by the FDA to approve pending applications or supplements to approved applications we filed or suspension or revocation of license
 approvals;

 requirements
 to conduct post-marketing studies or clinical trials;

 restrictions
 on coverage by third-party payors;

 fines,
 restitution or disgorgement of profits or revenues;

 suspension
 or withdrawal of marketing approvals;

 product
 seizure or detention, or refusal to permit the import or export of the product; and

 injunctions
 or the imposition of civil or criminal penalties.

 The
FDA's and other regulatory authorities' policies may change and additional government regulations may be enacted that could
prevent, limit or delay marketing approval of a product. We cannot predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt
to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance,
we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

 We
face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than
the product candidates we develop, our commercial opportunities will be negatively impacted.

 The
life sciences industry is highly competitive. We are currently developing therapeutics that will compete, if approved, with other products
and therapies that currently exist, are being developed or will in the future be developed, some of which we may not currently be aware.

 We
have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology
companies, specialty pharmaceutical companies, universities and other research institutions. Many of our competitors have significantly
greater financial, manufacturing, marketing, product development, technical and human resources than we do. Large pharmaceutical companies,
in particular, have extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical
products. These companies also have significantly greater research and marketing capabilities than we do and may also have products that
have been approved or are in late stages of development, and collaborative arrangements in our target markets with leading companies
and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel
compounds or to in-license novel compounds that could make the product candidates that we develop obsolete. Mergers and acquisitions
in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our
competitors. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval
or discovering, developing and commercializing products in our field before we do.

 There
is a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical and biotechnology companies.
These treatments consist both of small molecule drug products, such as traditional chemotherapy, as well as novel immunotherapies. For
example, a number of multinational companies as well as large biotechnology companies, including Astellas Pharma Inc., AstraZeneca, Pfizer,
Eli Lilly, Gilead Sciences, Immunity Bio, GlaxoSmithKline plc, Xilio and Werewolf Therapeutics are developing programs for the targets
that we are exploring for our pipeline programs.

 Our
commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,
have fewer or less severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less
expensive than any products that we may develop. Our competitors also may obtain FDA, EMA or other marketing approval for their products
more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before
we are able to enter the market. Even if the product candidate we develop achieve marketing approval, they may be priced at a significant
premium over competitive products if any have been approved by then, resulting in reduced competitiveness.

 Smaller
and other early stage companies may also prove to be significant competitors. These third parties compete with us in recruiting and retaining
qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well
as in acquiring technologies complementary to, or necessary for, our programs. In addition, the biopharmaceutical industry is characterized
by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively.
Technological advances or products developed by our competitors may render our product candidates obsolete, less competitive or not economical.

 The
commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients,
payors and others in the medical community.

 We
have never commercialized a product, and even if we obtain any regulatory approval for our product candidates, the commercial success
of our product candidates will depend in part on the medical community, patients, and payors accepting our product candidates as effective,
safe and cost-effective. Any product that we bring to the market may not gain market acceptance by physicians, patients, payors and others
in the medical community. Physicians are often reluctant to switch their patients from existing therapies even when new and potentially
more effective or convenient treatments enter the market. Further, patients often acclimate to the therapy that they are currently taking
and do not want to switch unless their physicians recommend switching products or they are required to switch therapies due to lack of
reimbursement for existing therapies.

 The
degree of market acceptance of these product candidates, if approved for commercial sale, will depend on a number of factors, including:

 the
 potential efficacy and potential advantages over alternative treatments;

 the
 frequency and severity of any side effects, including any limitations or warnings contained in a product's approved labeling;

 the
 frequency and severity of any side effects resulting from follow-up requirements for the administration of our product candidates;

 the
 relative convenience and ease of administration;

 the
 willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

 the
 strength of marketing and distribution support and timing of market introduction of competitive products;

 publicity
 concerning our products or competing products and treatments; and

 sufficient
 third-party insurance coverage and adequate reimbursement.

 Even
if a product candidate displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance
of the product, if approved for commercial sale, will not be known until after it is launched. Our efforts to educate the medical community
and payors on the benefits of our product candidates may require significant resources and may never be successful. Such efforts to educate
the marketplace may require more resources than are required by the conventional technologies marketed by our competitors, particularly
due to the novelty of our Sonnet approach. If these products do not achieve an adequate level of acceptance, we may not generate
significant product revenue and may not become profitable.

 If
the market opportunities for our product candidates are smaller than we believe they are, our product revenues may be adversely affected
and our business may suffer.

 We
currently focus our research and product development on treatments for oncology indications and our product F H AB candidates
are designed to target solid tumors. Our understanding of both the number of people who have these diseases, as well as the subset of
people with these diseases who have the potential to benefit from treatment with our product candidates, are based on estimates. These
estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of these diseases. Patient identification
efforts also influence the ability to address a patient population. If efforts in patient identification are unsuccessful or less impactful
than anticipated, we may not address the entirety of the opportunity we are seeking.

 The
insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage
and reimbursement for any of our product candidates, if approved, could limit our ability to market those products and decrease our ability
to generate revenue.

 We
expect the cost of our product candidates to be substantial, when and if they achieve market approval. The availability and extent of
reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments. Sales of our
product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates
will be paid by private payors, such as private health coverage insurers, health maintenance, managed care, pharmacy benefit and similar
healthcare management organizations, or reimbursed by government health care programs, such as Medicare and Medicaid. We may not be able
to provide data sufficient to gain acceptance with respect to coverage and reimbursement. If reimbursement is not available, or is available
only at limited levels, we may not be able to successfully commercialize our product candidates, even if approved. Even if coverage is
provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize
a sufficient return on our investment.

 There
is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the
principal decisions about coverage and reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid
Services, or CMS, an agency within the U.S. Department of Health and Human Services, as the CMS decides whether and to what extent a
new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult
to predict what CMS will decide with respect to coverage and reimbursement for novel products such as ours, as there is no body of established
practices and precedents for these new products. Coverage and reimbursement by a third-party payor may depend upon a number of factors,
including the third-party payor's determination that use of a product is: (1) a covered benefit under its health plan; (2) safe,
effective and medically necessary; (3) appropriate for the specific patient; (4) cost-effective; and (5) neither experimental nor investigational.
In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. As a result, the
coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support
for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently
or obtained in the first instance. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not
be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Third-party payors
may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the approved
drugs for a particular indication.

 Additionally,
third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of
product candidates. Patients are unlikely to use our product candidates unless coverage is provided and reimbursement is adequate to
cover a significant portion of the cost of our product candidates. Because our product candidates may have a higher cost of goods than
conventional therapies, and may require long-term follow-up evaluations, the risk that coverage and reimbursement rates may be inadequate
for us to achieve profitability may be greater. There is significant uncertainty related to insurance coverage and reimbursement of newly
approved products. It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement
for our product candidates.

 Moreover,
increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause
such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover
or provide adequate payment for our product candidates. There has been increasing legislative and enforcement interest in the United
States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and
proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription
drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement
methodologies for drugs. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to
the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional
legislative changes.

 Outside
the United States, certain countries, including a number of member states of the European Union, set prices and reimbursement for pharmaceutical
products, or medicinal products, as they are commonly referred to in the European Union. These countries have broad discretion in setting
prices and we cannot be sure that such prices and reimbursement will be acceptable to us or our collaborators. If the regulatory authorities
in these jurisdictions set prices or reimbursement levels that are not commercially attractive for us or our collaborators, our revenues
from sales by us or our collaborators, and the potential profitability of our drug products, in those countries would be negatively affected.
An increasing number of countries are taking initiatives to attempt to reduce large budget deficits by focusing cost-cutting efforts
on pharmaceuticals for their state-run health care systems. These international price control efforts have impacted all regions of the
world, but have been most drastic in the European Union. Additionally, some countries require approval of the sale price of a product
before it can be lawfully marketed. In many countries, the pricing review period begins after marketing or product licensing approval
is granted. To obtain reimbursement or pricing approval in some countries, we, or any collaborators, may be required to conduct a clinical
trial that compares the cost-effectiveness of our product to other available therapies. As a result, we might obtain marketing approval
for a product in a particular country, but then may experience delays in the reimbursement approval of our product or be subject to price
regulations that would delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the
revenues we are able to generate from the sale of the product in that particular country.

 Moreover,
efforts by governments and payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to
limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate reimbursement
for our product candidates. There has been increasing legislative and enforcement interest in the United States with respect to specialty
drug practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation
designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review
the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed
healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on
healthcare costs in general, particularly prescription drugs and other treatments, has become very intense. As a result, increasingly
high barriers are being erected to the entry of new products. If reimbursement of our products is unavailable or limited in scope or
amount, or if pricing is set at unsatisfactory levels, our business could be harmed.

 If
the FDA or comparable foreign regulatory authorities approve generic versions of any of our product candidates that receive marketing
approval, or such authorities do not grant such products appropriate periods of data exclusivity before approving generic versions of
such products, the sales of such products could be adversely affected.

 In
the United States, manufacturers may seek approval of biosimilar versions of biologics approved by the FDA under a BLA through submission
of abbreviated biologic license applications, or ABLAs. In support of an ABLA, a biosimilar manufacturer generally must show that its
product is similar to the original biologic product. Biosimilar products may be less costly to bring to market than the original biologic
and companies that produce biosimilar products are sometimes able to offer them at lower prices. Thus, following the introduction of
a biosimilar product, a significant percentage of the sales of the original biologic may be lost to the biosimilar product, and the price
of the original biologic product may be lowered.

 The
FDA may not accept for review or approve an ABLA for a biosimilar product until any applicable period of non-patent exclusivity for the
original biologic has expired. The Public Health Service (PHS) Act provides a period of twelve years of non-patent exclusivity for a
biologic approved under a BLA.

 Competition
that our products may face from biosimilar versions of our products could negatively impact our future revenue, profitability and cash
flows and substantially limit our ability to obtain a return on our investments in those product candidates.

 We
may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws health information privacy
and security laws, and other health care laws and regulations. If we are unable to comply, or have not fully complied, with such laws,
we could face substantial penalties.

 If
we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations
will be directly, or indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and abuse
laws and regulations, including, without limitation, the federal Health Care Program Anti-Kickback Statute, or Anti-Kickback Statute,
the federal civil and criminal False Claims Act and Physician Payments Sunshine Act and regulations. These laws will impact, among other
things, our proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal
government and the states in which we conduct our business. The laws that will affect our operations include, but are not limited to:

 the
 Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving,
 offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
 or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement, or recommendation
 of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such
 as the Medicare and Medicaid programs. "Remuneration" has been interpreted broadly to include anything of value. A person
 or entity does not need to have actual knowledge of the Anti-Kickback Statute or specific intent to violate it to have committed
 a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback
 Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act, or FCA, or federal civil money penalties.
 The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and
 prescribers, purchasers, and formulary managers on the other. There are a number of statutory exceptions and regulatory safe harbors
 protecting some common activities from prosecution;

 the
 federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, which impose criminal and civil
 penalties against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal
 government, claims for payment that are false or fraudulent; knowingly making, using or causing to be made or used, a false statement
 of record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government. Manufacturers
 can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to "cause"
 the submission of false or fraudulent claims. The FCA also permits a private individual acting as a "whistleblower" to
 bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;

 the
 beneficiary inducement provisions of the CMP Law, which prohibits, among other things, the offering or giving of remuneration, which
 includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions),
 to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary's selection
 of a particular supplier of items or services reimbursable by a federal or state governmental program;

 the
 federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit
 a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or
 obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the
 custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully
 falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent
 statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating
 to healthcare matters; similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute
 or specific intent to violate it in order to have committed a violation;

 HIPAA,
 as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations,
 which impose requirements on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities,
 as well as their respective business associates, individuals and entities that perform services on their behalf that involve the
 use or disclosure of individually identifiable health information, relating to the privacy, security and transmission of individually
 identifiable health information;

 the
 U.S. federal transparency requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education
 Reconciliation Act, or collectively, ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, which
 requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare,
 Medicaid or the Children's Health Insurance Program (with certain exceptions) to report annually to CMS information related
 to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors)
 and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate
 family members. Beginning in 2022, applicable manufacturers also will be required to report information regarding payments and transfers
 of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified
 nurse-midwives;

 federal
 government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner
 to government programs; and

 federal
 consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm
 consumers.

 Additionally,
we are subject to state and foreign equivalents of each of the healthcare laws and regulations described above, among others, some of
which may be broader in scope and may apply regardless of the payer. Many U.S. states have adopted laws similar to the Anti-Kickback
Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or
marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers.
In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General
Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America's
Code on Interactions with Healthcare Professionals. Several states also impose other marketing restrictions or require pharmaceutical
companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply with these state
requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties. Finally, there are state
and foreign laws governing the privacy and security of health information, many of which differ from each other in significant ways and
often are not preempted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that
some of our business activities could be subject to challenge under one or more of such laws. Law enforcement authorities are increasingly
focused on enforcing fraud and abuse laws, and it is possible that some of our practices may be challenged under these laws. Efforts
to ensure that our current and future business arrangements with third parties, and our business generally, will comply with applicable
healthcare laws and regulations will involve substantial costs. If our operations, including our arrangements with physicians and other
healthcare providers, some of whom receive stock options as compensation for services provided, are found to be in violation of any of
such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative,
civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings,
the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs (such as Medicare
and Medicaid), additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar
agreement to resolve allegations of non-compliance with these laws, and individual imprisonment, any of which could adversely affect
our ability to operate our business and our financial results. Any action for violation of these laws, even if successfully defended,
could cause a pharmaceutical manufacturer to incur significant legal expenses and divert management's attention from the operation
of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in
an adverse way.

 Healthcare
legislative reform measures and constraints on national budget social security systems may have a material adverse effect on our business
and results of operations.

 Payors,
whether domestic or foreign, or governmental or private, are developing increasingly sophisticated methods of controlling healthcare
costs and those methods are not always specifically adapted for new technologies such as those we are developing. In both the United
States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that
could impact our ability to sell our products profitably. In particular, in the United States, the ACA was enacted in 2010 which, among
other things, subjects biologic products to potential competition by lower-cost biosimilars; addresses a new methodology by which rebates
owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted
or injected; increases the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extends the Medicaid
Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjects manufacturers
to new annual fees and taxes for certain branded prescription drugs; and provides incentives to programs that increase the federal government's
comparative effectiveness research.

 Since
its enactment, there have been judicial, Congressional and executive challenges to certain aspects of the ACA. While Congress has not
passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into
law. The Tax Cuts and Jobs Act of 2017, or TCJA, includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility
payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly
referred to as the "individual mandate." Additionally, on January 22, 2018, President Trump signed a continuing resolution
on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called "Cadillac"
tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain high cost employer-sponsored insurance
plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device exercise tax on non-exempt
medical devices. Further, the Bipartisan Budget Act of 2018, or BBA, among other things, amends the ACA, effective January 1, 2019, to
increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare
Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the "donut hole." More recently,
in July 2018, CMS published a final rule permitting further collections and payments to and from certain ACA qualified health plans and
health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding
the method CMS uses to determine this risk adjustment. Congress also could consider additional legislation to repeal or replace other
elements of the ACA. Thus, the full impact of the ACA, any law repealing or replacing elements of it, and the political uncertainty surrounding
any repeal or replacement legislation on our business remains unclear.

 On
June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically
ruling on the constitutionality of the ACA. Prior to the Supreme Court's decision, President Biden issued an executive order to
initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage
through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing
policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs
that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through
Medicaid or the ACA. It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge,
repeal or replace the ACA will impact our business.

 In
addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the
Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit
Reduction, tasked with recommending a targeted deficit reduction of at least $1.5 trillion for the years 2013 through 2021, was unable
to reach required goals, thereby triggering the legislation's automatic reduction to several government programs. This includes
aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013, and due to subsequent
legislative amendments, including the BBA, will remain in effect through 2027 unless additional Congressional action is taken. In January
2013, the American Taxpayer Relief Act of 2012, was signed into law, which, among other things, further reduced Medicare payments to
several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government
to recover overpayments to providers from three to five years.

 Also,
there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products,
which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other
things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform
government program reimbursement methodologies for drug products. In August 2022, the Inflation Reduction Act of 2022, or the IRA, was
signed into law. The IRA includes several provisions that may impact our business if we ultimately have approved drugs. Provisions that
may impact our business include a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, the imposition of new manufacturer financial
liability on most drugs in Medicare Part D, permitting the U.S. government to negotiate Medicare Part B and Part D pricing for certain
high-cost drugs and biologics without generic or biosimilar competition, requiring companies to pay rebates to Medicare for drug prices
that increase faster than inflation, and delaying the rebate rule that would require pass through of pharmacy benefit manager rebates
to beneficiaries. In August 2023, the government selected the first 10 drugs to be put through the Medicare drug price negotiation program,
which is currently subject to several constitutional challenges. The outcomes of most of these challenges on the IRA, and the effect
of the IRA on our business and the healthcare industry in general, are not yet known.

 There
have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at
broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may
be adopted in the future. The continuing efforts of these governments and other payors to contain or reduce costs of healthcare and/or
impose price controls may adversely affect:

 the
 demand for our product candidates, if we obtain regulatory approval;

 our
 ability to set a price that we believe is fair for our products;

 our
 ability to generate revenue and achieve or maintain profitability;

 the
 level of taxes that we are required to pay; and

 the
 availability of capital.

 Any
denial in coverage or reduction in reimbursement from Medicare or other government programs may result in a similar denial or reduction
in payments from private payors, which may adversely affect our future profitability.

 We
are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, and other anti-corruption laws, as well as export
control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations.

 Our
operations are subject to anti-corruption laws, including the FCPA, the U.S. domestic bribery statute contained in 18 §201, the
U.S. Travel Act, and other anti-corruption laws that apply in countries where we do business. The Bribery Act, the FCPA and these other
laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly,
improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or
gain some other business advantage. Under the Bribery Act, we may also be liable for failing to prevent a person associated with us from
committing a bribery offense. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential
Bribery Act or FCPA violations, and we participate in collaborations and relationships with third parties whose corrupt or illegal activities
could potentially subject us to liability under the Bribery Act, FCPA or local anti-corruption laws, even if we do not explicitly authorize
or have actual knowledge of such activities. In addition, we cannot predict the nature, scope or effect of future regulatory requirements
to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

 We
are also subject to other laws and regulations governing our international operations, including regulations administered by the governments
of the United Kingdom and the United States, and authorities in the European Union, including applicable export control regulations,
economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency
exchange regulations, collectively referred to as the Trade Control laws.

 There
is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the
Bribery Act, the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the Bribery Act, the
FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other
sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results
of operations and liquidity. Likewise, any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption
laws or Trade Control laws by United Kingdom, United States or other authorities could also have an adverse impact on our reputation,
our business, results of operations and financial condition.

 Recently
enacted and future policies and legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize
our product candidates and may affect the reimbursement made for any product candidate for which we receive marketing approval.

 Legislative
and regulatory actions affecting government prescription drug procurement and reimbursement programs occur relatively frequently. In
the United. States, for example, the Patient Protection and Affordable Care Act ("PPACA") was enacted in 2010 to expand healthcare
coverage and made significant changes to drug reimbursement. Other legislative changes that affect the pharmaceutical industry have been
proposed and adopted in the United States since PPACA was enacted. For example, the Inflation Reduction Act of 2022 included, among other
things, a provision that authorizes Centers for Medicare and Medicaid Services ("CMS") to negotiate a "maximum fair
price" for a limited number of high-cost, single-source drugs every year, and another provision that requires drug companies to
pay rebates to Medicare if prices rise faster than inflation. Complying with any new legislation could be time-intensive and expensive,
resulting in a material adverse effect on our business.

 In
addition, many states have proposed or enacted legislation that seeks to indirectly or directly regulate pharmaceutical drug pricing,
such as by requiring biopharmaceutical manufacturers to publicly report proprietary pricing information or to place a maximum price ceiling
on pharmaceutical products purchased by state agencies. For example, in 2017, California's governor signed a prescription drug
price transparency state bill into law, requiring prescription drug manufacturers to provide advance notice and explanation for price
increases of certain drugs that exceed a specified threshold. Both Congress and state legislatures are considering various bills that
would reform drug purchasing and price negotiations, allow greater use of utilization management tools to limit Medicare Part D coverage,
facilitate the import of lower-priced drugs from outside the United States and encourage the use of generic drugs. Such initiatives and
legislation may cause added pricing pressures on our products.

 Changes
to the Medicaid program at the federal or state level could also have a material adverse effect on our business. Proposals that could
impact coverage and reimbursement of our products, including giving states more flexibility to manage drugs covered under the Medicaid
program and permitting the re-importation of prescription medications from Canada or other countries, could have a material adverse effect
by limiting our products' use and coverage. Furthermore, state Medicaid programs could request additional supplemental rebates
on our products as a result of an increase in the federal base Medicaid rebate. To the extent that private insurers or managed care programs
follow Medicaid coverage and payment developments, they could use the enactment of these increased rebates to exert pricing pressure
on our products, and the adverse effects may be magnified by their adoption of lower payment schedules.

 We
cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or
executive action, either in the United States or abroad. We expect that additional state and federal health care reform measures will
be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and
services. Moreover, the Biden administration, including the Secretary of the United States Department of Human and Health Services, has
indicated that lowering prescription drug prices is a priority, but we do not yet know what steps the administration will take or whether
such steps will be successful.

 Other
proposed regulatory actions affecting manufacturers could have a material adverse effect on our business. It is difficult to predict
the impact, if any, of any such proposed legislative and regulatory actions or resulting state actions on the use and reimbursement of
our products in the United States, but our results of operations may be adversely affected.

 If
we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur
costs that could have a material adverse effect on the success of our business.

 We
are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the
handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable
materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract
with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these
materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting
damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines
and penalties. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.
We cannot predict the impact of such changes and cannot be certain of our future compliance. In addition, we may incur substantial costs
in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations
may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial
fines, penalties or other sanctions.

 Although
we maintain workers' compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting
from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential
liabilities. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws
and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to
comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could
materially adversely affect our business, financial condition, results of operations and prospects.

 Risks
Related to Our International Operations

 As
one of our subsidiaries, Relief, is based outside of the United States, we are subject to economic, political, regulatory and other risks
associated with international operations.

 As
Relief Therapeutics SA ("Relief") is based in Switzerland, our business is subject to risks associated with conducting business
outside of the United States. Many of our suppliers and clinical trial relationships are located outside the United States. Accordingly,
our future results could be harmed by a variety of factors, including:

 economic
 weakness, including inflation, or political instability in particular non-U.S. economies and markets;

 differing
 and changing regulatory requirements for product approvals;

 differing
 jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions;

 potentially
 reduced protection for intellectual property rights;

 difficulties
 in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with
 a wide variety of foreign laws, treaties and regulations;

 changes
 in non-U.S. regulations and customs, tariffs and trade barriers;

 changes
 in non-U.S. currency exchange rates of the pound sterling, U.S. dollar, euro and currency controls;

 trade
 protection measures, import or export licensing requirements or other restrictive actions by governments;

 differing
 reimbursement regimes and price controls in certain non-U.S. markets;

 negative
 consequences from changes in tax laws;

 compliance
 with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax
 treatment in different jurisdictions of options granted under our share option schemes or equity incentive plans;

 workforce
 uncertainty in countries where labor unrest is more common than in the United States;

 litigation
 or administrative actions resulting from claims against us by current or former employees or consultants individually or as part
 of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or
 other alleged conduct;

 difficulties
 associated with staffing and managing international operations, including differing labor relations;

 production
 shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 business
 interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons,
 floods and fires.

 European
data collection is governed by restrictive regulations governing the use, processing, and cross-border transfer of personal information.

 The
collection and use of personal health data in the European Union was governed by the provisions of the Data Protection Directive, and
which, as of May 25, 2018, has been superseded by the GDPR. These directives impose several requirements relating to the consent of the
individuals to whom the personal data relates, the information provided to the individuals, notification of data processing obligations
to the competent national data protection authorities and the security and confidentiality of the personal data. The Data Protection
Directive and GDPR also impose strict rules on the transfer of personal data out of the European Union to the United States. Failure
to comply with the requirements of the Data Protection Directive, the GDPR, and the related national data protection laws of the European
Union Member States may result in fines and other administrative penalties. While the Data Protection Directive did not apply to organizations
based outside the EU, the GDPR has expanded its reach to include any business, regardless of its location, that provides goods or services
to residents in the EU. This expansion would incorporate any potential clinical trial activities in EU member states. The GDPR imposes
strict requirements on controllers and processors of personal data, including special protections for "sensitive information"
which includes health and genetic information of data subjects residing in the EU. GDPR grants individuals the opportunity to object
to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and
provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been
violated. Further, the GDPR imposes strict rules on the transfer of personal data out of the European Union to the United States or other
regions that have not been deemed to offer "adequate" privacy protections. Failure to comply with the requirements of the
GDPR and the related national data protection laws of the European Union Member States, which may deviate slightly from the GDPR, may
result in fines of up to 4% of global revenues, or 20,000,000, whichever is greater. As a result of the implementation of the
GDPR, we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules.

 Risks
Related to Our Dependence on Third Parties

 For
certain product candidates, we may depend on development and commercialization collaborators to develop and conduct clinical trials with,
obtain regulatory approvals for, and if approved, market and sell product candidates. If such collaborators fail to perform as expected,
the potential for us to generate future revenue from such product candidates would be significantly reduced and our business would be
harmed.

 For
certain products candidates, we depend, or will depend, on our development and commercial collaborators to develop, conduct clinical
trials of, and, if approved, commercialize product candidates.

 Our
current collaborations and any future collaborations that we enter into are subject to numerous risks, including:

 have significant discretion in determining the efforts and resources that they will apply to the collaborations;

 may not perform their obligations as expected or fail to fulfill their responsibilities in a timely manner, or at all;

 may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue
 or renew development or commercialization programs based on preclinical studies or clinical trial results, changes in the collaborators'
 strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

 may delay preclinical studies or clinical trials, provide insufficient funding for clinical trials, stop a preclinical study or clinical
 trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for
 clinical testing;

 we
 may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or
 commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such
 product candidates;

 could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates
 if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under
 terms that are more economically attractive than ours;

 the
 collaborations may not result in product candidates to develop and/or preclinical studies or clinical trials conducted as part of
 the collaborations may not be successful;

 product
 candidates developed with collaborators may be viewed by our collaborators as competitive with their own product candidates or products,
 which may cause collaborators to stop commercialization of our product candidates;

 a
 collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may
 not commit sufficient resources to the marketing and distribution of any such product candidate; and

 may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite
 litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation.

 In
addition, certain collaboration and commercialization agreements provide our collaborators with rights to terminate such agreements,
which rights may or may not be subject to conditions, and which rights, if exercised, would adversely affect our product development
efforts and could make it difficult for us to attract new collaborators. In that event, we would likely be required to limit the size
and scope of efforts for the development and commercialization of such product candidates or products; we would likely be required to
seek additional financing to fund further development or identify alternative strategic collaborations; our potential to generate future
revenue from royalties and milestone payments from such product candidates or products would be significantly reduced, delayed or eliminated;
and it could have an adverse effect on our business and future growth prospects. Our rights to recover tangible and intangible assets
and intellectual property rights needed to advance a product candidate or product after termination of a collaboration may be limited
by contract, and we may not be able to advance a program post- termination.

 If
conflicts arise with our development and commercialization collaborators or licensors, they may act in their own self-interest, which
may be adverse to the interests of our company.

 We
may in the future experience disagreements with our development and commercialization collaborators or licensors. Conflicts may arise
in our collaboration and license arrangements with third parties due to one or more of the following:

 disputes
 with respect to milestone, royalty and other payments that are believed due under the applicable agreements;

 disagreements
 with respect to the ownership of intellectual property rights or scope of licenses;

 disagreements
 with respect to the scope of any reporting obligations;

 unwillingness
 on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities, or
 to permit public disclosure of these activities; and

 disputes
 with respect to a collaborator's or our development or commercialization efforts with respect to our products and product candidates.

 Conflicts
with our development and commercialization collaborators or licensors could materially adversely affect our business, financial condition
or results of operations and future growth prospects.

 We
will rely on third parties, including independent clinical investigators and CROs, to conduct and sponsor some of the clinical trials
of our product candidates. Any failure by a third party to meet its obligations with respect to the clinical development of our product
candidates may delay or impair our ability to obtain regulatory approval for our product candidates.

 We
will be relying upon and plan to continue to rely upon third parties, including independent clinical investigators, academic partners,
regulatory affairs consultants and third-party CROs, to conduct our preclinical studies and clinical trials, including in some instances
sponsoring such clinical trials, and to engage with regulatory authorities and monitor and manage data for our ongoing preclinical and
clinical programs. Given the breadth of clinical therapeutic areas for which we believe our product candidates may have utility, we intend
to continue to rely on external service providers rather than build internal regulatory expertise.

 Any
of these third parties may terminate their engagements with us under certain circumstances. We may not be able to enter into alternative
arrangements or do so on commercially reasonable terms. In addition, there is a natural transition period when a new contract research
organization begins work. As a result, delays would likely occur, which could negatively impact our ability to meet our expected clinical
development timelines and harm our business, financial condition and prospects.

 We
remain responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable
protocol and legal, regulatory and scientific standards, and our reliance on these third parties does not relieve us of our regulatory
responsibilities. We and our third-party contractors and CROs are required to comply with GCP requirements, which are regulations and
guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable
foreign regulatory authorities for all of our products in clinical development. Regulatory authorities enforce these GCP requirements
through periodic inspections of trial sponsors, principal investigators and trial sites. If we fail to exercise adequate oversight over
any of our academic partners or CROs or if we or any of our academic partners or CROs do not successfully carry out their contractual
duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised
due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, the clinical data generated
in our clinical trials may be deemed unreliable and the FDA, the EMA or comparable foreign regulatory authorities may require us to perform
additional clinical trials before approving our marketing applications. We cannot assure you that upon a regulatory inspection of us,
our academic partners or our CROs or other third parties performing services in connection with our clinical trials, such regulatory
authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must be conducted
with product produced under applicable CGMP regulations. Our failure to comply with these regulations may require us to repeat clinical
trials, which would delay the regulatory approval process.

 Furthermore,
the third parties conducting clinical trials on our behalf are not our employees, and except for remedies available to us under our agreements
with such contractors, we cannot control whether or not they devote sufficient time, skill and resources to our ongoing development programs.
These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting
clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs.
If these third parties, including clinical investigators, do not successfully carry out their contractual duties, meet expected deadlines
or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may not be able to obtain, or may
be delayed in obtaining, marketing approvals for our product candidates. If that occurs, we will not be able to, or may be delayed in
our efforts to, successfully commercialize our product candidates.

 In
addition, with respect to investigator-sponsored trials that may be conducted, we would not control the design or conduct of these trials,
and it is possible that the FDA or EMA will not view these investigator-sponsored trials as providing adequate support for future clinical
trials or market approval, whether controlled by us or third parties, for any one or more reasons, including elements of the design or
execution of the trials or safety concerns or other trial results. We expect that such arrangements will provide us certain information
rights with respect to the investigator-sponsored trials, including access to and the ability to use and reference the data, including
for our own regulatory submissions, resulting from the investigator-sponsored trials. However, we would not have control over the timing
and reporting of the data from investigator-sponsored trials, nor would we own the data from the investigator- sponsored trials. If we
are unable to confirm or replicate the results from the investigator-sponsored trials or if negative results are obtained, we would likely
be further delayed or prevented from advancing further clinical development.

 Further,
if investigators or institutions breach their obligations with respect to the clinical development of our product candidates, or if the
data proves to be inadequate compared to the firsthand knowledge we might have gained had the investigator-sponsored trials been sponsored
and conducted by us, then our ability to design and conduct any future clinical trials ourselves may be adversely affected. Additionally,
the FDA or EMA may disagree with the sufficiency of our right of reference to the preclinical, manufacturing or clinical data generated
by these investigator-sponsored trials, or our interpretation of preclinical, manufacturing or clinical data from these investigator-sponsored
trials. If so, the FDA or EMA may require us to obtain and submit additional preclinical, manufacturing, or clinical data.

 We
intend to rely on third parties to manufacture product candidates, which increases the risk that we will not have sufficient quantities
of such product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development
or commercialization efforts.

 We
do not own or operate manufacturing facilities for the production of clinical or commercial supplies of the product candidates that we
are developing or evaluating in our development programs. We have limited personnel with experience in drug manufacturing and lack the
resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. We rely on third parties
for supply of our product candidates, and our strategy is to outsource all manufacturing of our product candidates and products to third
parties.

 In
order to conduct clinical trials of product candidates, we will need to have them manufactured in potentially large quantities. Our third-
party manufacturers may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or
cost- effective manner, or at all. In addition, quality issues may arise during scale-up activities and at any other time. For example,
ongoing data on the stability of our product candidates may shorten the expiry of our product candidates and lead to clinical trial material
supply shortages, and potentially clinical trial delays. If these third-party manufacturers are unable to successfully scale up the manufacture
of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate
may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained,
which could significantly harm our business.

 Our
use of new third-party manufacturers increases the risk of delays in production or insufficient supplies of our product candidates as
we transfer our manufacturing technology to these manufacturers and as they gain experience manufacturing our product candidates. Even
after a third-party manufacturer has gained significant experience in manufacturing our product candidates or even if we believe we have
succeeded in optimizing the manufacturing process, there can be no assurance that such manufacturer will produce sufficient quantities
of our product candidates in a timely manner or continuously over time, or at all.

 We
may be delayed if we need to change the manufacturing process used by a third party. Further, if we change an approved manufacturing
process, then we may be delayed if the FDA or a comparable foreign authority needs to review the new manufacturing process before it
may be used.

 We
operate an outsourced model for the manufacture of our product candidates, and contract with good manufacturing practice, or GMP, licensed
pharmaceutical contract development and manufacturing organizations. While we have engaged several third-party vendors to provide clinical
and non-clinical supplies and fill-finish services, we do not currently have any agreements with third-party manufacturers for long-term
commercial supplies. In the future, we may be unable to enter into agreements with third-party manufacturers for commercial supplies
of any product candidate that we develop, or may be unable to do so on acceptable terms. Even if we are able to establish and maintain
arrangements with third-party manufacturers, reliance on third- party manufacturers entails risks, including:

 reliance
 on third-parties for manufacturing process development, regulatory compliance and quality assurance;

 limitations
 on supply availability resulting from capacity and scheduling constraints of third-parties;

 the
 possible breach of manufacturing agreements by third-parties because of factors beyond our control; and

 the
 possible termination or non-renewal of the manufacturing agreements by the third-party, at a time that is costly or inconvenient
 to us.

 Third-party
manufacturers may not be able to comply with cGMP requirements or similar regulatory requirements outside the United States. Our failure,
or the failure of our third-party manufacturers, to comply with applicable requirements could result in sanctions being imposed on us,
including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls
of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely
affect supplies of our product candidates. In addition, some of the product candidates we intend to develop, including SON-080, use toxins
or other substances that can be produced only in specialized facilities with specific authorizations and permits, and there can be no
guarantee that we or our manufacturers can maintain such authorizations and permits. These specialized requirements may also limit the
number of potential manufacturers that we can engage to produce our product candidates, and impair any efforts to transition to replacement
manufacturers.

 Our
future product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing
facilities. There are a limited number of manufacturers that operate under cGMP requirements that might be capable of manufacturing for
us.

 If
the third parties that we engage to supply any materials or manufacture product for our preclinical tests and clinical trials should
cease to continue to do so for any reason, we likely would experience delays in advancing these tests and trials while we identify and
qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.
In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it
will be more difficult for us to develop our product candidates and compete effectively.

 Our
current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit
margins and our ability to develop product candidates and commercialize any products that receive marketing approval on a timely and
competitive basis.

 Our
reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them
or that our trade secrets will be misappropriated or disclosed.

we rely on third parties to manufacture our product candidates, and because we collaborate with various organizations and academic institutions
on the development of our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology
in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements,
consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research
or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential
information, such as trade secrets.

 Despite
the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information
increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others,
or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and
trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive
position and may have a material adverse effect on our business.

 In
addition, these agreements typically restrict the ability of our collaborators, advisors, employees and consultants to publish data potentially
relating to our trade secrets. Our academic collaborators typically have rights to publish data, provided that we are notified in advance
and may delay publication for a specified time in order to secure our intellectual property rights arising from the collaboration. In
other cases, publication rights are controlled exclusively by us, although in some cases we may share these rights with other parties.
Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of these agreements,
independent development or publication of information including our trade secrets in cases where we do not have proprietary or otherwise
protected rights at the time of publication. A competitor's discovery of our trade secrets would impair our competitive position
and have an adverse impact on our business.

 Risks
Related to Our Intellectual Property

 If
we are unable to obtain and maintain patent and other intellectual property protection for our products and product candidates, or if
the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our competitors could develop
and commercialize products similar or identical to ours, and our ability to successfully commercialize our products and product candidates
may be adversely affected.

 Our
ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of our technology and manufacturing
processes. We rely on research, manufacturing and other know-how, patents, trade secrets, license agreements and contractual provisions
to establish our intellectual property rights and protect our products and product candidates. These legal means, however, afford only
limited protection and may not adequately protect our rights. As of December 17, 2024, our intellectual property portfolio includes 20
total pending patent applications and issued patents, inclusive of 5 issued patents in the U.S., Japan, China, Russia and New Zealand,
and 9 PCT applications within the 5007 patent family - also, 9 pending provisional applications covering formulations, manufacturing
processes and methods of use.

 In
certain situations and as considered appropriate, we have sought, and we intend to continue to seek to protect our proprietary position
by filing patent applications in the United States and, in at least some cases, one or more countries outside the United States relating
to current and future products and product candidates that are important to our business. However, we cannot predict whether the patent
applications currently being pursued will issue as patents, or whether the claims of any resulting patents will provide us with a competitive
advantage or whether we will be able to successfully pursue patent applications in the future relating to our current or future products
and product candidates. Moreover, the patent application and approval process is expensive and time-consuming. We may not be able to
file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Furthermore, we, or any
future partners, collaborators, or licensees, may fail to identify patentable aspects of inventions made in the course of development
and commercialization activities before it is too late to obtain patent protection on them. Therefore, we may miss potential opportunities
to seek additional patent protection. It is possible that defects of form in the preparation or filing of patent applications may exist,
or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term
adjustments. If we fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced
or eliminated. If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications,
such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents.

 Even
if they are unchallenged, our patents and patent applications, if issued, may not provide us with any meaningful protection or prevent
competitors from designing around our patent claims by developing similar or alternative technologies or therapeutics in a non-infringing
manner. For example, a third party may develop a competitive therapy that provides benefits similar to one or more of our product candidates
but that falls outside the scope of our patent protection. If the patent protection provided by the patents and patent applications we
hold or pursue with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully
commercialize our product candidates could be negatively affected.

 As
discussed under the heading " Business," our PCT patent application having international patent application number
PCT/US2018/00085 received an application filing date of February 20, 2018, which is four days after the one year anniversary of the filing
date of U.S. provisional patent applications U.S. 62/459,975 and U.S. 62/459,981 to which the PCT patent application claims a priority
benefit due to a computer issue at the PCT receiving office. Despite the restoration of the priority benefit to the filing date of U.S.
provisional patent applications (U.S. 62/459,975 and U.S. 62/459,981) by the PCT, some countries in which national stage patent applications
were filed from this PCT patent application did not accept this restoration including Canada, and the restoration procedure is pending
in Brazil. In the event that priority is not restored, prior art may be available to these patent applications that may otherwise not
be available to other patent applications filed from PCT/US2018/00085. This could affect the scope or breadth of the patent claims we
are pursuing in Brazil, Canada, Hong Kong and India, or could result in no ability to receive patents in these countries.

 Other
parties, many of whom have substantially greater resources and have made significant investments in competing technologies, have developed
or may develop technologies that may be related or competitive with our approach, and may have filed or may file patent applications
and may have been issued or may be issued patents with claims that overlap or conflict with our patent applications, either by claiming
the same compositions, formulations or methods or by claiming subject matter that could dominate our patent position. In addition, the
laws of foreign countries may not protect our rights to the same extent as the laws of the United States. As a result, any patents we
may obtain in the future may not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing
products similar to our products and product candidates.

 The
patent position of biotechnology and pharmaceutical companies generally is highly uncertain. No consistent policy regarding the breadth
of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions.
In addition, the determination of patent rights with respect to pharmaceutical compounds commonly involves complex legal and factual
questions, which has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability
and commercial value of our patent rights are highly uncertain. Our competitors may also seek approval to market their own products similar
to or otherwise competitive with our products. Alternatively, our competitors may seek to market generic versions of any approved products
by submitting ANDAs to the FDA in which they claim that our patents are invalid, unenforceable or not infringed. In these circumstances,
we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types
of proceedings, a court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are
competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not provide protection
against competing products or processes sufficient to achieve our business objectives.

 In
the future, one or more of our products and product candidates may be in-licensed from third parties. Accordingly, in some cases, the
availability and scope of potential patent protection is limited based on prior decisions by our licensors or the inventors, such as
decisions on when to file patent applications or whether to file patent applications at all. Our failure to obtain, maintain, enforce
or defend such intellectual property rights, for any reason, could allow third parties, in particular, other established and better financed
competitors having established development, manufacturing and distribution capabilities, to make competing products or impact our ability
to develop, manufacture and market our products and product candidates, even if approved, on a commercially viable basis, if at all,
which could have a material adverse effect on our business.

 In
addition to patent protection, we expect to rely heavily on trade secrets, know-how and other unpatented technology, which are difficult
to protect. Although we seek such protection in part by entering into confidentiality agreements with our vendors, employees, consultants
and others who may have access to proprietary information, we cannot be certain that these agreements will not be breached, adequate
remedies for any breach would be available, or our trade secrets, know-how and other unpatented proprietary technology will not otherwise
become known to or be independently developed by our competitors. If we are unsuccessful in protecting our intellectual property rights,
sales of our products may suffer and our ability to generate revenue could be severely impacted.

 Issued
patents covering our products and product candidates could be found invalid or unenforceable if challenged in court or in administrative
proceedings. We may not be able to protect our trade secrets in court.

 If
we initiate legal proceedings against a third-party to enforce a patent covering one of our products or product candidates, should such
a patent issue, the defendant could counterclaim that the patent covering our product or product candidate is invalid or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for
a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness,
written description or non- enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with
prosecution of the patent withheld information material to patentability from the USPTO, or made a misleading statement, during prosecution.
Third parties also may raise similar claims before administrative bodies in the United States or abroad, even outside the context of
litigation. Such mechanisms include re- examination, post grant review, inter partes review and equivalent proceedings in foreign jurisdictions.
An adverse determination in any of the foregoing proceedings could result in the revocation or cancellation of, or amendment to, our
patents in such a way that they no longer cover our products or product candidates. The outcome following legal assertions of invalidity
and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating
prior art, of which the patent examiner and we were unaware during prosecution. If a defendant or third party were to prevail on a legal
assertion of invalidity or unenforceability, we could lose at least part, and perhaps all, of the patent protection on one or more of
our products and product candidates. Such a loss of patent protection could have a material adverse impact on our business.

 In
addition, our trade secrets may otherwise become known or be independently discovered by competitors. Competitors and other third parties
could purchase our products and product candidates and attempt to replicate some or all of the competitive advantages we derive from
our development efforts, willfully infringe, misappropriate or otherwise violate our intellectual property rights, design around our
protected technology or develop their own competitive technologies that fall outside of our intellectual property rights. If any of our
trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to
prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If our trade secrets
are not adequately protected or sufficient to provide an advantage over our competitors, our competitive position could be adversely
affected, as could our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient
recourse against third parties for misappropriating our trade secrets.

 We
may be subject to claims challenging the inventorship or ownership of the patents and other intellectual property.

 We
may be subject to claims that former employees, collaborators or other third parties have an ownership interest in the patents and intellectual
property that we own or that we may own or license in the future. While it is our policy to require our employees and contractors who
may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may
be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own or
such assignments may not be self-executing or may be breached. We could be subject to ownership disputes arising, for example, from conflicting
obligations of employees, consultants or others who are involved in developing our products or product candidates. Litigation may be
necessary to defend against any claims challenging inventorship or ownership. If we or fail in defending any such claims, we may have
to pay monetary damages and may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual
property, which could adversely impact our business, results of operations and financial condition.

 Obtaining
and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements
imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non- compliance with these requirements.

 Periodic
maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications are required to be paid
to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents
and applications. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary,
fee payment and other similar provisions during the patent application process and after a patent has issued.

 There
are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or
complete loss of patent rights in the relevant jurisdiction. The terms of one or more licenses that we enter into the future may not
provide us with the ability to maintain or prosecute patents in the portfolio, and must therefore rely on third parties to do so.

 If
we do not obtain patent term extension and data exclusivity for our products and product candidates, our business may be materially harmed.

 Patents
have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally
20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection
it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired for a product
candidate, we may be open to competition from competitive products. Given the amount of time required for the development, testing and
regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates
are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing
products similar or identical to ours.

 In
the future, if we obtain an issued patent covering one of our present or future product candidates, depending upon the timing, duration
and specifics of any FDA marketing approval of such product candidates, such patent may be eligible for limited patent term extension
under the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit
a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term
extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent
may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.
A patent may only be extended once and only based on a single approved product. However, we may not be granted an extension because of,
for example, failure to obtain a granted patent before approval of a product candidate, failure to exercise due diligence during the
testing phase or regulatory review process, failure to apply within applicable deadlines, failure to apply prior to expiration of relevant
patents or otherwise our failure to satisfy applicable requirements. A patent licensed to us by a third party may not be available for
patent term extension. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, our competitors may obtain
approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.

 Changes
in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability
to protect our products and product candidates.

 Changes
in either the patent laws or the interpretation of the patent laws in the United States or other jurisdictions could increase the uncertainties
and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. On September 16, 2011,
the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. When implemented, the Leahy-Smith Act included several
significant changes to U.S. patent law that impacted how patent rights could be prosecuted, enforced and defended. In particular, the
Leahy-Smith Act also included provisions that switched the United States from a "first-to-invent" system to a "first-to-file"
system, allowed third- party submission of prior art to the USPTO during patent prosecution and set forth additional procedures to attack
the validity of a patent by the USPTO administered post grant proceedings. Under a first-to-file system, assuming the other requirements
for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless
of whether another inventor had made the invention earlier. The USPTO developed new regulations and procedures governing the administration
of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the
first to file provisions, only became effective on March 16, 2013. It remains unclear what, if any, impact the Leahy-Smith Act will have
on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding
the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse
effect on our business.

 In
addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly
uncertain. Recent rulings from the U.S. Court of Appeals for the Federal Circuit and the U.S. Supreme Court have narrowed the scope of
patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination
of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions
by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways
that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property
in the future.

 We
cannot assure you that our efforts to seek patent protection for one or more of our products and product candidates will not be negatively
impacted by the decisions described above, rulings in other cases or changes in guidance or procedures issued by the USPTO. We cannot
fully predict what impact courts' decisions in historical and future cases may have on the ability of life science companies to
obtain or enforce patents relating to their products in the future. These decisions, the guidance issued by the USPTO and rulings in
other cases or changes in USPTO guidance or procedures could have a material adverse effect on our existing patent rights and our ability
to protect and enforce our intellectual property in the future.

 We
may not be able to protect our intellectual property rights throughout the world.

 Filing,
prosecuting, maintaining, defending and enforcing patents on products and product candidates in all countries throughout the world would
be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive
than those in the United States. The requirements for patentability may differ in certain countries, particularly in developing countries;
thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that
cover our products. There can be no assurance that we will obtain or maintain patent rights in or outside the United States under any
future license agreements. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent
as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions
in all countries outside the United States, even in jurisdictions where we pursue patent protection, or from selling or importing products
made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions
where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing
products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products
may compete with our products and product candidates and our patents or other intellectual property rights may not be effective or sufficient
to prevent them from competing.

 Many
companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The
legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets
and other intellectual property protection, particularly those relating to biotechnology and pharmaceutical products, which could make
it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights
generally. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third
parties. Proceedings to enforce our patent rights, even if obtained, in foreign jurisdictions could result in substantial costs and divert
our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly
and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in
any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. While we intend
to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain
similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to enforce our intellectual
property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we
develop.

 If
we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could
prevent or delay us from developing or commercializing our product candidates.

 Our
commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates without infringing
the intellectual property and other proprietary rights of third parties. Third parties may have U.S. and non-U.S. issued patents and
pending patent applications relating to compounds, methods of manufacturing compounds and/or methods of use for the treatment of the
disease indications for which we are developing our product candidates. If any third-party patents or patent applications are found to
cover our product candidates or their methods of use or manufacture, we and our collaborators or sublicensees may not be free to manufacture
or market our product candidates as planned without obtaining a license, which may not be available on commercially reasonable terms,
or at all. We may also be required to indemnify our collaborators or sublicensees in such an event.

 There
is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party
to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our products
candidates, including interference and post-grant proceedings before the USPTO. There may be third-party patents or patent applications
with claims to materials, formulations, methods of manufacture or methods for treatment related to the composition, use or manufacture
of our product candidates. We cannot guarantee that any of our patent searches or analyses including, but not limited to, the identification
of relevant patents, the scope of patent claims or the expiration of relevant patents are complete or thorough, nor can we be certain
that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary
for the commercialization of our product candidates in any jurisdiction. Because patent applications can take many years to issue, there
may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing.
In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Accordingly,
third parties may assert infringement claims against us based intellectual property rights that exist now or arise in the future. The
outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical
and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants,
including us, which patents cover various types of products or methods of use or manufacture. The scope of protection afforded by a patent
is subject to interpretation by the courts, and the interpretation is not always uniform. If we were sued for patent infringement, we
would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent
or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example,
in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity
enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention
of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business
and operating results. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

 If
we are found to infringe a third party's intellectual property rights, we could be forced, including by court order, to cease developing,
manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required to obtain a license from
such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product
candidate or product.

 However,
we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license,
it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us; alternatively or additionally
it could include terms that impede or destroy our ability to compete successfully in the commercial marketplace. In addition, we could
be found liable for monetary damages, including treble damages and attorneys' fees if we are found to have willfully infringed
a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business
operations, which could harm our business. Claims that we have misappropriated the confidential information or trade secrets of third
parties could have a similar negative impact on our business.

 We
may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming
ownership of what we regard as our own intellectual property.

 Many
of our current and former employees, including our senior management, were previously employed at universities or at other biotechnology
or pharmaceutical companies, including some which may be competitors or potential competitors. Some of these employees may be subject
to proprietary rights, non-disclosure and non- competition agreements, or similar agreements, in connection with such previous employment.
Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may
be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary
information, of any such third party. Litigation may be necessary to defend against such claims. If we fail in defending any such claims,
in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual
property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize
our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful
in defending against such claims, litigation could result in substantial costs and be a distraction to management.

 In
addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual
property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with
each party who in fact develops intellectual property that we regard as our own, which may result in claims by or against us related
to the ownership of such intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary
damages, we may lose valuable intellectual property rights. Even if we are successful in prosecuting or defending against such claims,
litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.

 We
may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming
and unsuccessful.

 Competitors
may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may
be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management
and scientific personnel. In addition, our patents may become, involved in inventorship, priority, or validity disputes. To counter or
defend against such claims can be expensive and time-consuming, and our adversaries may have the ability to dedicate substantially greater
resources to prosecuting these legal actions than we can. Any claims we assert against perceived infringers could provoke these parties
to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are
invalid or unenforceable, or both.

 In
an infringement proceeding, a court may decide that a patent is invalid or unenforceable, or may refuse to stop the other party from
using the technology at issue on the grounds that our patents do not cover the technology in question. Accordingly, despite our efforts,
we may not be able to prevent third parties from infringing upon or misappropriating intellectual property rights we own or control.
An adverse result in any litigation proceeding could put one or more of our owned or in-licensed patents at risk of being invalidated
or interpreted narrowly. Further, because of the substantial amount of discovery required in connection with intellectual property litigation,
there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

 Even
if resolved in our favor, the court may decide not to grant an injunction against further infringing activity and instead award only
monetary damages, which may or may not be an adequate remedy. Litigation or other legal proceedings relating to intellectual property
claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. In addition, there
could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts
or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such
litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities
or any future sales, marketing, or distribution activities.

 We
may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may
be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources
and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent
litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

 If
we fail to comply with our obligations under any future intellectual property licenses with third parties, we could lose license rights
that are important to our business.

 In
connection with our efforts to build our product candidate pipeline, we may enter into license agreements in the future. We expect that
such license agreements will impose, various diligence, milestone payment, royalty, insurance and other obligations on us. If we fail
to comply with our obligations under these licenses, our licensors may have the right to terminate these license agreements, in which
event we might not be able to market any product that is covered by these agreements, or our licensors may convert the license to a non-exclusive
license, which could negatively impact the value of the product candidate being developed under the license agreement. Termination of
these license agreements or reduction or elimination of our licensed rights may also result in our having to negotiate new or reinstated
licenses with less favorable terms.

 If
our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest
and our business may be adversely affected.

 Our
trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
We rely on both registration and common law protection for our trademarks. We may not be able to protect our rights to these trademarks
and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in
our markets of interest. During trademark registration proceedings, we may receive rejections. Although we would be given an opportunity
to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in
many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered
trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.
If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and
our business may be adversely affected.

 Risks
Related to Employee Matters and Managing Growth

 We
only have a limited number of employees to manage and operate our business.

 As
of September 30, 2025, we had 9 full-time employees. Additionally, we utilize independent contractors and other third parties to assist
with various aspects of our business. Our focus on the development of our product candidates requires us to optimize cash utilization
and to manage and operate our business in a highly efficient manner. We cannot assure you that we will be able to hire or retain adequate
staffing levels to develop our product candidates or run our operations or to accomplish all of the objectives that we otherwise would
seek to accomplish.

 Our
future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified
personnel.

 We
are highly dependent on principal members of our executive team and key employees, the loss of whose services may adversely impact the
achievement of our objectives. While we have entered into employment agreements with certain of our executive officers, any of them could
leave our employment at any time. We do not maintain "key person" insurance policies on the lives of these individuals or
the lives of any of our other employees. The loss of the services of one or more of our current employees might impede the achievement
of our research, development and commercialization objectives. Furthermore, replacing executive officers or other key employees may be
difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills
and experience required to develop, gain marketing approval of and commercialize products successfully.

 Recruiting
and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will
also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As
a result, competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel
on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill
sets. In addition, failure to succeed in preclinical or clinical trials may make it more challenging to recruit and retain qualified
personnel.

 In
addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and
development and commercialization strategy. Our consultants and advisors may be employed by other entities and may have commitments under
consulting or advisory contracts with those entities that may limit their availability to us. If we are unable to continue to attract
and retain highly qualified personnel, our ability to develop and commercialize our product candidates will be limited.

 The
inability to recruit or the loss of the services of any executive, key employee, consultant or advisor may impede the progress of our
research, development and commercialization objectives.

 Our
employees, independent contractors, consultants, collaborators and contract research organizations may engage in misconduct or other
improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for
us and harm our reputation.

 We
are exposed to the risk that our employees, independent contractors, consultants, collaborators and contract research organizations may
engage in fraudulent conduct or other illegal activity. Misconduct by those parties could include intentional, reckless and/or negligent
conduct or disclosure of unauthorized activities to us that violates: (1) FDA regulations or similar regulations of comparable non-U.S.
regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities,
(2) manufacturing standards, (3) federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established
and enforced by comparable non-U.S. regulatory authorities, and (4) laws that require the reporting of financial information or data
accurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations
intended to prevent fraud, misconduct, kickbacks, self- dealing, bribery and other abusive practices. These laws and regulations restrict
or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business
arrangements. Employee or collaborator misconduct could also involve the improper use of, including trading on, information obtained
in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. While we have a code
of conduct and business ethics, it is not always possible to identify and deter misconduct, and the precautions we take to detect and
prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental
investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. If
any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could
have a significant impact on our business and results of operations, including the imposition of civil, criminal and administrative penalties,
damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional
reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations
of non-compliance with these laws, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, and
curtailment of our operations, any of which could have a material adverse effect on our ability to operate our business and our results
of operations.

 We
expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

 We
expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of
drug manufacturing, regulatory affairs and sales, marketing and distribution, as well as to support our public company operations. To
manage these growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our
facilities and continue to recruit and train additional qualified personnel. Our management may need to devote a significant amount of
its attention to managing these growth activities. Moreover, our expected growth could require us to relocate to geographic areas beyond
those where we have been historically located. For example, we maintain an office in Princeton, New Jersey, at which many of our finance,
management and administrative personnel work. Due to our limited financial resources and the limited experience of our management team
in managing a company with such anticipated growth, we may not be able to effectively manage the expansion or relocation of our operations,
retain key employees, or identify, recruit and train additional qualified personnel. Our inability to manage the expansion or relocation
of our operations effectively may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities,
loss of employees and reduced productivity among remaining employees. Our expected growth could also require significant capital expenditures
and may divert financial resources from other projects, such as the development of additional product candidates. If we are unable to
effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced
and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.

 Risks
Related to Our Common Stock

 We
incur significant costs and devote substantial management time as a result of operating as a public company, and we expect those costs
to increase.

 As
a public company, we incur significant legal, accounting and other expenses. For example, we are required to comply with certain of the
requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations
subsequently implemented by the SEC, including the establishment and maintenance of effective disclosure and financial controls and changes
in corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance
costs and will make some activities more time consuming and costly. In addition, we expect that our management and other personnel will
need to divert attention from operational and other business matters to devote substantial time to these public company requirements.
In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act. We currently do not have an internal audit function, and we have contracted for additional
accounting and financial staff and may need to hire or contract for additional accounting and financial staff in the future with appropriate
public company experience and technical accounting knowledge.

 Director
and officer liability is limited.

 As
permitted by Delaware law, our bylaws limit the liability of our directors for monetary damages for breach of a director's fiduciary
duty except for liability in certain instances. As a result of our bylaw provisions and Delaware law, stockholders may have limited rights
to recover against directors for breach of fiduciary duty.

Risk Factors

 Cyber-attacks
or other failures in telecommunications or information technology systems could result in information theft, data corruption and significant
disruption of our business operations.

 We
utilize information technology, or IT, systems and networks to process, transmit and store electronic information in connection with
our business activities. As use of digital technologies has increased, cyber incidents, including deliberate attacks and attempts to
gain unauthorized access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk
to the security of our systems and networks, the confidentiality and the availability and integrity of our data.

 Our
business, strategy, and access to capital may be adversely affected by the business, financial condition, and decisions of HSI.

 As
a result of the Business Combination, we are a wholly owned subsidiary of HSI and depend on HSI for strategic direction, funding and
other resources. HSI's business model and treasury strategy, including a significant focus on HYPE and other digital assets, expose
it to market volatility, liquidity constraints, evolving and uncertain regulatory regimes, heightened cybersecurity and custodial risks,
and complex accounting and tax outcomes that may affect its financial results and cash flows. Adverse developments affecting HSI, such
as declines in the value or liquidity of its digital asset holdings, regulatory or enforcement actions impacting digital asset activities
or counterparties, restrictions on custodial or trading venues, increased earnings volatility (including fair value adjustments), potential
tax obligations, or limitations on its access to external financing, could reduce or delay HSI's ability or willingness to fund
our operations or support our growth initiatives. In addition, shifts in HSI's strategic priorities or risk tolerance, or constraints
arising from its public company obligations and market conditions, may lead to changes in our business plans, capital allocation, or
risk profile that could negatively impact our operating results, competitiveness, and financial condition.

 Item
1B. Unresolved Staff Comments

 Not
Applicable.

 Item
1C. Cybersecurity.

 Cybersecurity
Risk Management

 Like
many companies, we face significant and persistent cybersecurity risks. The small size of our organization and limited resources could
exacerbate these risks. Our business strategy, results of operations, and financial condition have not, to date, been affected by risks
from cybersecurity threats. During the reporting period, we have not experienced any material cyber incidents, nor have we experienced
a series of immaterial incidents, which would require disclosure.

 In
the ordinary course of our business, we collect and store sensitive data, including intellectual property. To effectively prevent, detect,
and respond to cybersecurity threats, we maintain a cyber risk management strategy, which is comprised of a wide array of policies, standards,
architecture, processes, and governance. Under the guidance and supervision of our Interim Chief Executive Officer, we further limit
risk by delegating our information technology and cybersecurity to a leading third-party IT consultant to safeguard our networks. Additionally,
as an added layer of security, all of our data is stored on the cloud.

 Despite
being a small organization, we are committed to maintaining governance and oversight of these risks and to implementing standard operating
procedures ("SOPs") and training to help us assess, identify, monitor and respond to these risks. Employees are trained to
avoid phishing emails, and our internal controls system is designed to mitigate the risk of payments of fraudulent invoices.

 Governance

 We
aim to incorporate industry best practices for companies of our size and financial strength throughout our cybersecurity program. Our
Board has ultimate oversight of cybersecurity risk. The Interim Chief Executive Officer reports to our Board. Our Interim Chief Executive
Officer provides periodic updates to the Board on (1) any critical cybersecurity risks; (2) ongoing cybersecurity initiatives and strategies;
(3) applicable regulatory requirements; and (4) industry standards. The Interim Chief Executive Officer also notifies the Board of any
cybersecurity incidents (suspected or actual) and provides updates on the incidents as well as cybersecurity risk mitigation activities
as appropriate.

 Item
2. Properties.

 The
Company relies on short term office use contracts to procure office and meeting space.

 Item
3. Legal Proceedings.

 We
are not currently subject to any material legal proceedings. However, we may from time to time become a party to various legal proceedings
arising in the ordinary course of our business.

 Item
4. Mine Safety Disclosures.

 Not
applicable.

 Part
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Market
Information

 Our
common stock traded on The Nasdaq Capital Market under the symbol "SONN."

 Holders

 As
of the Closing Date, we had one holder of record of our common stock. The transfer agent of our common stock was Securities Transfer
Corporation, 2901 N Dallas Parkway, Suite 380, Plano, TX 75093.

 Dividends

 We
have never declared or paid cash dividends on our common stock. We do not intend to declare or pay cash dividends on our common stock
for the foreseeable future, but currently intend to retain any future earnings to fund the development and growth of our business. The
payment of cash dividends if any, on the common stock will rest solely within the discretion of our Board and will depend, among other
things, upon our earnings, capital requirements, financial condition, and other relevant factors.

 Item
6. [Reserved]

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 The
following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended
to help facilitate an understanding of our financial condition and our historical results of operations for the periods presented. This
MD&A should be read in conjunction with the financial statements and notes thereto included in this Annual Report on Form 10-K. This
MD&A may contain forward-looking statements that involve risks and uncertainties. For a discussion on forward-looking statements,
see the information set forth above under the caption " Special Note Regarding Forward-Looking Statements," which information
is incorporated herein by reference.

 Overview

 We
are a clinical stage, oncology-focused biotechnology company with a proprietary platform for innovating biologic medicines of single
or bifunctional action. Known as F H AB (Fully Human Albumin Binding), the technology utilizes a fully human single-chain variable
fragment (scFv) that binds to and "hitchhikes" on human serum albumin for transport to target tissues. We designed the construct
to extend the half-life in serum and to improve drug delivery to and retention in solid tumors, which extends the duration of cytokine
activity in the microenvironment. F H AB development candidates can be produced in mammalian cell culture, which enables glycosylation
of the interleukins, thereby reducing the risk of immunogenicity and in certain instances, improves the cytokine's biological activity.
We believe our F H AB technology, for which we received an initial U.S. patent in June 2021 and a continuation of such patent
in June 2024, is a distinguishing feature of our biopharmaceutical platform. The approach is well suited for future drug development
across a range of human disease areas, including in oncology, autoimmune, pathogenic, inflammatory, and hematological conditions.

 Our
current internal pipeline development activities are focused on cytokines, which are a class of cell signaling molecules that serve as
potent immunomodulatory agents, linked to the F H AB domain. Working both independently and synergistically, specific cytokines
have shown the ability to modulate the activation and maturation of immune cells to help fight cancer and pathogens. However, because
they do not preferentially accumulate in specific tissues and are quickly eliminated from the body, the conventional approach to achieving
a treatment effect with cytokine therapy typically requires the administration of high and frequent doses. This can result in the potential
for systemic toxicity, which poses challenges to the therapeutic application of this class of drugs.

 Our
lead proprietary asset, SON-1010, is a single-chain version of human Interleukin 12 (IL-12), covalently linked to the F H AB
construct, for which we are pursuing clinical development in solid tumor indications, including ovarian cancer, soft tissue sarcoma,
colorectal cancer, and breast cancer. In March 2022, the FDA cleared our Investigational New Drug ("IND") application for
SON-1010. This allowed us to initiate a U.S. clinical trial (SB101) in oncology patients with solid tumors during the second calendar
quarter of 2022. In September 2021, we created a wholly-owned Australian subsidiary, SonnetBio Pty Ltd ("Subsidiary"), for
the purpose of conducting certain clinical trials. We received approval and initiated an Australian clinical study (SB102) of SON-1010
in healthy volunteers during the third calendar quarter of 2022 and published the final results of that study in February 2024. Interim
safety, tolerability, and efficacy data from the SB101 study was most recently reported in March 2025.

 In
January 2023, we announced a collaboration agreement with Roche for the clinical evaluation of SON-1010 with atezolizumab (Tecentriq).
The companies have entered into a Master Clinical 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 proof-of-concept ("POC") 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. Since the highest dose has been well tolerated, the Safety Review Committee ("SRC") recommended
adding a seventh cohort using a maintenance dose that is now 50% higher to study its safety and effect before proceeding to the randomized
Part 2 in patients with PROC at one of the two highest doses versus the standard of care ("SOC") for PROC. Interim safety,
tolerability, and efficacy data from the SB221 study was most recently reported in August 2025 following initiation of enrollment of
a higher dose cohort.

 In
January 2025, we announced an expansion of our Phase 1 SB101 clinical study of SON-1010 to add a new cohort to evaluate its effect in
combination with trabectedin (Yondelis), following the successful monotherapy dose escalation above the IL-12 MTD molar equivalent.
Trabectedin is an alkylating DNA-binding agent that was approved as a second-line treatment in early 2024 for patients with unresectable,
metastatic liposarcoma or leiomyosarcoma who have received a prior anthracycline-containing regimen. It is also known to convert tumor
macrophages into a pro-inflammatory phenotype. We believe that SON-1010 has the potential to complement that activity by activating the
NK and T cells in the TME to secrete more interferon-gamma (IFN), which is considered to be important for anti-tumor control.
The initial safety and tolerability of this approach was reported in March 2025 and top line data is expected by the end of calendar
2025. This cohort is also fully enrolled, bringing the total number of people exposed to SON-1010 to103 to date, including 42 with soft
tissue sarcoma and 32 with PROC. Partial responses have been seen in both indications at the highest dose, along with one complete response
("CR") with PROC.

 We
acquired the global development rights to our most advanced compound, SON-080, a fully human version of Interleukin 6 ("IL-6"),
in April 2020 through our acquisition of the outstanding shares of Relief Therapeutics SA. We are advancing SON-080 in target indications
of Chemotherapy-Induced Peripheral Neuropathy ("CIPN") and Diabetic Peripheral Neuropathy ("DPN"). We received
approval to initiate an ex-U.S. Phase 1b/2a study with SON-080 in CIPN (SB211) during the third quarter of 2022. The Data Safety Monitoring
Board ("DSMB") completed its review of the preliminary safety data during the first calendar quarter of 2024 and cleared
the trial to proceed to Part 2. Following the completion of the DSMB review, we announced initial safety data from the CIPN study. On
the basis of the DSMB review of both initial safety and a preliminary trend of efficacy data, an outreach program was initiated to identify
a potential partner to develop SON-080 in the DPN indication. Until new clinical data are generated in the DPN indication, we have decided
to delay further direct development of this program.

 On
October 8, 2024, we entered into a license agreement (the "Alkem Agreement") with Alkem Laboratories Limited ("Alkem")
for the development and commercialization of SON-080 in DPN and/or CIPN and/or autonomic neuropathy in India. Pursuant to the terms of
the Alkem Agreement, Alkem will bear the cost of, and be responsible for, among other things, conducting clinical studies, preparing
and filing applications for regulatory approval aiming at commercializing SON-080 in the DPN indication in India.

to a license agreement (the "New Life Agreement") we entered into with New Life Therapeutics Pte, Ltd. ("New Life")
of Singapore in May 2021, we agreed to be jointly responsible for developing SON-080 in DPN with New Life, with the objective to analyze
the data and to consider initiating a Phase 2 study, pending the outcome of any partnering activity. We were informed by New Life that
it has elected to move its business in a different direction. Consequently, on December 2, 2024, New Life provided written notice to
us of its intention to exercise its right to give back the rights with respect to the Products under the New Life Agreement (the "Give
Back Option") under the New Life Agreement, subject to the negotiation and mutual agreement of the terms of such Give Back Option
by us and New Life. We are negotiating the terms of the Give Back Option with New Life. If we and New Life are unable to reach a mutual
agreement on such terms prior to initiation of a Phase III Trial, the Give Back Option will expire unexercised, and New Life will retain
the rights granted subject to the terms and conditions of the New Life Agreement. Furthermore, the New Life Agreement will remain in
effect unless otherwise terminated by either us or New Life pursuant to the terms and conditions of the New Life Agreement.

 SON-1210
(IL12-F H AB-IL15), our lead bifunctional construct, combines F H AB with single-chain human IL-12 and human Interleukin
15 ("IL-15"). This drug candidate is being developed for solid tumor indications, including colorectal and pancreatic cancer.
In February 2023, we announced the successful completion of two IND-enabling toxicology studies with SON-1210 in non-human primates.
In August 2024, we entered into a Master Clinical Collaboration Agreement (the "SOC Agreement") with the Sarcoma Oncology
Center ("SOC") to advance the development of SON-1210. Based on the FDA feedback of approving the basic study design, preparations
for the full IND submission package are underway.

 SON-1411
(IL18-F H AB-IL12) is a bifunctional combination of human Interleukin 18 ("IL-18"), which was modified to resist
inhibitory interaction with the IL-18 binding protein while maintaining biological activity, along with single-chain human IL-12 for
solid tumor cancers. Cell line development and titer/bioactivity assessments are underway. We have elected to put the SON-1411 development
program on hold to preserve cash.

 On
July 11, 2025, we entered into a definitive Business Combination Agreement (as amended, the "BCA") with Rorschach I LLC ("Rorschach"),
Hyperliquid Strategies Inc. ("HSI"), TBS Merger Sub Inc., and Rorschach Merger Sub, LLC, pursuant to which, on December 2,
2025 (the "Closing Date"), subject to the terms and conditions contained in the BCA, Rorschach Merger Sub, LLC, merged with
and into Rorschach with Rorschach surviving as a direct wholly owned subsidiary of HSI and TBS Merger Sub Inc. merged with and into Sonnet,
with Sonnet surviving as a direct wholly owned subsidiary of HSI. The common stock of HSI, par value $0.01 per share ("HSI Common
Stock") began trading on the Nasdaq Capital Market under the symbol "PURR" on December 3, 2025. On the Closing Date,
Nasdaq filed a notification of removal from listing and deregistration of our common stock on Form 25 with the SEC on December 2, 2025.
After the Form 25 becomes effective, we intend to file with the SEC a Form 15 to request deregistration of our common stock under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and suspension of our reporting obligations
under Sections 13 and 15(d) of the Exchange Act. Following the Closing Date, we will operate as a wholly owned subsidiary of HSI and
will continue to focus on the development of our existing biotech assets, including SON-1010, while disposing of other assets.

 We
have incurred recurring operating losses and negative cash flows since inception. Our ability to generate product or licensing revenue
sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of
our current or future product candidates. Our net losses were $16.0 million and $7.4 million for the years ended September 30, 2025 and
2024, respectively. As of September 30, 2025, we had cash and cash equivalents of $5.1 million. In accordance with the BCA, we may not
spend cash proceeds of $8.2 million received from the exercise of outstanding warrants without the prior written consent of Rorschach.

 We
expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect that
our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

 conduct
 additional clinical trials for product candidates;

 continue
 to discover and develop additional product candidates;

 acquire
 or in-license other product candidates and technologies;

 maintain,
 expand and protect our intellectual property portfolio;

 hire
 additional clinical, scientific and commercial personnel;

 establish
 a commercial manufacturing source and secure supply chain capacity sufficient to provide commercial quantities of any product candidates
 for which we may obtain regulatory approval;

 seek
 regulatory approval for product candidates that successfully complete clinical trials;

 establish
 a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; and

 add
 operational, financial and management information systems and personnel, including personnel to support our product development and
 planned future commercialization efforts, as well as to support our operation as a public reporting company.

 We
will not generate revenue from product sales, if any, unless and until we receive licensing revenue and/or successfully complete clinical
development and obtain regulatory approval for our product candidates. If we obtain regulatory approval for any of our product candidates
and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our internal commercialization
capability to support product sales, marketing and distribution. We will continue to incur significant costs associated with operating
as a public company.

 As
a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such
time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity,
including sales pursuant to our ChEF Purchase Agreement (the "Purchase Agreement") with Chardan related to a "ChEF,"
Chardan's committed equity facility (the "Facility"), debt financings or other capital sources, which may include collaborations
with other companies or other strategic transactions. We may not be able to raise additional funds or enter into such other agreements
or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed,
we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates
or delay our pursuit of potential in-licenses or acquisitions.

of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased
expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not
become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis or raise additional capital
or enter into collaboration or license agreements, then we may be unable to continue our operations at planned levels and be forced to
reduce or terminate operations.

 Since
our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing the Company,
business planning, raising capital, acquiring or discovering product candidates and securing related intellectual property rights and
conducting discovery, research and development activities for product candidates. We do not have any products approved for sale and have
not generated any revenue from product sales. We have funded our operations to date primarily with proceeds from sales of common and
preferred stock, warrants and proceeds from the issuance of convertible debt.

 Lead
Clinical Programs Update

 SON-1010

 Phase
1 Trial (SB101 Trial): in Solid Tumors (SON-1010 Monotherapy) and in Sarcoma (with Trabectedin)

 This
first-in-human study is primarily designed to evaluate the safety of multiple ascending doses of SON-1010 in cancer patients and is being
conducted at several sites across the United States. The highest dose group studied to date was enrolled at 1200 ng/kg in December 2024
and one patient has had a partial response ("PR") at that dose. We recently announced an expansion of this trial to study
the combination of SON-1010 with trabectedin (Yondelis) in certain advanced soft-tissue sarcomas ("STS"), following
the successful completion of monotherapy dose escalation. Enrollment in this cohort is complete and topline safety data of the combination
with trabectedin is expected in H2 calendar year 2025. No new safety concerns have been reported to date.

 Phase
1b/2a Trial (SB221 Trial): PROC (Combo with Atezolizumab)

 The
second cancer trial is a global Phase 1b/2a multicenter, dose-escalation and randomized proof-of-concept study to assess the safety,
tolerability, PK, PD, and preliminary efficacy of SON-1010 administered subcutaneously ("SC") in combination with atezolizumab
given intravenously ("IV"). Enrollment remains ongoing and an update on safety in that trial was released on August 4, 2025
after the maximum dose to date was established at 1200 ng/kg. One of the three patients with PROC who was enrolled at that dose had a
PR and one had a CR.

 Program
Highlights:

 PK
 data reveals about 10-fold extended half-life for SON-1010 compared with rhIL-12 and suggests tumor targeting by F H AB
 binding to albumin.

 Dose-related,
 controlled, and prolonged IFN response.

 The
 SB101, SB102, and SB221 trials have collectively enrolled 103 subjects, with 13 of 24 evaluable monotherapy patients (54%) with cancer
 suggesting clinical benefit of SON-1010 monotherapy (stable disease ["SD"] at four months). At the highest dose, five
 of six patients (83%) had clinical benefit and one patient had a PR.

 Patients
 have received up to 24 cycles of SON-1010 as monotherapy and up to 19 cycles of SON-1010 with atezolizumab without dose-limiting
 toxicity at any dose level.

 Toxicity
 is minimized in both trials with the use of a lower 'desensitizing' first dose that takes advantage of the known tachyphylaxis
 with rhIL-12, which allows higher maintenance doses and potential improvements in efficacy.

 Favorable
 safety profile.

 Dose
 escalation to 1200 ng/kg has been archived safely in both trials, which is higher than the rhIL-12 MTD molar equivalent.

 The
 1200 ng/kg dose-escalation cohort in SB101 was increased in size to six patients to enhance the assessment of PK and PD. An expansion
 cohort was also added to study the dosing of SON-1010 alternating with trabectedin in certain types of soft tissue sarcoma.

 The
 safety and toxicity profile that has developed is typical for a Phase 1 oncology trial, with the majority of adverse events ("AEs")
 being reported as mild. All AEs seen to date have been transient, with no evidence of cytokine release syndrome.

 Upcoming
Milestones:

 Phase
 1: Solid Tumors (SON-1010 Monotherapy and Combination with Trabectedin)

 H2
 calendar year 2025: Topline Safety and Efficacy Data

 Phase
 1b/2a: PROC (SON-1010 in Combination with Atezolizumab)

 H2
 calendar year 2025: RP2D Safety & Topline Efficacy

 Phase
1b/2a Trial (SB211 Trial): Chemotherapy Induced Peripheral Neuropathy (CIPN)

 The
SB211 study was a double-blind, randomized, controlled trial of SON-080 conducted at two sites in Australia in patients with persistent
CIPN using a new proprietary version of recombinant human Interleukin-6 (rhIL-6) that builds upon previous work with atexakin-alfa. The
goal of the first portion of the SB211 study was to confirm safety and tolerability before continued development in Phase 2. As previously
announced in March 2024, a DSMB reviewed the unblinded safety and tolerability of SON-080 in the first nine patients and concluded that
the symptoms were tolerable in the initial patients and the study could proceed to Phase 2. Given the business priorities at the time,
the SB211 study was put on hold.

 In
October 2024, we entered into the Alkem Agreement with Alkem for the research, development, manufacturing, marketing, and commercialization
of our SON-080 molecule for the treatment of DPN in India and the manufacturing, marketing, and commercialization of SON-080 for CIPN
and autonomic neuropathy in India. Alkem will conduct all clinical trials it believes appropriate to obtain regulatory/commercial approval
in India of SON-080 for the treatment of DPN. Subsequent to the partnership established with Alkem, preparations are being made to support
initiation of a Phase 2 clinical trial in DPN, a mechanistically synergistic and larger, high-value indication with unmet medical need.

 Phase
1b Data Highlights:

 demonstrated to be well-tolerated at both 20 g and 60 g/dose, which was about 10-fold lower than the MTD for IL-6 that
 was established in previous clinical evaluations.

 Pain
 and quality of life survey results suggest the potential for rapid improvement of peripheral neuropathy symptoms and post-dosing
 durability with both doses, compared to placebo controls.

 Upcoming
Milestones:

 H2
 calendar year 2025: Alkem's Initiation of Phase 2 trial

 SON-1210:
Proprietary, Bifunctional Version of Human Interleukins 12 (IL-12) and 15 (IL-15), Configured Using Our F H AB Platform, in
Combination with Chemotherapy for the Treatment of Advanced Solid Tumors and Metastatic Pancreatic Cancer

 In
August 2024, we entered into the SOC Agreement with the SOC to conduct an investigator-initiated Phase 1/2a clinical study to evaluate
SON-1210 in combination with several chemotherapeutic agents including but not limited to NALIRIFOX (the combination of liposomal irinotecan,
5-fluorouracil/leucovorin, and oxaliplatin) for the specific treatment of metastatic pancreatic cancer. The NALIRIFOX regimen is U.S.
FDA-approved for the treatment of metastatic pancreatic cancer in the front-line and refractory settings.

 Components
of Results of Operations

Revenue

revenue was earned from the license arrangement entered into with New Life in May 2021, which granted an exclusive license to New Life
for rights (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 the Exclusive Territory. We identified the following obligations
under the arrangement: (i) License to develop, market, import, use and commercialize the Product in the Field in the Exclusive Territory
(the "New Life License"); and (ii) transfer of know-how and clinical development and regulatory activities ("R&D
Activities"). We determined that the New Life License and the R&D Activities are not distinct from each other and, therefore,
combined these material promises comprise a single performance obligation. Under this agreement, we received upfront cash payments totaling
$1.0 million, which were fully allocated to the single performance obligation and were recognized over the estimated performance period
of R&D services, which ended in the first fiscal quarter of 2024.

revenue was also earned from the Alkem Agreement entered into in October 2024, which granted an exclusive license to Alkem for rights
(with the right to sublicense) to research, develop, manufacture, import, export, market, use and commercialize pharmaceutical products
containing our IL-6 (SON-080) asset (or any derivatives, fragments or conjugates thereof) (the "Compounds") (such products,
the "Products") for the treatment of DPN (the "DPN Field") and to manufacture, import, export, market, use and
commercialize Products for the treatment of CIPN and autonomic neuropathy (together with the DPN Field, the "Fields") in
India. We identified the following obligations under the Alkem Agreement: (i) License to research, develop, market, import, use and commercialize
the Product in the DPN Field in India (the "Alkem License") and (ii) supply of Compound for a Phase 2 clinical trial ("Supply").
We determined that the Alkem License and Supply are not distinct from each other and, therefore, combined these material promises comprise
a single performance obligation. Under the Alkem Agreement, we received upfront cash payments totaling $1.0 million, which were fully
allocated to the single performance obligation and were recognized at the point-in-time at which the Company transferred the Alkem License
and Supply to Alkem.

Expenses

and Development Expenses

and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates.
We expense research and development costs as incurred and such costs include:

 employee-related
 expenses, including salaries, share-based compensation and related benefits, for employees engaged in research and development functions;

 expenses
 incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third
 parties, such as consultants and clinical research organizations;

 the
 cost of manufacturing drug products for use in our preclinical studies and clinical trials, including under agreements with third
 parties, such as consultants and contract manufacturing organizations;

 facilities,
 depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance;

 costs
 related to compliance with regulatory requirements; and

 payments
 made under third-party licensing agreements.

 We
recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided
by our service providers. This process involves reviewing open contracts and purchase orders, communicating with their personnel to identify
services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the
service when we have not yet been invoiced or otherwise notified of actual costs. Nonrefundable advance payments for goods or services
to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized
as an expense when the goods have been delivered or the services have been performed.

 Our
direct research and development expenses consist primarily of external costs, such as fees paid to outside consultants, contract research
organizations, contract manufacturing organizations and research laboratories in connection with preclinical development, process development,
manufacturing and clinical development activities. Our direct research and development expenses also include fees incurred under third-party
license agreements. We do not allocate employee costs and costs associated with discovery efforts, laboratory supplies and facilities,
including depreciation or other indirect costs, to specific product candidates because these costs are deployed across multiple programs
and as such, are not separately classified. We use internal resources primarily to conduct our research and discovery as well as for
managing preclinical development, process development, manufacturing and clinical development activities. These employees work across
multiple programs and therefore, we do not track costs by product candidate.

 We
will continue to incur research and development expenses for the foreseeable future as we attempt to advance development of our product
candidates. The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or
know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of our current pipeline
or any future product candidates we may develop due to the numerous risks and uncertainties associated with clinical development, including
risks and uncertainties related to:

 the
 timing and progress of preclinical and clinical development activities;

 the
 number and scope of preclinical and clinical programs that we decide to pursue;

 our
 ability to maintain our current research and development programs and to establish new ones;

 establishing
 an appropriate safety profile with investigational new drug-enabling studies;

 successful
 patient enrollment in, and the initiation and completion of, clinical trials;

 the
 successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any
 comparable foreign regulatory authority;

 the
 receipt of regulatory approvals from applicable regulatory authorities;

 our
 ability to establish new licensing or collaboration arrangements;

 establishing
 agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if any of our
 product candidates is approved;

 development
 and timely delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial
 launch;

 obtaining,
 maintaining, defending and enforcing patent claims and other intellectual property rights;

 launching
 commercial sales of product candidates, if approved, whether alone or in collaboration with others;

 maintaining
 a continued acceptable safety profile of the product candidates following approval; and

 the
 potential impact of health epidemics or outbreaks of communicable diseases on operations which may affect among other things, the
 timing of clinical trials, availability of raw materials, and the ability to access and secure testing facilities.

 A
change in the outcome of any of these variables with respect to the development of our product candidates could significantly change
the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval
for any of our product candidates.

and Administrative Expenses

and administrative expenses consist primarily of salaries and related costs for personnel, including share-based compensation, in executive,
finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as
well as professional fees for legal, patent, consulting, accounting, and audit services.

 Our
general and administrative expenses will increase in the future as we increase our headcount to support continued research activities
and development of product candidates. We will continue to incur increased accounting, audit, legal, regulatory, compliance and director
and officer insurance costs as well as investor and public relations expenses associated with being a public company.

 Other
Income (Expenses)

 Other
Income

 We
have participated in the Program sponsored by the New Jersey Economic Development Authority. The Program enables approved biotechnology
companies with unused net operating losses ("NOLs") and unused research and development credits to sell these tax benefits
for at least 80% of the value of the tax benefits to unaffiliated, profitable corporate taxpayers in the state of New Jersey. Other income
consists of net proceeds from the sale of New Jersey state NOLs through the Program. We plan to sell additional NOLs under the Program
in the future, subject to program availability and state approval.

 Foreign
Exchange Gain (Loss)

 Foreign
exchange gain (loss) consists of exchange rate changes on transactions denominated in currencies other than the U.S. dollar.

of Debt Discount

of debt discount consists of amortization expense related to the discount recorded in connection with the issuance of convertible notes
in July 2025.

 Provision
for Income Taxes

 Provision
for income taxes consists of foreign withholding taxes incurred on collaboration revenue.

 Results
of Operations

 Comparison
of the Years Ended September 30, 2025 and 2024

 The
following table summarizes our results of operations for the years ended September 30, 2025 and 2024:

 Years ended September 30,

 2025

 2024

 Change

 Collaboration revenue

 $
 1,000,000

 $
 18,626

 $
 981,374

 Operating expenses:

 8,355,304

 5,737,252

 $
 2,618,052

 General and administrative

 8,488,811

 6,130,845

 2,357,966

 Total operating expenses

 16,844,115

 11,868,097

 4,976,018

 Loss from operations

 (15,844,115
)

 (11,849,471
)

 (3,994,644
)

 Foreign exchange (loss) gain

 (112,985
)

 84,293

 (197,278
)

 Other income

 720,102

 4,327,946

 (3,607,844
)

 Amortization of debt discount

 (556,089
)

 —

 (556,089
)

 Loss before provision for income taxes

 (15,793,087
)

 (7,437,232
)

 $
 (8,355,855
)

 Provision for income taxes

 (218,400
)

 —

 (218,400
)

 $
 (16,011,487
)

 $
 (7,437,232
)

 $
 (8,574,255
)

Revenue

 We
recognized $1.0 million of revenue related to the Alkem Agreement during the year ended September 30, 2025 compared to $18,626 of revenue
related to the New Life Agreement during the year ended September 30, 2024. Revenue of $1.0 million for the year ended September 30,
2025 was due to our transfer of the Alkem License and Supply to Alkem during the first quarter of fiscal 2025. Revenue of $18,626 for
the year ended September 30, 2024 was due to our completion of R&D Activities related to New Life during the first quarter of fiscal
2024.

and Development Expenses

and development expenses were $8.4 million for the year ended September 30, 2025, compared to $5.7 million for the year ended September
30, 2024. The increase of $2.6 million was primarily related to a $3.0 million increase in costs for our SB101 and SB221 clinical trials
and a $1.0 million increase resulting from the cancellation in 2024 of accrued but unpaid bonuses that had been awarded for fiscal years
2022 and 2023, partially offset by a $1.6 million reduction in non-clinical expenses as we have tightened our focus on research and development
projects that we have assessed to have the greatest near-term potential and have placed certain development projects on hold while we
seek partnering opportunities.

and Administrative Expenses

and administrative expenses were $8.5 million for the year ended September 30, 2025, compared to $6.1 million for the year ended September
30, 2024. The increase of $2.4 million was primarily due to an increase of $1.8 million in professional
fees primarily related to costs incurred in connection with the BCA and related registration statements filed with the SEC, as well as
costs incurred in connection with the Purchase Agreement, and the cancellation in 2024 of accrued but unpaid bonuses that had been awarded
for fiscal years 2022 and 2023 in the amount of $0.9 million.

 Other
Income

 Other
income was $0.7 million for the year ended September 30, 2025, compared to $4.3 million for the year ended September 30, 2024. The decrease
of $3.6 million was due to a reduction in the sale of unused New Jersey state NOLs available for sale under the Program.

of Debt Discount

of debt discount was $0.6 million for the year ended September 30, 2025 as a result of the discount recorded in connection with the issuance
of convertible notes.

 Provision
for Income Taxes

 Provision
for income taxes was $0.2 million for the year ended September 30, 2025 as a result of withholding taxes from collaboration revenue earned
under the Alkem Agreement.

 Liquidity
and Capital Resources

 We
have funded operations to date primarily with proceeds from sales of common and preferred stock, warrants and proceeds from the issuance
of convertible debt. We will likely offer additional securities for sale in response to market conditions or other circumstances, including
sales to Chardan pursuant to the Facility, if we believe such a plan of financing is required to advance our business plans and is in
the best interests of our stockholders. In addition, we have requested that our stockholders approve the merger transactions contemplated
by the BCA, pursuant to which, if approved, Sonnet will operate as a wholly owned subsidiary of HSI and we will continue to focus on
the development of our existing biotech assets. There is no certainty that equity or debt financing will be available in the future or
that it will be at acceptable terms, or that our stockholders will approve the merger transactions and, at this time, it is not possible
to predict the outcome of these matters.

 We
have incurred net losses of $16.0 million and $7.4 million for the years ended September 30, 2025 and 2024, respectively. We expect to
continue to incur significant operational expenses and net losses in the upcoming 12 months and beyond. Our net losses may fluctuate
significantly from quarter to quarter and year to year, depending on the stage and complexity of our R&D studies and related expenditures,
the receipt of additional payments on the licensing of our technology, if any, and the receipt of payments under any current or future
collaborations we may enter into.

 We
have evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to
continue as a going concern. We believe our cash and cash equivalents of $5.1 million at September 30, 2025 will fund our projected operations
into February 2026. Substantial additional financing will be needed by us to fund our operations. These factors raise substantial doubt
about our ability to continue as a going concern.

 The
following table summarizes our sources and uses of cash for each of the periods presented:

 Year ended September 30,

 2025

 2024

 Net cash used in operating activities

 $
 (12,827,199
)

 $
 (8,607,723
)

 Net cash used in investing activities

 (12,000
)

 (12,000
)

 Net cash provided by financing activities

 26,047,009

 6,494,920

 Net increase (decrease) in cash, cash equivalents and restricted cash

 $
 13,207,810

 $
 (2,124,803
)

Activities

the year ended September 30, 2025, we used $12.8 million
of cash in operating activities which was primarily attributable to our net loss of $16.0 million, partially offset by a combined decrease
in prepaid expenses and other assets and incentive tax receivable of $1.0 million related to deposits applied to research and development
expenses, an increase of $0.8 million in accounts payable and accrued expenses primarily due to professional fees incurred in connection
with the transactions contemplated in the BCA, $0.6 million in amortization of debt discount, $0.5 million in financing costs associated
with the Purchase Agreement that are classified as financing activities, and $0.2 million in share-based compensation expense.

the year ended September 30, 2024, we used $8.6 million
of cash in operating activities which was primarily attributable to our net loss of $7.4 million, a $2.2 million net decrease in accounts
payable and accrued expenses primarily due to the decrease in research and development expenses, offset by an increase of $0.5 million
from a decrease in prepaid expenses and other assets, $0.4 million in financing costs associated with the Purchase Agreement that are
classified as financing activities and $0.2 million in share-based compensation expense.

 Investing
Activities

each of the years ended September 30, 2025 and 2024, we used $12,000 of cash in investing activities for the purchase of acquired in-process
research and development.

 Financing
Activities

the year ended September 30, 2025, net cash provided by financing activities was $26.0 million, consisting of $15.3 million in net proceeds
from the sale of common and preferred stock and pre-funded warrants through a combination of public, registered direct and PIPE offerings
and $11.2 million received from the exercise of warrants, partially offset by the payment of $0.5 million of financing costs related
to the Facility.

the year ended September 30, 2024, net cash provided by financing activities was $6.5 million, consisting of $3.5 million in net proceeds
from the sale of common stock through the Purchase Agreement and in an underwritten public offering. In addition, we received proceeds
of $3.0 million from the exercise of warrants.

 Funding
Requirements

 We
expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we advance preclinical activities
and clinical trials of product candidates in development. The timing and amount of our operating expenditures will depend largely on:

 the
 scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical
 studies for our current or future product candidates;

 the
 clinical development plans we establish for these product candidates;

 the
 number and characteristics of product candidates and programs that we develop or may in-license;

 the
 outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA
 and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to
 require that we perform more studies for our product candidates than those that we currently expect;

 our
 ability to obtain marketing approval for product candidates;

 the
 cost of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights covering our product candidates;

 our
 ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual
 property disputes, including patent infringement actions brought by third parties against us or our product candidates;

 the
 cost and timing of completion of commercial-scale outsourced manufacturing activities with respect to product candidates;

 our
 ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent
 we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement;

 the
 cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory
 approval in regions where we choose to commercialize our products on our own;

 the
 success of any other business, product or technology that we acquire or in which we invest;

 the
 costs of acquiring, licensing or investing in businesses, product candidates and technologies;

 our
 need and ability to hire additional management and scientific and medical personnel;

 the
 costs to operate as a public company in the United States, including the need to implement additional financial and reporting systems
 and other internal systems and infrastructure for our business;

 market
 acceptance of our product candidates, to the extent any are approved for commercial sale;

 the
 effect of competing technological and market developments; and

 the
 potential impact of a widespread outbreak of any communicable disease on our clinical trials and operations.

 Until
such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity
offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of ours
may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the
rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive
covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring
dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third
parties, we may have to relinquish valuable rights to technologies, future revenue streams, research programs or product candidates or
grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings
or other arrangements when needed, we may be required to delay, reduce or eliminate product development or future commercialization efforts,
sell off assets, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market.

 Exercise
of Warrants

 In
the fourth quarter of 2025, holders exercised outstanding warrants to purchase 3,744,624 shares of our common stock, from which we received
gross proceeds of $11.2 million. In accordance with the BCA, we may not spend any cash proceeds in excess of $3.0 million received from
the exercise of warrants without the prior written consent of Rorschach.

 July
2025 Convertible Notes and Warrants

 In
July 2025, we completed a private placement of zero-interest convertible notes (the "Convertible Notes"), raising an aggregate
of $2.0 million in gross proceeds. The Convertible Notes were scheduled to mature on June 30, 2026, and were convertible at any time
into an aggregate of up to 1,730,104 shares of common stock at a fixed price of $1.156 per share. If, at any time while the Convertible
Notes remained outstanding, we issued shares of common stock or common stock equivalents in an offering for gross proceeds of at least
$5.0 million (a "Subsequent Issuance"), the entire unpaid principal amount of the Convertible Notes would convert automatically
into the same securities issued pursuant to the Subsequent Issuance. In connection with the Convertible Notes, investors also received
five-year warrants to purchase an aggregate of 865,052 shares of common stock at the same $1.156 exercise price, providing approximately
$0.1 million in additional cash proceeds. The Convertible Notes were converted into shares of Series 5 Preferred Stock (as defined below)
and warrants in connection with the PIPE described below.

 July
2025 PIPE Offering

 We
raised an aggregate of $5.5 million in a private placement (the "PIPE") to accredited investors through the issuance and
sale of an aggregate of 5,500 shares of Series 5 Convertible Preferred Stock (the "Series 5 Preferred Stock"), stated value
$1,000 per share, initially convertible at a conversion price of $1.25 per share, or 4,400,000 shares of common stock, and warrants to
purchase up to an aggregate of 8,800,000 shares of common stock. At the closing of the PIPE, the $2.0 million principal amount of the
Convertible Notes automatically converted into an aggregate of 2,000 shares of Series 5 Preferred Stock and warrants to purchase up to
3,200,000 shares of common stock, on the same terms as the PIPE investors.

 December
2024 Registered Direct and PIPE Offering

 On
December 10, 2024, we closed a registered direct offering with institutional investors for the issuance and sale of 768,000 shares of
our common stock, pre-funded warrants to purchase up to 317,325 shares of common stock, and accompanying warrants to purchase up to an
aggregate of 1,085,325 shares of our common stock. Each share of common stock and pre-funded warrant to purchase one share of common
stock was sold together with a common warrant to purchase one share of common stock. The offering price of each share of common stock
and accompanying common warrant was $2.23 and the offering price of each pre-funded warrant and accompanying common warrant was $2.2299,
priced at-the-market under the rules of the Nasdaq Stock Market. The registered direct warrants were immediately exercisable at a price
of $2.10 per share, expire five years from the date of issuance and contain an alternative cashless exercise provision. The pre-funded
warrants were immediately exercisable at any time, until exercised in full, at a price of $0.0001 per share of common stock.

 We
closed a concurrent private placement with an existing investor for the issuance and sale of 127,500 shares of our common stock, pre-funded
warrants to purchase up to 545,500 shares of common stock, and accompanying warrants to purchase up to an aggregate 673,000 shares of
our common stock. Each share of common stock and pre-funded warrant to purchase one share of common stock was sold in the PIPE together
with a common warrant to purchase one share of common stock. The PIPE offering price of each share of common stock and accompanying common
warrant was $2.23 and the PIPE offering price of each pre-funded warrant and accompanying common warrant was $2.2299, priced at-the-market
under the rules of the Nasdaq Stock Market. The PIPE warrants were immediately exercisable at a price of $2.10 per share, expire five
years from the date of issuance and contain an alternative cashless exercise provision. The pre-funded warrants were immediately exercisable
at any time, until exercised in full, at a price of $0.0001 per share of common stock.

 We
raised net proceeds of approximately $3.4 million from the registered direct and PIPE offering.

 November
2024 Underwritten Public Offering

 On
November 7, 2024, we closed a public offering of common stock and certain warrants through Chardan, as underwriter, for net proceeds
of $4.2 million through the issuance and sale of 155,000 shares of our common stock, pre-funded warrants to purchase up to 956,111 shares
of common stock, and accompanying common warrants to purchase up to an aggregate of 2,222,222 shares of our common stock. Each share
of common stock and pre-funded warrant to purchase one share of common stock was sold together with a common warrant to purchase two
shares of common stock. The public offering price of each share of common stock and accompanying common warrant was $4.50 and the public
offering price of each pre-funded warrant and accompanying common warrant was $4.4999. The common warrants were immediately exercisable
at a price of $4.50 per share of common stock, expire five years from the date of issuance and contain an alternative cashless exercise
provision. The pre-funded warrants were immediately exercisable at any time, until exercised in full, at a price of $0.0001 per share
of common stock.

 Alkem
Licensing Agreement

 In
October 2024, we executed the Alkem Agreement for the treatment of DPN in India as well as the manufacturing, marketing and commercialization
of SON-080 for the treatment of CIPN and autonomic neuropathy in India. Pursuant to the terms of the Alkem Agreement, Alkem will bear
the cost of certain expenses, including conducting clinical studies, preparing and filing regulatory applications and undertaking other
developmental and regulatory activities for commercializing SON-080 for DPN in India. Alkem paid us $1.0 million in upfront non-refundable
cash payments, which after tax withholdings resulted in net payments of $0.8 million, and will pay us potential additional milestone
payments totaling up to $1.0 million subject to the achievement of certain development and regulatory milestones. In addition, Alkem
is obligated to pay us a royalty equal to a percentage in the low double digits of net sales less Alkem's actual cost of goods
sold and Alkem's sales and marketing and related expenses of SON-080 in India until the first commercial sale of a competitive
intermittent low dose IL-6 compound as set forth in the Alkem Agreement.

 Committed
Equity Facility

 On
May 2, 2024, we entered into the Purchase Agreement and a Registration Rights Agreement (the "Registration Rights Agreement"),
each with Chardan, related to the Facility. Pursuant to the Purchase Agreement, we have the right from time to time at our option to
sell to Chardan up to $25.0 million in aggregate gross purchase price of newly issued shares of our common stock, of which $24.7 million
is available to be sold as of September 30, 2025. The Facility will allow us to raise primary equity on a periodic basis at our sole
discretion depending on a variety of factors including, among other things, market conditions, the trading price of the common stock,
and determinations by us regarding the use of proceeds of such common stock. The purchase price of the shares of common stock will be
determined by reference to the Volume Weighted Average Price ("VWAP") of the common stock during the applicable purchase
period, less a fixed 4% discount to such VWAP, and the total shares to be purchased on any day may not exceed 20% of the trading volume
of our common stock during the applicable purchase period. The Purchase Agreement will be effective for a 36-month period ending May
16, 2027, unless earlier terminated upon the terms and conditions therein. We sold 153,020 shares of common stock pursuant to the Purchase
Agreement for net proceeds of approximately $0.2 million during the year ended September 30, 2025.

 Contractual
Obligations and Commitments

 Our
contractual obligations as of September 30, 2025 that will affect our future liquidity consist of an operating lease. As of September
30, 2025, we had a current operating lease liability of $46,573.

 In
addition to the operating lease, we have entered into other contracts in the normal course of business with certain CROs, CMOs and other
third-parties for preclinical research studies and testing, clinical trials and manufacturing services. These contracts do not contain
any minimum purchase commitments and are cancellable upon prior notice. Payments due upon cancellation consist only of payments for services
provided and expenses incurred, including non-cancellable obligations to our service providers, up to the date of cancellation.

 Critical
Accounting Policies and Estimates

 Our
management's discussion and analysis of financial condition and results of operations are based on our consolidated financial statements,
which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets
and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to
the accrual for research and development expenses. We base our estimates on historical experience, known trends and events, and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

 While
our significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere
in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates
used in the preparation of the consolidated financial statements.

and Development Expenses

and development expenses include all direct and indirect costs associated with the development of our 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 each reporting period, we compare 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 we consider in preparing the estimates include
costs incurred by the service provider, milestones achieved, and other criteria related to the efforts of our service providers. Such
estimates are subject to change as additional information becomes available. Depending on the timing of payment to the third-party service
providers and the progress we estimate has been made as a result of the service provided, we will record a prepaid expense or accrued
liability related to these costs. Contingent development or regulatory milestone payments are recognized upon the related resolution
of such contingencies. As of September 30, 2025, we did not make any material adjustments to our prior estimates of accrued research
and development expenses.

 Recently
Issued Accounting Pronouncements

 A
description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations
is disclosed in Note 2 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

 Item
7A. Quantitative and Qualitative Disclosures about Market Risk.

 Not
applicable.

 Item
8. Financial Statements and Supplementary Data.

 SONNET
BIOTHERAPEUTICS HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report
 of Independent Registered Public Accounting Firm (KMPG, LLP, Philadelphia, PA, Auditor Firm ID: 185)

 Balance Sheets

 10 3

 Statements of Operations

 Statements of Changes in Stockholders' Equity (Deficit)

 Statements of Cash Flows

 Notes

 Report
of Independent Registered Public Accounting Firm

 To
the Stockholders and Board of Directors

BioTherapeutics Holdings, Inc. and Hyperliquid Strategies, Inc.:

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated balance sheets of Sonnet BioTherapeutics Holdings, Inc. and Hyperliquid Strategies, Inc.
and subsidiaries (the Company) as of September 30, 2025 and 2024, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively, the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for the years then
ended, in conformity with U.S. generally accepted accounting principles.

 Going
Concern

 The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company has incurred recurring losses and negative cash flows from operations
since inception that will require substantial additional financing to continue to fund its research and development activities that raise
substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described
in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matter

 The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.

 Accrued research and development expense

 As
discussed in Notes 2 and 3 to the consolidated financial statements, research and development costs are expensed as incurred, which include
amounts due to third parties for research, development, and manufacturing services. At the end of each reporting period, the Company
compares the payments made to third-party service providers to the estimated progress towards 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. Depending on the timing
of payments to the third-party service providers and the progress the Company estimates has been made as a result of the services provided,
the Company will record a prepaid expense or accrued liability related to these costs. As of September 30, 2025, the Company reported
accrued research and development
expenses of $0.6 million.

 We
identified the evaluation of certain accrued research and development expenses for third-party service providers as a critical
audit matter. Evaluating the estimated progress toward completion of research and development projects, including the factors described
above, required especially subjective auditor judgment.

 The
following are the primary procedures we performed to address this critical audit matter. To evaluate the Company's estimate of
costs incurred as of September 30, 2025, for a selection of accrued research and development expenses, we (1) examined the
provisions in the contracts, invoices and communications received from third party service providers related to the project status; (2)
sent confirmations to the third-party service providers; and (3) inquired of the individuals who are responsible for monitoring and tracking
the status of research and development activities.

 /s/
 KPMG LLP

 We
have served as the Company's auditor since 2015.

 Philadelphia,
Pennsylvania

 December
16, 2025

Balance Sheets

 2025

 2024

 September
 30,

 2025

 2024

 Assets

 Current assets:

 Cash and cash
 equivalents

 $
 5,120,264

 $

 Restricted cash

 8,237,002

 —

 Prepaid expenses and other
 current assets

 470,615

 1,206,409

 Incentive
 tax receivable

 514,845

 762,078

 Total current assets

 14,342,726

 2,117,943

 Property and equipment, net

 10,906

 20,523

 Operating lease right-of-use asset

 43,775

 123,417

 Deferred offering costs

 —

 15,000

 Other assets

 487,151

 494,147

 Total
 assets

 $
 14,884,558

 $
 2,771,030

 Liabilities and stockholders'
 equity (deficit)

 Current liabilities:

 Accounts payable

 $
 2,942,331

 $
 2,183,416

 Accrued expenses and other
 current liabilities

 1,108,075

 942,489

 Current
 portion of operating lease liability

 46,573

 84,291

 Total current liabilities

 4,096,979

 3,210,196

 Operating lease liability,
 net of current portion

 —

 46,573

 Total
 liabilities

 4,096,979

 3,256,769

 Commitments and contingencies (Note 5)

 -

 -

 Stockholders' equity (deficit):

 Preferred stock, $ 0.0001 par value: 5,000,000
 shares authorized; 7,500 and no shares issued and outstanding at September 30, 2025 and 2024, respectively (Liquidation value of
 $ 7,601,250 as of September 30, 2025)

 —

 Common stock, $ 0.0001 par
 value: 125,000,000 shares authorized; 7,077,352 and 650,284 issued and outstanding at September 30, 2025 and 2024, respectively

 Additional paid-in capital

 144,479,342

 117,195,181

 Accumulated
 deficit

 ( 133,692,472
)

 ( 117,680,985
)

 Total
 stockholders' equity (deficit)

 10,787,579

 ( 485,739
)

 Total
 liabilities and stockholders' equity (deficit)

 $
 14,884,558

 $
 2,771,030

 See
accompanying notes to consolidated financial statements

Statements of Operations

 2025

 2024

 Years

 2025

 2024

 revenue

 $
 1,000,000

 $
 18,626

 Operating expenses:

 8,355,304

 5,737,252

 and administrative

 8,488,811

 6,130,845

 Total
 operating expenses

 16,844,115

 11,868,097

 Loss from operations

 ( 15,844,115
)

 ( 11,849,471
)

 Foreign exchange (loss) gain

 ( 112,985
)

 84,293

 Other income

 720,102

 4,327,946

 Amortization of debt discount

 ( 556,089
)

 —

 Loss before provision for
 income taxes

 ( 15,793,087
)

)

 Provision for income taxes

 ( 218,400
)

 —

 ( 16,011,487
)

)

 Accrual of cumulative
 dividends on Series 5 convertible preferred stock

 ( 101,250
)

 —

 Net loss attributable
 to common stockholders

 $
 ( 16,112,737
)

 $
)

 Per share information:

 Net loss per share,
 basic and diluted

 $
 ( 3.95
)

 $
 ( 11.35
)

 Weighted average shares outstanding, basic
 and diluted

 4,081,296

 655,240

 See
accompanying notes to consolidated financial statements

Statements of Changes in Stockholders' Deficit

 Shares

 Shares

 capital

 deficit

 Total

 Preferred
 stock

 stock

 Additional
 paid-in

 Accumulated

 Shares

 Shares

 capital

 deficit

 Total

 Balance at October 1, 2023

 —

 $
 —

 218,786

 $

 $
 110,017,751

 $
 ( 110,243,753
)

 $
 ( 225,980
)

 Sale of common stock, net of issuance costs

 —

 —

 167,987

 3,976,365

 —

 3,976,382

 Retirement of shares in connection with reverse
 stock split

 —

 —

 ( 190
)

 —

 —

 —

 —

 Issuance of common stock on vesting of restricted
 stock units and restricted stock awards

 —

 —

 —

 —

 —

 —

 Net share settlement of warrants

 —

 —

 94,288

 ( 9
)

 —

 —

 Exercise and modification of warrants, net
 of issuance costs

 —

 —

 168,437

 2,969,884

 —

 2,969,901

 Share-based compensation

 —

 —

 —

 —

 231,190

 —

 231,190

 —

 —

 —

 —

 —

)

)

 Balance at September 30, 2024

 —

 —

 650,284

 117,195,181

 ( 117,680,985
)

 ( 485,739
)

 Sale of common stock, net of issuance costs

 —

 —

 1,203,520

 7,806,377

 —

 7,806,497

 Retirement of shares in connection with reverse
 stock split

 —

 —

 ( 373
)

 —

 —

 —

 —

 Shares released from abeyance

 —

 —

 187,500

 ( 19
)

 —

 —

 Issuance of common stock on vesting of restricted
 stock units and restricted stock awards

 —

 —

 17,152

 ( 2
)

 —

 —

 Sale of warrants in connection with convertible notes, net of issuance
 costs

 —

 —

 —

 —

 578,874

 —

 578,874

 Net share settlement of warrants

 —

 —

 1,209

 —

 —

 —

 —

 Exercise of warrants

 —

 —

 5,018,060

 11,199,337

 —

 11,199,839

 Sale of preferred stock, net of issuance costs

 5,500

 —

 —

 5,499,999

 —

 5,500,000

 Conversion of convertible notes into preferred
 stock

 2,000

 —

 —

 —

 2,000,000

 —

 2,000,000

 Share-based compensation

 —

 —

 —

 —

 199,595

 —

 199,595

 —

 —

 —

 —

 —

 ( 16,011,487
)

 ( 16,011,487
)

 Balance at September 30, 2025

 7,500

 $

 7,077,352

 $

 $
 144,479,342

 $
 ( 133,692,472
)

 $
 10,787,579

 See
accompanying notes to consolidated financial statements

Statements of Cash Flows

 2025

 2024

 Years

 2025

 2024

 Cash flows from operating activities:

 $
 ( 16,011,487
)

 $
)

 Adjustments to reconcile
 net loss to net cash used in operating activities:

 Acquired in-process research
 and development

 114,399

 12,000

 Depreciation

 9,617

 12,843

 Amortization of operating
 lease right-of-use asset

 79,642

 70,272

 Share-based compensation

 199,595

 231,190

 Financing costs related
 to ChEF Purchase Agreement

 520,200

 370,426

 Non-cash financing costs

 3,044

 1,732

 Amortization of debt discount

 556,089

 —

 Changes in operating assets
 and liabilities:

 Prepaid expenses and other
 current assets

 735,794

 470,987

 Incentive tax receivable

 247,233

 24,496

 Other assets

 6,996

 ( 79,941
)

 Accounts payable

 630,384

 48,423

 Accrued expenses and other
 current liabilities

 165,586

 ( 2,241,246
)

 Deferred income

 —

 ( 18,626
)

 lease liability

 ( 84,291
)

 ( 73,047
)

 Net
 cash used in operating activities

 ( 12,827,199
)

 ( 8,607,723
)

 Cash flows from investing activities:

 Purchases
 of in-process research and development

 ( 12,000
)

 ( 12,000
)

 Net
 cash used in investing activities

 ( 12,000
)

 ( 12,000
)

 Cash flows from financing activities:

 Proceeds from sale of common
 stock, net of issuance costs

 7,803,453

 3,896,577

 Proceeds from sale of preferred
 stock and warrants, net of issuance costs

 5,500,000

 —

 Proceeds from issuance
 of convertible notes and warrants, net of issuance costs

 2,022,785

 —

 Payment of deferred offering
 costs

 —

 ( 15,000
)

 Payment of financing costs
 related to ChEF Purchase Agreement

 ( 465,200
)

 ( 370,426
)

 Proceeds
 from exercise of warrants, net of issuance costs

 11,185,971

 2,983,769

 Net
 cash provided by financing activities

 26,047,009

 6,494,920

 Net increase (decrease) in cash, cash equivalents
 and restricted cash

 13,207,810

 ( 2,124,803
)

 Cash, cash equivalents
 and restricted cash at beginning of year

 2,274,259

 Cash, cash equivalents
 and restricted cash at end of year

 $
 13,357,266

 $

 Cash and cash equivalents

 $
 5,120,264

 $

 Restricted cash

 8,237,002

 —

 Total
 cash, cash equivalents and restricted cash

 $
 13,357,266

 $

 Supplemental disclosure of non-cash operating,
 investing and financing activities:

 Conversion
 of convertible notes into preferred stock

 $
 1,443,911

 $
 —

 Net
 settlement of warrants

 $
 —

 $

 ChEF
 Purchase Agreement financing costs in accounts payable

 $
 40,000

 $
 —

 In-process
 research and development in accounts payable

 $
 102,399

 $
 —

 Warrant
 issuance costs in accounts payable

 $
 —

 $
 13,868

 See
accompanying notes to consolidated financial statements

 Notes

 1.
 Organization and Description of Business

 Description
of business

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 AB
(Fully Human Albumin Binding), the technology utilizes a fully human single chain antibody fragment (scFv) that binds to and "hitch-hikes"
on human serum albumin ("HSA") for transport to target tissues. Sonnet designed the F H AB construct to improve
drug accumulation in solid tumors, as well as to extend the duration of activity in the body. F H AB development candidates
can be produced in mammalian cell culture, which enables glycosylation of the interleukins, thereby reducing the risk of immunogenicity,
as well as E. coli. Sonnet believes its F H AB technology, for which it received a U.S. patent in June 2021, is a distinguishing
feature of its biopharmaceutical platform. The approach is well suited for future drug development across a range of human disease areas,
including in oncology, autoimmune, pathogenic, inflammatory, and hematological conditions.

 Sonnet's
lead proprietary asset, SON-1010, is a fully human version of Interleukin 12 ("IL-12"), covalently linked to the F H AB
construct, for which Sonnet is pursuing clinical development in solid tumor indications, including ovarian cancer, soft tissue sarcoma,
colorectal cancer, and breast cancer. In March 2022, the U.S. Food and Drug Administration (the "FDA") cleared Sonnet's
Investigational New Drug ("IND") application for SON-1010. This allowed the Company to initiate a U.S. clinical trial (SB101)
in oncology patients with solid tumors during the second calendar quarter of 2022. In September 2021, the Company created a wholly-owned
Australian subsidiary, SonnetBio Pty Ltd ("Subsidiary"), for the purpose of conducting certain clinical trials. Sonnet received
approval and initiated an Australian clinical study (SB102) of SON-1010 in healthy volunteers during the third calendar quarter of 2022
and published the final results of that study in February 2024. Interim safety, tolerability, and efficacy data from the SB101 study
was most recently reported in March 2025, following successful completion of dose escalation in December 2024.

 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 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 have provided SON-1010 and atezolizumab, respectively, for use in the Phase 1b/Phase 2a combination
safety, dose-escalation, and proof-of-concept ("POC") 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 a maximum tolerated dose ("MTD") of SON-1010 with a fixed dose of atezolizumab. Clinical benefit in PROC will be
confirmed in an expansion group. Since the highest dose has been well tolerated, the Safety Review Committee recommended adding a seventh
cohort using a maintenance dose that was 25% higher to study its safety and effect before proceeding to the randomized Phase 2a portion
in patients with PROC at one of the two highest doses. Part 2 of the study will then investigate SON-1010 in combination with atezolizumab,
or the standard of care ("SOC") for PROC in a randomized comparison to show POC. Interim safety, tolerability, and efficacy
data from the SB221 study was most recently reported in April 2025, following completion of the initial dose escalation series.

 In
January 2025, Sonnet announced an expansion of its Phase 1 SB101 clinical study of SON-1010 to add a new cohort to evaluate its effect
in combination with trabectedin (Yondelis), following the successful completion of monotherapy dose escalation. Trabectedin
is an alkylating DNA-binding agent that was approved in the U.S. as a second-line treatment in early 2024 for patients with undetectable,
metastatic liposarcoma or leiomyosarcoma who have received a prior anthracycline-containing regimen. It is also known to activate tumor
macrophages toward a pro-inflammatory phenotype. The Company believes that SON-1010 has the potential to complement that activity by
activating the NK and T cells in the TME to secrete more interferon-gamma (IFN), which is considered to be important for anti-tumor
control. The initial safety and tolerability of this approach was reported in March 2025 and top line data is expected by the end of
calendar 2025. This cohort is also fully enrolled, bringing the total number of people exposed to SON-1010 to 99 to date, including 45
with soft tissue sarcoma and 30 with PROC. Partial responses have been seen in both indications at the highest dose.

 Notes

 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 (SB211) during the third quarter of 2022. The Data Safety Monitoring
Board ("DSMB") overseeing the study met during the first calendar quarter of 2024 and cleared the trial to proceed to Part
2. Following the completion of the DSMB review, Sonnet announced initial safety data from the CIPN study. The objective was to consider
completing the Phase 2 study, pending the outcome of any partnering activity; given the business priorities at the time, the SB211 study
was put on hold. On October 8, 2024, the Company entered into a License Agreement (the "Alkem Agreement") with Alkem Laboratories
Limited ("Alkem") to develop and commercialize SON-080 for DPN in India initially, and potentially CIPN as well as autonomic
neuropathy. Alkem will conduct all clinical trials that it believes appropriate to obtain regulatory approval in India for SON-080 for
the treatment of DPN.

 SON-1210
(IL12-F H AB-IL15), Sonnet's lead bifunctional construct, combines F H AB with single-chain human IL-12 and human
Interleukin 15 ("IL-15"). This compound is being developed for solid tumor indications, including colorectal and pancreatic
cancer. In February 2023, Sonnet announced the successful completion of two IND-enabling toxicology studies with SON-1210 in non-human
primates. In August 2024, the Company entered into a Master Clinical Collaboration Agreement (the "SOC Agreement") with the
Sarcoma Oncology Center ("SOC") to advance the development of SON-1210. An Innovative Immuno Oncology Consortium ("IIOC")
that is funded by the SOC will conduct an investigator-initiated Phase 1b/2a study of SON-1210 in pancreatic cancer. The IIOC submitted
a pre-IND package to the FDA in November 2024. Based on the FDA feedback, preparations for the full IND submission package are underway.

 SON-1411
(IL18-F H AB-IL12) is a bifunctional combination of human Interleukin 18 ("IL-18"), which was modified to resist
the inhibitory binding interaction with the IL-18 binding protein, and single-chain human IL-12 for solid tumor cancers. Cell line development
and titer/bioactivity assessments are underway. The SON-1411 development program has been re-engaged with a focus on cell line development
and in vivo evaluation in an appropriate humanized mouse model.

has completed sequence confirmation for SON-3015 (anti-IL6-F H AB-anti-TGF). Early-stage bifunctional drug has been generated
and is being stored for future use in in vivo mice studies. The Company has elected to place the SON-3015 development program
on hold for expense reduction purposes.

 Business
combination

 On
July 11, 2025, the Company entered into a definitive Business Combination Agreement (as amended on September 22, 2025, the "BCA")
with Rorschach I LLC ("Rorschach"), Hyperliquid Strategies Inc. ("HSI"), TBS Merger Sub Inc., and Rorschach Merger
Sub, LLC, pursuant to which, subject to the terms and conditions contained in the BCA, Rorschach Merger Sub, LLC, will merge with and
into Rorschach with Rorschach surviving as a direct wholly owned subsidiary of HSI and TBS Merger Sub Inc. will merge with and into Sonnet,
with Sonnet surviving as a direct wholly owned subsidiary of HSI. Following the closing, the Company will operate as a wholly owned subsidiary
of HSI and will continue to focus on the development of its existing biotech assets, including SON-1010, while disposing of other assets.
The transaction was subject to customary closing conditions, including approval by the Company's stockholders, and closed on December
2, 2025. In connection with the transaction, legacy Sonnet stockholders and certain other equity holders of record will receive contingent
value rights ("CVRs") tied to the potential future value of the Company's biotech assets. See Note 11 for additional
details.

 Notes

 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 and cash equivalents at September 30, 2025 of $ 5.1 million will fund the Company's projected operations into
February 2026. Substantial additional financing will be needed by the Company to fund its operations. These factors raise substantial
doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course
of business. However, substantial doubt about the Company's ability to continue as a going concern exists. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

 The
Company plans to secure additional capital in the future through equity or debt financings, including sales pursuant to its ChEF Purchase
Agreement (the "Purchase Agreement") with Chardan Capital Markets, LLC ("Chardan"), related to a "ChEF,"
Chardan's committed equity facility (the "Facility"); partnerships; collaborations; or other sources to carry out the
Company's planned development activities. In addition, the Company has completed the merger transactions contemplated by the BCA,
pursuant to which the Company will operate as a wholly owned subsidiary of HSI and continue to focus on the development of its existing
biotech assets. 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 and clinical first in human ("FIH") 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, retaining skilled personnel, and dependence
on key members of management.

 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.

 Notes

 d. Segment information

segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation
by the chief operating decision-maker ("CODM") in deciding how to allocate resources and assess performance.

 The
Company's Interim Chief Executive Officer ("CEO"), as the CODM, manages the Company's business activities as
a 1 single operating and reportable segment at the consolidated level. The accounting policies of the Company's segment are the same
as those described in the summary of significant accounting policies. To date, the Company has not generated any product revenue and
expects to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages
of development and clinical trials and, ultimately, seeks regulatory approval. Accordingly, the CODM uses forecast models in deciding
how to invest into the segment. Such forecast models are reviewed to assess the Company's operating results and performance. The
CODM is regularly provided with operating expenses and cash balances, which are reported on the consolidated statements of operations
and consolidated balance sheets, respectively.

 e. Fair value of financial instruments

 The
Company measures and records certain financial assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. U.S. GAAP provides a fair value hierarchy that prioritizes
the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority, referred to as Level 1, to quoted
prices in active markets for identical assets and liabilities. The next priority, referred to as Level 2, is given to quoted prices for
similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not
active; that is, markets in which there are few transactions for the asset or liability. The lowest priority, referred to as Level 3,
is given to unobservable inputs. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of
unobservable inputs. The asset's or liability's fair value measurement level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement.

 Management
believes that the carrying amounts of the Company's financial instruments, including cash equivalents and accounts payable, approximate
fair value due to the short-term nature of those instruments.

 f. Cash and cash equivalents

 The
Company considers highly-liquid investments with original maturities of three months or less to be cash equivalents. The Company holds
cash in highly-liquid bank accounts and invests excess cash in money market funds.

 g. Restricted cash

 The
Company maintains certain cash balances that are restricted as to withdrawal or use. In accordance with the BCA, any cash proceeds in
excess of $ 3.0 million received from the exercise of warrants may not be spent by the Company without the prior written consent of Rorschach.

 h. 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.

 Notes

 i. 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 impairment charges recorded during the fiscal
years ended September 30, 2025 and 2024.

 j. 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, 2024, the
Company had $ 15,000 in deferred offering costs associated with a shelf registration statement. There were no deferred offering costs
as of September 30, 2025.

 k. 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 September 30, 2025 and 2024, 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
$ 0.5 million and $ 0.8 million, respectively. In November 2024, the Company received a cash refund of $ 0.7 million, with the $ 0.1 million
difference attributable to a change in foreign exchange rates. For the years ended September 30, 2025 and 2024, $ 0.5 million and $ 0.8
million, respectively, for the expected net cash refund related to the tax incentive program was included in research and development
expenses.

 l. Derivative liability

 The
Company evaluates all features contained in financing agreements to determine if there are any embedded derivatives that require separate
accounting from the underlying agreement. An embedded derivative that requires separation is accounted for as a separate asset or liability
from the host agreement. The derivative asset or liability is accounted for at fair value, with changes in fair value recognized in the
consolidated statement of operations. The Company determined that certain features under the convertible notes and the ChEF Purchase
Agreement (see Note 7) qualified as embedded derivatives. The derivative liability associated with the convertible notes was deemed de
minimis at the issuance date. The related notes were subsequently converted into preferred stock and are no longer outstanding as of
September 30, 2025. The derivative liability associated with the ChEF Purchase Agreement is accounted for separately at fair value, which
has been deemed de minimis.

 Notes

 m. Collaboration revenue

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.

 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. In October 2024, the Company entered into the Alkem Agreement.
See Not e 6 for further discussion of these agreements.

 n. Research and development expense

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.

 o. 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.

 Notes

 p. Share-based compensation

 The
Company measures equity classified share-based awards granted to employees and non-employees 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.

 q. Other income

 The
Company has participated in the State of New Jersey's Technology Business Tax Certificate Transfer Program (the "Program")
sponsored by the New Jersey Economic Development Authority. The Program enables approved biotechnology companies with unused net operating
losses and unused research and development credits to sell these tax benefits for at least 80 % of the value of the tax benefits to unaffiliated,
profitable corporate taxpayers in the state of New Jersey. The Company received net proceeds of $ 0.7 million and $ 4.3 million during
the years ended September 30, 2025 and 2024, respectively, from the sale of New Jersey state net operating losses through the Program,
which is included in other income in the consolidated statements of operations.

 r. 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.

 s. Net loss per share

 Basic
net loss per share of common stock 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). Included in basic weighted-average
number of shares of common stock outstanding during the year ended September 30, 2024 are the pre-funded October 2023 warrants to purchase
 99,687 shares of common stock with an exercise price of $ 0.0008 per share and warrants exercised through the June 2024 inducement offer
for 187,500 shares of common stock that were being held in abeyance as of September 30, 2024.

 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.

 Notes

 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 Excluded from Computation of Diluted Shares

 2025

 2024

 September
 30,

 2025

 2024

 Common stock warrants August 2021

 14,031

 14,031

 Underwriter warrants August 2021

 Chanticleer warrants

 Series C warrants

 2,297

 2,297

 Series 3 warrants

 1,566

 1,566

 Unvested restricted stock units and awards

 17,152

 Common stock warrants February 2023

 31,563

 33,982

 Underwriter warrants February 2023

 1,933

 1,933

 Common stock private placement warrants June
 2023

 28,409

 28,409

 Placement agent warrants June 2023

 Common stock warrants October 2023

 354,994

 354,994

 Underwriter warrants October 2023

 10,664

 10,664

 Placement agent warrants June 2024

 14,142

 14,142

 Common stock warrants June 2024

 623,125

 703,125

 Common stock warrants November 2024

 611,110

 —

 Common stock PIPE warrants December 2024

 350,000

 —

 Common stock warrants July 2025

 865,052

 —

 Common stock PIPE warrants July 2025

 8,800,000

 —

 Common stock warrants
 July 2025

 3,200,000

 —

 Total
 anti-dilutive weighted average shares

 15,030,028

 1,183,437

 t. Recent accounting pronouncements

 In
November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU
2023-07, which is applicable to entities with a single reportable segment, primarily requires enhanced disclosures about significant
segment expenses and enhanced disclosures in interim periods. The guidance in ASU 2023-07 was effective for annual reporting periods
in fiscal years beginning after December 15, 2023 and interim reporting periods in fiscal years beginning after December 31, 2024. The
Company adopted the guidance in ASU 2023-07 on January 1, 2024, and it is being applied retrospectively to its consolidated financial
statement disclosures.

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended
to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the
rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the
income tax disclosure requirements. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning
after December 15, 2024. The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its consolidated
financial statements and disclosures.

 In
November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
(Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified
categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions
presented on the consolidated statement of operations. The guidance in this ASU is effective for fiscal years beginning after December
15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may
be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively
to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption
of ASU 2024-03 will have on its consolidated financial statements and disclosures.

 Notes

 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

 2025

 2024

 September
 30,

 2025

 2024

 Compensation and benefits

 $
 150,488

 $
 149,802

 598,421

 617,545

 Professional fees

 357,620

 173,319

 Other

 1,546

 1,823

 Accrued
 expenses and other current liabilities

 $
 1,108,075

 $
 942,489

 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
was 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 million.

 The
components of lease expense for the years ended September 30, 2025 and 2024 are as follows:

 Schedule of Lease Expenses

 Lease expense

 2025

 2024

 Operating lease expense

 $
 90,837

 $
 90,837

 Variable lease expense

 3,285

 1,472

 Total
 lease cost

 $
 94,122

 $
 92,309

 At
September 30, 2025, the weighted average remaining lease term was 0.5 years and the weighted average discount rate was 12 %.

 Cash
flow information related to operating leases for the years ended September 30, 2025 and 2024 is as follows:

 Schedule of Operating Lease Liabilities

 Cash paid for amounts included in the measurement
 of lease liabilities:

 2025

 2024

 Operating cash flows from operating
 leases

 $
 95,487

 $
 93,614

 Future
minimum lease payments under non-cancellable leases at September 30, 2025 are as follows:

 Schedule of Future Minimum Lease Payments

 Fiscal year

 2026

 $
 48,216

 Total undiscounted lease payments

 48,216

 Less: imputed interest

 ( 1,643
)

 Total lease liabilities

 $
 46,573

 Notes

 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.

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 million on a product-by-product basis upon the achievement of certain development and approval milestones related to a product.
The Company has also agreed to pay XOMA low single-digit royalties on net sales of products sold by the Company. Royalties on each product
are payable on a country-by-country basis until the later of (i) a specified period of time after the first commercial sale, and (ii)
the date of expiration of the last valid claim in the last-to-expire of the issued patents covered by the Collaboration Agreement. The
first milestone was achieved in April 2022, at which time the Company incurred a $ 0.5 million license fee which was recorded as acquired
in-process research and development. No license fees were incurred during the years ended September 30, 2025 and 2024.

 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. Additionally, the Company
will pay ARES a percentage of all revenue received through sublicensing the IL-6 compound, including revenue from any upfront, milestone,
royalty, maintenance and similar payments, net of certain full time equivalent ("FTE") costs incurred by the Company pursuant
to such sublicense. The percentage rate owed to ARES on sublicense revenue decreases depending on the point in time of execution of the
relevant sublicense agreement and the development progress accomplished by the Company to that point in time. The upfront cash payments
received by the Company pursuant to the New Life Agreement (see Note 6) were specifically excluded from the scope of the amended ARES
License Agreement. The Company owes ARES $ 0.1 million in license fees related to sublicense revenue received pursuant to the Alkem Agreement
(see Note 6), which is included in research and development expenses in the consolidated statement of operations for the year ended September
30, 2025. No license fees were incurred during the years ended September 30, 2025 and 2024.

 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 million upon the achievement of certain development
and approval milestones if the Buy-Out Option is not exercised. The Company has a Buy-Out Option that will be effective between the time
of completion of a clinical trial and the receipt of regulatory approval for commercialization of product. The cost to exercise the Buy-Out
Option increases on each anniversary of the commencement date of the Buy-Out Option Period, and ranges from $ 0.1 million to $ 0.6 million.
The cost to exercise the Buy-Out Option will replace the $ 0.6 million contingent milestone payment due upon final regulatory approval.
The first milestone was achieved in April 2022, at which time the Company incurred a $ 0.1 million license fees which was recorded as
acquired in-process research and development. No license fees were incurred during the years ended September 30, 2025 and 2024.

 Notes

 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 million. In April 2023, the Brink Agreement
was amended, effective November 2022, to reduce the annual license fee payments to $ 12,000 for storage of the licensed cell line. If
materials are removed from storage during the product development phase, the annual product development license fee of approximately
$ 0.1 million will apply. If a product achieves commercial status, the Company is obligated to make a commercial product license fee payment
of approximately $ 0.1 million per commercial product. The amended agreement has an initial term of one year and will automatically renew
for one additional year unless terminated or converted to a product development license. After the second year, the license will automatically
convert to a full license requiring a product development or a commercial product license fee unless the parties mutually agree to terminate
the agreement or extend the cell line storage fee of $ 12,000. The Company incurred $ 12,000 in license fees during each of the years ended
September 30, 2025 and 2024, which were recorded as acquired in-process research and development and included in research and development
expenses in the consolidated statements of operations. The Company cancelled the Brink Agreement effective November 1, 2025, and there
are no remaining obligations with respect to this license.

 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
million fee per extension (approximately $ 0.1 million as of September 30, 2025). In July 2025, the Company exercised its first option
to extend the InvivoGen Agreement for an additional three-year term, extending the agreement through February 2028. In connection with
the extension, the Company incurred $ 0.1 million in license fees during the year ended September 30, 2025, which was recorded as acquired
in-process research and development and included in research and development expenses in the consolidated statements of operations. No
license fees were incurred during the year ended September 30, 2024.

 In
May 2025, 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 is obligated to make contingent milestone payments to ProteoNic
of 0.2 million (approximately $ 0.2 million as of September 30, 2025) upon the initial submission of an IND or clinical trial application
to a regulatory authority for each distinct product. No license fees were incurred during the year ended September 30, 2025.

agreement

 In
August 2024, the Company entered into the SOC Agreement to advance the development of SON-1210 (see Note 1). An IIOC that is funded by
the SOC will conduct an investigator-initiated Phase 1b/2a study of SON-1210 in pancreatic cancer. The Company will provide the study
drug and provide support services for the study. If the Company establishes a partnership with a third party prior to the initiation
of the initial efficacy combination trial under this collaboration, the Company will incur, payable to the SOC, a one-time fee equal
to the greater of 5% or $1.5 million from the first upfront payment received from such third party partnership.

 Notes

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 million technology access fee upon execution of the Navigo Agreement, at which time it was recorded
as acquired in-process research. The Company is obligated to make contingent milestone payments to Navigo totaling up to $ 1.0 million
upon the achievement of certain evaluation and development milestones as outlined in the Navigo Agreement, of which $ 0.3 million of evaluation
milestones have been previously recognized. No milestones were achieved and no license fees were incurred during the years ended September
30, 2025 and 2024.

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.

 6.
 Collaboration Revenue

 New
Life Agreement

 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 DPN in humans (the "DPN Field") in Malaysia, Singapore,
Indonesia, Thailand, Philippines, Vietnam, Brunei, Myanmar, Lao PDR and Cambodia (the "Exclusive Territory"). New Life paid
the Company an aggregate of $ 1.0 million in non-refundable upfront cash payments in connection with the execution of the New Life Agreement.
The related collaboration revenue was fully recognized by December 31, 2023, as the Company had completed its performance obligations
under the New Life Agreement. In December 2024, New Life informed the Company that it has elected to move its business in a different
direction and provided the Company with written notice of its intention to exercise its Give Back Option, which is the right to give
back the rights with respect to Products in the DPN Field in one or more countries in the Exclusive Territory. The exercise of the Give
Back Option is subject to the negotiation and mutual agreement of terms between the Company and New Life.

 Notes

 Alkem
Agreement

 Under
the Alkem Agreement entered into on October 8, 2024 (see Note 1), the Company granted Alkem an exclusive license (with the right to sublicense)
to research, develop, manufacture, import, export, market, use and commercialize pharmaceutical products containing its IL-6 (SON-080)
asset (or any derivatives, fragments or conjugates thereof) (the "Compounds") (such products, the "Products")
for the treatment of DPN (the "DPN Field") and to manufacture, import, export, market, use and commercialize Products for
the treatment of CIPN and autonomic neuropathy (together with the DPN Field, the "Fields") in India. Except as provided for
in the Alkem Agreement, the Company agreed not to develop, use, sell, offer or otherwise commercialize any Compounds or Products for
use in the DPN Field in India during the term of the Alkem Agreement. The Company retains all rights to manufacture Compounds and Products
anywhere in the world. The Company and Alkem will enter into a follow-on supply agreement pursuant to which the Company will manufacture
for Alkem Compounds and Products for post-Phase 2 clinical development and commercialization in accordance with the Alkem Agreement on
terms to be negotiated by the parties. Pursuant to the terms of the Alkem Agreement, Alkem will bear the cost of, and be responsible
for, among other things, conducting clinical studies and additional non-clinical studies (if any, subject to both parties' approval),
preparing and filing applications for regulatory approval and undertaking other developmental and regulatory activities for commercializing
Products in the DPN Field in India. Alkem will own and maintain all regulatory filings and approvals for Products in India. Upon payment
of a Clinical Data Access Fee (as defined in the Alkem Agreement), the Company will have rights to access and use the data generated
by the clinical trials conducted in connection with the Alkem Agreement. Under the terms of the Alkem Agreement, Alkem paid the Company
$ 1.0 million in upfront payments and will pay up to an additional $ 1.0 million in milestone payments. Additionally, the Company is entitled
to receive a royalty equal to a percentage in the low double digits of the net sales of the Product upon commercialization of SON-080
in India, less certain expenses as set forth in the Alkem Agreement.

 Revenue
recognition

 The
Company first assessed the Alkem Agreement under ASC 808, Collaborative Arrangements ("ASC 808"), to determine whether
the Alkem Agreement or units of accounts within the Alkem Agreement represent a collaborative arrangement based on the risks and rewards
and activities of the parties. The Company applied relevant guidance from ASC 606, Revenue from Contracts with Customers ("ASC
606"), to evaluate the appropriate accounting for the collaborative arrangement with Alkem.

 In
accordance with this guidance, the Company identified the following obligations under the Alkem arrangement: (i) License to research,
develop, market, import, use and commercialize the Product in the DPN field in India (the "License"); and (ii) supply of
Compound for a Phase 2 clinical trial ("Supply"). The future supply agreement for post-Phase 2 clinical development represents
an optional purchase, which will be accounted for as a separate contract, and the Company did not identify any material right to be present.
The Company determined that the License and Supply are not distinct from each other and therefore combined these material promises into
a single performance obligation. The Company determined the initial transaction price of the single performance obligation to be $ 1.0
million, as the future development and commercialization milestones, which represent variable consideration, are subject to constraint
at inception. At the end of each subsequent reporting period, the Company will reevaluate the probability of achievement of the future
development and commercialization milestones subject to constraint and, if necessary, will adjust its estimate of the overall transaction
price. Any such adjustments will be recorded on a cumulative catch-up basis. For the sales-based royalties, the Company will recognize
revenue when the related sales occur.

revenue from the single performance obligation related to the Alkem Agreement was recognized at the point-in-time at which the Company
transferred the License and Supply to Alkem. Collaboration revenue from the single performance obligation related to the New Life Agreement
was recognized over the estimated performance of the research and development activities. The Company recognized $ 1.0 million and $ 18,626
of collaboration revenue for the years ended September 30, 2025 and 2024, respectively.

 Notes

 7.
 Stockholders' Equity (Deficit)

 October
2023 underwritten public offering

 On
October 26, 2023, the Company closed a public offering of common stock and certain warrants through Chardan and Ladenburg Thalmann &
Co. Inc. as underwriters, for net proceeds of $ 3.9 million through the issuance and sale of 163,281 shares of its common stock and, to
certain investors, pre-funded warrants to purchase 192,187 shares of common stock, and accompanying common warrants to purchase up to
an aggregate of 710,931 shares of its common stock. Each share of common stock and pre-funded warrant to purchase one share of common
stock was sold together with a common warrant to purchase two shares of common stock. The public offering price of each share of common
stock and accompanying common warrant was $ 12.80 and the public offering price of each pre-funded warrant and accompanying common warrant
was $ 12.7992. The common warrants were immediately exercisable at a price of $ 12.80 per share of common stock, expire five years from
the date of issuance and contain an alternative cashless exercise provision. In connection with the June 2024 inducement offer, the exercise
price was decreased to $ 9.60 per share of common stock for common warrants that remained unexercised at the time of the offer. The pre-funded
warrants were immediately exercisable at any time, until exercised in full, at a price of $ 0.0008 per share of common stock. All of the
pre-funded warrants have been exercised as of September 30, 2025. In addition, warrants to purchase 10,664 shares of common stock were
issued to the underwriters as compensation for their services related to the offering. These common stock warrants have an exercise price
of $ 16.00 per share and expire five years from the date of issuance.

 Committed
equity facility

 On
May 2, 2024, the Company entered into the Purchase Agreement and a Registration Rights Agreement (the "Registration Rights Agreement"),
each with Chardan, related to a "ChEF," Chardan's committed equity facility, or the Facility (see Note 1). Pursuant
to the Purchase Agreement, the Company has the right from time to time at its option to sell to Chardan up to $ 25.0 million in aggregate
gross purchase price of newly issued shares of the Company's common stock, of which $ 24.7 million is available to be sold as
of September 30, 2025. The Facility will allow the Company to raise primary equity on a periodic basis at its sole discretion depending
on a variety of factors including, among other things, market conditions, the trading price of the common stock, and determinations by
the Company regarding the use of proceeds of such common stock. The purchase price of the shares of common stock will be determined by
reference to the Volume Weighted Average Price ("VWAP") of the common stock during the applicable purchase period, less a
fixed 4 % discount to such VWAP, and the total shares to be purchased on any day may not exceed 20% of the trading volume of the Company's
common stock during the applicable purchase period. The Purchase Agreement will be effective for a 36-month period ending May 16, 2027.
Due to certain pricing and settlement provisions, the Purchase Agreement qualifies as a standby equity purchase agreement and includes
an embedded put option and an embedded forward contract. The Company accounts for the embedded features in the Purchase Agreement as
derivatives measured at fair value, with changes in fair value recognized in the consolidated statement of operations. The derivatives
associated with the Purchase Agreement have been deemed de minimis. The Company sold 153,020 and 4,706 shares of common stock, respectively,
pursuant to the Purchase Agreement for net proceeds of approximately $ 0.2 million and $ 0.1 million, respectively, during the years ended
September 30, 2025 and 2024. The Company incurred $ 0.5 million and $ 0.4 million, respectively, of costs in connection with the Purchase
Agreement during the years ended September 30, 2025 and 2024, which are included in general and administrative expenses in the consolidated
statement of operations.

 November
2024 underwritten public offering

 On
November 7, 2024, the Company closed a public offering of common stock and certain warrants through Chardan, as underwriter, for net
proceeds of $ 4.2
million through the issuance and sale of 155,000
shares of its common stock, pre-funded warrants to purchase up to 956,111
shares of common stock, and accompanying common warrants to purchase up to an aggregate of 2,222,222
shares of its common stock. Each share of common stock and pre-funded warrant to purchase one share of common stock was sold
together with a common warrant to purchase two shares of common stock. The public offering price of each share of common stock and
accompanying common warrant was $ 4.50
and the public offering price of each pre-funded warrant and accompanying common warrant was $ 4.4999.
The common warrants were immediately exercisable at a price of $ 4.50
per share of common stock, expire five
years from the date of issuance and contain an alternative cashless exercise provision. The pre-funded warrants were
immediately exercisable at any time, until exercised in full, at a price of $ 0.0001
per share of common stock. All of the pre-funded warrants and 1,611,112 of the common warrants have been exercised as of September
30, 2025.

 Notes

 December
2024 registered direct and PIPE offering

 On
December 10, 2024, the Company closed a registered direct offering with institutional investors for the issuance and sale of 768,000
shares of its common stock, pre-funded warrants to purchase up to 317,325 shares of common stock, and accompanying warrants to purchase
up to an aggregate of 1,085,325 shares of its common stock. Each share of common stock and pre-funded warrant to purchase one share of
common stock was sold together with a common warrant to purchase one share of common stock. The offering price of each share of common
stock and accompanying common warrant was $ 2.23 and the offering price of each pre-funded warrant and accompanying common warrant was
$ 2.2299, priced at-the-market under the rules of the Nasdaq Stock Market. The registered direct warrants were immediately exercisable
at a price of $ 2.10 per share, expire five years from the date of issuance and contain an alternative cashless exercise provision. The
pre-funded warrants were immediately exercisable at any time, until exercised in full, at a price of $ 0.0001 per share of common stock.
All of the pre-funded and common warrants have been exercised as of September 30, 2025.

 The
Company closed a concurrent private placement with an existing investor for the issuance and sale of 127,500 shares of its common stock,
pre-funded warrants to purchase up to 545,500 shares of common stock, and accompanying warrants to purchase up to an aggregate 673,000
shares of its common stock. Each share of common stock and pre-funded warrant to purchase one share of common stock was sold in the private
placement ("PIPE") together with a common warrant to purchase one share of common stock. The PIPE offering price of each
share of common stock and accompanying common warrant was $ 2.23 and the PIPE offering price of each pre-funded warrant and accompanying
common warrant was $ 2.2299, priced at-the-market under the rules of the Nasdaq Stock Market. The PIPE warrants were immediately exercisable
at a price of $ 2.10 per share, expire five years from the date of issuance and contain an alternative cashless exercise provision. The
pre-funded warrants were immediately exercisable at any time, until exercised in full, at a price of $ 0.0001 per share of common stock.
All of the pre-funded warrants and 323,000 of the common warrants have been exercised as of September 30, 2025.

 The
Company raised net proceeds of $ 3.4 million from the registered direct and PIPE offerings.

 Convertible
note and warrant private placements

 In
July 2025, the Company completed a private placement of zero-interest convertible notes, raising an aggregate of $ 2.0 million in principal.
The notes were scheduled to mature on June 30, 2026, and were convertible at any time into an aggregate of up to 1,730,104 shares of
common stock at a fixed price of $ 1.156 per share. If, at any time while the convertible notes remained outstanding, the Company issued
shares of common stock or common stock equivalents in an offering for gross proceeds of at least $ 5.0 million (a "Subsequent Issuance"),
the entire unpaid principal amount of the convertible notes would convert automatically into the same securities issued pursuant to the
Subsequent Issuance. In connection with the notes, investors also received five-year warrants to purchase an aggregate of 865,052 shares
of common stock at the same $ 1.156 exercise price, providing $ 0.1 million in additional cash proceeds.

 The
Company raised $ 2.0 million in net cash proceeds from the convertible note and warrant private placements. The Company analyzed the convertible
notes and identified certain features that require bifurcation from the host and accounting as derivatives measured at fair value, with
changes in fair value recognized in the consolidated statement of operations. The derivatives associated with the convertible notes have
been deemed de minimis. However, as the convertible notes were issued with warrants, the net proceeds from the issuance were allocated
to the convertible notes and the warrants based on their relative fair values, resulting in an allocation of $ 1.4 million to the convertible
notes and $ 0.6 million to the warrants. The Company recorded a debt discount of approximately $ 0.6 million for the difference between
the face value of the convertible notes and the amount allocated to the debt at the issuance date. These notes were subsequently converted
into shares of non-voting convertible preferred stock and warrants in connection with the preferred stock private placement described
below, and the remaining unamortized debt discount was expensed in full.

 Notes

 The
fair value of the warrants at the issuance date was determined using a Black-Scholes option pricing model, which includes the use of
Level 3 inputs. The Company estimates its stock price volatility using the historical volatility of publicly traded peer companies. The
term is equal to the contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield
curve for the time period equal to the term of the warrants. The expected dividend yield is zero based on the fact that the Company has
never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. Assumptions used in
calculating the fair value of the warrants at the issuance date include the following:

 Schedule of Fair Value of Assumptions

 Stock price per share

 $
 1.21

 Term (years)

 5.00

 Expected volatility

 99.84
 %

 Dividend yield

 —
 %

 Risk-free interest rate

 3.84
 %

 The
Company's Chief Medical Officer, Dr. Richard Kenney, participated in the private placement and purchased notes for a principal
amount of $ 0.2 million and warrants to purchase up to an aggregate of 86,505 shares of common stock. As described below, Dr. Kenney's
notes converted into shares of non-voting convertible preferred stock, which are convertible into an aggregate of 160,000 shares of common
stock and warrants to purchase up to an aggregate of 320,000 shares of common stock.

 Preferred
stock and warrant private placements

 Concurrently
with the signing of the BCA, the Company raised an aggregate of $ 5.5 million in a private placement to accredited investors through the
issuance and sale of an aggregate of 5,500 shares of non-voting Series 5 convertible preferred stock, convertible into up to an aggregate
of 4,400,000 shares of common stock, and five-year warrants to purchase up to an aggregate of 8,800,000 shares of common stock at an
exercise price of $ 1.25 per share. At the closing of the PIPE, the $ 2.0 million principal amount of convertible notes issued in July
2025 automatically converted into 2,000 shares of convertible preferred stock and the investors received additional warrants to purchase
up to an aggregate of 3,200,000 shares of common stock on the same terms as the PIPE investors.

 The
significant rights and preferences of the Company's Series 5 convertible preferred stock are as follows:

 Liquidation

 In
the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Series 5 convertible preferred
stock are entitled to receive, prior and in preference to any distribution to holders of junior securities (including common stock) and
pari passu with any designated parity preferred, an amount per share equal to the stated value of $ 1,000 plus all unpaid, accrued and
accumulated preferential dividends (whether or not declared). If the assets available for distribution are insufficient to pay the full
amounts due, distributions to Series 5 holders will be made ratably based on the aggregate amounts otherwise payable.

 Notes

 Conversion

 Each
share of Series 5 preferred stock is convertible, at the option of the holder at any time, into a number of shares of common stock equal
to (i) the stated value plus all unpaid, accrued and accumulated preferential dividends, divided by (ii) the conversion price. The initial
conversion price is $ 1.25 per share, subject to adjustment for standard structural events (e.g., stock splits, stock dividends, combinations,
and reclassifications), but there is no price-based anti-dilution adjustment. Conversions are subject to a beneficial ownership limitation
(generally 4.99%, or 9.99% if elected, subject to notice-based increases up to but not exceeding applicable exchange limits) and to an
exchange cap until required stockholder approval is obtained. Immediately prior to the closing of the transactions contemplated by the
BCA, each outstanding share of Series 5 convertible preferred stock will automatically convert at the then-applicable conversion rate.
No fractional shares will be issued upon conversion; the Company will round or make a customary cash adjustment consistent with the Certificate
of Designation.

 Voting

 Holders
of Series 5 convertible preferred stock have no general voting rights. A separate class vote of the holders of a majority of the outstanding
Series 5 convertible preferred stock is required to approve specified actions, including (among others) altering or changing the powers,
preferences, or rights of the Series 5 convertible preferred stock; authorizing or issuing any class or series ranking senior to or pari
passu with the Series 5 convertible preferred stock as to dividends, redemption, or liquidation; increasing authorized shares of preferred
stock; or certain distributions and redemptions.

 Redemption
rights

 The
Series 5 convertible preferred stock is not mandatorily redeemable at a fixed date, is not redeemable at the option of the holders, and
is not redeemable upon events outside the Company's control. The instrument provides only a liquidation preference payable upon
an actual liquidation, dissolution, or winding up, and addresses mergers and similar transactions through conversion and Fundamental
Transaction provisions rather than redemption.

 Dividends

 Dividends
on the Series 5 convertible preferred stock are cumulative at 6.0 % per annum of the stated value, payable quarterly in arrears. At the
Company's election and subject to applicable limitations, dividends may be paid in cash, in shares of common stock, or by accruing
and compounding into the stated value. Unpaid, accrued and accumulated dividends are included in the conversion and liquidation preference
calculations as described above.

 Notes

stock warrants

 As
of September 30, 2025, 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

 14,031

 $
 2,094.40

 August 24, 2026

 Underwriter warrants August 2021

 $
 2,618

 August 19, 2026

 Chanticleer warrants

 $
 144,144.00
- $ 224,224.00

 April 30, 2027 - December 17, 2028

 Series C warrants

 2,297

 $
 7,860.16

 October 16, 2025

 Series 3 warrants

 1,566

 $
 717.024

 August 15, 2027

 Common stock warrants February 2023

 31,563

 $
 190.08

 February 10, 2028

 Underwriter warrants February 2023

 1,933

 $
 237.60

 February 8, 2028

 Common stock private placement warrants June
 2023

 28,409

 $
 12.4000

 June 21, 2029

 Placement agent warrants June 2023

 $
 118.7824

 December 30, 2026

 Common stock warrants October 2023

 354,994

 $
 9.6000

 October 27, 2028

 Underwriter warrants October 2023

 10,664

 $
 16.0000

 October 24, 2028

 Placement agent warrants June 2024

 14,142

 $
 14.8800

 June 19, 2029

 Common stock warrants June 2024

 623,125

 $
 12.4000

 June 21, 2029

 Common stock warrants November 2024

 611,110

 $
 4.5000

 November 7, 2029

 Common stock PIPE warrants December 2024

 350,000

 $
 2.1000

 December 9, 2029

 Common stock warrants July 2025

 865,052

 $
 1.1560

 June 30, 2030

 Common stock PIPE warrants July 2025

 8,800,000

 $
 1.2500

 July 14, 2030

 Common stock warrants
 July 2025

 3,200,000

 $
 1.2500

 July 14, 2030

 Total

 14,910,028

the year ended September 30, 2025, 2,419 warrants were net share settled, resulting in the issuance of 1,209 shares of common stock,
and 5,018,060 warrants were exercised on a cash basis, resulting in proceeds of $ 11.2 million. In accordance with the BCA, any cash proceeds
in excess of $ 3.0 million received from the exercise of warrants may not be spent by the Company without the prior written consent of
Rorschach.

 On
June 19, 2024, the Company entered into inducement offer letter agreements with holders of certain existing warrants issued in October
2023 having an original exercise price of $ 12.80 per share to purchase up to an aggregate of 353,562 shares of the Company's common
stock at a reduced exercise price of $ 9.60 per share. The transaction closed on June 21, 2024, resulting in net proceeds of the Company
of $ 2.9 million. Due to beneficial ownership limitations, 187,500 shares of common stock related to the exercise of warrants in this
transaction were initially held in abeyance. All 187,500 shares of common stock were released from abeyance during the year ended September
30, 2025. Also in connection with this inducement offer, the Company (i) issued to holders who participated in the transaction new common
stock warrants to purchase an aggregate of 703,125 shares of common stock, (ii) reduced the exercise price of existing warrants to purchase
 354.994 shares of common stock for those holders who did not exercise warrants in the transaction from $ 12.80 per share to $ 9.60 per
share for the remaining term of the warrants, and (iii) reduced the exercise price of certain existing warrants issued in June 2023 to
purchase 28,409 shares of common stock from $ 118.78 per share to $ 12.40 per share and extended the expiration date of these warrants
from December 30, 2026 to June 21, 2029. The new common stock warrants were immediately exercisable at a price of $ 12.40 per share and
expire five years from the date of issuance. Warrants to purchase 14,142 shares of common stock were issued to the placement agent as
compensation for its services related to the offering. These common stock warrants were immediately exercisable at a price of $ 14.88
per share and expire five years from the date of issuance. The incremental fair value associated with the modification of certain existing
June and October 2023 warrants to purchase common stock was accounted for in additional paid-in capital as an equity cost because the
modification was done in order to raise equity by inducing the exercise of warrants.

 Notes

the year ended September 30, 2024, an aggregate of 96,090 warrants were net share settled, resulting in the issuance of 94,288 shares
of common stock, 355,937 warrants were exercised on a cash basis (including 187,500 warrants for which the related shares were held in
abeyance as of September 30, 2024 due to beneficial ownership limitations), resulting in proceeds of $ 3.0 million, and 4,302 warrants
were abandoned by the warrant holder.

 8.
 Share-Based Compensation

 In
April 2020, the Company adopted the 2020 Omnibus Equity Incentive Plan (the "Plan"). There were 302 shares avail able
for issuance under the Plan as of September 30, 2025. The Plan increases the amount of shares issuable under the Plan by four
percent of the outstanding shares of common stock at each January 1, each year. The Plan permits the granting of share-based awards,
including stock options, restricted stock units and awards, stock appreciation rights and other types of awards as deemed appropriate,
in each case, in accordance with the terms of the Plan. The terms of the awards are determined by the Company's Board of Directors.

 Restricted
stock units and awards

 On
July 9, 2025, 120,000 restricted stock units ("RSUs") were granted, 100 % of which vest on January 8, 2026. On January 1, 2024,
 9,175 RSUs and 7,977 restricted stock awards ("RSAs") were granted, 100 % of which vested on January 1, 2025. 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

 2025

 2024

 Years

 2025

 2024

 $
 66,896

 $
 109,356

 General and administrative

 132,699

 121,834

 Share-based
 compensation

 $
 199,595

 $
 231,190

 Notes

 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, 2023

 $
 174.26

 Granted

 9,175

 $
 14.08

 Vested

 ( 288
)

 $
 174.26

 Forfeited

 —

 $
 —

 Unvested balance at September 30, 2024

 9,175

 $
 14.08

 Granted

 $
 4.64

 Vested

 ( 9,175
)

 $
 14.08

 Forfeited

 —

 $
 —

 Unvested balance at September 30, 2025

 $
 4.64

 As
of September 30, 2025, total unrecognized compensation expense relating to unvested RSUs granted was $ 0.4 million, which is expected
to be recognized over a weighted-average period o f 0.3 years.

 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, 2023

 $
 226.16

 Granted

 7,977

 $
 14.08

 Vested

 ( 688
)

 $
 226.16

 Unvested balance at September 30, 2024

 7,977

 $
 14.08

 Granted

 —

 $
 —

 Vested

 ( 7,977
)

 $
 14.08

 Unvested balance at September 30, 2025

 —

 $
 —

the years ended September 30, 2025 and 2024, there were no RSAs forfeited. As of September 30, 2025, there was no unrecognized compensation
expense relating to unvested RSAs granted.

 9.
 Income Taxes

 As
of September 30, 2025, the Company had $ 117.9 million, $ 26.7 million and $ 16.0 million of federal, state and foreign net operating losses,
respectively. The federal net operating losses will begin to expire in 2030, the state net operating losses will begin to expire in 2039
and the foreign net operating losses begin to expire in 2027. As of September 30, 2025, the Company has federal and state research and
development tax credit carryforwards of $ 2.4 million and $ 0.4 million available to reduce future tax liabilities which will begin to
expire in 2035 and 2032, respectively. Realization of the deferred tax asset is contingent on future taxable income and based upon the
level of historical losses, management has concluded that the deferred tax asset does not meet the more-likely-than-not threshold for
realizability. Accordingly, a full valuation allowance continues to be recorded against the Company's deferred tax assets as of
September 30, 2025 and 2024. The valuation allowance increased $ 3.2 million during the year ended September 30, 2025 and decreased $ 0.6
million during the year ended September 30, 2024.

 Notes

 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

 2025

 2024

 September
 30,

 2025

 2024

 Deferred tax assets:

 Net operating
 loss carryforwards

 $
 29,195,207

 $
 26,754,767

 credit carryforwards

 2,789,965

 3,129,222

 6,620,882

 5,791,883

 Share-based compensation

 39,130

 19,357

 Operating lease liability

 13,092

 36,786

 Accrued expenses and other

 24,327

 26,977

 Section 163(j) disallowed
 interest expense

 758,351

 761,450

 Foreign
 tax credits

 218,400

 —

 Gross deferred tax assets

 39,659,354

 36,520,442

 Less:
 valuation allowance

 ( 39,644,696
)

 ( 36,480,967
)

 Deferred tax assets

 14,658

 39,475

 Deferred tax liabilities:

 Property and equipment

 ( 2,353
)

 ( 4,782
)

 lease right-of-use asset

 ( 12,305
)

 ( 34,693
)

 Net deferred tax assets

 $
 —

 $
 —

the year ended September 30, 2025, the Company sold New Jersey state net operating losses in the amount of $ 8.1 million and unused New
Jersey state research and development tax credits in the amount of $ 0.1 million, resulting in the recognition of other income of $ 0.7
million in the consolidated statement of operations. During the year ended September 30, 2024, the Company sold New Jersey state net
operating losses in the amount of $ 49.4 million and unused New Jersey state research and development tax credits in the amount of $ 0.3
million, resulting in the recognition of other income of $ 4.4 million in the consolidated statement of operations.

 Notes

 The
Company recorded foreign income tax expense of $0.2 million for the year ended September 30, 2025 and no income tax expense for the year
ended September 30, 2024. A reconciliation of income tax expense 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

 2025

 2024

 Years

 2025

 2024

 U.S. federal statutory rate

 ( 21.0
)%

 ( 21.0
)%

 State taxes, net of federal benefit

 ( 6.0
)

 ( 5.8
)

 Permanent differences

 2.7

 2.7

 Foreign tax rate differential

 —

 0.1

 Foreign tax credits

 ( 1.4
)

 —

 Foreign withholding taxes

 1.4

 —

 Research and development credit

 1.8

 ( 4.6
)

 Change in valuation allowance

 20.0

 ( 8.3
)

 Sale of state net operating losses and research
 and development credits

 4.1

 51.5

 Other

 ( 0.2
)

 ( 14.6
)

 Effective
 income tax rate

 1.4
 %

 —
 %

 In
August 2022, the U.S. enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA contains a number of tax-related provisions
that were effective for tax years beginning after December 31, 2022, including a corporate alternative minimum tax of 15 % on certain
large corporations and an excise tax of 1 % on corporate stock repurchases. The various provisions of the IRA did not result in a material
impact on the consolidated financial statements.

 On
July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (the "Act"), which contains a broad range of tax reform provisions
affecting businesses, including extending or reinstating certain provisions of the 2017 Tax Cuts and Jobs Act, tax relief measures, modifications
of certain energy tax credits granted under the IRA and limits on various tax deductions, among other key provisions. The Company is
currently evaluating the full effects of the Act and does not anticipate a material impact on its consolidated financial statements.

 10.
 Segment Information

 The
Company has a single reportable segment and allocates resources based on cash resources and operating expense projections. The table
below summarizes the significant expense categories regularly reviewed by the CODM:

 Schedule of Segment Information

 2025

 2024

 Years

 2025

 2024

 Research and development:

 Clinical

 $
 5,632,217

 $
 2,613,188

 Non-clinical

 2,260,300

 3,888,787

 Other (1)

 462,787

 ( 764,723
)

 Total
 research and development

 8,355,304

 5,737,252

 General and administrative:

 Payroll and related

 1,716,552

 715,846

 Professional fees

 3,695,790

 1,922,292

 Consulting

 1,314,698

 1,532,601

 Other (2)

 1,761,771

 1,960,106

 Total
 general and administrative

 8,488,811

 6,130,845

 expenses

 $
 16,844,115

 $
 11,868,097

 (1)

 Other
 research and development consists primarily of payroll and related expenses and dues, licenses and subscriptions. The balance is
 negative for the year ended September 30, 2024 due to the cancellation of accrued but unpaid bonuses that had been awarded for fiscal
 years 2022 and 2023.

 (2)

 Other
 general and administrative consists primarily of facilities, insurance, filing fees, travel expenses and franchise taxes.

 Notes

 11.
 Subsequent Events

 The
Company has evaluated subsequent events from the balance sheet date through December 16, 2025, the date at which the consolidated financial
statements were available to be issued.

 As
discussed in Note 1, on December 2, 2025 (the "Closing Date"), the Company completed the business combination (the "Closing")
contemplated by the BCA. The common stock of HSI, par value $ 0.01 per share ("HSI Common Stock") began trading on the Nasdaq
Capital Market under the symbol "PURR" on December 3, 2025. The BCA, among other things, provided for (i) the merger of Rorschach
Merger Sub with and into Rorschach (the "Rorschach Merger"), with Rorschach surviving the Rorschach Merger as a direct wholly
owned subsidiary of HSI, and (ii) immediately following the Rorschach Merger, the merger of Sonnet Merger Sub with and into Sonnet (the
"Sonnet Merger" and, together with the Rorschach Merger, the "Mergers" or "Business Combination"),
with Sonnet surviving the Sonnet Merger as a direct wholly owned subsidiary of HSI.

 In
addition, concurrently with the execution of the BCA, certain accredited investors (the "Subscribers") entered into subscription
agreements with the Company and HSI (the "Subscription Agreements"), pursuant to which the Company agreed to issue, and the
Subscribers agreed to purchase, immediately prior to the Closing, an aggregate of 239,921,355 shares of the Company's common stock
at a purchase price of $ 1.25 per share, pursuant to a private placement in accordance with Section 4(a)(2) of the Securities Act (the
"Closing PIPE"). The Closing PIPE was consummated on the Closing Date immediately prior to the Closing and the Company issued
 239,921,355 shares of its common stock to the Subscribers pursuant to the Subscription Agreements.

 As
a result of the Closing, Nasdaq filed a notification of removal from listing and deregistration of the Company's common stock on
Form 25 with the SEC on December 2, 2025. After the Form 25 becomes effective, the Company intends to file with the SEC a Form 15 to
request deregistration of its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and suspension of its reporting obligations under Sections 13 and 15(d) of the Exchange Act.

 Item
9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

 None.

 Item
9A. Controls and Procedures.

 Conclusions
Regarding the Evaluation of Our Disclosure Controls

 We
maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be
disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded,
processed, summarized, and reported within the time periods specified in the SEC's rules and forms and to provide reasonable assurance
that such information is accumulated and communicated to our management, our Chief Executive Officer and our Chief Financial Officer,
to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation
of our management, including our principal executive and principal financial officer, of the effectiveness of the design and operation
of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the Exchange Act. Based on this evaluation, our principal
executive officer and principal financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were
effective.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance
of the reliability of financial reporting and of the preparation of financial statements for external reporting purposes, in accordance
with U.S. generally accepted accounting principles.

 Internal
control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and disposition of assets; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles,
and that receipts and expenditures are being made only in accordance with the authorization of its management and directors; and (3)
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on tis financial statements.

 Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in
 Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of September 30,
2025.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 This
Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm because we are
a "non-accelerated filer," and may take advantage of certain exemptions from various reporting requirements that are applicable
to public companies that are accelerated filers, including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act.

 Changes
in Internal Controls over Financial Reporting

 There
was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act)
that occurred during the fourth quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

 Item
9B. Other Information.

 (a)
None.

 (b)
During the three months ended September 30, 2025, no director or "officer" (as defined in Rule 16a-1(f) under the Exchange
Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement,"
as each term is defined in Item 408(a) of Regulation S-K.

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Not
applicable.

 Part
III

 Item
10. Directors, Executive Officers and Corporate Governance.

 Directors

 The
following table sets forth certain information about our officers and our members of the Board of Directors as of September 30, 2025.
Directors are elected to hold office until the next annual meeting of stockholders and until their successors are elected and qualified.
As described above, Donald Giffith, Nailesh Bhatt, Albert Dyrness and Lori McNeill resigned and ceased to serve as directors of Sonnet
as of the Closing Date.

 Directors

 Age

 Year
 First

 Became
 Director

 Raghu
 Rao

 2020

 Griffith

 2020

 Nailesh
 Bhatt (1)(2)(3)

 2020

 Albert
 Dyrness (1)(2)(3)

 2020

 Lori
 McNeill (1)(3)

 2022

 (1)
Member of the Audit Committee of the Board.

 (2)
Member of the Compensation Committee of the Board.

 (3)
Member of the Nominating and Corporate Governance Committee of the Board.

 Set
forth below are brief biographical descriptions of the individuals serving as our directors as of September 30, 2025, based on information
furnished to the Company by such individuals.

 Raghu
Rao

 Raghu
Rao has served on Sonnet's board of directors since November 2019, and was appointed to our Board at the closing of the Merger.
Mr. Rao is a serial entrepreneur, strategic business advisor and angel investor. Mr. Rao has founded, scaled and had successful exits
with several high-technology companies. In his 33-year career, Mr. Rao has advised clients on the strategy and roll-out of high-profile
projects, such as USA.gov, TSA Screening Gateway, Cancer.gov and other eGovernment initiatives. As the Vistage Princeton Chair, from
July 2012 to March 2017, Mr. Rao ran three high-performing peer advisory boards for middle-market CEOs and business leaders of companies
with total revenues exceeding $2 Billion. As the Chairman & President of InfoZen from August 1995 to July 2008, Mr. Rao has managed
over $1 Billion in U.S. Federal Government contracts. Mr. Rao is a 20-year Charter Member of The Indus Entrepreneurs (TiE.org) and a
5-year patron of the Indiaspora. He has held board positions at several companies including Cellix BioSciences (Jan 2016 - Jan 2017),
Paper Battery Company (Jan 2009 - Dec 2018), Kovid Group (Feb 2016 - Oct 2017), WizNucleus (Jun 2010 - present) and InfoZen (Aug 1995
- Jul 2008). Mr. Rao is active in social entrepreneurship and community service. He co-founded the Hindu Jewish Coalition in December
2012 and Forum for Religious Freedom in March 2007, to preserve religious diversity worldwide. He has held non-profit board positions
at the Infinity Foundation (New Jersey), Arsha Vidya Gurukulam (Pennsylvania) and the Family Services Agency (Maryland). Mr. Rao has
an MBA in Finance from George Washington University (Dec 1991), an M.S. in Computer Science from Virginia Tech (Dec 1986), and a B.Tech.
in Electrical Engineering from Indian Institute of Technology Madras (June 1984). The Company believes Mr. Rao is capable of making valuable
contributions to the Board due to his 15 years of experience as an executive, along with 25 years of entrepreneurial experience, including
in the biotech industry.

Griffith, CPA

Griffith, CPA has served on Sonnet's board of directors since its inception in April 2015, was Chairman of the Sonnet board from
April 2015 to June 2018, and was appointed to our Board at the closing of the Merger. Mr. Griffith has served as Sonnet's Financial
Controller since January 1, 2019, and since the Merger served as our Controller, until February 2025 when he became our Chief Financial
Officer. Prior to being Financial Controller, he served as Sonnet's Chief Executive Officer and Chief Financial Officer from April
2015 to December 2016. Before that, Mr. Griffith was the Chief Financial Officer, Director and Secretary of Oncobiologics Inc. (now Outlook
Therapeutics; Nasdaq: OTLK) from 2011 to 2018. Mr. Griffith has over 40 years' experience in finance and accounting and is the
founder and Partner of Stolz & Griffith, LLC, a New Jersey accounting firm. The Company believes Mr. Griffith is capable of making
valuable contributions to the Board due to his years of experience in finance as well as in the pharmaceutical industry.

 Nailesh
Bhatt

 Nailesh
Bhatt has served on Sonnet's board of directors since July 2018, and was appointed to our Board at the closing of the Merger. Since
January 2018, Mr. Bhatt has been the Chief Executive Officer of VGYAAN Pharmaceuticals LLC ("VGYAAN"), a company focused
on developing and commercializing clinically critical drugs. Mr. Bhatt was also a Board Member of VGYAAN until June 2023. Prior to that,
in November 2001, Mr. Bhatt founded Proximare and is its Managing Director. Proximare is a strategic advisory firm focused exclusively
on the pharmaceutical industry. Mr. Bhatt also serves as a Board Member of Azurity Pharmaceuticals, Inc., CoreRx Pharma and Spectra Medical
Devices. In June 2015, Mr. Bhatt founded Proximare Lifesciences Fund. Mr. Bhatt pursued a Bachelor of Arts at Boston University with
a major in Biology. The Company believes Mr. Bhatt can make valuable contributions to the Board due to his years of experience in the
pharmaceutical industry working with start-ups to Fortune 500 companies.

 Albert
Dyrness

 Albert
Dyrness has served on Sonnet's board of directors since October 2019, and was appointed to our Board at the closing of the Merger.
Mr. Dyrness is a recognized biopharmaceutical industry expert in bio-process engineering with expertise in upstream, downstream, and
fill/finish processes. Since July 2019, Mr. Dyrness has been the Managing Director of ADVENT Engineering Services, Inc., a Trinity Consultants
Company, which serves as its life-sciences division. In 1988, Mr. Dyrness Co-Founded ADVENT Engineering Services, Inc., an engineering
consulting firm serving the energy and life sciences industries. Starting with only 4 employees in the San Francisco Bay Area, ADVENT
has grown to a staff of over 130 engineers with offices in Toronto, Canada, Singapore, Raleigh, North Carolina, Portland Oregon, Boston,
Massachusetts, Irvine and San Ramon, California. In 2016, Mr. Dyrness became President and Chief Technical Officer of ADVENT and, in
2017, guided the company to a merger with Trinity Consultants, a 700-person engineering consulting firm. He also served as a member of
the board of directors of Oncobiologics, Inc. (now Outlook Therapeutics, Inc.; Nasdaq: OTLK) from December 2015 to September 2017. In
1986, Mr. Dyrness graduated from the Massachusetts Institute of Technology where he studied mechanical engineering and entrepreneurism.
The Company believes Mr. Dyrness is capable of making valuable contributions to the Board due to his years of experience in a Nasdaq-listed
public company, along with years of entrepreneurial experience, including in the biopharmaceutical industry.

 Lori
McNeill

 Lori
McNeill has served on our Board since September 2022 and as Chairperson of our Business Advisory Committee since September 2019. Ms.
McNeill is the founder and Chief Executive Officer of McNeill Consulting, LLC since 2016, a management consulting company focused on
developing leaders to be more effective and ensuring that change management initiatives are seamless. Ms. McNeill has over twenty years'
experience in the healthcare industry, thirteen of which were at Pfizer Inc., which included working as the Chief of Staff of Global
Operations in the Integrated Health Business unit. From 2020 to 2021, Ms. McNeill was the Chief Operating Officer and Chairperson of
the board of directors of Global PPE, Inc., a worldwide supplier of personal protective equipment and safety supplies focused on healthcare
and government entities to fight the COVID-19 pandemic. She has been recognized by several institutions: Top 100 Global Women in Leadership
- Global Council for the Promotion of International Trade, 2021; Changemakers Summit Award Winner, 2021; The State of Women in Leadership
- Cover article for HR.com, 2020; and Pfizer International Innovation Excellence Award, 2011 and is currently Global Chairperson of Womenomics.
The Company believes Ms. McNeill is capable of making valuable contributions to the Board due to her over 20 years of experience in the
healthcare industry, including in senior leadership positions.

 Executive
Officers

 The
following table sets forth certain information about the executive officers of the Company as of September 30, 2025:

 Executive
 Officers

 Age

 Position
 and Office

 Raghu
 Rao

 Interim
 Chief Executive Officer and Director

 Griffith

 Chief
 Financial Officer and Director

 John
 K. Cini, Ph. D.

 Chief
 Scientific Officer

 Susan
 Dexter

 Chief
 Technical Officer

 Richard
 Kenney, M.D.

 Chief
 Medical Officer

 Stephen
 J, McAndrew, Ph. D.

 President
 and Chief Business Officer

 Set
forth below are brief biographical descriptions of the individuals serving as the Company's executive officers as of September
30, 2025, based on information furnished to the Company by such individuals.

 Raghu
Rao

 See
description under Directors.

Griffith, CPA

 See
description under Directors.

 John
K. Cini, Ph. D.

 John
K. Cini, Ph. D. co-founded Sonnet in 2015 and has since served as its Chief Scientific Officer, and was appointed Chief Scientific Officer
of the Company at the closing of the Merger, where he oversees and directs the Company's discovery and development programs. His
role includes the oversight of the selection process of cancer and immune oncology targets and proof-of-concept testing. Prior to joining
Sonnet, he was Vice President of Discovery and Development Sciences at Oncobiologics, Inc. from January 2011 to April 2015. Dr. Cini
has successfully advanced more than 20 novel monoclonal antibody products from discovery to IND. He is the holder of several novel product
and formulation patents and applications. He has also been directly involved in several successful novel biologics through early discovery
research into development and manufacturing through clinical trials and commercialization. Previous positions include Executive Director
at Mederex (acquired by Bristol-Myers Squibb in 2010), lead discovery scientific roles at Johnson & Johnson (Ethicon, OrthoBioTech
& Pharmaceutical Research), and Bayer. Dr. Cini's therapeutic areas of expertise in system biology include oncology, immune
oncology, inflammation, osteoporosis, wound healing, surgical adhesion and cellular aging. Dr. Cini has a PhD in Biochemistry from University
of North Texas.

 Susan
Dexter

 Susan
Dexter has served as a contract consultant to Sonnet in the capacity of Chief Technical Officer since May 2019 and was appointed full-time
Chief Technical Officer of the Company at the closing of the Merger on April 1, 2020. Her role at Sonnet is to manage the operations
for drug development from cell line development, through cGMP manufacturing of drug substance and clinical drug product, regulatory submissions
to initiate human clinical trials, and supply chain for labeling/packaging and distribution to clinical depots. All activities fall under
the FDA's Chemical Manufacturing and Controls for biological drugs ("CMC"). She is also responsible for drug supply
and management of non-clinical animal studies in support of regulatory filings related to first-in-human studies. She came to Sonnet
with more than thirty years of experience in biotechnology science, manufacturing and business development, having been directly involved
in three start-up companies and multiple M&A activities. Her expertise in CMC for biologics process development ranges from cell
line development to process development through commercial manufacturing. In her role as Managing Director at Latham Biopharm Group ("LBG")
from September 2008 until the closing of the Merger, Ms. Dexter ran the Product Development service offering, managing the activities
and disciplines related to pre- clinical toxicology studies, and CMC-related activities including IND filings, Quality oversight of cGMP
activities and other related CMC supply chain activities. She came to LBG from Xcellerex, Inc., a CDMO and developer of single use technology
for bioprocessing. She was Chief Business Officer at Xcellerex from April 2004 to September 2008. Prior to Xcellerex, from July 1998
to April 2004, she was VP of Business Development at The Dow Chemical Company's CDMO, an acquisition of Collaborative BioAlliance,
facilitated by Ms. Dexter in 2000, and Assoc. Director of Business Development at Celltech Biologics, purchased by Lonza Biologics, a
biologics CDMO. She worked at Celltech/Lonza from 1986 to July 1998. Ms. Dexter holds a double major with Honors in Immunology and Marketing
from American University, Washington, D.C., and certifications from Harvard University in 'Negotiations for Lawyers' and
'Finance for Non-financial Managers'. She was also Professor Emeritus at University College, London, Department of Bioengineering,
teaching a credited course lecture and workshop in "Project managing of a biologics facility", to graduate, Ph. D. and post-graduate
professionals, from 1999 to 2006. She has served as a non-executive board member for Sartorius Stedim Biotech since 2015, compensation
committee member since 2019, and audit committee member since 2022. In February 2023, Ms. Dexter was appointed to the board of directors
for a London, UK based company Virocell, a technology developer and CDMO for manufacture of viral vectors for cell and gene therapies.
In October 2024, Ms. Dexter was appointed to the board of directors of Virica, a Canadian provider of Viral Sensitizer Enhancers for
improved productivity of viral vectors used in gene therapy.

 Richard
Kenney, M.D.

 Richard
Kenney, M.D. has served as the Company's Chief Medical Officer since April 2021. Dr. Kenney has more than 20 years of experience
in translational-stage development of biologics, as well as the commercialization strategy and corporate management of preclinical, clinical-stage
and commercialized vaccines and immunotherapies. As President of ClinReg Biologics, he has provided strategic consulting in clinical
and regulatory affairs of biologics and medical monitoring and pharmacovigilance in several capacities. Dr. Kenney previously served
as Chief Development Officer at X-VAX Technology and before that had Chief Medical Officer roles at Immune Design and Crucell Holland,
where he led the clinical development and regulatory affairs groups. Dr. Kenney was a researcher/reviewer for the FDA for over six years
and did post-graduate training at Duke and NIH. Dr. Kenney received a B.S. in Chemistry from George Washington University and his M.D.
from Harvard Medical School.

 Stephen
J. McAndrew, Ph. D.

 Stephen
J. McAndrew, Ph. D. has served as the Company's Chief Business Officer since February 2025 and its President since April 2025, and
previously its Senior Vice President of Business Development since the Company's Merger in 2020. Prior to the Merger, Dr. McAndrew
served as the Senior Vice President of Business Development of Sonnet BioTherapeutics, Inc. ("Prior Sonnet") from February
2020. Before joining Prior Sonnet, Dr. McAndrew served as the Senior Vice President of Business Strategy & Development at Oncobiologics,
Inc. from March 2014 to October 2019 and as the Vice President of Business Development from February 2012 to March 2014. Prior to Oncobiologics,
Inc., Dr. McAndrew served in various business development roles at several biopharmaceutical companies from 2001 to 2011. From March
1993 to December 2001, Dr. McAndrew also served in various positions of increasing responsibility at Bristol-Myers Squibb Company, including
as the Director of Biotechnology Licensing within the External Science and Technology Department. Dr. McAndrew earned his Ph. D. in Molecular
and Cellular Biology from Ohio University, an M.S in Molecular Genetics from the State University of New York at Albany and a B.S from
the State University of New York at Oswego.

 Delinquent
Section 16(a) Reports

 Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive, officers, and persons
who are beneficial owners of more than 10% of a registered class of the Company's equity securities, to file reports of ownership
and changes in ownership with the SEC. These persons are required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.

 Based
solely upon the review of copies of Forms 3, 4 and 5 furnished to us, we believe that all of our directors, executive officers and any
other applicable stockholders timely filed all reports required by Section 16(a) of the Exchange Act during the fiscal year ended September
30, 2025, except for the following: we filed a Form 4 for Rick Kenney on August 21, 2025 to report the acquisition of (i) warrants on
June 30, 2025 and (ii) Series 5 Preferred Stock and warrants on July 14, 2025.

 Code
of Business Conduct and Ethics

 We
have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees. The purpose of the Code of
Business Conduct and Ethics is to deter wrongdoing and to provide guidance to our directors, officers and employees to help them recognize
and deal with ethical issues, to provide mechanisms to report unethical or illegal conduct and to contribute positively to the Company's
culture of honesty and accountability. Our Code of Business Conduct and Ethics is publicly available on our website at
If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver, including any implicit waiver from
a provision of the Code of Business Conduct and Ethics to its directors or executive officers, we intend to disclose the nature of such
amendments or waiver on our website or in a current report on a Current Report on Form 8-K.

 Insider
Trading Policy

 The
Board has adopted an Insider Trading Policy governing the purchase, sale and other dispositions of our securities that applies to each
of our directors, officers, employees, and other covered persons. The Board has adopted the Insider Trading Policy to ensure, among other
things: (i) that persons to whom the policy applies understand their obligations to preserve the confidentiality of undisclosed "Material
Information" (as defined in the Insider Trading Policy); (ii) strict compliance by all insiders with all requirements relating
to the reporting of insider trading and with respect to trading when in possession of undisclosed "Material Information";
and (iii) that individuals subject to scheduled and unscheduled blackout periods adhere to the restrictions on trading as set out in
the policy. We seek to discourage our employees from frequent buying and selling of securities for the purpose of realizing short term
profits and to acquire securities as long term investments only. We believe that our Insider Trading Policy is reasonably designed to
promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us.

 Under
our Insider Trading Policy, among other things, short sales and certain forms of hedging or monetization transactions involving our securities
are prohibited, including zero-cost collars and forward sale contracts. In addition, persons subject to the policy are generally prohibited
under our Insider Trading Policy from pledging our securities in a margin account or as collateral for a loan, except in circumstances
that are pre-approved by our Chief Financial Officer. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report
on Form 10-K.

 Policies
and Practices Related to the Timing of Grants of Certain Equity Awards

 At
a regularly scheduled meeting of our Board and Compensation Committee held in December of each year, our Board and Compensation Committee
has a long-standing practice to review our results for the most recently completed fiscal year, review our financial plan and strategy
for the upcoming fiscal year. This timing coincides with our calendar-year-based performance management cycle, allowing managers to deliver
the equity awards close in time to performance appraisals. Our Board and Compensation Committee believe that maintaining a consistent
grant practice, based on a date that is generally set three months in advance, is in the best interests of the Company as is strengthens
the link between pay and performance while also minimizing the risk that awards are granted opportunistically for the benefit of employees.

these annual meetings, the Compensation Committee and our Board reviews market data on how much equity similarly situated officers are
receiving at companies as well as how much equity and the mix of equity awards that should be granted to each executive officer in order
to be competitive with equity awards provided to comparable officers at companies. Among the types of equity awards often granted to
our executive officers are restricted stock units and restricted stock awards. These grants provide a certain amount of equity to officers
that will vest as long as the officer continues to serve, aligning the officers' interests with those of our stockholders because
the grants will only have value to the extent the market value of equity increases from the price per share on the date of grant.

 Board
Committees

 Audit
Committee

 The
Audit Committee of the Board as of September 30, 2025 consisted of Messrs. Bhatt (Chairman) and Dyrness and Ms. McNeill. The Audit Committee's
primary functions are to oversee and review: the integrity of our consolidated financial statements and other financial information furnished
by us, our compliance with legal and regulatory requirements, our systems of internal accounting and financial controls, the independent
auditor's engagement, qualifications, performance, compensation and independence, related party transactions, and compliance with
our Code of Business Conduct and Ethics.

 Each
member of the Audit Committee is "independent" as that term is defined under the applicable rules of the SEC and the applicable
rules of The Nasdaq Capital Market. Our Board has determined that each Audit Committee member has sufficient knowledge in financial and
auditing matters to serve on the Committee. Our Board determined that Mr. Bhatt is an "audit committee financial expert,"
as defined under the applicable rules of the SEC and the applicable rules of The Nasdaq Capital Market. Our Board has adopted an Audit
Committee Charter, which is available for viewing at

 Compensation
Committee

 The
Compensation Committee of the Board as of September 30, 2025 consisted of the following two non-employee directors: Mr. Dyrness (Chairman)
and Mr. Bhatt. None of these Compensation Committee members was an officer or employee of the Company during the year ended September
30, 2025. Each member of the Compensation Committee is "independent" as that term is defined under the applicable rules of
the SEC and the applicable rules of The Nasdaq Capital Market.

 The
responsibilities of the Compensation Committee include overseeing the evaluation of our executive officers (including the Chief Executive
Officer), determining the compensation of our executive officers, and overseeing the management of risks associated therewith. The Compensation
Committee determines and approves the Chief Executive Officer's compensation. The Compensation Committee develops and periodically
reviews compensation policies and practices applicable to executive officers, including the criteria upon which executive compensation
is based, the specific relationship of corporate performance to executive compensation and the composition in terms of base salary, deferred
compensation and incentive or equity-based compensation and other benefits. The Compensation Committee also administers our equity-based
plans and makes recommendations to the Board with respect to actions that are subject to approval of the Board regarding such plans.
The Compensation Committee also reviews and makes recommendations to the Board with respect to the compensation of directors. The Compensation
Committee monitors the risks associated with our compensation policies and practices as contemplated by Item 402(s) of Regulation S-K.
Our Board has adopted a Compensation Committee Charter, which is available for viewing at

 Nominating
and Corporate Governance Committee

 The
Nominating and Corporate Governance Committee of the Board as of September 30, 2025 consisted of Messrs. Bhatt and Dyrness (Chairman)
and Ms. McNeill. None of these members was an officer or employee of the Company during the year ended September 30, 2025. Each member
of the Nominating and Corporate Governance Committee is "independent" as that term is defined under the applicable rules
of the SEC and the applicable rules of The Nasdaq Capital Stock Market. The Nominating and Corporate Governance Committee nominates individuals
to be elected to our Board by our stockholders. The Nominating and Corporate Governance Committee of the Board assesses potential candidates
to fill perceived needs on the Board for required skills, expertise, independence and other factors.

 The
Nominating and Corporate Governance Committee considers recommendations from stockholders if submitted in a timely manner in accordance
with the procedures set forth in our bylaws and will apply the same criteria to all persons being considered. Our Board has adopted a
Nominating and Corporate Governance Committee Charter, which is available for viewing at

 Item
11. Executive Compensation.

 Summary
Compensation Table

 The
following table shows the compensation awarded to or earned by each person serving as our principal executive officer during fiscal year
2025, our two most highly compensated executive officers who were serving as executive officers as of September 30, 2025, and up to two
additional individuals for whom disclosure would have been provided but for the fact that such individuals were not serving as an executive
officer as of September 30, 2025. The persons listed in the following table are referred to herein as the "Named Executive Officers."

 SUMMARY
COMPENSATION TABLE

 Name and Principal
 Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards ($) (1)

 Option
 Awards ($)(1)

 All
 Other Compensation ($)

 Total
 ($)

 Raghu Rao

 2025

 155,769

 100,000

 92,800

 —

 —

 348,569

 Interim Chief Executive
 Officer (2)

 2024

 —

 —

 5,254

 —

 —

 5,254

 Pankaj Mohan, Ph. D.

 2025

 407,414

 —

 —

 —

 122,718

 530,132

 Former President and Chief
 Executive Officer(3)

 2024

 538,998

 —

 87,628

 —

 —

 626,626

 John K. Cini, Ph. D.

 2025

 397,750

 —

 55,680

 —

 19,584

 473,014

 Chief Scientific Officer

 2024

 397,750

 —

 21,907

 —

 —

 419,657

 Susan Dexter

 2025

 330,150

 —

 37,120

 —

 7,201

 374,471

 Chief Technical Officer

 2024

 330,150

 —

 16,852

 —

 —

 347,002

 (1)
Represents the aggregate grant date fair value for grants made in fiscal year 2024 and 2023 computed in accordance with Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718. This calculation does not give
effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the requisite service
for the award to vest in full.

 (2)
Mr. Rao became the interim Chief Executive Officer on March 31, 2025 as a result of the passing of Dr. Mohan.

 (3)
Dr. Mohan became the Chairman of Sonnet in June 2018 and the Chief Executive Officer in January 2019, and the Chairman, President and
Chief Executive Officer of the Company at the closing of the Merger. On March 31, 2025, Dr. Mohan ceased serving as our President and
Chief Executive Officer as a result of his passing.

 Narrative
Disclosure to Summary Compensation Table

Agreements

 The
material terms of each Named Executive Officer's employment agreement or arrangement are described below.

 We
entered into an employment agreement with Raghu Rao on July 31, 2025 (the "Rao Agreement"), setting forth the terms of his
employment as interim Chief Executive Officer. Pursuant to the Rao Agreement, Mr. Rao is entitled to, among other things, (i) an annual
gross base salary of $400,000, (ii) eligibility for a bonus equal to 5.0% of gross revenue received by the Company from a strategic transaction
(subject to certain exceptions and not including the Business Combination) and (iii) at the sole discretion of the Company's board
of directors, a cash or equity/options/restricted stock units bonus for achieving or progressing Company stated goals. The Rao Agreement
shall terminate in accordance with its terms. Pursuant to the Agreement, if Mr. Rao is terminated without "Cause" (as defined
in the Rao Agreement), he is entitled to his base salary for six months, payable in accordance with the Company's then-current
payroll practices and subject to all required withholdings. In the event Mr. Rao resigns for any reason, Mr. Rao will not receive any
severance benefits, provided that, pursuant to the Company's standard payroll policies, the Company shall pay Mr. Rao any accrued
obligations.

 We
entered into an employment agreement with Dr. Mohan on December 31, 2018, as amended (the "Mohan Agreement"), setting forth
the terms of his employment as Chief Executive Officer. Pursuant to the employment agreement, Dr. Mohan was entitled to, among other
things, (i) an annual gross base salary of $490,000, (ii) eligibility for a bonus equal to 5.4% of gross revenue received by the Company
from a strategic transaction and (iii) for any year in which the bonus in the previous clause amounts to less than 50% of the base salary,
an additional performance-based cash bonus to bring the aggregate cash bonus for such year to up to 50% of the base salary, as determined
by the Board. The Mohan Agreement terminated in accordance with its terms on March 31, 2025 in connection with Dr. Mohan's passing.
Pursuant to Dr. Mohan's employment agreement, if he was terminated without "Cause" or for "Good Reason"
within 2 months prior to or within 12 months following a "Change in Control", he was entitled to (i) his base salary for
18 months, (ii) a bonus equal to his performance bonus for the year in which the termination occurs, divided by 12, and then multiplied
by 18, and (iii) if he timely continued coverage under COBRA, payment for COBRA premiums necessary to continue coverage until the earliest
of (a) 18 months following the termination date, (b) the date he becomes eligible for substantially equivalent health insurance coverage
in connection with new employment or self-employment, or (c) the date he becomes ineligible for COBRA continuation coverage. If Dr. Mohan
was terminated without "Cause" or for "Good Reason" not coincident with a "Change in Control", he
was entitled to (i) his base salary for 18 months, (ii) any performance bonus for the performance year in which his termination occurs,
and (iii) if he timely continued coverage under COBRA, payment for COBRA premiums necessary to continue coverage until the earliest of
(a) 18 months following the termination date, (b) the date he becomes eligible for substantially equivalent health insurance coverage
in connection with new employment or self-employment, or (c) the date he becomes ineligible for COBRA continuation coverage.

 We
entered into an employment agreement with Dr. Cini on January 10, 2020, as amended (the "Cini Agreement"), setting forth
the terms of his employment as Chief Scientific Officer. Pursuant to the Cini Agreement, Dr. Cini was entitled to, among other things,
(i) an annual gross base salary of $370,000, (ii) eligibility for a bonus equal to 1.1% of gross revenue received by the Company from
a strategic transaction and (iii) for any year in which the bonus in the previous clause amounts to less than 35% of the base salary,
an additional performance-based cash bonus to bring the aggregate cash bonus for such year to up to 35% of the base salary, as determined
by the Board. The Cini Agreement terminated in accordance with its terms on December 2, 2025 in connection with his resignation as a
result of the Business Combination. Pursuant to Dr. Cini's employment agreement, if he was terminated without "Cause"
or for "Good Reason" within 2 months prior to or within 12 months following a "Change in Control", he was entitled
to (i) his base salary for 12 months and (ii) if he timely continued coverage under COBRA, payment for COBRA premiums necessary to continue
coverage until the earliest of (a) 18 months following the termination date, (b) the date he becomes eligible for substantially equivalent
health insurance coverage in connection with new employment or self-employment, or (c) the date he becomes ineligible for COBRA continuation
coverage. If Dr. Cini was terminated without "Cause" or for "Good Reason" not coincident with a "Change
in Control", he was entitled to (i) his base salary for 9 months and (ii) if he timely continued coverage under COBRA, payment
for COBRA premiums necessary to continue coverage until the earliest of (a) 12 months following the termination date, (b) the date he
becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, or (c)
the date he becomes ineligible for COBRA continuation coverage.

 On
April 1, 2020, we entered into an employment agreement with Ms. Dexter (the "Dexter Agreement"), setting forth the terms
of her employment as Chief Technical Officer. Pursuant to the employment agreement, Ms. Dexter is entitled to, among other things, (i)
an annual gross base salary of $310,000 and (ii) eligibility for a performance-based cash bonus of up to 35% of the base salary, as determined
by the Board. The employment agreement shall terminate in accordance with its terms. Pursuant to Ms. Dexter's employment agreement,
if she is terminated without "Cause" or for "Good Reason" within 2 months prior to or within 12 months following
a "Change in Control", she is entitled to (i) her base salary for 12 months, (ii) any performance bonus for the performance
year in which her termination occurs, and (iii) if she timely continued coverage under COBRA, payment for COBRA premiums necessary to
continue coverage until the earliest of (a) 18 months following the termination date, (b) the date she becomes eligible for substantially
equivalent health insurance coverage in connection with new employment or self-employment, or (c) the date she becomes ineligible for
COBRA continuation coverage. If Ms. Dexter is terminated without "Cause" or for "Good Reason" not coincident
with a "Change in Control", she is entitled to (i) his base salary for 9 months, (ii) any performance bonus for the performance
year in which her termination occurs, and (iii) if she timely continued coverage under COBRA, payment for COBRA premiums necessary to
continue coverage until the earliest of (a) 12 months following the termination date, (b) the date she becomes eligible for substantially
equivalent health insurance coverage in connection with new employment or self-employment, or (c) the date she becomes ineligible for
COBRA continuation coverage.

 Outstanding
Equity Awards at Fiscal Year End

 The
following table sets forth certain information, on an award-by-award basis, concerning unexercised options to purchase common stock,
restricted shares of common stock and common stock that has not yet vested for each Named Executive Officer and outstanding as of September
30, 2025.

 OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END - 2025

 Stock
 Awards

 Name

 Equity
 incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)

 Equity
 incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)

 Raghu Rao

 20,000
 (1)

 $
 92,800

 John K. Cini, Ph. D.

 12,000
 (1)

 $
 55,680

 Susan Dexter

 8,000
 (1)

 $
 37,120

 (1)
Scheduled to vest in full on January 8, 2026.

 Director
Compensation

 Non-Employee
Director Compensation Policy

 In
connection with the Merger, our Board approved a compensation policy for our non-employee directors. Other than reimbursement for reasonable
expenses incurred in connection with attending Board and committee meetings, this policy provides for the following cash compensation:

 each
 non-employee director is entitled to receive an annual fee from us of $35,000;

 the
 chair of our Audit Committee will receive an annual fee from us of $15,000;

 the
 chair of our Compensation Committee will receive an annual fee from us of $10,000;

 the
 chair of our Nominating and Corporate Governance Committee will receive an annual fee from us of $8,000; and

 each
 non-chairperson member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee will
 receive annual fees from us of $7,500, $5,000 and $4,000, respectively.

 The
following table sets forth director compensation for the fiscal year ended September 30 2025, paid by us (excluding compensation to our
executive officer set forth in the summary compensation table above). Except as set forth in the table below, the non-employee directors
did not receive any cash or equity compensation during fiscal year 2025.

 DIRECTOR
COMPENSATION

 Name

 Fees
 Earned
 or
 Paid
 in
 Cash ($)

 Stock
 Awards
 ($)(1)

 Option
 Awards
 ($)(1)

 All
 Other
 Compensation
 ($)

 Total
 ($)

 Nailesh Bhatt(2)

 54,000

 46,400

 —

 —

 100,400

 Albert Dyrness(3)

 55,500

 18,560

 —

 —

 74,060

 Donald Griffith (4)

 —

 46,400

 —

 169,301

 215,701

 Raghu Rao(5)

 97,375

 92,800

 —

 255,769

 445,944

 Lori McNeill(6)

 60,000

 18,560

 —

 —

 78,560

 (1)
Represents the aggregate grant date fair value for grants made in 2025 computed in accordance with FASB ASC Topic 718. This calculation
does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the
requisite service for the award to vest in full.

 (2)
Mr. Bhatt holds an aggregate of 10,000 restricted stock units, as of September 30, 2025.

 (3)
Mr. Dyrness holds an aggregate of 4,000 restricted stock units, as of September 30, 2025.

 (4)
Mr. Griffith served as Sonnet's Financial Controller since January 1, 2019, and since the Merger served as our Controller. In connection
with Mr. Cross's resignation, on February 12, 2025, Mr. Griffith was appointed to succeed Mr. Cross as our Chief Financial Officer.
The amounts in the table above under "All Other Compensation" represent salary and bonus earned by Mr. Griffith for the fiscal
year 2025. See the description of the employment agreement with Mr. Griffith below. Mr. Griffith holds an aggregate of 10,000 restricted
stock units, as of September 30, 2025.

 (5)
Mr. Rao became the interim Chief Executive Officer on March 31, 2025 as a result of the passing of Dr. Mohan. The amounts in the table
above under "All Other Compensation" represent salary and bonus earned by Mr. Rao for the fiscal year 2025. See the description
of the employment agreement with Mr. Rao in the "Employment Agreements" section above. Mr. Rao holds an aggregate of 20,000
restricted stock units, as of September 30, 2025.

 (6)
Ms. McNeill holds an aggregate of 4,000 restricted stock units, as of September 30, 2025.

 Other
Agreement with a Director

 We
entered into an employment agreement with Mr. Griffith on January 1, 2019, setting forth the terms of his employment as Financial Controller
(the "Griffith Offer Letter"). Pursuant to the Griffith Offer Letter, Mr. Griffith is entitled to, among other things, (i)
an annual prorated gross base salary of $150,000 and (ii) eligibility for a target bonus equal to 25% of gross salary earned. The Griffith
Offer Letter has no specific term and constitutes an at-will employment. The terms of the Griffith Offer Letter continue to govern Mr.
Griffith's employment with us as Chief Financial Officer.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 Security
Ownership of Certain Beneficial Owners and Management

 The
following table sets forth certain information as of December 12, 2025 with respect to the beneficial ownership of our common stock by
the following: (i) each of our current directors; (ii) each of our Named Executive Officers; (iii) all of the current executive officers
and directors as a group; and (iv) each person known by us to own beneficially more than five percent (5%) of the outstanding shares
of the our common stock.

 For
purposes of the following table, beneficial ownership is determined in accordance with the applicable SEC rules and the information is
not necessarily indicative of beneficial ownership for any other purpose. Except as otherwise noted in the footnotes to the table, we
believe that each person or entity named in the table has sole voting and investment power with respect to all shares of our common stock
shown as beneficially owned by that person or entity (or shares such power with his or her spouse). Under the SEC's rules, shares
of the our common stock issuable under options that are exercisable on or within 60 days after December 12, 2025 ("Presently Exercisable
Options") are deemed outstanding and therefore included in the number of shares reported as beneficially owned by a person or entity
named in the table and are used to compute the percentage of the common stock beneficially owned by that person or entity. These shares
are not, however, deemed outstanding for computing the percentage of the common stock beneficially owned by any other person or entity.

 The
percentage of the common stock beneficially owned by each person or entity named in the following table is based on no shares of common
stock issued and outstanding as of the Closing Date.

 Name
 And Address of Beneficial Owner*

 And Nature of Beneficial Ownership

 Percent
 Of Class

 Named Executive
 Officers and Directors:

 Nailesh Bhatt

 —

 **

 Albert Dyrness

 —

 **

 Donald Griffith

 —

 **

 Raghu Rao

 —

 **

 Lori McNeill

 —

 **

 John K. Cini, Ph. D.

 —

 **

 Susan Dexter

 —

 **

 Richard Kenney

 —

 **

 All current executive officers and directors
 as a group (8 persons)

 —

 **

 *

 Unless
 otherwise indicated, the address is c/o Sonnet BioTherapeutics, Inc., 100 Overlook Center, Suite 102, Princeton, New Jersey, 08540.

 **

 Less
 than 1%.

 Equity
Compensation Plan Information

 The
following table provides information as of September 30, 2025 regarding shares of our common stock that may be issued under our existing
equity compensation plans, including our 2020 Omnibus Equity Incentive Plan (the "2020 Plan").

 Equity
 Compensation Plan Information

 Plan Category

 (a)
 Number
 of securities to be issued upon exercise of outstanding options, warrants and rights

 (b)
 Weighted
 average exercise price of outstanding options, warrants and rights

 (c)
 Number
 of securities remaining available for future issuance under equity compensation plans (excluding
 securities reflected in column (a))

 Equity compensation plans approved
 by security holders (1)

 N/A

 Equity compensation plans
 not approved by security holders

 N/A

 N/A

 N/A

 Total

 —

 (1)

 The
 weighted-average exercise price does not reflect the shares that will be issued in connection with the settlement of RSUs since RSUs
 have no exercise price. Other than RSUs, there were no outstanding options, warrants, or rights under our equity compensation plan
 as of September 30, 2025.

 Item
13. Certain Relationships and Related Transactions, and Director Independence.

 Other
than compensation arrangements for our Named Executive Officers and directors, we describe below each transaction and series of similar
transactions, since the beginning of fiscal year 2024, to which we were a party or will be a party, in which:

 the
 amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of the smaller reporting company's
 total assets at year-end for the last two completed fiscal years; and

 any
 of our directors, nominees for director, executive officers or holders of more than 5% of our common stock, or any member of the
 immediate family of the foregoing persons, had or will have a direct or indirect material interest.

 Compensation
arrangements for our Named Executive Officers and directors are described in the section entitled "Executive Compensation."

 Public
Offering

 Pankaj
Mohan, our former Chairman and Chief Executive Officer, purchased 4,296 shares of common stock and warrants to purchase 8,593 shares
of common stock pursuant to an underwritten public offering by us at $12.80 per share and accompanying two warrants. The offering closed
on October 27, 2023.

 Raghu
Rao, a director and our interim Chief Executive Officer, purchased 1,953 shares of common stock and warrants to purchase 3,906 shares
of common stock pursuant to an underwritten public offering by us at $12.80 per share and accompanying two warrants. The offering closed
on October 27, 2023.

 Private
Placement

 Dr.
Richard Kenney, our Chief Medical Officer, participated in a private placement that closed on June 30, 2025, and purchased convertible
notes for a principal amount of $200,000 and warrants to purchase up to an aggregate of 86,505 shares of common stock. The notes converted
into shares of convertible preferred stock, which are convertible into an aggregate of 160,000 shares of common stock and warrants to
purchase up to an aggregate of 320,000 shares of common stock.

 Indemnification
Agreements

 We
have entered into indemnification agreements with each of our current directors and executive officers. These agreements will require
us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of
their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
We also intend to enter into indemnification agreements with our future directors and executive officers.

 Director
Independence

 Our
Board as of September 30, 2025 consisted of six directors. Our Board has determined that Messrs. Bhatt and Dyrness and Ms. McNeill were
"independent" as that term is defined under the rules of The Nasdaq Stock Market.

 Item
14. Principal Accountant Fees and Services.

 The
following table summarizes the fees for professional services rendered by KPMG LLP, our independent registered public accounting firm,
for each of the respective last two fiscal years:

 Fee Category

 2025

 2024

 Audit Fees

 $
 1,257,500

 $
 668,000

 Audit-Related Fees

 —

 —

 Tax Fees

 61,825

 42,074

 All Other Fees

 —

 —

 Total Fees

 $
 1,319,325

 $
 710,074

 Audit
Fees

 Represents
fees for professional services provided in connection with the audit of our annual consolidated financial statements and reviews of our
quarterly interim consolidated financial statements, as well as for fees associated with registration statements, comfort letters and
consents.

 Audit-Related
Fees

 We
did not incur any audit-related fees from our independent auditors in 2025 or 2024.

 Tax
Fees

 Tax
fees are associated with tax compliance, tax advice, tax planning and tax preparation services.

 All
Other Fees

 Fees
related to products and services provided by the principal accountant, other than the services reported in the above sections.

 The
Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent auditors. The Audit Committee
is required to review and approve the proposed retention of independent auditors to perform any proposed auditing and non-auditing services
as outlined in its charter. The Audit Committee has not established policies and procedures separate from its charter concerning the
pre-approval of auditing and non-auditing related services. As required by Section 10A of the Exchange Act, our Audit Committee has authorized
all auditing and non-auditing services provided by KPMG LLP during 2025 and 2024 and the fees paid for such services. However, the pre-approval
requirement may be waived with respect to the provision of non-audit services for the Company if the "de minimis" provisions
of Section 10A(i)(1)(B) of the Exchange Act are satisfied.

 The
Audit Committee has considered whether the provision of Audit-Related Fees, Tax Fees, and all other fees as described above is compatible
with maintaining KPMG LLP's independence and has determined that such services for fiscal years 2024 and 2023 were compatible.
All such services were approved by the Audit Committee pursuant to Rule 2-01 of Regulation S-X under the Exchange Act to the extent that
rule was applicable.

 The
Audit Committee is responsible for reviewing and discussing the audited consolidated financial statements with management, discussing
with the independent registered public accountants the matters required by Public Company Accounting Oversight Board Auditing Standard
No. 1301 Communications with Audit Committees, receiving written disclosures from the independent registered public accountants
required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public
accountants' communications with the Audit Committee concerning independence and discussing with the independent registered public
accountants their independence, and recommending to the Board that the audited consolidated financial statements be included in our Annual
Report on Form 10-K.

 Part
IV

 Item
15. Exhibits, Financial Statement Schedules.

 (a)(1)
 Financial Statements. The financial statements filed as part of this report are listed on the Index to the Consolidated Financial
Statements.

 (a)(2)
 Financial Statement Schedules. Schedules are omitted because they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.

 (a)(3)
 Exhibits. Reference is made to the Exhibit Index. The exhibits are included, or incorporated by reference, in this Annual Report
on Form 10-K and are numbered in accordance with Item 601 of Regulation S-K.

 Item
16. Form 10-K Summary.

 None.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 (Registrant)

 Date:
 December 16, 2025

 /s/
 Raghu Rao

 Raghu
 Rao

 Chief
 Executive Officer

 (Principal
 Executive Officer, Principal Financial and Accounting Officer and sole Director)

TO EXHIBITS

 Exhibit

 No.

 Description

 2.1#

 Agreement
 and Plan of Merger, dated October 10, 2019, by and among the Company, Sonnet Sub. and Merger Sub (filed as Exhibit 2.1 to the Company's
 Current Report on Form 8-K as filed on October 11, 2019, and incorporated herein by reference).#

 2.2

 No. 1 to Agreement and Plan of Merger, dated February 7, 2020, by and among the Company, Sonnet Sub and Merger Sub (filed as Exhibit
 2.1 to the Company's Current Report on Form 8-K as filed on February 7, 2020, and incorporated herein by reference).

 2.3#

 Share
 Exchange Agreement, between Sonnet BioTherapeutics, Inc. and Relief Therapeutics Holding SA, dated August 9, 2019 (incorporated by
 reference to Exhibit 2.10 to the Company's Registration Statement on Form S-4 filed with the SEC on November 27, 2019).#

 2.4#

 Business
 Combination Agreement, dated July 11, 2025, by and among the Company, Rorschach I LLC, Hyperliquid
 Strategies Inc, TBS Merger Sub Inc and Rorschach Merger Sub, LLC (filed as Exhibit 2.1 to
 the Company's Current Report on Form 8-K as filed on July 14, 2025 and incorporated
 herein by reference).#

 2.5

 No. 1 to Business Combination Agreement, dated September 22, 2025, by and among the Company, Rorschach I LLC, Hyperliquid Strategies
 Inc, TBS Merger Sub Inc and Rorschach Merger Sub, LLC (filed as Exhibit 2.2 to the Company's Current Report on Form 8-K as
 filed on December 3, 2025 and incorporated herein by reference).

 3.1

 of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's
 Annual Report on Form 10-K filed with the SEC on December 17, 2020).

 3.2

 of Designation of Preferences, Rights and Limitations of Series 3 Preferred Stock (incorporated by reference to Exhibit 3.1 to the
 Company's Current Report on Form 8-K, filed with the SEC on August 15, 2022).

 3.3

 of Designation of Preferences, Rights and Limitations of Series 4 Preferred Stock (incorporated by reference to Exhibit 3.2 to the
 Company's Current Report on Form 8-K, filed with the SEC on August 15, 2022).

 3.4

 of Amendment of Certificate of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc., dated September 16, 2022 (incorporated
 by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on September 19, 2022).

 3.5

 of Amendment of Certificate of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc., dated August 31, 2023 (incorporated
 by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on September 1, 2023).

 3.6

 of Amendment of Certificate of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc., dated September 25, 2024 (incorporated
 by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on September 30, 2024).

 3.7

 Amended
 and Restated Bylaws, of Sonnet BioTherapeutics Holdings, Inc. (incorporated by reference to Exhibit 3.3 to the Company's Current
 Report on Form 8-K, filed with the SEC on August 15, 2022).

 3.8

 Of Designation of Preferences, Rights and Limitations of Series 5 Convertible Preferred Stock (incorporated by reference to Exhibit
 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on July 14, 2025).

 3.9

 of Amendment of Certificate of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc., dated December 2, 2025 (incorporated
 by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on December 3, 2025).

 4.1

 Form
 of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Registration
 No. 333-178307), filed with the SEC on December 2, 2011).

 4.2

 Form
 of Warrant dated May 4, 2017 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed with
 the SEC on May 5, 2017).

 4.3

 Spin-Off
 Entity Warrant, dated April 1, 2020 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed
 with the SEC on April 3, 2020).

 4.4

 Form
 of Sonnet BioTherapeutics, Inc. Converted Warrant (incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report
 on Form 10-Q filed with the SEC on August 14, 2020).

 4.5

 Form
 of Series A/B Warrants (incorporated by reference to Exhibit 4.16 to the Company's Registration Statement on Form S-4/A filed
 with the SEC on February 7, 2020).

 4.6

 Form
 of Series C Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC
 on August 4, 2020).

 4.7

 Registration
 Rights Agreement, dated February 7, 2020, by and between the Company and certain investors named therein (incorporated by reference
 to Exhibit 4.17 to the Company's Registration Statement on Form S-4/A filed with the SEC on February 7, 2020).

 4.8

 Description
 of Securities (incorporated by reference to Exhibit 4.8 to the Company's Annual Report on Form 10-K filed with the SEC on December
 17, 2024).

 4.9

 Form
 of Pre-Funded Warrant, dated August 24, 2021 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form
 8-K filed with the SEC August 25, 2021).

 4.10

 Form
 of Underwriter Warrant, dated August 24, 2021 (incorporated by reference to Exhibit 4.9 to the Company's Registration Statement
 on Form S-1/A filed with the SEC on August 16, 2021).

 4.11

 Form
 of Common Warrant, dated August 24, 2021 (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form
 8-K filed with the SEC August 25, 2021).

 4.12

 Form
 of Pre-Funded Warrant dated February 10, 2023 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on
 Form 8-K filed with the SEC on February 13, 2023).

 4.13

 Form
 of Underwriter Warrant dated February 10, 2023 (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed
 with the SEC on February 13, 2023).

 4.14

 Form
 of Common Warrant dated February 10, 2023 (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form
 8-K filed with the SEC on February 13, 2023).

 4.15

 Form
 of Pre-Funded Warrant dated June 30, 2023 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form
 8-K, filed with the SEC on June 30, 2023).

 4.16

 Form
 of Warrant dated June 30, 2023 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed
 with the SEC on June 30, 2023).

 4.17

 Form
 of Placement Agent Warrant dated June 30, 2023 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on
 Form 8-K, filed with the SEC on June 30, 2023).

 4.18

 Form
 of Pre-Funded Warrant (filed as Exhibit 4.14 to the Company's Registration Statement on Form S-1/A as filed on September 28,
 2023, and incorporated herein by reference).

 4.19

 Form
 of Underwriter Warrant (filed as Exhibit 4.15 to the Company's Registration Statement on Form S-1/A as filed on September 28,
 2023, and incorporated herein by reference).

 4.20

 Form
 of Common Warrant (filed as Exhibit 4.16 to the Company's Registration Statement on Form S-1/A as filed on September 28, 2023,
 and incorporated herein by reference).

 4.21

 Form
 of Common Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC
 on June 20, 2024).

 4.22

 Form
 of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K filed with
 the SEC on June 20, 2024).

 4.23

 Form
 of Common Warrant (incorporated by reference to Exhibit 4.22 of the Company's Registration Statement on Form S-1/A filed with
 the SEC on November 6, 2024).

 4.24

 Form
 of Pre-Funded Warrant (incorporated by reference to Exhibit 4.23 to the Company's Registration Statement on Form S-1/A filed
 with the SEC on November 6, 2024).

 4.25

 Form
 of Registered Direct Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K
 filed with the SEC on December 10, 2024).

 4.26

 Form
 of Private Placement Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K
 filed with the SEC on December 10, 2024).

 4.27

 Form
 of Common Warrant (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the SEC
 on December 10, 2024).

 4.28

 Form
 of Convertible Note (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC
 on July 2, 2025).

 4.29

 Form
 of Warrant (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the SEC on July
 2, 2025).

 4.30

 Form
 of PIPE Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on
 July 14, 2025).

 10.1

 Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS and Sonnet BioTherapeutics, Inc., dated August 6, 2019 (incorporated
 by reference to Exhibit 10.54 to the Company's Registration Statement on Form S-4 filed with the SEC on November 27, 2019).

 10.2

 to Common Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS and Sonnet BioTherapeutics, Inc., dated September 25, 2019
 (incorporated by reference to Exhibit 10.55 to the Company's Registration Statement on Form S-4 filed with the SEC on November
 27, 2019).

 10.3

 Side
 Letter and Amendment No. 2 to Common Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS, Sonnet BioTherapeutics, Inc.
 and Chanticleer Holdings, Inc., dated February 7, 2020 (incorporated by reference to Exhibit 10.60 to the Company's Registration
 Statement on Form S-4 filed with the SEC on February 7, 2020).

 10.4

 Agreement, between Pankaj Mohan and Sonnet BioTherapeutics, Inc., dated December 31, 2018 (incorporated by reference to Exhibit 10.56
 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).

 10.5

 Agreement, between John Cini and Sonnet BioTherapeutics, Inc., dated January 10, 2020 (incorporated by reference to Exhibit 10.58
 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).

 10.6

 Agreement, between Jay Cross and Sonnet BioTherapeutics, Inc., dated January 10, 2020 (incorporated by reference to Exhibit 10.57
 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).

 10.7

 Agreement, between Susan Dexter and the Company, dated April 1, 2020 (incorporated by reference to Exhibit 10.7 to the Company's
 Current Report on Form 8-K filed with the SEC on April 3, 2020).

 10.8

 Offer
 Letter, between Donald Griffith and Sonnet BioTherapeutics, Inc., dated January 1, 2019 (incorporated by reference to Exhibit 10.59
 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).

 10.9

 BioTherapeutics Holdings, Inc. 2020 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 4.2 to the Company's
 Registration Statement on Form S-8 filed with the SEC on May 20, 2020).

 10.10

 Form
 of Restricted Stock Unit Award (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed
 with the SEC on July 9, 2020).

 10.11

 Agreement, between Ares Trading SA and Relief Therapeutics SA, dated August 28, 2015 (incorporated by reference to Exhibit 10.51
 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***

 10.12

 Discovery
 Collaboration Agreement, between XOMA (US) LLC and Oncobiologics, Inc., dated July 23, 2012 (incorporated by reference to Exhibit
 10.52 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***

 10.13

 of Discovery Collaboration Agreement, between XOMA (US) LLC and Sonnet BioTherapeutics, Inc., dated May 7, 2019 (incorporated by
 reference to Exhibit 10.53 to the Company's Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***

 10.14

 Securities
 Purchase Agreement, dated as of February 7, 2020, by and among Chanticleer Holdings, Inc., Sonnet BioTherapeutics, Inc. and the investors
 party thereto (incorporated by reference to Exhibit 10.64 to the Company's Registration Statement on Form S-4 filed with the
 SEC on February 7, 2020).

 10.15

 Form
 of Warrant Exercise and Omnibus Amendment Agreement, dated as of August 3, 2020, by and between Sonnet BioTherapeutics Holdings,
 Inc. and the Holders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the
 SEC on August 4, 2020).

 10.16

 Assignment
 and Assumption Employment Agreements by Sonnet BioTherapeutics Holdings, Inc., effective April 1, 2020 (incorporated by reference
 to Exhibit 10.16 to the Company's Annual Report on Form 10-K filed with the SEC on December 17, 2020).

 10.17

 No. 1 to Executive Employment Agreement, between Pankaj Mohan and the Company, dated November 23, 2020 (incorporated by reference
 to Exhibit 10.17 to the Company's Annual Report on Form 10-K filed with the SEC on December 17, 2020).

 10.18

 No. 1 to Executive Employment Agreement, between John Cini and the Company, dated November 23, 2020 (incorporated by reference to
 Exhibit 10.18 to the Company's Annual Report on Form 10-K filed with the SEC on December 17, 2020).

 10.19

 Form
 of Indemnification Agreement (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K filed
 with the SEC on December 17, 2020).

 10.20

 At-The-Market
 Sales Agreement, dated February 5, 2020, between the Company and BTIG (incorporated by reference to Exhibit 1.1 to the Company's
 Current Report on Form 8-K filed with the SEC on February 5, 2021).

 10.21

 Agreement, dated May 2, 2021, between Sonnet BioTherapeutics, Inc. and New Life Therapeutics PTE, LTD (incorporated by reference
 to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on May 17, 2021).

 10.22

 First
 Amendment to License Agreement, dated June 11, 2021, between Sonnet BioTherapeutics, Inc. and New Life Therapeutics PTE, LTD (incorporated
 by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K, filed with the SEC on December 17, 2021).

 10.23

 Second
 Amendment to License Agreement, dated July 7, 2021, among Sonnet Biotherapeutics CH SA, Sonnet BioTherapeutics, Inc. and New Life
 Therapeutics PTE, Ltd. (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K, filed with
 the SEC on December 17, 2021).

 10.24

 to License Agreement and Settlement, dated November 1, 2021, between ARES TRADING SA and Sonnet BioTherapeutics CH SA (incorporated
 by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K, filed with the SEC on December 17, 2021).

 10.25

 At-The-Market
 Sales Agreement, dated August 15, 2022, between the Company and BTIG (incorporated by reference to Exhibit 1.1 to the Company's
 Current Report on Form 8-K, filed with the SEC on August 15, 2022).

 10.26

 Underwriting
 Agreement, dated February 8, 2023, between the Company and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 1.1
 to the Company's Current Report on Form 8-K filed with the SEC on February 13, 2023).

 10.27

 Form
 of Securities Purchase Agreement, dated June 28, 2023, by and between the Company and the Purchaser (incorporated by reference to
 Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2023).

 10.28

 ChEF
 Purchase Agreement, dated as of May 2, 2024, by and between Sonnet BioTherapeutics Holdings, Inc. and Chardan Capital Markets, LLC
 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 3, 2024).

 10.29

 Registration
 Rights Agreement, dated as of May 2, 2024, by and between Sonnet BioTherapeutics Holdings, Inc. and Chardan Capital Markets, LLC
 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on May 3, 2024).

 10.30

 Form
 of Inducement Letter (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the
 SEC on June 20, 2024).

 10.31

 Agreement, dated October 8, 2024, between Sonnet BioTherapeutics, Inc., Sonnet BioTherapeutics CH SA and Alkem Laboratories Limited
 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 9, 2024).

 10.32

 Underwriting
 Agreement, dated November 6, 2024, between the Company and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 1.1
 to the Company's Current Report on Form 8-K filed with the SEC on November 8, 2024).

 10.33

 Form
 of Registered Direct Securities Purchase Agreement, dated December 9, 2024, by and between the Company and the Purchasers (incorporated
 by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on December 10, 2024).

 10.34

 Form
 of Private Placement Securities Purchase Agreement, dated December 9, 2024, by and between the Company and the Purchasers (incorporated
 by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the SEC on December 10, 2024).

 10.35

 Offer
 Letter, between Donald Griffith and Sonnet BioTherapeutics, Inc., dated January 1, 2019 (incorporated
 by reference to Exhibit 10.59 to the Company's Registration Statement on Form S-4 filed
 with the SEC on February 7, 2020).

 10.36

 Agreement by and between the Company and Stephen McAndrew, Ph. D., dated February 12, 2025 (incorporated by reference to Exhibit 10.6
 to the Company's Quarterly Report on Form 10-Q filed with the SEC on February 13, 2025).

 10.37

 Form
 of Contribution Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with
 the SEC on July 14, 2025).

 10.38

 Form
 of Subscription Agreement (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with
 the SEC on July 14, 2025).

 10.39

 Form
 of PIPE Purchase Agreement (incorporated by reference to Exhibit 10.3 to the Company's
 Current Report on Form 8-K filed with the SEC on July 14, 2025).

 10.40

 Agreement by and between the Company and Raghu Rao, dated July 31, 2025 (incorporated by reference to Exhibit 10.1 to the Company's
 Current Report on Form 8-K filed with the SEC on August 1, 2025)

 19.1

 Insider
 Trading Policy (incorporated by reference to Exhibit 19.1 to the Company's Annual Report on Form 10-K filed with the SEC on
 December 17, 2024).

 21.1

 Subsidiaries
 of the Company (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed with the SEC on
 December 14, 2023).

 23.1*

 Consent of KPMG LLP.*

 31.1*

 Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities and Exchange Act of 1934, as amended.*

 31.2*

 Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities and Exchange Act of 1934, as amended.*

 32.1**

 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 32.2**

 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 97.1

 Clawback
 Policy (incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K filed with the SEC on December
 14, 2023).

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 *

 Filed
 herewith.

 **

 Furnished
 herewith.

 ***

 Filed
 herewith; portions of the exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. A copy of any omitted portions
 will be furnished to the Securities and Exchange Commission upon request.

 #

 The
 schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule
 and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

 Indicates
 a management contract or compensation plan, contract or arrangement.