Item
1.01. Entry into a Material Definitive Agreement.
On
February 5, 2021, Sonnet BioTherapeutics Holdings, Inc. (the “Company”) entered into an At-the-Market Sales Agreement
(the “Sales Agreement”) with BTIG, LLC (“BTIG”), pursuant to which the Company may offer and sell, from
time to time, through BTIG, as sales agent and/or principal, shares of its common stock, par value $0.0001 per share (the “Common
Stock”), having an aggregate offering price of up to $15,875,000 (“Shares”), subject to certain limitations
on the amount of Common Stock that may be offered and sold by the Company set forth in the Sales Agreement. The Company is not
obligated to make any sales of Shares under the Sales Agreement and any determination by the Company to do so will be dependent,
among other things, on market conditions and the Company’s capital raising needs. If the Company determines to sell Shares
directly to BTIG, as principal (each such transaction, a “Principal Transaction”), the Company and BTIG will enter
into a separate agreement that governs such Principal Transaction.
Offers
and sales of Shares by the Company under the Sales Agreement, if any, will be made through a prospectus supplement, dated February
5, 2021 (the “ATM Prospectus Supplement”), to the prospectus forming a part of the Company’s shelf registration
statement on Form S-3 filed by the Company with Securities and Exchange Commission (the “SEC”) on December 17, 2020
(the “Registration Statement”) and declared effective by the SEC on December 29, 2020.
Sales
of the Shares, if any, made under the ATM Prospectus Supplement may be made in negotiated transactions, which may include block
trades, or by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities
Act of 1933, as amended (the “Securities Act”), including sales made directly on the Nasdaq Capital Market or sales
made to or through a market maker other than on an exchange. Upon delivery of a placement notice and subject to the terms and
conditions of the Sales Agreement, BTIG will use commercially reasonable efforts, consistent with its normal trading and sales
practices, applicable state and federal law, rules and regulations, and the rules of the Nasdaq Capital Market, to sell the Shares
from time to time based upon the Company’s instructions, including any price, time or size limits specified by the Company.
BTIG is not obligated to purchase any Shares on a principal basis pursuant to the Sales Agreement.
The
Company will pay BTIG commissions for its services in acting as agent in the sale of Shares pursuant to the Sales Agreement. BTIG
will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of Shares pursuant to
the Sales Agreement. The Company has agreed to provide BTIG and BTIG Affiliates (as defined in the Sales Agreement) with customary
indemnification and contribution rights, including for liabilities under the Securities Act. The Company also will reimburse BTIG
for certain specified expenses in connection with entering into the Sales Agreement up to $65,000, and certain specified expenses
on a quarterly basis not to exceed $7,500. The Sales Agreement contains customary representations and warranties and conditions
to the placements of the Shares pursuant thereto, obligations to sell Shares under the Sales Agreement are subject to satisfaction
of certain conditions, including the effectiveness of the Registration Statement and other customary closing conditions. The Sales
Agreement will terminate upon the earlier of (i) the sale of all Shares subject to the Sales Agreement and (ii) termination of
the Sales Agreement as permitted therein. The Company may terminate the Sales Agreement in its sole discretion at any time by
giving 10 days’ prior notice to BTIG. BTIG may terminate the Sales Agreement under the circumstances specified in the Sales
Agreement and in its sole discretion at any time by giving 10 days’ prior notice to the Company.
The
foregoing description of the Sales Agreement does not purport to be complete and is qualified in its entirety by reference to
the full text of the Sales Agreement. A copy of the Sales Agreement is attached hereto as Exhibit 1.01.
This
Current Report on Form 8-K does not constitute an offer to sell or the solicitation of offers to buy any securities of the Company,
and shall not constitute an offer, solicitation or sale of any security in any state or jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.