Item
1.01. Entry into a Material Definitive Agreement.
On
August 19, 2021, Sonnet BioTherapeutics Holdings, Inc. (the “Company”) entered into an underwriting agreement with BTIG,
LLC, as representative of the several underwriters named in Schedule I thereto (the “Representative”), relating to the public
offering, issuance and sale of 33,193,485 shares of its common stock and, to certain investors, pre-funded warrants to purchase 2,100,632
shares of common stock, and accompanying common warrants to purchase up to an aggregate of 35,294,117 shares of its common stock (the
“Offering”). Each share of common stock and pre-funded warrant to purchase one share of common stock was sold together
with a common warrant to purchase one share of common stock. In addition, the underwriters partially exercised their over-allotment
option to purchase additional common warrants to purchase 4,294,117 shares of Common Stock. All of the securities sold in the
Offering were sold by the Company. The public offering price of each share of common stock and accompanying common warrant is $0.85 and
$0.8499 for each pre-funded warrant and accompanying common warrant. The pre-funded warrants are immediately exercisable at a
price of $0.0001 per share of common stock. The common warrants are immediately exercisable at a price of $0.85 per share of common
stock and will expire five years from the date of issuance. The shares of common stock and pre-funded warrants, and the accompanying
common warrants, were issued separately and are immediately separable upon issuance. The Company also granted the underwriters
in the Offering a 30-day over-allotment option, pursuant to the underwriting agreement, to purchase an additional 5,294,117 shares of
common stock and/or additional common warrants to purchase 1,000,000 shares of common stock (net of the partial exercise mentioned
above), in each case at the public offering price per share or common warrant, respectively, less the underwriters’
discounts and commissions. The Offering closed on August 24, 2021.
The
gross proceeds to the Company, before deducting underwriting discounts and commissions and other offering expenses, were approximately
$30.0 million. The Company anticipates using the net proceeds from the Offering for research and development, including clinical trials,
working capital and general corporate purposes.
The
common stock, pre-funded warrants and common warrants are being offered by the Company pursuant to a Registration Statement on Form S-1
(the “Form S-1”), as amended, filed on July 22, 2021 with the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (File No. 333-258092) and declared effective on August
19, 2021.
The
Underwriting Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of
this nature. Pursuant to the Underwriting Agreement, the Company and its directors and officers agreed, for a period of 90 days, subject
to certain exceptions, not to offer, sell, pledge or otherwise dispose of the common stock and other of the Company’s securities
that they beneficially own, including securities that are convertible into shares of common stock and securities that are exchangeable
or exercisable for shares of common stock, without the prior written consent of the Representative.
In
addition, the Company issued to the underwriters warrants (the “underwriter warrants”) to purchase 705,882
shares of common stock (representing 2% of the aggregate number of shares sold in the offering, including the number of shares of common
stock underlying the pre-funded warrants, but excluding the underwriters’ option to purchase additional shares of common stock),
at an exercise price of $1.0625 per share (representing 125% of the public offering price for a share to be sold in this offering). The
underwriter warrants are exercisable immediately and for five years from the date of commencement of sales in this offering.
The
foregoing summaries of the Underwriting Agreement, pre-funded warrants common warrants and underwriter warrants do not purport to be
complete and are subject to, and qualified in their entirety by, the forms of such documents, which are incorporated herein by reference.