On June 28, 2023 Sonnet BioTherapeutics Holdings, Inc. (NASDAQ:SONN) ("Sonnet" or the "Company"), a biopharmaceutical company developing innovative targeted biologic drugs, reported that it has entered into a definitive agreement with a single institutional investor for the purchase and sale of an aggregate of 5,000,000 shares of its common stock (or common stock equivalents in lieu thereof), at a purchase price of $0.45 per share of common stock (or common stock equivalent in lieu thereof), in a registered direct offering (Press release, Sonnet BioTherapeutics, JUN 28, 2023, View Source [SID1234632968]). The Company has also agreed to issue to the investor, in a concurrent private placement, warrants to purchase up to an aggregate of 5,000,000 shares of common stock. The warrants will have an exercise price of $0.6749 per share, are exercisable six months from issuance, and will expire three and one-half years from the date of issuance. The closing of the registered direct offering and the concurrent private placement is expected to occur on or about June 30, 2023, subject to the satisfaction of customary closing conditions.

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Chardan is acting as the exclusive placement agent for the offering.

The gross proceeds to the Company from the registered direct offering and the concurrent private placement are expected to be approximately $2.25 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds for research and development, including clinical trials, working capital and general corporate purposes.

The securities described above (excluding the warrants and the shares of common stock underlying the warrants) are being offered and sold by the Company in a registered direct offering pursuant to a "shelf" registration statement on Form S-3 (File No. 333-251406) that was originally filed with the Securities and Exchange Commission (the "SEC") on December 17, 2020, and declared effective on December 29, 2020. The offering of such securities in the registered direct offering is being made only by means of a prospectus supplement that forms a part of the effective registration statement. A final prospectus supplement and the accompanying base prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying base prospectus may also be obtained, when available, from Chardan Capital Markets, LLC, 17 State Street, Suite 2130, New York, New York 10004, at (646) 465-9000, or by email at [email protected].

The warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and, along with the shares of common stock underlying such warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the warrants and the underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws.