Sionna Therapeutics, Inc.

1. Nature of the Business

Organization

Sionna Therapeutics, Inc. (the “Company”), formerly known as Sling Therapeutics, Inc., was incorporated in Delaware in August 2019 and is headquartered in Waltham, Massachusetts. The Company is a clinical-stage biopharmaceutical company on a mission to revolutionize the current treatment paradigm for cystic fibrosis(“CF”)patients by developing novel medicines that normalize the function of the cystic fibrosis transmembrane conductance regulator protein to deliver clinically meaningful benefit to CF patients.

Risks and Uncertainties

The Company is subject to a number of risks common to other companies in the biotechnology industry, including but not limited to, development by competitors of new technological innovations, risks of failure of preclinical studies and clinical trials, development and manufacturing of product candidates, obtaining regulatory approval for product candidates, competition from substitute products, the need to successfully commercialize and gain market acceptance of its product candidates, protection of proprietary technology, dependence on key personnel, the ability to attract and retain qualified employees, reliance on third-party organizations, compliance with government regulations, and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive clinical testing and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Liquidity and Going Concern

The Company has incurred annual net operating losses and has generated negative operating cash flows in every year since inception. As of June 30, 2026, the Company had an accumulated deficit of $313.0 million. The Company expects its operating losses to continue into the foreseeable future as it continues to pursue its research and development efforts.

The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The Company believes that its existing cash, cash equivalents and marketable securities of $268.3 million as of June 30, 2026, will be sufficient to allow the Company to fund operations beyond twelve months from the date that the financial statements are issued.

In March 2026, the Company entered into a sales agreement with Leerink Partners LLC (“Leerink”), under which the Company, from time to time, may issue and sell shares of the Company’s common stock through an "at the market" equity offering program under which Leerink is acting as sales agent, for aggregate gross sale proceeds of up to $250.0 million. As of June 30, 2026, the Company has not sold any shares of common stock under the sales agreement.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2,“Summary of Significant Accounting Policies,” in the audited consolidated annual financial statements in the Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on March 2, 2026 (the “Annual Report”). Since the date of those annual financial statements, there have been no changes to the Company’s significant accounting policies.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of June 30, 2026, and the condensed consolidated statements of operations and comprehensive loss, statements of convertible preferred stock and stockholders’ equity and statements of cash flows for the six months ended June 30, 2026, and 2025, are unaudited. The condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2026, and the results of its operations and its cash flows for the periods presented. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2026, and 2025, are also unaudited. The results for the three and six months ended June 30, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, or for any other subsequent period.

Recently Adopted Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinement, ("ASU 2025-07"). ASU 2025-07 creates a scope exception within ASC 815 for certain contracts with underlyings tied to a party's operations or activities (such as regulatory approval, clinical, or earnings milestones), which may cause some arrangements that previously met the derivative definition to no longer be accounted for as derivatives. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods. Early adoption is permitted. The Company adopted the guidance prospectively as of January 1, 2026, for contracts entered into or modified after the adoption date. The adoption did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

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("ASU 2024-03"), which requires entities to disclose additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 may be applied retrospectively or prospectively. The Company is currently evaluating the effect of this update on its consolidated financial statements and related disclosures.

3. Marketable Securities

The following tables summarize the amortized cost and estimated fair value of the Company’s current and noncurrent marketable securities (in thousands):

The Company has determined that there were no material changes in the credit risk, therefore the Company hasnot recognized any allowance for credit losses on its debt securities. As of June 30, 2026, the Company holds marketable securities with an aggregate fair value of $57.2 million that had remaining maturities between one and two years. All other securities had a contractual maturity of less than a year. There wereno realized gains or losses during the three and six months ended June 30, 2026, or 2025.

4. Fair Value Measurements

The following tables present information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value (in thousands):

During the three and six months ended June 30, 2026, there were no transfers or reclassifications between fair value measurement levels of assets or liabilities. The carrying values of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

5. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense for the three months ended June 30, 2026 and 2025 was $0.2 million and $0.1 million, respectively. Depreciation expense was $0.3 million for the six months ended June 30, 2026 and 2025.

6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

7. Commitments and Contingencies

Operating Leases

The Company leases office space under a noncancelable operating lease. There have been no material changes to the Company’s lease during the six months ended June 30, 2026. For additional information, see Note 7, “Leases,” in the audited consolidated annual financial statements in the Annual Report.

Legal Proceedings

The Company was not subject to any material legal proceedings as of June 30, 2026, and the Company is not aware of any material legal proceedings that are currently pending or threatened.

Other Contracts

The Company enters into agreements in the ordinary course of business with contract research organizations and contract manufacturing organizations, which generally provide for termination on notice. Amounts payable upon termination are dependent on the timing of termination and the terms of the respective agreement.

The Company evaluates such arrangements on an ongoing basis and records a liability for obligations that are probable and reasonably estimable. For matters that do not meet these criteria, the Company considers whether disclosure is appropriate.

Indemnification Agreements

In the ordinary course of business the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters arising out of the relationship between such parties and the Company. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, however, the Company has not incurred any material costs as a result of such indemnifications nor experienced any losses related to them. As of June 30, 2026, the Company was not aware of any claims under indemnification arrangements and does not expect significant claims under indemnification arrangements and it has not accrued any liabilities related to such obligations.

8. License Agreements

The Company has entered into several license agreements with third parties that typically involve payments from the Company, including up-front payments, milestone payments and royalty payments. The terms and conditions as well as accounting analysis for the Company’s significant license agreements are described in Note 9, “License Agreements,” in the audited consolidated annual financial statements in the Annual Report. There have been no material changes to the terms and conditions, or accounting conclusions, previously disclosed in the Annual Report.

9. Stock-Based Compensation

The Company’s stock-based compensation plans are described in Note 11, "Common Stock," in the audited consolidated annual financial statements in the Annual Report. There have been no material changes to the Company’s stock-based compensation plans previously disclosed in the Annual Report.

Stock Option Activity

The following table summarizes the Company’s common stock option activity for the six months ended June 30, 2026:

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the estimated fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The weighted-average grant date fair value of options granted during the three and six months ended June 30, 2026, was $27.06 per share and $27.91 per share, respectively. The total intrinsic value of stock options exercised during the three and six months ended June 30, 2026 was $2.7 million and $13.7 million, respectively.

Stock-Based Compensation Expense

During the three and six months ended June 30, 2026, and 2025, the Company recorded stock-based compensation in the accompanying condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

As of June 30, 2026, there was $79.7 million of unrecognized stock-based compensation expense for common stock option awards that are expected to be recognized over a weighted average period of 2.8 years.

10. Segment Information

The following table presents segment net loss, including significant expense categories (in thousands):

(1)External research and development expenses consist primarily of costs paid to third-parties including contract research organizations, contract development and manufacturing organizations, consultants, advisors and lab-related vendors.

(2)General corporate and facility expenses consists primarily of professional services fees for legal, finance, human resources, medical affairs in addition to information technology expenses and rent expense, net of sublease income.

(3)Other segment items consists primarily of interest income, partially offset by taxes and non-cash expenses, such as stock-based compensation, depreciation, and amortization of discounts and premiums on marketable securities.

11. Net Loss Per Share

The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of June 30, 2026, and 2025, because including them would have had an anti-dilutive effect: