10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2024

☐ 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: 001-36593

SOLENO THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

    Delaware

    77-0523891

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification No.)

203 Redwood Shores Parkway, Suite 500

Redwood City, California

(Address of principal executive offices)

94065

(Zip Code)

(650) 213-8444

(Registrant’s telephone number, including area code)


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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	SLNO	NASDAQ

Indicate 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 ☐

Indicate 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 ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. ☐

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

As of May 2, 2024, there were 33,411,329 shares of the registrant’s Common Stock, par value $0.001 per share, outstanding.

SOLENO THERAPEUTICS, INC.

TABLE OF CONTENTS


	Page
PART I—FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets (unaudited)	3
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)	4
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)	5
Condensed Consolidated Statements of Cash Flows (unaudited)	6
Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	19
Item 4. Controls and Procedures	19
PART II—OTHER INFORMATION	20
Item 1. Legal Proceedings	20
Item 1A. Risk Factors	20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3. Defaults Upon Senior Securities	20
Item 4. Mine Safety Disclosures	20
Item 5. Other Information	20
Item 6. Exhibits	20
EXHIBIT INDEX	21
SIGNATURES	21

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Soleno Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)


	March 31, 2024			December 31, 2023
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	42,847		$	169,681
Short-term investments		106,780			-
Prepaid expenses and other current assets		1,596			1,677
Total current assets		151,223			171,358
Long-term assets
Property and equipment, net		27			12
Operating lease right-of-use assets		338			407
Intangible assets, net		8,263			8,749
Long-term investments		8,821			-
Other long-term assets		165			165
Total assets	$	168,837		$	180,691
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	8,022		$	3,149
Accrued compensation		1,226			3,135
Accrued clinical trial site costs		2,395			3,393
Operating lease liabilities		310			273
Other current liabilities		1,511			1,555
Total current liabilities		13,464			11,505
Long-term liabilities
Contingent liability for Essentialis purchase price		11,950			11,549
Long-term lease liabilities		37			130
Total liabilities		25,451			23,184
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares authorized, 33,337,079 and 31,678,159 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		33			32
Additional paid-in-capital		441,267			433,885
Accumulated other comprehensive loss		(106	)		-
Accumulated deficit		(297,808	)		(276,410	)
Total stockholders’ equity		143,386			157,507
Total liabilities and stockholders’ equity	$	168,837		$	180,691

See accompanying notes to condensed consolidated financial statements

Soleno Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended March 31,
	2024			2023
Operating expenses
Research and development	$	14,602		$	5,316
General and administrative		8,472			2,854
Change in fair value of contingent consideration		401			299
Total operating expenses		23,475			8,469
Operating loss		(23,475	)		(8,469	)
Other income, net
Interest income, net		2,077			113
Total other income, net		2,077			113
Net loss	$	(21,398	)	$	(8,356	)

Other comprehensive income (loss)
Net unrealized loss on marketable securities		(105	)		—
Foreign currency translation adjustment		(1	)		16
Total comprehensive loss	$	(21,504	)	$	(8,340	)

Net loss per common share, basic and diluted	$	(0.59	)	$	(0.88	)
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share		36,208,371			9,447,350

See accompanying notes to condensed consolidated financial statements

Soleno Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2024 and 2023

(unaudited)

(in thousands, except share data)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balances at January 1, 2024		31,678,159	$	32	$	433,885	$	-		$	(276,410	)	$	157,507
Stock-based compensation		-		-		6,445		-			-			6,445
Issuance of restricted stock units under equity incentive plans		11,034		-		-		-			-			-
Exercise of common stock warrants and pre-funded common stock warrants		1,644,886		1		922		-			-			923
Exercise of stock options		3,000		-		15		-			-			15
Unrealized loss on marketable securities		-		-		-		(105	)		-			(105	)
Foreign currency translation adjustment		-		-		-		(1	)		-			(1	)
Net loss		-		-		-		-			(21,398	)		(21,398	)
Balances at March 31, 2024		33,337,079	$	33	$	441,267	$	(106	)	$	(297,808	)	$	143,386


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-In

SEC Form 10-Q filed by Soleno Therapeutics Inc.