| | | | |
| CUSIP No. 834203200 | | 13D | | Page 1 of 4 pages |
Explanatory Note
This Amendment No. 4 to Schedule 13D (“Amendment No. 4”) amends and supplements the Schedule 13D originally filed with the United States Securities and Exchange Commission on December 27, 2018 (as amended to date, the “Schedule 13D”), relating to the shares of common stock, par value $0.001 per share (the “Common Stock”), of Soleno Therapeutics, Inc., a Delaware corporation (the “Issuer”). Capitalized terms used herein without definition shall have the meanings set forth in the Schedule 13D.
| Item 4. | Purpose of Transaction. |
Item 4 of the Schedule 13D is hereby amended and supplemented as follows:
Securities Purchase Agreement
On December 16, 2022, the Issuer entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) for a private placement (the “Private Placement”) with certain entities affiliated with Nantahala Capital Management, LLC, Abingworth Bioventures VII LP, Vivo Capital, LLC and members of management (collectively, the “Purchasers”). Pursuant to the Securities Purchase Agreement, the Issuer agreed to sell to the Purchasers warrants (the “Warrants”) to purchase up to an aggregate of 22,598,870 shares of the Common Stock, at a purchase price of $0.4425 per Warrant. The Warrants are separated into two tranches, 8,598,870 Tranche A Warrants and 14,000,000 Tranche B Warrants. Abingworth Bioventures VII LP agreed to purchase 2,870,056 of the Warrants, consisting of 1,092,056 Tranche A Warrants and 1,778,000 Tranche B Warrants. The closing of the Private Placement is expected to occur in the first quarter of 2023, subject to the satisfaction of certain closing conditions, including the completion of enrollment of the Issuer’s Study C602, a long-term treatment study of DCCR (Diazoxide Choline) Extended-Release tablets for the treatment of Prader-Willi syndrome (PWS).
The Tranche A Warrants are exercisable for $1.75 per Share, for an aggregate exercise price of up to approximately $15 million, and the Tranche B Warrants are exercisable for $2.50 per Share, for an aggregate exercise price of up to $35 million. The Tranche A Warrants are immediately exercisable and must be exercised within 30 days of announcement of positive top-line data from the randomized withdrawal period of the Issuer’s Study C602 and will expire if positive top-line data is not announced prior to the 3.5 year anniversary of the date of issuance. The Tranche B Warrants are also immediately exercisable and expire upon the earlier of 3.5 years from the date of issuance and 30 days following receipt of U.S. Food and Drug Administration approval of DCCR for the treatment of PWS. Abingworth Bioventures VII LP’s Warrants will initially contain provisions preventing the Warrants from being exercised if such exercise would result in Abingworth Bioventures VII LP obtaining greater than 9.99% of the Issuer’s voting securities. The Issuer intends to seek stockholder approval for the Private Placement at its annual meeting of stockholders in 2023 and these blocking provisions will terminate if such approval is obtained.
