Soleno Therapeutics, Inc. (SLNO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Jim MacKaness, Chief Financial Officer of Soleno Therapeutics, Inc., and it's a pleasure to welcome you to the Soleno Therapeutics, Inc. Annual Meeting of Stockholders. I will act as Chairman of this meeting, and I've asked Jesse Schumaker, our Secretary to record the minutes of this meeting. Before proceeding further, let me introduce the directors and director nominees of the company who are with us today. Please say hello, as I call your name, Dr. Ernest Mario. We may have people on mute.

I didn't realize I was muted.

Here we go. So welcome, Dr. Mario. We also have with us Gwen Melincoff.

Good morning.

And also Dr. Anish Bhatnagar, who is also our Chief Executive Officer.

Good morning.

I'd also like to introduce Raymond Lloyd, representing Marcum LLP.

Good morning, everybody.

And Jesse Schumaker, representing Wilson Sonsini Goodrich & Rosati, our outside corporate counsel.

Thanks, Jim.

And Steve Hoffman, representing the American Stock Transfer & Trust Company, LLC, the Inspector of Election. Steve's probably on mute at this stage. Let me proceed with the agenda. So the annual meeting is being held in accordance with the company's bylaws and Delaware law. During the meeting, we will address the matters described in the company's definitive proxy statement dated April 21, 2022. Balloting will be completed, and announcement will be made regarding the preliminary results, and then the meeting will be adjourned. The items on the agenda for the meeting are: one, to elect 2 Class III Directors to serve until the 2025 Annual Meeting of Stockholders or until their respective successors are duly elected and called upon; two, to ratify the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; three, to approve on an advisory basis, executive compensation; four, to approve on an advisory basis the frequency of future votes on executive compensation; and five, to approve an amendment to the company's amended and restated certificate of incorporation to effect a reverse split of all our outstanding shares of Soleno's common stock at a ratio of 1 for [ 15 ] to be affected at the sole discretion of Soleno's Board of Directors. During the meeting, questions should be restricted to the procedures for the meeting and the proposals under consideration. Thank you for your understanding. I approve by affidavit that notice of this meeting has been duly given and the notice of Annual Meeting of Stockholders, proxy statement and proxy were mailed on or about April 21, 2022, to all stockholder of record at the close of business on April 12, 2022, the record date for the meeting. We have at this meeting a record of stockholders as of that date. The affidavit, together with copies of the notice, proxy statement and proxy will be filed with the minutes of the meeting. We have appointed Steve Hoffman to act as Inspector of Election for this annual meeting. The Inspector of Election has signed an oath of office, which will be filed with the minutes of this meeting. The Inspector of Election has advised me that we have present in person or by proxy a sufficient number of shares to constitute a quorum. Therefore, the meeting is duly constituted, and we may proceed with business. Let me briefly describe the voting procedures. We will vote by proxy and by ballot submitted in real-time via email, if anyone has not already submitted their proxy. Each holder of common stock is entitled to one vote for each share of common stock held of record at the close of business on the record date. If you have previously turned in your proxy and you do not intend to change your vote, it is not necessary that you complete another proxy or ballot. Your vote will be counted. If you have completed the proxy that you wish to file with the Inspector of Elections, please notify us at this time. If you are eligible to vote and have not submitted your proxy or if you want to change your vote, please notify us at this time. This year, we're conducting the meeting virtually, so we ask that any proxies or ballots be submitted immediately via e-mail to admin 12, that's A-D-M-I-N 12 at astfinancial.com. Please submit any proxies or votes to [email protected] now. Upon receipt of the proxy cards and ballots, the polls will officially be closed. The votes cast today will be counted in the final tally, along with proxies previously received. As the Inspector of Election, Steve Hoffman, will announce the preliminary results of the voting at the end of the meeting. Does anyone have any questions regarding voting procedures? It is now 8:08, on June 1, 2022, and the polls for the matter to be voted on at the meeting are now open. Proposal 1. The company's Board of Directors presently consists of 6 members and is divided into 3 classes, each with a 3-year term. There are 2 Class I Directors, 2 Class II Directors and 2 Class III Directors. The Class III Directors will be elected at today's meeting. Those 2 nominees receiving the highest number of votes of the shares present in person or represented by proxy at this meeting and entitled to vote will be elected as Directors. Our Nominating and Corporate Governance Committee has recommended and our Board of Directors has approved Dr. Anish Bhatnagar and William G. Harris as nominees for election as Class III Directors. If elected, each of Dr. Anish Bhatnagar and William G. Harris will serve as Class III Directors until the 2025 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified. Each of the nominees is currently director of our company and pursuant to the notice of this annual meeting and the proxy statement dated April 21, 2022, the proxies solicited by the Board of Directors will be voted in favor of these nominees. This item is discussed on Page 15 of the proxy statement. The company's bylaws require that a stockholder provide advance notice to the company of a stockholder's intent to nominate persons as directors. No such notice was received. Accordingly, I declare the nominations for directors closed. Are there any questions concerning director elections? Proposal 2. At the annual meeting, stockholders are being asked to ratify the appointment of Marcum as our independent registered public accounting firm for our fiscal year ending December 31, 2022. The Audit Committee of the Board, which is comprised entirely of nonemployee directors, recommended to the Board of Directors that Marcum LLP be appointed as our independent auditors. As our independent auditors, Marcum LLP would audit our financial statements for the fiscal year ending December 31, 2022, and perform audit-related services and consultation in connection with various accounting and financial reporting matters. Marcum LLP may also perform certain non-audit services for the company. The Board approved the selection of Marcum LLP as independent auditors for the fiscal year ending December 31, 2022, is asking the stockholders for ratification of the selection. Stockholder ratification of the appointment of Marcum is not required by our bylaws or other applicable legal requirements. However, our Board is submitting the appointment of Marcum to our stockholders for ratification as a matter of good corporate governance. If the stockholders do not approve the selection of Marcum LLP as independent auditors, the Board and the Audit Committee will reconsider the appointment. This item is discussed on Page 16 of the proxy statement. Raymond Lloyd is present from Marcum LLP and is available to answer any appropriate questions that you may have at this time. And are there any questions concerning the proposal? Okay. Proposal 3. At the annual meeting, stockholders are being asked to approve, on an advisory basis, the compensation of our named executive officers. The Board asks that you vote for the following resolution: that the stockholders of Soleno Therapeutics, Inc. hereby approve, on an advisory basis, the compensation of the named executive officers as disclosed in the proxy statement furnished for the 2022 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules and regulations of the U.S. Securities and Exchange Commission. This item is discussed on Page 18 of the proxy statement. Are there any questions concerning the proposal? Proposal 4. At the annual meeting, stockholders are being asked to approve, on an advisory basis, the frequency with which we should solicit a stockholders' advisory vote on the compensation of our named executive officers, such as previously mentioned in Proposal 3. The Board believes that a stockholder advisory vote on the compensation of our named executive officers should take place every 3 years although the Board and Compensation Committee evaluate executive compensation policies on an annual basis. And this item is discussed on Page 19 of the proxy statement. Are there any questions concerning the proposal? Proposal 5. At the annual meeting, stockholders being asked to approve an amendment to the company's charter that would, at the discretion of the Board of Directors, effect the reverse split of all the outstanding shares of Soleno's common stock at a ratio of 1 for 15 within 6 months following this annual meeting. This item is discussed on Page 20 of the proxy statement. And are there any questions concerning this proposal? The Board of Directors recommends the stockholders vote in favor of each of these proposals, and the proxy solicited by the Board will be voted in favor of each of these proposals. Are there any proxies or ballots that are not being submitted? If they are any proxies or ballots that are not being submitted, you must e-mail them to [email protected] now in order for them to be counted. The Inspector of Elections will not accept ballots, proxies or votes or any changes or revocations submitted after the closing of the polls. It is now 8:14, on June 1, 2022, and the polls for the matter to be voted on at this meeting are closed. No additional ballots, proxies or votes and no changes or revocations will be accepted. The proxies and ballots will be tabulated by Inspector of Elections. And at this time, the Inspector of Elections will provide us with a preliminary report on the voting results. Thank you.

With regards to Proposal 1, to elect 2 Class III Directors to serve until the 2025 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified, the 2 nominees who received the highest number of affirmative votes were Dr. Anish Bhatnagar and William G. Harris, who are approved by a majority of the shares present in person or by proxy. With regard to Proposal 2, the appointment of Marcum LLP to act as the company's independent auditor for the fiscal year ending December 31, 2022, has been ratified by a majority of the shares present in person or by proxy. With regards to Proposal 3, the named executive compensation, has been approved on an advisory basis by a majority of the shares present in person or by proxy. With regards to Proposal 4, the plurality of the shares present in person or by proxy, has, on an advisory basis, selected every 1 year as the desired frequency of the advisory votes on named executive compensation. And with regard to Proposal 5, amending the company's charter to effect the reverse split of Soleno's common stock at a ratio of 1 for 15, the proposal has been approved by a majority of the shares present in person or by proxy. These are the preliminary results of voting. The final count may vary following final examination of the proxies and ballots. Final results of voting, including any balance and proxies recorded during this meeting, will be set forth in the report of the Inspector of Election and will be included in the minutes of the meeting. The final results will also be reported in our reports filed with the SEC.

Thank you, Steve. This Annual Meeting of Stockholders is now adjourned. Thank you for your attendance. And I want to thank all of you for attending today's meeting and for the interest you have shown in the affairs of your company. We very much appreciate your attendance. And as always, thank you for your support.