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•	develop a commercial organization capable of sales, marketing and distribution of any products for which we obtain marketing approval in markets where we intend to commercialize independently;

•	achieve market acceptance of our current and future products, if any;

•	set a commercially viable price for our current and future products, if any;

•	establish and maintain supply and manufacturing relationships with reliable third parties, and ensure adequate and legally compliant manufacturing to maintain that supply;

•	obtain coverage and adequate reimbursement from third-party payors, including government and private payors;

•	find suitable global and U.S. distribution partners to help us market, sell and distribute our approved products in other markets;

•	complete and submit applications to, and obtain regulatory approval from, foreign regulatory authorities;

•	complete development activities successfully and on a timely basis;

•	establish, maintain and protect our intellectual property rights and avoid third-party patent interference or patent infringement claims; and

•	attract, hire and retain qualified personnel.

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•	the cost and risk of initiating sales and marketing activities;

•	the timing and cost of, and level of investment in, research and development activities relating to our planned products, which will change from time to time;

•	our ability to enroll patients in clinical trials and the timing of enrollment;

•	the cost of manufacturing our products may vary depending on FDA and other regulatory requirements, the quantity of production and the terms of our agreements with manufacturers;

•	expenditures that we will or may incur to acquire or develop additional planned products and technologies;

•	the design, timing and outcomes of clinical studies;

•	changes in the competitive landscape of our industry, including consolidation among our competitors or potential partners;

•	any delays in regulatory review or approval in the U.S., or, if applicable, globally, of any of our planned products;

•	the level of demand for our products may fluctuate significantly and be difficult to predict;

•	the risk/benefit profile, cost and reimbursement policies with respect to our future products, if approved, and existing and potential future drugs that compete with our planned products;

•	competition from existing and potential future offerings that compete with our products;

•	our ability to commercialize our products inside and outside of the U.S., either independently or working with third parties;

•	our ability to establish and maintain collaborations, licensing or other arrangements;

•	our ability to adequately support future growth;

•	potential unforeseen business disruptions that increase our costs or expenses;

•	future accounting pronouncements or changes in our accounting policies; and

•	the changing and volatile global economic environment.

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•	the cost of activities and added personnel associated with the commercialization of our products, including marketing, manufacturing, and distribution;

•	the cost to manufacture our products on a larger scale;

•	the degree and rate of market acceptance of our products, and the revenue that we are able to collect as a result;

•	our ability to set a commercially attractive price for our products, and our customers’ perception of the value relative to the prices we set;

•	the timing of, and costs involved in, seeking and obtaining approvals from the FDA and other regulatory authorities for our products;

•	our ability to obtain and maintain partners on attractive economic terms, or engage in commercial sales of our products on our own or through distributors, or maintain existing distributors;

•	the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights and/or the loss of those rights;

•	our ability to enter into distribution, collaboration, licensing, commercialization or other arrangements and the terms and timing of such arrangements;

•	the emergence of competing technologies or other adverse market developments;

•	the costs of attracting, hiring and retaining qualified personnel;

•	unforeseen developments during our clinical trials;

•	unforeseen changes in healthcare reimbursement for any of our approved products;

•	our ability to maintain commercial scale manufacturing capacity and capability with a commercially acceptable cost structure;

•	unanticipated financial resources needed to respond to technological changes and increased competition;

•	enactment of new legislation or administrative regulations;

•	the application to our business of new regulatory interpretations;

•	claims that might be brought in excess of our insurance coverage;

•	the failure to comply with regulatory guidelines; and

•	the uncertainty in industry demand.

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•	exposure to unknown and contingent liabilities;

•	disruption of our business and diversion of our management's time and attention in order to develop acquired products, product candidates or technologies;

•	incurrence of substantial debt or dilutive issuances of equity securities to pay for acquisitions;

•	higher than expected acquisition and integration costs;

•	the timing and likelihood of payment of milestones or royalties;

•	write-downs of assets or goodwill or impairment charges;

•	increased operating expenditures, including additional research, development and sales and marketing expenses;

•	increased amortization expenses;

•	difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel; and

•	impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership.

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•	obtain a sufficiently broad label that would not unduly restrict patient access;

•	receipt of marketing approvals for DCCR in the E.U. and U.S.;

•	building an infrastructure capable of supporting product sales, marketing, and distribution of DCCR in territories where we pursue commercialization directly;

•	establishing commercial manufacturing arrangements with third party manufacturers;

•	establishing commercial distribution agreements with third party distributors;

•	launching commercial sales of DCCR, if and when approved, whether alone or in collaboration with others;

•	acceptance of DCCR, if and when approved, by patients, the medical community, and third party payors;

•	the regulatory approval pathway that we pursue for DCCR in the United States;

•	effectively competing with other therapies;

•	a continued acceptable safety profile of DCCR following approval;

•	obtaining and maintaining patent and trade secret protection and regulatory exclusivity;

•	protecting our rights in our intellectual property portfolio; and

•	obtaining a commercially viable price for our products.

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•	our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

•	the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe DCCR or any future products;

•	the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines;

•	unforeseen costs and expenses associated with creating an independent sales and marketing organization; and

•	efforts by our competitors to commercialize products at or about the time when our product candidates would be coming to market.

•	generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;

•	obtain regulatory approval, or feedback on trial design, to commence a trial;

•	identify, recruit and train suitable clinical investigators;

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•	reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites;

•	obtain and maintain IRB approval at each clinical trial site;

•	identify, recruit and enroll suitable patients to participate in a trial;

•	have a sufficient number of patients complete a trial or return for post-treatment follow-up;

•	ensure clinical investigators observe trial protocol or continue to participate in a trial;

•	address any patient safety concerns that arise during the course of a trial;

•	address any conflicts with new or existing laws or regulations;

•	have a sufficient number of clinical trial sites to conduct the trials;

•	timely manufacture sufficient quantities of product candidate for use in clinical trials; or

•	raise sufficient capital to fund a trial.

•	our inability to satisfactorily demonstrate that the product candidates are safe and effective for the requested indication;

•	the FDA’s disagreement with our trial protocol or the interpretation of data from preclinical studies or clinical trials;

•	the population studied in the clinical trial may not be sufficiently broad or representative to assess safety in the full population for which we seek approval;

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•	our inability to demonstrate that clinical or other benefits of our product candidates outweigh any safety or other perceived risks;

•	the FDA’s determination that additional preclinical or clinical trials are required;

•	the FDA’s non-approval of the formulation, labeling or the specifications of our product candidates;

•	the FDA’s failure to accept the manufacturing processes or facilities of third-party manufacturers with which we contract; or

•	the potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval.

•	the efficacy and potential advantages compared to alternative treatments;

•	the prevalence and severity of any side effects;

•	the ability to offer our product candidates for sale at competitive prices;

•	convenience and ease of administration compared to alternative treatments;

•	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•	the strength of marketing and distribution support and timing of market introduction of competitive products;

•	publicity concerning our products or competing products and treatments; and

•	sufficient third party coverage or reimbursement.

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•	the outcomes of clinical utility studies of such products in collaboration with key thought leaders to demonstrate our products’ value in informing important medical decisions such as treatment selection;

•	the success of our distribution partners;

•	whether healthcare providers believe such tests provide clinical utility;

•	whether the medical community accepts that such tests are sufficiently sensitive and specific to be meaningful in patient care and treatment decisions; and

•	whether hospital administrators, health insurers, government health programs and other payors will cover and pay for such tests and, if so, whether they will adequately reimburse us.

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•	establishment of commercially viable pricing, and obtaining approval for adequate reimbursement from third-party and government payors;

•	our ability, or that of third-party manufacturers that we may retain, to manufacture quantities of Serenz using commercially viable processes at a scale sufficient to meet anticipated demand and reduce our cost of manufacturing, and that are compliant with cGMP regulations;

•	our success in educating physicians and patients about the benefits, administration and use of Serenz;

•	the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;

•	acceptance of Serenz as safe and effective by patients, caregivers and the medical community; and

•	a continued acceptable safety profile of Serenz following approval.

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•	clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical studies or abandon product development programs;

•	the number of patients required for clinical studies may be larger than we anticipate, enrollment in these clinical studies may be insufficient or slower than we anticipate or patients may drop out of these clinical studies at a higher rate than we anticipate;

•	the cost of clinical studies or the manufacturing of our planned products may be greater than we anticipate;

•	third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

•	we might have to suspend or terminate clinical studies of our planned products for various reasons, including a finding that our planned products have unanticipated serious side effects or other unexpected characteristics or that the patients are being exposed to unacceptable health risks;

•	regulators may not approve our proposed clinical development plans;

•	regulators or independent institutional review boards, or IRBs, may not authorize us or our investigators to commence a clinical study or conduct a clinical study at a prospective study site;

•	regulators or IRBs may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; and

•	the supply or quality of our planned products or other materials necessary to conduct clinical studies of our planned products may be insufficient or inadequate.

•	be delayed in obtaining marketing approval for our planned products;

•	not obtain marketing approval at all;

•	obtain approval for indications that are not as broad as intended;

•	have the product removed from the market after obtaining marketing approval;

•	be subject to additional post-marketing testing requirements; or

•	be subject to restrictions on how the product is distributed or used.

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•	the prevalence and severity of any side effects;

•	their effectiveness and potential advantages compared to alternative treatments;

•	the price we charge for our planned products;

•	the willingness of physicians to change their current treatment practices;

•	convenience and ease of administration compared to alternative treatments;

•	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•	the strength or effectiveness of marketing and distribution support or partners; and

•	the availability of third-party coverage or reimbursement.

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•	we may be forced to recall such product and suspend the marketing of such product;

•	regulatory authorities may withdraw their approvals of such product;

•	regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such products;

•	the FDA or other regulatory bodies may issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such product;

•	the FDA may require the establishment or modification of Risk Evaluation Mitigation Strategies or a comparable foreign regulatory authority may require the establishment or modification of a similar strategy that may, for instance, restrict distribution of our products and impose burdensome implementation requirements on us;

•	we may be required to change the way the product is administered or conduct additional clinical trials;

•	we could be sued and held liable for harm caused to subjects or patients;

•	we may be subject to litigation or product liability claims; and

•	our reputation may suffer.

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•	decreased demand for any planned products that we may develop;

•	injury to our reputation and significant negative media attention;

•	withdrawal of patients from clinical studies or cancellation of studies;

•	significant costs to defend the related litigation and distraction to our management team;

•	substantial monetary awards to patients;

•	loss of revenue; and

•	the inability to commercialize any products that we may develop.

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•	multiple, conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

•	potential failure by us or our distributors to obtain regulatory approvals for the sale or use of our current products and our planned future products in various countries;

•	difficulties in managing foreign operations;

•	complexities associated with managing government payor systems, multiple payor-reimbursement regimes or self-pay systems;

•	logistics and regulations associated with shipping products, including infrastructure conditions and transportation delays;

•	limits on our ability to penetrate international markets if our distributors do not execute successfully;

•	financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable, and exposure to foreign currency exchange rate fluctuations;

•	reduced protection for intellectual property rights, or lack of them in certain jurisdictions, forcing more reliance on our trade secrets, if available;

•	natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and

•	failure to comply with the Foreign Corrupt Practices Act, including its books and records provisions and its anti-bribery provisions, by maintaining accurate information and control over sales activities and distributors’ activities.

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•	collaborators have significant discretion in determining the efforts and resources that they will apply to any such collaborations;

•	collaborators may not pursue development and commercialization of our products, or may elect not to continue or renew efforts based on clinical study results, changes in their strategic focus for a variety of reasons, potentially including the acquisition of competitive products, availability of funding, and mergers or acquisitions that divert resources or create competing priorities;

•	collaborators may delay clinical studies, provide insufficient funding for a clinical study program, stop a clinical study, abandon a product, repeat or conduct new clinical studies or require a new engineering iterations of a product for clinical testing;

•	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products;

•	a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution;

•	collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

•	disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our products or that results in costly litigation or arbitration that diverts management attention and resources;

•	collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable products; and

•	collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.

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•	managing our clinical trials effectively, which we anticipate being conducted at numerous clinical sites;

•	identifying, recruiting, maintaining, motivating and integrating additional employees with the expertise and experience we will require;

•	managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties;

•	managing additional relationships with various strategic partners, suppliers and other third parties;

•	improving our managerial, development, operational and finance reporting systems and procedures; and

•	expanding our facilities.

•	different regulatory requirements for device approvals in foreign countries;

•	reduced protection for intellectual property rights;

•	unexpected changes in tariffs, trade barriers and regulatory requirements;

•	economic weakness, including inflation or political instability in particular foreign economies and markets;

•	compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

•	foreign taxes, including withholding of payroll taxes;

•	foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

•	workforce uncertainty in countries where labor unrest is more common than in the U.S.;

•	production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

•	business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires

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•	Others may be able to make products that are similar to our current and planned products, but that are not covered by claims in our patents;

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•	The original filers of our patents that we developed or purchased might not have been the first to make the inventions covered by the claims contained in such patents;

•	We might not have been the first to file patent applications covering an invention;

•	Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

•	Pending patent applications may not lead to issued patents;

•	Issued patents may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

•	Our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

•	We may not develop or in-license additional proprietary technologies that are patentable; and

•	The patents of others may have an adverse effect on our business.

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•	warning letters;

•	civil or criminal penalties and fines;

•	injunctions;

•	suspension or withdrawal of regulatory approval;

•	suspension of any ongoing clinical studies;

•	voluntary or mandatory product recalls and publicity requirements;

•	refusal to accept or approve applications for marketing approval of new drugs or biologics or supplements to approved applications filed by us;

•	restrictions on operations, including costly new manufacturing requirements; or

•	seizure or detention of our products or import bans.

•	a planned product may not be deemed safe or effective;

•	FDA officials may not find the data from preclinical studies and clinical studies sufficient;

•	the FDA might not approve our or our third-party manufacturer’s processes or facilities; or

•	the FDA may change its approval policies or adopt new regulations.

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•	imposes a tax of 2.3% on the retail sales price of medical devices sold after December 31, 2012;

•	could result in the imposition of injunctions;

•	requires collection of rebates for drugs paid by Medicaid managed care organizations; and

•	requires manufacturers to participate in a coverage gap discount program, under which they must agree to offer

•	50% point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

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•	our ability to set a price that we believe is fair for our products;

•	our ability to generate revenue and achieve or maintain profitability; and

•	the availability of capital.

•	the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or providing remuneration, directly or indirectly, in

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•	indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs;

•	the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government, and which may apply to entities like us which provide coding and billing advice to customers;

•	federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

•	the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical supplies to report to the HHS information related to physician payments and other transfers of value and physician ownership and investment interests;

•	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and

•	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

•	our ability to successfully commercialize, and realize significant revenues from sales of our products;

•	the success of competitive products or technologies; results of clinical studies of our products or those of our competitors;

•	regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products;

•	introductions and announcements of new products by us, our commercialization partners, or our competitors, and the timing of these introductions or announcements;

•	actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms;

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•	variations in our financial results or those of companies that are perceived to be similar to us;

•	the success of our efforts to acquire or in-license additional products or planned products;

•	developments concerning our collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners;

•	developments concerning our ability to bring our manufacturing processes to scale in a costeffective manner;

•	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

•	developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products;

•	our ability or inability to raise additional capital and the terms on which we raise it;

•	the recruitment or departure of key personnel;

•	changes in the structure of healthcare payment systems;

•	market conditions in the pharmaceutical and biotechnology sectors;

•	actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally;

•	trading volume of our common stock;

•	sales of our common stock by us or our stockholders;

•	general economic, industry and market conditions; and

•	the other risks described in this “Risk Factors” section.

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•	our Board of Directors is divided into three classes with staggered three-year terms which may delay or prevent a change of our management or a change in control;

•	our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which will prevent stockholders from being able to fill vacancies on our Board of Directors;

•	our stockholders are not able to act by written consent or call special stockholders’ meetings; as a result, a holder, or holders, controlling a majority of our capital stock cannot take certain actions other than at annual stockholders’ meetings or special stockholders’ meetings called by our Board of Directors, the chairman of our board, the chief executive officer or the president;

•	our certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

•	amendments of our certificate of incorporation and bylaws require the approval of 66 2/3% of our outstanding voting securities;

•	our stockholders are required to provide advance notice and additional disclosures in order to nominate individuals for election to our Board of Directors or to propose matters that can be acted upon at a

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•	our Board of Directors are able to issue, without stockholder approval, shares of undesignated preferred stock, which makes it possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.

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•	the market price per share of the common stock after the Reverse Split will rise in proportion to the reduction in the number of pre-split shares of common stock outstanding before the Reverse Split;

•	the Reverse Split will result in a per share price that will attract brokers and investors, including institutional investors, who do not trade in lower priced stocks;

•	the Reverse Split will result in a per share price that will increase our ability to attract and retain employees and other service providers;

•	the market price per share post Revise Split will remain in excess of the $1.00 minimum closing bid price as required by the Nasdaq Marketplace Rules or that we would otherwise meet the requirements of Nasdaq for continued inclusion for trading on The Nasdaq Global Select Market or The Nasdaq Capital Market; and

•	the Reverse Split will increase the trading market for our common stock, particularly if the stock price does not increase as a result of the reduction in the number of shares of common stock available in the public market.

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•	the timing and the success of additional approvals of any of our products pursuant to our clinical and regulatory efforts;

•	our ability to successfully build a distribution network and commercial infrastructure for our products;

•	whether the results of the trials will be sufficient to support domestic or global regulatory approvals for any of our products;

•	our ability to obtain and/or maintain regulatory approval of our products;

•	our expectation that our existing capital resources will be sufficient to enable us to successfully meet the capital requirements for all of our current and future products;

•	the benefits of the use of our products;

•	the projected dollar amounts of future sales of established and novel diagnostics for neonatal hemolysis;

•	our ability to successfully commercialize any products;

•	the rate and degree of market acceptance of our products;

•	our expectations regarding government and third-party payor coverage and reimbursement;

•	our ability to manufacture our products in conformity with the applicable regulatory requirements and to scale up manufacturing of our products to commercial scale;

•	our ability to compete with companies that may enter the market with products that compete with our products;

•	our reliance on third parties to conduct clinical studies;

•	our reliance on third-party contract manufacturers to manufacture and supply our products for us;

•	our reliance on our collaboration partners’ performance over which we do not have control;

•	our ability to retain and recruit key personnel, including development of a sales and marketing function;

•	our ability to obtain and maintain intellectual property protection for our products;

•	our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing;

•	our expectations regarding the time during which we will be an emerging growth company under the Jobs Act;

•	our ability to identify, develop, acquire and in-license additional products;

•	our ability to successfully establish and successfully maintain appropriate collaborations and derive significant revenue from those collaborations;

•	our financial performance; and

•	developments and projections relating to our competitors or our industry.

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•	contract manufacturers in connection with the production of clinical trial materials;

•	contract research organizations and other service providers in connection with clinical studies;

•	investigative sites in connection with clinical studies;

•	vendors in connection with preclinical development activities; and

•	professional service fees for consulting and related services.

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•	Expected volatility: We calculate the estimated volatility rate based on a peer index of common stock of comparable companies.

•	Expected term: We do not believe we are able to rely on our historical exercise and post-vesting termination activity to provide accurate data for estimating the expected term for use in estimating the fair value-based measurement of our options. Therefore, we have opted to use the “simplified method” for estimating the expected term of options.

•	Risk-free rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity.

•	Expected dividend yield: We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

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•	the rate of progress in the commercialization of our products and the generation of revenue from product sales;

•	the degree and rate of market acceptance of any products launched by us or future partners;

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•	the cost of commercializing our products, including the costs of sales, marketing, and distribution;

•	the costs of developing our anticipated internal sales and marketing capabilities;

•	the cost of preparing to manufacture our products on a larger scale;

•	the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

•	our ability to enter into additional collaboration, licensing, commercialization or other arrangements and the terms and timing of such arrangements;

•	the emergence of competing technologies or other adverse market developments; and,

•	the cost of clinical trials for Cluster Headache, TN and Serenz.

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•	it must be intended for the treatment, prevention or diagnosis of a disease that is life-threatening or chronically debilitating;

•	the prevalence of the condition in the E.U. must not be more than 5 in 10,000 or it must be unlikely that marketing of the medicine would generate sufficient returns to justify the investment needed for its development; and

•	no satisfactory method of diagnosis, prevention or treatment of the condition concerned can be authorized, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.

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•	Rapid relief

•	Relief from all nasal congestion, sneezing and itchy/runny nose

•	Non-sedating

•	Tolerant side effect profile

•	Acts locally in the nasal cavity

•	Non-steroidal

•	No known long-lasting side effects

•	Usable on an as-needed basis

•	Compact, handheld design

•	SAR-2005-This was the first randomized, placebo-controlled trial in subjects with SAR. Symptomatic subjects used a single application of active (nasal CO2) or placebo 60 sec/nostril one time. Symptoms were measured just before and at several time points after the treatment. Statistically significant improvements in symptoms were noted as early as 10 minutes.

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C211 (PAR)-This was a randomized, placebo-controlled trial in subjects with PAR. Symptomatic subjects used a single application of active or placebo. Subjects were assigned to one of six arms: CO2 at 5 mL/sec for 10 sec/nostril, CO2 at 10 mL/sec for 10 sec/nostril, CO2 at 5 mL/sec for 30 sec/nostril, CO2 at 10 mL/sec for 30 sec/nostril, placebo for 10 sec/nostril, and placebo for 30 sec/nostril in a 2:2:2:2:1:1 ratio. Symptoms were measured just before and at several time points after use. Statistically significant improvements in symptoms were noted at 30 minutes in the CO2 at 10 mL/sec for 10 sec/nostril group. There was sustained (4-6 hours) relief of symptoms in this arm.

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C216 (SAR)-This was the first multi-application, randomized, placebo-controlled trial in which the nasal CO2 device was used as needed in subjects with SAR. Subjects applied active or placebo 10 sec/nostril only as needed up to six times a day for 14 days. Symptoms were measured just before and at 30 minutes after each use during the 14-day study period. Statistically significant improvements (p<0.0001) in symptoms were noted at 30 minutes after each use during the 14-day treatment period. These results show that the nasal CO2 device is effective for the as needed use of SAR symptoms. The effect is rapid and the effect size is large.

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•	Focus efforts on growing the volume of tests performed and associated consumables used. We plan to focus specifically on sales to the neonatal intensive care unit, or NICU, well-baby nursery, and labor/delivery units within each hospital.

•	Establish and engage a network of distributors in the E.U., as well as elsewhere in the world. We may establish continuing operations at a location in the E.U. to ensure close coordination and effective execution of the CoSense sales and marketing plan in the E.U.

•	Price the CoSense device at a level that allows hospitals to purchase it without protracted review via a “capital purchase committee” or analogous body.

•	Price the PSS consumable sampling sets at a price that is competitive with the current costs of performing the Coombs Test and other associated invasive assays. We believe that this cost offset, complemented by potential improvements in discharge planning and clinical outcomes, will provide hospital decision-makers with a compelling economic case for adoption of CoSense.

•	Build awareness of the AAP treatment guidelines, and of the benefits of CoSense, via medical education efforts to key clinical audiences, including neonatologists, pediatricians, obstetricians, and pediatric nurses.

•	Collaborate with key specialty societies, including the AAP, Pediatric Academic Societies, American Academy of Family Physicians, or AAFP, and patient advocacy groups

•	Support clinical trials and publications that expand the base of evidence supporting broad adoption of CoSense.

•	Identification of full breaths that follow a normal pattern, also known as “physiologically representative” breaths. Our platform can identify these breaths even if the patient is breathing very rapidly, a capability that is particularly relevant in infants.

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•	Capture of individual exhaled breaths, and segmentation of the breath into different components such as “end-tidal”, “upper airway”, and “lower airway”. This may allow the localization of the source of a given analyte to a specific anatomic area.

•	Ability to move a specific micro-liter component of breath to a sensor module. When combined, these capabilities provide a novel patent protected platform for non-invasive detection of various analytes.

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•	Focus efforts on growing the volume of consumables used as our universal circuit will work with all installed base devices of NFI and its competitors.

•	Establish and engage a network of distributors in the E.U. and other international markets as conditions warrant.

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•	A large family of salts including diazoxide choline, the active ingredient in DCCR and all pharmaceutical formulations of those salts

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•	Specific polymorphs (specific crystalline forms) of salts of diazoxide and all pharmaceutical formulations of those polymorphs

•	Methods of manufacture of diazoxide choline and specific crystalline forms

•	Methods to treat various diseases including a number of aspects of PWS and other rare diseases with DCCR

•	Pharmaceutical formulations of diazoxide

•	Methods to treat various diseases including a number of aspects of PWS and other rare diseases with diazoxide

•	Methods to treat various rare diseases including PWS with KATP channel agonists

•	use of Sensalyze Technology in various medical applications to test and screen for a variety of medical conditions;

•	breath selection, algorithmically and physically, to tailor the analysis to the underlying medical condition;

•	detection and storage of discrete portions of a breath;

•	diversion and isolation of gases to enable measurement within a breath pattern;

•	specific compositions of valving and pumps to route airflow in a tightly controlled manner;

•	microfluidic collection methods for increasing the precision of measurement of small volumes of gas; and

•	various methods for arrangement and specification of components to enhance precision and compensate for factors that cause inaccurate measurements.

•	gas dispensing devices, including various nosepiece configurations, and features for providing consistent doses of gas;

•	methods for delivering therapeutic gases to patients;

•	the treatment of various medical conditions via delivery of therapeutic gases to the nasal cavity; and

•	combined delivery of gases with other therapeutic agents.

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•	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•	fines, warning letters or holds on post-approval clinical trials;

•	refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals;

•	product seizure or detention, or refusal to permit the import or export of products; and

•	injunctions or the imposition of civil or criminal penalties.

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•	the submission of false claims or false information to government programs;

•	deceptive or fraudulent conduct;

•	excessive or unnecessary services or services at excessive prices; and

•	prohibitions in defrauding private sector health insurers.

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(1)	Member of the audit committee.

(2)	Member of the compensation committee.

(3)	Member of the nominating and corporate governance committee.

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•	The Class I directors are Drs. Engleman and Shah and Mr. Dalal, and their terms will expire at our annual meeting of stockholders to be held later in 2018;

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•	The Class II directors are Drs. Kirnon, Glasheen and Engelsen, and their terms will expire at our annual meeting of stockholders to be held in 2019; and

•	The Class III directors are Drs. Bhatnagar, Collinson and Mario and Mr. Harris, and their terms will expire at our annual meeting of stockholders to be held in 2017.

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(1)

The amounts in this column reflect the aggregate grant date fair value of each option award granted during the fiscal year, computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 6 and Note 9 to our financial statements included in this prospectus. The table below lists the aggregate number of shares and additional information with respect to the outstanding option awards held by each of our non-employee directors.

(2)	Dr. Engelman joined our Board in June 2001. During 2016, Dr. Engelman was granted one option to purchase 27,083 shares outstanding. This option vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, subject to continued service through each such date.

(3)	Dr. Mario joined our Board in August 2007. During 2016, Dr. Mario was granted one option to purchase 27,083 shares outstanding. This option vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, subject to continued service through each such date.

(4)	Dr. Engelsen joined our Board in April 2004. During 2016, Dr. Engelsen was granted one option to purchase 27,083 shares outstanding. This option vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, subject to continued service through each such date.

(5)	Dr. Kirnon joined our Board in July 2002. During 2016, Dr. Kirnon was granted one option to purchase 27,083 shares outstanding. This option vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, subject to continued service through each such date.

(6)	Dr. Alexander joined our Board in June 2008 and resigned from our Board on March 28, 2016.

(7)	Mr. Harris joined our Board in June 2014. During 2016, Mr. Harris was granted one option to purchase 27,083 shares outstanding. This option vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, subject to continued service through each such date.

(8)

Mr. Dalal joined our Board in April 2016. During 2016, Mr. Dalal was granted two options to purchase an aggregate of 47,083 shares of our common stock outstanding, comprised of an option to purchase 27,083 shares, which vests as to 100% of the shares on the earlier of the 12 month anniversary of the date of grant or the day before the next annual meeting of stockholders, and an option to purchase 20,000 shares, which vests as to 1/48th of the shares each month, in each case subject to continued service through each such date in June 2001.

•	The chair or executive chair of our board of directors will receive an annual cash retainer of $25,000 for such service, paid quarterly;

•	The chairperson of our audit committee will receive an annual cash retainer of $15,000 for such service and each other member of the audit committee will receive an annual cash retainer of $7,500 for such service, paid quarterly;

•	The chairperson of our compensation committee will receive an annual cash retainer of $10,000 for such service and each other member of the compensation committee will receive an annual cash retainer of $5,000 for such service, paid quarterly; and

•	The chairperson of our nominating and corporate governance committee will receive an annual cash retainer of $7,000 for such service and each other member of the nominating and corporate governance committee will receive an annual cash retainer of $3,500, paid quarterly.

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•	Anish Bhatnagar, M.D., our Chief Executive Officer, President and Chief Operating Officer;

•	David D. O’Toole, our Senior Vice President, Chief Financial Officer; and

•	Anthony Wondka, our Senior Vice President, Research & Development.

(1)

The amounts in this column reflect the aggregate grant date fair value of each option award granted during the fiscal years ended December 31, 2016 and 2015, as applicable, computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in the Notes to our audited financial statements for the year ended December 31, 2015 and December 31, 2016.

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If Dr. Bhatnagar’s termination or resignation occurs prior to six (6) months before a Change in Control (as defined in Dr. Bhatnagar’s employment agreement) of the Company: (i) continuing payments of severance pay at a rate equal to Dr. Bhatnagar’s base salary rate for fifteen (15) months from the date of such termination without Cause or resignation for Good Reason; (ii) if Dr. Bhatnagar elects continuation coverage pursuant to the Consolidated Budget Reconciliation Act of 1985 (“COBRA”), then the Company will reimburse Dr. Bhatnagar on the last day of each month for a period ending fifteen (15) months after Dr. Bhatnagar’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Dr. Bhatnagar’s termination); and (iii) twenty-five percent (25%) of any unvested equity awards held by Dr. Bhatnagar as of the date of such termination without Cause or resignation for Good Reason shall immediately vest and become fully exercisable;

•

If such termination or resignation occurs within six (6) months prior to, or twelve (12) months following, a Change in Control of the Company: (i) continuing payments of severance pay at a rate equal to Dr. Bhatnagar’s base salary rate for eighteen (18) months from the date of such termination without Cause or resignation for Good Reason; (ii) if Dr. Bhatnagar elects continuation coverage pursuant to COBRA, then the Company will reimburse Dr. Bhatnagar on the last day of each month for a period ending eighteen (18) months after Dr. Bhatnagar’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Dr. Bhatnagar’s termination); (iii) a payment equal to one hundred fifty percent (150%) the annual target bonus opportunity for the year in which Dr. Bhatnagar is terminated without Cause or resigns for Good Reason; and (iv) one hundred percent (100%) of any unvested equity awards held by Dr. Bhatnagar as of the date of such termination without Cause or resignation for Good Reason shall immediately vest and become fully exercisable; and

•	If Dr. Bhatnagar is terminated without Cause or resigns for Good Reason during the term of Dr. Bhatnagar’s employment agreement, then Dr. Bhatnagar’s shall have one y.ear following such termination without Cause or resignation for Good Reason to exercise any then vested options.

•

if Mr. O’Toole’s termination or resignation occurs prior to three (3) months before a Change in Control (as defined in Mr. O’Toole’s employment agreement) of the Company: (i) continuing payments of severance pay at a rate equal to Mr. O’Toole’s base salary rate for six (6) months from the date of such termination without Cause or resignation for Good Reason; and (ii) if Mr. O’Toole elects continuation coverage pursuant to COBRA, then the Company will reimburse Mr. O’Toole on the last day of each month for a period ending six (6) months after Mr. O’Toole’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Mr. O’Toole’s termination); and

•

If Mr. O’Toole’s termination or resignation occurs within three (3) months prior to, or six (6) months following, a Change in Control of the Company: (i) continuing payments of severance pay at a rate equal to Mr. O’Toole’s base salary rate for twelve (12) months from the date of such termination without Cause or resignation for Good Reason; (ii) if Mr. O’Toole elects continuation coverage pursuant to COBRA, then the Company will reimburse Mr. O’Toole on the last day of each month for a period ending twelve (12) months after Mr. O’Toole’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Mr. O’Toole’s termination); (iii) a payment equal to one hundred percent (100%) the annual target bonus opportunity for the year in which Mr. O’Toole is terminated without Cause or resigns for Good Reason; and (iv) one hundred

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•

If Mr. Wondka’s termination or resignation occurs prior to three (3) months before a Change in Control (as defined in Mr. Wondka’s employment agreement) of the Company: (i) continuing payments of severance pay at a rate equal to Mr. Wondka’s base salary rate for six (6) months from the date of such termination without Cause or resignation for Good Reason; and (ii) if Mr. Wondka elects continuation coverage pursuant to COBRA, then the Company will reimburse Mr. Wondka on the last day of each month for a period ending six (6) months after Mr. Wondka’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Mr. Wondka’s termination); and

•

If Mr. Wondka’s termination or resignation occurs within three (3) months prior to, or six (6) months following, a Change in Control of the Company: (i) continuing payments of severance pay at a rate equal to Mr. Wondka’s base salary rate for twelve (12) months from the date of such termination without Cause or resignation for Good Reason; (ii) if Mr. Wondka elects continuation coverage pursuant to COBRA, then the Company will reimburse Mr. Wondka on the last day of each month for a period ending twelve (12) months after Mr. Wondka’s termination date for the COBRA premiums paid during such period for such coverage (at the coverage levels in effect immediately prior to Mr. Wondka’s termination); (iii) a payment equal to one hundred percent (100%) the annual target bonus opportunity for the year in which Mr. Wondka is terminated without Cause or resigns for Good Reason; and (iv) one hundred percent (100%) of any unvested equity awards held by Mr. Wondka as of the date of such termination without Cause or resignation for Good Reason shall immediately vest and become fully exercisable.

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(1)	The options listed are fully vested or are subject to an early exercise right and may be exercised in full prior to vesting of the shares underlying such options. Vesting of all options is subject to continued service on each vesting date.

(2)	The shares subject to the stock option vest over a four-year period as follows: 50% of the shares underlying the options vest immediately on the vesting commencement date, and thereafter 1/48th of the shares vest each month, subject to the officer’s continued service to us through each vesting date.

(3)	The shares subject to the stock option vest over a four-year period as follows: 1/48th of the shares vest each month beginning on the vesting commencement date, subject to the officer’s continued service to us through each vesting date.

(4)	The shares subject to the stock option vest over a four-year period as follows: 25% of the shares underlying the option vest immediately on the vesting commencement date and thereafter 1/48th of the shares vest each month, subject to the officer’s continued service to us through each vesting date.

(5)	The shares subject to the stock option vest over a four-year period as follows: 25% of the shares underlying the option vest on the one-year anniversary of the vesting commencement date, and thereafter 1/36th of the shares vest each month, subject to the officer’s continued service to us through each vesting date.

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•	1,118,714 shares;

•	4.0% of the outstanding shares of common stock as of the last day of our immediately preceding year; or

•	such other amount as our board of directors may determine.

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•	1.0% of the outstanding shares of our common stock on the first day of such year;

•	279,680 shares; or

•	such amount as determined by our board of directors.

•	immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of our capital stock; or

•	hold rights to purchase stock under all of our employee stock purchase plans that accrue at a rate that exceeds $25,000 worth of stock for each calendar year.

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•

Entities affiliated with Vivo Ventures, which are affiliated with Drs. Engleman and Shah, purchased 1,410,461 shares of common stock in the Concurrent Financing (approximately 16.9% of the shares of common stock issued in the Concurrent Financing) and received 5,827,818 shares (approximately 30.81% of the shares of common stock issued to Essentialis stockholders in the Merger). Additionally, Dr. Shah received a portion of the Merger consideration as a participant in Essentialis’ management carve-out plan.

•	Entities affiliated with Technology Partners, which is affiliated with Dr. Glasheen purchased 1,332,898 shares of common stock in the Concurrent Financing (approximately 16.0 % of the shares of common stock issued in the Concurrent Financing) and received 5,717,793 shares (approximately 30.23% of the shares of common stock issued to Essentialis stockholders in the Merger).

•	Entities affiliated with Forward Ventures, which is affiliated with Dr. Collinson purchased 1,423,306 shares of common stock in the Concurrent Financing (approximately 17.08 % of the shares of common stock issued in the Financing) and received 5,828,422 shares (approximately 30.81% of the shares of common stock issued to Essentialis stockholders in the Merger).

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•	each of our directors;

•	each of our named executive officers;

•	all of our current directors and executive officers as a group; and

•	each person, or group of affiliated persons, who beneficially owned more than 5% of Soleno Therapeutics, Inc. common stock.

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(1)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, consisting of: (a) 16,674,428 shares of common stock held by Vivo Ventures Fund, V, L.P., consisting of (W) 14,076,263 shares of outstanding Common Stock, of which 7,154,140 shares of Common Stock are being registered as part of this offering, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, (Y) 1,255,019 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017), and (Z) 1,343,146 shares of Common Stock are potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017 and are being registered as part of this offering; (b) 195,918 shares of common stock held by Vivo Ventures V Affiliates Fund, LP., consisting of (W) 165,373 shares of outstanding Common Stock, of which 84,140 shares of Common Stock are being registered as part of this offering, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, (Y) 14,726 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017), and (Z) 15,819 shares of Common Stockare potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017 and are being registered as part of this offering; (c) 231,273 shares of common stock held by BDF IV Annex Fund, L.P., consisting of (W) 227,068 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 4,205 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017); (d) 167,945 shares of common stock held by Biotechnology Development Fund IV, L.P., consisting of (W) 166,943 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 1,002 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017); and (e) 3,093 shares of common stock held by Biotechnology Development Fund IV Affiliates, L.P., consisting of (W) 3,076 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 17 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017). Vivo Ventures V LLC (Vivo V LLC), is the sole general partner of both of Vivo Ventures Fund V, L.P. and Vivo Ventures V Affiliates Fund, L.P. (Vivo V Funds), and may be deemed to beneficially own the common stock of Soleno Therapeutics owned by the Vivo V Funds. Vivo V LLC disclaims beneficial ownership of the shares of Soleno Therapeutics held by each of the Vivo V Funds, except to the extent of its pecuniary interest therein. BioAsia Investments IV, LLC (BAI IV), is the sole general partner of Biotechnology Development Fund IV, LP, Biotechnology Development Fund IV Affiliates, L.P., BDF IV Annex Fund, L.P. (BDF IV Funds) and may be deemed to beneficially own the common stock of Soleno Therapeutics owned by the BDF IV Funds. BAI IV

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(2)

Represents an aggregate of 8,610,835 shares of Common Stock, consisting of (i) 7,251,728 shares of outstanding Common Stock, and (ii) 1,359,107 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones. Stuart Collinson is a managing member of Forward Ventures and has shared voting power over the shares of common stock beneficially owned by Forward Ventures.

(3)

Represents an aggregate of 8,383,652 shares of Common Stock, consisting of (i) 7,050,691 shares of outstanding Common Stock, and (ii) 1,332,961 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones. James Glasheen is one of the managing members of Technology Partners and Technology Affiliates and has shared voting power over the shares of common stock beneficially owned by Technology Partners and Technology Affiliates.

(4)	Represents shares of common stock outstanding, issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 2,791,666 shares of common stock held by Aspire Capital LLC consisting of (W) 2,791,666 shares of outstanding common stock, and (Y) no shares of common stock subject to outstanding options that are vested and exercisable within 60 days of April 12, 2017.

(5)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 2,165,751 shares of common stock held by Dr. Mario, consisting of (W) 1,819,739 shares of outstanding common stock, (X) 77,134 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, (Y) 268,878 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017).

(6)	Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise options or warrants: 1,025,811 shares of common stock held by Dr. Bhatnagar, consisting of (W) 83,419 shares of outstanding common stock, (X) 942,392 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

(7)	Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 125,788 shares of common stock held by Mr. Wondka, all of which are shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

(8)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017: an aggregate of 17,315,739 shares of common stock held by Dr. Engleman, consisting of (Y) the shares held by the Vivo V Funds, the BDF IV Funds and BDF II as set forth above in footnote 1, and (Z) 43,082 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

(9)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of option or warrants: 160,693 shares of common stock held by Dr. Engelsen, consisting of (W) 118,738 shares of outstanding common stock, (X) 40,583 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 1,372 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017).

(10)	Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 57,875 shares of common stock held by Dr. Kirnon, consisting of (W) 14,793 shares of outstanding common stock, and (X) 43,082 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

(11)	Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 75,758 shares of common stock held by Mr. Harris, consisting of (W) 35,175 shares of outstanding common stock and (X) 40,583 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

(12)	Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 239,980 shares of common stock held by Mr. O’Toole, consisting of (W) 45,250 shares of outstanding common stock and (X) 194,730 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017.

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(13)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of options or warrants: 23,598 shares of common stock held by Mr. Dalal, consisting of (W) 17,765 shares of outstanding common stock and (X) 5,833 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017. Rajen Dalal joined our Board on April 15, 2016 and received his initial Board option grant on this date.

(14)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of option or warrants: 121,201 shares of common stock held by Dr. Shah, consisting of (W) 97,117 shares outstanding of common stock, (Y) 1,250 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Z) and (iii) 1,358,965 shares of Common Stock that are potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017.

(15)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of option or warrants: 8,614,630 shares of common stock held by Dr. Collinson, consisting of (W) 2,545 shares outstanding of common stock, (Y) the shares held by Forward Ventures V, LP as set forth above in footnote 3, and (Z) 1,250 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017. Dr. Collinson joined our Board on March 7, 2017 and received his initial Board option grant on this date.

(16)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, upon the exercise of option or warrants: 8,387,480 shares of common stock held by Dr. Glasheen, consisting of (W) 2,578 shares outstanding of common stock, (Y) the shares held by Technology Partners as set forth above in footnote 2, and (Z) 1,250 shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017. Dr. Glasheen joined our Board on March 7, 2017 and received his initial Board option grant on this date.

(17)	In total, 7,136,043 of these shares are attributable to options and warrants currently exercisable or potentially issuable upon the achievement of milestones within 60 days of April 12, 2017.

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•	before such date, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

•

upon closing of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by: (i) persons who are directors and also officers; and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•	on or after such date, the business combination is approved by our board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

•	any merger or consolidation involving the corporation and the interested stockholder;

•	any sale, transfer, pledge or other disposition of ten percent (10%) or more of the assets of the corporation involving the interested stockholder;

•	subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

•	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

•	the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or through the corporation.

•	any breach of the director’s duty of loyalty to the corporation or its stockholders;

•	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

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•	unlawful payments of dividends or unlawful stock repurchases or redemptions; or

•	any transaction from which the director derived an improper personal benefit.

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•	ordinary brokers’ transactions;

•	transactions involving cross or block trades;

•	through brokers, dealers, or underwriters who may act solely as agents;

•	“at the market” into an existing market for the common stock;

•	in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;

•	in privately negotiated transactions; or

•	any combination of the foregoing.

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(1)

Assumes the sale of all shares of common stock registered pursuant to this prospectus, although the selling stockholder is under no obligation known to us to sell any shares of common stock at this time. An aggregate of 32,730,600 shares are being registered in this offering, consisting of (i) 27,250,273 shares that are issued and outstanding, (ii) 4,566,948 shares of Common Stock that are potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017, and (iii) 913,379 shares of Common Stock that are designated holdback shares that are not potentially issuable within sixty days of April 12, 2017.

(2)

Includes an aggregate of 5,843,167 shares of Common Stock issuable within sixty days of April 12, 2017, consisting of (i) 1,276,219 shares of Common Stock that are potentially issuable upon the exercise of outstanding warrants and the vested portion of outstanding options within sixty days of April 12, 2017 and (ii) 4,566,948 shares of Common Stock that are potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017 and which are being registered as part of this offering. The shares excludes 913,379 shares of Common Stock that are designated holdback shares and are being registered as a part of this offering, but are not potentially issuable within sixty days of April 12, 2017.

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(3)	Includes 1,276,219 shares of Common Stock that are potentially issuable upon the exercise of outstanding warrants and the vested portion of outstanding options within sixty days of April 12, 2017.

(4)	Calculated based on 20,337,374 shares outstanding following the offering, based on (i) 47,587,647 shares of common stock outstanding on April 12, 2017, less (ii) 27,250,273 shares that are issued and outstanding and being offered by the Selling Stockholders as part of this offering.

(5)

Represents shares of common stock outstanding or issuable within 60 days of April 12, 2017, consisting of: (a) 16,674,428 shares of common stock held by Vivo Ventures Fund, V, L.P., consisting of (W) 14,076,263 shares of outstanding Common Stock, of which 7,154,140 shares of Common Stock are being registered as part of this offering, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, (Y) 1,255,019 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017), and (Z) 1,343,146 shares of Common Stock are potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017 and are being registered as part of this offering; (b) 195,918 shares of common stock held by Vivo Ventures V Affiliates Fund, LP., consisting of (W) 165,373 shares of outstanding Common Stock, of which 84,140 shares of Common Stock are being registered as part of this offering, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, (Y) 14,726 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017), and (Z) 15,819 shares of Common Stockare potentially issuable upon the achievement of certain milestones within sixty days of April 12, 2017 and are being registered as part of this offering; (c) 231,273 shares of common stock held by BDF IV Annex Fund, L.P., consisting of (W) 227,068 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 4,205 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017); (d) 167,945 shares of common stock held by Biotechnology Development Fund IV, L.P., consisting of (W) 166,943 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 1,002 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017); and (e) 3,093 shares of common stock held by Biotechnology Development Fund IV Affiliates, L.P., consisting of (W) 3,076 shares of outstanding common stock, (X) zero shares of common stock subject to outstanding options that are vested and exercisable within sixty days of April 12, 2017, and (Y) 17 shares of common stock issuable upon the exercise of warrants (assuming an exercise date of April 12, 2017). Vivo Ventures V LLC (Vivo V LLC), is the sole general partner of both of Vivo Ventures Fund V, L.P. and Vivo Ventures V Affiliates Fund, L.P. (Vivo V Funds), and may be deemed to beneficially own the common stock of Soleno Therapeutics owned by the Vivo V Funds. Vivo V LLC disclaims beneficial ownership of the shares of Soleno Therapeutics held by each of the Vivo V Funds, except to the extent of its pecuniary interest therein. BioAsia Investments IV, LLC (BAI IV), is the sole general partner of Biotechnology Development Fund IV, LP, Biotechnology Development Fund IV Affiliates, L.P., BDF IV Annex Fund, L.P. (BDF IV Funds) and may be deemed to beneficially own the common stock of Soleno Therapeutics owned by the BDF IV Funds. BAI IV disclaims beneficial ownership of the shares of Soleno Therapeutics held by each of the BDF IV Funds, except to the extent of its pecuniary interest therein. BioAsia Management, LLC (BAM), is the sole general partner of Biotechnology Development Fund II, L.P. (BDF II), and may be deemed to beneficially own the common stock of Soleno Therapeutics owned by BDF II. BAM disclaims beneficial ownership of the shares of Soleno Therapeutics held by each of the BDF II Funds, except to the extent of its pecuniary interest therein.

(6)

The shares being offered by funds affiliated with Vivo Ventures in this offering represents an aggregate of 8,869,037 shares of Common Stock, consisting of (i) 7,238,280 shares of outstanding Common Stock, (ii) 271,792 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 1,358,965 shares of Common Stock that are potentially issuable upon the achievement of certain milestones.

(7)

The shares being offered by Forward Ventures V, L.P. in this offering represents an aggregate of 8,882,656 shares of Common Stock, consisting of (i) 7,251,728 shares of outstanding Common Stock, (ii) 271,821 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 1,359,107 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones

(8)

The shares being offered by funds affiliated with Technology Partners in this offering represents an aggregate of 8,650,244 shares of Common Stock, consisting of (i) 7,050,691 shares of outstanding Common Stock, (ii) 266,592 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 1,332,961 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(9)	The shares being offered by Palo Alto Healthcare Master Fund, L.P. in this offering represents an aggregate of 271,955 shares of Common Stock, consisting of (i) 211,869 shares of outstanding Common Stock, (ii) 10,014 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 50,072 shares of

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(10)

The shares being offered by Palo Alto Fund II, L.P. in this offering represents an aggregate of 271,955 shares of Common Stock, consisting of (i) 211,869 shares of outstanding Common Stock, (ii) 10,014 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 50,072 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(11)	The shares being offered by Genovate Biotechnology Co. Ltd. in this offering represents an aggregate of 1,041,667 shares of Common Stock, all of which are issued and outstanding.

(12)	The shares being offered by Uni Pharma Co. Ltd. in this offering represents an aggregate of 1,041,667 shares of Common Stock, all of which are issued and outstanding.

(13)	The shares being offered by Giddi Pharma Co. Ltd. in this offering represents an aggregate of 1,041,667 shares of Common Stock, all of which are issued and outstanding.

(14)	The shares being offered by Top Taiwan XI Venture Capital Co. Ltd. in this offering represents an aggregate of 520,833 shares of Common Stock, all of which are issued and outstanding.

(15)	The shares being offered by Top Taiwan VIII Venture Capital Co. Ltd. in this offering represents an aggregate of 520,833 shares of Common Stock, all of which are issued and outstanding.

(16)

The shares being offered by Mahendra Shah in this offering represents an aggregate of 121,984 shares of Common Stock, consisting of (i) 94,584 shares of outstanding Common Stock, (ii) 4,566 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 22,834 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones. In addition to the shares being offered, Dr. Shah also beneficially holds 3,783 shares of Common Stock, of which (i) 2,533 shares are issued and outstanding, and (ii) 1,250 shares are issuable upon the exercise of vested options.

(17)

The shares being offered by Aquilo Capital in this offering represents an aggregate of 109,606 shares of Common Stock, consisting of (i) 0 shares of outstanding Common Stock, (ii) 18,267 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 91,339 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(18)

The shares being offered by DLA Piper in this offering represents an aggregate of 81,085 shares of Common Stock, consisting of (i) 63,171 shares of outstanding Common Stock, (ii) 2,985 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 14,929 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(19)

The shares being offered by Neil M. Cowen in this offering represents an aggregate of 767,892 shares of Common Stock, consisting of (i) 543,548 shares of outstanding Common Stock, (ii) 37,390 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 186,954 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(20)

The shares being offered by Glaze Family Revocable Trust dtd 6/17/04 in this offering represents an aggregate of 122,647 shares of Common Stock, consisting of (i) 95,549 shares of outstanding Common Stock, (ii) 4,516 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 22,582 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(21)

The shares being offered by Richard A. Glaze in this offering represents an aggregate of 2,059 shares of Common Stock, consisting of (i) 1,605 shares of outstanding Common Stock, (ii) 75 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 379 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(22)

The shares being offered by Jeffrey A. Staffa and Jo-Ann Staffa Trustees, or their successors, in trust, under the Jeffrey and Jo-Ann Staffa Living Trust, dated December 10, 2015, and any amendments thereto in this offering represents an aggregate of 10,666 shares of Common Stock, consisting of (i) 8,310 shares of outstanding Common Stock, (ii) 392 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 1,964 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(23)	The shares being offered by Khaled Yamout in this offering represents an aggregate of 71,194 shares of Common Stock, consisting of (i) 55,465 shares of outstanding Common Stock, (ii) 2,621 shares of Common Stock that are

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(24)

The shares being offered by Debra L. Robertson in this offering represents an aggregate of 4,677 shares of Common Stock, consisting of (i) 3,644 shares of outstanding Common Stock, (ii) 172 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 861 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(25)

The shares being offered by Richard Pasternak in this offering represents an aggregate of 145,376 shares of Common Stock, consisting of (i) 112,808 shares of outstanding Common Stock, (ii) 5,427 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 27,141 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(26)

The shares being offered by Alain Baron in this offering represents an aggregate of 136,955 shares of Common Stock, consisting of (i) 106,248 shares of outstanding Common Stock, (ii) 5,117 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 25,590 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(27)

The shares being offered by Aaron Berg in this offering represents an aggregate of 36,528 shares of Common Stock, consisting of (i) 28,458 shares of outstanding Common Stock, (ii) 1,345 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 6,725 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(28)

The shares being offered by Aaron Berg in this offering represents an aggregate of 36,528 shares of Common Stock, consisting of (i) 28,458 shares of outstanding Common Stock, (ii) 1,345 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 6,725 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

(29)

The shares being offered by Joy Becker in this offering represents an aggregate of 410 shares of Common Stock, consisting of (i) 320 shares of outstanding Common Stock, (ii) 15 shares of Common Stock that are potentially issuable upon the release date of the holdback shares, and (iii) 75 shares of Common Stock that are potentially issuable within 60 days of April 12, 2017 upon the achievement of certain milestones.

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•	persuasive evidence of an arrangement exists;

•	the sales price is fixed or determinable;

•	collection of the relevant receivable is probable at the time of sale; and

•	delivery has occurred or services have been rendered.

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•	Level I Unadjusted quoted prices in active markets for identical assets or liabilities;

•	Level II Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

•	Level III Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

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•	Expected volatility: The estimated volatility rate based on a peer index of common stock of comparable companies in the Company's industry.

•

Expected term: The expected life of stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. The Company has elected to use the simplified method, as the Company does not have enough historical exercise experience to provide a reasonable basis upon which to estimate the expected term and the stock option grants are considered “plain vanilla” options.

•	Risk-free rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity.

•	Expected dividend yield: The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.

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•	1.0% of the outstanding shares of our common stock on the first day of such year; 279,680 shares; or

•	such amount as determined by our board of directors.

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the increase of amortization expense of $53,000 in the year ended December 31, 2015 related to the estimated fair value of intangible assets from the purchase price allocation which are being amortized over their estimated useful lives through 2028. The change in depreciation expense related to the change in estimated fair value of property and equipment from the book value at the time of the acquisition was not material.

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•	Level I Unadjusted quoted prices in active markets for identical assets or liabilities;

•	Level II Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

•	Level III Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

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•	Expected volatility: The estimated volatility rate based on a peer index of common stock of comparable companies in the Company's industry.

•

Expected term: The expected life of stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. The Company has elected to use the simplified method, as the Company does not have enough historical exercise experience to provide a reasonable basis upon which to estimate the expected term and the stock option grants are considered “plain vanilla” options.

•	Risk-free rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity.

•	Expected dividend yield: The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.

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•	1.0% of the outstanding shares of our Common Stock on the first day of such year; 279,680 shares; or

•	such amount as determined by our Board of Directors.

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•	Separate historical financial statements of the Company as of and for the year ended December 31,

•	Separate historical financial statements of Essentialis as of and for the years ended December 31, 2016 and December 31, 2015 as Exhibit 99.1;

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1.	Basis of Presentation

2.	Disposition of NFI

3.	Pro Forma Adjustments

(a)	Represents the amounts of NFI assets and liabilities which were sold or transferred to Holdings as if the Disposition had occurred on March 31, 2017.

(b)	Reflects the proceeds received at closing from the Disposition. The sale price of $720,000 was reduced by (1) approximately $69,000 for estimated transaction expenses assumed to be paid at closing and increased by $20,000, representing $20,000 of the maximum of $100,000 saleable inventory for purposes of this calculation.

(c)	Reflects the proceeds receivable from the sale of NFI for the remaining saleable inventory of $110,841 and accounts receivable of $126,565 to be received by the Company as sold or collected, respectively.

(d)	The elimination of operating results of NFI business in the unaudited condensed consolidated statements of operations for the Company for the three months ended March 31, 2016 and 2017 and the year ended December 31, 2016, as if the Disposition had occurred on January 1, 2016.