What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-12 compared with 2021-08-13 · 233 added, 223 removed, 980 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands, except shares and per share data)

September 30,

Current assets:

15 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 12,185,496 and 5,099,512 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 12,191,112 and 5,099,512 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

7 unchanged sentences

(In thousands, except shares and per share data)

For the Three Months Ended

For the Six Months Ended

For the Three Months

For the Nine Months

Ended September 30,

Grant revenue

Total revenue

Cost of sales

19 unchanged sentences

(In thousands, except shares and per share data)

For The Three Months Ended June 30, 2020 and 2021

For The Three Months Ended September 30, 2020 and 2021

Stockholders’

Equity (Deficit)

Balance, March 31, 2020

Stock based compensation

Issuance of common stock, sold for cash, net

Issuance of common stock upon exercise of warrants

Issuance costs of common stock for service

Net loss for the three months ended June 30, 2020

Balance, June 30, 2020

$ ( 100,227 )

Balance, March 31, 2021

Stock based compensation

Offering expenses for June, 2020 share offering

Net loss for the three months ended September 30, 2020

Balance, September 30, 2020

$ ( 102,146 )

Balance, June 30, 2021

$ ( 107,761 )

Stock based compensation

Issuance of common stock upon exercise of warrants

Issuance costs of common stock for service

Payments for employee withholding taxes related to share based awards

Net loss for the three months ended June 30, 2021

Balance, June 30, 2021

Net loss for the three months ended September 30, 2021

Balance, September 30, 2021

$ ( 110,014 )

For The Six Months Ended June 30, 2020 and 2021

For The Nine Months Ended September 30, 2020 and 2021

Balance, December 31, 2019

5 unchanged sentences

Warrant antidilution price protection adjustment

Net loss for the six months ended June 30, 2020

Balance, June 30, 2020

Net loss for the nine months ended September 30, 2020

Balance, September 30, 2020

$ ( 102,146 )

6 unchanged sentences

Payments for employee withholding taxes related to share based awards

Net loss for the six months ended June 30, 2021

Balance, June 30, 2021

Net loss for the nine months ended September 30, 2021

Balance, September 30, 2021

$ ( 110,014 )

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of

these financial statements.

SENESTECH, INC.

1 unchanged sentence

(In thousands)

For the Six Months Ended

For the Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

34 unchanged sentences

Deemed dividend

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of

these financial statements.

SENESTECH, INC.

18 unchanged sentences

Rats also cause significant damage to critical infrastructure by burrowing

beneath foundations and gnawing on electrical wiring, insulation, fire proofing systems, electronics and computer equipment.

beneath foundations and gnawing on electrical wiring, insulation, fire proofing systems, electronics and equipment.

The most prevalent solution to rat infestations

22 unchanged sentences

in the United States, ContraPest must obtain registration from the various state regulatory agencies prior to selling in each state.

have received registration for ContraPest in all 50 states and the District of Columbia, 48 of which have approved the removal of the

RUP designation.

have received registration for ContraPest in all 50 states and the District of Columbia.

The District of Columbia and 48 states have also

approved the removal of the RUP designation.

We expect to continue to pursue regulatory approvals

19 unchanged sentences

On February 4, 2020, we amended our amended and

restated certificate of incorporation to effect a 1-for-20 reverse split of our issued and outstanding shares of our common stock.

accompanying condensed financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented.

All issued and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, preferred stock conversions

to common stock and per share amounts contained in our condensed financial statements have been retrospectively adjusted.

restated certificate of incorporation to effect a 1-for-20 reverse split of our issued and outstanding shares of common stock.

The accompanying

condensed financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented.

and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, preferred stock conversions to

common stock and per share amounts contained in our condensed financial statements have been retrospectively adjusted.

Going Concern

Our financial statements as of June 30, 2021,

December 31, 2020 and June 30, 2020 have been prepared under the assumption that we will continue as a going concern.

Our financial statements as of September 30, 2021,

December 31, 2020 and September 30, 2020 have been prepared under the assumption that we will continue as a going concern.

Our independent

23 unchanged sentences

consisting primarily of convertible notes and government loan programs, and, to a lesser extent, payments received in connection with

product sales, research grants and licensing fees.

Through June 30, 2021, we received net proceeds

product sales, grants and licensing fees.

Through September 30, 2021, we received net proceeds

of $ 89.3 million from our sales of common stock, preferred stock and warrant exercises and issuance of convertible and other promissory

notes, an aggregate of $ 1.7 million from licensing fees and an aggregate of $ 1.2 million in net product sales.

As of June 30, 2021, we

had an accumulated deficit of $ 107.8 million and cash and cash equivalents of $ 13.1 million.

notes, an aggregate of $ 1.7 million from licensing fees and an aggregate of $ 1.4 million in net product sales and grants.

As of September

30, 2021, we had an accumulated deficit of $ 110.0 million and cash and cash equivalents of $ 11.1 million.

SENESTECH, INC.

2 unchanged sentences

Note 1 - Organization and Description of Business – (continued)

Our ultimate success depends upon the

outcome of a combination of factors, including:

(i) successful commercialization of ContraPest and maintaining and obtaining

regulatory approval of our products and product candidates;

(ii) market acceptance, commercial viability and profitability of

ContraPest and other products;

(iii) the ability to market our products and establish an effective sales force and marketing

infrastructure to generate significant revenue;

Our ultimate success depends upon the outcome

of a combination of factors, including:

(i) successful commercialization of ContraPest and maintaining and obtaining regulatory approval

of our products and product candidates;

(ii) market acceptance, commercial viability and profitability of ContraPest and other products;

(iii) the ability to market our products and establish an effective sales force and marketing infrastructure to generate significant revenue;

(iv) the success of our research and development;

(v) the ability to retain and

attract key personnel to develop, operate and grow our business;

(v) the ability to retain and attract key personnel to develop, operate and grow our

and (vi) our ability to meet our working capital needs.

our current operating plan, we expect that cash and cash equivalents at June 30, 2021, in combination with anticipated revenue and

additional sales of our equity securities, will be sufficient to fund our current operations for at least the next 12 months.

have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful

commercialization of ContraPest in the United States.

However, if anticipated revenue targets and margin targets are not achieved or

expenses are more than we have budgeted, we may need to raise additional financing before that time.

If we need more financing,

including within the next 12 months, and we are unable to raise necessary capital through the sale of our securities, we may be

required to take other measures that could impair our ability to be successful and operate as a going concern.

In any event, we may

require additional capital in order to fund our operating losses and research and development activities before we become profitable

and may opportunistically raise capital.

We may never achieve profitability or generate positive cash flows, and unless and until we

do, we will continue to need to raise capital through equity or debt financing.

If such equity or debt financing is not available at

adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development efforts or

discontinue operations.

Based upon our current operating plan, we expect that cash and cash

equivalents at September 30, 2021, in combination with anticipated revenue and additional sales of our equity securities, will be sufficient

to fund our current operations for at least the next 12 months.

We have evaluated and will continue to evaluate our operating expenses

and will concentrate our resources toward the successful commercialization of ContraPest in the United States.

However, if anticipated

revenue targets and margin targets are not achieved or expenses are more than we have budgeted, we may need to raise additional financing

before that time.

If we need more financing, including within the next 12 months, and we are unable to raise necessary capital through

the sale of our securities, we may be required to take other measures that could impair our ability to be successful and operate as a

going concern.

In any event, we may require additional capital in order to fund our operating losses and research and development activities

before we become profitable and may opportunistically raise capital.

We may never achieve profitability or generate positive cash flows,

and unless and until we do, we will continue to need to raise capital through equity or debt financing.

If such equity or debt financing

is not available at adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development

efforts or discontinue operations.

Basis of Presentation

8 unchanged sentences

In the Company’s opinion, the unaudited condensed financial statements include all material adjustments,

all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2021,

the Company’s operating results for the three and six months ended June 30, 2021 and 2020, and the Company’s cash flows for

the six months ended June 30, 2021 and 2020.

The accompanying financial information as of December 31, 2020 is derived from audited financial

all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of September

30, 2021, the Company’s operating results for the three and nine months ended September 30, 2021 and 2020, and the Company’s

cash flows for the nine months ended September 30, 2021 and 2020.

The accompanying financial information as of December 31, 2020 is derived

from audited financial statements.

Interim results are not necessarily indicative of results for a full year.

The information included in this Quarterly Report

on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed

with the SEC on March 29, 2021.

All amounts shown in these financial statements and accompanying notes are in thousands, except percentages

and per share and share amounts.

The information included

in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended

December 31, 2020, filed with the SEC on March 29, 2021.

All amounts shown in these financial statements and accompanying notes are in

thousands, except percentages and per share and share amounts.

Note 2 - Summary of Significant Accounting Policies

7 unchanged sentences

Actual results could differ from such

Reclassifications

Certain prior year amounts have been reclassified

to conform to the current period presentation.

These reclassifications had no material impact on net earnings, financial position or cash

SENESTECH, INC.

2 unchanged sentences

Note 2 - Summary of Significant Accounting Policies – (continued)

Reclassifications

Certain prior year amounts have been reclassified

to conform to the current period presentation.

These reclassifications had no material impact on net earnings, financial position or cash

Cash and Cash Equivalents

1 unchanged sentence

to be cash equivalents.

The Company had cash equivalents in the form of money market fund investment of $ 8,302 and $ 1,500 at June 30,

The Company had cash equivalents in the form of money market fund investment of $ 10,493 and $ 1,500 at September

30, 2021 and December 31, 2020, respectively, included in cash as reported.

5 unchanged sentences

of each customer’s trade accounts receivable.

The allowance for doubtful trade receivables was $ 0 at June 30, 2021 and December

The allowance for doubtful trade receivables was $ 0 at September 30, 2021 and December

Inventories are stated at the lower of cost or

2 unchanged sentences

materials are stocked to reduce the risk of impact on manufacturing for potential supply interruptions due to the COVID-19 pandemic or

long lead times on certain ingredients.

other supply chain interruptions and long lead times on certain ingredients.

Components of inventory are:

September 30,

Raw materials

2 unchanged sentences

Total inventory

Reserve for obsolete

Reserve for obsolete and revaluation

Total net inventory

1 unchanged sentence

Prepaid expenses consist primarily of payments

made for director and officer insurance, director compensation, rent, legal and inventory purchase deposits and seminar fees to be expensed

in the current year.

made for director and officer insurance, marketing services, rent, legal and inventory purchase deposits and seminar/trade show fees to

be expensed in the current year.

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 2 - Summary of Significant Accounting

Policies – (continued)

Property and Equipment

11 unchanged sentences

which are expensed as incurred.

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 2 - Summary of Significant Accounting

Policies – (continued)

Impairment of Long-Lived Assets

30 unchanged sentences

Research and Development

Research, and development costs are expensed as

Research, and development costs are expensed

Research and development expenses primarily consist of salaries and benefits for research and development employees, stock-based

3 unchanged sentences

an allocation of facilities related costs, including depreciation of equipment.

Stock-based Compensation

Stock based awards, consisting of stock options

and restricted stock units expected to be settled in shares of the Company’s common stock, are recorded as equity awards.

date fair value of these awards is measured using the Black-Scholes option pricing model for stock options and grant date market value

for restricted stock units.

The Company expenses the grant date fair value of its stock options on a straight-line basis over their respective

vesting periods.

SENESTECH, INC.

2 unchanged sentences

Note 2 - Summary of Significant Accounting Policies – (continued)

Stock-based Compensation

Stock-based awards, consisting of stock options

and restricted stock units expected to be settled in shares of the Company’s common stock, are recorded as equity awards.

date fair value of these awards is measured using

the Black-Scholes option pricing model for stock

options and grant date market value for restricted stock units.

The Company expenses the grant date fair value of its stock-based awards

on a straight-line basis over their respective vesting periods.

The stock-based compensation expense recorded

for the three and six months ended June 30, 2021 and 2020, is as follows:

for the three and nine months ended September 30, 2021 and 2020, is as follows:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

27 unchanged sentences

related to uncertain tax positions in income tax expense.

There are no uncertain tax positions as of June 30, 2021 or December 31, 2020

There are no uncertain tax positions as of September 30, 2021 or December 31,

2020 and as such, no interest or penalties were recorded in income tax expense.

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 2 - Summary of Significant Accounting Policies – (continued)

Comprehensive Loss

6 unchanged sentences

during the period.

Diluted loss per share attributable to common stockholders is computed

by dividing the loss attributable to common stockholders by the weighted average number of common shares and potentially dilutive securities

outstanding for the period determined using the treasury stock and if-converted methods.

For purposes of the computation of diluted loss

per share attributable to common stockholders, common stock purchase warrants, and common stock options are considered to be potentially

dilutive securities but have been excluded from the calculation of diluted loss per share attributable to common stockholders because

their effect would be anti-dilutive given the net loss reported for the three and six months ended June 30, 2021 and 2020.

basic and diluted loss per share attributable to common stockholders are the same for each period presented.

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 2 - Summary of Significant Accounting Policies – (continued)

Diluted loss per share attributable to common stockholders is computed by dividing the loss attributable to common

stockholders by the weighted average number of common shares and potentially dilutive securities outstanding for the period determined

using the treasury stock and if-converted methods.

For purposes of the computation of diluted loss per share attributable to common stockholders,

common stock purchase warrants, and common stock options are considered to be potentially dilutive securities but have been excluded from

the calculation of diluted loss per share attributable to common stockholders because their effect would be anti-dilutive given the net

loss reported for the three and nine months ended September 30, 2021 and 2020.

Therefore, basic and diluted loss per share attributable

to common stockholders are the same for each period presented.

The following table sets forth the outstanding

1 unchanged sentence

(in common stock equivalent shares):

September 30,

Common stock purchase warrants

19 unchanged sentences

inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting

The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

1 —Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

The three-level hierarchy for the inputs

SENESTECH, INC.

2 unchanged sentences

Note 3 - Fair Value Measurements – (continued)

to valuation techniques is briefly summarized

Level 1 —Inputs

are unadjusted, quoted prices in active markets for identical assets or liabilities at

the measurement date;

Level 2 —Inputs are observable,

30 unchanged sentences

At December 31, 2020, the account was deemed uncollectable and offset against the reserve.

The Company did not have any potentially uncollectable account at June 30, 2021 or December 31, 2020 and therefore, did not record a reserve

for uncollectable accounts at June 30, 2021 or December 31, 2020.

The Company does not require collateral or other securities to support

its accounts receivable.

The Company did not have any potentially uncollectable account at September 30, 2021 or December 31, 2020 and therefore, did not record

a reserve for uncollectable accounts at September 30, 2021 or December 31, 2020.

The Company does not require collateral or other securities

to support its accounts receivable.

SENESTECH, INC.

3 unchanged sentences

Prepaid expenses consist of the following:

September 30,

Director, officer and other insurance

6 unchanged sentences

Property and equipment, net consist of the following:

September 30,

Research and development equipment

5 unchanged sentences

* Shorter of lease term or estimated useful life

(1) In the three months ended and six months ended June 30, 2021, the Company

received net proceeds of less than $ 1 in the sale of research and development equipment resulting in gains on the sale of these assets

of less than $ 1 .

In the three months ended and six months ended June 30, 2020, the Company received net proceeds of $ 4 and $ 40 in the

sale of research and development equipment and office and computer equipment, respectively, resulting in a gain on the sale of these assets

of $ 3 and $ 18 for the three months ended and six months ended June 30, 2020, respectively.

(1) In the three months ended and nine months ended September 30, 2021, the Company received net proceeds of less than $ 1 in the sale of research and development equipment resulting in gains on the sale of these assets of less than $ 1 .

In the three months ended and nine months ended September 30, 2020, the Company received net proceeds of $ 0 and $ 44 in the sale of research and development equipment and office and computer equipment, respectively, resulting in a gain on the sale of these assets of $ 0 and $ 18 for the three months ended and nine months ended September 30, 2020, respectively.

Depreciation and amortization expense was approximately

$ 78 and $ 71 for the three months ended June 30, 2021 and 2020, respectively, and $ 151 and $ 148 for the three months ended June 30, 2021

$ 78 and $ 71 for the three months ended September 30, 2021 and 2020, respectively, and $ 229 and $ 219 for the nine months ended September

30, 2021 and 2020, respectively.

4 unchanged sentences

Accrued expenses consist of the following:

September 30,

Compensation and related benefits

1 unchanged sentence

Personal property and franchise tax

Legal services

Total accrued expenses

2 unchanged sentences

obligations, is as follows:

September 30,

Short-term debt:

7 unchanged sentences

Finance Lease Obligations

Finance lease obligations at June 30, 2021 are

for manufacturing equipment leased through ENGS Commercial Finance Co.

This finance lease expires on April 18, 2022 and carries an interest

rate of 11.4 %.

Finance lease obligations at September 30, 2021

is for manufacturing equipment leased through ENGS Commercial Finance Co.

This finance lease expires on April 18, 2022 and carries an

interest rate of 11.4 %.

Other Promissory Notes

Also included in the table above are notes payable

to Direct Capital and Fidelity Capital for the financing of manufacturing and computing fixed assets.

These notes expire at various dates

through June 2022 and carry interest rates ranging from 13.1 % to 13.3 %.

Also included in the table above is a note payable

to Fidelity Capital for the financing of a computing fixed asset.

This note expires on July 1, 2022 and carries interest rate of 13.3 %.

On June 18, 2021, the Company received notification

3 unchanged sentences

The forgiveness of this note and related interest was recorded

as other income on the Condensed Statements of Operations and Comprehensive Loss for the quarter ended June 30, 2021.

as other income on the Condensed Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2021.

SENESTECH, INC.

1 unchanged sentence

(In thousands, except share and per share data)

Note 9 - Common Stock Warrants and Common Stock Warrant

The table summarizes the common stock warrant activity as of June 30,

Note 9 - Common Stock Warrants and Common Stock Warrant Liability

The table summarizes the common stock warrant activity as of September

30, 2021 as follows:

September 30,

Various-2020/2021

12 unchanged sentences

Registered Direct Offering

July 28, 2025

Dealer Manager Warrants

July 28, 2025

Registered Direct Offering

1 unchanged sentence

Dealer Manager Warrants

March 4, 2025

Dealer Manager Warrants

24 unchanged sentences

Outstanding Warrants

As of June 30, 2021, we had 4,553,234 shares of

common stock issuable upon exercise of outstanding common stock warrants, at a weighted-average exercise price of $ 3.984 per share.

As of September 30, 2021, we had 4,547,618 shares

of common stock issuable upon exercise of outstanding common stock warrants, at a weighted-average exercise price of $ 3.987 per share.

On November 21, 2017, the Company issued a total

44 unchanged sentences

dividend yield of 0 % and risk-free interest rate of

On June 20, 2018, the Company entered into

an agreement with a holder of 56,696 of the November 2017 warrants to exercise its original warrant representing 56,696 shares of

common stock for cash at the $ 30.00 exercise price for gross proceeds of $ 1.7 million and the Company issued to holder a new warrant

to purchase 56,696 shares of common stock at an exercise price of $ 36.40 per share.

The new warrant did not contain the antidilution

price adjustment protection that was contained within the exercised warrants.

In June 2018, the Company recorded stock compensation

expense of $ 1,700 representing the fair value of the of 56,696 inducement warrants issued.

The Company estimated the fair value of

the common stock warrants, exercisable at $ 36.40 per share, to be $ 1,700 using a Black Scholes model based on the following

significant inputs:

On June 20, 2018, the Company entered into an

agreement with a holder of 56,696 of the November 2017 warrants to exercise its original warrant representing 56,696 shares of common

stock for cash at the $ 30.00 exercise price for gross proceeds of $ 1.7 million and the Company issued to holder a new warrant to purchase

56,696 shares of common stock at an exercise price of $ 36.40 per share.

The new warrant did not contain the antidilution price adjustment

protection that was contained within the exercised warrants.

In June 2018, the Company recorded stock compensation expense of $ 1,700 representing

the fair value of the of 56,696 inducement warrants issued.

The Company estimated the fair value of the common stock warrants, exercisable

at $ 36.40 per share, to be $ 1,700 using a Black Scholes model based on the following significant inputs:

common stock price of $ 42.20 ;

1 unchanged sentence

remaining term 5 years;

dividend yield of

0 % and risk-free interest rate of 2.8 %.

Also, in June 2018, an additional 17,088 of the November 8, 2017 warrants that were in the

money at the time of exercise, were exercised for gross proceeds of $ 513 .

dividend yield of 0 % and risk-free interest rate of 2.8 %.

Also, in June

2018, an additional 17,088 of the November 8, 2017 warrants that were in the money at the time of exercise, were exercised for gross proceeds

SENESTECH, INC.

60 unchanged sentences

dividend yield of 0 % and risk-free interest rate of 0.39 %.

For so long as the 2020 Warrants remain outstanding,

the exercise price and number of shares of common stock issuable upon exercise of the warrants are subject to adjustment as follows:

(a) upon payment of a stock dividend or other distribution on a class or series of shares common stock, not including shares issued

under this warrant;

(b) upon subdivision (by stock spilt, stock dividend, recapitalization, or otherwise) or combination (by reverse

stock split or otherwise) of shares of common stock;

or (c) upon the issuance of any shares of capital stock by reclassification of shares

of the common stock.

For so long as the 2020 Warrants remain outstanding, the exercise price

and number of shares of common stock issuable upon exercise of the warrants are subject to adjustment as follows:

(a) upon payment

of a stock dividend or other distribution on a class or series of shares common stock, not including shares issued under this warrant;

SENESTECH, INC.

3 unchanged sentences

– (continued)

(b) upon subdivision (by stock spilt, stock

dividend, recapitalization, or otherwise) or combination (by reverse stock split or otherwise) of shares of common stock;

the issuance of any shares of capital stock by reclassification of shares of the common stock.

In the event that the Company declares or makes

38 unchanged sentences

No fractional shares of common stock will be issued in connection with the exercise of a 2020 Warrant.

In lieu of fractional shares, we

will either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole

In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise

price or round up to the next whole share.

SENESTECH, INC.

176 unchanged sentences

exercise price of the Original Warrants were reduced from $ 2.88 and $ 3.05 , respectively, to $ 1.725 .

Per recent proposed guidance of ASC 260, the Company

determined that this was an exchange of the existing 1,700,680 warrants that were affected and the difference between the fair value of

the warrants immediately prior to modification of terms and immediately after the adjustment was a cost of raising capital and was recorded

as a reduction of equity.

The difference between the fair value of the warrants immediately prior to modification of terms and immediately

after the adjustment was calculated as $ 237 , using a Black Scholes model based on the following significant inputs:

On October 26, 2020:

Per recent proposed guidance of ASC 260, the

Company determined that this was an exchange of the existing 1,700,680 warrants that were affected and the difference between the fair

value of the warrants immediately prior to modification of terms and immediately after the adjustment was a cost of raising capital and

was recorded as a reduction of equity.

The difference between the fair value of the warrants immediately prior to modification of terms

and immediately after the adjustment was calculated as $ 237 , using a Black Scholes model based on the following significant inputs:

October 26, 2020:

common stock price of $ 1.47 ;

1 unchanged sentence

remaining term 4.5 -4.

dividend yield of 0 % and risk-free

interest rate of 0.18 %.

dividend yield of

0 % and risk-free interest rate of 0.18 %.

SENESTECH, INC.

14 unchanged sentences

The Company had 12,191,112 and 5,099,512 shares

of common stock issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

During the six months ended June 30, 2021, the

Company issued 7,085,984 shares of common stock as follows:

of common stock issued and outstanding as of September 30, 2021 and December 31, 2020, respectively.

During the nine months ended September 30, 2021,

the Company issued 7,091,600 shares of common stock as follows:

● an aggregate of 4,388,854 shares in connection with a private placement offering and exercise of pre-funded warrants issued in connection with the offering, generating net proceeds to the Company in February 2021 of approximately $ 8,898 , as further described below;

● an aggregate of 1,975,000 shares in connection with a registered direct offering generating net proceeds to the Company in March 2021 of approximately $ 3,523 , as further described below;

● an aggregate of 701,179 shares in connection with the exercise of common stock warrants in March and June 2021, generating net proceeds to the Company of approximately $ 1,220 , as further described below;

● an aggregate of 706,795 shares in connection with the exercise of common stock warrants in March, June and July 2021, generating net proceeds to the Company of approximately $ 1,228 , as further described below;

● an aggregate of 20,951 shares for service as a result of the vesting of restricted stock units.

8 unchanged sentences

agent warrants to purchase up to 329,164 shares of Common Stock with an exercise price of $2.8481 per share.

On March 23, 2021, the Company consummated a registered direct

offering with certain institutional investors and issued an aggregate of 1,975,000 shares of the Company’s common stock, par

value $0.001 per share at a purchase price of $2.00 per share for gross proceeds to the Company of approximately $3.95 million,

pursuant to a prospectus, dated August 24, 2018, and a prospectus supplement,

dated March 22, 2021, in connection with a takedown from the Company’s shelf registration statement on Form S-3 (File No.

On March 23, 2021, the Company consummated a registered

direct offering with certain institutional investors and issued an aggregate of 1,975,000 shares of the Company’s common stock,

par value $0.001 per share at a purchase price of $2.00 per share for gross proceeds to the Company of approximately $3.95 million, pursuant

to a prospectus, dated August 24, 2018, and a prospectus supplement, dated March 22, 2021, in connection with a takedown from the Company’s

shelf registration statement on Form S-3 (File No.

SENESTECH, INC.

4 unchanged sentences

placement agent warrants to purchase up to 148,125 shares of Common Stock at an exercise price per share of $ 2.50 per share.

On March 19, 2021 and June 22, 2021, the Company

issued an aggregate of 700,680 and 499 shares of commons stock for the exercise of certain warrants, respectively.

The net proceeds to

the Company for these exercises was $ 1,220 .

On March 19, 2021, June 22, 2021 and July 15,

2021, the Company issued an aggregate of 700,680, 499 and 5,616 shares of commons stock for the exercise of certain warrants, respectively.

The net proceeds to the Company for these exercises was $ 1,228 .

Note 11 - Stock-based Compensation

On June 24, 2021, the Company’s stockholders, at its 2021 annual

meeting of stockholders, approved an amendment to the SenesTech, Inc.

2018 Equity Incentive Plan (the “2018 Plan”) to increase

the number of shares of common stock available for issuance under the 2018 Plan by 3,000,000 shares.

Stock Options

6 unchanged sentences

Certain stock options provide for accelerated vesting upon a change in control.

As of June 30, 2021, the Company had 2,856,259

As of September 30, 2021, the Company had 2,857,184

shares of common stock available for issuance under the 2018 Plan.

5 unchanged sentences

The weighted-average assumptions used in the Black-Scholes

option-pricing model used to calculate the fair value of options granted during the six months ended June 30, 2021 were as follows:

option-pricing model used to calculate the fair value of options granted during the nine months ended September 30, 2021 were as follows:

Expected volatility

3 unchanged sentences

The weighted average grant date fair value of

options granted during the six months ended June 30, 2021 was $ 0.98 per share, as per the table above.

options granted during the nine months ended September 30, 2021 was $ 0.98 per share, as per the table above.

SENESTECH, INC.

19 unchanged sentences

Outstanding at December 31, 2020

Outstanding at June 30, 2021

Exercisable at June 30, 2021

Outstanding at September 30, 2021

Exercisable at September 30, 2021

(1) The aggregate intrinsic value in the table was calculated based on the difference between the estimated fair market value of the Company’s stock and the exercise price of the underlying options.

The estimated stock values used in the calculation were $ 1.73 and $ 1.61 per share for the year ended December 31, 2020 and the six months ended June 30, 2021, respectively.

The estimated stock values used in the calculation were $ 1.73 and $ 1.51 per share for the year ended December 31, 2020 and the nine months ended September 30, 2021, respectively.

Restricted Stock Units

The following table summarizes restricted stock

unit activity for the six months ended June 30, 2021:

unit activity for the nine months ended September 30, 2021:

Weighted Average

2 unchanged sentences

Outstanding as of December 31, 2020

Outstanding as of June 30, 2021

Outstanding as of September 30, 2021

SENESTECH, INC.

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

The allocation between research and development and selling, general

and administrative expense was based on the department and services performed by the employee or non-employee.

At June 30, 2021, the total compensation cost

related to restricted stock units and unvested options not yet recognized was $ 999 , which will be recognized over a weighted average period

of 35 months , assuming the employees and non-employee s complete their service period required for vesting.

The allocation between research and development

and selling, general and administrative expense was based on the department and services performed by the employee or non-employee.

At September 30, 2021, the total compensation

cost related to restricted stock units and unvested options not yet recognized was $ 782 , which will be recognized over a weighted average

period of 32 months , assuming the employees and non-employees complete their service period required for vesting.

Note 12 - Commitments and Contingencies

31 unchanged sentences

Note 12 - Commitments and Contingencies –

Rent expense was $ 111 and $ 132 for the six months

ended June 30, 2021 and 2020, respectively.

Rent expense was $ 166 and $ 202 for the nine months

ended September 30, 2021 and 2020, respectively.

The future minimum lease payments under non-cancellable operating lease and future minimum

finance lease payments as of June 30, 2021 are follows:

finance lease payments as of September 30, 2021 are follows:

Years Ending December 31,

Total minimum lease payments

amounts representing interest (ranging from 11.43% to 14.68%)

amounts representing interest (11.43%)

Present value of minimum lease payments

2 unchanged sentences

Note 13 - Subsequent Events

On July 15, 2021, the Company issued 5,616 shares

of common stock in connection with the exercise of common stock warrants generating net proceeds to the Company of approximately $ 8 .

The travel and other restrictions that began in March 2020 in response

to the COVID-19 global pandemic resulted in a significant slowdown in our field studies and sales efforts.

We were able to resume some

projects by mid-year 2020, however, we still have delays on certain projects that might remain on hold until businesses

On October 7, 2021, the Company issued 16,171

shares of common stock in connection with the exercise of common stock warrants generating net proceeds to the Company of approximately

The travel and other restrictions that began in

March 2020 in response to the COVID-19 global pandemic resulted in a significant slowdown in our field studies and sales efforts.

able to resume some projects by mid-year 2020, however, we still have delays on certain projects that might remain on hold until businesses

and government entities return to more normal operations.

These continued delays have impacted our results of operations and could

impact our results in future quarters.

In addition, extended stay at home orders and other social distancing initiatives severely limited

our ability to communicate with current and potential commercial customers.

While many restrictions were lifted during our second fiscal

quarter of 2021, we have not returned to full scope pre-pandemic activities, and are uncertain as to when or if, with potential further

restrictions, that may occur.

The COVID-19 pandemic is also placing a significant budgetary burden on federal, state and local governments,

which may impede or delay their ability to purchase our products.

These continued delays have impacted our results of operations and could impact

our results in future quarters.

In addition, extended stay at home orders and other social distancing initiatives severely limited our

ability to communicate with current and potential commercial and governmental customers.

While many restrictions were lifted during our

second and third fiscal quarters of 2021, we have not returned to full scope pre-pandemic activities, and are uncertain as to when or

if, with potential further restrictions, that may occur.

The COVID-19 pandemic is also placing a significant budgetary burden on federal,

state and local governments, which may impede or delay their ability to purchase our products.

The Company has evaluated subsequent events from

the balance sheet date through August 13, 2021, the date at which the financial statements were issued, and determined that there were

the balance sheet date through November 12, 2021, the date at which the financial statements were issued, and determined that there were

no other items that require adjustment to or disclosure in the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements