What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-13 · 689 added, 714 removed, 362 unchanged (79% of the section changed)

Financial Statements

SENESTECH, INC.

BALANCE SHEETS

(In thousands, except shares and per share data)

thousands, except shares and per share data)

Current assets:

9 unchanged sentences

Accrued expenses

Deferred Revenue

Total current liabilities

3 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 12,212,283 and 12,207,283 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 12,212,950 and 12,207,283 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

2 unchanged sentences

Total liabilities and stockholders’ equity

See accompanying notes to financial statements.

SENESTECH, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except shares and per share data)

accompanying notes to financial statements.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

thousands, except shares and per share data)

For The Three Months Ended

June 30, 2021 and 2022

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Cost of sales

7 unchanged sentences

Interest expense

Payroll Protection Program loan forgiveness

Total other income

2 unchanged sentences

Net loss per common share - basic and fully diluted

See accompanying notes to financial statements.

SENESTECH, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except shares and per share data)

For The Three Months Ended March 31, 2021 and

accompanying notes to financial statements.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

thousands, except shares and per share data)

For The Three Months Ended June 30, 2021 and 2022

Stockholders’

Equity (Deficit)

Balance, December 31, 2020

Balance, March 31, 2021

$ ( 106,061 )

Stock-based compensation

Issuance of common stock, sold for cash, net

Issuance of common stock upon exercise of warrants, net

Issuance of common stock upon cashless exercise of warrants

Net loss for the three months ended March 31, 2021

Issuance 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

$ ( 107,761 )

Balance, March 31, 2022

$ ( 114,840 )

Stock-based compensation

Issuance of common stock for service

Net loss for the three months ended June 30, 2022

Balance, June 30, 2022

$ ( 117,409 )

For The Six Months Ended June 30, 2021 and 2022

Balance, December 31, 2020

1 unchanged sentence

Stock-based compensation

Issuance costs of common stock for service

Net loss for the three months ended March 31, 2022

Balance, March 31, 2022

Issuance of common stock for service

Issuance of common stock, sold for cash, net

Issuance of common stock upon exercise of warrants

Payments for employee withholding taxes related to share based awards

Net loss for the six months ended June 30, 2021

Balance, June 30, 2021

$ ( 107,761 )

See accompanying notes to financial statements.

SENESTECH, INC.

Balance, December 31, 2021

$ ( 112,508 )

Stock-based compensation

Issuance of common stock for service

Net loss for the six months ended June 30, 2022

Balance, June 30, 2022

$ ( 117,409 )

accompanying notes to financial statements.

STATEMENTS OF CASH FLOWS

(In thousands)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

Stock-based compensation

Bad debt expense

Paycheck Protection Program loan forgiveness

Paycheck Protection Program loan accrued interest forgiveness

Gain on sale of equipment

(Increase) decrease in current assets:

Accounts receivable - trade

Accounts receivable - other

Prepaid expenses

2 unchanged sentences

Accrued expenses

Deferred revenue

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash received on sale of property and equipment

Purchase of property and equipment

5 unchanged sentences

Proceeds from the exercise of warrants

Payment of employee withholding taxes related to share based awards

Net cash (used in) provided by financing activities

5 unchanged sentences

Income taxes paid

See accompanying notes to financial statements.

SENESTECH, INC.

accompanying notes to financial statements.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 1 - Organization and Description of Business

SenesTech, Inc.

(referred to in this report as “SenesTech,”

the “Company,” “we” or “us”) was formed in July 2004 and incorporated in the state of Nevada.

We subsequently

reincorporated in the state of Delaware in November 2015.

1 - Organization and Description of Business

(referred to in this report as “SenesTech,” the “Company,” “we,” “us”, or “our”)

was formed in July 2004 and incorporated in the state of Nevada.

We subsequently reincorporated in the state of Delaware in November

Our corporate headquarters is in Phoenix, Arizona.

We have developed and are

commercializing a global, proprietary technology for managing animal pest populations, initially rat populations, through fertility control.

Although there are myriad tools available to control rat populations,

most rely on some form of lethal method to achieve effectiveness.

Each of these solutions is inherently limited by rat species’

resilience and survival mechanisms as well as their extraordinary rate of reproduction.

ContraPest ® , our initial product,

is unique in the pest control industry in attacking the reproductive systems of both male and female rats, which our field data shows

will result in a sustained reduction of the rat population.

Rats have plagued humanity throughout history.

They pose significant

threats to the health and food security of many communities.

In addition, rodents cause significant product loss and damage through consumption

and contamination.

Rats also cause significant damage to critical infrastructure by burrowing beneath foundations and gnawing on electrical

wiring, insulation, fire proofing systems, electronics and equipment.

The most prevalent solution to rat

infestations is the use of increasingly powerful rodenticides.

Although these solutions provide short term results, there are

growing concerns about secondary exposure and bioaccumulation of rodenticides in the environment, as well as concerns about

rodenticides that have no antidotes.

The pest management industry and Pest Management Professionals (“PMPs”) are being

asked for new solutions that are both effective and less toxic.

We have developed and are commercializing a global, proprietary technology for

managing animal pest populations, initially rat populations, through fertility control.

there are myriad tools available to control rat populations, most rely on some form of lethal method to achieve effectiveness.

these solutions is inherently limited by rat species’ resilience and survival mechanisms as well as their extraordinary rate of

reproduction.

ContraPest ® , our initial product, is unique in the pest control industry in attacking the reproductive systems

of both male and female rats, which our field data shows will result in a sustained reduction of the rat population.

have plagued humanity throughout history.

They pose significant threats to the health and food security of many communities.

rodents cause significant product loss and damage through consumption and contamination.

Rats also cause significant damage to critical

infrastructure by burrowing beneath foundations and gnawing on electrical wiring, insulation, fire proofing systems, electronics and

most prevalent solution to rat infestations is the use of increasingly powerful rodenticides.

Although these solutions provide short

term results, there are growing concerns about secondary exposure and bioaccumulation of rodenticides in the environment, as well as

concerns about rodenticides that have no antidotes.

The pest management industry and Pest Management Professionals (“PMPs”)

are being asked for new solutions that are both effective and less toxic.

Our goal is to provide customers with not only a highly effective

solution to combat their rat problems, but also offer a non-lethal option to serve customers that are looking to

decrease or remove the amount of rodenticide used in their pest control programs.

ContraPest is a liquid bait containing the active ingredients 4-vinylcyclohexene

diepoxide (“VCD”) and triptolide.

ContraPest limits reproduction of male and female rats beginning with the first breeding

cycle following consumption.

ContraPest is being marketed for use in controlling Norway and roof rat populations.

SenesTech began the registration process with the United States Environmental

Protection Agency (the “EPA”) for ContraPest on August 23, 2015.

On August 2, 2016, the EPA granted an unconditional registration

for ContraPest as a Restricted Use Product (“RUP”), due to the need for applicator expertise for deployment.

On October 18,

2018, the EPA approved the removal of the RUP designation.

We believe ContraPest is the first and only non-lethal, fertility control product

approved by the EPA for the management of rodent populations.

In addition to the EPA registration of ContraPest in the United States,

we must obtain registration from the various state regulatory agencies prior to selling in each state.

To date, we have received registration

for ContraPest in all 50 states and the District of Columbia, 48 of which have approved the removal of the Restricted Use designation.

In addition to product registration, the EPA also approves all labeling

(the container label, instructional inserts, and the Safety Data Sheet (SDS)) of ContraPest.

Generally, states accept the EPA approved

ContraPest’s labeling was submitted to states at initial registration and is resubmitted during state scheduled reregistration

or for any significant labeling change requiring EPA approval.

We expect to continue to pursue regulatory

approvals and amendments to the existing U.S.

registration for ContraPest to broaden the marketability and use of ContraPest, and if

ContraPest begins to generate sufficient revenue, regulatory approvals for additional jurisdictions beyond the United States.

certain cases, our EPA and state registrations require completion of additional testing and certifications even though we have

received approval for the product or its labelling.

We continue to seek to comply with these requirements.

SENESTECH, INC.

solution to combat their rat problems, but also offer a non-lethal option to serve customers that are looking to decrease or remove the

amount of rodenticide used in their pest control programs.

is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide (“VCD”) and triptolide.

ContraPest limits

reproduction of male and female rats beginning with the first breeding cycle following consumption.

ContraPest is being marketed for

use in controlling Norway and roof rat populations.

began the registration process with the United States Environmental Protection Agency (the “EPA”) for ContraPest on August

On August 2, 2016, the EPA granted an unconditional registration for ContraPest as a Restricted Use Product (“RUP”),

due to the need for applicator expertise for deployment.

On October 18, 2018, the EPA approved the removal of the RUP designation.

believe ContraPest is the first and only non-lethal, fertility control product approved by the EPA for the management of rodent populations.

June 2022, we received EPA registration and approval our new Elevate Bait System with ContraPest.

This innovative bait system provides

a unique and effective delivery system designed to target roof rats in elevated spaces.

addition to the EPA registration of ContraPest in the United States, we must obtain registration from the various state regulatory agencies

prior to selling in each state.

To date, we 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.

addition to product registration, the EPA also approves all labeling (the container label, instructional inserts, and the Safety Data

Sheet (“SDS”)) of ContraPest.

Generally, states accept the EPA approved label as is.

ContraPest’s labeling was

submitted to the states at the initial registration and is resubmitted during state scheduled reregistration or for any significant labeling

change requiring EPA approval.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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

We also continue to research and develop enhancements to ContraPest

that align with our target verticals and other potential fertility control options for additional species.

Going Concern

Our financial statements as of March 31, 2022, December 31, 2021 and

March 31, 2021 were prepared under the assumption that we would continue as a going concern, the report of our independent registered

public accounting firm that accompanies our financial statements for the years ended December 31, 2021 and December 31, 2020 contains

a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on

the financial statements at that time.

Specifically, as noted above, we have incurred operating losses since our inception, and we expect

to continue to incur significant expenses and operating losses for the foreseeable future.

These prior losses and expected future losses

have had, and will continue to have, an adverse effect on our financial condition.

If we encounter continued issues or delays in the commercialization

of ContraPest, our prior losses and expected future losses could have an adverse effect on our financial condition and negatively impact

our ability to fund continued operations, obtain additional financing in the future and continue as a going concern.

There are no assurances

that such financing, if necessary, will be available to us at all or will be available in sufficient amounts or on reasonable terms.

financial statements do not include any adjustments that may result from the outcome of this uncertainty.

If we are unable to generate

additional funds in the future through additional financings, sales of our products, licensing fees, royalty payments or from other sources

or transactions, we will exhaust our resources and will be unable to continue operations.

Liquidity and Capital Resources

Since our inception, we have sustained significant

operating losses in the course of our research and development and commercialization activities and expect such losses to continue for

the near future.

We have generated limited revenue to date from product sales, research grants and licensing fees received under our former

license agreement.

We have primarily funded our operations to date through the sale of equity securities, including convertible preferred

stock, common stock and warrants to purchase common stock.

See Note 10 for a description of our public equity sales.

We have also raised capital through debt financing,

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 March 31, 2022, we received net proceeds

of $ 89.6 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 $ 1.7 million in net product sales.

As of March 31, 2022, we

had an accumulated deficit of $ 114.8 million and cash and cash equivalents of $ 7.2 million.

Our ultimate success depends upon the outcome

of a combination of factors, including the following:

(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

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

1 - Organization and Description of Business – (continued)

expect to continue to pursue regulatory approvals and amendments to the existing U.S.

registration for ContraPest to broaden the marketability

and use of ContraPest, and if ContraPest begins to generate sufficient revenue, regulatory approvals for additional jurisdictions beyond

the United States.

In certain cases, our EPA and state registrations require completion of additional testing and certifications even

though we have received approval for the product or its labelling.

We continue to seek to comply with these requirements.

also continue to research and develop enhancements to ContraPest that align with our target verticals and other potential fertility control

options for additional species and alternate delivery systems.

financial statements as of June 30, 2022, December 31, 2021 and June 30, 2021 were prepared under the assumption that we would continue

as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the

years ended December 31, 2021 and December 31, 2020 contains a going concern qualification in which such firm expressed substantial doubt

about our ability to continue as a going concern, based on the financial statements at that time.

Specifically, as noted above, we have

incurred operating losses since our inception, and we expect to continue to incur significant expenses and operating losses for the foreseeable

These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition.

If we encounter continued issues or delays in the commercialization of ContraPest, our prior losses and expected future losses could

have an adverse effect on our financial condition and negatively impact our ability to fund continued operations, obtain additional financing

in the future and continue as a going concern.

There are no assurances that such financing, if necessary, will be available to us at

all or will be available in sufficient amounts or on reasonable terms.

Our financial statements do not include any adjustments that may

result from the outcome of this uncertainty.

If we are unable to generate additional funds in the future through additional financings,

sales of our products, licensing fees, royalty payments or from other sources or transactions, we will exhaust our resources and will

be unable to continue operations.

and Capital Resources

our inception, we have sustained significant operating losses in the course of our research and development and commercialization activities

and expect such losses to continue for the near future.

We have generated limited revenue to date from product sales, research grants

and licensing fees received under our former license agreement.

We have primarily funded our operations to date through the sale of equity

securities, including convertible preferred stock, common stock and warrants to purchase common stock.

See Note 10 for a description

of our public equity sales.

have also raised capital through debt financing, 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.

June 30, 2022, we received net proceeds of $ 89.6 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 $ 2.0 million in net product

As of June 30, 2022, we had an accumulated deficit of $ 117.4 million and cash and cash equivalents of $ 5.0 million.

ultimate success depends upon the outcome of a combination of factors, including the following:

(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 business;

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

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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

Based upon our current operating plan, we expect

that cash and cash equivalents at March 31, 2022, in combination with anticipated revenue and any additional sales of our equity securities,

will be sufficient to fund our current operations for at least the next 9 to 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 9 to 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

Our accompanying unaudited condensed financial

statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”)

for interim financial reporting.

Certain information and footnote disclosures normally included in the annual financial statements prepared

in accordance with U.S.

1 - Organization and Description of Business – (continued)

upon our current operating plan, we expect that cash and cash equivalents at June 30, 2022, in combination with anticipated revenue and

any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next six to nine 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

six to nine 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

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.

of Presentation

accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and

Exchange Commission (“SEC”) for interim financial reporting.

Certain information and footnote disclosures normally included

in the annual financial statements prepared in accordance with the U.S.

generally accepted accounting principles (“U.S.

GAAP”) have been condensed or omitted pursuant to

such rules and regulations.

In our opinion, the unaudited condensed financial statements include all material adjustments, all of which

are of a normal and recurring nature, necessary to present fairly our financial position as of March 31, 2022, our operating results for

the three months ended March 31, 2022 and 2021, and our cash flows for the three months ended March 31, 2022 and 2021.

The accompanying

financial information as of December 31, 2021 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 our Annual

Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 29, 2022.

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

Use of Estimates

The preparation of financial statements in conformity

GAAP requires management to make estimates and assumptions that affect the reported amounts and classification of assets and

liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues

and expenses during the reporting period.

The significant estimates in our financial statements include the valuation of preferred stock,

if issued, common stock and related warrants, and other stock-based awards.

Actual results could differ from such estimates.

have been condensed or omitted pursuant to such rules and regulations.

In our opinion, the unaudited condensed financial statements include

all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly our financial position as of

June 30, 2022, our operating results for the three months and six months ended June 30, 2022 and 2021, and our cash flows for the six

months ended June 30, 2022 and 2021.

The accompanying financial information as of December 31, 2021 is derived from audited financial

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 our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC

on March 29, 2022.

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

share and share amounts.

2 - Summary of Significant Accounting Policies

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts and classification of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial

statements and reported amounts of revenues and expenses during the reporting period.

The significant estimates in our financial statements

include the valuation of preferred stock, if issued, common stock and related warrants, and other stock-based awards.

Actual results

could differ from such estimates.

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

We consider money market fund investments to be

cash equivalents.

We had cash equivalents in the form of money market fund investment of $ 6,794 and $ 8,793 at March 31, 2022 and December

31, 2021, respectively, included in cash as reported.

SENESTECH, INC.

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 flows.

and Cash Equivalents

consider money market fund investments to be cash equivalents.

We had cash equivalents in the form of money market fund investment of

$ 4,095 and $ 8,793 at June 30, 2022 and December 31, 2021, respectively, included in cash as reported.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 2 - Summary of Significant Accounting

Policies – (continued)

Accounts Receivable-Trade

Accounts receivable-trade consist primarily of receivables from customers.

We provide an allowance for doubtful trade receivables equal to the estimated uncollectible amounts.

That estimate is based on historical

collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts

We did not have any allowance for doubtful trade receivables at March 31, 2022 or at December 31, 2021.

Inventories are stated at the lower of cost or

market value, using the first-in, first-out convention.

Inventories consist of raw materials, work in progress and finished goods.

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.

Components of inventory are:

2 - Summary of Significant Accounting Policies – (continued)

Receivable-Trade

receivable-trade consist primarily of receivables from customers.

We provide an allowance for doubtful trade receivables equal to the

estimated uncollectible amounts.

That estimate is based on historical collection experience, current economic and market conditions and

a review of the current status of each customer’s trade accounts receivable.

We had allowance for doubtful trade receivables at

June 30, 2022 of $ 12 .

We did not have any allowance for doubtful trade receivables at December 31, 2021.

are stated at the lower of cost or market value, using the first-in, first-out convention.

Inventories consist of raw materials, work

in progress and finished goods.

Raw materials are stocked to reduce the risk of impact on manufacturing for potential supply interruptions

due to the COVID-19 pandemic, supply chain issues or long lead times on certain ingredients.

of inventory were:

Raw materials

4 unchanged sentences

Total net inventory

Prepaid Expenses

Prepaid expenses consist primarily of payments

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

to be expensed in the current year.

Property and Equipment

Property and equipment are stated at cost less

accumulated depreciation.

Equipment held under finance leases are stated at the present value of minimum lease payments less accumulated

amortization.

Depreciation on property and equipment is computed

using the straight-line method over the estimated useful lives of the respective assets.

The cost of leasehold improvements is amortized

over the life of the improvement or the term of the lease, whichever is shorter.

Equipment held under finance leases is amortized over

the shorter of the lease term or estimated useful life of the asset.

We incur repair and maintenance costs on our major equipment, which

are expensed as incurred.

SENESTECH, INC.

expenses consist primarily of payments made for director and officer insurance, director compensation, rent, legal and inventory purchase

deposits and seminar/trade show fees to be expensed in the current year.

and Equipment

and equipment are stated at cost less accumulated depreciation.

Equipment held under finance leases are stated at the present value of

minimum lease payments less accumulated amortization.

on property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets.

of leasehold improvements is amortized over the life of the improvement or the term of the lease, whichever is shorter.

Equipment held

under finance leases is amortized over the shorter of the lease term or estimated useful life of the asset.

We incur repair and maintenance

costs on our major equipment, which are expensed as incurred.

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

Long-lived assets, such as property and

equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may

not be recoverable.

If circumstances require long- lived assets or asset groups to be tested for possible impairment, we compare the

undiscounted cash flows expected to be generated from the use of the asset or asset group to its carrying amount.

If the carrying

amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is

2 - Summary of Significant Accounting Policies – (continued)

of Long-Lived Assets

assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset may not be recoverable.

If circumstances require long- lived assets or asset groups to be tested for possible impairment,

we compare the undiscounted cash flows expected to be generated from the use of the asset or asset group to its carrying amount.

carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is

recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined through various valuation

techniques, such as discounted cash flow models and the use of third-party independent appraisals.

We have not recorded an

impairment of long-lived assets since its inception.

Revenue Recognition

Effective January 1, 2018, we adopted Accounting Standards Codification

(“ASC”) 606 — Revenue from Contracts with Customers (“ASC 606”) .

Under ASC 606, we recognize

revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps:

Fair value is determined through various valuation techniques,

such as discounted cash flow models and the use of third-party independent appraisals.

We have not recorded an impairment of long-lived

assets since inception.

January 1, 2018, we adopted Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers

(“ASC 606”) .

Under ASC 606, we recognize revenue from the commercial sales of products, licensing agreements and

contracts to perform pilot studies by applying the following steps:

(1) identify the contract with a customer;

(2) identify the performance obligations in the contract;

(2) identify the performance

obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction price to each performance obligation in the contract;

and (5) recognize revenue when each performance obligation

is satisfied.

We recognize revenue when product is shipped at a fixed selling price

on payment terms of 30 to 120 days from invoicing.

We recognize other revenue earned from pilot studies, consulting and implementation

services upon the performance of specific services under the respective service contract.

We derive revenue primarily from commercial sales of products, net

of discounts and promotions, as well as consulting and implementation services provided in conjunction with our product deployments.

Research and Development

Research and development costs are expensed as incurred.

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

fees, lab supplies, costs incurred related to conducting scientific trials and field studies, regulatory compliance costs,

as well as manufacturing costs associated with process improvement

and other research.

(4) allocate the transaction price to each performance obligation in

the contract;

and (5) recognize revenue when each performance obligation is satisfied.

recognize revenue when product is shipped at a fixed selling price on payment terms of 30 to 120 days from invoicing.

We recognize other

revenue earned from pilot studies, consulting and implementation services upon the performance of specific services under the respective

service contract.

derive revenue primarily from commercial sales of products, net of discounts and promotions, as well as consulting and implementation

services provided in conjunction with our product deployments.

Deferred revenue represents payments that have

been received in advance of fulfillment of these orders.

These product orders are anticipated to be fulfilled in future periods.

and Development

and development costs are expensed as incurred.

Research and development expenses primarily consist of salaries and benefits for research

and development employees, stock-based compensation, consulting fees, lab supplies, costs incurred related to conducting scientific trials

and field studies, regulatory compliance costs, as well as manufacturing costs associated with process improvement and other research.

Research and development expenses include 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 our common stock, are recorded as equity awards.

The grant 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

We expense the grant date fair value of stock options on a straight-line basis over their respective vesting periods.

The stock-based compensation expense recorded

for the three months ended March 31, 2022 and 2021, is as follows:

awards, consisting of stock options and restricted stock units expected to be settled in shares of our common stock, are recorded as

equity awards.

The grant 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.

We expense the grant date fair value of stock options on a straight-line basis over

their respective vesting periods.

stock-based compensation expense recorded for the three and six months ended June 30, 2022 and 2021, was as follows:

Three Months Ended

Six Months Ended

Research and development

1 unchanged sentence

Total stock-based compensation expense

See Note 11 for additional discussion on stock-based compensation.

SENESTECH, INC.

Note 11 for additional discussion on stock-based compensation.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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

We account for income taxes under the asset and

liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events

that have been included in the financial statements.

Under this method, deferred tax assets and liabilities are determined based on the

differences between the financial statements and tax bases of assets and liabilities and net operating loss carryforwards using enacted

tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax

assets and liabilities is recognized in the period that includes the enactment date.

We record net deferred tax assets to the extent

we believe these assets will more likely than not be realized.

These deferred tax assets are subject to periodic assessments as to recoverability

and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which

would increase the provision for income taxes.

In making such determination, we consider all available positive and negative evidence,

including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent

financial operations.

We apply a more-likely-than-not recognition threshold

for all tax uncertainties.

Only those benefits that have a greater than 50% likelihood of being sustained upon examination by the taxing

authorities are recognized.

Based on our evaluation, we have concluded there are no significant uncertain tax positions requiring recognition

in our financial statements.

We recognize interest and/or penalties related

to uncertain tax positions in income tax expense.

There are no uncertain tax positions as of March 31, 2022 or December 31, 2021 and as

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

Comprehensive Loss

Net loss and comprehensive loss were the same

for all periods presented;

therefore, a separate statement of comprehensive loss is not included in the accompanying financial statements.

Loss Per Share Attributable to Common Stockholders

Basic loss per share attributable to common stockholders

is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding

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 months ended March 31, 2022 and 2021.

Therefore, basic and diluted loss per share attributable to common stockholders

are the same for each period presented.

SENESTECH, INC.

2 - Summary of Significant Accounting Policies – (continued)

account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the financial statements.

Under this method, deferred tax

assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities

and net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

record net deferred tax assets to the extent we believe these assets will more likely than not be realized.

These deferred tax assets

are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will

not be realized, valuation allowances are recorded which would increase the provision for income taxes.

In making such determination,

we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected

future taxable income, tax planning strategies and recent financial operations.

apply a more-likely-than-not recognition threshold for all tax uncertainties.

Only those benefits that have a greater than fifty percent

likelihood of being sustained upon examination by the taxing authorities are recognized.

Based on our evaluation, we have concluded there

are no significant uncertain tax positions requiring recognition in our financial statements.

recognize interest and/or penalties related to uncertain tax positions in income tax expense.

There are no uncertain tax positions as

of June 30, 2022 or December 31, 2021 and, as such, no interest or penalties were recorded in income tax expense.

Comprehensive

loss and comprehensive loss were the same for all periods presented;

therefore, a separate statement of comprehensive loss is not included

in the accompanying financial statements.

Per Share Attributable to Common Stockholders

loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the

weighted average number of common shares outstanding 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, 2022 and 2021.

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

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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

The following table sets forth the outstanding

potentially dilutive securities that have been excluded in the calculation of diluted loss per share attributable to common stockholders

(in common stock equivalent shares):

2 - Summary of Significant Accounting Policies – (continued)

following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss

per share attributable to common stockholders (in common stock equivalent shares):

Common stock purchase warrants

1 unchanged sentence

Common stock options

Accounting Standards Issued but Not Yet Adopted

There have been no new accounting pronouncements not yet effective

or adopted in the current year that we believe have a significant impact, or potential significant impact, to our condensed consolidated

financial statements.

Note 3 - Fair Value Measurements

The carrying amounts of our financial instruments,

including accounts payable and accrued liabilities, approximate fair value due to their short maturities.

The estimated fair value of

our notes, not recorded at fair value, are recorded at cost or amortized cost which was deemed to estimate fair value.

Note 4 - Credit Risk

We are potentially subject to concentrations of credit risk in our

accounts receivable.

Credit risk with respect to receivables is limited due to the number of companies comprising our customer base.

did not have any potentially uncollectable accounts at March 31, 2022 or December 31, 2021 and therefore, did not record a reserve for

uncollectable accounts at March 31, 2022 or December 31, 2021.

We do not require collateral or other securities to support its accounts

Note 5 - Prepaid Expenses

Prepaid expenses consist of the following:

Standards Issued but Not Yet Adopted

have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact,

or potential significant impact, to our condensed consolidated financial statements.

3 - Fair Value Measurements

carrying amounts of our financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their

short maturities.

The estimated fair value of our notes, not recorded at fair value, are recorded at cost or amortized cost which was

deemed to estimate fair value.

4 - Credit Risk

are potentially subject to concentrations of credit risk in our accounts receivable.

Credit risk with respect to receivables is limited

due to the number of companies comprising our customer base.

At June 30, 2022, we had $ 12 in potentially uncollectable accounts and recorded

a reserve for uncollectable accounts in that amount.

We did not have any potentially uncollectable accounts at December 31, 2021 and

therefore, did not record a reserve for uncollectable accounts at December 31, 2021.

We do not require collateral or other securities

to support its accounts receivable.

5 - Prepaid Expenses

expenses consisted of the following:

Director, officer and other insurance

Marketing programs and conferences

Engineering, software licenses and other

Inventory deposits

Professional services

Engineering, software licenses and other

Total prepaid expenses

SENESTECH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 6 - Property and Equipment

Property and equipment, net consist of the following:

6 - Property and Equipment

and equipment, net consisted of the following:

Research and development equipment (1)

5 unchanged sentences

* Shorter of lease term or estimated useful life

Depreciation and amortization expense was approximately

$ 66 and $ 73 for the three months ended March 31, 2022 and 2021, respectively.

Note 7 - Accrued Expenses

Accrued expenses consist of the following:

(1) In the three months ended and six months ended June 30, 2022, we received net proceeds of less than $ 2 in the sale of manufacturing, research and development equipment, resulting in gains on the sale of these assets of less than $ 2 .

In the three months ended and six months ended June 30, 2021, we received net proceeds of less than $ 1 in the sale of manufacturing, research and development equipment, resulting in gains on the sale of these assets of less than $ 1 .

and amortization expense was approximately $ 47 and $ 78 for the three months ended June 30, 2022 and 2021, respectively, and $ 113 and

$ 151 for the six months ended June 30, 2022 and 2021, respectively.

7 - Accrued Expenses

expenses consisted of the following:

Compensation and related benefits

Legal services

Digital media

Product warranty

1 unchanged sentence

Total accrued expenses

Note 8 - Borrowings

A summary of our borrowings, including finance lease obligations, is

8 - Borrowings

summary of our borrowings, including finance lease obligations, was as follows:

Short-term debt:

1 unchanged sentence

Other promissory notes

Finance Lease Obligations

Finance lease obligations at March 31, 2022 was 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 %.

SENESTECH, INC.

Lease Obligations

All finance lease and promissory note obligations, for manufacturing

equipment leased through ENGS Commercial Finance Co., were settled in full during the three months ended June 30, 2022.

June 18, 2021, we received notification from BMO Harris Bank National Association as the lender in a promissory note pursuant to the

Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”),

that a loan to us under this program in the amount of $ 646 was forgiven in full under the terms of the program.

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.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

Note 8 - Borrowings – (continued)

Other Promissory Notes

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 %.

Note 9 - Common Stock Warrants and Common Stock Warrant Liability

The table summarizes the common stock warrant activity as of March

31, 2022 by warrant type.:

9 - Common Stock Warrants and Common Stock Warrant Liability

table summarizes the common stock warrant activity as of June 30, 2022 by warrant type:

November 21, 2017

1 unchanged sentence

November 21, 2022

June 20, 2018

Warrant Reissue

December 20, 2023

August 13, 2018

Rights Offering Warrants

July 25, 2023

August 13, 2018

Dealer Manager Warrants

August 13, 2023

July 16, 2019

Dealer Manager Warrants

July 11, 2024

January 28, 2020

Registered Direct Offering

July 28, 2025

January 28, 2020

Dealer Manager Warrants

July 28, 2025

March 6, 2020

Dealer Manager Warrants

March 4, 2025

April 21, 2020

Dealer Manager Warrants

April 21, 2025

April 24, 2020

Registered Direct Offering

April 24, 2025

October 26, 2020

Private Warrant Inducement

April 27, 2026

October 26, 2020

Dealer Manager Warrants

April 27, 2026

February 2, 2021

Private Placement Agreement

August 2, 2026

February 2, 2021

Dealer Manager Warrants

August 2, 2026

March 23, 2021

Dealer Manager Warrants

March 23, 2026

(1) The initial exercise price of these

warrants was $ 30.00 per share.

Pursuant to antidilution price adjustment protection contained within these warrants, the initial exercise

price of these warrants was adjusted downward to $ 29.40 on July 24, 2018, the record date of the 2018 Rights Offering (defined herein)

and downward to $ 19.00 per share on August 13, 2018.

These warrants were further adjusted downward from $ 19.00 to $ 7.13 and to $ 2.1122

on January 28, 2020 and March 4, 2020, respectively, in connection with separate registered direct offerings.

These warrants were

further adjusted downward from $ 2.1122 to $ 1.3659 on October 26, 2020 in connection with a registered direct offering.

These warrants

are subject to further adjustment pursuant to antidilution price adjustment protection.

(1) The initial exercise price of these warrants was $ 30.00 per share.

Pursuant to antidilution price adjustment protection contained within these warrants, the initial exercise price of these warrants was adjusted downward to $ 29.40 on July 24, 2018, the record date of the 2018 Rights Offering (defined herein) and downward to $ 19.00 per share on August 13, 2018.

These warrants were further adjusted downward from $ 19.00 to $ 7.13 and to $ 2.1122 on January 28, 2020 and March 4, 2020, respectively, in connection with separate Registered Direct Offerings.

These warrants were further adjusted downward from $ 2.1122 to $ 1.3659 on October 26, 2020 in connection with a Registered Direct Offering.

These warrants are subject to further adjustment pursuant to antidilution price adjustment protection.

SENESTECH, INC.

4 unchanged sentences

Outstanding Warrants

As of March 31, 2022, we had 4,531,447 shares

of common stock issuable upon exercise of outstanding common stock warrants, at a weighted-average exercise price of $ 4.00 per share.

As of June 30, 2022, we had 4,531,447 shares of

common stock issuable upon exercise of outstanding common stock warrants, at a weighted-average exercise price of $ 4.00 per share.

On November 21, 2017, we issued a total of 232,875

15 unchanged sentences

of common stock.

Per guidance of ASC 260 – Earnings Per Share (“ASC 260”), we recorded a deemed dividend of $ 285

on the 143,501 unexercised warrants that contained this antidilution price adjustment protection provision and was calculated as the difference

Per guidance of ASC 260 – Earnings Per Share (“ASC260”), we recorded a deemed dividend of $ 285 on the

143,501 unexercised warrants that contained this antidilution price adjustment protection provision and was calculated as the difference

between the fair value of the warrants immediately prior to downward exercise price adjustment and immediately after the adjustment using

5 unchanged sentences

dividend yield of 0 % and risk-free interest rate of 1.45 %.

The exercise price of the warrants was adjusted downward to $ 2.1122

on March 4, 2020 in connection with a private placement of common stock.

Per guidance of ASC 260, we recorded a deemed dividend of $ 129

on the 143,501 unexercised warrants that contained this antidilution price adjustment protection provision and was calculated as the difference

between the fair value of the warrants immediately prior to downward exercise price adjustment and immediately after the adjustment using

a Black Scholes model based on the following significant inputs:

The exercise price of the warrants was adjusted

downward to $ 2.1122 on March 4, 2020 in connection with a private placement of common stock.

Per guidance of ASC 260, we recorded a deemed

dividend of $ 129 on the 143,501 unexercised warrants that contained this antidilution price adjustment protection provision and was calculated

as the difference between the fair value of the warrants immediately prior to downward exercise price adjustment and immediately after

the adjustment using a Black Scholes model based on the following significant inputs:

On March 4, 2020, common stock price of $ 2.88 ;

comparable company volatility

company volatility of 74.5 %;

remaining term 2.71 years;

dividend yield of 0 % and risk-free interest rate of 0.68 %.

The exercise price of the warrants was adjusted downward to $ 1.3659

on October 26, 2020 in connection with an inducement offering of common stock.

Per guidance of ASC 260, we recorded a deemed dividend

of $ 22 on the 143,501 unexercised warrants that contained this antidilution price adjustment protection provision and was calculated as

the difference between the fair value of the warrants immediately prior to downward exercise price adjustment and immediately after the

adjustment using a Black Scholes model based on the following significant inputs:

The exercise price of the warrants was adjusted

downward to $ 1.3659 on October 26, 2020 in connection with an inducement offering of common stock.

Per guidance of ASC 260, we recorded

a deemed dividend of $ 22 on the 143,501 unexercised warrants that contained this antidilution price adjustment protection provision and

was calculated as the difference between the fair value of the warrants immediately prior to downward exercise price adjustment and immediately

after the adjustment using a Black Scholes model based on the following significant inputs:

On October 26, 2020, common stock price of

company volatility of 96.5 %;

comparable company volatility of 96.5 %;

remaining term 2.08 years;

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

On June 20, 2018, we 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 we 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, we recorded stock compensation expense

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

We 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, we 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 we 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, we recorded stock compensation expense of $ 1,700 representing the fair

value of the of 56,696 inducement warrants issued.

We 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 ;

comparable company volatility of 72.6 %;

comparable company

volatility of 72.6 %;

remaining term five 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 of $ 513 .

SENESTECH, INC.

3 unchanged sentences

– (continued)

On August 13, 2018, in connection with a rights offering of 267,853

shares of our common stock (the “2018 Rights Offering), we issued 267,853 warrants to purchase shares of our common stock at an

exercise price of $ 23.00 per share.

We estimated the fair value of the common stock warrants, exercisable at $ 23.00 per share, to be $ 3,600

using a Monte Carlo model based on the following significant inputs:

On August 13, 2018, in connection with a rights

offering of 267,853 shares of our common stock (the “2018 Rights Offering”), we issued 267,853 warrants to purchase shares

of our common stock at an exercise price of $ 23.00 per share.

We estimated the fair value of the common stock warrants, exercisable at

$ 23.00 per share, to be $ 3,600 using a Monte Carlo model based on the following significant inputs:

common stock price of $ 18.80 ;

comparable company volatility of 159.0 %;

company volatility of 159.0 %;

remaining term five years ;

dividend yield of 0 % and risk-free interest rate of 2.77 %.

In connection with the closing of the 2018 Rights Offering, we issued

a warrant to purchase 13,393 shares of common stock to Maxim Partners LLC, an affiliate of the dealer-manager of the 2018 Rights Offering.

We estimated the fair value of the common stock warrants, exercisable at $ 34.50 per share, to be $ 169 using a using a Monte Carlo model

based on the following significant inputs:

In connection with the closing of the 2018 Rights

Offering, we issued a warrant to purchase 13,393 shares of common stock to Maxim Partners LLC, an affiliate of the dealer-manager of the

2018 Rights Offering.

We estimated the fair value of the common stock warrants, exercisable at $ 34.50 per share, to be $ 169 using a using

a Monte Carlo model based on the following significant inputs:

common stock price of $ 18.80 ;

comparable company volatility of 159.0 %;

remaining term five

remaining term five years ;

dividend yield of 0 % and risk-free interest rate of 2.77 %.

2 unchanged sentences

In July 2019, we issued to H.C.

Wainwright & Co., as placement

agent, a warrant to purchase 8,334 shares of common stock at an exercise price of $ 33.75 per share as consideration for providing services

in connection with a common stock offering in July 2019.

The warrant was fully vested and exercisable on the date of issuance.

stock warrant is exercisable until five years from the date of grant.

We estimated the fair value of the common stock warrants, exercisable

at $ 33.75 per share, to be $ 127 using a lattice model based on the following significant inputs:

common stock price of $ 26.80 ;

company volatility of 133.3 %;

Co., as placement agent, a warrant to purchase 8,334 shares of common stock at an exercise price of $ 33.75 per share as consideration

for providing services in connection with a common stock offering in July 2019.

The warrant was fully vested and exercisable on the date

The common stock warrant is exercisable until five years from the date of grant.

We estimated the fair value of the common

stock warrants, exercisable at $ 33.75 per share, to be $ 127 using a lattice model based on the following significant inputs:

price of $ 26.80 ;

comparable company volatility of 133.3 %;

remaining term five years ;

dividend yield of 0 % and risk-free interest rate of 2.07 %.

dividend yield of 0 % and risk-free interest rate

Common Stock Warrants Issued in January

and March 2020 Private Placements

In January and March 2020, in separate private placements concurrent

with registered direct offerings (collectively, the “2020 Registered Direct Offerings”) of shares of our common stock, we

also issued warrants to purchase an aggregate of up to 353,872 shares of common stock to certain institutional and accredited investors

that participated in the 2020 Registered Direct Offerings (the “2020 Warrants”).

The warrants were issued in reliance on the

exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and

Rule 506(b) of Regulation D promulgated thereunder.

Terms used but not otherwise defined herein will have the meanings given them in the

warrants, attached as Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on January 28, 2020 and our Current Report

on Form 8-K filed with the SEC on March 6, 2020.

The warrants issued in January 2020 to purchase 177,500 shares of common

stock have an exercise price of $ 9.00 per share, are exercisable after July 28, 2020 and will expire July 28, 2025 .

the fair value of the common stock warrants, exercisable at $ 9.00 per share, to be $ 813 using a Black Scholes model based on the following

significant inputs:

In January and March 2020, in separate private

placements concurrent with registered direct offerings (collectively, the “2020 Registered Direct Offerings”) of shares of

our common stock, we also issued warrants to purchase an aggregate of up to 353,872 shares of common stock to certain institutional and

accredited investors that participated in the 2020 Registered Direct Offerings (the “2020 Warrants”).

The warrants were issued

in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities

Act”) and Rule 506(b) of Regulation D promulgated thereunder.

Terms used but not otherwise defined herein will have the meanings

given them in the warrants, attached as Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on January 28, 2020

and our Current Report on Form 8-K filed with the SEC on March 6, 2020.

The warrants issued in January 2020 to purchase

177,500 shares of common stock have an exercise price of $ 9.00 per share, are exercisable after July 28, 2020 and will expire July

We estimated the fair value of the common stock warrants, exercisable at $ 9.00 per share, to be $ 813 using a Black Scholes model

based on the following significant inputs:

common stock price of $ 7.90 ;

1 unchanged sentence

remaining term five years ;

dividend yield of

0 % and risk-free interest rate of 1.53 %.

The warrants issued in March 2020 to purchase 176,372 shares of common

stock have an exercise price of $ 2.88 per share, are immediately exercisable and will expire September 8, 2025 .

We estimated the fair

value of the common stock warrants, exercisable at $ 2.88 per share, to be $ 242 using a Black Scholes model based on the following significant

dividend yield of 0 % and risk-free interest rate of 1.53 %.

The warrants issued in March 2020 to purchase

176,372 shares of common stock have an exercise price of $ 2.88 per share, are immediately exercisable and will expire September 8, 2025.

We estimated the fair value of the common stock warrants, exercisable at $ 2.88 per share, to be $ 242 using a Black Scholes model based

on the following significant inputs:

common stock price of $ 2.35 ;

comparable company volatility of 74.8 %;

remaining term five and one-half years ;

dividend yield of

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

remaining term five and one-half

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

SENESTECH, INC.

3 unchanged sentences

– (continued)

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.

In the event that we declare or make any dividend or other distribution

of our assets to holders of our common stock, each 2020 Warrant holder will be entitled to participate in such distribution to the same

extent that such holder would have participated therein if the holder had held the number of shares of common stock acquirable upon exercise

of the 2020 Warrant.

In the event of a Fundamental Transaction, as described in the 2020

Warrants and generally including the sale, transfer or other disposition of all or substantially all of our properties or assets;

consolidation or merger with or into another person or reorganization;

a recapitalization, reorganization or reclassification in which

our common stock is converted into other securities, cash or property;

or any acquisition of our outstanding common stock that results

in any person or group becoming the beneficial owner of 50 % of the voting power represented by our outstanding common stock, then the

holders of the 2020 Warrants will be entitled to receive upon exercise of such warrants the kind and amount of securities, cash, assets

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:

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

(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.

In the event that we declare or make any dividend

or other distribution of our assets to holders of our common stock, each 2020 Warrant holder will be entitled to participate in such distribution

to the same extent that such holder would have participated therein if the holder had held the number of shares of common stock acquirable

upon exercise of the 2020 Warrant.

In the event of a Fundamental Transaction, as

described in the 2020 Warrants and generally including the sale, transfer or other disposition of all or substantially all of our properties

our consolidation or merger with or into another person or reorganization;

a recapitalization, reorganization or reclassification

in which our common stock is converted into other securities, cash or property;

or any acquisition of our outstanding common stock that

results in any person or group becoming the beneficial owner of 50 % of the voting power represented by our outstanding common stock, then

the holders of the 2020 Warrants will be entitled to receive upon exercise of such warrants the kind and amount of securities, cash, assets

or other property that the holders would have received had they exercised the 2020 Warrants immediately prior to such Fundamental Transaction.

2 unchanged sentences

the remaining unexercised portion of the 2020 Warrant on the date of the consummation of the Fundamental Transaction.

Any time that we grant, issue, or sell any securities pro rata to all

of the record holders of our common stock (the “2020 Purchase Right”), each holder of 2020 Warrants will be entitled to acquire

the aggregate amount of securities that the holder could have acquired if the holder had held the number of shares of common stock acquirable

upon exercise of the applicable 2020 Warrant.

However, to the extent that an exercise of a 2020 Purchase Right would exceed the Beneficial

Ownership Limitation (defined below), then to such extent the 2020 Purchase Right will be held in abeyance until such time, if ever, that

complete exercise of the 2020 Purchase Right would not exceed the Beneficial Ownership Limitation.

After the Initial Exercisability Date, the 2020 Warrants will be exercisable,

at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full

for the number of shares of our common stock purchased upon such exercise.

If, at the time a holder exercises the 2020 Warrant (but not

sooner than six months following the date of such warrant), a registration statement registering the issuance of the shares of common

stock underlying the 2020 Warrants under the Securities Act is not then effective or available, nor is any current prospectus thereto

available, and an exemption from registration under the Securities Act is not available for the issuance of such shares, then in lieu

of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the

holder may elect instead to receive upon such exercise (either in whole or in part) the number of shares of common stock determined according

to a formula set forth in the 2020 Warrant.

Any time that we grant, issue or sell any securities

pro rata to all of the record holders of our common stock (the “2020 Purchase Right”), each holder of 2020 Warrants will be

entitled to acquire the aggregate amount of securities that the holder could have acquired if the holder had held the number of shares

of common stock acquirable upon exercise of the applicable 2020 Warrant.

However, to the extent that an exercise of a 2020 Purchase Right

would exceed the Beneficial Ownership Limitation (defined below), then to such extent the 2020 Purchase Right will be held in abeyance

until such time, if ever, that complete exercise of the 2020 Purchase Right would not exceed the Beneficial Ownership Limitation.

After the Initial Exercisability Date, the 2020

Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied

by payment in full for the number of shares of our common stock purchased upon such exercise.

If, at the time a holder exercises the 2020

Warrant (but not sooner than six months following the date of such warrant), a registration statement registering the issuance of the

shares of common stock underlying the 2020 Warrants under the Securities Act is not then effective or available, nor is any current prospectus

thereto available, and an exemption from registration under the Securities Act is not available for the issuance of such shares, then

in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,

the holder may elect instead to receive upon such exercise (either in whole or in part) the number of shares of common stock determined

according to a formula set forth in the 2020 Warrant.

Limitations on Exercise .

(together with its affiliates) may not exercise any portion of the 2020 Warrants to the extent that the holder would own more than

4.99% of the outstanding common stock after exercise (the “Beneficial Ownership Limitation”), except that upon at least

61 days’ prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation up to 9.99% of the

number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is

determined in accordance with the terms of the 2020 Warrants.

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 share.

A holder (together

with its affiliates) may not exercise any portion of the 2020 Warrants to the extent that the holder would own more than 4.99% of the

outstanding common stock after exercise (the “Beneficial Ownership Limitation”), except that upon at least 61 days’

prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation up to 9.99% of the number of shares of

our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance

with the terms of the 2020 Warrants.

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 share.

SENESTECH, INC.

3 unchanged sentences

– (continued)

Except as otherwise provided in the 2020 Warrants or by virtue of such

holder’s ownership of shares of our common stock, the holders of the 2020 Warrants do not have the rights or privileges of holders

of our common stock, including any voting rights, unless and until they exercise such warrants.

Except as otherwise provided in the 2020 Warrants

or by virtue of such holder’s ownership of shares of our common stock, the holders of the 2020 Warrants do not have the rights or

privileges of holders of our common stock, including any voting rights, unless and until they exercise such warrants.

Common Stock Warrants Issued in April 2020

Public Offering

On April 24, 2020, in connection with a previously announced public

offering of 145,586 Class A Units and 1,428,722 Class B Units, we issued warrants to purchase 1,574,308 shares of common stock to the

participants in the public offering and have an exercise price of $ 3.05 per share (the “April 2020 Warrants”).

These warrants

are immediately exercisable and will expire April 24, 2025 .

The Common Stock, Pre-Funded Warrants and Warrants sold in this Public

Offering were offered and sold pursuant to a registration statement on Form S-1 (File No.

333-236302) initially filed with the SEC on

February 7, 2020, as amended (“Registration Statement”), which was declared effective by the SEC on February 14, 2020.

Post-Effective Amendment No.

On April 24, 2020, in connection with a previously

announced public offering of 145,586 Class A Units and 1,428,722 Class B Units, we issued warrants to purchase 1,574,308 shares of common

stock to the participants in the public offering and have an exercise price of $ 3.05 per share (the “April 2020 Warrants”).

These warrants are immediately exercisable and will expire April 24, 2025 .

The Common Stock, Pre-Funded Warrants and Warrants

sold in this Public Offering were offered and sold pursuant to a registration statement on Form S-1 (File No.

333-236302) initially filed

with the SEC on February 7, 2020, as amended (“Registration Statement”), which was declared effective by the SEC on February

The Post-Effective Amendment No.

2 to the Registration Statement was declared effective by the SEC on April 21, 2020.

We estimated the fair value of the common stock warrants, exercisable

at $ 3.05 per share, to be $ 2,402 using a Black Scholes model based on the following significant inputs:

common stock price of $ 2.40 ;

company volatility of 87.9 %;

We estimated the fair value of the common stock

warrants, exercisable at $ 3.05 per share, to be $ 2,402 using a Black Scholes model based on the following significant inputs:

price of $ 2.40 ;

comparable company volatility of 87.9 %;

remaining term five years ;

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Agent in 2020 Registered Direct Offerings and Private Placement

In connection with the separate private placements concurrent with

registered direct offerings of shares of our common stock in January and March 2020, we issued to H.C.

Wainwright & Co., LLC, as placement

agent, a warrant to purchase 13,228 shares of common stock and a warrant to purchase 13,313 shares of common stock.

The warrants were

issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation

D promulgated thereunder.

These warrants have substantially similar terms as the 2020 Warrants described above, except that the placement

agent warrant issued in January 2020 has an exercise price of $ 10.00 per share, and the placement agent warrant issued in March 2020 has

an exercise price of $ 3.7563 per share.

We estimated the fair value of the common stock warrants issued in

January, with an exercise price of $ 10.00 per share, to be $ 58 using a Black Scholes model based on the following significant inputs:

In connection with the separate private placements

concurrent with registered direct offerings of shares of our common stock in January and March 2020, we issued to H.C.

Co., LLC, as placement agent, a warrant to purchase 13,228 shares of common stock and a warrant to purchase 13,313 shares of common stock.

The warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b)

of Regulation D promulgated thereunder.

These warrants have substantially similar terms as the 2020 Warrants described above, except that

the placement agent warrant issued in January 2020 has an exercise price of $ 10.00 per share, and the placement agent warrant issued in

March 2020 has an exercise price of $ 3.7563 per share.

We estimated the fair value of the common stock

warrants issued in January, with an exercise price of $ 10.00 per share, to be $ 58 using a Black Scholes model based on the following significant

common stock price of $ 7.90 ;

1 unchanged sentence

remaining term five years ;

dividend yield of 0 % and risk-free interest

rate of 1.53 %.

We estimated the fair value of the common stock warrants issued in

March, with an exercise price of $ 3.7563 per share, to be $ 17 using a Black Scholes model based on the following significant inputs:

stock price of $ 2.35 ;

comparable company volatility of 74.8 %;

remaining term five and one-half years ;

dividend yield of 0 % and risk-free

interest rate of 1.53 %.

We estimated the fair value of the common stock

warrants issued in March, with an exercise price of $ 3.7563 per share, to be $ 17 using a Black Scholes model based on the following significant

common stock price of $ 2.35 ;

comparable company volatility of 74.8 %;

remaining term five and one-half years ;

dividend yield of

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

In connection with the public offering of 145,586

Class A Units and 1,428,722 Class B Units on April 24, 2020, we issued to H.C.

Wainwright & Co., LLC, as placement

agent, warrants to purchase 118,073 shares of common stock.

The warrants were issued in reliance on the exemption from registration

provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

These warrants have

substantially similar terms as the April 2020 Warrants described above, except that the placement agent warrant issued has an

exercise price of $ 3.97 per share.

Wainwright & Co., LLC, as placement agent, warrants

to purchase 118,073 shares of common stock.

The warrants were issued in reliance on the exemption from registration provided by Section

4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

These warrants have substantially similar terms

as the April 2020 Warrants described above, except that the placement agent warrant issued has an exercise price of $ 3.97 per share.

SENESTECH, INC.

3 unchanged sentences

– (continued)

We estimated the fair value of the common stock warrants issued in

April, with an exercise price of $ 3.97 per share, to be $ 167 using a Black Scholes model based on the following significant inputs:

stock price of $ 2.40 ;

We estimated the fair value of the common stock

warrants issued in April, with an exercise price of $ 3.97 per share, to be $ 167 using a Black Scholes model based on the following significant

common stock price of $ 2.40 ;

comparable company volatility of 87.9 %;

remaining term five and one-half years ;

dividend yield of 0 % and risk-free

interest rate of 0.18 %.

Common Stock Warrants Issued in October 2020 Private Warrant

In October 2020, in connection with an inducement agreement with an

existing accredited investor to exercise 1,700,680 outstanding warrants to purchase an equal number of shares of our common stock, we

issued new unregistered warrants to purchase up to an aggregate of 1,700,680 shares of common stock at an exercise price of $ 1.725 per

The warrants issued were immediately exercisable with an exercise period of five and one-half years from the date of issuance.

dividend yield of

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

Common Stock Warrants Issued in October

2020 Private Warrant Inducement

In October 2020, in connection with an inducement

agreement with an existing accredited investor to exercise 1,700,680 outstanding warrants to purchase an equal number of shares of our

common stock, we issued new unregistered warrants to purchase up to an aggregate of 1,700,680 shares of common stock at an exercise price

of $ 1.725 per share.

The warrants issued were immediately exercisable with an exercise period of five and one-half years from the date

The Original Warrants were issued on March 6, 2020 and on April 24, 2020.

Pursuant to the Letter Agreement, the per share exercise price

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

We estimated the fair value of the common stock warrants,

exercisable at $ 1.725 per share, to be $ 1,806 using a Black Scholes model based on the following significant inputs:

common stock price

Pursuant to the Letter Agreement, the per share

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

We estimated the fair value of the

common stock warrants, exercisable at $ 1.725 per share, to be $ 1,806 using a Black Scholes model based on the following significant inputs:

common stock price of $ 1.47 ;

comparable company volatility of 96.5 %;

remaining term five and one-half years ;

dividend yield of 0 % and risk-free interest

rate of 0.18 %.

Common Stock Warrants Issued to Placement Agent in October 2020

Inducement Offering

In connection with the private warrant inducement in October 2020 of

1,700,680 shares of our common warrants, we issued to H.C.

Wainwright & Co., LLC, as placement agent, warrants to purchase 85,034

shares of common stock.

These warrants have substantially similar terms as the 2020 Warrants described above, except that the placement

agent warrant issued in October 2020 has an exercise price of $ 2.156 per share.

We estimated the fair value of these common stock warrants, with an

exercise price of $ 2.156 per share, to be $ 86 using a Black Scholes model based on the following significant inputs:

common stock price

dividend yield of 0 % and

risk-free interest rate of 0.18 %.

Common Stock Warrants Issued to Placement

Agent in October 2020 Inducement Offering

In connection with the private warrant inducement

in October 2020 of 1,700,680 shares of our common warrants, we issued to H.C.

Wainwright & Co., LLC, as placement agent, warrants

to purchase 85,034 shares of common stock.

These warrants have substantially similar terms as the 2020 Warrants described above, except

that the placement agent warrant issued in October 2020 has an exercise price of $ 2.156 per share.

We estimated the fair value of these common stock

warrants, with an exercise price of $ 2.156 per share, to be $ 86 using a Black Scholes model based on the following significant inputs:

common stock price of $ 1.47 ;

comparable company volatility of 96.5 %;

remaining term 5.5 years;

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

Common Stock Warrants Issued in February 2021 Private Placement

In February 2021, in connection with a private placement agreement

with certain institutional and accredited investors, we issued common stock warrants to purchase up to an aggregate of 2,194,427 shares

of common stock at an exercise price of $ 2.216 per share.

The warrants were exercisable immediately and have an exercise period of five

and one-half years from the date of issuance.

The warrant holder may not exercise any portion of such holder’s warrants to the extent

that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of our

outstanding shares of common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to

us, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of common stock outstanding immediately

after giving effect to the exercise.

We estimated the fair value of the common stock warrants, exercisable at $ 2.216 per share, to be

$ 3,052 using a Black Scholes model based on the following significant inputs:

dividend yield of 0 % and risk-free interest

rate of 0.18 %.

Common Stock Warrants Issued in February

2021 Private Placement Agreement

In February 2021, in connection with a private

placement agreement with certain institutional and accredited investors, we issued common stock warrants to purchase up to an aggregate

of 2,194,427 shares of common stock at an exercise price of $ 2.216 per share.

The warrants were exercisable immediately and have an exercise

period of five and one-half years from the date of issuance.

The warrant holder may not exercise any portion of such holder’s warrants

to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder,

9.99%) of our outstanding shares of common stock immediately after exercise, except that upon at least 61 days’ prior notice from

the holder to us, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of common stock outstanding

immediately after giving effect to the exercise.

We estimated the fair value of the common stock warrants, exercisable at $ 2.216 per share,

to be $ 3,052 using a Black Scholes model based on the following significant inputs:

common stock price of $ 1.93 ;

5 unchanged sentences

(In thousands, except share and per share data)

Note 9 - Common Stock Warrants and Common Stock Warrant Liability

– (continued)

Common Stock Warrants Issued to Placement Agent in February 2021

Private Placement Agreement

In connection with the private placement in February 2021, we issued

Wainwright & Co., LLC, as placement agent, warrants to purchase up to 329,164 shares of common stock with an exercise price

of $ 2.8481 per share.

The warrants are exercisable immediately and have an exercise period of five and one-half years from the date of

We estimated the fair value of these common stock warrants, with an exercise price of $ 2.8481 per share, to be $ 435 using a

Black Scholes model based on the following significant inputs:

Note 9 - Common Stock Warrants and Common Stock

Warrant Liability – (continued)

Common Stock Warrants Issued to Placement

Agent in February 2021 Private Placement Agreement

In connection with the private placement in February

2021, we issued to H.C.

Wainwright & Co., LLC, as placement agent, warrants to purchase up to 329,164 shares of common stock with

an exercise price of $ 2.8481 per share.

The warrants are exercisable immediately and have an exercise period of five and one-half years

from the date of issuance.

We estimated the fair value of these common stock warrants, with an exercise price of $ 2.8481 per share, to

be $ 435 using a Black Scholes model based on the following significant inputs:

common stock price of $ 1.93 ;

comparable company volatility of 95.6 %;

term five and one-half years ;

comparable company volatility

remaining term five and one-half years ;

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

Common Stock Warrants Issued to Placement Agent in March 2021

Registered Direct Offering

On March 23, 2021, we consummated a registered direct offering with

certain institutional investors and issued an aggregate of 1,975,000 shares of our common stock, par value $ 0.001 per share at a purchase

price of $ 2.00 per share for gross proceeds to us of approximately $ 3.95 million, before deducting fees payable to the placement agent

and other estimated offering expenses payable by us.

The 1,975,000 shares of common stock sold in the offering were offered and sold pursuant

to a prospectus, dated August 24, 2018, and a prospectus supplement, dated March 22, 2021, in connection with a takedown from our shelf

registration statement on Form S-3 (File No.

In connection with the registered direct offering in March 2021, we

issued to H.C.

Wainwright & Co., LLC, as the placement agent, warrants to purchase up to 148,125 shares of common stock.

The placement

agent warrants will be exercisable commencing six months following the date of issuance, expire five years following the date of sale

and have an exercise price per share of $ 2.50 per share.

The placement agent warrants, and the shares of common stock issuable upon exercise

thereof, will be issued in reliance on the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as

amended, and Regulation D promulgated thereunder.

We estimated the fair value of these common stock warrants, with an exercise price of

$ 2.50 per share, to be $ 181 using a Black Scholes model based on the following significant inputs:

common stock price of $ 1.76 ;

company volatility of 100.8 %;

Common Stock Warrants Issued to Placement

Agent in March 2021 Registered Direct Offering

On March 23, 2021, we consummated a registered

direct offering with certain institutional investors and issued an aggregate of 1,975,000 shares of our common stock, par value $ 0.001

per share at a purchase price of $ 2.00 per share for gross proceeds to us of approximately $ 3.95 million, before deducting fees payable

to the placement agent and other estimated offering expenses payable by us.

The 1,975,000 shares of common stock sold in the offering

were offered and sold pursuant to a prospectus, dated August 24, 2018, and a prospectus supplement, dated March 22, 2021, in connection

with a takedown from our shelf registration statement on Form S-3 (File No.

In connection with the registered direct offering

in March 2021, we issued to H.C.

Wainwright & Co., LLC, as the placement agent, warrants to purchase up to 148,125 shares of common

The placement agent warrants will be exercisable commencing six months following the date of issuance, expire five years following

the date of sale and have an exercise price per share of $ 2.50 per share.

The placement agent warrants, and the shares of common stock

issuable upon exercise thereof, will be issued in reliance on the exemption from registration provided in Section 4(a)(2) under the Securities

Act of 1933, as amended, and Regulation D promulgated thereunder.

We estimated the fair value of these common stock warrants, with an

exercise price of $ 2.50 per share, to be $ 181 using a Black Scholes model based on the following significant inputs:

common stock price

comparable company volatility of 100.8 %;

remaining term five years ;

2 unchanged sentences

Terms Revaluation

On March 3, 2020, we issued an aggregate of 51,414 common shares in

a cashless exercise of 56,625 warrants issued in December 2016 and November 2017.

Consideration for the exercise of these warrants was

the full settlement of an outstanding litigation reserve of $ 238 .

On October 26, 2020, in connection with the private warrant inducement

with an existing accredited investor to exercise 1,700,680 outstanding warrants (“Original Warrants”), we agreed to modify

the terms of the original warrants that were originally issued on March 6, 2020 and on April 24, 2020.

Pursuant to the agreement, the

per share 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, we 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 March 3, 2020, we issued an aggregate of 51,414

common shares in a cashless exercise of 56,625 warrants issued in December 2016 and November 2017.

Consideration for the exercise of these

warrants was the full settlement of an outstanding litigation reserve of $ 238 .

On October 26, 2020, in connection with the private

warrant inducement with an existing accredited investor to exercise 1,700,680 outstanding warrants (“Original Warrants”),

we agreed to modify the terms of the original warrants that were originally issued on March 6, 2020 and on April 24, 2020.

the agreement, the per share 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, we 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

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:

common stock price

stock price of $ 1.47 ;

comparable company volatility of 96.5 %;

remaining term 4.5 -4.8 years;

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.

13 unchanged sentences

We had 12,212,950 and 12,207,283 shares of common

stock issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022,

we issued 5,000 shares of common stock as follows:

● an aggregate of 5,000 shares in connection with a restricted stock grant that was issued and vested on February 25, 2022 for services.

stock issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.

During the six months ended June 30, 2022, we

issued 5,667 shares of common stock as follows:

● an aggregate of 5,000 shares in

connection with a restricted stock grant that was issued and vested on February 25, 2022 for services.

● an aggregate of 667 shares in

connection with a restricted stock grant that vested on May 4, 2022 for services.

Note 11 - Stock-Based Compensation

On June 12, 2018, our stockholders approved the 2018 Equity Incentive

Plan (the “2018 Plan”) to replace our 2015 Equity Incentive Plan (the “2015 Plan”).

On July 8, 2020, our stockholders

approved an amendment to the 2018 Plan to increase the number of shares of common stock available for issuance under the 2018 Plan by

800,000 shares from 50,000 to 850,000 .

In addition, up to 122,279 shares of our common stock previously reserved for issuance under the

2015 Plan are available for issuance under the 2018 Plan to the extent such shares were available for issuance under the 2015 Plan as

of June 12, 2018 or thereafter cease to be subject to awards outstanding under the 2015 Plan, such as by expiration, cancellation, or

forfeiture of such awards.

On June 24, 2021, our stockholders approved an amendment to 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 are generally issued with a per share exercise price

equal to no less than fair market value of our common stock at the date of grant.

Options granted under the 2018 Plan generally vest immediately,

or ratably over a two- to 36-month period coinciding with their respective service periods.

Options under the 2018 Plan generally have

a term of five years .

On June 12, 2018, our stockholders approved the

2018 Equity Incentive Plan (the “2018 Plan”) to replace our 2015 Equity Incentive Plan (the “2015 Plan”).

8, 2020, our stockholders approved an amendment to the 2018 Plan to increase the number of shares of common stock available for issuance

under the 2018 Plan by 800,000 shares from 50,000 to 850,000 .

In addition, up to 122,279 shares of our common stock previously reserved

for issuance under the 2015 Plan are available for issuance under the 2018 Plan to the extent such shares were available for issuance

under the 2015 Plan as of June 12, 2018 or thereafter cease to be subject to awards outstanding under the 2015 Plan, such as by expiration,

cancellation, or forfeiture of such awards.

On June 24, 2021, our stockholders approved an

amendment to 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 are generally issued with a per

share exercise price equal to no less than fair market value of our common stock at the date of grant.

Options granted under the 2018

Plan generally vest immediately, or ratably over a two- to 36-month period coinciding with their respective service periods.

Options under

the 2018 Plan generally have a term of five years .

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

As of March 31, 2022, we had 2,453,600 shares

of common stock available for issuance under the 2018 Plan.

As of June 30, 2022, we had 2,457,600 shares of

common stock available for issuance under the 2018 Plan.

Stock Options

We measure the fair value of stock options with service-based vesting

criteria to employees, directors and consultants on the date of grant using the Black-Scholes option pricing model.

The Black-Scholes

valuation model requires us to make certain estimates and assumptions, including assumptions

related to the expected price volatility of our stock, the period during which the options will be outstanding, the rate of return on

risk-free investments, and the expected dividend yield for our stock.

We measure the fair value of stock options with

service-based vesting criteria to employees, directors and consultants on the date of grant using the Black-Scholes option pricing model.

The Black-Scholes valuation model requires us to make certain estimates and assumptions, including assumptions related to the expected

price volatility of our stock, the period during which the options will be outstanding, the rate of return on risk-free investments,

and the expected dividend yield for our stock.

SENESTECH, INC.

1 unchanged sentence

(In thousands, except share and per share data)

Note 11 - Stock-Based Compensation – (continued)

Note 11 - Stock-Based Compensation –

We did not issue any stock options in the three

months ended June 30, 2022.

The weighted-average assumptions used in the Black-Scholes

option-pricing model used to calculate the fair value of options granted during the three months ended March 31, 2022 were as follows:

option-pricing model used to calculate the fair value of options granted during the six months ended June 30, 2022 were as follows:

Expected volatility

3 unchanged sentences

The weighted average grant date fair value of

options granted during the three months ended March 31, 2022 was $ 0.444 per share, as per the table above.

options granted during the six months ended June 30, 2022 was $ 0.444 per share, as per the table above.

Due to our limited operating history and lack

16 unchanged sentences

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Outstanding at June 30, 2022

Exercisable at June 30, 2022

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

The estimated stock values used in the calculation were $ 0.98 and $ 0.73 per share for the year ended December 31, 2021 and the three months ended March 31, 2022, respectively.

The estimated stock values used in the calculation were $ 0.98 and $ 0.53 per share for the year ended December 31, 2021 and the six months ended June 30, 2022, respectively.

SENESTECH, INC.

4 unchanged sentences

The following table summarizes restricted stock

unit activity for the three months ended March 31, 2022:

unit activity for the six months ended June 30, 2022:

Weighted Average

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Outstanding as of December 31, 2021

Outstanding as of March 31, 2022

Outstanding as of June 30, 2022

The stock-based compensation expense was recorded as follows:

Three Months Ended

Six Months Ended

Research and development

3 unchanged sentences

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

At March 31, 2022, the total compensation cost

At June 30, 2022, the total compensation cost

related to restricted stock units and unvested options not yet recognized was $ 327 , which will be recognized over a weighted average period

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In July 2020, Kennan E.

Kaedar, our former

corporate general counsel (the “Plaintiff”), commenced an action against us in the Superior Court of the State of

California, for the County of San Diego.

The complaint alleges, among other things, that we breached the Plaintiff’s

employment contract with us, as well as the implied covenant of good faith and fair dealing, by refusing to issue him the balance of

stock options he claims we owe him.

In September 2021, the Plaintiff served us and also named the following individuals as

Loretta Mayer, Cheryl Dyer, Thomas C.

Chesterman, Kim Wolin, Grover Wickersham, Marc Dumont, Bob Ramsey, Matthew Szot,

Julia Williams, and Bill Baker.

We do not believe that all of the defendants have yet been served.

The Plaintiff alleges that such

individuals agreed to knowingly and wrongfully withhold the stock options owed to him and are knowingly in receipt of stolen

The Plaintiff seeks compensatory damages in excess of $ 500,000 , treble damages and reasonable attorneys’ fees.

not believe the claims described above have merit and intend to aggressively defend against these accusations.

Kaeder, our former corporate

general counsel (the “Plaintiff”), commenced an action against us in the Superior Court of the State of California, for the

County of San Diego.

The complaint alleges, among other things, that we breached the Plaintiff’s employment contract with us, as

well as the implied covenant of good faith and fair dealing, by refusing to issue him the balance of stock options he claims we owe him.

In September 2021, the Plaintiff served us and also named the following individuals as defendants:

Loretta Mayer, Cheryl Dyer, Thomas

Chesterman, Kim Wolin, Grover Wickersham, Marc Dumont, Bob Ramsey, Matthew Szot, Julia Williams, and Bill Baker.

We do not believe

that this litigation is likely to have a material effect on our operations.

that all of the defendants have yet been served.

The Plaintiff alleges that such individuals agreed to knowingly and wrongfully withhold

the stock options owed to him and are knowingly in receipt of stolen property.

The Plaintiff seeks compensatory damages in excess of $ 500,000 ,

treble damages, and reasonable attorneys’ fees.

We do not believe the claims described above have merit and intend to aggressively

defend against these accusations.

We do not believe that this litigation is likely to have a material effect on our operations.

SENESTECH, INC.

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Note 12 - Commitments and Contingencies –

In addition to the matter described above, we may be subject to other

legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business.

is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could have a material adverse

effect on our financial position, results of operations or liquidity.

In addition to the matter described above, we

may be subject to other legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course

Management is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could

have a material adverse effect on our financial position, results of operations or liquidity.

Lease Commitments

On December 1, 2019, we entered into a lease for our corporate headquarters

in Phoenix, Arizona where we lease and occupy approximately 5,529 square feet of office space.

This lease expires in November 2024.

On August 1, 2020, we entered into a lease for our manufacturing and

research facility in Phoenix, Arizona where we occupy approximately 5,105 square feet of manufacturing and warehouse space.

expires on November 30, 2024.

On December 1, 2019, we entered into a lease for

our corporate headquarters in Phoenix, Arizona where we lease and occupy approximately 5,529 square feet of office space.

This lease expires

in November 2024.

On August 1, 2020, we entered into a lease for

our manufacturing and research facility in Phoenix, Arizona where we occupy approximately 5,105 square feet of manufacturing and warehouse

This lease expires on November 30, 2024.

We believe that our existing facilities are adequate

and meet our current needs for business, manufacturing and research.

Rent expense was $ 56 and $ 54 for the three months

ended March 31, 2022 and 2021, respectively.

Rent expense was $ 112 and $ 111 for the six months

ended June 30, 2022 and 2021, respectively.

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

finance lease payments as of March 31, 2022 are follows:

finance lease payments as of June 30, 2022 are follows:

Years Ending December 31,

Total minimum lease payments

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

Present value of minimum lease payments

current installments under finance lease obligations

Total long-term portion

Note 13 - Subsequent Events

On May 4, 2022, the Company issued 667 shares

of common stock for service for restricted stock units that vested in April, 2022.

We have evaluated subsequent events from the balance

sheet date through May 13, 2022, 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.

sheet date through August 12, 2022, the date at which the financial statements were issued, and determined that there were no 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