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Item 8. Financial Statements and Supplementary Data

2024-02-21 compared with 2023-03-17 · 182 added, 253 removed, 561 unchanged (44% of the section changed)

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Statements of Operations and Comprehensive Loss for the years ended December 31, 202 3 and 202 2

Statements of Changes in Stockholder s ’ Equity for the years ended December 31, 202 2 and 202 1

Statements of Changes in Stockholders’ Equity for the years ended December 31, 202 3 and 202 2

Statements of Cash Flows for the years ended December 31, 202 3 and 202 2

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Equity Transactions

As discussed in Note 9 to the financial statements, the Company issues options and warrants.

As discussed in Note 6 and Note 9 to the financial statements, the Company issues options and warrants.

The proper valuation of options and warrants requires significant management judgment in determining the volatility and method used to calculate the option and warrant values.

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We have served as the Company’s auditor since 2017.

March 16, 2023

February 21, 2024

SENESTECH, INC.

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Current liabilities:

Short-term debt $ — $ 32

Accounts payable 150 540

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Current portion of operating lease liability 217 180

Current portion of notes payable 33 —

Deferred revenue 18 44

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Operating lease liability, less current portion — 179

Notes payable, less current portion 156 —

Total liabilities 942 1,503

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Product sales, net $ 1,193 $ 1,019

Grant revenue — 24

Total revenues 1,019 600

Cost of sales 654 555

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Interest expense ( 4 ) ( 2 )

Payroll Protection Program loan forgiveness — 651

Miscellaneous income (expense) ( 26 ) 22

Miscellaneous expense — ( 26 )

Other income (expense), net 22 ( 21 )

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Shares Amount

Balance as of December 31, 2020 254,976 $ — $ 108,124 $ ( 104,240 ) $ 3,884

Balances as of December 31, 2021 50,864 $ — $ 122,543 $ ( 112,508 ) $ 10,035

Stock-based compensation — — 707 — 707

Net proceeds received for issuance of common stock 308,193 — 12,421 — 12,421

Net proceeds received for exchange of warrants for common stock 46,148 — 1,250 — 1,250

Net proceeds received for issuance of common stock and prefunding of warrants 5,631 — 4,228 — 4,228

Issuance of common stock upon exercise of warrants 10,916 — — — —

Issuance of common stock for services 57 — 4 — 4

Shares forfeited for payment of employee withholding taxes related to share based awards — — ( 17 ) — ( 17 )

Issuance of common stock for fractional shares in the 20:1 reverse stock split 4 — — — —

Net loss — — — ( 9,695 ) ( 9,695 )

Balance as of December 31, 2021 610,364 1 122,542 ( 112,508 ) 10,035

Balances as of December 31, 2022 67,472 — 127,482 ( 122,203 ) 5,279

Stock-based compensation — — 455 — 455

Net proceeds received for issuance of common stock and prefunding of warrants 521,735 — 5,407 — 5,407

Issuance of common stock upon exercise of warrants 131,000 — — — —

Issuance of common stock upon exercise of warrants, net 4,544,437 5 2,826 — 2,831

Issuance of common stock for services 4,539 — 100 — 100

Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes 1,102 — ( 11 ) — ( 11 )

Issuance of common stock for fractional shares in the 12:1 reverse stock split 739 — — — —

Net loss — — — ( 7,710 ) ( 7,710 )

Balance as of December 31, 2022 809,648 $ 1 $ 127,481 $ ( 122,203 ) $ 5,279

Balances as of December 31, 2023 5,140,024 $ 5 $ 136,259 $ ( 129,913 ) $ 6,351

See accompanying notes to the financial statements.

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Stock-based compensation 555 711

Paycheck Protection Program loan forgiveness — ( 646 )

Loss on sale of equipment — 28

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Proceeds from the issuance of common stock, net 5,407 4,228

Proceeds from the exercise of warrants 2,831 —

Proceeds from the issuance of notes payable 114 —

Repayments of notes payable ( 6 ) ( 5 )

Repayments of finance lease obligations — ( 27 )

Proceeds from the exercise of warrants — 1,250

Payment of employee withholding taxes related to share based awards ( 11 ) —

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Income taxes paid — —

Non-cash investing and financing activities:

Notes payable incurred for the purchase of certain equipment 81 —

See accompanying notes to the financial statements.

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Our corporate headquarters and manufacturing site are in Phoenix, Arizona.

We have developed and are commercializing a global, proprietary technology for managing animal pest populations, initially rat populations, through fertility control with our product known as ContraPest.

ContraPest is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide and triptolide.

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To date, we have received registration for ContraPest in all 50 states and the District of Columbia, 49 of which have approved the removal of the Restricted Use designation, as well as the District of Columbia and five major U.S.

In November 2023, we launched our latest product, Evolve, a soft bait containing the active ingredient cottonseed oil.

Evolve limits reproduction of male and female rats after one to two breeding cycles following consumption.

Evolve is being marketed for use in controlling rat populations as a minimum risk pesticide under the U.S.

Environmental Protection Agency Federal Insecticide, Fungicide, and Rodenticide Act, Section 25(b).

We must obtain registration from the various state regulatory agencies that do not accept the federal exemption.

To date, we are authorized to sell Evolve in 30 states.

Reverse Stock Split

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We have generated limited revenue to date from product sales, research grants and licensing fees from a former license.

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;

and debt financing, consisting primarily of convertible notes.

As of December 31, 2022, we had an accumulated deficit of $ 122.2 million and cash and cash equivalents of $ 4.8 million.

In April 2020, we received cash proceeds of $ 645,700 from the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

We used the proceeds from the PPP loan to retain employees,

We have primarily funded our operations

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NOTES TO THE FINANCIAL STATEMENTS, continued

maintain payroll and make lease, interest and utility payments.

In June 2021, the Company received notification from BMO Harris Bank National Association as the lender in a promissory note pursuant to the CARES Act, that this loan was forgiven in full under the terms of the program.

to date through the sale of equity securities, including convertible preferred stock, common stock and warrants to purchase common stock;

and debt financing, consisting primarily of convertible notes.

As of December 31, 2023, we had an accumulated deficit of $ 129.9 million and cash and cash equivalents of $ 5.4 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 products;

(i) successful commercialization of ContraPest and Evolve and maintaining and obtaining regulatory approval of our products and product candidates;

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

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

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

Based upon our current operating plan, we expect that cash and cash equivalents at December 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 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.

Based upon our current operating plan, we expect that cash and cash equivalents at December 31, 2023, in combination with anticipated revenue, will be sufficient to fund our current operations for at least the next nine months.

We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of ContraPest and Evolve in the United States and globally.

However, if anticipated revenue targets and margin targets are not achieved or expenses are more than we have budgeted, we may need to raise additional financing before that time.

If we need more financing, including within the next 12 months, and we are unable to raise necessary capital through the sale of our securities, we may be required to take other measures that could impair our ability to be successful and operate as a going concern.

If we need more financing, including within the next 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 capital.

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Our actual results may differ from these estimates under different conditions.

Reclassifications

To conform with the 2022 presentation, we have reclassified (i) Deposits of $ 22,000 with Other noncurrent assets and (ii) provided separate presentation of Current portion of operating lease liability of $ 164,000 from Operating lease liability in the balance sheet as of December 31, 2021.

In addition, we have reclassified $ 22,000 to Miscellaneous income from Paycheck Protection Program loan forgiveness in the statement of operations and comprehensive loss for the year ended December 31, 2021.

These reclassifications had no impact on our statement of cash flows for the year ended December 31, 2021.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

That estimate is based on historical

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NOTES TO THE FINANCIAL STATEMENTS, continued

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

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.

Provisions for uncollectible accounts receivable are charged to Selling, general and administrative expense, with an offsetting credit to the allowance for uncollectible accounts.

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Cost includes the acquired cost of raw materials, with work-in-progress and finished goods including the application of labor and overhead costs related to the manufacturing process.

Raw materials are stocked to reduce the risk of impact on manufacturing for any potential supply interruptions or long lead times on certain ingredients.

Raw materials

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NOTES TO THE FINANCIAL STATEMENTS, continued

are stocked to reduce the risk of impact on manufacturing for any potential supply interruptions or long lead times on certain ingredients.

Reserves for obsolete inventory consist of reserves primarily related to obsolete product containers and delivery systems.

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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.

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NOTES TO THE FINANCIAL STATEMENTS, continued

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.

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

We recognize any other revenue earned from pilot studies, consulting and implementation services upon the performance of specific services under the respective service contract.

Research and Development

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Research and development expenses include an allocation of facilities related costs, including depreciation of equipment.

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NOTES TO THE FINANCIAL STATEMENTS, continued

Stock-based Compensation

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Raw materials $ 747 $ 772

Work in progress 0 5

Finished goods 53 99

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Software licenses $ 152 $ 157

Marketing programs and conferences 74 66

Prepaid inventory 111 —

Insurance 64 61

Patents 39 41

Professional services 30 41

Patents 14 39

Marketing programs and conferences 1 74

Total prepaid expenses $ 388 $ 378

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During the years ended December 31, 2023 and 2022, depreciation and amortization expense was $ 135,000 and $ 183,000 , respectively.

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NOTES TO THE FINANCIAL STATEMENTS, continued

Accrued Expenses

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Total accrued expenses $ 368 $ 560

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NOTES TO THE FINANCIAL STATEMENTS, continued

Notes Payable

In the second half of 2023, we arranged financing for the purchase of certain equipment.

The notes payable have an annual interest rate of 9.1 % with a term of five years and is secured by the underlying equipment.

As of December 31, 2023, future principal payments were as follows (in thousands):

Total principal payments 189

current portion of notes payable ( 33 )

Notes payable, less current portion $ 156

FAIR VALUE MEASUREMENTS

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Level 3 — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

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NOTES TO THE FINANCIAL STATEMENTS, continued

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

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If the implicit rate is not readily determinable in the contract, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Contract terms may

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NOTES TO THE FINANCIAL STATEMENTS, continued

include options to extend or terminate the lease, and, when we deem it is reasonably certain that we will exercise that option, it is included in the ROU asset and liability.

Contract terms may include options to extend or terminate the lease, and, when we deem it is reasonably certain that we will exercise that option, it is included in the ROU asset and liability.

Operating leases reflect lease expense on a straight-line basis, while any finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the ROU asset.

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Total finance lease cost $ — $ 36

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NOTES TO THE FINANCIAL STATEMENTS, continued

As of December 31, 2023, maturities of operating lease liabilities are follows (in thousands):

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2018 Equity Incentive Plan (the “2018 Plan”).

The 2018 Plan has since been amended and restated on certain occasions, most recently on October 12, 2022, when our stockholders approved an increase to the total number of authorized shares to 348,614 shares.

The 2018 Plan has since been amended and restated on certain occasions, most recently on June 23, 2023, when our stockholders approved an increase to the total number of authorized shares to 70,717 shares.

Stock options are generally issued with a per share exercise price equal to the fair market value of our common stock at the date of grant.

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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.

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NOTES TO THE FINANCIAL STATEMENTS, continued

Fair value of options granted is determined using the Black-Scholes option-pricing model with the following weighted average assumptions:

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Expected term (in years) 5.0 3.3

Due to our limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption was determined based on historical volatilities from traded options of biotech companies of comparable size and stability, whose share prices are publicly available.

The expected term of options granted to employees is calculated based on the mid-point between the vesting date and the end of the contractual term according to the simplified method as described in SEC Staff Accounting Bulletin 110 because we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time our awards have been outstanding.

The weighted average fair value of options granted during the years ended December 31, 2023 and 2022 was $ 14.88 and $ 41.04 per share, respectively.

The risk-free interest rate is estimated using treasury bill interest rates.

The expected dividend yield is no as we have not paid any dividends to date and do not expect to pay dividends in the future.

Expected volatility is estimated based on the historical volatility of our common stock over the expected term as this represents our best estimate of future volatility.

The contractual life of stock options granted is five years , and we have elected to use the “simplified method” to estimate expected term.

Under the simplified method, an option’s expected term is calculated as the average of its vesting period and original contractual life.

For non-employee options, the expected term of options granted is the contractual term of the options.

The risk-free interest rate is determined by reference to the implied yields of U.S.

Treasury securities with a remaining term equal to the expected term assumed at the time of grant.

The expected dividend assumption is based on our history and expectation of dividend payouts.

We have not paid and do not intend to pay dividends.

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NOTES TO THE FINANCIAL STATEMENTS, continued

The stock option activity consists of the following:

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Exercisable as of December 31, 2023 20,634 (2)

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

The estimated stock values used in the calculation was $ 5.96 and $ 19.60 per share for each of the years ended December 31, 2022 and 2021, respectively.

The weighted average grant date fair value of options granted to employees for the year ended December 31, 2022 was $ 3.42 per share.

(1) Calculated based on the difference between the estimated fair value of our stock and the exercise price of the underlying option.

The estimated stock values used in the calculation was $ 15.00 and $ 71.52 per share for the years ended December 31, 2023 and 2022, respectively.

(2) Includes options related to 8,249 shares that are inducement awards and not granted under the 2018 Plan.

As of December 31, 2023, the unrecognized stock-based compensation cost was $ 293,000 , which is expected to be recognized over a weighted average period of 13 months.

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NOTES TO THE FINANCIAL STATEMENTS, continued

Restricted Stock Units

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Outstanding as of December 31, 2021 2 $ 432.00

Granted 1,587 34.44

Vested ( 23 ) 212.04

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Outstanding as of December 31, 2022 1,566 32.52

Granted 19,049 2.87

Vested ( 1,566 ) 32.52

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Outstanding as of December 31, 2023 — —

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NOTES TO THE FINANCIAL STATEMENTS, continued

The stock-based compensation expense was recorded as following (in thousands):

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Total stock-based compensation expense $ 555 $ 711

(1) Includes $ 100,000 related to stock issued in exchange for marketing services.

Our losses before income taxes for the years ended December 31, 2023 and December 31, 2022 were generated entirely from U.S.

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Stock-based compensation 1.2 2.5

PPP loan forgiveness — ( 1.7 )

Effective tax rate — % — %

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Deferred income tax liabilities:

Depreciation — ( 7 )

ROU assets ( 52 ) ( 86 )

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November 2022 .

We consummated a private placement with certain institutional and accredited investors and issued an aggregate of 67,572 shares of our common stock at a purchase price of $ 3.50 per share, pre-funded warrants to purchase up to an aggregate of 1,361,000 shares of common stock at a purchase price of $ 3.50 per pre-funded warrant (“Pre-Funded Warrants”) and associated warrants to purchase up to an aggregate of 2,857,144 share of common stock at $ 3.165 per share, for gross proceeds of approximately $ 5.0 million, prior to deducting placement agent fees and offering expenses.

We consummated a private placement with certain institutional and accredited investors and issued an aggregate of 5,631 shares of our common stock at a purchase price of $ 42.00 per share, pre-funded warrants to purchase up to an aggregate of 113,416 shares of common stock at a purchase price of $ 42.00 per pre-funded warrant (“November 2022 Pre-Funded Warrants”) and associated warrants to purchase up to an aggregate of 238,094 share of common stock at $ 37.98 per share (“Series A” and “Series B” warrants), for gross proceeds of approximately $ 5.0 million, prior to deducting placement agent fees and offering expenses of $ 770,000 .

In connection with this offering, we issued the placement agent warrants to purchase up to 8,931 shares of common stock with an exercise price of $ 52.50 per share.

Of the Pre-Funded Warrants, 131,000 were exercised in December 2022, with the remaining 1,230,000 exercised in early 2023.

The common stock, Pre-Funded Warrants and warrants sold in this November 2022 public offering were offered and sold pursuant to a registration statement on Form S-1 (File No.

Of the November 2022 Pre-Funded Warrants, 10,916 were exercised in December 2022, with the remaining 102,500 exercised in early 2023.

The common stock, November 2022 Pre-Funded Warrants and Series A and Series B warrants issued in this November 2022 offering were offered and sold pursuant to a registration statement on Form S-1 (File No.

333-267991) initially filed with the SEC on October 24, 2022, as amended, which was declared effective by the SEC on November 16, 2022.

We consummated a registered direct offering with certain institutional investors and issued an aggregate of 98,750 shares of our common stock at a purchase price of $ 40.00 per share for gross proceeds of approximately $ 3.95 million, pursuant to a prospectus, dated August 24, 2018, and a prospectus supplement, dated March 22, 2021, in connection with a takedown from our shelf registration statement on Form S-3 (File No.

In connection with the offering, we issued the placement agent warrants to purchase up to 7,408 shares of common stock at an exercise price per share of $ 50.00 per share.

February 2021.

We consummated a private placement with certain institutional and accredited investors and issued an aggregate of 198,443 shares of our common stock at a purchase price of $ 45.57 per share, pre-funded warrants to purchase up to an aggregate of 21,000 shares of common stock at a purchase price of $ 2.2775 per pre-funded warrant and associated warrants to purchase up to an aggregate of 109,730 shares of common stock, for gross proceeds of approximately $ 10.0 million, prior to deducting placement agent fees and offering expenses.

During 2021, all 420,000 pre-funded shares had been distributed.

In connection with the offering, we issued the placement agent warrants to purchase up to 329,164 shares of common stock with an exercise price of $ 2.8481 per share.

We consummated a registered direct offering with certain institutional investors and issued an aggregate of 71,429 shares of our common stock at a purchase price of $ 21.00 per share and warrants to purchase up to an aggregate of 71,430 shares of common stock at a purchase price of $ 19.44 per share (“Series C” warrants), for gross proceeds of approximately $ 1.5 million, prior to deducting placement agent fees and offering expenses of $ 290,000 .

In connection with this offering, we issued the placement agent warrants to purchase up to 5,359 share of common stock with an exercise price of $ 26.25 per share.

The common stock and Series C warrants issued in this April 2023 offering were offered and sold pursuant to a shelf registration statement on Form S-3 (File No.

333-261227) initially filed with the SEC on November 19, 2021, as amended, which was declared effective by the SEC on May 6, 2022, and a prospectus supplement dated April 10, 2023.

November 2023 .

We consummated a private placement with certain institutional and accredited investors and issued an aggregate of 450,306 shares of our common stock at a purchase price of $ 1.30 per share, pre-funded warrants to purchase up to an aggregate of 3,395,848 shares of common stock at a purchase price of $ 1.30 per pre-funded warrant (“November 2023 Pre-Funded Warrants”) and associated warrants to purchase up to an aggregate of 7,692,308 shares of common stock at $ 1.30 per share (“Series D” and “Series E” warrants), for gross proceeds of approximately $ 5.0 million, prior to deducting placement agent fees and offering expenses of $ 800,000 .

In connection with this offering, we issued the placement agent warrants to purchase up to 288,462 shares of common stock with an exercise price of $ 1.630 per share.

All of the November 2023 Pre-Funded Warrants were exercised by December 31, 2023.

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NOTES TO THE FINANCIAL STATEMENTS, continued

The common stock, November 2023 Pre-Funded Warrants and Series D and Series E warrants issued in this November 2023 offering were offered and sold pursuant to a registration statement on Form S-1 (File No.

333-273370) initially filed with the SEC on July 21, 2023, as amended, which was declared effective by the SEC on November 27, 2023.

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NOTES TO THE FINANCIAL STATEMENTS, continued

COMMON STOCK WARRANTS

The following is the activity for common stock warrants:

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Issue Date Warrant Type Term

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April 2020 Registered Direct Offering April 2025 732.00 209 — — — 209 — — — 209

October 2020 Private Inducement April 2026 $ 34.500 35,034 — ( 35,034 ) — — — — — —

October 2020 Private Inducement November 2027 37.98 4,166 — — — 4,166 — ( 4,166 ) — —

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November 2022 Dealer Manager November 2027 52.50 — 8,931 — — 8,931 — — — 8,931

April 2023 Series C October 2028 19.44 — — — — — 71,430 — — 71,430

April 2023 Dealer Manager April 2028 26.25 — — — — — 5,359 — — 5,359

August 2023 Private Inducement September 2024 8.64 — — — — — 238,096 — — 238,096

August 2023 Private Inducement August 2028 8.64 — — — — — 251,001 — — 251,001

August 2023 Dealer Manager August 2028 10.80 — — — — — 12,229 — — 12,229

November 2023 Pre-Funded Warrants December 2023 1.30 — — — — — 3,395,848 ( 3,395,848 ) — —

November 2023 Series D November 2028 1.30 — — — — — 3,846,154 ( 30,000 ) — 3,816,154

November 2023 Series E May 2025 1.30 — — — — — 3,846,154 ( 771,544 ) — 3,074,610

November 2023 Dealer Manager November 2028 1.63 — — — — — 288,462 — — 288,462

18,926 360,441 ( 10,916 ) ( 507 ) 367,944 11,954,733 ( 4,544,437 ) ( 2,506 ) 7,775,734

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2.95 7,775,734

Common Stock Warrant Inducement

In June 2018, in order to induce an existing warrant holder to exercise its original warrant representing 2,835 shares of common stock for cash at the $ 600.00 exercise price for gross proceeds of $ 1.7 million, we issued to the holder a new warrant to purchase 2,835 shares of common stock at an exercise price of $ 728.00 per share.

In connection with the issuance of these inducement warrants, we recorded stock-based compensation expense of $ 1,700 , representing the fair value of the inducement warrants issued using the Black Scholes model based on the following significant inputs:

common stock price of $ 844.00 per share;

comparable company volatility of 72.6 %;

remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 2.8 %.

Common Stock Warrants Issued in August 2018 Rights Offering

In August 2018, in connection with a rights offering of 13,393 shares of our common stock, we issued warrants to purchase 13,393 shares of our common stock at an exercise price of $ 460.00 per share.

We estimated the fair value of these warrants to be $ 3.6 million using a Monte Carlo model based on the following significant inputs:

common stock price of $ 376.00 per share;

comparable company volatility of 159.0 %;

remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 2.77 %.

In connection with the closing of the August 2018 rights offering, we issued warrants to purchase 670 shares of our common stock at an exercise price of $ 690.00 per share to Maxim Partners LLC, an affiliate of the dealer-manager of the rights offering.

We estimated the fair value of these warrants to be $ 169,000 using a using a Monte Carlo model based on the following significant inputs:

common stock price of $ 376.00 per share;

comparable company volatility of 159.0 %;

remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 2.77 %.

Common Stock Warrant Issued to Underwriter of Common Stock Offering

In July 2019, we issued to H.C.

Wainwright & Co., as placement agent, a warrant to purchase 419 shares of common stock at an exercise price of $ 675.00 per share as consideration for providing services in connection with a common stock offering in July 2019.

We estimated the fair value of this warrant to be $ 127,000 using a lattice model based on the following significant inputs:

Common Stock Warrants Issued in November 2022 Common Stock Offering

In November 2022, in connection with a registered direct offering with certain institutional and accredited investors, we issued common stock warrants as follows:

• Pre-Funded Warrants to purchase up to an aggregate of 113,416 shares of common stock at an exercise price of $ 42.00 per share, which are exercisable immediately and terminate until exercised in full.

A portion of the Pre-Funded Warrants were exercised in December 2022, with the last traunch of these warrants being exercised in February 2023.

We estimated the fair value of the Pre-Funded Warrants to be $ 153,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 36.36 per share;

comparable company volatility of 93.9 %;

remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 2.07 %.

Common Stock Warrants Issued in January 2020 Private Placement

In January 2020, in a private placement concurrent with a registered direct offering of shares of our common stock, we also issued warrants to purchase an aggregate of up to 8,875 shares of common stock to certain institutional and accredited investors that participated in the 2020 Registered Direct Offerings (the “January 2020 Warrants”).

These 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.

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

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NOTES TO THE FINANCIAL STATEMENTS, continued

the warrants, attached as Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 28, 2020.

We estimated the fair value of the January 2020 Warrants to be $ 813,000 using a Black Scholes model based on the following significant inputs:

remaining term of three months;

dividend yield of 0 % and risk-free interest rate of 3.8 %.

• Series A warrants to purchase up to an aggregate of 119,047 shares at an exercise price of $ 37.980 per share, which are exercisable immediately and expire five years from date of issuance.

We estimated the fair value of the Series A warrants to be $ 3.1 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 36.36 per share;

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dividend yield of 0 % and risk-free interest rate of 3.8 %.

For so long as the January 2020 Warrants remain outstanding, the exercise price and number of shares of common stock issuable upon exercise of these 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 spilled, 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 January 2020 Warrants 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 January 2020 Warrants.

In the event of a Fundamental Transaction, as described in the January 2020 Warrants and generally including the sale, transfer or other disposition of all or substantially all of our properties or assets;

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 January 2020 Warrants immediately prior to such Fundamental Transaction.

Subject to certain limitations, in the event of a Fundamental Transaction the January 2020 Warrants holder may at its option require us or any successor entity to purchase such warrant from the holder by paying to the holder an amount of cash equal to the Black Scholes Value of 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 January 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 January 2020 Warrants.

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 January 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 January 2020 Warrants (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 January 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 January 2020 Warrants.

Limitations on Exercise .

A holder (together with its affiliates) may not exercise any portion of the January 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 January 2020

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

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

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.

Except as otherwise provided in the January 2020 Warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the January 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

In April 2020, in connection with a previously announced public offering of our common stock, we issued warrants to purchase 78,715 shares of common stock at an exercise price of $ 61.00 to the participants in the public offering (the “April 2020 Warrants”).

We estimated the fair value of these warrants to be $ 2.4 million using a Black Scholes model based on the following significant inputs:

• Series B warrants to purchase up to an aggregate of 119,047 shares at an exercise price of $ 37.98 per share, which are exercisable immediately and expire 13 months from date of issuance.

We estimated the fair value of the Series B warrants to be $ 1.6 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 36.36 per share;

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remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 0.18 %.

The common stock, pre-funded warrants and warrants sold in this April 2020 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.

The Post-Effective Amendment No.

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

Common Stock Warrants Issued to Placement Agent in 2020 Private Placements

In connection with the separate private placements concurrent with registered direct offerings of shares of our common stock, we issued to H.C.

Wainwright & Co., LLC, as placement agent, in January 2020, warrants to purchase 667 shares of common stock at an exercise price of $ 200.00 per share and in March 2020, warrant to purchase 664 shares of common stock at an exercise price of $ 75.13 per share.

These 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 and have substantially similar terms as the January 2020 Warrants described above, except for differing exercise prices.

We estimated the fair value of the January 2020 warrants issued in January to be $ 58,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 158.00 ;

comparable company volatility of 73.8 %;

remaining term of five years;

dividend yield of 0 % and risk-free interest rate of 3.8 %.

We estimated the fair value of the March 2020 warrants to be $ 17,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 47.00 per share;

comparable company volatility of 74.8 %;

remaining term of six years;

dividend yield of 0 %;

and risk-free interest rate of 0.39 %.

Common Stock Warrants Issued to Placement Agent in 2020 Registered Direct Offering

In connection with the public offering of (preferred or common) stock in April 2020, we issued to H.C.

Wainwright & Co., LLC, as placement agent, warrants to purchase 5,906 shares of common stock at an exercise price of $ 79.40 per share.

These 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, and have substantially similar terms as the April 2020 Warrants described above, except for differing exercise prices.

We estimated the fair value of these warrants to be $ 167,000 using a Black Scholes model based on the following significant inputs:

In August 2023, certain terms of the Series A and Series B warrants were modified to induce exercise.

The exercise price was reduced to $ 8.64 per share, and the warrants were exercised in full (“Warrant Inducement Transaction”).

The offsetting impact related to the warrant inducement transaction was $ 657,000 , which was calculated as the difference between the fair value of the warrants immediately prior to modification and immediately after modification using the Black-Scholes model based on the following significant inputs:

common stock price of $ 8.18 per share;

comparable company volatility of 87.9 %;

remaining term of six years;

volatility of 96 %;

term of 2.3 years;

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 85,034 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 85,034 shares of common stock at an exercise price of $ 34.50 per share.

and risk-free rate of 5.0 %.

Common Stock Warrants Issued to Placement Agent in November 2022 Common Stock Offering

In connection with the registered direct offering in November 2022, we issued to the placement agent, warrants to purchase up to 8,931 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 $ 52.50 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.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

warrants were issued in March and April, 2020, whereby the per share exercise price of the original warrants were reduced from $ 57.60 per share and $ 61.00 per share, respectively, to $ 34.50 per share.

We estimated the fair value of these warrants to be $ 1.8 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 29.40 per share;

We estimated the fair value of these warrants to be $ 240,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 39.00 ;

comparable company volatility of 93.9 %;

remaining term of six years;

remaining term five years;

dividend yield of 0 %;

and risk-free interest rate of 3.8 %.

In connection with the November 2022 registered direct offering with certain institutional and accredited investors, we modified the terms of the then outstanding warrants related to 50,000 shares to an exercise price of $ 3.165 per share and extended the expiration date to November 2027.

We estimated the fair value of these warrants to be $ 110,000 using a Black Scholes model based on the following significant inputs:

Common Stock Warrants Issued in April 2023 Registered Direct Offering

In April 2023, Series C warrants were issued to the investors to purchase up to 71,430 shares of our common stock.

The Series C warrants are exercisable immediately with an exercise price of $ 19.44 per share and expire October 12, 2028.

We estimated the fair value of these warrants to be $ 1.1 million using a Black-Scholes model based on the following significant inputs:

common stock price of $ 16.56 per share;

comparable company volatility of 93.9 %;

remaining term of five years;

volatility of 164 %;

term of 5.5 years;

dividend yield of 0 %;

and risk-free interest rate of 3.4 %.

Common Stock Warrants Issued to Placement Agent in October 2020 Inducement Offering

In connection with the private warrant inducement in October 2020 of 85,034 shares of our common warrants, we issued to H.C.

Wainwright & Co., LLC, as placement agent, warrants to purchase 4,254 shares of common stock at an exercise price of $ 43.12 per share.

These warrants have substantially similar terms as the January 2020 Warrants described above, except for differing exercise prices.

In April 2023, placement agent warrants were issued to purchase up to 5,359 shares of our common stock.

The placement agent warrants are exercisable immediately upon issuance, with an exercise price per share of $ 26.25 per share, and expire April 10, 2028.

We estimated the fair value of these warrants to be $ 82,000 using a Black-Scholes model based on the following significant inputs:

common stock price of $ 16.56 per share;

comparable company volatility of 96.5 %;

remaining term of six years;

volatility of 165 %;

term of 5 years;

dividend yield of 0 %;

and risk-free interest rate of 3.5 %.

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 109,730 shares of common stock at an exercise price of $ 44.32 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 these warrants to be $ 3.1 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 38.60 per share;

comparable company volatility of 95.6 %;

remaining term of six years;

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

In connection with the November 2022 registered direct offering with certain institutional and accredited investors, we modified the terms related to 27,430 shares of these warrants to an exercise price of $ 3.165 per share and extended the expiration date to November 2027.

We estimated the fair value of these warrants to be $ 60,000 using a Black Scholes model based on the following significant inputs:

Common Stock Warrants Issued in August 2023 Private Inducement

In August 2023, in connection with the Warrant Inducement Transaction, warrants were issued to the investor in the Warrant Inducement Transaction to purchase up to 489,097 shares of our common stock.

These warrants are exercisable immediately with an exercise price of $ 8.64 per share, with 251,001 expiring August 2028 (“5-Year Warrants”) and 238,096 expiring September 2024 (“13-Month Warrants”).

We estimated the fair value of the 5-Year Warrants to be $ 1.5 million using a Black-Scholes model based on the following significant inputs:

common stock price of $ 8.18 per share;

comparable company volatility of 93.9 %;

remaining term of five years;

volatility of 98 %;

term of 5 years;

dividend yield of 0 %;

and risk-free interest rate of 3.83 %.

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 16,460 shares of common stock with an exercise price of $ 56.96 per share.

We estimated the fair value of these warrants to be $ 435,000 using a Black Scholes model based on the following significant inputs:

and risk-free rate of 4.4 %.

The fair value of the 13-Month Warrants was estimated to be $ 930,000 using the Black-Scholes model based on the following significant inputs:

common stock price of $ 8.18 per share;

comparable company volatility of 95.6 %;

remaining term six years;

volatility of 122 %;

term of 1.1 years;

dividend yield of 0 %;

and risk-free interest rate of 0.18 %.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Common Stock Warrants Issued to Placement Agent in March 2021 Registered Direct Offering

In March 2021, we consummated a registered direct offering with certain institutional investors and issued an aggregate of 98,750 shares of our common stock at a purchase price of $ 40.00 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.

These shares 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 7,408 shares of common stock at an exercise price of $ 50.00 per share .

and risk-free rate of 4.4 %.

In August 2023, placement agent warrants were issued to purchase up to 12,229 shares of our common stock.

The placement agent warrants are exercisable immediately upon issuance, with an exercise price per share of $ 10.80 per share, and expire August 2028.

We estimated the fair value of these warrants to be $ 72,000 using a Black-Scholes model based on the following significant inputs:

common stock price of $ 8.18 per share;

comparable company volatility of 100.8 %;

remaining term of five years;

volatility of 98 %;

term of 5 years;

dividend yield of 0 %;

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In November 2023, in connection with a registered direct offering with certain institutional and accredited investors, we issued common stock warrants as follows:

• Pre-Funded Warrants to purchase up to an aggregate of 1,361,000 shares of common stock at an exercise price of $ 3.50 per share, which are exercisable immediately and terminate until exercised in full.

A portion of the Pre-Funded Warrants were exercised in December 2022, with the last traunch of these warrants being exercised in February 2023.

• Pre-Funded Warrants to purchase up to an aggregate of 3,395,848 shares of common stock at an exercise price of $ 1.30 per share, which are exercisable immediately and terminate only when exercised in full.

These warrants were exercised in full by December 31, 2023.

We estimated the fair value of the Pre-Funded Warrants to be $ 685,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 0.93 per share;

comparable company volatility of 93.9 %;

remaining term of three months;

volatility of 262 %;

remaining term of one month;

dividend yield of 0 % and risk-free interest rate of 5.5 %.

• Series A warrants to purchase up to an aggregate of 1,428,572 shares at an exercise price of $ 3.165 per share, which are exercisable immediately and expire five years from date of issuance.We estimated the fair value of the Series A warrants to be $ 3.1 million using a Black Scholes model based on the following significant inputs:

• Series D warrants to purchase up to an aggregate of 3,846,154 shares at an exercise price of $ 1.30 per share, which are exercisable immediately and expire November 2028.We estimated the fair value of the Series D warrants to be $ 2.6 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 0.93 per share;

comparable company volatility of 93.9 %;

remaining term of five years;

volatility of 103 %;

remaining term of 5 years;

dividend yield of 0 % and risk-free interest rate of 4.2 %.

• Series B warrants to purchase up to an aggregate of 1,428,572 shares at an exercise price of $ 3.165 per share, which are exercisable immediately and expire 13 months from date of issuance.

We estimated the fair value of the Series B warrants to be $ 1.6 million using a Black Scholes model based on the following significant inputs:

• Series E warrants to purchase up to an aggregate of 3,846,154 shares at an exercise price of $ 1.30 per share, which are exercisable immediately and expire May 2025.

We estimated the fair value of the Series E warrants to be $ 1.8 million using a Black Scholes model based on the following significant inputs:

common stock price of $ 0.93 per share;

comparable company volatility of 93.9 %;

remaining term of five years;

volatility of 128 %;

remaining term of 1.5 years;

dividend yield of 0 % and risk-free interest rate of 4.6 %.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Common Stock Warrants Issued to Placement Agent in November 2023 Common Stock Offering

In connection with the registered direct offering in November 2022, we issued to H.C.

Wainwright & Co., LLC, as the placement agent, warrants to purchase up to 107,143 shares of common stock.

In connection with the registered direct offering in November 2023, we issued to the placement agent, warrants to purchase up to 288,462 shares of common stock.

1 unchanged sentence

We estimated the fair value of these warrants to be $ 189,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 3.25 ;

comparable company volatility of 93.9 %;

remaining term five years;

common stock price of $ 0.93 per share;

volatility of 103 %;

remaining term of five years;

dividend yield of 0 %;

and risk-free interest rate of 4.2 %.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

LOSS PER SHARE

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, restricted stock units 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 years ended December 31, 2022 and 2021.

Therefore, basic and diluted loss per share attributable to common stockholders was the same for all periods presented.

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):

Basic loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period, which includes prefunded warrants and any shares held in abeyance from date of issuance.

Diluted loss per share is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus potentially dilutive securities outstanding during the period determined using the treasury stock method.

Stock options, warrants and restricted stock units 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 years ended December 31, 2023 and 2022.

Therefore, basic and diluted loss per share was the same for all periods presented.

The following shares were excluded from the calculation of diluted loss per share:

Common stock warrants 6,755,010 172,473

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CONTINGENCIES

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 also named the following individuals as defendants:

Loretta Mayer, Cheryl Dyer, Thomas C.

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

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.

In July 2020, 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 alleged, 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 claimed that we owed him.

In September 2021, the Plaintiff served us and also named 10 individuals as defendants, consisting of current and former directors and employees.

The Plaintiff alleged that such individuals agreed to knowingly and wrongfully withhold the stock options owed to him and were knowingly in receipt of stolen property.

In November 2023, this legal matter was settled for $ 185,000 .

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.

2 unchanged sentences

Related party transactions are conducted in the normal course of business and, unless otherwise noted, are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

In connection with consulting agreements in place, during each of the years ended December 31, 2022 and 2021, $ 50,400 of cash payments were made to the Kito Impact Foundation of which Dr.

Bechtel, the Chair of our board, serves as chief executive officer.

In connection with consulting agreements in place, during each of the years ended December 31, 2023 and 2022, $ 4,200 and $ 50,400 ,

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

respectively, of cash payments were made to the Kito Impact Foundation of which the Chair of our board, serves as chief executive officer.

SUBSEQUENT EVENTS

Through February 13, 2023, the Pre-Funded Warrants were exercised in full with the issuance of 1,230,000 shares of common stock.

We have evaluated subsequent events from the balance sheet date through March 16, 2023, 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.

Subsequent to December 31, 2023, 4,608 shares of common stock were issued pursuant to the exercise of certain warrants for gross proceeds of $ 6,000 .

We have evaluated subsequent events from the balance sheet date through February 21, 2024, 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.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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-K

Item 8. Financial Statements and Supplementary Data