What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-08 · 137 added, 60 removed, 351 unchanged (36% of the section changed)

3 unchanged sentences

(In thousands, except shares and per share data)

September 30,

2024 December 31, 2023

23 unchanged sentences

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 515,340 shares and 514,003 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 1,020,842 shares issued and 1,012,549 shares outstanding as of September 30, 2024 and 514,003 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 138,492 136,263

6 unchanged sentences

(In thousands, except shares and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

19 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

4 unchanged sentences

Bad debt expense 2 ( 4 )

Gain on sale of property and equipment ( 28 ) —

Changes in operating assets and liabilities:

9 unchanged sentences

Purchase of property and equipment ( 69 ) ( 114 )

Proceeds received from sale of property and equipment 28 —

Net cash used in investing activities ( 41 ) ( 114 )

Cash flows from financing activities:

Proceeds from the exercise of warrants, net 1,983 —

Proceeds from issuances of common stock, net — 2,998

1 unchanged sentence

Repayments of notes payable ( 29 ) —

Proceeds from the exercise of warrants 6 —

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

17 unchanged sentences

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.

Our current products are known as ContraPest ® and Evolve TM .

Our initial product was ContraPest, which is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide and triptolide.

We have developed and are commercializing a global, proprietary technology for managing animal pest populations, initially rat and mouse populations, through fertility control.

Our current products are known as ContraPest ® , Evolve TM and Evolve Mouse.

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

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

2 unchanged sentences

Environmental Protection Agency (“EPA”) registration of ContraPest, 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, 49 of which have approved the removal of the Restricted Use designation, as well as the District of Columbia and five major U.S.

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

territories, Puerto Rico and The U.S.

Virgin Islands.

In January 2024, we launched Evolve, which is a soft bait containing the active ingredient cottonseed oil.

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

Evolve is considered a minimum risk pesticide under the EPA Federal Insecticide, Fungicide, and Rodenticide Act, Section 25(b) (“Section 25(b)”).

Evolve is considered a minimum risk pesticide under the EPA Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 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 43 states.

To date, we are authorized to sell Evolve in 45 states, and two major U.S.

territories, Puerto Rico and The U.S.

Virgin Islands.

In May 2024, we launched our latest product Evolve Mouse, a modified version of our soft bait technology containing the active ingredient cottonseed oil.

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

Evolve Mouse is also considered a minimum risk pesticide under Section 25(b).

Evolve Mouse is also considered a minimum risk pesticide under the EPA’s FIFRA, 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 Mouse in 32 states.

To date, we are authorized to sell Evolve Mouse in 34 states, with an additional state authorized effective January 1, 2025.

Going Concern

Our condensed financial statements as of June 30, 2024 were prepared under the assumption that we would continue as a going concern.

Our condensed financial statements as of September 30, 2024 were prepared under the assumption that we would continue as a going concern.

The reports of our independent registered public accounting firm that accompanies our financial statements for each of the years ended December 31, 2023 and December 31, 2022 contain 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.

10 unchanged sentences

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.

As of June 30, 2024, we had an accumulated deficit of $ 133.3 million and cash and cash equivalents of $ 2.0 million.

As of September 30, 2024, we had an accumulated deficit of $ 134.8 million and cash and cash equivalents of $ 2.5 million.

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

5 unchanged sentences

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

Based upon our current operating plan, we expect that cash and cash equivalents at June 30, 2024, 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 three months.

Based upon our current operating plan, we expect that cash and cash equivalents at September 30, 2024, 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 four months.

While we have evaluated and continue to evaluate our operating expenses and concentrate our resources toward the successful commercialization of fertility control products in the United States, additional financing will be needed before achieving anticipated revenue targets and margin targets.

7 unchanged sentences

All issued and outstanding common stock, options and warrants exercisable for common stock and per share amounts contained in our financial statements have been retrospectively adjusted.

Also, see Note 10.

Condensed Financial Statements

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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 June 30, 2024, and our operating results and cash flows for the six month periods ended June 30, 2024 and 2023.

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 September 30, 2024, and our operating results and cash flows for the nine month periods ended September 30, 2024 and 2023.

The accompanying financial information as of December 31, 2023 is derived from audited financial statements.

9 unchanged sentences

Advertising Costs

Advertising costs are expensed as incurred and was $ 62,000 and $ 43,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 121,000 and $ 84,000 for the six months ended June 30, 2024 and 2023, respectively.

Advertising costs are expensed as incurred and were $ 58,000 and $ 57,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 180,000 and $ 147,000 for the nine months ended September 30, 2024 and 2023, respectively.

Comprehensive Loss

3 unchanged sentences

Cash and Cash Equivalents

Highly liquid investments with maturities of three months or less as of the date of acquisition are classified as cash equivalents, of which we had $ 2.0 million and $ 5.4 million as of June 30, 2024 and December 31, 2023, respectively, included within cash and cash equivalents in the condensed balance sheets.

Highly liquid investments with maturities of three months or less as of the date of acquisition are classified as cash equivalents, of which we had $ 2.5 million and $ 5.4 million as of September 30, 2024 and December 31, 2023, respectively, included within cash and cash equivalents in the condensed balance sheets.

Accounts Receivable, Net

Accounts receivable, net consisted of the following (in thousands):

September 30,

2024 December 31,

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Inventory, net consisted of the following (in thousands):

September 30,

2024 December 31,

Raw materials $ 765 $ 747

Work in progress 7 —

Finished goods 115 53

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

2024 December 31,

1 unchanged sentence

Software licenses 82 152

Professional services 48 30

Insurance 52 64

Professional services 30 30

Prepaid inventory — 111

2 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

September 30,

2024 December 31,

5 unchanged sentences

Accumulated depreciation and amortization ( 2,201 ) ( 2,419 )

Total in service, net 346 388

Construction in progress 34 —

Property and equipment, net $ 380 $ 388

1 unchanged sentence

Accrued expenses consisted of the following (in thousands):

September 30,

2024 December 31,

4 unchanged sentences

Notes Payable

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

The notes payable for that certain equipment have a weighted average annual interest rate of 8.9 % with a term of five years and is secured by the underlying equipment.

As of June 30, 2024, future principal payments were as follows (in thousands):

We have financing arrangements related to the purchase of certain equipment.

The notes payable for that certain equipment have a weighted average annual interest rate of 9.8 % with a term of five years and are secured by the underlying equipment.

As of September 30, 2024, future principal payments were as follows (in thousands):

Total principal payments 223

4 unchanged sentences

Notes payable are recorded at amortized cost, which approximates fair value.

We have operating leases for our corporate headquarters and our manufacturing and research facility, which expire in 2024.

In August, we entered into an operating lease for a new location for our corporate headquarters and manufacturing and research operations, which commences in April 2025, when we take physical possession, and expires in 2035.

Our current operating lease for our corporate headquarters expires in 2024.

The components of lease cost were as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Operating lease cost $ 57 $ 55 $ 170 $ 166

As of June 30, 2024, maturities of operating lease liabilities were as follows (in thousands):

As of September 30, 2024, maturities of operating lease liabilities were as follows (in thousands):

Total operating lease payments 41

5 unchanged sentences

The 2018 Plan has since been amended and restated on certain occasions, most recently on July 11, 2024, when our stockholders approved an increase to the total number of authorized shares to 207,071 shares.

Currently, we only have stock options outstanding under the 2018 Plan, which are generally issued with a per share exercise price equal to the fair market value of our common stock at the date of grant.

Options granted generally vest immediately, or ratably over a 12 - to 36 -month period coinciding with their respective service periods, with terms generally of five years .

Currently, only stock options are outstanding under the 2018 Plan, which are generally issued with a per share exercise price equal to the fair market value of our common stock at the date of grant.

Options granted generally vest ratably over a 12 - to 36 -month period coinciding with their respective service periods, with terms generally of ten years .

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

We have 203,311 shares of common stock available for issuance under the 2018 Plan, which includes the increase to the total number of authorized shares of 200,000 shares approved by our stockholders on July 11, 2024.

We have 60,008 shares of common stock available for issuance under the 2018 Plan, which reflects the increase to the total number of authorized shares of 200,000 shares approved by our stockholders on July 11, 2024.

The following table presents the outstanding stock option activity:

1 unchanged sentence

Share Weighted

Three months ended June 30, 2024:

Outstanding as of March 31, 2024

3,641 $ 1,194.90 3.8

Granted 892 6.740 4.8

Three months ended September 30, 2024:

Outstanding as of June 30, 2024 4,533 $ 899.48 3.8

Six months ended June 30, 2024:

Granted 143,312 2.81 9.9

Expired ( 9 ) 45,013.33 —

Outstanding as of September 30, 2024 147,836 (1)

Nine months ended September 30, 2024:

Outstanding as of December 31, 2023 3,643 1,197.00 4.0

1 unchanged sentence

Forfeited ( 2 ) 1,965.36 3.0

Outstanding as of June 30, 2024 4,533 (1)

Exercisable as of June 30, 2024 3,987 1,009.40 3.8

Expired ( 9 ) 45,013.33 —

Outstanding as of September 30, 2024 147,836 (1)

Exercisable as of September 30, 2024 6,274 557.32 5.8

(1) Includes options related to 823 shares that are inducement awards and not granted under the 2018 Plan.

The weighted average grant date fair value of options granted during the three months ended June 30, 2024 was $ 5.59 per share, based on the following assumptions used in the Black-Scholes option pricing model:

The weighted average grant date fair value of options granted during the nine months ended September 30, 2024 was $ 2.73 per share based on the following assumptions used in the Black-Scholes option pricing model:

Expected volatility 128.0 %

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Total stock-based compensation expense $ 73 $ 131 $ 246 $ 467

(1) Includes $ 56,000 related to stock issued in exchange for marketing services for the three and six month periods ended June 30, 2023.

(1) Includes $ 44,000 and $ 100,000 related to stock issued in exchange for marketing services for the three and nine month periods ended September 30, 2023.

The allocation between research and development and selling, general and administrative expense was based on the department and services performed by the employee or non-employee.

At June 30, 2024, the total compensation cost related to unvested options not yet recognized was $ 124,000 , which will be recognized over a weighted average period of 1.1 years, assuming the employees and non-employees complete their service period required for vesting.

At September 30, 2024, the total compensation cost related to unvested options not yet recognized was $ 439,000 , which will be recognized over a weighted average period of 2.0 years, assuming the employees and non-employees complete their service period required for vesting.

STOCKHOLDERS’ EQUITY

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All issued and outstanding common stock, options and warrants exercisable for common stock and per share amounts contained in our financial statements have been retrospectively adjusted.

Activity in equity during the three and six month periods ended June 30, 2024 and 2023 was as follows (dollars in thousands):

Activity in equity during the nine month periods ended September 30, 2024 and 2023 was as follows (dollars in thousands):

Common Stock Additional

8 unchanged sentences

Stock-based compensation — — 88 — 88

Issuance of common stock upon exercise of warrants, net — — — — —

Issuance of common stock for fractional shares in the 10:1 reverse stock split 877 — — — —

1 unchanged sentence

Balances as of June 30, 2024 515,340 1 136,442 ( 133,329 ) 3,114

Stock-based compensation — — 73 — 73

Issuance of common stock upon exercise of warrants, net 505,502 — 1,977 — 1,977

Net loss — — — ( 1,513 ) ( 1,513 )

Balances as of September 30, 2024 1,020,842 $ 1 $ 138,492 $ ( 134,842 ) $ 3,651

Balances as of December 31, 2022 6,748 $ — $ 127,482 $ ( 122,203 ) $ 5,279

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Balances as of June 30, 2023 24,706 — 129,060 ( 126,233 ) 2,827

Stock-based compensation — — 88 — 88

Issuance of common stock upon exercise of warrants, net 2,625 — 1,788 — 1,788

Net loss — — — ( 1,947 ) ( 1,947 )

Balances as of September 30, 2023 27,331 $ — $ 130,936 $ ( 128,180 ) $ 2,756

In August 2024, we issued 505,502 shares pursuant to the exercise of warrants.

Certain warrant holders were induced to exercise warrants by reducing the exercise price to the then current market price of our common stock (the “Warrant Inducement”).

The original warrants consisted of 48,911 shares issued August 24, 2023 with an exercise price of $ 86.40 per share and a weighted average remaining life of 2.1 years (the “August 2023 Original Warrants”) and 456,591 shares issued November 29, 2023 with an exercise price of $ 13.00 per share and a weighted average remaining life of 2.5 years (the “November 2023 Original Warrants”) (collectively, the “Original Warrants”).

The Original Warrants were exercised

for $ 4.60 per share for gross proceeds of $ 2.3 million, before deducting $ 340,000 of issuance costs.

Of the 505,502 shares issued, 8,293 shares were held in abeyance as of September 30, 2024 and not considered outstanding until certain conditions are met, at which time such shares will become outstanding.

The balance of the shares in abeyance will be held in abeyance until notice from the stockholder that the balance, or portion thereof, may be issued in compliance with a beneficial ownership limitation provision in the warrants.

Such shares were released from abeyance in October.

In connection with the Warrant Inducement transaction, new warrants to purchase 1,036,279 shares of our common stock were issued, which are discussed in Note 7.

In June 2024, we entered into an at-the-market offering arrangement with a sales agent, pursuant to which we may offer and sell, from time to time at our sole discretion, in transactions that are deemed to be “at the market” offerings under the Securities Act of 1933, as amended (the “Securities Act”), shares of our common stock for aggregate gross proceeds of up to $ 1,575,944 (“ATM Facility”).

1 unchanged sentence

333-261227), originally filed with the SEC on November 19, 2021 and amended on May 4, 2022, and declared effective by the SEC on May 6, 2022, and the related prospectus supplement related to the offering of shares dated June 20, 2024, and filed with the SEC on such date pursuant to Rule 424(b) under the Securities Act.

As of June 30, 2024, we have not sold any shares under this ATM Facility and there are 315,189 shares of common stock reserved for potential issuance under the ATM Facility.

As of September 30, 2024, we have not sold any shares under this ATM Facility and there are 315,189 shares of common stock reserved for potential issuance under the ATM Facility.

COMMON STOCK WARRANTS

2 unchanged sentences

Date Exercise

Price Balance December 31, 2023 Issued Exercised Expired Balance June 30, 2024

Price Balance December 31, 2023 Issued Exercised Expired Balance September 31, 2024

July 2019 Dealer Manager July 2024 $ 81,000.00 3 — — ( 3 ) —

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November 2023 Dealer Manager November 2028 $ 16.25 28,844 — — — 28,844

August 2024 Series F-1 August 2029 $ 4.35 — 571,318 — — 571,318

August 2024 Series F-2 February 2026 $ 4.35 — 439,686 — — 439,686

August 2024 Dealer Manager August 2029 $ 5.75 — 25,275 — — 25,275

777,528 1,036,279 ( 505,962 ) ( 3 ) 1,307,842

2 unchanged sentences

Outstanding as of December 31, 2023 777,528 $ 29.53 3.4

Issued 1,036,279 4.38 3.4

Exercised ( 505,962 ) 4.61 —

Outstanding as of June 30, 2024

777,060 28.80 2.9

During the six months ended June 30, 2024, warrants representing 460 shares of common stock were exercised with an exercise price of $ 13.00 per share.

Expired ( 3 ) 81,000.00 —

Outstanding as of September 30, 2024 1,307,842 12.63 3.3

During the nine months ended September 30, 2024:

• In August, warrants were issued to the investors in the Warrant Inducement transaction discussed in Note 6 to purchase up to 1,011,004 shares of our common stock.

These warrants are exercisable immediately with an exercise price of $ 4.35 per share, with 571,318 expiring August 23, 2029 (5-Year New Warrants) and 439,686 expiring February 23, 2026 (18-Month New Warrants).

We estimated the fair value of the 5-Year New Warrants to be $ 1.9 million using a Black-Scholes model based on the following significant inputs:

common stock price of $ 4.10 per share;

volatility of 118 %;

term of 5 years;

dividend yield of 0 %;

and risk-free rate of 3.6 %.

The fair value of the 18-Month New Warrants was estimated to be $ 1.2 million using the Black-Scholes model based on the following significant inputs:

common stock price of $ 4.10 per share;

volatility of 153 %;

term of 1.5 years;

dividend yield of 0 %;

and risk-free rate of 4.1 %.

• In August, placement agent warrants were issued to purchase up to 25,275 shares of our common stock.

The placement agent warrants are exercisable immediately upon issuance, with an exercise price per share of $ 5.75 per share, and expire August 23, 2029.

We estimated the fair value of these warrants to be $ 83,000 using a Black-Scholes model based on the following significant inputs:

common stock price of $ 4.10 per share;

volatility of 118 %;

term of 5 years;

dividend yield of 0 %;and risk-free interest rate of 3.6 %.

• In August, the Original Warrants representing 505,502 shares of common stock were exercised for $ 4.60 per share.

The terms of the Original Warrants were modified in order to induce exercise.

See Warrant Inducement discussion in Note 6.

The difference between the fair value of the warrants immediately prior to modification and immediately after modification was $ 386,000 using the Black-Scholes model based on the following significant inputs:

◦ For the August 2023 Original Warrants related to 48,911 shares:

common stock price of $ 4.10 per share;

volatility of 151 %;

term of 2.1 years;

dividend yield of 0 %;

and risk-free rate of 3.9 %;

◦ For the November 2023 Original Warrants related to 456,591 shares:

common stock price of $ 4.10 per share;

volatility of 140 %;

term of 2.5 years;

dividend yield of 0 %;

and risk-free rate of 3.8 %.

• In January, warrants representing 460 shares of common stock were exercised with an exercise price of $ 13.00 per share.

LOSS PER SHARE

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Stock options 43,889 — 84,293 4,283

Restricted stock units — 85 — 629

43,889 25,938 454,619 332,034

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Distributor A 6 6 10 3

Distributor B 14 — 8 —

The following accounts represented at least 10% of total accounts receivable in at least one of the periods presented:

September 30,

2024 December 31, 2023

3 unchanged sentences

SUBSEQUENT EVENTS

On July 11, 2024, we held our annual meeting of stockholders (the “Annual Meeting”), at which meeting our stockholders approved an amendment to our 2018 Plan.

The effect of the amendment to the 2018 Plan is to increase the number of shares of common stock available under the 2018 Plan by 200,000 shares.

On July 11, 2024, our stockholders also approved a proposal at our Annual Meeting further amending our Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”), to effect a reverse stock split of our common stock at a ratio between one-for-two (1:2) and one-for-twenty (1:20), without reducing the authorized number of shares of common stock.

On July 11, 2024, our board of directors approved a final split ratio of one-for-ten (1:10).

Following such approval, we filed an amendment to the Certificate of Incorporation with the Secretary of the State of Delaware on July 23, 2024 to effect the reverse stock split, with an effective date of July 24, 2024.

We have evaluated subsequent events from the balance sheet date through August 8, 2024, the date at which the condensed financial statements were issued, and determined that there were no additional items that require adjustment to or disclosure in the condensed financial statements.

Since September 30, 2024, we have issued 12,802 shares of common stock pursuant to the ATM Financing for gross proceeds of $ 38,000 .

We have evaluated subsequent events from the balance sheet date through November 12, 2024, the date at which the condensed financial statements were issued, and determined that there were no additional items that require adjustment to or disclosure in the condensed 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