SenesTech, Inc. 10-Q

Item 1. Financial Statements SENESTECH, INC. CONDENSED BALANCE SHEETS (In thousands, except shares and per share data) September 30, 2024 December 31, 2023 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 2,518 $ 5,395 Accounts receivable, net 214 95 Prepaid expenses and other current assets 360 388 Inventory, net 880 795 Total current assets 3,972 6,673 Right to use assets, operating leases 39 210 Property and equipment, net 380 388 Other noncurrent assets 58 22 Total assets $ 4,449 $ 7,293 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 128 $ 150 Accrued expenses 394 368 Current portion of operating lease liability 41 217 Current portion of notes payable 53 33 Deferred revenue 12 18 Total current liabilities 628 786 Notes payable, less current portion 170 156 Total liabilities 798 942 Commitments and contingencies (see notes) Stockholders’ equity: 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, 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 1 1 Additional paid-in capital 138,492 136,263 Accumulated deficit ( 134,842 ) ( 129,913 ) Total stockholders’ equity 3,651 6,351 Total liabilities and stockholders’ equity $ 4,449 $ 7,293 See accompanying notes to condensed financial statements. 1 Table of Contents SENESTECH, INC. CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except shares and per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues, net $ 482 $ 360 $ 1,356 $ 898 Cost of sales 167 184 657 488 Gross profit 315 176 699 410 Operating expenses: Research and development 451 379 1,288 1,147 Selling, general and administrative 1,411 1,748 4,403 5,259 Total operating expenses 1,862 2,127 5,691 6,406 Loss from operations ( 1,547 ) ( 1,951 ) ( 4,992 ) ( 5,996 ) Other income (expense): Interest income 11 4 48 19 Interest expense ( 6 ) — ( 15 ) — Miscellaneous income 29 — 30 — Other income, net 34 4 63 19 Net loss and comprehensive loss $ ( 1,513 ) $ ( 1,947 ) $ ( 4,929 ) $ ( 5,977 ) Weighted average shares outstanding - basic and diluted 729,400 34,805 586,628 25,315 Net loss per share - basic and diluted $ ( 2.07 ) $ ( 55.93 ) $ ( 8.40 ) $ ( 236.10 ) See accompanying notes to condensed financial statements. 2 Table of Contents SENESTECH, INC. CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, 2024 2023 Cash flows from operating activities: Net loss $ ( 4,929 ) $ ( 5,977 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 115 104 Stock-based compensation 246 467 Bad debt expense 2 ( 4 ) Gain on sale of property and equipment ( 28 ) — Changes in operating assets and liabilities: Accounts receivable ( 121 ) 34 Prepaid expenses and other current assets 28 ( 7 ) Inventory ( 85 ) 150 Other assets ( 41 ) ( 3 ) Accounts payable ( 22 ) ( 393 ) Accrued expenses 26 111 Deferred revenue ( 6 ) ( 29 ) Net cash used in operating activities ( 4,815 ) ( 5,547 ) Cash flows from investing activities: 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 Proceeds from issuance of notes payable 25 44 Repayments of notes payable ( 29 ) — Payment of employee withholding taxes related to share based awards — ( 11 ) Net cash provided by financing activities 1,979 3,031 Decrease in cash and cash equivalents ( 2,877 ) ( 2,630 ) Cash and cash equivalents, beginning of period 5,395 4,775 Cash and cash equivalents, end of period $ 2,518 $ 2,145 Supplemental cash flow information is as follows: Interest paid $ 15 $ — Income taxes paid $ — $ — Non-cash investing and financing activities: Note payable incurred for the purchase of certain equipment 38 10 See accompanying notes to condensed financial statements. 3 Table of Contents SENESTECH, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) NOTE 1: BASIS OF PRESENTATION Nature of Business SenesTech, Inc. (subsequently referred to in this report as “we,” “us,” “our,” or “our company”) was incorporated in the state of Nevada in July 2004. On November 12, 2015, we subsequently reincorporated in the state of Delaware. 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 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. ContraPest is being marketed for use in controlling Norway and roof rat populations. In addition to the U.S. 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 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 (“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 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 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 34 states, with an additional state authorized effective January 1, 2025. 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. Specifically, we have incurred operating losses since our inception, and we expect to continue to incur significant expenses and operating losses for the foreseeable future. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. If we encounter continued issues or delays in the commercialization of fertility control products, our expected future losses could have an adverse effect on our financial condition and negatively impact our ability to fund continued operations, obtain additional financing in the future and continue as a going concern. There are no assurances that such financing, if necessary, will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to generate additional funds in the future through additional financings, sales of our products, licensing fees, royalty payments or from other sources or transactions, we will exhaust our resources and will be unable to continue operations. Liquidity and Capital Resources Since our inception, we have sustained significant operating losses in the course of our research and development and commercialization activities and expect such losses to continue for the near future. We have generated limited revenue to date from product sales, research grants and licensing fees received under a former license agreement. We have primarily funded our operations to date through the sale of equity securities, including convertible preferred stock, common stock and warrants to purchase common stock. 4 Table of Contents 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 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: (i) successful commercialization of fertility control products and maintaining and obtaining regulatory approval of our products and product candidates; (ii) market acceptance, commercial viability and profitability of fertility control products and other products; (iii) the ability to market our products and establish an effective sales force and marketing infrastructure to generate significant revenue; (iv) the success of our research and development; (v) the ability to retain and attract key personnel to develop, operate and grow our business; and (vi) our ability to meet our working capital needs. 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. If 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, additional capital is needed in order to fund our operating losses and research and development activities before we become profitable. We may never achieve profitability or generate positive cash flows, and unless and until we do, we will continue to need to raise capital through equity or debt financing. If such equity or debt financing is not available at adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development efforts or discontinue operations. Reverse Stock Split On July 23, 2024, we amended our amended and restated certificate of incorporation to effect a 1-for-10 reverse split of our issued and outstanding shares of common stock. The accompanying financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented. All issued and outstanding common stock, options and warrants exercisable for common stock and per share amounts contained in our financial statements have been retrospectively adjusted. Condensed Financial Statements Our accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, the unaudited condensed financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly our financial position as of 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. Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 21, 2024. Recent Accounting Pronouncements There have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, to our condensed financial statements. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and classification of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. 5 Table of Contents The significant estimates in our financial statements include the valuation of inventory, common stock warrants, and stock-based awards, such as stock options and restricted stock units. Actual results could differ from such estimates. Advertising Costs 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 We have no other comprehensive income items for the periods presented. As a result, our net loss and comprehensive loss were the same for the periods presented, and a separate statement of comprehensive loss is not included in the accompanying condensed financial statements. NOTE 2: BALANCE SHEET COMPONENTS 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 $ 2.5 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, 2023 Accounts receivable $ 218 $ 99 Allowance for uncollectible accounts ( 4 ) ( 4 ) Accounts receivable, net $ 214 $ 95 The following was the activity in the allowance for uncollectible accounts (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Balance as of beginning of period $ 4 $ 4 $ 4 $ 6 Increase in provision — 2 — 2 Amounts written off, less recoveries — ( 4 ) — ( 6 ) Balance as of end of period $ 4 $ 2 $ 4 $ 2 Inventory, net Inventory, net consisted of the following (in thousands): September 30, 2024 December 31, 2023 Raw materials $ 765 $ 747 Finished goods 115 53 Total inventory 880 800 Less: reserve for obsolescence — ( 5 ) Inventory, net $ 880 $ 795 6 Table of Contents The following was the activity in the reserve for obsolescence (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Balance as of beginning of period $ — $ 18 $ 5 $ 18 Increase in reserve — — — — Amounts relieved — — ( 5 ) — Balance as of end of period $ — $ 18 $ — $ 18 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2024 December 31, 2023 Equity offering costs $ 132 $ — Software licenses 82 152 Insurance 52 64 Professional services 30 30 Rent 29 11 Prepaid inventory — 111 Other 35 20 Total prepaid expenses and other current assets $ 360 $ 388 7 Table of Contents Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): September 30, 2024 December 31, 2023 Research and development equipment $ 1,801 $ 1,763 Office and computer equipment 494 808 Autos 54 54 Furniture and fixtures 46 41 Leasehold improvements 152 141 Total in service 2,547 2,807 Accumulated depreciation and amortization ( 2,201 ) ( 2,419 ) Total in service, net 346 388 Construction in progress 34 — Property and equipment, net $ 380 $ 388 Accrued Expenses Accrued expenses consisted of the following (in thousands): September 30, 2024 December 31, 2023 Compensation and related benefits $ 377 $ 232 Legal and consulting professional services 14 121 Product warranty 3 15 Total accrued expenses $ 394 $ 368 Notes Payable 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): 2024 $ 13 2025 54 2026 60 2027 49 2028 44 Thereafter 3 Total principal payments 223 Less: current portion of notes payable ( 53 ) Notes payable, less current portion $ 170 NOTE 3: FAIR VALUE MEASUREMENTS The carrying amounts of our financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their short maturities. Notes payable are recorded at amortized cost, which approximates fair value. 8 Table of Contents NOTE 4: LEASES 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Operating lease cost $ 57 $ 55 $ 170 $ 166 As of September 30, 2024, maturities of operating lease liabilities were as follows (in thousands): 2024 $ 41 Total operating lease payments 41 Less: imputed interest — Total operating lease liabilities $ 41 NOTE 5: STOCK-BASED COMPENSATION In 2018, our stockholders approved the adoption of the SenesTech, Inc. 2018 Equity Incentive Plan (the “2018 Plan”), which provides for the issuance of stock-based instruments, such as stock options or restricted stock units, to employees or consultants as deemed appropriate. 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, 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 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. 9 Table of Contents The following table presents the outstanding stock option activity: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (years) Three months ended September 30, 2024: Outstanding as of June 30, 2024 4,533 $ 899.48 3.8 Granted 143,312 2.81 9.9 Expired ( 9 ) 45,013.33 — Outstanding as of September 30, 2024 147,836 (1) 27.56 9.7 Nine months ended September 30, 2024: Outstanding as of December 31, 2023 3,643 1,197.00 4.0 Granted 144,204 2.83 9.9 Forfeited ( 2 ) 1,965.36 3.0 Expired ( 9 ) 45,013.33 — Outstanding as of September 30, 2024 147,836 (1) 27.56 9.7 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 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 % Expected dividend yield — Expected term (in years) 10 Risk-free interest rate 3.83 % The expected volatility assumption is based on the calculated volatility of our common stock at the date of grant based on historical prices over the most recent period commensurate with the term of the award. The expected dividend yield assumption is based on our history and expected dividend payouts: we have not, and do not expect to, pay dividends. The expected term assumption is the contractual term of the options for non-employees. The risk-free interest rate assumption is determined using the U.S. treasury yields for bonds with a maturity commensurate with the term of the award. The stock-based compensation expense was recorded as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Research and development $ 5 $ 3 $ 13 $ 12 Selling, general and administrative (1) 68 128 233 455 Total stock-based compensation expense $ 73 $ 131 $ 246 $ 467 (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. 10 Table of Contents 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. NOTE 6: STOCKHOLDERS’ EQUITY On July 23, 2024, we amended our amended and restated certificate of incorporation to effect a 1-for-10 reverse split of our issued and outstanding shares of common stock. The accompanying financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented. All issued and outstanding common stock, options and warrants exercisable for common stock and per share amounts contained in our financial statements have been retrospectively adjusted. Activity in equity during the nine month periods ended September 30, 2024 and 2023 was as follows (dollars in thousands): Common Stock Additional Paid-In Capital Accumulated Deficit Total Shares Amount 2024 Balances as of December 31, 2023 514,003 $ 1 $ 136,263 $ ( 129,913 ) $ 6,351 Stock-based compensation — — 85 — 85 Issuance of common stock upon exercise of warrants 460 — 6 — 6 Net loss — — — ( 1,832 ) ( 1,832 ) Balances as of March 31, 2024 514,463 1 136,354 ( 131,745 ) 4,610 Stock-based compensation — — 88 — 88 Issuance of common stock for fractional shares in the 10:1 reverse stock split 877 — — — — Net loss — — — ( 1,584 ) ( 1,584 ) 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 2023 Balances as of December 31, 2022 6,748 $ — $ 127,482 $ ( 122,203 ) $ 5,279 Stock-based compensation — — 166 — 166 Issuance of common stock upon exercise of warrants 10,250 — — — — Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes 111 — ( 11 ) — ( 11 ) Issuance of common stock for service 454 — 100 — 100 Net loss — — — ( 2,037 ) ( 2,037 ) Balances as of March 31, 2023 17,563 — 127,737 ( 124,240 ) 3,497 Stock-based compensation — — 113 — 113 Issuance of common stock, net of issuance costs 7,143 — 1,210 — 1,210 Net loss — — — ( 1,993 ) ( 1,993 ) 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 11 Table of Contents 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”). The offer and sale of shares will be made pursuant to a previously filed shelf registration statement on Form S-3 (Registration no. 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 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. 12 Table of Contents NOTE 7: COMMON STOCK WARRANTS The following table presents the common stock warrant activity: Issue Date Warrant Type Term Date Exercise Price Balance December 31, 2023 Issued Exercised Expired Balance September 31, 2024 July 2019 Dealer Manager July 2024 $ 81,000.00 3 — — ( 3 ) — January 2020 Registered Direct Offering July 2025 $ 21,600.00 60 — — — 60 January 2020 Dealer Manager July 2025 $ 24,000.00 4 — — — 4 March 2020 Dealer Manager March 2025 $ 9,015.12 4 — — — 4 April 2020 Dealer Manager April 2025 $ 9,528.00 47 — — — 47 April 2020 Registered Direct Offering April 2025 $ 7,320.00 20 — — — 20 October 2020 Dealer Manager April 2026 $ 5,174.40 34 — — — 34 February 2021 Private Placement Agreement August 2026 $ 5,318.40 540 — — — 540 February 2021 Dealer Manager August 2026 $ 6,835.40 136 — — — 136 March 2021 Dealer Manager March 2026 $ 6,000.00 60 — — — 60 November 2022 Dealer Manager November 2027 $ 525.000 892 — — — 892 April 2023 Series C October 2028 $ 194.40 7,142 — — — 7,142 April 2023 Dealer Manager April 2028 $ 262.50 534 — — — 534 August 2023 Private Inducement September 2024 $ 86.42 23,810 — ( 23,810 ) — — August 2023 Private Inducement August 2028 $ 86.42 25,101 — ( 25,101 ) — — August 2023 Dealer Manager August 2028 $ 108.04 1,222 — — — 1,222 November 2023 Series D November 2028 $ 13.00 381,615 — ( 230,589 ) — 151,026 November 2023 Series E May 2025 $ 13.00 307,460 — ( 226,462 ) — 80,998 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 Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (years) 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 — Expired ( 3 ) 81,000.00 — Outstanding as of September 30, 2024 1,307,842 12.63 3.3 13 Table of Contents 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 %; and ◦ 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. NOTE 8: LOSS PER SHARE 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 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 and warrants are considered to be potentially dilutive securities but have been excluded from the calculation of diluted loss per share because their effect would be anti-dilutive given the net losses reported for all periods presented. Therefore, basic and diluted loss per share are the same for each period presented. The following shares were excluded from the calculation of diluted net loss per share: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Common stock warrants — 25,938 370,326 327,751 Stock options 43,889 — 84,293 4,283 43,889 25,938 454,619 332,034 14 Table of Contents NOTE 9: SEGMENT INFORMATION We operate in one segment: the formulation, development, marketing and sale of fertility control products for use in managing pest populations. We generate our revenue from six broad product markets: agribusiness, pest management, facilities management, industrial, consumer, and governmental agencies. Geographic Information Revenue by geographic region was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 United States $ 482 $ 360 $ 1,314 $ 898 International — — 42 — $ 482 $ 360 $ 1,356 $ 898 Significant Customers The percentage of revenue attributable to our distributors and to customers that represented 10% or more of revenue in at least one of the periods presented, was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 All distributors 41 % 19 % 41 % 12 % 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 Distributor A 43 % 13 % End customer A — % 19 % End customer B — % 13 % NOTE 10: SUBSEQUENT EVENTS 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. 15 Table of Contents