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Item 8. Financial Statements and Supplementary Data

2025-03-13 compared with 2024-02-21 · 194 added, 156 removed, 587 unchanged (37% of the section changed)

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Equity Transactions

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.

To evaluate the appropriateness of the model and estimates determined by management, we examined and evaluate the model, and the time period and stock prices used in determining the valuation of the options and warrants issued.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going Concern

Due to the recurring net loss for the year and net cash used in operating activities, the Company evaluated the need for a going concern.

See discussion in Note 1.

To evaluate the appropriateness of the lack of going concern, we examined and evaluated the financial information that was the initial cause along with management’s plans to mitigate the going concern and managements lack of disclosure on the going concern.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since 2014.

February 21, 2024

The Woodlands, TX

March 12, 2025

SENESTECH, INC.

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Accounts receivable, net 335 95

Prepaid expenses 388 378

Prepaid expenses and other current assets 377 388

Inventory, net 794 795

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Total current liabilities 561 786

Operating lease liability, less current portion — 179

Notes payable, less current portion 206 156

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Years Ended December 31,

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

Revenues, net $ 1,857 $ 1,193

Cost of sales 853 654

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Interest expense ( 22 ) ( 4 )

Miscellaneous expense — ( 26 )

Other income (expense), net 22 ( 21 )

Miscellaneous income 31 —

Other income, net 65 22

Net loss and comprehensive loss $ ( 6,184 ) $ ( 7,710 )

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Net proceeds received for issuance of common stock and prefunding of warrants 52,173 — 5,407 — 5,407

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

Issuance of common stock upon exercise of warrants, net 454,444 1 2,830 — 2,831

Issuance of common stock for services 454 — 100 — 100

Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes 110 — ( 11 ) — ( 11 )

Issuance of common stock for fractional shares in the 12:1 reverse stock split 74 — — — —

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Stock-based compensation — — 326 — 326

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

Net proceeds received for issuance of common stock 15,051 — 38 — 38

Issuance of common stock upon exercise of warrants, net 505,962 — 1,980 — 1,980

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 10:1 reverse stock split 877 — — — —

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Stock-based compensation 326 555

Loss on sale of equipment — 28

Gain on sale of equipment ( 28 ) —

Bad debt expense 2 ( 2 )

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Accounts receivable ( 242 ) 20

Other assets ( 4 ) —

Prepaid expenses ( 10 ) ( 148 )

Prepaid expenses and other current assets 11 ( 10 )

Inventory 1 58

Other assets ( 44 ) ( 4 )

Accounts payable 65 ( 390 )

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Proceeds from the issuance of common stock, net 38 5,407

Proceeds from the exercise of warrants 2,831 —

Proceeds from the exercise of warrants, net 1,980 2,831

Proceeds from the issuance of notes payable 25 114

Repayments of notes payable ( 42 ) ( 6 )

Repayments of finance lease obligations — ( 27 )

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

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(referred to in this report as “SenesTech,” the “Company,” “we” or “us”) was incorporated in the state of Nevada in July 2004.

On November 15, 2015, the Company subsequently reincorporated in the state of Delaware.

On November 15, 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 populations, through fertility control with our current products known as ContraPest and Evolve.

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

To date, we have received registration for ContraPest in all 50 states and the District of Columbia, 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).

In addition to the 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 states and the District of Columbia have approved 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 cycles 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 30 states.

To date, we are authorized to sell Evolve in 48 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 35 states.

Reverse Stock Split

On November 16, 2023, we amended our amended and restated certificate of incorporation to effect a 1-for-12 reverse split of our issued and outstanding shares of common stock.

In July 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.

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Going Concern

Although our audited financial statements for the years ended December 31, 2023 and December 31, 2022 were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the years ended December 31, 2023 and December 31, 2022 contains a going concern qualification in which such firm expressed substantial doubt in our ability to continue as a going concern without additional capital from becoming available, based on the financial statements at that time.

Although our audited financial statements for the years ended December 31, 2024 and 2023 were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the years ended December 31, 2024 and 2023 contains a going concern qualification in which such firm expressed substantial doubt in our ability to continue as a going concern without additional capital from becoming available, based on the financial statements at that time.

Specifically, as noted above, we have incurred operating losses since our inception, and we expect to continue to incur significant expenses and operating losses for the foreseeable future.

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

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Need for Additional Capital

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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

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

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

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.

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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, 2023, in combination with anticipated revenue, will be sufficient to fund our current operations for at least the next nine months.

Based upon our current operating plan, we expect that cash and cash equivalents at December 31, 2024, in combination with anticipated revenue, will be sufficient to fund our current operations for at least the next three 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 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.

If we need more financing, including within the next three 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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Provisions for uncollectible accounts receivable are charged to Selling, general and administrative expense, with an offsetting credit to the allowance for uncollectible accounts.

Inventories consist of raw materials, work in progress and finished goods and are stated at the lower of cost or market value, using the first-in, first-out convention.

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

SENESTECH, INC.

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.

Inventories consist of raw materials, work in progress and finished goods and are stated at the lower of cost or market value, using the first-in, first-out convention.

Cost includes the acquired cost of raw materials, with work-in-progress and finished goods including the application of labor 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.

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

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Research and development costs are expensed as incurred.

Research and development expenses primarily consist of salaries and benefits for research and development employees, stock-based compensation, consulting fees, lab supplies, costs incurred related to conducting scientific trials and field studies, regulatory compliance costs, as well as manufacturing costs associated with process improvement and other research.

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

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

costs associated with process improvement and other research.

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

Stock-based Compensation

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Raw materials $ 719 $ 747

Work in progress 1 —

Finished goods 74 53

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NOTES TO THE FINANCIAL STATEMENTS, continued

Prepaid Expenses

Prepaid expenses consist of the following (in thousands):

Prepaid Expenses and Other Current Assets

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

As of December 31,

Equity offering costs $ 146 $ —

Software licenses 112 152

Prepaid inventory 111 —

Insurance 27 64

Professional services 30 41

Patents 14 39

Marketing programs and conferences 21 1

Total prepaid expenses $ 388 $ 378

Professional services 18 30

Prepaid inventory — 111

Total prepaid and other current expenses $ 377 $ 388

Property and Equipment, Net

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Property and equipment, net $ 407 $ 388

Construction in progress consists of manufacturing equipment.

The equipment is expected to be placed in service when we commence operations at our new manufacturing facility, which is expected in April 2025.

Also see Note 5.

During the years ended December 31, 2024 and 2023, depreciation and amortization expense was $ 156,000 and $ 135,000 , respectively.

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As of December 31,

Compensation, severance and related benefits $ 232 $ 497

Legal services 121 36

Product warranty 15 18

Personal property and franchise tax — 6

Compensation and related benefits $ 244 $ 232

Legal and other services 30 121

Product warranty and other 4 15

Total accrued expenses $ 278 $ 368

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):

We have arranged financing for the purchase of certain equipment.

These notes payable have a weighted average annual interest rate of 10.4 % with a term of five years and are secured by the underlying equipment.

As of December 31, 2024, the future principal payments were as follows (in thousands):

Total principal payments 262

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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.

SENESTECH, INC.

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.

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

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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.

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

We were obligated under finance leases for certain research and computer equipment, of which the last arrangement expired in July 2022.

In August 2024, we entered into an operating lease for a new location for our corporate headquarters and manufacturing and research operations.

The new operating lease commences in April 2025 and expires in 2035.

The previous operating lease for our corporate headquarters expired in November 2024.

However, our operating lease for our existing manufacturing and research operations was extended and now expires in May 2025.

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

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Operating lease cost $ 285 $ 231

Finance lease cost:

Amortization of ROU asset — 35

Interest on lease liability — 1

Total finance lease cost $ — $ 36

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

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

Years Ending December 31:

Total operating lease payments 225

Less imputed interest ( 8 )

Total operating lease liabilities $ 217

STOCK-BASED COMPENSATION

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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.

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

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

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

As of December 31, 2024, we had 60,228 shares of common stock available for issuance under the 2018 Plan.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Stock Options

We measure the fair value of stock options with service-based vesting criteria to employees, directors and consultants on the date of grant using the Black-Scholes option pricing model.

The Black-Scholes valuation model requires us to make certain estimates and assumptions, including assumptions related to the expected price volatility of our stock, the period during which the options will be outstanding, the rate of return on risk-free investments, and the expected dividend yield for our stock.

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 expected period during which the options will be outstanding, the rate of return on risk-free investments, and the expected dividend yield for our stock.

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

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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.

The expected dividend yield is zero 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.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

We use the “simplified method” to estimate expected term.

Under the simplified method, an option’s expected term is calculated as the time until expiration.

The stock option activity consists of the following:

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(2) Includes options related to 603 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.

As of December 31, 2024, the unrecognized stock-based compensation cost was $ 340,000 , which is expected to be recognized over a weighted average period of 1.7 years.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

Restricted Stock Units

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Outstanding as of December 31, 2022 156 $ 325.20

Granted 1,587 34.44

Vested ( 156 ) 325.20

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Outstanding as of December 31, 2023 — —

Vested ( 1,566 ) 32.52

Forfeited — —

Outstanding as of December 31, 2024 — —

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

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

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(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.

Our losses before income taxes for the years ended December 31, 2024 and 2023 were generated entirely from U.S.

We have no current or deferred provision for income taxes from continuing operations for the years ended December 31, 2024 and 2023.

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Federal statutory tax rate ( 21.0 ) % ( 21.0 ) %

State taxed, net of federal tax benefit ( 3.8 ) ( 3.7 )

State taxes, net of federal tax benefit ( 3.8 ) ( 3.8 )

Change in valuation allowance 23.7 23.5

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A valuation allowance has been recognized to offset the net deferred tax assets as realization of such deferred tax assets have not met the more likely than not threshold.

As of December 31, 2023, we had federal and state net operating loss carryforwards of approximately $ 91.2 million and $ 78.0 million, respectively, not considering the IRC Section 382 annual limitation discussed below.

As of December 31, 2024, we had federal and state net operating loss carryforwards of approximately $ 96.1 million and $ 83.0 million, respectively, not considering the Internal Revenue Code Section 382 annual limitation discussed below.

The federal loss carryforwards begin to expire in 2029, unless previously utilized.

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We had the following common stock offerings in 2024 and 2023:

November 2022 .

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 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 7,142 shares of our common stock at a purchase price of $ 210.00 per share and warrants to purchase up to an aggregate of 7,142 shares of common stock at a purchase price of $ 194.40 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 .

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

SENESTECH, INC.

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.

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 $ 1.6 million (“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, 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.

Through December 31, 2024, we have sold 15,051 shares for gross proceeds of $ 44,000 under this ATM Facility.

As of December 31, 2024, there are 300,138 shares of common stock reserved for potential issuance with available capacity of $ 1.5 million under this ATM Facility.

See prepaid equity offering costs under Prepaid Expenses and Other Current Assets in Note 2 for costs related to the ATM Facility, which are ratably netted against proceeds received based on stock sales.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

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.

The difference between the fair value of the warrants immediately prior to modification and immediately after modification was treated as a transaction cost, which is netted against proceeds received, and was $ 386,000 using the Black-Scholes model based on the following significant inputs:

• For the August 2023 Original Warrants:

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:

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 connection with the Warrant Inducement transaction, new warrants to purchase 1,036,279 shares of our common stock were issued, which are discussed under Common Stock Warrants Issued in August 2024 Private Inducement in Note 9.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

COMMON STOCK WARRANTS

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2023 Issued Exercised Expired Balance

November 2017 Common Stock Offering November 2022 $ 327.84 507 — — ( 507 ) — — — — —

June 2018 Reissue December 2023 $ 87,360.00 24 — — ( 24 ) — — — — —

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

36,757 1,195,466 ( 454,444 ) ( 251 ) 777,528 1,036,279 ( 505,962 ) ( 3 ) 1,307,842

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12.63 1,307,842

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 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;

comparable company volatility of 93.9 %;

remaining term of five years;

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

• 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;

comparable company volatility of 93.9 %;

remaining term of five years;

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

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;

volatility of 96 %;

term of 2.3 years;

dividend yield of 0 %;

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

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 five years;

dividend yield of 0 %;

and risk-free interest rate of 3.8 %.

Common Stock Warrants Issued in April 2023 Registered Direct Offering

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In August 2023, placement agent warrants were issued to purchase up to 1,222 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.

The placement agent warrants are exercisable immediately upon issuance, with an exercise price of $ 108.04 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:

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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:

We estimated the fair value of the Pre-Funded Warrants to be

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

$ 685,000 using a Black Scholes model based on the following significant inputs:

common stock price of $ 9.30 per share;

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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 2023, we issued to the placement agent, warrants to purchase up to 288,462 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 28,844 shares of common stock at an exercise price of $ 16.25 per share.

These warrants are exercisable in May 2024 and expire in November 2028.

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.

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

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volatility of 103 %;

remaining term of five years;

remaining term of 5 years;

dividend yield of 0 %;

and risk-free interest rate of 4.2 %.

Common Stock Warrants Issued in August 2024 Private Inducement

In August 2024, in connection with the Warrant Inducement transaction discussed in Note 8, warrants were issued to the investor in the Warrant Inducement Transaction to purchase up to 1,011,004 shares of our common stock.

These warrants are immediately exercisable with an exercise price of $ 4.35 per share, with 571,318 expiring August 2029 (“Series F-1 Warrants”) and 439,686 expiring February 2026 (“Series F-2 Warrants”).

For additional information, see Note 14.

We estimated the fair value of the Series F-1 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 Series F-2 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 2024, 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 of $ 5.75 per share, and expiring August 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 %.

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

SEGMENT INFORMATION

We operate in a single operating segment:

the formulation, development, marketing and sale of fertility control products for use in managing pest populations.

This single operating segment has been identified based on our internal management structure and reporting to our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer.

Our CODM evaluates segment performance on based on the revenues, gross profit and operating loss of the segment and uses internal financial statements to make decisions regarding resource allocation.

Revenues, gross profit and operating loss used by the CODM are presented on our accompanying statement of operations.

The measure of segment assets is represented as total assets presented on our accompanying balance sheets.

There are no intersegment revenues, as all transactions are conducted within the one operating segment.

We have not identified any reportable segments other than the single operating segment discussed.

Significant Customers

The percentage of revenue attributable to our distributors and end customers that represented 10% or more of revenue in at least one of the periods presented, was as follows:

Years Ended December 31,

All distributors 34 % 9 %

Distributor A 13 2

Distributor B 7 3

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

As of December 31,

Distributor A 58 % — %

Distributor B 20 % 13 %

End customer A 2 % 19 %

End customer B — % 13 %

LOSS PER SHARE

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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.

Warrants and 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, 2024 and 2023.

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

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Common stock warrants 249,053 675,501

Restricted stock units — 1,567

Common stock options 73,533 —

Total 322,586 675,501

SENESTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS, continued

CONTINGENCIES

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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.

In December 2024, Liphatech Inc.

(“Liphatech”) commenced an action against us in the United States District Court for the Eastern District of Wisconsin Division.

The complaint alleges, among other things, breach of contract, misappropriation of trade secrets, unfair competition, and unjust enrichment.

These claims are based on allegations that we misappropriated and utilized proprietary information and trade secrets of Liphatech.

The complaint also alleges that we breached a non-disclosure agreement that we had entered into with Liphatech.

The complaint seeks unspecified damages as well as injunctive relief.

We believe we have strong defenses against these claims and intend to defend the case vigorously.

The outcome of this legal matter is not known or probable at this time, therefore no amounts have been accrued for a settlement.

In addition to the matters 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.

Management is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on our financial position, results of operations or liquidity.

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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, 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.

In connection with consulting agreements in place a $ 4,200 cash payment was made during 2023 to the Kito Impact Foundation, of which the Chair of our board serves as chief executive officer.

There were no related party transactions for 2024.

SUBSEQUENT EVENTS

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.

Since December 31, 2024, we have issued 365,319 shares of common stock pursuant to the ATM Financing for gross proceeds of $ 1.2 million.

On March 11, 2025, we completed a warrant inducement transaction whereby we issued 374,718 shares of common stock pursuant to the exercise of certain warrants.

Such warrants, which were originally issued in August 2024 with an original exercise price of $ 4.35 per share, were exercised at a reduced exercise price of $ 2.90 per share, for gross proceeds of $ 1.1 million.

As consideration for the exercise of such existing warrants, we issued new short-term warrants to purchase up to an aggregate of 1,498,872 shares of common stock at an exercise price of $ 2.90 per share, which will be exercisable for 18 months beginning on the effective date of stockholder approval of the issuance of the shares of common stock.

In addition, we issued placement agent warrants to purchase up to an aggregate of 18,736 shares of common stock at an exercise price of $ 3.625 per share, which will be exercisable for 18 months beginning on the effective date of stockholder approval of the issuance of the shares of common stock.

Of the shares issued, 29,000 shares are held in abeyance and not considered outstanding.

The shares held in abeyance will be held in abeyance until notice from the stock holder that the balance, or portion thereof, may be issued in compliance with a beneficial ownership limitation provisions in the terms of the warrant.

We have evaluated subsequent events from the balance sheet date through March 12, 2025, 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.

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What changed 10-K

Item 8. Financial Statements and Supplementary Data