What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-08 · 92 added, 84 removed, 144 unchanged (55% of the section changed)

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Forward-Looking Statements

The statements contained in this Quarterly Report on Form 10-Q that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).

The statements contained in this Quarterly Report on Form 10-Q that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).

All statements other than statements of historical facts contained or incorporated herein by reference in this Quarterly Report on Form 10-Q, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations, are forward-looking statements.

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• our ability to meet our working capital needs;

• our expectation that cash and cash equivalents will be sufficient to fund our current operations through at least the end of fiscal 2027;

• our expectation that cash and cash equivalents will be sufficient to fund our current operations for the next 12 months and the foreseeable future;

• our belief that the use of our products can lead to sustained reductions of the rat or mice populations;

• our belief that additional financing will be needed before achieving anticipated revenue targets and margin targets;

• our belief that additional financing may still be needed before achieving our anticipated revenue and margin targets;

• our belief that 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;

• our belief that 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 tat adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development efforts or discontinue operations;

• our belief that if 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;

• our belief that we will not pay dividends;

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• our belief that Evolve qualifies for exemption from registration as a minimum risk pesticide under the EPA’s FIFRA, Section 25(b);

• our belief that additional financing will be needed before achieving anticipated revenue targets and margin targets;

• our belief that the market opportunity for non-poison rodent control remains significant and growing, driven by regulatory restrictions on traditional rodenticides and increasing demand for safer, sustainable pest management alternatives;

• our ability to raise necessary capital through the sale of our securities;

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• our anticipation that the cost of producing Evolve will continue to be lower than ContraPest based on the current costs of raw materials;

• our expectation that Evolve product sales will continue to increase as the market adoption of Evolve grows;

• our expectation that for the foreseeable future tariffs on foreign countries will not increase our costs, as the majority of our components are sourced domestically;

• our expectation that our expenses will continue or increase in connection with our ongoing activities, particularly as we focus on marketing and sales of fertility control products;

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Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

The forward-looking statements contained in or

incorporated by reference into this Quarterly Report on Form 10-Q reflect our views as of the date of this Quarterly Report on Form 10-Q about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results, performance or achievements to differ significantly from those expressed or implied in any forward-looking statement.

The forward-looking statements contained in or incorporated by reference into this Quarterly Report on Form 10-Q reflect our views as of the date of this Quarterly Report on Form 10-Q about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results, performance or achievements to differ significantly from those expressed or implied in any forward-looking statement.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance or achievements.

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The SEC’s website contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Since our inception, we have incurred significant operating losses related to our research and development and commercialization efforts, with a net loss of $1.6 million for the three months ended June 30, 2025, and we expect these losses to continue in the near term.

Although sales of our product have increased over the last three years, 56% in 2024, 17% in 2023, and 77% in 2022, we are not yet able to fund operations by product sales alone.

We have primarily funded our operations to date through the sale of equity securities, including common stock and warrants to purchase common stock.

As of June 30, 2025, we had received net proceeds of $111.4 million from the issuance of common and preferred stock, warrant exercises, and convertible and other promissory notes.

We have also generated an aggregate of $6.7 million in net product sales and $1.7 million in licensing fees.

At the end of the period, we reported an accumulated deficit of $139.4 million and cash and cash equivalents totaling $6.1 million.

Our ultimate, long-term 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 June 30, 2025, in combination with anticipated revenue and any additional sales of our equity securities, including the most recent warrant exercise transaction in August 2025 (as further described below), will be sufficient to fund our current operations through at least the end of fiscal 2027.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 and internationally, additional financing may still 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 may be 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.

SenesTech, Inc.

(subsequently referred to in this report as “we,” “us,” “our,” or “our company”) was incorporated in Nevada in July 2004 and reincorporated in Delaware in November 2015.

Our corporate headquarters and manufacturing facility are located in Surprise, Arizona.

We develop and commercialize products that manage animal pest populations through fertility control.

Our current products focus on rat and mouse populations and are marketed under the brands ContraPest®, Evolve® Rat, and Evolve® Mouse.

Our products target the reproductive systems of both male and female rodents, are formulated for high palatability, and do not cause illness or behavioral change, resulting in significant and sustained population reductions.

To date, ContraPest is registered in all 50 states, the District of Columbia, Puerto Rico, and the U.S.

Virgin Islands.

We are authorized to sell Evolve Rat in 48 states, Puerto Rico, and the U.S.

Virgin Islands, and Evolve Mouse in 36 states and the U.S.

Virgin Islands.

We have also begun to market Evolve products internationally through distributors.

During the third quarter of 2025, we continued to experience strong growth in our Evolve® product line, which now represents the majority of our total revenue.

Sales of Evolve Rat and Evolve Mouse increased across all major distribution channels, led by e-commerce, pest management professionals, and retail expansion.

We also announced that our products are now available on retailer e-commerce sites, which we view as an important step toward broader brick-and-mortar retail availability.

Our focus remains on achieving sustainable, high-margin revenue growth while progressing toward profitability.

To that end, we continue to emphasize operational efficiency, manufacturing cost reductions, and sales channel optimization.

Gross margins remain strong, reflecting the favorable economics of our Evolve products and improved manufacturing throughput at our Surprise, Arizona facility.

We also expanded our regulatory footprint and distribution reach.

Evolve Mouse received additional state registrations during the quarter, and we continued to support our international distribution partners as they introduce our fertility control technology to new markets.

We believe the market opportunity for non-poison rodent control remains significant and growing, driven by regulatory restrictions on traditional rodenticides and increasing demand for safer, sustainable pest-management alternatives.

Our near-term priorities are to further scale our Evolve product family, expand retail and professional distribution channels, and strengthen our path to profitability.

Results of Operations

The following table summarizes our results of operations for the periods presented (in thousands):

Three Months Ended June 30, % Increase (Decrease) Six Months Ended June 30, % Increase (Decrease)

Three Months Ended September 30, % Increase (Decrease) Nine Months Ended September 30, % Increase (Decrease)

2025 2024 2025 2024

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Loss from operations (1,347) (1,547) (13) % (4,624) (4,992) (7) %

Other income (expense), net (2) 18 (111) % (4) 29 (114) %

Other income, net 49 34 44 % 45 63 (29) %

Net loss $ (1,298) $ (1,513) (14) % $ (4,579) $ (4,929) (7) %

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

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

2025 2024 2025 2024

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Revenues, net $ 690 100 % $ 482 100 % $ 1,800 100 % $ 1,356 100 %

Sales, net of sales discounts and promotions, were $625,000 for the second quarter of 2025, compared to $459,000 for the second quarter of 2024.

Sales, net of sales discounts and promotions, were $690,000 for the third quarter of 2025, compared to $482,000 for the third quarter of 2024.

The $208,000 increase was driven by sales of our Evolve product offerings — Evolve Rat and Evolve Mouse (collectively, “Evolve”) — partially offset by a decline in units sold of our existing ContraPest product line.

Evolve, which launched in January 2024 and expanded with variations later that year, is a soft bait containing the active ingredient, cottonseed oil.

It represented approximately 83% of second quarter 2025 revenues, compared to 58% in the second quarter of 2024.

It represented approximately 85% of third quarter 2025 revenues, compared to 69% in the third quarter of 2024.

The increase in Evolve revenues was partially offset by a continued decline in ContraPest sales.

Sales, net of sales discounts and promotions, were $1.1 million for the first half of 2025, compared to $874,000 for the first half of 2024.

Sales, net of sales discounts and promotions, were $1.8 million for the nine months ended September 30, 2025, compared to $1.4 million for the comparable period of 2024.

The $444,000 increase was driven by sales of Evolve , partially offset by a decline in units sold of our ContraPest product line.

Evolve product sales represented approximately 81% of revenues for the first half of 2025, compared with 41% in the first half of 2024.

Evolve product sales represented approximately 83% of revenues for the nine months ended September 30, 2025, compared with 63% in the comparable period of 2024.

The increase in Evolve revenues was partially offset by a continued decline in ContraPest sales.

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Cost of sales consists of costs related to products sold, including scrap and reserves for obsolescence, as well as shipping costs when charged to the customer.

Cost of sales was $216,000, or 34.6% of net sales, for the second quarter of 2025, compared to $210,000, or 45.8%, for the second quarter of 2024.

Cost of sales was $388,000, or 35.0% of net sales, for the first half of 2025, compared to $490,000, or 56.1%, for the first half of 2024.

Cost of sales was $257,000, or 37.2% of net sales, for the third quarter of 2025, compared to $167,000, or 34.6%, for the third quarter of 2024.

Cost of sales was $645,000, or 35.8% of net sales, for the nine months ended September 30, 2025, compared to $657,000, or 48.5%, for the same period of 2024.

The decrease as a percentage of sales was driven by a shift in product mix toward Evolve, which carries a lower cost relative to ContraPest.

Additionally, the second quarter of 2024 and first half of 2024 reflected higher input costs for a key Evolve ingredient, as we transitioned from development-stage pricing to production-scale sourcing.

Gross profit for the second quarter of 2025 was $409,000, representing a margin of 65.4%, compared to $249,000, or 54.2%, in the second quarter of 2024.

Gross profit for the first half of 2025 was $722,000, representing a margin of 65.0%, compared to $384,000, or 43.9%, in the first half of 2024.

The improvement in gross margin was primarily driven by a greater proportion of sales coming from Evolve.

This benefit was partially offset by a shift in sales channel mix, with increased distributor sales, which typically yield lower margins.

Additionally, 2024 reflected higher input costs for a key Evolve ingredient, as we transitioned from development-stage pricing to production-scale sourcing.

For the foreseeable future, tariffs on foreign countries are not expected to increase our costs, as the majority of our components are sourced domestically.

Gross profit for the third quarter of 2025 was $433,000, representing a margin of 62.8%, compared to $315,000, or 65.4%, in the third quarter of 2024.

Gross profit for the nine months ended September 30, 2025 was $1.2 million, representing a margin of 64.2%, compared to $699,000, or 51.5%, for the comparable period of 2024.

The improvement in gross margin was primarily driven by a greater proportion of sales coming from Evolve combined with lower input costs for a key Evolve ingredient as transitioned from development-stage pricing in 2024 to production-scale sourcing into 2025.

Research and Development Expenses

Research and development expenses consisted of the following (in thousands):

Three Months Ended June 30, Increase

(Decrease) Six Months Ended June 30, Increase

Three Months Ended September 30, Increase

(Decrease) Nine Months Ended September 30, Increase

2025 2024 2025 2024

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Total $ 400 $ 451 $ (51) $ 1,245 $ 1,288 $ (43)

Research and development expenses were $427,000 for the second quarter of 2025, compared to $467,000 for the second quarter of 2024.

The $40,000 reduction was primarily due to cost containment efforts, including lower personnel costs resulting from changes in headcount.

Research and development expenses were $400,000 for the third quarter of 2025, compared to $451,000 for the third quarter of 2024.

The $51,000 decrease was primarily due to cost containment efforts, including lower personnel costs resulting from changes in headcount.

These savings were partially offset by increased facility expenses associated with our move to a new manufacturing site in April 2025, with expanded production capacity and corporate offices, and included $44,000 in non-cash operating lease costs.

Research and development expenses were $845,000 for the first half of 2025, compared to $837,000 during the same period of 2024.

The $8,000 increase was primarily driven by higher facility-related costs related to our April 2025 move to a new manufacturing site with expanded production capacity and corporate offices, which included $34,000 in non-cash operating lease expense.

This increase was partially offset by overall reductions in spending as a result of our ongoing cost containment efforts.

Additionally, maintenance costs were higher and related to the expanded production capacity.

Research and development expenses were $1.2 million for the nine months ended September 30, 2025, compared to $1.3 million during the same period of 2024.

The $43,000 decrease was primarily driven by overall reductions in spending as a result of our ongoing cost containment efforts.

This decrease was partially offset by higher facility-related costs related to our April 2025 move to a new facility, which included $87,000 in non-cash operating lease expense.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consisted of the following (in thousands):

Three Months Ended June 30, Increase

(Decrease) Six Months Ended June 30, Increase

Three Months Ended September 30, Increase

(Decrease) Nine Months Ended September 30, Increase

2025 2024 2025 2024

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Licensed software 44 57 (13) 140 187 (47)

Travel & entertainment 32 56 (24) 94 115 (21)

Travel and entertainment 49 64 (15) 143 179 (36)

Facilities 32 39 (7) 32 119 (87)

Other 79 146 (67) 404 313 91

Total $ 1,380 $ 1,411 $ (31) $ 4,534 $ 4,403 $ 131

Selling, general and administrative expenses were $1.6 million for the second quarter of 2025, compared to $1.4 million for the second quarter of 2024.

Selling, general and administrative expenses were approximately $3.2 million for the first half of 2025, compared to $3.0 million for the first half of 2024.

The increase in selling, general and administrative expenses was primarily due to higher legal fees related to an ongoing legal matter, as well as increased franchise fees.

Overall, our other operating expenses decreased as a result of our continued cost containment efforts.

Selling, general and administrative expenses were $1.4 million for the third quarter of 2025, compared to $1.4 million for the third quarter of 2024.

The decreases resulting from our continued cost containment efforts in 2025 were largely offset by higher legal fees related to an ongoing legal matter as well as higher franchise fees.

Selling, general and administrative expenses were $4.5 million for the nine months ended September 30, 2025, compared to $4.4 million for the same period of 2024.

The increase in selling, general and administrative expenses was primarily due to higher legal fees related to an ongoing legal matter, as well as increased franchise fees and corporate governance costs.

Other operating expenses decreased as a result of our continued cost containment efforts.

Other Income, Net

For the second quarter of 2025, other expense, net totaled $2,000, consisting of $6,000 in interest expense partially offset by $4,000 in interest income.

This compares to other income, net of $18,000 in the second quarter of 2024, which included $22,000 in interest income and $5,000 in interest expense.

The increase in interest expense in 2025 reflects a higher average balance of notes payable, following the financing of new equipment in late 2024 to expand production capacity and streamline operations.

Interest income declined due to a lower average balance of cash and cash equivalents compared to the same period in 2024.

For the first half of 2025, other expense, net was $4,000, comprised of $11,000 in interest expense and $7,000 in interest income.

In contrast, the first half of 2024 reflected other income, net of $29,000, including $37,000 in interest income and $9,000 in interest expense.

The increase in interest expense and decrease in interest income in 2025 were similarly driven by a higher average balance of notes payable and a lower average balance of cash and cash equivalents, respectively.

For the third quarter of 2025, other income, net was $49,000, consisting of $55,000 in interest income and $6,000 in interest expense.

This compares to other income, net of $34,000 in the third quarter of 2024, which included a $28,000 gain from the sale of equipment, consisting of $11,000 in interest income and $6,000 in interest expense.

The increase in interest income in 2025 reflects a higher average balance of cash, cash equivalents and investments compared to the same period in 2024.

For the nine months ended September 30, 2025, other income, net was $45,000, consisting of $62,000 in interest income and $17,000 in interest expense.

This compares to other income, net of $63,000, which included a $28,000 gain from the sale of equipment, consisting of $48,000 in interest income and $15,000 in interest expense.

The increase in interest income and in interest expense in 2025 were driven by a higher average balance of cash, cash equivalents and investments and a higher average balance of notes payable, respectively.

The higher average balance of cash, cash equivalents and investments was driven by warrant exercise and ATM transactions in June and August 2025, while the higher average balance of notes payable relates to the financing of new equipment in late 2024 to expand production capacity and streamline operations.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses related to our research and development activities and commercialization efforts, and we expect these losses to continue in the near term.

To date, we have generated limited revenue from product sales and have primarily funded our operations through the sale of equity securities, including common stock and warrants.

As of June 30, 2025, we had received net proceeds of $111.4 million from the issuance of common and preferred stock, warrant exercises, and convertible and other promissory notes.

Since our inception, we have incurred significant operating losses related to our research and development activities and commercialization efforts, with a net loss of $1.3 million for the three months ended September 30, 2025, and we expect these losses to continue in the near term.

Although sales of our product have increased over the last three years — 56% in 2024, 17% in 2023, and 77% in 2022 — we are not yet able to fund operations by product sales alone.

We have primarily funded our operations to date through the sale of equity securities, including common stock and warrants to purchase common stock.

As of September 30, 2025, we had received net proceeds of $117.0 million from the issuance of common and preferred stock, warrant exercises, and convertible and other promissory notes.

We have also generated an aggregate of $7.3 million in net product sales and $1.7 million in licensing fees.

At the end of the period, we reported an accumulated deficit of $139.4 million and cash and cash equivalents totaling $6.1 million.

At the end of the period, we reported an accumulated deficit of $140.7 million and cash and cash equivalents and short-term investments totaling $10.2 million.

Our long-term success depends on several key factors, including:

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(ii) market acceptance, commercial viability, and profitability of our products;

(iii) the development of an effective sales and marketing infrastructure;

(iv) the success of our ongoing research and development programs;

(v) our ability to attract and retain key personnel;

(vi) our capacity to meet ongoing working capital requirements.

Based on our current operating plan, we believe our cash and cash equivalents as of June 30, 2025, combined with anticipated revenue and potential proceeds from future equity sales, will be sufficient to fund operations through at least the end of fiscal 2027.

We continue to monitor and adjust our operating expenses and remain focused on the successful commercialization of our fertility control products both in the United States and abroad.

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

(iv) the success of our ongoing research and development efforts;

(v) our ability to attract and retain key personnel to develop, operate and grow our business;

(vi) our ability to meet our ongoing working capital requirements.

Based on our current operating plan, we expect that our cash and cash equivalents and short-term investments as of September 30, 2025, combined with anticipated revenue and potential proceeds from future equity sales, will be sufficient to fund operations for the next 12 months and the foreseeable future.

While we have evaluated and continue to evaluate our operating expenses and remain focused on the successful commercialization of our fertility control products both in the United States and abroad.

However, if our revenue or margin targets are not met, or if our expenses exceed projections, we may need to secure additional financing sooner than expected.

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Without adequate financing on acceptable terms, we may be forced to delay, scale back, or discontinue commercialization and development activities—or cease operations entirely.

Additional Funding Requirements

Potential Additional Funding Requirements

We expect our expenses to continue or increase in connection with our ongoing activities, particularly as we focus on marketing and sales of fertility control products.

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The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash and cash equivalents, beginning of period $ 1,307 $ 5,395

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Cash Flows from Operating Activities— Cash flows from operating activities are generally determined by the amount and timing of cash received from customers and payments made to vendors, as well as the nature and amount of non-cash items, including depreciation and amortization and stock-based compensation included in operating results during a given period.

During the six months ended June 30, 2025, operating activities used $2.7 million of cash, resulting from our net loss of $3.3 million and net changes in our operating assets and liabilities of $275,000, partially offset by net non-cash charges of $299,000, consisting primarily of stock-based compensation, depreciation and amortization and operating lease expenses.

During the nine months ended September 30, 2025, operating activities used $4.1 million of cash, resulting from our net loss of $4.6 million and net changes in our operating assets and liabilities of $75,000, partially offset by net non-cash charges of $418,000, consisting primarily of stock-based compensation, depreciation and amortization and operating lease expenses.

Our net loss was driven by costs related to our selling, general and administrative activities resulting from our continued efforts to commercialize our products, combined with research and development costs related to our continued efforts on formulations of new products and improvements to existing products.

Net cash provided by changes in our operating assets and liabilities consisted of a net increase in accounts payable and accrued expenses of $194,000 combined by decreases in prepaid expenses of $139,000 and inventory of $83,000, partially offset by increase in accounts receivable of $141,000.

During the six months ended June 30, 2024, operating activities used $3.4 million of cash, resulting from our net loss of $3.4 million and net changes in our operating assets and liabilities of $245,000, partially offset by non-cash charges of $245,000, consisting primarily of stock-based compensation and depreciation and amortization expense.

Net cash provided by changes in our operating assets and liabilities consisted of a net increase in accounts payable and accrued expenses of $77,000 combined by decreases in prepaid expenses of $64,000, inventory of $27,000 and other assets related to the return of facility deposits of $22,000, partially offset by increase in accounts receivable of $125,000.

During the nine months ended September 30, 2024, operating activities used $4.8 million of cash, resulting from our net loss of $4.9 million and net changes in our operating assets and liabilities of $216,000, partially offset by non-cash charges of $330,000, consisting primarily of stock-based compensation and depreciation and amortization expense.

Our net loss was driven by costs related to our selling, general and administrative activities resulting from our efforts to commercialize our products, combined with costs related to our research and development efforts.

Net cash used by changes in our operating assets and liabilities consisted primarily of increases in accounts receivable of $150,000, inventory of $104,000, and prepaid expenses of $76,000, partially offset by an increase in accounts payable and accrued expenses of $88,000.

Cash Flows from Investing Activities— Cash flows used in investing activities primarily consist of the purchase of property and equipment, offset by any proceeds received in connection with sales of property and equipment.

During the six months ended June 30, 2025 and 2024, cash flows used in investing activities consisted of property and equipment purchases and was higher in 2025 in connection with the April 2025 move into our new manufacturing facility with increased production capacity and corporate offices.

Net cash used by changes in our operating assets and liabilities consisted primarily of increases in accounts receivable of $121,000, inventory of $85,000, and other assets related to the deposit on our new facility of $36,000, partially offset by a decrease in prepaid expenses of $28,000 and an increase in accounts payable and accrued expenses of $4,000.

Cash Flows from Investing Activities— Cash flows used in investing activities consist of held-to-maturity investment transactions, the purchase of property and equipment, and any proceeds received in connection with sales of property and equipment.

For the nine months ended September 30, 2025, cash used in investing activities consisted of purchases of held-to-maturity investments totaling $3.0 million and property and equipment purchases of $125,000 compared to property and equipment purchases of $69,000, partially offset by proceeds received in connection with the sale of property and equipment of $28,000 in the same period of 2024.

The higher 2025 property and equipment purchases were related to our move into a new manufacturing facility with increased production capacity and corporate offices.

Cash Flows from Financing Activities— Financing activities provide cash for both day-to-day operations and capital requirements as needed.

During the six months ended June 30, 2025, net cash provided by financing activities consisted of net proceeds received from the exercise of warrants of $4.9 million and from the issuance of common stock under our ATM Facility of $2.7 million, partially offset by repayments on notes payable of $28,000.

During the six months ended June 30, 2024, net cash provided by financing activities consisted of proceeds received from notes payable of $25,000 and net proceeds received from the exercise of warrants of $6,000, partially offset by the repayment of notes payable of $17,000.

During the nine months ended September 30, 2025, net cash provided by financing activities consisted of net proceeds received from the exercise of warrants of $10.5 million and from the issuance of common stock under our ATM Facility of $2.7 million, partially offset by repayments on notes payable of $42,000.

During the nine months ended September 30, 2024, net cash provided by financing activities consisted of net proceeds received from the exercise of warrants of $2.0 million and proceeds received from notes payable of $25,000, partially offset by the repayment of notes payable of $29,000.

Warrant Inducement Transaction

On August 5, 2025, we completed a warrant inducement transaction resulting in the issuance of 1,458,872 shares of our common stock upon the exercise of certain existing warrants (the “Warrant Inducement Transaction”).

The holders of such warrants agreed to exercise their existing warrants at the exercise price of $4.15 per share and pay a purchase price of

$0.125 per share—totaling $274,000—in consideration of our issuance, in a private placement, of new warrants.

The holders of such warrants agreed to exercise their existing warrants at the exercise price of $4.15 per share and pay a purchase price of $0.125 per share—totaling $274,000—in consideration of our issuance, in a private placement, of new warrants.

These new warrants relate to 2,188,308 shares of common stock, have an exercise price of $5.25 per share, are immediately exercisable, and will expire 15 months after the effective date of the resale registration statement covering the underlying shares.

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These placement agent warrants have an exercise price of $5.4219 per share and have terms substantially similar to those of the new warrants issued to the investors.

As a result of the Warrant Inducement Transaction, we had approximately $11.2 million in cash and cash equivalents as of August 5, 2025, and we believe that our existing cash and cash equivalents will be sufficient to fund our operations and any capital expenditures through at least the end of fiscal 2027.

As a result of this latest Warrant Inducement Transaction, we had $10.2 million in cash and cash equivalents and short-term investments as of September 30, 2025, and we believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations and any capital expenditures for the next 12 months and the foreseeable future.

If we have not yet achieved break-even or profitability by that point, our ability to continue as a going concern will depend on our ability to generate sufficient revenues, reduce operating costs, or obtain additional funding through equity or debt financings, strategic collaborations, or other arrangements.

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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 2. Management’s Discussion and Analysis