Item 8. Financial Statements and Supplementary Data
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following financial statements and report are included in Item 8:
Report of Independent Registered Public Accounting Firm (PCAOB ID 2738 )
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Balance Sheets as of December 31, 202 5 and 202 4
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Statements of Operations and Comprehensive Loss for the years ended December 31, 202 5 and 202 4
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Statements of Changes in Stockholders’ Equity for the years ended December 31, 202 5 and 202 4
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Statements of Cash Flows for the years ended December 31, 202 5 and 202 4
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Notes to Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of SenesTech, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of SenesTech, Inc. (the Company) as of December 31, 2025 and 2024, and the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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: (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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the Company’s Alleviation of Going Concern
Description of the Matter:
The Company’s recurring losses from operations, negative cash flows, and accumulated deficit raised substantial doubt about its ability to continue as a going concern. As disclosed in Note 1 to the financial statements, the Company’s ability to continue as a going concern was alleviated as a result of successfully completing equity raises during the year and management’s significant assumptions and judgments related to forecasting future cash flows demonstrating a positive liquidity position.
We identified the evaluation of the Company’s ability to alleviate the going concern position as a critical audit matter. This matter required especially challenging auditor judgment due to the complexity and subjectivity involved in assessing management’s forecasts and assumptions, and the potential impact on the financial statements if the going concern basis was not appropriate.
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How We Addressed the Matter in Our Audit:
To evaluate the Company’s conclusion that the conditions and events raising substantial doubt about the Company’s ability to continue as a going concern have been alleviated, we evaluated management’s forecasts that included underlying assumptions, budget to actual comparisons, current and projected economic and geographic factors, the impact of successfully completing equity raises and the consideration of subsequent events occurring after the balance sheet date. We also evaluated the adequacy of the Company’s disclosures regarding the alleviation of substantial doubt related to its ability to continue as a going concern and management’s plans and actions to address those concerns.
/s/ M&K CPAS, PLLC
We have served as the Company’s auditor since 2014.
The Woodlands, TX
March 12, 2026
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SENESTECH, INC.
BALANCE SHEETS
(In thousands, except share and par value data)
As of December 31,
2025 2024
ASSETS
Current assets:
Cash and cash equivalents $ 7,575 $ 1,307
Short-term investments 994 —
Accounts receivable, net 201 335
Inventory 994 794
Prepaid expenses and other current assets 297 377
Total current assets 10,061 2,813
Right to use assets, operating leases 2,336 —
Property and equipment, net 410 407
Other noncurrent assets 36 58
Total assets $ 12,843 $ 3,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable 183 215
Accrued expenses 383 278
Current portion of operating lease liability 139 —
Current portion of notes payable 61 56
Deferred revenue 32 12
Total current liabilities 798 561
Operating lease liability, less current portion 2,332 —
Notes payable, less current portion 145 206
Total liabilities 3,275 767
Commitments and contingencies (see notes)
Stockholders’ equity:
Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding as of December 31, 2025 and 2024
— —
Common stock, $ 0.001 par value, 100,000,000 shares authorized, 5,223,015 shares and 1,035,893 shares issued and outstanding as of December 31, 2025 and 2024, respectively
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Additional paid-in capital 152,043 138,607
Accumulated deficit ( 142,480 ) ( 136,097 )
Total stockholders’ equity 9,568 2,511
Total liabilities and stockholders’ equity $ 12,843 $ 3,278
See accompanying notes to the financial statements.
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SENESTECH, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
Years Ended December 31,
2025 2024
Revenues, net $ 2,221 $ 1,857
Cost of sales 833 853
Gross profit 1,388 1,004
Operating expenses:
Research and development 1,698 1,712
Selling, general and administrative 6,195 5,541
Total operating expenses 7,893 7,253
Loss from operations ( 6,505 ) ( 6,249 )
Other income (expense):
Interest income 144 56
Interest expense ( 22 ) ( 22 )
Miscellaneous income — 31
Other income, net 122 65
Net loss and comprehensive loss $ ( 6,383 ) $ ( 6,184 )
Weighted average shares outstanding — basic and diluted 3,275,983 697,974
Loss per share — basic and diluted $ ( 1.95 ) $ ( 8.86 )
See accompanying notes to the financial statements.
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SENESTECH, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except share data)
Additional
Paid-In
Capital Accumulated
Deficit Total
Common Stock
Shares Amount
Balances as of December 31, 2023 514,003 $ 1 $ 136,263 $ ( 129,913 ) $ 6,351
Stock-based compensation — — 326 — 326
Net proceeds received for issuance of common stock upon exercise of warrants 505,962 — 1,980 — 1,980
Net proceeds received for issuance of common stock 15,051 — 38 — 38
Issuance of common stock for fractional shares in the 10:1 reverse stock split 877 — — — —
Net loss — — — ( 6,184 ) ( 6,184 )
Balances as of December 31, 2024 1,035,893 1 138,607 ( 136,097 ) 2,511
Stock-based compensation — — 264 — 264
Net proceeds received for issuance of common stock upon exercise of warrants 3,332,462 3 10,467 — 10,470
Net proceeds received for issuance of common stock 854,660 1 2,705 — 2,706
Net loss — — — ( 6,383 ) ( 6,383 )
Balances as of December 31, 2025 5,223,015 $ 5 $ 152,043 $ ( 142,480 ) $ 9,568
See accompanying notes to the financial statements.
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SENESTECH, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
2025 2024
Cash flows from operating activities:
Net loss $ ( 6,383 ) $ ( 6,184 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 264 326
Depreciation and amortization 135 156
Operating lease liability 135 ( 8 )
Bad debt expense 14 2
Accretion of interest on held-to-maturity investments ( 30 ) —
Gain on sale of equipment — ( 28 )
Changes in operating assets and liabilities:
Accounts receivable 121 ( 242 )
Prepaid expenses and other current assets 80 11
Inventory ( 200 ) 1
Other assets 22 ( 36 )
Accounts payable ( 32 ) 65
Accrued expenses 105 ( 90 )
Deferred revenue 19 ( 6 )
Net cash used in operating activities ( 5,750 ) ( 6,033 )
Cash flows from investing activities:
Purchase of held-to-maturity investments ( 2,964 ) —
Maturity of held-to-maturity investments 2,000 —
Proceeds received on sale of property and equipment — 28
Purchase of property and equipment ( 138 ) ( 84 )
Net cash used in investing activities ( 1,102 ) ( 56 )
Cash flows from financing activities:
Proceeds from the issuance of common stock, net 2,706 38
Proceeds from the exercise of warrants, net 10,470 1,980
Proceeds from the issuance of notes payable — 25
Repayments of notes payable ( 56 ) ( 42 )
Net cash provided by financing activities 13,120 2,001
Increase (decrease) in cash and cash equivalents 6,268 ( 4,088 )
Cash and cash equivalents, beginning of year 1,307 5,395
Cash and cash equivalents, end of year $ 7,575 $ 1,307
Supplemental disclosures of cash flow information:
Cash paid for:
Interest paid $ 22 $ 22
Income taxes paid — —
Non-cash investing and financing activities:
Operating lease entered into for right-to-use asset $ 2,439 $ —
Notes payable incurred for the purchase of certain equipment — 90
See accompanying notes to the financial statements.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
Nature of Business
SenesTech, Inc. (referred to in this report as “SenesTech,” the “Company,” “we” or “us”) was incorporated in the State of Nevada in July 2004. In November 2015, we subsequently reincorporated in the State of Delaware. Our corporate headquarters and manufacturing site are in Surprise, Arizona. We have developed and are commercializing products for managing animal pest populations through fertility control. Our current products focus on rat and mouse populations, and are known as ContraPest ® , Evolve ® Rat and Evolve Mouse.
CONTRAPEST . ContraPest, our initial product, is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide and triptolide. ContraPest targets the reproductive systems of both male and female rats, is a highly palatable formulation, does not cause illness or changed behavior in rats, and leads to significant reductions in fertility and rat populations. Accordingly, ContraPest is an additional tool to use as part of an integrated pest management program.
As of the date hereof, ContraPest is registered in all 50 states and the District of Columbia ( 49 states and the District of Columbia have approved the removal of the Restricted Use Product designation), and two major U.S. territories, Puerto Rico and the U.S. Virgin Islands.
EVOLVE . The Evolve product line, which began in the form of Evolve Rat, launched in January 2024, and is currently our lead product. Evolve Rat is a soft bait product that is novel to the pest control industry and contains the active ingredient, cottonseed oil. Evolve Rat reduces fertility in both male and female rats. Additionally, its palatable formulation produces high acceptance for sustained consumption even when other sought-after food sources are present. Evolve Rat does not cause illness in rats and, therefore, it does not change behavior or result in bait aversion. By targeting the reproductive systems of both male and female rats, and with palatability promoting continued consumption, the use of Evolve Rat can lead to a sustained reduction of the rat population.
Evolve Rat meets the EPA’s minimum risk pesticide conditions under Section 25(b) of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). Due to its classification, Evolve Rat is exempt from federal registration because it poses little to no risk to human health and the environment. Evolve Rat is also made from food ingredients with tolerance exemptions for both food and nonfood applications, which allows it to be used in agricultural applications. There are 10 states that accept the federal exemption for pesticide registration and require no additional determination or approval. In states that do not accept the federal exemption, we must obtain registration from the various state regulatory agencies. As of the date hereof, we are authorized to sell Evolve Rat in 48 states and territories.
In May 2024, we launched Evolve Mouse, our latest iteration of the Evolve product line. Evolve Mouse is a modified version of our soft bait technology and contains the same active ingredient, cottonseed oil. Evolve Mouse limits reproduction of male and female mice and is also considered a minimum risk pesticide under Section 25(b) of FIFRA. As of the date hereof, we are authorized to sell Evolve Mouse in 37 states and territories.
Going Concern Substantial Doubt Alleviated
Our audited financial statements for the years ended December 31, 2025 and 2024 were prepared under the assumption that we would continue as a going concern. The report of our independent registered public accounting firm that accompanied our financial statements for the year ended December 31, 2024 contained a going concern qualification in which such firm expressed substantial doubt in our ability to continue as a going concern without additional capital becoming available, based on the financial statements at that time.
In connection with the preparation of our financial statements for the year ended December 31, 2025, management evaluated the Company’s ability to continue as a going concern in accordance with the Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements–Going Concern (Subtopic 205-40), which requires an assessment of relevant conditions or events, considered in the aggregate, that are known or reasonably knowable by management on the issuance dates of the financial statements, which indicated the probable likelihood that the Company will be able to meet its obligations as they become due within one year after the issuance date of the financial statements.
As part of its evaluation, management assessed known events, trends, commitments, and uncertainties, including proceeds from recent financings. During 2025, the Company generated net proceeds of $ 13.2 million from the sale of common
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
stock, including the exercise of outstanding warrants. The proceeds are available for operating expenses, including selling, general and administration expenses, as well as the cost of research and development. Based on its evaluation, management believes it has mitigated the circumstance that led to a doubt with respect to the Company’s ability to continue as a going concern, which existed at the time of the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
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. While we have generated revenue from product sales over the past few years, those revenues have not been sufficient to cover our operating costs. Accordingly, we have primarily funded our operations to date through the sale of equity securities, including warrant exercises, and product sales. As of December 31, 2025, we had an accumulated deficit of $ 142.5 million and cash and cash equivalents and short-term investments of $ 8.6 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 (if approved); (ii) market acceptance, commercial viability and profitability of our products and product; candidates (if approved) (iii) our 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) our 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 our cash and cash equivalents and short-term investments of $ 8.6 million as of December 31, 2025, in combination with anticipated revenue will be sufficient to fund our current operations through approximately the second quarter of 2027. While we have evaluated and continue to evaluate our operating expenses and have focused our resources on the successful commercialization of fertility control products in the United States, additional financing may be needed in order to achieve our anticipated revenue and margin targets. If we are unable to raise necessary capital through the sale of our securities, credit facilities, sales of our products, government and foundation grants, third party collaborations, strategic alliances or from other sources or transactions, 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. If such capital 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.
Use of Estimates
The preparation of our financial statements and related disclosures in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different conditions.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance enhances the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid. We adopted ASU 2023-09 retrospectively as of December 31, 2025. Accordingly, the income tax disclosures for prior periods presented have been revised to conform to the 2025 presentation. The adoption of ASU 2023-09 did not have an impact on our financial position, results of operations, or cash flows, as the guidance affects disclosure requirements only.
There have been no other recent accounting pronouncements that we believe have a significant impact, or potential significant impact, to our financial statements.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
Reclassification
To conform with the 2025 presentation, we have reclassified the non-cash operating lease benefit of $ 8,000 from the change in other assets in the statement of cash flows for the year ended December 31, 2024. This reclassification had no impact on our statement of operations and comprehensive loss for the year ended December 31, 2024.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Highly liquid investments with maturities of three months or less as the date of acquisition are classified as cash equivalents, of which we had $ 7.1 million and $ 1.0 million as of December 31, 2025 and 2024, respectively, included within Cash and cash equivalents in the balance sheets.
Short-term Investments
As of December 31, 2025, we held investments in U.S. Treasuries classified as held-to-maturity and measured at amortized cost, which approximates fair value. We have both the intent and the ability to hold these securities to maturity. U.S. Treasuries with original maturities greater than 90 days and less than one year are presented as short-term investments on the balance sheet.
Accounts Receivable
Accounts receivable are recorded at invoiced amounts based on standard prices and do not bear interest. We provide an allowance for doubtful receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions, and a review of the current status of each customer’s trade accounts receivable. Provisions for uncollectible accounts receivable are charged to Selling, general and administrative expense, with an offsetting credit to the allowance for uncollectible accounts.
Inventories
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.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Equipment held under finance leases are stated at the present value of minimum lease payments less accumulated amortization.
Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets as follows:
Research and development equipment 5 years
Office and computer equipment 3 years
Autos 5 years
Furniture and fixtures 7 years
The cost of leasehold improvements is amortized over the life of the improvement or the term of the lease, whichever is shorter. Equipment held under finance leases are amortized over the shorter of the lease term or estimated useful life of the asset. The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
Impairment of Long-Lived Assets
Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated from the use of the asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and the use of third- party independent appraisals. We have not recorded an impairment of long-lived assets since our inception.
Revenue Recognition
In accordance with Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers (“ASC 606”), we recognize revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
We derive revenue primarily from commercial sales of products, net of discounts and promotions, as well as consulting and implementation services provided in conjunction with our product deployments. We recognize revenue when product is shipped at a fixed selling price with payment terms of 30 to 120 days from invoicing. We recognize any other revenue earned from pilot studies, consulting and implementation services upon the performance of specific services under the respective service contract.
Research and Development
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.
Stock-based Compensation
Stock-based awards, consisting of stock options and restricted stock units expected to be settled in shares of our common stock, are recorded as equity awards. The grant date fair value of these awards is measured using the Black-Scholes option pricing model for stock options and grant date market value for restricted stock units. We expense the grant date fair value of our stock-based awards on a straight-line basis over their respective vesting periods.
Advertising Costs
Advertising costs are expensed as incurred and were $ 138,000 and $ 224,000 for the years ended December 31, 2025 and 2024, respectively.
Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determination, we consider all available positive and negative evidence, including future reversals of existing
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. We currently maintain a full valuation allowance against our deferred tax assets.
We apply a more-likely-than-not recognition threshold for all tax uncertainties. Only those benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities are recognized. Based on our evaluation, we have concluded there are no significant uncertain tax positions requiring recognition in our financial statements.
We recognize interest and/or penalties related to uncertain tax positions in income tax expense. There are no uncertain tax positions as of December 31, 2025 or 2024 and as such, no interest or penalties were recorded in income tax expense.
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 all periods presented and a separate statement of comprehensive loss is not included in the accompanying financial statements.
NOTE 3: BALANCE SHEET COMPONENTS
Accounts Receivable, Net
Accounts receivable, net consisted of the following (in thousands):
As of December 31,
2025 2024
Accounts receivable $ 219 $ 339
Allowance for uncollectible accounts ( 18 ) ( 4 )
Accounts receivable, net $ 201 $ 335
The following is the activity in the allowance for uncollectible accounts (in thousands):
Years Ended December 31,
2025 2024
Balance as of beginning of year $ 4 $ 4
Increase in provision 14 —
Amounts written off, less recoveries — —
Balance as of end of year $ 18 $ 4
Inventory
Inventory consisted of the following (in thousands):
As of December 31,
2025 2024
Raw materials $ 726 $ 719
Work in progress — 1
Finished goods 268 74
Total inventory 994 794
Reserve for obsolescence — —
Inventory $ 994 $ 794
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
The following is the activity in the reserve for obsolescence (in thousands):
Years Ended December 31,
2025 2024
Balance as of beginning of year $ — $ 5
Increase in reserve — —
Amounts relieved — ( 5 )
Balance as of end of year $ — $ —
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of December 31,
2025 2024
Software licenses $ 127 $ 112
Insurance 47 27
Rent 32 38
Equity offering costs 29 146
Marketing programs and conferences 25 21
Professional services 14 18
Other 23 15
Total prepaid and other current expenses $ 297 $ 377
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
As of December 31,
2025 2024
Research and development equipment $ 1,291 $ 1,826
Office and computer equipment 84 494
Autos 54 54
Furniture and fixtures 47 46
Leasehold improvements 105 157
Total in service 1,581 2,577
Accumulated depreciation and amortization ( 1,171 ) ( 2,242 )
Total in service, net 410 335
Construction in progress — 72
Property and equipment, net $ 410 $ 407
During the years ended December 31, 2025 and 2024, depreciation and amortization expense was $ 135,000 and $ 156,000 , respectively.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
Accrued Expenses
Accrued expenses consisted of the following (in thousands):
As of December 31,
2025 2024
Compensation and related benefits $ 313 $ 244
Legal and other services 66 30
Product warranty and other 4 4
Total accrued expenses $ 383 $ 278
Notes Payable
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, 2025, the future principal payments were as follows (in thousands):
2026 $ 61
2027 68
2028 65
2029 12
2030 —
Total principal payments 206
Less: current portion of notes payable ( 61 )
Notes payable, less current portion $ 145
NOTE 4: FAIR VALUE MEASUREMENTS
The accounting guidance for fair value, among other things, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The framework for measuring fair value consists of a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:
Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 — Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
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.
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.
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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:
A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost).
C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations, including present value techniques, option-pricing and excess earnings models.
Financial Instruments Not Carried at Fair Value
The carrying amounts of our financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their short maturities. The fair value of investments approximates cost due to their short-term nature and fixed interest rates. The estimated fair value of the long-term debt, not recorded at fair value, are recorded at cost or amortized cost, which was deemed to estimate fair value.
NOTE 5: LEASES
We determine if an arrangement is a lease at inception and whether the arrangement is classified as an operating or finance lease. At commencement of the lease, we record a right-of-use (“ROU”) asset and lease liability in the balance sheet based on the present value of lease payments over the term of the arrangement. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. If the implicit rate is not readily determinable in the contract, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Contract terms may include options to extend or terminate the lease, and, when we deem it is reasonably certain that we will exercise that option, it is included in the ROU asset and liability.
Operating leases reflect lease expense on a straight-line basis, while any finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the ROU asset.
In August 2024, we entered into an operating lease for a new location for our corporate headquarters and manufacturing and research operations. This operating lease commenced in April 2025 and expires in 2035. The previous operating lease for our corporate headquarters expired in November 2024 and the previous operating lease for our manufacturing and research operations expired in May 2025.
The components of lease cost are as follows (in thousands):
Years Ended December 31,
2025 2024
Operating lease cost $ 250 $ 217
Short-term lease cost (1)
111 19
Variable lease cost (2)
33 34
Total lease cost $ 394 $ 270
(1) Includes amounts related to leases with original terms of 12 months or less and our company has elected the short-term lease exemption.
(2) Includes amounts related to common area maintenance, property taxes and any other lease-related charges that vary based on usage or actual costs and are not included in the operating lease liability.
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NOTES TO THE FINANCIAL STATEMENTS, continued
As of December 31, 2025, the maturities under the operating lease liability were as follows (in thousands):
2026 $ 331
2027 338
2028 348
2029 359
2030 369
Thereafter 1,875
Total operating lease payments 3,620
Less: imputed interest ( 1,149 )
Total operating lease liability $ 2,471
NOTE 6: STOCK-BASED COMPENSATION
In 2018, our stockholders approved the adoption of the SenesTech, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan has since been amended and restated on certain occasions, most recently on June 23, 2023, when our stockholders approved an increase to the total number of authorized shares to 207,071 shares of common stock.
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 ratably over a 1 - to 3-year 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.
As of December 31, 2025, we had 32,266 shares of common stock available for issuance under the 2018 Plan.
Contingent Stock Options
On October 15, 2025, the Company’s Board of Directors approved the grant of stock options to purchase up to 420,000 shares of common stock to the Company’s Board members pursuant to a proposed amendment to the 2018 Plan (the “Contingent Stock Options”). The Board intends to propose to amend the 2018 Plan to increase the number of shares available for issuance thereunder to ensure that the Company has sufficient shares to attract, retain, and motivate key employees and directors.
The Contingent Stock Options have an exercise price of $ 4.05 per share, vest in four equal installments of 25 % on each of January 15, 2026, April 15, 2026, July 15, 2026, and October 15, 2026, and have a contractual term expiring October 15, 2035. The grants are contingent upon stockholder approval of the amended 2018 Plan by October 15, 2026. If such approval is not obtained by that date, the Contingent Stock Options will be rescinded, terminated, and deemed void ab initio, as if the grant had never occurred.
As of December 31, 2025, the Contingent Stock Options remained outstanding in form. Under ASC 718, Compensation—Stock Compensation, a contingency is substantive if (i) achievement is not assured at the grant date; (ii) there is meaningful uncertainty about whether it will be met; (iii) failure is plausible, based on facts and circumstances; and (iv) the conditions requires performance outcomes. Accordingly, no accounting recognition was recorded because the arrangement did not meet the definition of a grant date under ASC 718 due to the substantive contingency of stockholder approval.
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 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.
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NOTES TO THE FINANCIAL STATEMENTS, continued
Fair value of options granted is determined using the Black-Scholes option-pricing model with the following weighted average assumptions:
2025 2024
Risk-free interest rate 4.7 % 3.8 %
Expected dividend yield — % — %
Expected volatility 162 % 128.0 %
Expected term (in years) 10.0 10.0
The weighted average fair value of options granted during the years ended December 31, 2025 and 2024 was $ 3.08 and $ 2.73 per share, respectively. The risk-free interest rate is estimated using treasury bill interest rates. 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. 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, which excludes the Contingent Stock Options:
Number of
Options Weighted
Average
Exercise
Price Per
Share Weighted
Average
Remaining
Contractual
Term
(years) Aggregate
Intrinsic
Value (1)
Outstanding as of December 31, 2023 3,645 $ 1,197.00 4.0 $ —
Granted 144,204 2.38 9.6 —
Exercised — — — —
Forfeited ( 224 ) — — —
Expired ( 9 ) — — —
Outstanding as of December 31, 2024 147,616 27.13 9.5 —
Granted 28,057 3.09 9.3 —
Exercised — — — —
Forfeited ( 11 ) — — —
Expired ( 84 ) — — —
Outstanding as of December 31, 2025 175,578 20.75 8.8 —
Exercisable as of December 31, 2025 115,262 (2)
30.10 8.7 —
(1) Calculated based on the difference between the estimated fair value of our stock and the exercise price of the underlying option. The estimated stock values used in the calculation were $ 3.09 and $ 2.83 per share for the years ended December 31, 2025 and 2024, respectively.
(2) Includes options related to 603 shares that are inducement awards and not granted under the 2018 Plan.
As of December 31, 2025, the unrecognized stock-based compensation cost was $ 162,000 , which is expected to be recognized over a weighted average period of 1.7 years.
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NOTES TO THE FINANCIAL STATEMENTS, continued
The stock-based compensation expense was recorded as following (in thousands):
Years Ended December 31,
2025 2024
Research and development $ 11 $ 13
General and administrative 253 313
Total stock-based compensation expense $ 264 $ 326
NOTE 7: INCOME TAXES
Our losses before income taxes for the years ended December 31, 2025 and 2024 were generated entirely from U.S. operations.
We have no current or deferred provision for income taxes from continuing operations for the years ended December 31, 2025 and 2024.
The significant differences between the U.S. Federal statutory rate and our effective rate for financial reporting purposes are as follows:
Years Ended December 31,
2025 2024
Amount
Rate
Amount
Rate
Tax (benefit) at the U.S. statutory rate $ ( 1,340 ) ( 21.0 ) % $ ( 1,299 ) ( 21.0 ) %
State income taxes, net of federal income tax effect — — — —
Change in valuation allowance 1,269 19.9 1,237 20.0
Nontaxable or nondeductible items:
Stock-based compensation 65 1.0 48 0.8
Other 6 0.1 14 0.2
Provision for income taxes $ — — % $ — — %
Arizona represents the majority of the Company’s state and local income tax impact.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
Deferred income tax assets and liabilities consist of the following (in thousands):
As of December 31,
2025 2024
Deferred income tax assets:
Federal and state net operating loss carryovers $ 25,108 $ 23,376
Operating leases related to ROU assets 615 —
Capitalized research costs 604 859
Stock-based compensation 269 283
Compensation accruals and other 77 45
Deferred revenue 8 3
Depreciation — 13
Total deferred income tax assets 26,681 24,579
Valuation allowance for deferred income tax assets ( 26,082 ) ( 24,579 )
Deferred income tax assets, net of valuation allowance 599 —
Deferred income tax liabilities:
ROU assets ( 581 ) —
Depreciation ( 18 ) —
Total deferred income tax liabilities ( 599 ) —
Deferred income tax assets, net $ — $ —
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, 2025, we had federal and state net operating loss carryforwards of approximately $ 103.0 million and $ 90.0 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. In addition, we have approximately $ 58.6 million of the total $ 103.0 million of net operating losses that do not expire, as these losses were generated after the law change introduced as part of the Tax Cuts and Jobs Act. The state net operating losses begin to expire if not utilized by 2045.
Additionally, the utilization of the net operating loss carryforwards could be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and similar state tax provisions due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other tax attributes that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Sections 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. We have not conducted an analysis of an ownership change under Section 382. If we experience an ownership change, our use of our pre-change net operating losses and other tax attributes to offset post-change taxable income or taxes could be limited.
We did no t have any unrecognized tax benefits at the beginning and end of the years ended December 31, 2025 and 2024.
We file income tax returns in the United States and Arizona with general statutes of limitations of three and four years, respectively. Due to net operating losses incurred, our tax returns from 2005 to date are subject to examination by taxing authorities. Our policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of December 31, 2025, we had no interest or penalties accrued related to uncertain tax positions.
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NOTES TO THE FINANCIAL STATEMENTS, continued
NOTE 8: STOCKHOLDERS’ EQUITY
Preferred Stock
We are authorized to issue 10 million shares of preferred stock with a par value of $ 0.001 per share. Rights and any series designation would be established at time of issuance of preferred stock. As of December 31, 2025 and 2024 there was no preferred stock outstanding.
Common Stock
We are authorized to issue 100 million shares of common stock with a par value of $ 0.001 per share. Stockholders of common stock have unlimited voting rights and are entitled to receive the net assets of the Company upon dissolution, subject to the rights of the preferred stockholders, if any.
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 and at our sole discretion, shares of our common stock in transactions that are deemed to be “at the market” offerings under the Securities Act of 1933, as amended (the “ATM Facility”). As of December 31, 2025, there was approximately $ 7.5 million of capacity available under the ATM Facility.
We had the following common stock transactions in 2025 and 2024:
ATM Facility . In 2025, we sold 854,660 shares of our common stock under the ATM Facility for gross proceeds of $ 3.0 million, before deducting offering expenses of $ 299,000 . In 2024, we sold 15,051 shares of our common stock under the ATM Facility for gross proceeds of $ 44,000 , before deducting offering expenses of $ 7,000 . 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.
August 2024 . We issued 505,502 shares of our common stock 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 “August 2024 Warrant Inducement”). The original warrants consisted of warrants exercisable for (i) 48,911 shares of our common stock issued on August 24, 2023 with an exercise price of $ 86.40 per share and a remaining life of 2.1 years and (ii) 456,591 shares of our common stock issued on November 29, 2023 with an exercise price of $ 13.00 per share and a remaining life of 2.5 years (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.
In connection with the August 2024 Warrant Inducement, new warrants to purchase a total of 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.
March 2025 . We issued 374,718 shares of our common stock 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 “March 2025 Warrant Inducement”). The original warrants consisted of warrants exercisable for (i) 251,884 shares of our common stock issued on August 23, 2024 with an exercise price of $ 4.35 per share and a remaining life of 4.5 years and (ii) 122,834 shares of our common stock issued on August 23, 2024 with an exercise price of $ 4.35 per share and a remaining life of 1.0 year (collectively, the “F-Series Original Warrants”). The F-Series Original Warrants were exercised for $ 2.90 per share for gross proceeds of $ 1.1 million, before deducting $ 250,000 of issuance costs.
In connection with the March 2025 Warrant Inducement, new warrants to purchase a total of 1,517,608 shares of our common stock were issued, which are discussed under Common Stock Warrants Issued in March 2025 Private Inducement in Note 9.
June 2025 . We issued 1,458,872 shares of our common stock pursuant to the exercise of warrants as part of the June 2025 Warrant Inducement (as defined below). Certain warrant holders were induced to exercise warrants at the then existing exercise price of $ 2.90 per share and pay a purchase price of $ 0.125 per share, or an aggregate purchase price of $ 182,000 , in consideration of our issuance of new warrants with similar terms as the warrants that were induced to exercise (the “June 2025 Warrant Inducement”). Additionally, warrants to purchase 40,000
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
shares of our common stock were exercised in June 2025 outside of the June 2025 Warrant Inducement. Gross proceeds for these June 2025 warrant transactions were $ 4.5 million, before deducting $ 527,000 of issuance-related costs.
In connection with the June 2025 Warrant Inducement, new warrants to purchase a total of 1,531,816 shares of our common stock were issued, which are discussed under Common Stock Warrants Issued in June 2025 Private Inducement in Note 9.
August 2025 . We issued 1,458,872 shares of our common stock pursuant to the exercise of warrants. Certain warrant holders were induced to exercise warrants at the then existing exercise price of $ 4.15 per share and pay a purchase price of $ 0.125 per share, or an aggregate purchase price of $ 274,000 , in consideration of our issuance of new warrants with similar terms as the warrants that were induced to exercise (the “August 2025 Warrant Inducement”). Gross proceeds for warrants exercised in August 2025 was $ 6.3 million, before deducting $ 695,000 of issuance-related costs.
In connection with the August 2025 Warrant Inducement, new warrants to purchase a total of 2,261,252 shares of our common stock were issued, which are discussed under Common Stock Warrants Issued in August 2025 Private Inducement in Note 9.
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
NOTE 9: COMMON STOCK WARRANTS
The following is the activity for common stock warrants:
Issue Date Warrant Type Term
Date Exercise
Price Balance
December 31,
2023 Issued Exercised Expired Balance
December 31,
2024 Issued Exercised Expired Balance
December 31,
2025
July 2019 Dealer Manager July 2024 81,000.00 3 — — ( 3 ) — — — —
January 2020 Registered Direct Offering July 2025 21,600.00 60 — — — 60 — — ( 60 ) —
January 2020 Dealer Manager July 2025 24,000.00 4 — — — 4 — — ( 4 ) —
March 2020 Dealer Manager March 2025 9,015.12 4 — — — 4 — — ( 4 ) —
April 2020 Dealer Manager April 2025 9,528.00 47 — — — 47 — — ( 47 ) —
April 2020 Registered Direct Offering April 2025 7,320.00 20 — — — 20 — — ( 20 ) —
October 2020 Dealer Manager April 2026 5,174.40 34 — — — 34 — — — 34
February 2021 Private Placement Agreement August 2026 5,318.40 540 — — — 540 — — — 540
February 2021 Dealer Manager August 2026 6,835.40 136 — — — 136 — — — 136
March 2021 Dealer Manager March 2026 6,000.00 60 — — — 60 — — — 60
November 2022 Dealer Manager November 2027 525.00 892 — — — 892 — — — 892
April 2023 Series C October 2028 194.40 7,142 — — — 7,142 — — — 7,142
April 2023 Dealer Manager April 2028 262.50 534 — — — 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 — — — 1,222
November 2023 Series D November 2028 13.00 381,615 — ( 230,589 ) — 151,026 — — — 151,026
November 2023 Series E May 2025 13.00 307,460 — ( 226,462 ) — 80,998 — — ( 80,998 ) —
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 — ( 251,884 ) — 319,434
August 2024 Series F-2 February 2026 4.35 — 439,686 — — 439,686 — ( 122,834 ) — 316,852
August 2024 Dealer Manager August 2029 5.75 — 25,275 — — 25,275 — — — 25,275
March 2025 Series G-1 September 2026 2.90 — — — — — 1,498,872 ( 1,498,872 ) — —
March 2025 Dealer Manager September 2026 3.625 — — — — — 18,736 — — 18,736
July 2025 Series H October 2026 4.150 — — — — — 1,458,872 ( 1,458,872 ) — —
July 2025 Dealer Manager October 2026 3.781 — — — — — 72,944 — — 72,944
August 2025 Series I November 2026 5.250 — — — — — 2,188,308 — — 2,188,308
August 2025 Dealer Manager November 2026 5.4219 — — — — — 72,944 — — 72,944
777,528 1,036,279 ( 505,962 ) ( 3 ) 1,307,842 5,310,676 ( 3,332,462 ) ( 81,133 ) 3,204,923
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SENESTECH, INC.
NOTES TO THE FINANCIAL STATEMENTS, continued
As of December 31, 2025, there were warrants to purchase 3,204,923 shares of our common stock outstanding, at a weighted-average exercise price of $ 7.50 per share, which expire as follows:
Weighted Average Exercise Price Shares of Common Stock
Years Ending December 31:
2026 $ 6.72 2,670,554
2027 525.00 892
2028 21.68 188,768
2029 4.45 344,709
7.50 3,204,923
Common Stock Warrants Issued in August 2024 Private Inducement
In August 2024, in connection with the August 2024 Warrant Inducement discussed in Note 8, we issued warrants to purchase up to 1,011,004 shares of our common stock to the investor. These warrants were immediately exercisable with an exercise price of $ 4.35 per share, with warrants related to 571,318 shares of our common stock expiring in August 2029 (the “Series F-1 Warrants”) and warrants related to 439,686 shares of our common stock expiring in February 2026 (the “Series F-2 Warrants”). 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 addition, we issued placement agent warrants to purchase up to 25,275 shares of our common stock. These placement agent warrants were exercisable immediately upon issuance, have an exercise price of $ 5.75 per share, and expire 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 %.
Common Stock Warrants Issued in March 2025 Private Inducement
In connection with the March 2025 Warrant Inducement discussed in Note 8, we issued warrants to purchase up to 1,498,872 shares of our common stock to certain investors. These warrants have an exercise price of $ 2.90 per share and are exercisable for 1.5 years from the effective date of stockholder approval of the issuance of the shares of common stock, which was obtained on June 9, 2025. We estimated the fair value of these warrants to be $ 1.5 million using a Black-Scholes model based on the following significant inputs: common stock price of $ 2.38 per share; volatility of 117 %; term of 1.5 years; dividend yield of 0 %; and risk-free rate of 4.37 %.
In addition, we issued placement agent warrants to purchase up to 18,736 shares of our common stock. These placement agent warrants have an exercise price of $ 3.625 per share and are exercisable for 1.5 years from the effective date of stockholder approval of the issuance of the shares of common stock, which was obtained on June 9, 2025. We estimated the fair value of these warrants to be $ 20,000 using a Black-Scholes model based on the following significant inputs: common stock price of $ 2.38 per share; volatility of 117 %; term of 1.5 years; dividend yield of 0 %; and risk-free interest rate of 4.37 %.
Common Stock Warrants Issued in June 2025 Private Inducement
In connection with the June 2025 Warrant Inducement discussed in Note 8, we issued warrants to purchase up to 1,458,872 shares of our common stock to certain investors. These warrants have an exercise price of $ 4.15 per share and are exercisable for 1.3 years from the date of issuance. We estimated the fair value of these warrants to be $ 4.1 million using a Black-Scholes model based on the following significant inputs: common stock price of $ 5.09 per share; volatility of 114 %; term of 1.3 years; dividend yield of — %; and risk-free rate of 3.7 %. These warrants were exercised in August 2025.
In addition, we issued placement agent warrants to purchase up to 72,944 shares of our common stock. These placement agent warrants have an exercise price of $ 3.781 per share and are exercisable for 1.3 years from the date of issuance. We
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NOTES TO THE FINANCIAL STATEMENTS, continued
estimated the fair value of these warrants to be $ 212,000 using a Black-Scholes model based on the following significant inputs: common stock price of $ 5.09 per share; volatility of 114 %; term of 1.3 years; dividend yield of 0 %; and risk-free interest rate of 3.7 %.
Common Stock Warrants Issued in August 2025 Private Inducement
In connection with the August 2025 Warrant Inducement discussed in Note 8, we issued warrants to purchase up to 2,188,308 shares of our common stock to certain investors. These warrants have an exercise price of $ 5.25 per share and are exercisable for 1.3 years from the August 22, 2025 effective date of the resale registration statement covering the underlying shares. We estimated the fair value of these warrants to be $ 6.0 million using a Black-Scholes model based on the following significant inputs: common stock price of $ 5.36 per share; volatility of 116 %; term of 1.3 years; dividend yield of 0 %; and risk-free rate of 3.8 %.
In addition, we issued placement agent warrants to purchase up to 72,944 shares of our common stock. These placement agent warrants have an exercise price of $ 5.4219 per share and are exercisable for 1.3 years from the August 22, 2025 effective date of the resale registration statement covering the underlying shares. We estimated the fair value of these warrants to be $ 196,000 using a Black-Scholes model based on the following significant inputs: common stock price of $ 5.36 per share; volatility of 116 %; term of 1.3 years; dividend yield of 0 %; and risk-free interest rate of 3.8 %.
NOTE 10: 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 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 customers that represented 10% or more of revenue in at least one of the periods presented, was as follows:
Years Ended December 31,
2025 2024
Customer D 24 % 13 %
The following accounts represented at least 10% of total accounts receivable in at least one of the periods presented:
As of December 31,
2025 2024
Customer A 15 % 2 %
Customer B 14 % 5 %
Customer C 9 % 20 %
Customer D 1 % 30 %
NOTE 11: 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 any prefunded warrants and any shares held in abeyance from the date of issuance. Diluted loss per share is computed by dividing the loss attributable to common
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NOTES TO THE FINANCIAL STATEMENTS, continued
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. 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, 2025 and 2024. Therefore, basic and diluted loss per share was the same for all periods presented.
The following shares were excluded from the calculation of diluted loss per share:
December 31,
2025 2024
Common stock warrants 27,410 249,053
Common stock options — 73,533
Total 27,410 322,586
NOTE 12: CONTINGENCIES
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 alleged, 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 alleged that we breached a non-disclosure agreement that we had entered into with Liphatech. The complaint sought unspecified damages as well as injunctive relief. In March 2026, this matter was settled, see Note 14, Subsequent Events .
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. 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.
NOTE 13: RELATED PARTY TRANSACTIONS
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 a consulting agreement an aggregate of $ 24,000 in cash payments were made during 2025 to Hustle and Flower LLC, of which a member of our board serves as chief executive officer. There were no related party transactions for 2024.
NOTE 14: SUBSEQUENT EVENTS
Since December 31, 2025, we have issued 80,411 shares of common stock pursuant to the ATM Facility for gross proceeds of $ 182,000 .
In March 2026, the parties in the Liphatech legal matter discussed in Note 12, Contingencies , have resolved all disputes between them in a manner satisfactory to all involved. All litigation has been dismissed and cannot be reinstated.
We have evaluated subsequent events from the balance sheet date through March 12, 2026, 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.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.