Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20232024
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 001-37941
SENESTECH, INC.
(Exact name of registrant as specified in its charter)
Delaware20-2079805
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
23460 N 19th Ave, Suite 110
Phoenix, AZ85027
(Address of principal executive offices)(Zip Code)
(928) 779-4143
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueSNESThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares of common stock outstanding as of May 10, 2023: 2,964,4857, 2024: 5,144,632
1

Table of Contents
SENESTECH, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 20232024
TABLE OF CONTENTS
1.
i

Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
SENESTECH, INC.
CONDENSED BALANCE SHEETS
(In thousands, except shares and per share data)
March 31, 2023December 31, 2022
March 31,
2024
March 31,
2024
December 31, 2023
ASSETSASSETS(unaudited)
Current assets:Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$2,748 $4,775 
Accounts receivable, netAccounts receivable, net46 113 
Prepaid expensesPrepaid expenses450 378 
Inventory, netInventory, net815 853 
Total current assetsTotal current assets4,059 6,119 
Right to use assets, operating leasesRight to use assets, operating leases305 347 
Property and equipment, netProperty and equipment, net259 294 
Other noncurrent assetsOther noncurrent assets22 22 
Total assetsTotal assets$4,645 $6,782 
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payableAccounts payable$215 $540 
Accrued expensesAccrued expenses584 560 
Current portion of operating lease liabilityCurrent portion of operating lease liability184 180 
Current portion of note payable
Deferred revenueDeferred revenue33 44 
Total current liabilitiesTotal current liabilities1,016 1,324 
Operating lease liability, less current portion132 179 
Note payable, less current portion
Note payable, less current portion
Note payable, less current portion
Total liabilitiesTotal liabilities1,148 1,503 
Commitments and contingencies (see notes)Commitments and contingencies (see notes)Commitments and contingencies (see notes)
Stockholders’ equity:Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstandingPreferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding— — 
Common stock, $0.001 par value, 100,000,000 shares authorized, 2,107,339 and 809,648 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding
Common stock, $0.001 par value, 100,000,000 shares authorized, 5,144,632 shares and 5,140,024 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Additional paid-in capitalAdditional paid-in capital127,735 127,481 
Accumulated deficitAccumulated deficit(124,240)(122,203)
Total stockholders’ equityTotal stockholders’ equity3,497 5,279 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$4,645 $6,782 
See accompanying notes to condensed financial statements.
1

Table of Contents
SENESTECH, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except shares and per share data)
(Unaudited)
Three Months Ended March 31,
20232022
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
Revenues, net
Revenues, net
Revenues, netRevenues, net$233 $195 
Cost of salesCost of sales141 105 
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profitGross profit92 90 
Operating expenses:Operating expenses:
Operating expenses:
Operating expenses:
Research and development
Research and development
Research and developmentResearch and development387 516 
Selling, general and administrativeSelling, general and administrative1,750 1,907 
Selling, general and administrative
Selling, general and administrative
Total operating expenses
Total operating expenses
Total operating expensesTotal operating expenses2,137 2,423 
Loss from operationsLoss from operations(2,045)(2,333)
Loss from operations
Loss from operations
Other income (expense):
Other income (expense):
Other income (expense):Other income (expense):
Interest incomeInterest income
Interest income
Interest income
Interest expense
Interest expense
Interest expenseInterest expense— (1)
Other income, netOther income, net
Other income, net
Other income, net
Net loss and comprehensive lossNet loss and comprehensive loss$(2,037)$(2,332)
Weighted average shares outstanding - basic and fully diluted1,538,514610,450
Net loss per share - basic and fully diluted$(1.32)$(3.82)
Net loss and comprehensive loss
Net loss and comprehensive loss
Weighted average shares outstanding - basic and diluted
Weighted average shares outstanding - basic and diluted
Weighted average shares outstanding - basic and diluted
Net loss per share - basic and diluted
Net loss per share - basic and diluted
Net loss per share - basic and diluted
See accompanying notes to condensed financial statements.
2

Table of Contents
SENESTECH, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
20232022
Three Months Ended
March 31,
Three Months Ended
March 31,
202420242023
Cash flows from operating activities:Cash flows from operating activities:
Net lossNet loss$(2,037)$(2,332)
Net loss
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortizationDepreciation and amortization36 66 
Stock-based compensationStock-based compensation166 224 
Bad debt expenseBad debt expense(2)— 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:
Changes in operating assets and liabilities:
Changes in operating assets and liabilities:
Accounts receivable
Accounts receivable
Accounts receivableAccounts receivable69 21 
Other assets(1)— 
Prepaid expenses
Prepaid expenses
Prepaid expensesPrepaid expenses28 (29)
InventoryInventory38 54 
Other assets
Accounts payableAccounts payable(325)(89)
Accrued expensesAccrued expenses24 56 
Deferred revenueDeferred revenue(11)— 
Net cash used in operating activitiesNet cash used in operating activities(2,015)(2,029)
Cash flows from investing activities:Cash flows from investing activities:
Cash flows from investing activities:
Cash flows from investing activities:
Purchase of property and equipment
Purchase of property and equipment
Purchase of property and equipment
Purchase of property and equipment(1)(66)
Net cash used in investing activities
Net cash used in investing activities
Net cash used in investing activitiesNet cash used in investing activities(1)(66)
Cash flows from financing activities:Cash flows from financing activities:
Cash flows from financing activities:
Cash flows from financing activities:
Repayments of notes payableRepayments of notes payable— (3)
Repayments of finance lease obligations— (13)
Repayments of notes payable
Repayments of notes payable
Proceeds from the exercise of warrants
Proceeds from the exercise of warrants
Proceeds from the exercise of warrants
Payment of employee withholding taxes related to share based awardsPayment of employee withholding taxes related to share based awards(11)— 
Net cash used in financing activitiesNet cash used in financing activities(11)(16)
Decrease in cash and cash equivalentsDecrease in cash and cash equivalents(2,027)(2,111)
Decrease in cash and cash equivalents
Decrease in cash and cash equivalents
Cash and cash equivalents, beginning of periodCash and cash equivalents, beginning of period4,775 9,326 
Cash and cash equivalents, end of periodCash and cash equivalents, end of period$2,748 $7,215 
Supplemental disclosures of cash flow information:
Interest paid$— $
Income taxes paid$— $— 
Supplemental cash flow information is as follows:
Supplemental cash flow information is as follows:
Supplemental cash flow information is as follows:
Cash paid for interest
Cash paid for interest
Cash paid for interest
Cash paid for income taxes
See accompanying notes to condensed financial statements.
3

Table of Contents
SENESTECH, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
Nature of Business
SenesTech, Inc. (referred(subsequently referred to in this report as “SenesTech,“we,the “Company,“us,“we”“our,” or “us”“our company”) was incorporated in the state of Nevada in July 2004. On November 12, 2015, the Companywe subsequently reincorporated in the state of Delaware. Our corporate headquarters and manufacturing site are in Phoenix, Arizona. We have developed and are commercializing a global, proprietary technology for managing animal pest populations, initially rat populations, through fertility control with ourcontrol. Our first product is known as ContraPest.ContraPest®.
ContraPest is a liquid bait containing the active ingredients 4-vinylcyclohexene diepoxide and triptolide. ContraPest limits reproduction of male and female rats beginning with the first breeding cycle following consumption. ContraPest is being marketed for use in controlling Norway and roof rat populations. In addition to the U.S. Environmental Protection Agency registration of ContraPest, we must obtain registration from the various state regulatory agencies prior to selling in each state. To date, we have received registration for ContraPest in all 50 states and the District of Columbia, 49 of which have approved the removal of the Restricted Use designation, as well as the District of Columbia and five major U.S. territories.
In November 2023, we launched our latest product EvolveTM, a soft bait containing the active ingredient cottonseed oil. Evolve limits reproduction of male and female rats after one to two breeding cycles following consumption. Evolve is considered a minimum risk pesticide under the U.S. Environmental Protection Agency Federal Insecticide, Fungicide, and Rodenticide Act, Section 25(b). We must obtain registration from the various state regulatory agencies that do not accept the federal exemption. To date, we are authorized to sell Evolve in 33 states.
Going Concern
Our condensed financial statements as of March 31, 20232024 were prepared under the assumption that we would continue as a going concern. The reports of our independent registered public accounting firm that accompanies our financial statements for each of the years ended December 31, 20222023 and December 31, 20212022 contain a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on the financial statements at that time. Specifically, we have incurred operating losses since our inception, and we expect to continue to incur significant expenses and operating losses for the foreseeable future. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. If we encounter continued issues or delays in the commercialization of ContraPest,fertility control products, our expected future losses could have an adverse effect on our financial condition and negatively impact our ability to fund continued operations, obtain additional financing in the future and continue as a going concern. There are no assurances that such financing, if necessary, will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to generate additional funds in the future through additional financings, sales of our products, licensing fees, royalty payments or from other sources or transactions, we will exhaust our resources and will be unable to continue operations.
Liquidity and Capital Resources
Since our inception, we have sustained significant operating losses in the course of our research and development and commercialization activities and expect such losses to continue for the near future. We have generated limited revenue to date from product sales, research grants and licensing fees received under a former license agreement. We have primarily funded our operations to date through the sale of equity securities, including convertible preferred stock, common stock and warrants to purchase common stock.
We have also raised capital through debt financing, consisting primarily of convertible notes and government loan programs, and, to a lesser extent, payments received in connection with product sales, research grants and licensing fees.
As of March 31, 2023,2024, we had an accumulated deficit of $124.2$131.7 million and cash and cash equivalents of $2.7$3.6 million.
Our ultimate success depends upon the outcome of a combination of factors, including the following: (i) successful commercialization of ContraPestfertility control products and maintaining and obtaining regulatory approval of our products and
4

Table of Contents
product candidates; (ii) market acceptance, commercial viability and profitability of ContraPestfertility 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.
4

Table of Contents
Based upon our current operating plan, we expect that cash and cash equivalents at March 31, 2023,2024, in combination with anticipated revenue and any additional sales of our equity securities, (see Note 10), will be sufficient to fund our current operations for at least the next six months.
While we have evaluated and continue to evaluate our operating expenses and concentrate our resources toward the successful commercialization of ContraPestfertility control products in the United States, additional financing will be needed before achieving anticipated revenue targets and margin targetstargets. If we are unable to raise necessary capital through the sale of our securities, we may be required to take other measures that could impair our ability to be successful and operate as a going concern. In any event, additional capital is needed in order to fund our operating losses and research and development activities before we become profitable. We may never achieve profitability or generate positive cash flows, and unless and until we do, we will continue to need to raise capital through equity or debt financing. If such equity or debt financing is not available at adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development efforts or discontinue operations.
Condensed Financial Statements
Our accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, the unaudited condensed financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly our financial position as of March 31, 2023,2024, and our operating results and cash flows for the three-monththree month periods ended March 31, 20232024 and 2022.2023. The accompanying financial information as of December 31, 20222023 is derived from audited financial statements. Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022,2023, filed with the SEC on March 17, 2023.February 21, 2024.
Recent Accounting Pronouncements
There have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, to our condensed financial statements.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and classification of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The significant estimates in our financial statements include the valuation of inventory, common stock warrants, and stock-based awards, such as stock options and restricted stock units. Actual results could differ from such estimates.
Advertising Costs
Advertising costs are expensed as incurred and was $61,000 and $41,000 for the three months ended March 31, 2024 and 2023.
Comprehensive Loss
We have no other comprehensive income items for the periods presented. As a result, our net loss and comprehensive loss were the same for the periods presented and a separate statement of comprehensive loss is not included in the accompanying condensed financial statements.
5

Table of Contents
NOTE 2: BALANCE SHEET COMPONENTS
Cash and Cash Equivalents
Highly liquid investments with maturities of three months or less as of the date of acquisition are classified as cash equivalents, of which we had $2.7$3.6 million and $4.8$5.4 million as of March 31, 20232024 and December 31, 2022,2023, respectively, included within cash and cash equivalents in the condensed balance sheets.
5

Table of Contents
Accounts Receivable, Net
Accounts receivable, net consistconsisted of the following (in thousands):
March 31,
2023
December 31,
2022
March 31,
2024
March 31,
2024
December 31,
2023
Accounts receivableAccounts receivable$50 $119 
Allowance for uncollectible accountsAllowance for uncollectible accounts(4)(6)
Accounts receivable, netAccounts receivable, net$46 $113 
The following iswas the activity in the allowance for uncollectible accounts (in thousands):
Three Months Ended
March 31,
20232022
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
2024
2024
2024
Balance as of beginning of period
Balance as of beginning of period
Balance as of beginning of periodBalance as of beginning of period$$— 
Increase in provisionIncrease in provision— — 
Increase in provision
Increase in provision
Amounts written off, less recoveries
Amounts written off, less recoveries
Amounts written off, less recoveriesAmounts written off, less recoveries(2)— 
Balance as of end of periodBalance as of end of period$$— 
Balance as of end of period
Balance as of end of period
Inventory, net
Inventory, net consistconsisted of the following (in thousands):
March 31,
2023
December 31,
2022
March 31,
2024
March 31,
2024
December 31,
2023
Raw materialsRaw materials$771 $772 
Work in progressWork in progress— 
Finished goodsFinished goods56 99 
Total inventoryTotal inventory833 871 
Less: reserve for obsolescenceLess: reserve for obsolescence(18)(18)
Inventory, netInventory, net$815 $853 
The following iswas the activity in the reserve for obsolescence (in thousands):
Three Months Ended
March 31,
20232022
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
2024
2024
2024
Balance as of beginning of period
Balance as of beginning of period
Balance as of beginning of periodBalance as of beginning of period$18 $29 
Increase in reserveIncrease in reserve— — 
Increase in reserve
Increase in reserve
Amounts relieved
Amounts relieved
Amounts relievedAmounts relieved— (3)
Balance as of end of periodBalance as of end of period$18 $26 
Balance as of end of period
Balance as of end of period
6

Table of Contents
Prepaid Expenses
Prepaid expenses consistconsisted of the following (in thousands):
March 31,
2024
March 31,
2024
December 31,
2023
Software licenses
Professional services
Insurance
Deposit on equipment purchase
Patents
Prepaid inventory
March 31,
2023
December 31,
2022
Software licenses$113 $157 
Marketing programs and conferences10 74 
Insurance93 61 
Patents24 39 
Professional services198 41 
Other
Other
OtherOther12 
Total prepaid expensesTotal prepaid expenses$450 $378 
Property and Equipment, Net
Property and equipment, net consistconsisted of the following (in thousands):
March 31,
2023
December 31,
2022
March 31,
2024
March 31,
2024
December 31,
2023
Research and development equipmentResearch and development equipment$1,563 $1,558 
Office and computer equipmentOffice and computer equipment801 800 
AutosAutos54 54 
Furniture and fixturesFurniture and fixtures41 41 
Leasehold improvementsLeasehold improvements119 119 
Total in serviceTotal in service2,578 2,572 
Accumulated depreciation and amortizationAccumulated depreciation and amortization(2,319)(2,283)
Total in service, net259 289 
Construction in progress— 
Property and equipment, netProperty and equipment, net$259 $294 
Property and equipment, net
Property and equipment, net
Accrued Expenses
Accrued expenses consistconsisted of the following (in thousands):
March 31,
2024
March 31,
2024
December 31,
2023
Compensation, severance and related benefits
Legal and consulting professional services
Product warranty
March 31,
2023
December 31,
2022
Compensation, severance and related benefits$416 $497 
Legal services150 36 
Product warranty18 18 
Personal property and franchise tax— 
Other
Other
OtherOther— 
Total accrued expensesTotal accrued expenses$584 $560 
Notes Payable
In 2023, we arranged financing for the purchase of certain equipment. The notes payable for that certain equipment have an annual interest rate of 9.1% with a term of five years and is secured by the underlying equipment.
7

Table of Contents
As of March 31, 2024, future principal payments were as follows (in thousands):
2024$25 
202536 
202639 
202743 
202838 
Total principal payments181 
Less: current portion of notes payable(34)
Notes payable, less current portion$147 
NOTE 3: FAIR VALUE MEASUREMENTS
The carrying amounts of our financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their short maturities. Notes payable are recorded at amortized cost, which approximates fair value.
7

Table of Contents
NOTE 4: LEASES
We have operating leases for our corporate headquarters and our manufacturing and research facility, which expire in 2024. We were obligated under finance leases for certain research and computer equipment, of which the last arrangement expired in June 2022.
The components of lease cost arewere as follows (in thousands):
Three Months Ended
March 31,
20232022
Operating lease cost$56 $56 
Finance lease cost:
Amortization of right-of-use asset$— $16 
Interest on lease liability— 
Total finance lease cost$— $17 
Three Months Ended
March 31,
20242023
Operating lease cost$56 $56 
As of March 31, 2023,2024, maturities of operating lease liabilities arewere as follows (in thousands):
2023$149 
20242024186 
Total operating lease paymentsTotal operating lease payments335 
Less imputed interest(19)
Total operating lease payments
Total operating lease payments
Less: imputed interest
Total operating lease liabilitiesTotal operating lease liabilities$316 
NOTE 5: STOCK-BASED COMPENSATION
In 2018, our stockholders approved the adoption of the SenesTech, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). which provides for the issuance of stock-based instruments, such as stock options or restricted stock units, to employees or consultants as deemed appropriate. The 2018 Plan has since been amended and restated on certain occasions, most recently on October 12, 2022,June 26, 2023, when our stockholders approved an increase to the total number of authorized shares to 348,61470,717 shares.
StockCurrently, we only have stock options outstanding under the 2018 Plan, which are generally issued with a per share exercise price equal to the fair market value of our common stock at the date of grant. Options granted generally vest immediately, or ratably over a 12- to 36-month period coinciding with their respective service periods, with terms generally of generally five years. Certain stock option awards provide for accelerated vesting upon a change in control.
As of March 31, 2023,2024, we had 164,52242,049 shares of common stock available for issuance under the 2018 Plan.
8

Table of Contents
Stock Options
The following table summarizespresents the outstanding stock option activity for the periods indicated as follows:activity:
Number of OptionsWeighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Term
(years)
Outstanding as of December 31, 2022280,810 $17.00 3.9
Granted— — — 
Exercised— — 
Forfeited(326)— 
Expired(36)— 
Outstanding as of March 31, 2023280,448 (1)17.11 4.4
Exercisable as of March 31, 202398,406 32.22 — 
Number of OptionsWeighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Term
(years)
Three months ended March 31, 2024:
Outstanding as of December 31, 202336,708 $119.70 4.0
Forfeited(41)300.62 3.0
Outstanding as of March 31, 202436,667 (1)119.49 3.8
(1) - Includes options related to 99,0008,249 shares that are inducement awards and not granted under the 2018 Plan.
9

Table of Contents
Restricted Stock Units
The following table summarizes restricted stock unit activity for the three months ended March 31, 2023:
Number of
Units
Weighted
Average
Grant-Date
Fair
Value Per
Unit
Outstanding as of December 31, 202218,799 $2.71 
Granted— — 
Vested(18,799)2.71 
Forfeited— — 
Outstanding as of March 31, 2023— — 
The stock-based compensation expense was recorded as follows (in thousands):
Three Months Ended
March 31,
20232022
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
2024
2024
2024
Research and developmentResearch and development$$
Selling, general and administrative162223
Research and development
Research and development
Selling, general and administrative (1)
Selling, general and administrative (1)
Selling, general and administrative (1)
Total stock-based compensation expenseTotal stock-based compensation expense$166 $224 
Total stock-based compensation expense
Total stock-based compensation expense
(1) Includes $2,000 related to stock issued in exchange for marketing services for the three months ended March 31, 2023.
The allocation between research and development and selling, general and administrative expense was based on the department and services performed by the employee or non-employee.
At March 31, 2023,2024, the total compensation cost related to unvested options not yet recognized was $403,000,$207,000, which will be recognized over a weighted average period of 24 months,1.1 years, assuming the employees and non-employeesnon-employees complete their service period required for vesting.
109

Table of Contents
NOTE 6: STOCKHOLDERS’ EQUITY
Activity in equity during the three-monththree month periods ended March 31, 20232024 and 20222023 was as follows (dollars in thousands):
Common StockAdditional
Paid-In
Capital
Accumulated
Deficit
Total
SharesAmount
2023
Balances as of December 31, 2022809,648$$127,481 $(122,203)$5,279 
Stock-based compensation— 166 — 166 
Issuance of common stock upon exercise of warrants1,230,000(1)— — 
Issuance of common stock for service54,466— 100 — 100 
Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes13,225— (11)— (11)
Net loss— — (2,037)(2,037)
Balances as of March 31, 20232,107,339$$127,735 $(124,240)$3,497 
2022
Balances as of December 31, 2021610,364$$122,542 $(112,508)$10,035 
Stock-based compensation— 221 — 221 
Issuance of common stock for service250— — 
Net loss— — (2,332)(2,332)
Balances as of March 31, 2022610,614$$122,766 $(114,840)$7,927 
During the three months ended March 31, 2023, the following shares of common stock were issued:
1,230,000 shares pursuant to the exercise of previously outstanding prefunded warrants, which were issued in November 2022 with an exercise price of $3.50 per share;
54,466 restricted shares in exchange for marketing services to be performed through September 2023, with the total value of services to be recognized based on the stock price on date of issuance; and
13,225 shares pursuant to the vesting of restricted stock units.
11
Common StockAdditional
Paid-In
Capital
Accumulated
Deficit
Total
SharesAmount
2024
Balances as of December 31, 20235,140,024 $$136,259 $(129,913)$6,351 
Stock-based compensation— — 85 — 85 
Issuance of common stock upon exercise of warrants4,608 — — 
Net loss— — — (1,832)(1,832)
Balances as of March 31, 20245,144,632 $$136,350 $(131,745)$4,610 
2023
Balances as of December 31, 202267,472 $— $127,482 $(122,203)$5,279 
Stock-based compensation— — 166 — 166 
Issuance of common stock upon exercise of warrants102,500 — — — — 
Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes1,102 — (11)— (11)
Issuance of common stock for service4,539 — 100 — 100 
Net loss— — — (2,037)(2,037)
Balances as of March 31, 2023175,613 $— $127,737 $(124,240)$3,497 

Table of Contents
NOTE 7: COMMON STOCK WARRANTS
The following table summarizespresents the common stock warrant activity for the three months ended March 31, 2023:activity:
SharesWeighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Term
(years)
Outstanding as of December 31, 20224,414,810 $6.58 3.0
Issued— — — 
Exercised(1,230,000)3.50 — 
Expired— — — 
Outstanding as of March 31, 20233,184,810 7.78 2.8
SharesWeighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Term
(years)
Outstanding as of December 31, 20237,775,734 $2.95 3.4
Exercised(4,608)1.30 — 
Outstanding as of March 31, 20247,771,126 2.95 3.1
During the three months ended March 31, 2023, prefunded2024, warrants representing 1,230,0004,608 shares of common stock were exercised. Such prefunded warrants were issued in November 2022exercised with an exercise price of $3.50$1.30 per share.
NOTE 8: LOSS PER SHARE
Basic loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period.period, which includes prefunded warrants and shares held in abeyance from date of issuance. Diluted loss per share attributable to common stockholders is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares andused in the basic loss per share calculation plus potentially dilutive securities outstanding forduring the period determined using the treasury stock method. Stock options and if-converted methods. For purposes of the computation of diluted loss per share attributable to common stockholders, common stock purchase warrants and common 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 losslosses reported for the three months ended March 31, 2023 and 2022.all periods presented. Therefore, basic and diluted loss per share attributable to common stockholders are the same for each period presented.
The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share attributable to common stockholders (in common stock equivalent shares):
Three Months Ended
March 31,
20232022
Common stock warrants$3,184,810 $226,572 
Restricted stock units— 33 
Common stock options280,448 72,366 
$3,465,258 $298,971 
NOTE 9: CONTINGENCIES
Legal Proceedings
In July 2020, Kennan E. Kaeder, our former corporate general counsel (the “Plaintiff”), commenced an action against us in the Superior Court of the State of California, for the County of San Diego. The complaint alleges, among other things, that we breached the Plaintiff’s employment contract with us, as well as the implied covenant of good faith and fair dealing, by refusing to issue him the balance of stock options he claims we owe him. In September 2021, the Plaintiff served us and also named the following individuals as defendants: Loretta Mayer, Cheryl Dyer, Thomas C. Chesterman, Kim Wolin, Grover Wickersham, Marc Dumont, Bob Ramsey, Matthew Szot, Julia Williams, and Bill Baker. We do not believe that all of the defendants have yet been served. Furthermore, Loretta Mayer and Cheryl Dyer have separately settled with the Plaintiff.
1210

Table of Contents
The Plaintiff alleges that such individuals agreed to knowingly and wrongfully withholdfollowing shares were excluded from the stock options owed to him and are knowingly in receiptcalculation of stolen property. The Plaintiff seeks compensatory damages in excess of $500,000, treble damages, and reasonable attorneys’ fees. We do not believe the claims described above have merit and intend to aggressively defend against these accusations. The Plaintiff has agreed to mediation to resolve the issues. We do not believe that this litigation is likely to have a material effect on our operations.diluted net loss per share:
Three Months Ended
March 31,
20242023
Common stock warrants— 265,401 
Stock options— 23,371 
— 288,772 
NOTE 10:9: SUBSEQUENT EVENTS
On April 12, 2023, we consummated a registered direct offering with certain institutional investors and issued an aggregate of 857,146 shares of our common stock for $1.75 per share for gross proceeds of $1.5 million, before deducting fees payable to the placement agent and other estimated offering expenses payable by us. The shares were offered and sold pursuant to a prospectus, dated May 6, 2022, and a prospectus supplement, dated April 10, 2023, in connection with a takedown from our shelf registration statement on Form S-3 (File No. 333-261227).
In connection with the registered direct offering, the following warrants were issued:
Series C warrants to the investors in the offering to purchase up to 857,146 shares of our common stock. The Series C warrants are exercisable immediately with an exercise price of $1.62 per share, and expire five and one-half years from the date of issuance, or October 12, 2028.
Placement agent warrants to purchase up to 64,286 shares of our common stock. The placement agent warrants will be exercisable immediately upon issuance, with an exercise price per share of $2.1875 per share, and expire five years following the date of issuance, or April 10, 2028.
We have evaluated subsequent events from the balance sheet date through May 11, 2023,9, 2024, the date at which the condensed financial statements were issued, and determined that there were no additional items that require adjustment to or disclosure in the condensed financial statements.
1311

Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations –
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our condensed financial statements and related notes.
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”). 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. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “suggests,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “would,” “should,” “could,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this Quarterly Report on Form 10-Q include statements regarding:
our belief that Evolve is considered a minimum risk pesticide under the United States Environmental Protection Agency’s (the “EPA’s”) Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), Section 25(b);
our expectation that we will continue to incur significant expenses and generate operating losses for the foreseeable future;
our expectation that cash and cash equivalents at March 31, 2023,2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next six months;
our beliefexpectation that sales increasedsignificant operating losses in part due to continued focusthe course of our internet sales initiatives, enhanced strategic partnershipresearch and collaborations with key distributorsdevelopment and Pest Management Professionals (“PMP”s);commercialization activities will continue for the near future;
our expectation that we will continue to incur significant expenses and generate operating losses for at least the next six months;
our belief that the increased sales activity from our field sales organization was due in part to the launch of our new Elevate product offering;additional financing will be needed before achieving anticipated revenue targets 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 commercialization of ContraPest;and operate as a going concern;
our additional capital is needed to fund our operating losses and research and development activities before we become profitable;
our belief that we may require additional capital in order to fund our operating losses and research and development activities before we become profitable;
our ability to achieve profitability or generate positive cash flows;
our expectation that we will incur substantial and increased expenses;
our belief that we will need additional financing to fund these continuing and additional expenses;
our belief that if we encounter continued issues or delays in the commercialization of ContraPest,fertility control products, our prior losses and expected future losses could have an adverse effect on our financial condition and negatively impact our ability to fund continued operations, obtain additional financing in the future and continue as a going concern;
12

Table of Contents
our ability to maximize market acceptance for, and generate sales of, our products, including by conducting field demonstrations for potential lead customers;
our ability to enter into strategic partnerships to enable us to penetrate additional target markets and geographical locations;
our ability to manage the infrastructure for sales, marketing and distribution of fertility control products and any other product candidates for which we may receive regulatory approval;
our ability to seek regulatory approvals for fertility control products, including to more fully expand the market and use for fertility control products and, if we believe there is commercial viability, for our other product candidates;
our ability to further develop our manufacturing processes to contain costs while being able to scale to meet future demand of fertility control products and any other product candidates for which we receive regulatory approval;
our ability to continue product development of fertility control products and advance our research and development activities and, as our operating budget permits, advance the research and development programs for other product candidates;
our ability to maintain and protect our intellectual property portfolio;
our ability to add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and operations as a public company;
our expectation that our expenses willmay continue or increase in connection with our ongoing activities, particularly as we focus on marketing and sales of ContraPest;fertility control products;
our successful commercialization of fertility control products in the United States;
our ability to maintain and obtain regulatory approval forof our product and product candidates;
our ability to gain market acceptance, commercial viability and profitability of ContraPestour fertility control products and any other products;
our ability to market our products and establish an effective sales force and marketing infrastructure to generate significant revenue;
the success of our research and development;development activities;
our ability to retain and attract key personnel to develop, operate, and grow our business;
our ability to meet our working capital needs;
our estimates or expectations related to our revenue, cash flow, expenses, capital requirements and need for additional financing;
our plans for our business, including for research and development;
14

Table of Contents
our belief the claims against us do not have merit and our intention to aggressively defend against these accusations;
our belief the litigation against us is not likely to have a material effect on our operations;
our financial performance, including our ability to fund operations; and
developments and projections relating to our projects, competitors and our industry, including legislative developments and impacts from those developments.
These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and situations that are difficult to predict and that may cause our own, or our industry’s, actual results to be materially different from the future results that are expressed or implied by these statements. Accordingly, actual results may differ materially from those anticipated or expressed in such statements as a result of a variety of factors, including
13

Table of Contents
those discussed in Item 1A-“Risk Factors” of Part I of our Annual Report on Form 10-K, for the year ended December 31, 2022,2023, filed with the SEC on March 17, 2023,February 21, 2024, and those contained from time to time in our other filings with the SEC. A number of factors could cause our actual results to differ materially from those indicated by the forward-looking statements. Such factors include, among others, the following:
the successful commercialization of our products;products;
market acceptance of our products;products;
our financial performance, including our ability to fund operations;
our ability to regain and maintain compliance with Nasdaq’s continued listing requirements;
regulatory approval and regulation of our productsproducts; and
other factors and risks identified from time to time in our filings with the SEC, including this Quarterly Report on Form 10-Q.
All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. 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. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance or achievements.
We are subject to the information requirements of the Exchange Act, and we file or furnish reports, proxy statements and other information with the SEC. Such reports and other information we file with the SEC are available free of charge at www.senestech.com as soon as practicable after such reports are available on the SEC’s website at www.sec.gov. The SEC’s website contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Overview
Since our inception, we have sustained significant operating losses in the course of our research and development and commercialization activities and expect such losses to continue for the near future. WeAlthough sales of our product have generated limited revenueincreased over the last three years, 17% in 2023, 77% in 2022 and 123% in 2021, we are not yet able to date fromfund operations by product sales research grants and licensing fees received under our former license agreement.alone. We have primarily funded our operations to date through the sale of equity securities, including convertible preferred stock, common stock and warrants to purchase common stock. We have also generated limited revenue from research grants and licensing fees received under former license agreements.
Through March 31, 2023,2024, we received net proceeds of $93.6$101.8 million from our sales of common stock, preferred stock and warrant exercises and issuance of convertible and other promissory notes, an aggregate of $1.7 million from licensing fees and an aggregate of $2.7$4.1 million in net product sales. As of March 31, 2023,2024, we had an accumulated deficit of $124.2$131.7 million and cash and cash equivalents of $2.7$3.6 million.
We have incurred significant operating losses every year since our inception, with a net lossesloss of $2.0 million and $2.3$1.8 million for the three months ended March 31, 2023 and 2022, respectively.2024. We expect to continue to incur significant expenses and generate operating losses for at least the next six months.
15

Table of Contents
Our ultimate success depends upon the outcome of a combination of factors, including the following: (i) successful commercialization of ContraPestfertility control products and maintaining and obtaining regulatory approval of our products and product candidates; (ii) market acceptance, commercial viability and profitability of ContraPestfertility 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.
14

Table of Contents
Based upon our current operating plan, we expect that cash and cash equivalents at March 31, 2023,2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next six months. In April 2023, we consummated a registered direct offering with certain institutional investors and issued an aggregate of 857,146 shares of our common stock for $1.75 per share for gross proceeds of $1.5 million, before deducting fees payable to the placement agent and other estimated offering expenses payable by us.
While we have evaluated and continue to evaluate our operating expenses and concentrate our resources toward the successful commercialization of ContraPestfertility control products in the United States and internationally, additional financing will be needed before achieving anticipated revenue targets and margin targetstargets. If we are unable to raise necessary capital through the sale of our securities, we may be required to take other measures that could impair our ability to be successful and operate as a going concern. In any event, additional capital is needed in order to fund our operating losses and research and development activities before we become profitable. We may never achieve profitability or generate positive cash flows, and unless and until we do, we will continue to need to raise capital through equity or debt financing. If such equity or debt financing is not available at adequate levels or on acceptable terms, we may need to delay, limit or terminate commercialization and development efforts or discontinue operations.
Results of Operations
The following table summarizes our results of operations for the periods presented (in thousands):
Three Months Ended March 31,% Increase (Decrease)
20232022
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
Revenues, net
Revenues, net
Revenues, netRevenues, net$233 $195 19 %
Cost of salesCost of sales141 105 34 %
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profitGross profit92 90 %
Operating expenses:Operating expenses:  
Operating expenses:
Operating expenses:
Research and development
Research and development
Research and developmentResearch and development387 516 (25)%
Selling, general and administrativeSelling, general and administrative1,750 1,907 (8)%
Selling, general and administrative
Selling, general and administrative
Total operating expenses
Total operating expenses
Total operating expensesTotal operating expenses2,137 2,423 (12)%
Loss from operationsLoss from operations(2,045)(2,333)(12)%
Loss from operations
Loss from operations
Other income, net
Other income, net
Other income, netOther income, net700 %
Net lossNet loss$(2,037)$(2,332)(13)%
Net loss
Net loss
Revenues
Sales, net of sales discounts and promotions, were $415,000 for the first quarter of 2024, compared to $233,000 for the first quarter of 2023, compared to $195,0002023. The $182,000 increase was driven by the launch of our latest product Evolve in November 2023. Evolve is a soft bait containing the active ingredient cottonseed oil and represented approximately 56%, or $232,000, of revenues for the first quarter of 2022. Sales increased by $38,000, in part, due to continued focus on our internet sales initiatives, augmenting our existing pull through sales strategy, where demand from the consumer market encourages, or pulls, resellers and pest management professionals to offer our products, as well as enhanced strategic partnerships and collaborations with key distributors and PMP. In addition, we saw increased sales activity from our field sales organization, including the launch of our new Elevate product offering.2023.
Cost of Sales
Cost of sales consistconsisted primarily of the cost of products sold, including scrap and reserves for obsolescence, and was $280,000, or 67.5% of net sales, for the first quarter of 2024, compared to $141,000, or 60.4% of net sales, for the first quarter of 2023, compared to $105,000, or 53.8%2023. Cost of net sales forin the first quarter of 2022. The increase in2024 was impacted by the higher cost of a key ingredient in our new Evolve product, as we transitioned from development-stage raw materials pricing to production-level raw materials pricing. Cost of sales as a percentage of net sales duringin the first quarter of 2023 was drivenimpacted by the scrapping of defective tankstrays no longer used in our products, which totaled $42,000.
16

Table of Contents
Gross Profit
Gross profit for the first quarter of 20232024 was $92,000,$135,000, for a gross profit margin of 39.6%32.5%, compared to a gross profit of $90,000,$92,000, or a gross profit margin of 46.2%39.6%, for the first quarter of 2022.2023. The lower gross profit margin in the first quarter of 2024 was impacted by both the direct resulthigher-than-expected cost of a key ingredient in our new Evolve product, combined with an increased proportion of our sales coming from distributors. The gross profit margin in the first quarter of 2023 was impacted by the higher cost of sales related to the scrapping of defective tanks during no longer used in our products. Excluding the cost associated with the scrapped inventory, gross profit margin is 57.8% for the first quarter
15

Table of 2023.Contents
Research and Development Expenses
Research and development expenses consisted of the following (in thousands):
Three Months Ended March 31,Increase
(Decrease)
20232022
Personnel related (including stock-based compensation)$242 $241 $
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
Personnel (including stock-based compensation)
Personnel (including stock-based compensation)
Personnel (including stock-based compensation)
Facility-related
Facility-related
Facility-related
Depreciation
Depreciation
Depreciation
Supplies and maintenance
Supplies and maintenance
Supplies and maintenance
Professional feesProfessional fees44 90 (46)
Depreciation28 46 (18)
Facility-related26 26 — 
Professional fees
Professional fees
Stability studies, materials and testing
Stability studies, materials and testing
Stability studies, materials and testing
Other
Other
OtherOther47 113 (66)
TotalTotal$387 $516 $(129)
Total
Total
Research and development expenses were $370,000 for the first quarter of 2024, compared to $387,000 for the first quarter of 2023, compared to $516,000 for the first quarter of 2022.2023. The $129,000$17,000 decrease was primarily due to lower headcount and consulting and legal fees required for research and development purposes, lower depreciation as several assets became fully depreciated in 2023, and lowerwhich was partially offset by higher expenses overall related to field and product improvement studies.studies in the first quarter of 2024 when compared with the first quarter of 2023.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consisted of the following (in thousands):
Three Months Ended March 31,Increase
(Decrease)
20232022
Personnel related (including stock-based compensation)$903 $1,070 $(167)
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
Personnel (including stock-based compensation)
Personnel (including stock-based compensation)
Personnel (including stock-based compensation)
Professional feesProfessional fees452 436 16 
Professional fees
Professional fees
Marketing
Marketing
Marketing
Licensed software
Licensed software
Licensed software
Insurance
Insurance
InsuranceInsurance86 166 (80)
Travel and entertainmentTravel and entertainment74 46 28 
Office supplies/IT71 83 (12)
Marketing54 20 34 
Facility-related38 39 (1)
Travel and entertainment
Travel and entertainment
Facilities
Facilities
Facilities
Other
Other
OtherOther72 47 25 
TotalTotal$1,750 $1,907 $(157)
Total
Total
Selling, general and administrative expenses were $1.6 million for the first quarter of 2024, as compared to $1.8 million for the first quarter of 2023, as compared to $1.9 million for the first quarter of 2022.2023. The decrease of $157,000$142,000 was primarily due to lower professional fees. Consulting fees related to marketing efforts are lower in the first of 2024 when compared with the first quarter of 2023 due to changes in our overall marketing program, while legal fees are lower due to the settlement of a legal matter in November 2023. Additionally, personnel-related expenses bothwere lower due to lower headcount and stock-based compensation and insurance is lower headcount, combined with lower insuranceresulting from both policy and software-related license costs. This decrease was partiallyrate changes. These decreases were offset by higher digital marketing advertising costs and travel and entertainment expenses as we continuefranchise fees in the first quarter of 2024 when compared to focus efforts on the commercializationfirst quarter of our products, as well as higher legal related to selling, general and administrative and software license costs.2023.
Other Income, Net
Other income, net for the first quarter of 2024 consisted of interest income of $15,000, partially offset by interest expense of $4,000, while the first quarter of 2023 consisted of interest income of $8,000, which was $6,000 higher than the first quarter of 2022 due to higher interest rates of the comparable periods. Additionally, we had interest expense of $1,000 for the first quarter of 2022 related to certain notes payable and finance leases that expired in 2022.$8,000.
1716

Table of Contents
Interest income was higher due to a combination of a higher average balance of cash and cash equivalents and higher interest rate during the first quarter of 2024 when compared with the first quarter of 2023. Interest expense in the first quarter of 2024 relates to the notes payable entered into in late 2023 related to the purchase of certain equipment.
Liquidity and Capital Resources
Liquidity
Since our inception, we have sustained significant operating losses in the course of our research and development activities and commercialization efforts and expect such losses to continue for the near future. We have generated limited revenue to date from product sales, research grants and licensing fees received under a former license. We have primarily funded our operations to date through the sale of equity securities, including convertible preferred stock, common stock and warrants to purchase common stock; and debt financing, consisting primarily of convertible notes.
Through March 31, 2023,2024, we have received net proceeds of $93.6$101.8 million from our sales of common stock, preferred stock and warrant exercises and issuance of convertible and other promissory notes, an aggregate of $4.1 million in net product sales and an aggregate of $1.7 million from licensing fees and an aggregate of $2.7 million in net product sales.fees. As of March 31, 2023,2024, we had an accumulated deficit of $124.2$131.7 million and cash and cash equivalents of $2.7$3.6 million. And, in April 2023, we received net proceeds of $1.2 million from the sale of common stock.
Our ultimate success depends upon the outcome of a combination of factors, including the following: (i) successful commercialization of ContraPestour fertility control products and maintaining and obtaining regulatory approval of our products and product candidates; (ii) market acceptance, commercial viability and profitability of ContraPestour fertility control products and any 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 activities; (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 March 31, 2023,2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next six to nine months. We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of ContraPestour fertility control products in the United States.States and internationally. However, if anticipated revenue targets and margin targets are not achieved or expenses are more than we have budgeted, we may need to raise additional financing before that time. If we need more financing, including within the next six to nine months, and we are unable to raise the necessary capital through the sale of our securities, we may be required to take other measures that could impair our ability to be successful and operate as a going concern. In any event, we may require additional capital in order to fund our operating losses and research and development activities before we become profitable and may opportunistically raise capital. 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.
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 ContraPest.fertility control products. In addition, we will continue to incur costs associated with operating as a public company.
In particular, we expect to incur substantial and increased expenses as we:
work to maximize market acceptance for, and generate sales of, our products, including by conducting field demonstrations for potential lead customers;
explore strategic partnerships to enable us to penetrate additional target markets and geographical locations;
manage the infrastructure for sales, marketing and distribution of ContraPestfertility control products and any other product candidates for which we may receive regulatory approval;
seek additional regulatory approvals for ContraPest,fertility control products, including to more fully expand the market and use for ContraPestfertility control products and, if we believe there is commercial viability, for our other product candidates;
17

Table of Contents
further develop our manufacturing processes to contain costs while being able to scale to meet future demand of ContraPestfertility control products and any other product candidates for which we receive regulatory approval;
18

Table of Contents
continue product development of ContraPestfertility control products and advance our research and development activities and, as our operating budget permits, advance the research and development programs for other product candidates;
maintain and protect our intellectual property portfolio; and
add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and operations as a public company.
We will need additional financing to fund these continuing and additional expenses.
Cash FlowsCapital Resources
The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):
Three Months Ended March 31,
20232022
Three Months Ended March 31,Three Months Ended March 31,
202420242023
Cash and cash equivalents, beginning of periodCash and cash equivalents, beginning of period$4,775 $9,326 
Net cash used in:
Net cash provided by (used in):
Operating activities
Operating activities
Operating activitiesOperating activities(2,015)(2,029)
Investing activitiesInvesting activities(1)(66)
Financing activitiesFinancing activities(11)(16)
Decrease in cash and cash equivalentsDecrease in cash and cash equivalents(2,027)(2,111)
Cash and cash equivalents, end of periodCash and cash equivalents, end of period$2,748 $7,215 
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 three months ended March 31, 2024, operating activities used $1.8 million of cash, resulting from our net loss of $1.8 million and net changes in our operating assets and liabilities of $119,000, partially offset by net non-cash charges of $122,000, 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 continued efforts to commercialize our products, combined with research and development costs. Net cash used by changes in our operating assets and liabilities consisted primarily of increases in inventory of $79,000 and accounts receivable of $66,000, a net decrease in accounts payable and accrued expenses of $11,000, and a decrease in deferred revenue of $3,000, partially offset by decrease in prepaid expenses of $42,000.
During the three months ended March 31, 2023, operating activities used $2.0 million of cash, primarily resulting from our net loss of $2.0 million, partially offset by net changes in our operating assets and liabilities of $178,000 and by non-cash charges of $200,000, consisting primarily of stock-based compensation and depreciation and amortization expense. Our net loss was primarily attributabledriven by costs related to research and development activities and our selling, general and administrative expenses, as we generated limited product revenue during the period.activities resulting from our efforts to commercialize our products, combined with our research and development costs. Net cash usedprovided by changes in our operating assets and liabilities for the three months ended March 31, 2023 of $178,000 consisted primarily of a net decreasedecreases in accounts payable and accrued expenses of $301,000, partially offset by decreasesincreases in accounts receivable of $69,000, inventory of $38,000, and prepaid expenses of $28,000.
During the three months ended March 31, 2022, operating activities used $2.0 million of cash, primarily resulting from our net loss of $2.3 million, changes in our operating assets and liabilities of $13,000 and by non-cash charges of $290,000, consisting primarily of stock-based compensation and depreciation and amortization expense. Our net loss was primarily attributable to research and development activities and our selling, general and administrative expenses, as we generated limited product revenue during the period. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2022 of $13,000 consisted primarily of decreases in inventory of $54,000 and accounts receivable of $21,000, offset by a net decrease in accounts payable and accrued expenses of $33,000 and an increase in prepaid expenses of $29,000.
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 three
18

Table of Contents
months ended March 31, 20232024 and 2022,2023, cash flows used in investing activities consisted of property and equipment purchases of $1,000 and $66,000, respectively.purchases.
Cash Flows from Financing Activities—Financing activities provide cash for both day-to-day operations and capital requirements as needed. During the three months ended March 31, 2024, net cash used in financing activities consisted of repayments on notes payable of $8,000, partially offset by proceeds received from the exercise of warrants of $6,000. During the three months ended March 31, 2023, net cash used in financing activities consisted of the payment of employee withholding taxes of $11,000. During the three months ended March 31, 2022, net cash used in financing activities consisted of repayments notes payable and finance lease obligations of $16,000.related to share-based awards.
19

Table of Contents
Critical Accounting Policies and Estimates
There have been no material changes to the Company’sour critical accounting policies and estimates as previously disclosed in Item 7 of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2022,2023, filed with the SEC on March 17, 2023.February 21, 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We periodically conduct evaluations (pursuant to Rule 13a-15(b) of the Exchange Act), under the supervision and with the participation of management, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) as of the end of the period covered by this report.
These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
2019

Table of Contents
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
For information regardingFrom time to time, we may be a party to certain legal proceedings, in whichincidental to the normal course of business. We are not currently a party to any pending or threatened legal proceedings that we are involved, see Note 9 - Contingencies under the subsection titled “Legal Proceedings” inbelieve could have a material adverse effect on our Notes to Condensed Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.business or financial condition.
Item 1A. Risk Factors
There have been no material changes to our risk factors set forth in Part I, Item 1A, of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2022,2023, filed with the SEC on March 17, 2023.February 21, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Pursuant to a marketing services agreement, dated March 10, 2023, between us and Outside The Box Capital Inc. (“OTB”), we issued 54,466 shares of common stock to OTB for the performance of its marketing services. Such issuance was undertaken in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
21
During the quarter ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

Table of Contents
Item 6. Exhibits
Exhibit
Number
Description
4.28*
4.29*
10.26*
10.27*
31.1
31.2
32.1
32.2
101.INSInline XBRL Instance Document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*    Incorporated by reference as indicated.
2220

Table of Contents
SIGNATURESIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SENESTECH, INC.
(Registrant)
Date: May 11, 20239, 2024By:/s/ Joel L. Fruendt
Joel L. Fruendt
President and Chief Executive Officer
Date: May 9, 2024By:/s/ Thomas C. Chesterman
Thomas C. Chesterman
Executive Vice President, Chief Financial Officer, Treasurer and Secretary
(duly authorized officer and principal financial officer)
2321