SenesTech Inc

Previous wording

•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);

Current wording

•our belief that Evolve and Evolve Mouse are considered a minimum risk pesticides under the United States Environmental Protection Agency’s (the “EPA’s”) Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), Section 25(b);

Previous wording

•our expectation that cash and cash equivalents at March 31, 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;

Current wording

•our expectation that cash and cash equivalents at June 30, 2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next three months;

Previous wording

•our additional capital is needed to fund our operating losses and research and development activities before we become profitable;

Current wording

•our additional capital is needed in order to fund our operating losses and research and development activities before we become profitable;

Previous wording

•our belief that we may require additional capital in order to fund our operating losses and research and development activities before we become profitable;

Current wording

•our belief that 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;

Previous wording

•our ability to enter into strategic partnerships to enable us to penetrate additional target markets and geographical locations;

Current wording

•our ability to explore into strategic partnerships to enable us to penetrate additional target markets and geographical locations;

Previous wording

•our successful commercialization of fertility control products in the United States;

Current wording

•our successful commercialization of fertility control products in the United States and internationally;

Previous wording

•our ability to gain market acceptance, commercial viability and profitability of our fertility control products and any other products;

Current wording

•our ability to gain market acceptance, commercial viability and profitability of our fertility control products and other products;

Previous wording

Through March 31, 2024, we received net proceeds of $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 $4.1 million in net product sales. As of March 31, 2024, we had an accumulated deficit of $131.7 million and cash and cash equivalents of $3.6 million.

Current wording

Through June 30, 2024, we received net proceeds of $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 $4.6 million in net product sales. As of June 30, 2024, we had an accumulated deficit of $133.3 million and cash and cash equivalents of $2.0 million.

Previous wording

We have incurred significant operating losses every year since our inception, with a net loss of $1.8 million for the three months ended March 31, 2024. We expect to continue to incur significant expenses and generate operating losses for at least the next six months.

Current wording

We have incurred significant operating losses every year since our inception, with a net loss of $1.6 million for the three months ended June 30, 2024. We expect to continue to incur significant expenses and generate operating losses for at least the next six months.

Previous wording

Based upon our current operating plan, we expect that cash and cash equivalents at March 31, 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.

Current wording

Based upon our current operating plan, we expect that cash and cash equivalents at June 30, 2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next three months.

Previous wording

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. 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 2023.

Current wording

Sales, net of sales discounts and promotions, were $459,000 for the second quarter of 2024, compared to $305,000 for the second quarter of 2023. The $154,000 increase was driven by the launch of our latest products partially offset by a decrease in the number of units sold of our existing Elevate Bait System product offering. Launched in January 2024, Evolve is a soft bait containing the active ingredient cottonseed oil and represented approximately 58%, or $266,000, of revenues for the second quarter of 2024. Launched in August 2023, Isolate Bait System is a liquid bait and represented 8%, or $37,000, of revenues for the second quarter of 2024. Partially offsetting these increases was a decline in revenue in the second quarter of 2024 when compared with the second quarter of 2023, resulting from a decline in the number of units sold of our existing Elevate Bait System product offering. Limited erosion of demand for ContraPest products is expected as Evolve products are accepted in the marketplace.

Previous wording

Cost of sales consisted 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. Cost of sales in the first quarter of 2024 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 in the first quarter of 2023 was impacted by the scrapping of defective trays no longer used in our products, which totaled $42,000.

Current wording

For the six months ended June 30, 2024, cost of sales was $490,000, or 56.1% of net sales, compared to $304,000, or 56.5% of net sales, for the six months ended June 30, 2023. Cost of sales in the first half of 2024 was impacted during the first few months of 2024 from the higher cost of a key ingredient for our new Evolve product, as we transitioned from development-stage raw materials pricing to production-level raw materials pricing. Cost of sales in the first half of 2023 was impacted by the scrapping of defective trays no longer used in our products in the first quarter of 2023.

Previous wording

Gross profit for the first quarter of 2024 was $135,000, for a gross profit margin of 32.5%, compared to a gross profit of $92,000, or a gross profit margin of 39.6%, for the first quarter of 2023. The gross profit margin in the first quarter of 2024 was impacted by both the higher-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.

Current wording

For the six months ended June 30, 2024, gross profit was $384,000, for a gross profit margin of 43.9%, compared to $234,000, gross profit margin of 43.5%, for the six months ended June 30, 2023. The gross profit margin in the first half of 2024 was impacted by both the higher-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 half of 2023 was impacted by the higher cost of sales related to the scrapping of defective tanks during no longer used in our products.

Previous wording

Research and development expenses were $370,000 for the first quarter of 2024, compared to $387,000 for the first quarter of 2023. The $17,000 decrease was primarily due to lower headcount and consulting and legal fees required for research and development purposes, which was partially offset by higher expenses overall related to field and product improvement studies in the first quarter of 2024 when compared with the first quarter of 2023.

Current wording

Research and development expenses were $467,000 for the second quarter of 2024, compared to $381,000 for the second quarter of 2023. The $86,000 increase was primarily due to the realignment of the focus of our field development personnel to research and development activities, lower overhead allocation, and increased costs related to the expansion of facilities and supplies and maintenance related to research and development efforts. These increases were partially offset by lower consulting and legal fees required for research and development purposes, combined with lower expenses overall related to field and product improvement studies in the second quarter of 2024 when compared with the second quarter of 2023.

Previous wording

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. The decrease of $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 were lower due to lower headcount and stock-based compensation and insurance is lower resulting from both policy and rate changes. These decreases were offset by higher franchise fees in the first quarter of 2024 when compared to the first quarter of 2023.

Current wording

Selling, general and administrative expenses were $1.4 million for the second quarter of 2024, as compared to $1.8 million for the second quarter of 2023. The decrease of $377,000 was primarily due to lower personnel-related expenses resulting from both lower headcount and stock-based compensation, combined with lower professional fees and insurance costs. Consulting fees related to marketing efforts are lower in the second quarter of 2024 when compared with the second quarter of 2023 due to changes in our overall marketing program and lower legal fees. The changes in legal fees are due to the settlement of a legal matter in November 2023. Additionally, our insurance cost is lower resulting from both policy and rate changes. In the second quarter of 2023, personnel costs included severance costs of $119,000 related to the termination of our former Chief Revenue Officer.

Previous wording

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.

Current wording

Other income, net for the second quarter of 2024 consisted of interest income of $22,000, partially offset by interest expense of $5,000, compared with the second quarter of 2023, which consisted of interest income of $7,000.

Previous wording

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.

Current wording

Interest income was higher due to a combination of a higher average balance of cash and cash equivalents and a higher interest rate during the second quarter of 2024 when compared with the second quarter of 2023. Interest expense in the second quarter of 2024 relates to the notes payable entered into beginning in late 2023 for the purchase of certain equipment.

Previous wording

Through March 31, 2024, we have received net proceeds of $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. As of March 31, 2024, we had an accumulated deficit of $131.7 million and cash and cash equivalents of $3.6 million.

Current wording

Through June 30, 2024, we have received net proceeds of $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 $4.6 million in net product sales and an aggregate of $1.7 million from licensing fees. As of June 30, 2024, we had an accumulated deficit of $133.3 million and cash and cash equivalents of $2.0 million.

Previous wording

Based upon our current operating plan, we expect that cash and cash equivalents at March 31, 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. We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of our fertility control products in the United 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 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.

Current wording

Based upon our current operating plan, we expect that cash and cash equivalents at June 30, 2024, in combination with anticipated revenue and any additional sales of our equity securities, will be sufficient to fund our current operations for at least the next three months. We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of our fertility control products in the United 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 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.

Previous wording

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.

Current wording

During the six months ended June 30, 2024, operating activities used $3.4 million of cash, resulting from our net loss of $3.4 million and net changes in our operating assets and liabilities of $248,000, partially offset by net non-cash charges of $248,000, 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 related to our continued efforts on formulations of new products and improvements to existing products. Net cash used by changes in our operating assets and liabilities consisted primarily of increases in accounts receivable of $150,000, inventory of $104,000 and prepaid expenses of $76,000, partially offset by an increase in accounts payable and accrued expenses of $88,000.

Previous wording

During the three months ended March 31, 2023, operating activities used $2.0 million of cash, 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 driven by costs related to our selling, general and administrative activities resulting from our efforts to commercialize our products, combined with our research and development costs. Net cash provided by changes in our operating assets and liabilities consisted of a net decreases in accounts payable and accrued expenses of $301,000, partially offset by increases in accounts receivable of $69,000, inventory of $38,000, and prepaid expenses of $28,000.

Current wording

During the six months ended June 30, 2023, operating activities used $3.8 million of cash, resulting from our net loss of $4.0 million, partially offset by net changes in our operating assets and liabilities of $130,000 and by non-cash charges of $403,000, consisting primarily of stock-based compensation and depreciation and amortization expense. Our net loss was driven by costs related to our selling, general and administrative activities resulting from our efforts to commercialize our products, combined with costs related to our research and development efforts. Net cash used by changes in our operating assets and liabilities consisted of a net decreases in accounts payable and accrued expenses of $359,000, partially offset by decreases in prepaid expenses of $92,000, inventory of $88,000, and accounts receivable of $71,000.

Previous wording

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 months ended March 31, 2024 and 2023, cash flows used in investing activities consisted of property and equipment purchases.

Current wording

Cash Flows from Investing Activities—Cash flows used in investing activities primarily consist of the purchase of property and equipment, offset by any proceeds received in connection with sales of property and equipment. During the six months ended June 30, 2024 and 2023, cash flows used in investing activities consisted of property and equipment purchases.

Previous wording

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 related to share-based awards.

Current wording

Cash Flows from Financing Activities—Financing activities provide cash for both day-to-day operations and capital requirements as needed. During the six months ended June 30, 2024, net cash provided by financing activities consisted of proceeds received from notes payable of $25,000, proceeds received from the exercise of warrants of $6,000, partially offset by repayments on notes payable of $17,000. During the six months ended June 30, 2023, net cash provided by financing activities consisted of net proceeds of $1.2 million from the issuance of common stock, slightly offset by the payment of employee withholding taxes related to share-based awards of $11,000.