SenesTech Inc

Previous wording

Through December 31, 2023, we had received net proceeds of $92.5 million from our sales of common stock, preferred stock and issuance of convertible and other promissory notes, an aggregate of $1.7 million from research grants and licensing fees and an aggregate of $3.7 million in product sales. At December 31, 2023, we had an accumulated deficit of $129.9 million and cash and cash equivalents of $5.4 million.

Current wording

Through December 31, 2024, we had received net proceeds of $94.6 million from our sales of common stock, preferred stock and issuance of convertible and other promissory notes, an aggregate of $1.7 million from research grants and licensing fees and an aggregate of $5.6 million in product sales. At December 31, 2024, we had an accumulated deficit of $136.1 million and cash and cash equivalents of $1.3 million.

Previous wording

We have incurred significant operating losses every year since our inception. Our net losses were $7.7 million and $9.7 million for the years ended December 31, 2023 and 2022, respectively. We expect to continue to incur significant expenses and generate operating losses for at least the next 12 months.

Current wording

We have incurred significant operating losses every year since our inception. Our net losses were $6.2 million and $7.7 million for the years ended December 31, 2024 and 2023, respectively. We expect to continue to incur significant expenses and generate operating losses for at least the next 12 months.

Previous wording

We have historically utilized, and intend to continue to utilize, various forms of stock-based awards in order to hire, retain and motivate talented employees, consultants and directors and encourage them to devote their best efforts to our business and financial success. In addition, we believe that our ability to grant stock-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees, consultants and directors with the financial interests of our stockholders. As a result, a significant portion of our operating expenses includes stock-based compensation expense. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. Specifically, our stock-based compensation expense for the year ended December 31, 2023 and December 31, 2022 was $555,000 and $711,000, respectively, which represented 6.7% and 7.0%, respectively, of our total operating expenses for those periods.

Current wording

We have historically utilized, and intend to continue to utilize, various forms of stock-based awards in order to hire, retain and motivate talented employees, consultants and directors and encourage them to devote their best efforts to our business and financial success. In addition, we believe that our ability to grant stock-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees, consultants and directors with the financial interests of our stockholders. As a result, a significant portion of our operating expenses includes stock-based compensation expense. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. Specifically, our stock-based compensation expense for the years ended December 31, 2024 and 2023 was $326,000 and $555,000, respectively, which represented 4.5% and 6.7%, respectively, of our total operating expenses for those periods.

Previous wording

Research and development expenses are expensed as incurred and consist primarily of costs incurred in connection with the research and development of ContraPest and Evolve and our other product candidates. Such costs include the following:

Current wording

Research and development expenses are expensed as incurred and consist primarily of costs incurred in connection with the research and development of ContraPest, Evolve, and our other product candidates. Such costs include the following:

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Other income (expense), net, consists of interest income and expense, as well as any gains or losses related to the sale of fixed assets and other miscellaneous items. For the year ended December 31, 2023, other income, net largely consisted of interest income of $26,000, while other expense, net for the year ended December 31, 2022 largely consisted of a loss realized on the sale of research and development equipment of $28,000. Interest income was higher in 2023 when compared with 2022, as interest rates continued to climb throughout 2022 and into 2023, which then leveled off. Interest expense was also higher in 2023 when compared with 2022 due to new notes entered into to finance the purchase of new manufacturing equipment.

Current wording

Other income, net, consists of interest income and expense, as well as any gains or losses related to the sale of property and equipment and any other miscellaneous items. For the year ended December 31, 2024, other income, net largely consisted of interest income of $56,000 and a gain on the sale of equipment of $28,000, partially offset by interest expense of $22,000. For the year ended December 31, 2023, other income, net consisted of interest income of $26,000, partially offset by interest expense of $4,000. Interest expense was higher in 2024 when compared with 2023 due to new financing arrangements entered into for the purchase of new manufacturing equipment beginning in late 2023 and continuing into 2024.

Previous wording

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. While we have generated $1.2 million of revenue in our most recent fiscal year, it is not sufficient to cover our base operating costs. 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.

Current wording

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. While we have generated $1.9 million of revenue in our most recent fiscal year, it is not sufficient to cover our base operating costs. 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.

Previous wording

Through December 31, 2023, we had received net proceeds of $92.5 million from our sales of common stock, preferred stock and issuance of convertible and other promissory notes, an aggregate of $1.7 million from research grants and licensing fees and an aggregate of $3.7 million in product sales. At December 31, 2023, we had an accumulated deficit of $129.9 million and cash and cash equivalents of $5.4 million.

Current wording

Through December 31, 2024, we had received net proceeds of $94.6 million from our sales of common stock, preferred stock and issuance of convertible and other promissory notes, an aggregate of $1.7 million from research grants and licensing fees and an aggregate of $5.6 million in product sales. At December 31, 2024, we had an accumulated deficit of $136.1 million and cash and cash equivalents of $1.3 million.

Previous wording

Based upon our current operating plan, we expect that cash and cash equivalents at December 31, 2023, in combination with anticipated revenue, will be sufficient to fund our current operations for at least the next nine months. We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of ContraPest and Evolve in the United States. However, if anticipated revenue targets and margin targets are not achieved or expenses are more than we have budgeted, we may need to raise additional financing before that time. If we need more financing, including within the next nine months, and we are unable to raise 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 December 31, 2024, in combination with anticipated revenue, will be sufficient to fund our current operations for at least the next three months. We have evaluated and will continue to evaluate our operating expenses and will concentrate our resources toward the successful commercialization of ContraPest and Evolve in the United States, as well as 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 three 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

We expect our expenses to continue or increase in connection with our ongoing activities, particularly as we focus on marketing and sales of ContraPest. In addition, we will continue to incur costs associated with operating as a public company.

Current wording

We expect our expenses to continue or increase in connection with our ongoing activities, particularly as we focus on marketing and sales of ContraPest and Evolve. In addition, we will continue to incur costs associated with operating as a public company.

Previous wording

•seek additional regulatory approvals, if any, for ContraPest and Evolve, including to more fully expand the market and use for ContraPest and Evolve and, if we believe there is commercial viability, for our other product candidates;

Current wording

•seek additional regulatory approvals, if any, for our products, including to more fully expand the market and use for ContraPest and Evolve and, if we believe there is commercial viability, for our other product candidates;

Previous wording

•continue product development of ContraPest and Evolve and advance our research and development activities and, as our operating budget permits, advance the research and development programs for other product candidates;

Current wording

•continue product enhancement and evolution of ContraPest and Evolve and advance our research and development activities and, as our operating budget permits, advance the research and development programs for other product candidates;

Previous wording

During 2023, net cash flows used in operating activities consisted of our net loss of $7.7 million and by changes in our operating assets and liabilities of $545,000, offset by non-cash charges of $688,000. Our net loss was primarily attributed to expenses incurred related to selling, general and administrative as we continue efforts to commercialize our products, as well as research and development activities. Revenue from our product sales did not cover our operating expenses during the year. Net cash used by changes in our operating assets and liabilities consisted primarily of a $583,000 decrease in accrued expenses and accounts payable, a $26,000 decrease in deferred revenue; and a $10,000 increase in prepaid expenses, offset by decreases of $58,000 in inventory and $20,000 in accounts receivable.

Current wording

During 2024, net cash flows used in operating activities consisted of our net loss of $6.2 million and by changes in our operating assets and liabilities of $305,000, offset by non-cash charges of $456,000. Our net loss was primarily attributed to expenses incurred related to selling, general and administrative as we continue efforts to commercialize our products, as well as research and development activities. Revenue from our product sales did not cover our operating expenses during the year. Net cash used by changes in our operating assets and liabilities largely consisted of increases of $242,000 in accounts receivable and $44,000 in other assets.

Previous wording

During 2022, net cash flows used in operating activities consisted of our net loss of $9.7 million, offset by changes in our operating assets and liabilities of $191,000 and non-cash charges of $928,000. Our net loss was primarily attributed to research and development activities and our selling, general and administrative expenses. Net cash generated by changes in our operating assets and liabilities consisted primarily of a $188,000 increase in accrued expenses and accounts payable, a $148,000 decrease in inventory and a $44,000 increase in deferred revenue, offset by increases of $148,000 in prepaid expenses and $42,000 in accounts receivable.

Current wording

During 2023, net cash flows used in operating activities consisted of our net loss of $7.7 million and by changes in our operating assets and liabilities of $544,000, offset by non-cash charges of $688,000. Our net loss was primarily attributed to expenses incurred related to our selling, general and administrative activities. Net cash used by changes in our operating assets and liabilities consisted primarily of a $582,000 decrease in accounts payable and accrued expenses, and increases of $26,000 in deferred revenue and $10,000 in prepaid expenses, offset by decreases of $58,000 in inventory and $20,000 in accounts receivable.

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. In 2023, our purchases were $25,000 lower than 2022, slightly offset by a decrease of $4,000 in proceeds received on sales of property and equipment.

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. In 2024, the cash outlay for our property and equipment purchases were $65,000 lower than 2023. In 2024, we had proceeds received of $28,000 related to the sale of certain equipment.

Previous wording

Cash Flows from Financing Activities—Financing activities provide cash for both day-to-day operations and capital requirements as needed. In 2023, net cash provided by financing activities largely consisted of $5.4 million of net proceeds from issuances of common stock, $2.8 million from the exercise of warrants, and $114,000 from proceeds from notes payable. In 2022, net cash provided by financing activities consisted of $4.2 million of net proceeds from the issuance of common stock, partially offset by $32,000 of repayments related to notes payable and finance lease obligations.

Current wording

Cash Flows from Financing Activities—Financing activities provide cash for both day-to-day operations and capital requirements as needed. In 2024, net cash provided by financing activities consisted of $2.0 million from the exercise of warrants, $38,000 from the issuance of common stock, and $25,000 from proceeds received related to notes payable, partially offset by $42,000 of repayments of notes payable. In 2023, net cash provided by financing activities largely consisted of $5.4 million of net proceeds from the issuance of common stock, $2.8 million from the exercise of warrants, and $114,000 from proceeds from notes payable.

Previous wording

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.