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What changed in SenesTech, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SenesTech, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+194 added−185 removedSource: 10-K (2025-03-13) vs 10-K (2024-02-21)

Top changes in SenesTech, Inc.'s 2024 10-K

194 paragraphs added · 185 removed · 147 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

56 edited+26 added−16 removed18 unchanged
Biggest changeEvolve qualifies from registration as a minimum risk pesticide under FIFRA, Section 25(b). All applicable requirements for registration, manufacturing, selling, or distributing into designated sates and territories have been met. Evolve has not been registered by the EPA but is in the process for registration in all 50 states, the District of Columbia, and five major U.S. territories.
Biggest changeThe EPA has an exemption under FIFRA, Section 25(b) which exempts certain pesticides from federal registration based on six criteria for minimum risk. Evolve is exempt from registration as a minimum risk pesticide under FIFRA, Section 25(b). All applicable requirements for registration, manufacturing, selling, or distributing into designated sates and territories have been met.
Our manufacturing process for Evolve involves the incorporation of our active ingredient, in low concentration, into several inactive ingredients. Once incorporated, the entire product is packaged inside of a casing and cut to length for sale. This process allows Evolve to be delivered to rats in a palatable, effective manner, and it is designed to be non-lethal.
Our manufacturing process for Evolve involves the incorporation of our active ingredient, in low concentration, into several inactive ingredients. Once incorporated, the entire product is packaged inside of a casing and cut to length for sale. This process allows Evolve to be delivered to rats and mice in a palatable, effective manner, and it is designed to be non-lethal.
We seek to protect our proprietary data and trade secrets with attention to data exchanges among employees, consultants, collaborators and research and trade partners. 12 Table of Contents Patent Filings Our intellectual property portfolio supporting ContraPest consists of nine international patent filings (in the United States, Europe, Canada, Brazil, Russia, Japan, Mexico, South Korea, and Australia) addressing the ContraPest compound.
We seek to protect our proprietary data and trade secrets with attention to data exchanges among employees, consultants, collaborators and research and trade partners. Patent Filings Our intellectual property portfolio supporting ContraPest consists of nine international patent filings (in the United States, Europe, Canada, Brazil, Russia, Japan, Mexico, South Korea and Australia) addressing the ContraPest compound.
The EPA’s definition of a pesticide includes “any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest.” FIFRA defines a pest as “any insect, rodent, nematode, fungus, or weed.” To register a new product with the EPA, all active ingredients within the product must be registered with the EPA.
The EPA’s definition of a pesticide includes “any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest.” FIFRA defines a pest as “any insect, rodent, nematode, fungus, or weed.” To register a new product with the EPA, all active ingredients within the product must be registered with the EPA or meet specific exemptions.
Our approaches include, but are not limited to the following: • Product Development. The needs of customers in each vertical vary due to environment and limitations, requiring ongoing innovation, exploration of additional species, and the pursuit of additional regulatory approvals for ContraPest and Evolve both in the United States and globally. • Strategic Partnerships.
Our approaches include, but are not limited to the following: • Product Development. The needs of customers in each vertical vary due to environment and limitations, requiring ongoing innovation, exploration of additional species and the pursuit of additional regulatory approvals for ContraPest and Evolve, both in the United States and globally. 10 Table of Contents • Strategic Partnerships.
The process for obtaining regulatory approval and compliance with appropriate federal, state and local regulations is rigorous and requires the expenditure of substantial time and financial resources. 11 Table of Contents United States Review and Approval Processes In the United States, the EPA regulates the sale, distribution and use of any pesticide under FIFRA.
The process for obtaining regulatory approval and compliance with appropriate federal, state and local regulations is rigorous and requires the expenditure of substantial time and financial resources. United States Review and Approval Processes In the United States, the EPA regulates the sale, distribution and use of any pesticide under FIFRA.
On October 18, 2018, the EPA removed the Restricted Use designation, meaning that we can sell ContraPest to consumers who do not have applicator expertise. ContraPest is currently limited by EPA requirements to indoor use and to use within one foot of manmade structures.
On October 18, 2018, the EPA removed the Restricted Use designation, meaning that we can sell ContraPest to consumers 12 Table of Contents who do not have applicator expertise. ContraPest is currently limited by EPA requirements to indoor use and to use within one foot of manmade structures.
We intend to register new trademarks for products from our evolving rodenticide product line and for products for mammalian species beyond rodentia. Data Sets We have exclusive use status with the EPA for the data sets we have developed and submitted to the EPA as part of our application for ContraPest.
We intend to register new trademarks for products from our evolving rodenticide product line and for products for mammalian species beyond rodentia. 13 Table of Contents Data Sets We have exclusive use status with the EPA for the data sets we have developed and submitted to the EPA as part of our application for ContraPest.
We remain open to the potential to license our technology to other strategic partners to explore its applicability to other mammalian species. Business Strategy Our goal is for fertility control to be a standard tool utilized in pest management in IPM programs across all verticals. We will achieve this through the following: End User Awareness and Adoption.
We remain open to potentially to licensing our technology for our strategic partners to explore its applicability to other mammalian species. Business Strategy Our goal is for fertility control to be a standard tool utilized in pest management in IPM programs across all verticals. We will achieve this through the following: End User Awareness and Adoption.
Alignment with industry leaders and organizations accelerate awareness, adoption, product innovation and development. 9 Table of Contents • Efficiencies. Through securing more reliable, affordable suppliers for our raw materials, and continuous development of our manufacturing process, we will be able to increase profits while scaling to meet rising product demand, and production of additional registered products.
Alignment with industry leaders and organizations accelerate awareness, adoption, product innovation and development. • Efficiencies. Through securing more reliable, affordable suppliers for our raw materials, and continuous development of our manufacturing process, we will be able to increase profits while scaling production to meet rising product demand and the production of additional registered products.
Our focus is educating end users on the rapid reproduction rate of rats, which draws attention to the complex issue of gaining control of an infestation if you do not have control of rat fertility.
Our focus is educating end users on the rapid reproduction rate of rodents, which draws attention to the complex issue of gaining control of an infestation when you do not have control of fertility.
In November 2023, we amended our amended and restated certificate of incorporation to effect a 1-for-12 reverse split of our issued and outstanding shares of common stock. The accompanying financial statements and notes thereto give retrospective effect to the reverse stock split for all periods presented.
In July 2024, we amended our Amended and Restated Certificate of Incorporation to effect a 1-for-10 reverse split of our issued and outstanding shares of common stock. The accompanying financial statements and notes thereto provide retrospective effect to the reverse stock split for all periods presented.
As first and second generation anti-coagulants come under increased scrutiny for non-target accidental consumption or for bioaccumulation with impact on non-target species as rodenticides travel up the food chain, their use is being restricted or even banned in select areas across the United States and globally.
As first and second generation anti-coagulant rodenticides come under increased scrutiny for non-target exposure and bioaccumulation impacts on non-target species as they travel up the food chain, their use is being restricted or banned in select areas across the United States and globally.
On November 12, 2015, we reincorporated in the state of Delaware. Our corporate headquarters and manufacturing site are in Phoenix, Arizona. On December 8, 2016, we went public and are currently traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol SNES.
Incorporation and Capital Structure We were originally incorporated in the State of Nevada in July 2004, and on November 12, 2015, we reincorporated in the State of Delaware. Our corporate headquarters and manufacturing site are in Phoenix, Arizona. On December 8, 2016, we went public and are currently traded on the Nasdaq under the symbol SNES.
There are 10 states that accept the federal exemption for pesticide registration within the respective state. For those states that do not accept the federal exemption, we began the registration process for those states in October 2023. To date, we are authorized to sell Evolve in 30 states.
For the states that do not accept the federal exemption, we began the registration process for pesticide registration in October 2023. To date, we are authorized to sell Evolve in 48 states.
While some of these challenges are of recent concern, the efficacy of the response to rat infestations has always been limited by the rat’s extraordinary reproductive rate. ContraPest®, our initial product, is a novel liquid bait in the pest control industry, containing the active ingredients 4-vinylcyclohexene diepoxide (“VCD”) and triptolide.
While some of these challenges are of recent concern, the efficacy of how rodent infestations respond has always been limited by their extraordinary reproductive rate. CONTRAPEST. ContraPest, our initial product, is a liquid bait, containing the active ingredients 4-vinylcyclohexene diepoxide (“VCD”) and triptolide.
Integrated Pest Management and Fertility Control The most effective, long-term way to manage rats is by using a combination of tools that work together to magnify the efficacy of the pest management protocol; IPM is based upon this concept. An effective IPM program needs to reduce the existing rat population while preventing the population from rebounding.
Integrated Pest Management and Fertility Control The most effective, long-term way to manage rodents is by using a combination of tools that work together to magnify the efficacy of the pest management protocol; IPM is based upon this concept.
Marketing and Sales Approach ContraPest is differentiated in what is otherwise a very crowded pest control market. It is the only product registered with the EPA that restricts fertility in both male and female rats and is designed to be non-lethal.
Marketing and Sales Approach ContraPest and Evolve are differentiated in what is otherwise a very crowded pest control market. They are the only products registered with or exempt from registration by the EPA that restrict fertility in both male and female rats and are designed to be non-lethal.
Furthermore, ContraPest and Evolve are contraceptives, not sterilants, limiting fertility in male and female rats beginning with the first breeding cycle following consumption. The average duration of infertility post consumption ranges from 42 to over 180 days.
Further, based on laboratory and toxicology studies, ContraPest and Evolve should not cause rats to become ill or change their behavior. Furthermore, ContraPest and Evolve are contraceptives, not sterilants, limiting fertility in male and female rats beginning with the first breeding cycle following consumption. The average duration of infertility post consumption ranges from 42 to over 180 days.
Intellectual Property and Other Proprietary Rights Maintaining a strong position in the rodenticide market requires constant innovation along with a healthy research program to evolve product lines to remain competitive and relevant to the needs of the changing global marketplace.
None of our employees are represented by labor unions or covered by collective bargaining agreements. Intellectual Property and Other Proprietary Rights Maintaining a strong position in the rodenticide market requires constant innovation along with a healthy research program to evolve product lines in order to remain competitive and relevant to the needs of the changing global marketplace.
Neophobia, or the fear and avoidance of new objects, is an innate behavior that often impacts control efforts. Rats avoid bait stations, loose bait, or traps until they are confident that these new objects pose no danger. Over time rats will begin to sample new foods to determine if there are any negative side effects.
Neophobia, or the fear and avoidance of new objects, is an innate behavior that often impacts control efforts. Rats avoid bait stations, loose bait, or traps until they are confident that these new objects pose no danger.
As more rodenticides come to market to address rat populations, attention will be drawn to the impact other rodenticides may have to other species due to bioaccumulation, and the benefit of ContraPest and Evolve having a low potential for bioaccumulation. Tailored Value Propositions.
As more rodenticides come to market to address rat populations, attention will be drawn to the impact other rodenticides may have on other species due to bioaccumulation, and the benefit of ContraPest and Evolve having a low potential for bioaccumulation. Our fertility control products align with the EPA’s recent push for non-lethal alternatives and reduced environmental impact. Tailored Value Propositions.
On August 2, 2016, the EPA granted an unconditional registration for ContraPest as a Restricted Use Product (“RUP”), due to the need for applicator expertise for deployment. On October 18, 2018, the EPA approved the removal of the RUP designation and was reclassified as a general-use pesticide.
On August 2, 2016, the EPA granted an unconditional registration for ContraPest as a Restricted Use Product (“RUP”), requiring purchase or application oversight by a licensed professional. On October 18, 2018, the EPA approved the removal of the RUP designation and ContraPest was reclassified as a general-use pesticide.
It has been reported that animals that prey on rats such as raptors, large cats, foxes, and other mammals of concern have significant levels of rodenticide present in their bodies due to persistence of the rodenticide in the rat tissue, which may also result in contamination of the food supply.
Animals that prey or scavenge on poisoned rats such as raptors, large cats, foxes, and other mammals of concern have significant levels of rodenticide present in their bodies due to persistence of the rodenticide in the rat tissue.
There are non-registered products being sold online that claim to control rodent reproduction. We do not believe these to be competitive products. Our principal competition are large corporations with greater resources that offer a wider range of products. Generally, these are lethal pest control products largely consisting of rodenticide-based products and other tools that PMPs use in their IPM.
There are non-registered products being sold online that claim to control rodent reproduction. We do not believe these to be competitive products. Our principal competition is large corporations with greater resources that offer a wider range of products.
We are continuously enhancing ContraPest to align with the unique needs and environments of our customers in our target verticals while simultaneously pursuing regulatory approvals and amendments to the existing U.S. registration to broaden its use and marketability. When regulatory and financial conditions permit, we will seek regulatory approval for additional jurisdictions beyond the United States.
To date, we are authorized to sell Evolve Mouse in 35 states. We are continuously enhancing ContraPest and Evolve to align with the unique needs and environments of our customers in our target verticals while simultaneously pursuing regulatory approvals and amendments to our existing U.S. registration to broaden its use and marketability.
Females can give birth to six litters per year, an average of five to ten offspring each. This rapid reproduction rate can cause populations to rebound quickly after implementing a lethal control program. Rat behavior, either learned or innate, can negatively affect pest control efforts.
Female mice can produce up to ten litters per year with an average of five to six offspring. This prolific breeding can cause populations to rebound quickly even after implementing a lethal control program. Rodent behavior, either learned or innate, can negatively affect pest control efforts.
ITEM 1. BUSINESS. Overview We have developed and are commercializing products for managing animal pest populations, initially rat populations, through fertility control. We currently have two product lines of fertility control products: ContraPest and Evolve. As far back as we can trace, rats have been foe to mankind.
ITEM 1. BUSINESS. Overview We have developed and are commercializing products for managing animal pest populations through fertility control. Our current products focus on rat and mouse populations, and are known as: ContraPest, Evolve Rat, and Evolve Mouse. As far back as we can trace, rodents - and in particular rats - have been foes to mankind.
Through consumption and contamination, rats destroy at least 20% of the global stored food supply every year. Additionally, rats cause over $27 billion in damage to public and private infrastructure annually in the United States alone by burrowing beneath foundations, as well as gnawing on electrical wiring, insulation, fire proofing systems, electronics and computer equipment.
Additionally, rats cause over $27 billion in damage to public and private infrastructure annually in the United States alone by burrowing beneath foundations and gnawing on electrical wiring, insulation, fire-proofing systems and equipment.
Within the ovary, eggs develop within structures called follicles. The non-regenerating and least mature follicles are called primordial. The primordial follicles mature through primary, secondary and antral stages and ultimately ovulate. Once the primordial follicles have become depleted, ovarian failure occurs, which terminates reproductive capability.
The non-regenerating and least mature follicles are called primordial. The primordial follicles mature through primary, secondary and antral stages and ultimately ovulate. Once the primordial follicles have become depleted, ovarian failure occurs, which terminates reproductive capability. The active ingredients in our products cause specific loss of small ovarian follicles (both primordial and primary) and growing follicles (secondary and antral).
Other Potential Products We have begun work on the application of ContraPest and Evolve on other species, such as mice, and expect to introduce an additional product during 2024. Competition Currently, we are unaware of any other non-lethal fertility control products targeting rats that are registered by the EPA.
Other Potential Products We continue to explore the application of ContraPest and Evolve on other species. We expect to continuously evaluate and evolve our current product offerings and, technology and market conditions permitting, introduce additional products. Competition Currently, we are unaware of any other non-lethal fertility control products targeting rats that are registered by the EPA.
Over the centuries, the most prevalent response to rat infestations has been to try to eliminate them through the use of lethal tools such as traps and rodenticides. However, there are growing concerns about secondary exposure and bioaccumulation of rodenticides.
Over the centuries, the most prevalent response to rodent infestations has been an attempt to eliminate them through the use of lethal tools such as traps and rodenticides. However, there are growing concerns about the environmental and ecological impact of rodenticides due to secondary exposure and bioaccumulation, including a push for safer and more humane products as consumer awareness increases.
This process allows ContraPest to be delivered to rats in a palatable, effective manner, and it is designed to be non-lethal. Evolve contains one active ingredient, cottonseed oil, a plant-derived food product. Evolve also contains several other inactive food ingredients. Currently, we source cottonseed oil from standard food suppliers, and it is available from a variety of sources.
Raw Materials and Manufacturing Process The Evolve products contain one active ingredient, cottonseed oil, a plant-derived food product. Evolve also contains several other inactive food ingredients. Currently, we source cottonseed oil from standard food suppliers, and it is available from a variety of sources.
Based on company field research, the addition of a fertility control product to an IPM program has demonstrated improved efficacy of more than 90% with sustained population suppression.
An effective IPM program should reduce the existing rat population, while preventing recurrence of the problem thus limiting continual application of hazardous chemicals such as lethal rodenticides. Based on company field research, the addition of a fertility control product to an IPM program has demonstrated improved efficacy of more than 90% with sustained population suppression.
In addition, Evolve meets the EPA’s FIFRA Section 25(b) minimum risk pesticide conditions. Evolve is exempt from federal registration because it poses little to no risk to human health and the environment and is made from food ingredients, within tolerances of exemption for both food and nonfood applications, which allows it to be used in agricultural applications.
Due to its classification, Evolve is exempt from federal registration because it poses little to no risk to human health and the environment. Evolve is also made from food ingredients with tolerance exemptions for both food and nonfood applications, which allows it to be used in agricultural application.
Currently, we have production scale capability in our facilities in Arizona to manufacture ContraPest and Evolve. Our internal production capabilities allow us to meet our current and anticipated demand through 2024. Scientific Background Regarding our Product Female rats are born with a finite number of eggs, or oocytes, and remain fertile until death.
Our internal production capabilities allow us to meet our current and anticipated demand through 2025 and beyond. 11 Table of Contents Scientific Background Regarding our Product Female rats are born with a finite number of eggs, or oocytes, and remain fertile until death. Within the ovary, eggs develop within structures called follicles.
Thus, we are investigating other, less costly sources of triptolide. Our manufacturing process involves the incorporation of our two active ingredients, in low concentrations, into several inactive ingredients. Once incorporated, the entire product goes through a proprietary process in order to stabilize the final formulation.
Triptolide is available from a variety of sources, but the process to purify triptolide for use in ContraPest is expensive. Thus, we are investigating other, less costly sources of triptolide. Our manufacturing process involves the incorporation of our two active ingredients, in low concentrations, into several inactive ingredients.
All issued and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, and per share amounts contained in our financial statements have been retrospectively adjusted. Current Challenges in Pest Control Methodologies Two base rats, a male and female, can produce 15,000 descendants in approximately 12 months.
All issued and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, and per share amounts contained in our financial statements have been retrospectively adjusted.
Additionally, there is growing concern about the rise in reported cases of adverse effects that rodenticides have on children and pets due to accidental, direct exposure. In November 2022, the EPA released an update to its Endangered Species Act workplan which intends to expand the mitigation efforts for 90 species potentially affected by rodenticides.
Additionally, there is growing concern about the rise in reported cases of adverse effects that rodenticides have on children and pets due to accidental, direct exposure.
Currently, we source VCD from standard industrial chemical supply providers. Triptolide is derived from the Thunder god vine, Tripterygium wilfordii, which is commonly cultivated and harvested wild in southeastern China and other Asian countries. Triptolide is 10 Table of Contents available from a variety of sources, but the process to purify triptolide for use in ContraPest is expensive.
ContraPest contains two active ingredients, VCD, an industrial chemical, and triptolide, a plant derived chemical. ContraPest also contains several other inactive, generally recognized as safe, ingredients. Currently, we source VCD from standard industrial chemical supply providers. Triptolide is derived from the Thunder god vine, Tripterygium wilfordii, which is commonly cultivated and harvested wild in southeastern China and other Asian countries.
Evolve, our second product, is a novel soft bait product in the pest control industry. Evolve targets the reproductive systems of both male and female rats, which can lead to sustained reductions of the rat population. Evolve is a soft bait 6 Table of Contents containing the active ingredient cottonseed oil.
Evolve Rat is a soft bait product that is novel to the pest control industry and contains the active ingredient, cottonseed oil. Evolve Rat reduces fertility in both male and female rats.
If the food or rodenticide causes illness in rats but they do not die, they will avoid that food or rodenticide in the future. Resistance to traditional rodenticides creates challenges for rodent control programs. Rats, like all animals, are hard-wired to survive and some rats can be born with a genetic mutation making them resistant to certain rodenticides.
Resistance to traditional rodenticides creates challenges for rodent control programs. Rodents, like all animals, are hard-wired to survive. Further, some rats can be born with a genetic mutation making them resistant to certain rodenticides. Studies show that resistance is increasing in commensal rodents as resistance can be passed onto offspring who will then carry this resistant trait into future generations.
International Review and Approval Processes We are researching potential international markets and will evaluate the regulatory landscapes of each prospective market. Country-specific regulatory laws have provisions that include requirements for certain labeling, safety, efficacy and manufacturers’ quality control procedures to assure the consistency of the product, as well as company records and reports.
Country-specific regulatory laws have provisions that include requirements for certain labeling, safety, efficacy and manufacturers’ quality control procedures to assure the consistency of the product, as well as company records and reports. Some specific in-country studies will be required for particular countries, but others will generally accept an EPA or EU compliant dossier.
Lethal control measures such as traps and rodenticides are often at the forefront of rat control programs, but this reproduction rate, intelligence, and genetic resistance to the active ingredients in rodenticides can negatively impact results of traditional mitigation efforts. Rats reach sexual maturity at approximately nine weeks of age.
However, this reproduction rate, along with intelligence and genetic resistance to the active ingredients in rodenticides, can negatively impact results of traditional mitigation efforts. Rodents reach sexual maturity between approximately six to nine weeks of age. Female rats can give birth to six litters per year with an average of five to ten offspring each.
Because the pest industry in the United States has demonstrated a reluctance to adopt new technologies, the marketing of fertility control has primarily been aimed at end-user awareness, creating pull through demand with Pest Management Providers (“PMP”) by applying pressure for PMPs to use fertility control as part of their IPM.
Because the pest industry in the United States has demonstrated a reluctance to adopt new technologies, the marketing of fertility control has primarily been aimed at end-user and professional awareness, and penetration of the key verticals of agribusiness distribution, pest management distribution, industrial distribution, retail distribution, international distribution and e-commerce.
These increasing restrictions and bans create an opportunity for ContraPest, as industry professionals are looking for effective tools to serve their customers and gain control of rat populations through nontraditional means. Like ContraPest, Evolve is also differentiated in the pest control market due to its unique approach to restrict fertility in rats as opposed to other lethal means.
These increasing restrictions and bans create an opportunity to highlight the safety and efficacy of our products as industry professionals look for alternative tools to serve their customers and gain control of rat and mouse populations through nontraditional means.
The safety and efficacy of our active ingredients and products are supported by considerable evidence. The active ingredients are rapidly metabolized by the rat, limiting the possibility of bioaccumulation or effect on non-target species. Further, based on laboratory and toxicology studies, ContraPest and Evolve should not cause rats to become ill or change their behavior.
In males, the active ingredients in our products exert a significant suppression of male fertility by preventing sperm maturation and impairing the movement of sperm. The safety and efficacy of our active ingredients and products are supported by considerable evidence. The active ingredients are rapidly metabolized by the rat, limiting the possibility of bioaccumulation or effect on non-target species.
Even though ContraPest is not a traditional rodenticide, these requirements (or a subset) may impact our registration in the future since it is classified in the rodenticide category with the EPA.
While these requirements (or a subset) do not directly impact our registration, ContraPest is classified in the rodenticide category with the EPA, therefore, updates to ContraPest’s current registration or newly registered products with the agency in the future may be subject to stricter testing requirements or limitations on use.
In certain cases, our EPA and state registrations require completion of testing and certifications even after we have received approval for the product or its labeling. We continue to seek to comply with these requirements. The EPA has an exemption under FIFRA, Section 25(b) which exempts certain pesticides from federal registration based on six criteria for minimum risk.
In certain cases, our EPA and state registrations require completion of testing and certifications even after we have received approval for the product or its labeling. We continue to seek compliance with these requirements. International Review and Approval Processes With the assistance of in-country distributors, we are pursuing potential international markets and evaluating the regulatory landscapes of each prospective market.
Within our workforce, eight employees are engaged in research and development and 17 employees are engaged in sales, business development, finance, regulatory, human resources, facilities, information technology and general management and administration. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Personnel As of December 31, 2024, we had 23 full-time employees and no part-time employees. Within our workforce, 11 employees are engaged in manufacturing, quality assurance and research and development and 12 employees are engaged in sales, business development, finance, regulatory, human resources, facilities, information technology, and general management and administration.
There are 10 states that accept the federal exemption for pesticide registration with the respective state. For those states that do not accept the federal exemption, we began the registration process for those states in October 2023. To date, we are authorized to sell Evolve in 30 states. We were incorporated in the state of Nevada in July 2004.
There are 10 states that accept the federal exemption for pesticide registration and require no additional determination or approval. In states that do not accept the federal exemption, we must obtain registration from the various state regulatory agencies. To date, we are authorized to sell Evolve in 48 states.
Studies show that resistance is increasing in rat species. This resistance is passed onto their offspring who will then carry this resistant trait into future generations. Because of the above factors, traditional rodenticide producers are continually challenged to develop new, more lethal chemicals to control future rat populations. Rodenticides may affect other species within the food chain.
Because of these factors, traditional rodenticide producers are continually challenged to develop new, more lethal chemicals to control future rat populations. Rodenticides do not just affect their intended target but can also directly impact other species or transfer through the food chain.
On March 10, 2022, the EPA granted a sub-label for ContraPest allowing for an alternative delivery system in a hanging bait station designed to target roof rat habitats and infestations, currently marketed as Elevate Bait System™.
To date, ContraPest is registered in all 50 states (49 states and the District of Columbia have approved the RUP designation) and two major U.S. territories, Puerto Rico and the U.S. Virgin Islands. On March 10, 2022, the EPA granted a sub-label for ContraPest allowing for an alternative delivery system in a hanging bait station.
Posing threats to human and animal health, food security, and infrastructure around the world, we have spent centuries trying to solve the problem. Rats carry or can spread at least 35 diseases, globally posing a dangerous risk to public health and safety and agriculture.
Rodents pose threats to human and animal health, food security and infrastructure around the world, and we have spent centuries trying to mitigate the problems associated with these pests.
ContraPest targets the reproductive systems of both male and female Norway and roof rats beginning with the first breeding cycle following consumption, which can lead to sustained reductions of the rat population. ContraPest is a highly palatable liquid formulation that reduces fertility in both male and female rats.
ContraPest targets the reproductive systems of both male and female rats, is a highly palatable formulation, does not cause illness or changed behavior in rats, and leads to significant reductions in fertility and rat populations. Accordingly, ContraPest is an additional tool to use as part of an IPM program.
A portion of the draft plan includes a focus on addressing effects to primary consumers of rodenticide bait (mammals and birds) and to secondary consumers that consume primary consumers (mammals, birds, and reptiles). These changes to the EPA’s review and registration policies could affect filings with the agency due to expanded test requirements for mammals, birds, reptiles, and critical habitats.
In addition, they require rodenticide label updates to reflect new usage restrictions, mitigation measures and environmental protection guidelines, which can alter market preference to shift toward more attractive, non-lethal solutions. Changes to the EPA’s review and registration policies could affect filings with the agency due to expanded test requirements for mammals, birds, reptiles, and critical habitats.
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The high fat content and sweet taste of ContraPest promotes sustained consumption even when other sought-after food sources are present. In both field and laboratory settings, consumption of ContraPest occurs even in the presence of abundant water sources and plentiful food choices, including animal feed, trash and other options.
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Rodents are known to be reservoir hosts for at least 60 zoonotic diseases and the potential transmission of these diseases creates a global risk to public health and safety, as well as agriculture. Through consumption and contamination, rats destroy at least 20% of the global stored food supply every year.
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Additionally, ContraPest does not cause illness in rats, and, therefore, it does not change behavior or result in bait aversion. Accordingly, ContraPest offers a new tool used in coordination with rodenticides as part of an integrated pest management program.
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This sub-label is marketed as Elevate Bait System™ and was designed to target roof rat habitats and infestations. EVOLVE. The Evolve product line, which began in the form of Evolve Rat, launched in January 2024, and is currently our lead product.
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Additionally, ContraPest can be successfully used as an alternative to traditional rodenticides altogether, an important option in the increasing number of jurisdictions that are restricting the use of second-generation anti-coagulant products. The registration process with the EPA for ContraPest began on August 23, 2015.
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Additionally, its palatable formulation produces high acceptance for sustained consumption even when other sought-after food sources are present. , Evolve Rat does not cause illness in rats and, therefore, it does not change behavior or result in bait aversion.
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ContraPest is registered in all 50 states, 49 of which have approved the removal of the RUP designation, as well as the District of Columbia and five major U.S. territories. In certain cases, our registrations are conditional and require completion of testing. We continue to actively seek to comply with these requirements.
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By targeting the 6 Table of Contents reproductive systems of both male and female rats, and with palatability promoting continued consumption, the use of Evolve can lead to sustained reductions of the rat population. Evolve Rat meets the EPA’s minimum risk pesticide conditions under FIFRA, Section 25(b).
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Evolve limits the reproduction of male and female rats within one to two breeding cycles following consumption. Evolve has not been registered by the EPA. Evolve qualifies for exemption from registration as a minimum risk pesticide under FIFRA Section 25(b). All applicable requirements for registration, manufacturing, selling, or distributing into designated states and territories have been met.
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In May 2024, we launched Evolve Mouse, our latest iteration of the Evolve product line. Evolve Mouse is a modified version of our soft bait technology and contains the active ingredient, cottonseed oil. Evolve Mouse limits reproduction of male and female mice and is also considered a minimum risk pesticide under the EPA’s FIFRA, Section 25(b).
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The EPA will perform biological evaluations to analyze the potential effects of the rodenticides on listed species and their designated critical habitats and will identify mitigation measures for these species and critical habitats to avoid or minimize exposure from the rodenticides. When the plan is described, they will consider it the Rodenticide Strategy.
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When regulatory and financial conditions permit, we will seek regulatory approval for additional jurisdictions beyond the United States. Current Challenges in Pest Control Methodologies Under ideal conditions, a female rat can yield up to 15,000 descendants in approximately 12 months. Lethal control measures such as traps and rodenticides are often at the forefront of rat control programs.
Removed
We will maintain 7 Table of Contents close contact with the EPA as their final guidance with respect to this policy was released in December 2023 with an intended final biological evaluation due November 2024.
Added
Rodents will sample new foods and baits to establish palatability and determine if there are any negative side effects, which reduces the likelihood of ingesting a lethal dose of rodenticide. If the rodenticide causes illness in rodents but they survive, they will develop conditioned aversion and avoid such substance in the future.
Removed
Maintaining a fertility control program reduces the reproduction and therefore the risk of future population spikes, known in the industry as the rebound effect. 8 Table of Contents (source: company studies) Other Applications While our proprietary technology is effective on rat species, our technology can be applied to other mammalian species.
Added
The Center for Biological Diversity highlights that rodenticides can be lethal to any bird or mammal and their non-selective toxicity endangers various wildlife species. The United States Geological Survey notes that despite regulatory efforts to limit certain rodenticides, exposure and adverse effects in non-target predatory wildlife persist, indicating ongoing environmental risks.
Removed
Additionally, within our target verticals, agribusiness, commercial, distributors, e-commerce, pest management, municipalities, and zoos and sanctuaries, many large targets employ internal pest management teams as opposed to contracting with service providers. For these reasons, the end-user is our primary target in order to grow market penetration for fertility control products.
Added
The American Society for the Prevention of Cruelty to Animals (“ASPCA”) reports that these substances are highly toxic to cats and dogs leading to severe health issues such as internal bleeding, kidney failure, seizures, or even death. Studies show that anticoagulant rodenticides are the most reported substance causing pet poisonings.
Removed
Three core sales channels drive revenue allowing SenesTech to reach a wider customer base and target different segments of the market. • e-Commerce. E-commerce provides a hub to push end-users for further education as well as providing 24/7 availability for purchasing products and managing subscriptions. • Field Sales. Field sales allow for personal interaction, consultation, and development of potential customers.
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The American Association of Poison Control Centers reported the number of human cases between 7 Table of Contents 2011 and 2015 was a cumulative total of 44,095 and 1,029 for long-acting superwarfarin-type and warfarin-type drugs, respectively, and 88% of these involved children under the age of five.
Removed
Field sales representatives, in charge of regional territories across the United States, focus in the larger account segments, attending trade shows and educational opportunities within target verticals. • Distributors and resellers. Distributors and resellers serve as an expansion of our sales team, increasing our reach by leveraging the established networks and connections of these third-party businesses.
Added
In addition to direct exposure to humans, chemicals in rodenticides have also been found as contaminates in the food supply. In November 2022, the EPA announced an update to its Endangered Species Act of 1973 (“ESA”) Workplan to expand the protection efforts for endangered species potentially affected by rodenticides.
Removed
Additionally, the logistics and marketing support offered through these partners reduces cost and effort required to expand our sales. Raw Materials and Manufacturing Process ContraPest contains two active ingredients, VCD, an industrial chemical, and Triptolide, a plant derived chemical. ContraPest also contains several other inactive, generally recognized as safe (“GRAS”), ingredients.
Added
In November 2024, the EPA released its final Biological Evaluations for 11 rodenticide active ingredients, assessing their potential effects on approximately 90 endangered species and their critical habitats. These evaluations guide regulatory actions and implement mitigation measures to restrict or condition rodenticide use in areas where endangered species may be present to reduce exposure risks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to develop full-scale manufacturing capabilities, we may not be able to meet demand of our products without relying on third party manufacturers, which could adversely affect our operations or financial condition. 18 Table of Contents In addition, if our manufacturing operations fail or are disrupted for any reason, including because of labor, disasters, and/or equipment malfunctions, among others, our ability to timely produce our products may be adversely affected, which would harm our sales and reputation.
Biggest changeIn addition, if our manufacturing operations fail or are disrupted for any reason, including because of labor, disasters, and/or equipment malfunctions, among others, our ability to timely produce our products may be adversely affected, which would harm our sales and reputation.
Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities internationally; and • business interruptions resulting from geopolitical actions, including war and terrorism.
Foreign Corrupt Practices Act of 1977, as amended, or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities internationally; and • business interruptions resulting from geopolitical actions, including war and terrorism.
However, even if a stock split has a positive effect on the market price for the common stock immediately following a reverse stock split, performance of our business and financial results, general economic conditions and the market perception of our business, and other adverse factors which may not be in our control, could lead to a decrease in the price of our common stock following the reverse stock split.
Even if a stock split has a positive effect on the market price for the common stock immediately following a reverse stock split, performance of our business and financial results, general economic conditions and the market perception of our business, and other adverse factors which may not be in our control, could lead to a decrease in the price of our common stock following the reverse stock split.
We may seek regulatory approval of our product candidates outside of the United States and, in that case, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including the following: • differing regulatory requirements in foreign countries; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling internationally; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the U.S.
We may seek regulatory approval of our product candidates outside of the United States and, in that case, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including the following: • differing regulatory requirements in foreign countries; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling internationally; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; 19 Table of Contents • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the U.S.
We continue to develop a functional infrastructure for the sales, marketing, and distribution of our products and the cost of establishing and maintaining such an infrastructure may exceed the cost-effectiveness of doing so.
We continue to develop a functional infrastructure for the sales, marketing and distribution of our products; however, the cost of establishing and maintaining such an infrastructure may exceed the cost-effectiveness of doing so.
Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including the following: • the potential and perceived advantages of product candidates over alternative or complementary products; • the effectiveness of our sales and marketing efforts and those of our collaborators; • the efficacy and safety of such product candidates as demonstrated in trials; • the uses, indications or limitations for which the product candidate is approved; • product labeling or product insert requirements of the EPA or other regulatory authorities; • the timing of market introduction of our products as well as future competitive or alternative products; • relative convenience and ease of use; and • unfavorable publicity relating to the product.
Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including the following: • the potential and perceived advantages of product candidates over alternative or complementary products; 14 Table of Contents • the effectiveness of our sales and marketing efforts and those of our collaborators; • the efficacy and safety of such product candidates as demonstrated in trials; • the uses, indications or limitations for which the product candidate is approved; • product labeling or product insert requirements of the EPA or other regulatory authorities; • the timing of market introduction of our products as well as future competitive or alternative products; • relative convenience and ease of use; and • unfavorable publicity relating to the product.
Our independent registered public accounting firm included in its opinion for the years ended December 31, 2023, and 2022 an explanatory paragraph referring to our net loss from operations and net capital deficiency and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available.
Our independent registered public accounting firm included in its opinion for the years ended December 31, 2024, and 2023 an explanatory paragraph referring to our net loss from operations and net capital deficiency and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available.
Our stock could be subject to wide fluctuation in response to many risk factors listed in this section, and others beyond our control, including the following: • market acceptance and commercialization of our products; • our being able to timely demonstrate achievement of milestones, including those related to revenue generation, cost control, cost effective source supply, and regulatory approvals; • our ability to remain listed on Nasdaq; • results and timing of our submissions with the regulatory authorities; • failure or discontinuation of any of our development programs; • regulatory developments or enforcements in the United States and non-U.S. countries with respect to our products or our competitors’ products; • failure to achieve pricing acceptable to the market; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated fluctuations in our financial condition and operating results or our continuing to sustain operating losses; • competition from existing products or new products that may emerge; • announcements by us or our competitors of significant acquisitions, strategic arrangements, joint ventures, collaborations or capital commitments; • issuance of new or updated research or reports by securities analysts; • announcement or expectation of additional financing efforts, particularly if our cash available for operations significantly decreases or if the financing efforts result in a price adjustment to certain outstanding warrants; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; 27 Table of Contents • disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • entry by us into any material litigation or other proceedings; • sales of our common stock by us, our insiders, or our other stockholders; • exercise of outstanding warrants; • market conditions for equity securities; and • general economic and market conditions unrelated to our performance.
Our stock could be subject to wide fluctuation in response to many risk factors listed in this section, and others beyond our control, including the following: • market acceptance and commercialization of our products; • our being able to timely demonstrate achievement of milestones, including those related to revenue generation, cost control, cost effective source supply, and regulatory approvals; • our ability to remain listed on Nasdaq; • results and timing of our submissions with the regulatory authorities; • failure or discontinuation of any of our development programs; • regulatory developments or enforcements in the United States and non-U.S. countries with respect to our products or our competitors’ products; • failure to achieve pricing acceptable to the market; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated fluctuations in our financial condition and operating results or our continuing to sustain operating losses; • competition from existing products or new products that may emerge; • announcements by us or our competitors of significant acquisitions, strategic arrangements, joint ventures, collaborations or capital commitments; • issuance of new or updated research or reports by securities analysts; • announcement or expectation of additional financing efforts, particularly if our cash available for operations significantly decreases or if the financing efforts result in a price adjustment to certain outstanding warrants; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • entry by us into any material litigation or other proceedings; • sales of our common stock by us, our insiders, or our other stockholders; • exercise of outstanding warrants; • market conditions for equity securities; and • general economic and market conditions unrelated to our performance. 26 Table of Contents Furthermore, the capital markets can experience extreme price and volume fluctuations that may affect the market prices of equity securities of many companies.
We may not be able to comply with all applicable listing requirements or standards of The Nasdaq Capital Market, and Nasdaq could delist our common stock. Our common stock is listed on The Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards.
We may not be able to comply with all applicable listing requirements or standards of The Nasdaq, and Nasdaq could delist our common stock. Our common stock is listed on Nasdaq. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards.
Our Annual Report on Form 10-K for the year ended December 31, 2023 does not include an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for smaller reporting companies.
Our Annual Report on Form 10-K for the year ended December 31, 2024 does not include an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for smaller reporting companies.
The sale of additional equity or convertible debt securities would dilute all of our stockholders, and if such sales occur at a deemed issuance price that is lower than the current exercise price of our outstanding warrants sold to investors in November 2017, the exercise price for those warrants would adjust downward to the deemed issuance price pursuant to price adjustment protection contained within those warrants.
The sale of additional equity or convertible debt securities would dilute all of our 25 Table of Contents stockholders, and if such sales occur at a deemed issuance price that is lower than the current exercise price of our outstanding warrants sold to investors in November 2017, the exercise price for those warrants would adjust downward to the deemed issuance price pursuant to price adjustment protection contained within those warrants.
The occurrence of any such event or penalty could limit our ability to market ContraPest, Evolve, or any other product candidates and generate revenue. In addition, the EPA strictly regulates the advertising and promotion of pest control products, and these pest control products may only be marketed or promoted for their EPA approved uses, consistent with the product’s approved labeling.
The occurrence of any such event or penalty could limit our ability to market ContraPest, Evolve, or any other product candidates and generate revenue. 17 Table of Contents In addition, the EPA strictly regulates the advertising and promotion of pest control products, and these pest control products may only be marketed or promoted for their EPA approved uses, consistent with the product’s approved labeling.
If the SEC were to bring such an enforcement action against us, or if purchasers were to bring such an action for rescission, it may have a material adverse effect on our financial position. 22 Table of Contents Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.
If the SEC were to bring such an enforcement action against us, or if purchasers were to bring such an action for rescission, it may have a material adverse effect on our financial position. Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.
If we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
If we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely 22 Table of Contents report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
Any such setback in our pursuit of regulatory approval could have a material adverse effect on our business and prospects. Even following receipt of any regulatory approval for ContraPest, Evolve, and our other product candidates, requiring regulatory approval, we will continue to face extensive regulatory requirements and our products may face future development and regulatory difficulties.
Any such setback in our pursuit of regulatory approval could have a material adverse effect on our business and prospects. 16 Table of Contents Even following receipt of any regulatory approval for ContraPest, Evolve, and our other product candidates, requiring regulatory approval, we will continue to face extensive regulatory requirements and our products may face future development and regulatory difficulties.
In some cases, it may be difficult or impossible to detect third party infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult. Intellectual property rights do not necessarily address all potential threats to any competitive advantage we may have.
In some cases, it may be difficult or impossible to detect third party infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult. 20 Table of Contents Intellectual property rights do not necessarily address all potential threats to any competitive advantage we may have.
However, we have not yet had significant sales of ContraPest and Evolve, which are our only products to date that are available for commercialization and the generation of revenue. 13 Table of Contents ContraPest, Evolve, and our other product candidates may not achieve adequate market acceptance necessary for commercial success.
However, we have not yet had significant sales of ContraPest and Evolve, which are our only products to date that are available for commercialization and the generation of revenue. ContraPest, Evolve, and our other product candidates may not achieve adequate market acceptance necessary for commercial success.
For purposes of Section 203, “interested stockholder” means, generally, someone owning 15% or more of our outstanding voting stock or an affiliate of ours that owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in Section 203.
For purposes of Section 203, “interested stockholder” means, generally, 27 Table of Contents someone owning 15% or more of our outstanding voting stock or an affiliate of ours that owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in Section 203.
If we are unable to obtain 20 Table of Contents and maintain protection for our technology and products, or if the scope of the protection obtained is not sufficient, our competitors could develop and commercialize technology and products similar or superior to ours, and our ability to successfully commercialize our technology and products may be adversely affected.
If we are unable to obtain and maintain protection for our technology and products, or if the scope of the protection obtained is not sufficient, our competitors could develop and commercialize technology and products similar or superior to ours, and our ability to successfully commercialize our technology and products may be adversely affected.
Securing additional financing may divert our management from their day-to-day activities, which 14 Table of Contents may adversely affect our ability to develop and commercialize our product candidates, including ContraPest and Evolve. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
Securing additional financing may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates, including ContraPest and Evolve. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
It may be necessary for us to use the patented or proprietary technology of a third party to manufacture or otherwise commercialize our own technology or products, in which case we would be required to obtain a license from such third party.
It may be necessary for us to use the patented or proprietary technology of a third party to 21 Table of Contents manufacture or otherwise commercialize our own technology or products, in which case we would be required to obtain a license from such third party.
Our financial statements as of December 31, 2023 and 2022 have been prepared under the assumption that we will continue as a going concern.
Our financial statements as of December 31, 2024 and 2023 have been prepared under the assumption that we will continue as a going concern.
Because triptolide is sourced from China and other Asian countries, we have a greater risk of supply interruption, including as a result of tariff and trade disputes, or disruptive events like the outbreak of COVID-19.
Because triptolide is sourced from China and other Asian countries, we have a greater risk of supply interruption, including as a result of tariff and trade disputes, or disruptive events like the outbreak of the Coronavirus, also known as COVID-19.
For example, we have become aware that we were involved in a transaction in which an investor of the Company may have resold approximately 175,000 shares of our common stock pursuant to a registration statement that had not yet been declared effective by the SEC.
For example, we have become aware that we were involved in a transaction in which an investor of the Company may have resold approximately 17,500 shares of our common stock pursuant to a registration statement that had not yet been declared effective by the SEC.
Furthermore, because of the potential for significant damage awards, which are not necessarily predictable, it is not 21 Table of Contents unusual to find even arguably unmeritorious claims resulting in large settlements.
Furthermore, because of the potential for significant damage awards, which are not necessarily predictable, it is not unusual to find even arguably unmeritorious claims resulting in large settlements.
We expect to continue to incur significant expenses and operating losses for the foreseeable future. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues.
We expect to continue to incur significant expenses and operating losses for the foreseeable 23 Table of Contents future. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues.
If our products or product candidates do not gain or maintain sufficient regulatory approval, or if approved, fails to achieve market acceptance, we may never become profitable. Even if we achieve 24 Table of Contents profitability in the future, we may not be able to sustain profitability in subsequent periods.
If our products or product candidates do not gain or maintain sufficient regulatory approval, or if approved, fails to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
In order to market products, we must continue to build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for which we would incur substantial costs.
In order to 15 Table of Contents market products, we must continue to build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for which we would incur substantial costs.
Certain of our agreements with investors and our outstanding warrants contain provisions that impose limitations on our ability to participate in certain variable rate transactions, including at-the-market transactions, which may limit our opportunities to obtain financing in sufficient amounts or on acceptable terms.
Certain of our agreements with investors and our outstanding warrants contain provisions that impose limitations on our ability to participate in certain variable rate transactions, which may limit our opportunities to obtain financing in sufficient amounts or on acceptable terms.
Risks Related to our Business Our success is dependent on the successful commercialization of ContraPest and Evolve. The EPA granted registration approval for ContraPest effective August 2, 2016, and as of July 12, 2018, we have received registration for ContraPest in all 50 states, the District of Columbia, and five major U.S. territories.
Risks Related to our Business Our success is dependent on the successful commercialization of ContraPest and Evolve. The EPA granted registration approval for ContraPest effective August 2, 2016, and as of July 12, 2018, we have received registration for ContraPest in all 50 states, the District of Columbia, and two major U.S. territories, Puerto Rico and The U.S. Virgin Islands.
To regain compliance, the closing bid price of our common stock had to be $1.00 per share or more for a minimum of 10 consecutive business days at any time before the expiration of the initial compliance period.
To regain compliance, the closing bid price of our common stock had to be $1.00 24 Table of Contents per share or more for a minimum of 10 consecutive business days at any time before the expiration of the second compliance period.
As of December 31, 2023, we had 25 full-time employees. As our development and commercialization plans and strategies develop, we will need additional managerial, operational, sales, marketing, scientific and financial headcount and other resources. Our management, personnel, and systems currently in place may not be adequate to support this future growth.
As of December 31, 2024, we had 23 full-time employees. As our development and commercialization plans and strategies develop, we will need additional managerial, operational, sales, marketing, scientific and financial headcount and other 18 Table of Contents resources. Our management, personnel, and systems currently in place may not be adequate to support this future growth.
In the event that we are unable to establish compliance, or again become non-compliant, with any of the minimum financial and other continued listing requirements of Nasdaq and cannot re-establish compliance within the require timeframe, our common stock could be delisted from The Nasdaq Capital Market, which could have a material adverse effect on our 25 Table of Contents financial condition and which would cause the value of our common stock to decline.
In the event that we again become non-compliant with any of the minimum financial and other continued listing requirements of the Nasdaq and cannot re-establish compliance within the require timeframe, our common stock could be delisted from the Nasdaq, which could have a material adverse effect on our financial condition and which would cause the value of our common stock to decline.
Evolve, as a FIFRA 25(b) minimum risk pesticide, does not require federal registration with the EPA but is in the process of being registered in all 50 states, the District of Columbia, and five major U.S. territories. To date, we are authorized to sell Evolve in 30 states.
Evolve, as a FIFRA 25(b) minimum risk pesticide, does not require federal registration with the EPA but is in the process of being registered in all 50 states, the District of Columbia, and five major U.S. territories. To date, we are authorized to sell Evolve in 48 states, and two major U.S. territories, Puerto Rico and The U.S. Virgin Islands.
Our efforts could fail to receive approval from the EPA, with respect to ContraPest or our product candidates, or from a comparable foreign regulatory authority for many reasons, including the following: • disagreement over the design or implementation of our trials; • failure to demonstrate a product candidate is safe or works according to our claims; • failure to demonstrate a product candidate’s benefits outweigh its risks; • disagreement over our interpretation of data; • disagreement over whether to accept efficacy results from trials; • the insufficiency of data collected from trials to obtain regulatory approval; • irreparable or critical compliance issues relating to our manufacturing process; or • changes in the approval policies or regulations that render our data insufficient for approval. 16 Table of Contents Any of these factors, some of which are beyond our control, could jeopardize our ability to obtain regulatory approval of submittals.
Our efforts could fail to receive approval from the EPA, with respect to ContraPest or our product candidates, or from a comparable foreign regulatory authority for many reasons, including the following: • disagreement over the design or implementation of our trials; • failure to demonstrate a product candidate is safe or works according to our claims; • failure to demonstrate a product candidate’s benefits outweigh its risks; • disagreement over our interpretation of data; • disagreement over whether to accept efficacy results from trials; • the insufficiency of data collected from trials to obtain regulatory approval; • irreparable or critical compliance issues relating to our manufacturing process; or • changes in the approval policies or regulations that render our data insufficient for approval.
On August 18, 2023, our stockholders approved a reverse stock split of our common stock, par value $0.001 per share, at a ratio of not less than 1-for-2 and not more than 1-for-12, with the actual ratio to be determined by our board of directors.
On July 11, 2024, our stockholders approved a reverse stock split of our common stock, par value $0.001 per share, at a ratio of not less than 1-for-2 and not more than 1-for-20, with the actual ratio to be determined by our board of directors.
For the years ended December 31, 2023 and 2022, we reported net losses of $7.7 million and $9.7 million, respectively. Thru December 31, 2023, we have accumulated deficits of $129.9 million since inception. Since inception, we have dedicated a majority of our resources to the discovery and development and marketing of our proprietary product candidates.
For the years ended December 31, 2024 and 2023, we reported net losses of $6.2 million and $7.7 million, respectively. Thru December 31, 2024, we have accumulated deficits of $136.1 million since inception. Since inception, we have dedicated a majority of our resources to the discovery and development and marketing of our proprietary product candidates.
Following such approval, we filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the reverse stock split, with an effective time of 4:01 p.m., Eastern Time on November 16, 2023.
Following such approval, on July 23, 2024, we filed with the Secretary of State of the State of Delaware an amendment to the Certificate of Incorporation to effect the reverse stock split, with an effective time of 4:01 p.m., Eastern Time on July 24, 2024.
On August 18, 2023, our stockholders approved a reverse stock split of our common stock, par value $.001 per share, at a ratio of not less than 1-for-2 and not more than 1-for-12, with the actual ratio to be determined by our board of directors.
On July 11, 2024, our stockholders approved a reverse stock split of our common stock, par value $0.001 per share, at a ratio of not less than 1-for-2 and not more than 1-for-20, with the actual ratio to be determined by our board of directors.
If market demand for triptolide causes the price to increase beyond our ability to market at a competitive price or causes the quality of the refined ingredient to be less than needed for our production, our ability to commercialize ContraPest could be limited or delayed, which would adversely affect our business, results of operations and financial condition. 19 Table of Contents A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.
If market demand for triptolide causes the price to increase beyond our ability to market at a competitive price or causes the quality of the refined ingredient to be less than needed for our production, our ability to commercialize ContraPest could be limited or delayed, which would adversely affect our business, results of operations and financial condition.
Privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business. We are making sales through our new e-Commerce tool, which depends on information technology systems and networks.
Privacy breaches and other cyber security risks related to our business and vulnerabilities through the use of evolving tools such as Artificial Intelligence could negatively affect our reputation, credibility and business. We are making sales through our new e-Commerce tool, which depends on information technology systems and networks.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline. If incorrect or misleading information is disseminated publicly by third parties about us, our stock price could decline.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and/or be subject to different marketing requirements or fines or enhanced government oversight and reporting obligations, which would adversely affect our business, prospects, and ability to achieve or sustain profitability. 17 Table of Contents Even following receipt of any regulatory approval or introduction of products or product candidates, we will continue to be subject to regulation of our manufacturing processes and advertising practices.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and/or be subject to different marketing requirements or fines or enhanced government oversight and reporting obligations, which would adversely affect our business, prospects, and ability to achieve or sustain profitability.
Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable.
Our corporate documents, Delaware law and certain warrants contain provisions that could discourage, delay or prevent a change in control of our company. Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable.
Furthermore, the capital markets can experience extreme price and volume fluctuations that may affect the market prices of equity securities of many companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of shares of our common stock.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of shares of our common stock.
Our various warrants contain other terms that may affect our fundraising. In connection with this offering, we may agree to amend the terms of certain of our outstanding warrants held by certain significant purchasers in this offering.
Our various warrants contain other terms that may affect our fundraising. In connection with any future equity offering, we may agree to amend the terms of certain of our outstanding warrants held by certain significant purchasers in this offering. Any such amendments may, among other things, decrease the exercise prices or increase the term of exercise of those warrants.
On November 7, 2023, the Reverse Split Committee of our Board of Directors approved a final split ratio of 1-for-12 to regain compliance with the Nasdaq minimum bid price requirement. Prior to the November 2023 reverse stock split, we effected a reverse stock split in November 2022 with a ratio of 1-for-20.
On July 23, 2024, the Reverse Split Committee of our board of directors approved a final split ratio of 1-for-10 to regain compliance with the Nasdaq minimum bid price requirement.
On November 7, 2023, the Reverse Split Committee of our Board of Directors approved a final split ratio of 1-for-12 (the “November 2023 Reverse Split”).
On July 11, 2024, our board of directors approved a final split ratio of 1-for-10 (the “July 2024 Reverse Split”).
As a manufacturer of pest control products, we are subject to continual government oversight and periodic inspections by the EPA and other regulatory authorities.
Even following receipt of any regulatory approval or introduction of products or product candidates, we will continue to be subject to regulation of our manufacturing processes and advertising practices. As a manufacturer of pest control products, we are subject to continual government oversight and periodic inspections by the EPA and other regulatory authorities.
Any such amendments may, among other things, decrease the exercise prices or increase the term of exercise of those warrants. 26 Table of Contents The incurrence of indebtedness through credit facilities would result in increased fixed payment obligations and, potentially, the imposition of restrictive covenants.
The incurrence of indebtedness through credit facilities would result in increased fixed payment obligations and, potentially, the imposition of restrictive covenants.
While the bid price of our common stock has been at or above $1.000 per share for a minimum of 10 consecutive business days multiple times since the November 2023 Reverse Split, Nasdaq has used its discretion to monitor the bid price of our common stock for a longer period of time.
The bid price of our common stock has been at or above $1.00 per share for a minimum of 10 consecutive business days since the July 2024 Reverse Split, resulting in regaining compliance with the minimum bid price requirement.
Misuse of our products may cause an increased risk of injury to customers, which could harm our reputation in the marketplace, as well as lead to potential product liability lawsuits. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing Russia-Ukraine and Israel-Hamas wars.
Misuse of our products may cause an increased risk of injury to customers, which could harm our reputation in the marketplace, as well as lead to potential product liability lawsuits.
We are also responsible for storing data relating to our customers and employees and rely on third party vendors for the 23 Table of Contents storage, processing and transmission of personal and Company information. Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal information transmitted over the Internet, consumer identity theft and privacy.
Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal information transmitted over the Internet, consumer identity theft and privacy.
In the event that we are unable to regain compliance with Rule 5550(a)(2) during the initial compliance, Nasdaq rules provide that we may be eligible for an additional 180 calendar day compliance period.
On February 26, 2024, we received notice from Nasdaq that while we had not yet gained compliance with the Nasdaq Listing Rule 5550(a), the Staff had determined that we were eligible for an additional 180 calendar day period, or until August 19, 2024, to regain compliance.
Removed
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and Russia’s launch of a full-scale military invasion of Ukraine in February 2022. Although the length and impact of the ongoing military conflict is highly unpredictable, the war in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit, and capital markets.
Added
We are currently operating in a period of economic uncertainty, which has been significantly impacted by geopolitical instability, inflation, increases in interest rates, and other disruptions in credit and financial marktets. Economic downturns may adversely affect our customers. If consumers restrict their discretionary expenditures, due to inflation or other economic hardships, we may suffer a decline in revenue.
Removed
Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine, and subsequent military invasion in Ukraine have led to sanctions and other penalties being levied by the United States, the European Union, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including the agreement by the U.S. and the EU to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system.
Added
Disruptions in credit or financial markets could make it more difficult for us to obtain, or increase the cost of obtaining, financing in the future. Increases in interest rates may cause a reduction in spending, which could result in a decrease in revenue.
Removed
Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional equity or debt funding.
Added
We may be impacted by geopolitical tensions and conflicts, including changes to trade policies and regulations, such as tariffs. In addition, there can be no assurances that fuel prices, raw material costs, or other operating costs, all of which may be subject to inflationary pressures, will not materially increase in future years.
Removed
Any of the above-mentioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the war, 15 Table of Contents sanctions, and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described herein.
Added
Any of these factors, some of which are beyond our control, could jeopardize our ability to obtain regulatory approval of submittals.
Removed
In addition, as a result of the ongoing conflict between Russia and Ukraine, we may experience other risks, difficulties and challenges in the way we conduct our business and operations generally.
Added
If we are unable to develop full-scale manufacturing capabilities, we may not be able to meet demand of our products without relying on third party manufacturers, which could adversely affect our operations or financial condition.
Removed
For example, there may be an increased risk of cybersecurity attacks due to the current conflict between Russia and Ukraine, including cybersecurity attacks perpetrated by Russia or others at its direction in response to economic sanctions and other actions taken against Russia as a result of its invasion of Ukraine.
Added
A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.
Removed
Any increase in such attacks on us or our third-party providers or other systems could adversely affect our network systems or other operations. At this time, to the best of our knowledge, we do not believe we have experienced any cyberattacks that are related to the conflict between Russia and Ukraine.
Added
We are also responsible for storing data relating to our customers and employees and rely on third party vendors for the storage, processing and transmission of personal and Company information. The legal and regulatory landscape surrounding Artificial Intelligence technologies is rapidly evolving and uncertain, including in the areas of consumer protection, intellectual property, cybersecurity, and privacy and data protection.
Removed
Although we have taken steps to enhance our protections against such attacks, we may not be able to address these cybersecurity threats proactively or implement adequate preventative measures and there can be no assurance that we will promptly detect and address any such disruption or security breach, if at all.
Added
Prior to the July 2024 reverse stock split, we effected a reverse stock split in November 2023 with a ratio of 1-for-12 and in November 2022 with a ratio of 1-for-20.
Removed
The conflict in Israel and surrounding areas has also created economic uncertainty and regional instability, including due to the risk of escalation into a wider regional conflict, and resulted in the imposition of sanctions targeting Hamas-affiliated individuals and entities.
Removed
The broader consequences of these conflicts remain uncertain, but may include further sanctions, regional instability and geopolitical shifts, increased prevalence and sophistication of cyberattacks, potential retaliatory action against companies such as us, heightened regulatory scrutiny related to sanctions compliance, increased inflation, further increases or fluctuations in commodity and energy prices, decreases in global travel, further disruptions to the global supply chain and other adverse effects on macroeconomic conditions.
Removed
A protracted conflict between Ukraine and Russia and Israel and Hamas, any escalation of those conflicts, and the financial and economic sanctions and import and/or export controls imposed by the United States, the UK, the EU, Canada and others, and the above-mentioned adverse effect on our operations (both in this region and generally) and on the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.
Removed
To qualify, we needed to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
Removed
We hope to receive from Nasdaq the additional 180-day compliance period in which to regain compliance. We intend to effect another reverse stock split within such additional 180-day compliance period, if necessary, in order to regain compliance.
Removed
Following a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.
Removed
Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance that a reverse stock split will result in a share price that will attract new investors, including institutional investors.
Removed
In addition, there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our common stock may not necessarily improve.
Removed
If incorrect or misleading information is disseminated publicly by third parties about us, our stock price could decline. 28 Table of Contents Our corporate documents, Delaware law and certain warrants contain provisions that could discourage, delay or prevent a change in control of our company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our existing facilities are adequate and meet our current needs for business, manufacturing and research.
Biggest changeWe have entered into a lease arrangement for new corporate headquarters and manufacturing facility for approximately 21,000 square feet in Surprise, Arizona, which commences in April 2025 and expires in May 2035. We believe that our existing facilities are adequate and meet our current needs for business, manufacturing and research.
ITEM 2. PROPERTIES. As of December 31, 2023, our corporate headquarters and manufacturing facility are located in Phoenix, Arizona. We lease and occupy approximately 5,100 square feet of office space for our corporate headquarters and approximately 7,700 square feet of separate facility space for our manufacturing facility pursuant to a lease that expires on November 30, 2024.
ITEM 2. PROPERTIES. As of December 31, 2024, we lease and occupy approximately 7,700 square feet of facility space in Phoenix, Arizona for our manufacturing facility pursuant to a lease that expires in May 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed1 unchanged
Biggest changeHolders As of February 20, 2024, there were approximately 691 holders of record of our common stock. Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to determine the total number of beneficial owners represented by these holders of record.
Biggest changeBecause many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to determine the total number of beneficial owners represented by these holders of record. Dividends We have never declared or paid any cash dividends on our common stock.
Purchases of Equity Securities by the Company We withhold shares of common stock in connection with the vesting of restricted stock units to satisfy required tax withholding obligations when they occur. There were no purchases of our equity securities during the 12 months ended December 31, 2023.
Purchases of Equity Securities by the Company We withhold shares of common stock in connection with the vesting of restricted stock units to satisfy required tax withholding obligations when they occur. There were no purchases of our equity securities during the 12 months ended December 31, 2024.
Dividends We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future.
We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “SNES.” Our common stock was initially listed for trading on the Nasdaq Capital Market on December 8, 2016.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on Nasdaq under the symbol “SNES” and was initially listed for trading on December 8, 2016. Holders As of March 11, 2025, there were approximately 685 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

31 edited+13 added−5 removed25 unchanged
Biggest changeSelling, general and administrative expense consisted of the following (in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 Personnel (including stock-based compensation) $ 3,440 $ 3,851 $ (411) Professional fees 1,722 2,193 (471) Marketing 317 631 (314) Travel and related expenses 228 201 27 Facility 155 155 — Depreciation expense 27 55 (28) Other 1,154 1,193 (39) Total $ 7,043 $ 8,279 $ (1,236) 32 Table of Contents Selling, general and administrative expenses were $7.0 million for the year ended December 31, 2023, compared to $8.3 million for the year ended December 31, 2022.
Biggest changeSelling, general and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, consulting, accounting and audit services. 31 Table of Contents Selling, general and administrative expenses consisted of the following (in thousands): Years Ended December 31, Increase (Decrease) 2024 2023 Personnel-related (including stock-based compensation) $ 2,630 $ 3,440 $ (810) Professional fees 1,240 1,722 (482) Marketing 288 317 (29) Insurance 243 350 (107) Licensed software 232 240 (8) Travel and entertainment 230 228 2 Facility-related 146 155 (9) Other 532 591 (59) Total $ 5,541 $ 7,043 $ (1,502) Selling, general and administrative expenses were $5.5 million for the year ended December 31, 2024, compared to $7.0 million for the year ended December 31, 2023.
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.
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 and Evolve.
Liquidity and Capital Resources 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.
Liquidity and Capital Resources 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.
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.
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 addition, we will continue to incur costs associated with operating as a public company. 33 Table of Contents 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 at 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 ContraPest and Evolve and any other product candidates for which we may receive regulatory approval; • 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; • further develop our manufacturing processes to contain costs while being able to scale to meet future demand of ContraPest and Evolve and any other product candidates for which we receive regulatory approval; • 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; • 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.
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 at 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 ContraPest and Evolve and any other product candidates for which we may receive regulatory approval; • 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; • further develop our manufacturing processes to contain costs while being able to scale to meet future demand of ContraPest and Evolve and any other product candidates for which we receive regulatory approval; • 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; • 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.
When there are changes to the assumptions used in the option-pricing model, including fluctuations in the market prices of our common stock, there will be variations in the calculated fair value of our future stock option awards, which results in variation in the stock-based compensation expensed recognized.
When there are changes to the assumptions used in the option-pricing model, including fluctuations in the market prices of our common stock, there will be variations in the calculated fair value of our 34 Table of Contents future stock option awards, which results in variation in the stock-based compensation expensed recognized.
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.
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.
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.
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.
Until these positions are sustained by the taxing authorities, we do not recognize the tax benefit resulting from such positions and report the tax effect for uncertain tax positions in our balance sheets. Off-Balance Sheet Arrangements None. 35 Table of Contents
Until these positions are sustained by the taxing authorities, we do not recognize the tax benefit resulting from such positions and report the tax effect for uncertain tax positions in our balance sheets. Off-Balance Sheet Arrangements None.
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.
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.
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.
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.
Other Income (Expense), Net 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.
Other Income, Net 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.
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. Results of Operations The following tables provide financial and operational information to be considered in conjunction with management’s discussion and analysis of results of operations.
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. Results of Operations The following tables provide financial and operational information to be considered in conjunction with management’s discussion and analysis of results of operations.
Cash Flows The following table summarizes our sources and uses of cash for each of the years presented (in thousands): Years Ended December 31, 2023 2022 Cash and cash equivalents, beginning of year $ 4,775 $ 9,326 Net cash provided by (used in): Operating activities (7,566) (8,577) Investing activities (149) (170) Financing activities 8,335 4,196 Net change in cash and cash equivalents 620 (4,551) Cash and cash equivalents, end of year $ 5,395 $ 4,775 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.
Cash Flows The following table summarizes our sources and uses of cash for each of the years presented (in thousands): Years Ended December 31, 2024 2023 Cash and cash equivalents, beginning of year $ 5,395 $ 4,775 Net cash provided by (used in): Operating activities (6,033) (7,566) Investing activities (56) (149) Financing activities 2,001 8,335 Net change in cash and cash equivalents (4,088) 620 Cash and cash equivalents, end of year $ 1,307 $ 5,395 33 Table of Contents 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 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.
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. 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.
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.
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.
At December 31, 2023, we had an accumulated deficit of $129.9 million and cash and cash equivalents of $5.4 million. 30 Table of Contents 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.
At December 31, 2024, we had an accumulated deficit of $136.1 million and cash and cash equivalents of $1.3 million. 29 Table of Contents 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.
Cost of Sales Cost of sales, consisting primarily of the cost of products sold, including scrap and reserves for obsolescence, was $654,000 for the year ended December 31, 2023, compared with $555,000 for the year ended December 31, 2022, an increase of $99,000, or 17.8%.
Cost of Sales Cost of sales, consisting primarily of the cost of products sold, including scrap and reserves for obsolescence, was $853,000, or 45.9% of net sales, for the year ended December 31, 2024, compared with $654,000, or 54.8% of net sales, for the year ended December 31, 2023.
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. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
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. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).
The results of operations are as following for the years presented (dollars in thousands): Years Ended December 31, % Increase (Decrease) 2023 2022 Revenues, net $ 1,193 $ 1,019 17 % Cost of sales 654 555 18 % Gross profit 539 464 16 % Operating expenses: Research and development 1,228 1,859 (34) % Selling, general and administrative 7,043 8,279 (15) % Total operating expenses 8,271 10,138 (18) % Loss from operations (7,732) (9,674) (20) % Other income (expense), net 22 (21) (205) % Net loss $ (7,710) $ (9,695) (20) % Revenues, net Sales, which are net of any discounts and promotions, were $1.2 million for the year ended December 31, 2023, compared to $1.0 million for the year ended December 31, 2022.
The results of operations are as following for the years presented (dollars in thousands): Years Ended December 31, % Increase (Decrease) 2024 2023 Revenues, net $ 1,857 $ 1,193 56 % Cost of sales 853 654 30 % Gross profit 1,004 539 86 % Operating expenses: Research and development 1,712 1,228 39 % Selling, general and administrative 5,541 7,043 (21) % Total operating expenses 7,253 8,271 (12) % Loss from operations (6,249) (7,732) (19) % Other income, net 65 22 195 % Net loss $ (6,184) $ (7,710) (20) % Revenues, net Sales, which are net of any discounts and promotions, were $1.9 million for the year ended December 31, 2024, compared to $1.2 million for the year ended December 31, 2023.
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.
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.
At December 31, 2023, we had an accumulated deficit of $129.9 million and cash and cash equivalents of $5.4 million.
At December 31, 2024, we had an accumulated deficit of $136.1 million and cash and cash equivalents of $1.3 million.
However, gross profit margin was comparable year over year at 45.2% for 2023 compared with 45.5% for 2022. Research and Development Expenses 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.
Research and Development Expenses 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.
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.
However, if anticipated 32 Table of Contents 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.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, sales, marketing and administrative functions. Selling, general and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, consulting, accounting and audit services.
These increases were partially offset by lower consulting and legal fees required for research and development purposes. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, sales, marketing and administrative functions.
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.
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.
Research and development expense consisted of the following (in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 Personnel (including stock-based compensation) $ 636 $ 996 $ (360) Professional fees 156 284 (128) Facility 122 108 14 Depreciation 109 128 (19) Other 205 343 (138) Total $ 1,228 $ 1,859 $ (631) Research and development expenses were $1.2 million for the year ended December 31, 2023, compared to $1.9 million for the year ended December 31, 2022.
Research and development expenses consisted of the following (in thousands): Years Ended December 31, Increase (Decrease) 2024 2023 Personnel-related (including stock-based compensation) $ 1,032 $ 636 $ 396 Facility-related 184 122 62 Stability and animal studies, materials and field costs 133 45 88 Depreciation 127 109 18 Professional fees 99 156 (57) Supplies and maintenance 69 73 (4) Other 68 87 (19) Total $ 1,712 $ 1,228 $ 484 Research and development expenses were $1.7 million for the year ended December 31, 2024, compared to $1.2 million for the year ended December 31, 2023.
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.
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.
However, cost of sales as a percent of sales was comparable year over year, at 54.8% for 2023 compared with 54.5% for 2022. 31 Table of Contents Gross Profit Gross profit for the year ended December 31, 2023 was $539,000 compared with gross profit of $464,000 for the year ended December 31, 2022, an increase of $75,000, or 16.2%.
Gross Profit Gross profit for the year ended December 31, 2024 was $1,004,000, for a gross profit margin of 54.1%, compared with gross profit of $539,000, or a gross profit margin of 45.2%, for the year ended December 31, 2023.
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 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.
The $631,000 decrease was primarily driven by lower personnel costs and lower legal fees related to research and development matters, offset by higher costs related to increased and expanded product development efforts in the later part of 2023.
The $484,000 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, combined with higher expenses overall related to field and product improvement studies in 2024 when compared with 2023.
Removed
Sales increased by $174,000 in 2023 driven by more than 70% increases in our agribusiness, commercial and distributor vertical markets, as we continue efforts at commercializing our products, slightly offset by a 10% decrease in e-commerce.
Added
The $664,000, or 56%, increase in 2024 was driven by the launch of our latest Evolve product offerings, partially offset by a decrease in the number of units sold of our existing ContraPest product offerings.
Removed
The $1.2 million decrease was driven by lower professional fees related to legal matters, consulting related to advertising and marketing activities and recruiting costs related to employee turnover, partially offset by higher cost in 2023 related to the settlement of a legal matter.
Added
Launched in January 2024, and expanded during 2024 with variations in product offerings, Evolve is a soft bait containing the active ingredient, cottonseed oil, and represented approximately 66%, or $1.2 million, of revenue for 2024. Partially offsetting this increase was a decline in the revenue related to our ContraPest product offerings.
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Additionally, costs related to software licenses and marketing efforts for digital and social media outlets were lower in 2023 when compared to 2022, combined with lower costs related to the timing of personnel changes.
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Limited erosion of demand for ContraPest products is expected as Evolve products are accepted in the marketplace. Also in 2024, we had a shift in our sales channels, with distributors representing approximately 34% of revenues compared to 9% in 2023.
Removed
In 2023, personnel costs includes severance costs of $191,000 related to the termination of our former Chief Revenue Officer, while 2022 includes severance costs of $356,000 related to the termination of our former Chief Executive Officer.
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The lower cost of net sales is largely due to a shift in the mix of products sold, and declined due to our latest product offering, Evolve, which launched in January 2024.
Removed
Net cash generated by changes in 34 Table of Contents 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.
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Furthermore, cost of sales in 2024 30 Table of Contents 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, while cost of sales in 2023 was impacted by the scrapping of defective trays no longer used in our products in the first quarter of 2023.
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The increase in our gross profit margin was driven by the shift in the mix of our products sold, and increased due to our latest product offering, Evolve, which launched in January 2024.
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Additionally, the 2024 gross profit margin was impacted by both the higher-than-expected cost of a key ingredient in our new Evolve product during the first quarter, combined with an increased proportion of our sales coming from distributors, who are offered a lower price due to the quantities purchased, while the 2023 gross profit margin was impacted by the higher cost of sales related to the scrapping of defective tanks no longer used in our products.
Added
The $1.5 million decrease was primarily due to lower personnel-related expenses resulting from a lower headcount and stock-based compensation, the realignment of the focus of our field development personnel to research and development activities in early 2024 and severance costs incurred in 2023 related to the termination of our former Chief Revenue Officer, combined with lower professional fees and insurance costs.
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Legal fees were lower as a legal matter was settled at the end of 2023, consulting fees related to marketing efforts were lower due to changes in our overall marketing program, and our insurance costs were lower resulting from both policy and rate changes.
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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.
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In addition, we will continue to incur costs associated with operating as a public company.
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Our net loss was primarily attributed to expenses incurred related to our selling, general and administrative activities.
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In 2024, we had proceeds received of $28,000 related to the sale of certain equipment. Cash Flows from Financing Activities— Financing activities provide cash for both day-to-day operations and capital requirements as needed.

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