snes-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 001-37941

SENESTECH, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-2079805
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

23460 N 19th Ave, Suite 110
Phoenix, AZ						85027
(Address of principal executive offices)						(Zip Code)

(928) 779-4143

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

SNES

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of common stock outstanding as of May 10, 2023: 2,964,485


	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive Loss	2
	Condensed Statements of Cash Flows	3
	Notes to Condensed Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14





Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	22
	SIGNATURE	23


	March 31, 2023		December 31, 2022
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	2,748	$	4,775
Accounts receivable, net	46		113
Prepaid expenses	450		378
Inventory, net	815		853
Total current assets	4,059		6,119
Right to use assets, operating leases	305		347
Property and equipment, net	259		294
Other noncurrent assets	22		22
Total assets	$	4,645	$	6,782
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	215	$	540
Accrued expenses	584		560
Current portion of operating lease liability	184		180
Deferred revenue	33		44
Total current liabilities	1,016		1,324
Operating lease liability, less current portion	132		179
Total liabilities	1,148		1,503
Commitments and contingencies (see notes)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.001 par value, 100,000,000 shares authorized, 2,107,339 and 809,648 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	2		1
Additional paid-in capital	127,735		127,481
Accumulated deficit	(124,240)		(122,203)
Total stockholders’ equity	3,497		5,279
Total liabilities and stockholders’ equity	$	4,645	$	6,782


	Three Months Ended March 31,
	2023		2022
Revenues, net	$	233	$	195
Cost of sales	141		105
Gross profit	92		90
Operating expenses:
Research and development	387		516
Selling, general and administrative	1,750		1,907
Total operating expenses	2,137		2,423
Loss from operations	(2,045)		(2,333)
Other income (expense):
Interest income	8		2
Interest expense	—		(1)

Other income, net	8		1
Net loss and comprehensive loss	$	(2,037)	$	(2,332)

Weighted average shares outstanding - basic and fully diluted	1,538,514		610,450
Net loss per share - basic and fully diluted	$	(1.32)	$	(3.82)


	March 31, 2023		December 31, 2022
Accounts receivable	$	50	$	119
Allowance for uncollectible accounts	(4)		(6)
Accounts receivable, net	$	46	$	113


	Three Months Ended March 31,
	2023		2022
Balance as of beginning of period	$	6	$	—
Increase in provision	—		—
Amounts written off, less recoveries	(2)		—
Balance as of end of period	$	4	$	—


	March 31, 2023		December 31, 2022
Raw materials	$	771	$	772
Work in progress	6		—
Finished goods	56		99
Total inventory	833		871
Less: reserve for obsolescence	(18)		(18)
Inventory, net	$	815	$	853


	March 31, 2023		December 31, 2022
Software licenses	$	113	$	157
Marketing programs and conferences	10		74
Insurance	93		61
Patents	24		39
Professional services	198		41
Other	12		6
Total prepaid expenses	$	450	$	378


	March 31, 2023		December 31, 2022
Research and development equipment	$	1,563	$	1,558
Office and computer equipment	801		800
Autos	54		54
Furniture and fixtures	41		41
Leasehold improvements	119		119
Total in service	2,578		2,572
Accumulated depreciation and amortization	(2,319)		(2,283)
Total in service, net	259		289
Construction in progress	—		5
Property and equipment, net	$	259	$	294


	March 31, 2023		December 31, 2022
Compensation, severance and related benefits	$	416	$	497
Legal services	150		36
Product warranty	18		18
Personal property and franchise tax	—		6
Other	—		3
Total accrued expenses	$	584	$	560


2023	$	149
2024	186

Total operating lease payments	335
Less imputed interest	(19)
Total operating lease liabilities	$	316


	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)
Outstanding as of December 31, 2022	280,810		$	17.00	3.9
Granted	—		—		—
Exercised	—		—		—
Forfeited	(326)		—		—
Expired	(36)		—		—
Outstanding as of March 31, 2023	280,448	(1)	17.11		4.4
Exercisable as of March 31, 2023	98,406		32.22		—


	Number of Units	Weighted Average Grant-Date Fair Value Per Unit
Outstanding as of December 31, 2022	18,799	$	2.71
Granted	—	—
Vested	(18,799)	2.71
Forfeited	—	—
Outstanding as of March 31, 2023	—	—


	Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)
Outstanding as of December 31, 2022	4,414,810	$	6.58	3.0
Issued	—	—		—
Exercised	(1,230,000)	3.50		—
Expired	—	—		—
Outstanding as of March 31, 2023	3,184,810	7.78		2.8


	Three Months Ended March 31,				Increase (Decrease)
	2023		2022
Personnel related (including stock-based compensation)	$	903	$	1,070	$	(167)
Professional fees	452		436		16
Insurance	86		166		(80)
Travel and entertainment	74		46		28
Office supplies/IT	71		83		(12)
Marketing	54		20		34
Facility-related	38		39		(1)
Other	72		47		25
Total	$	1,750	$	1,907	$	(157)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount
2023
Balances as of December 31, 2022	809,648	$	1	$	127,481	$	(122,203)	$	5,279
Stock-based compensation	—	—		166		—		166
Issuance of common stock upon exercise of warrants	1,230,000	1		(1)		—		—
Issuance of common stock for service	54,466	—		100		—		100
Issuance of shares pursuant to the vesting of restricted stock units, net of shares withheld for taxes	13,225	—		(11)		—		(11)
Net loss	—	—		—		(2,037)		(2,037)
Balances as of March 31, 2023	2,107,339	$	2	$	127,735	$	(124,240)	$	3,497








2022
Balances as of December 31, 2021	610,364	$	1	$	122,542	$	(112,508)	$	10,035
Stock-based compensation	—	—		221		—		221
Issuance of common stock for service	250	—		3		—		3
Net loss	—	—		—		(2,332)		(2,332)
Balances as of March 31, 2022	610,614	$	1	$	122,766	$	(114,840)	$	7,927


	Three Months Ended March 31,				% Increase (Decrease)
	2023		2022
Revenues, net	$	233	$	195	19	%
Cost of sales	141		105		34	%
Gross profit	92		90		2	%
Operating expenses:
Research and development	387		516		(25)	%
Selling, general and administrative	1,750		1,907		(8)	%
Total operating expenses	2,137		2,423		(12)	%
Loss from operations	(2,045)		(2,333)		(12)	%
Other income, net	8		1		700	%
Net loss	$	(2,037)	$	(2,332)	(13)	%


Exhibit Number						Description

4.28*						Form of Series C Warrant (Form 8-K filed April 12, 2023, Exhibit 4.28 (File no. 001-37941)).
4.29*						Form of Series Placement Agent Warrant (Form 8-K filed April 12, 2023, Exhibit 4.29 (File no. 001-37941)).
10.26*						Form of Securities Purchase Agreement (Form 8-K filed April 12, 2023, Exhibit 10.26 (File no. 001-37941)).
10.27*						Separation Agreement between Sene s Tech, Inc. and Nicole Williams dated April 21, 2023 (Form 8-K filed April 24 , 2023, Exhibit 10.27 (File no. 001-37941)).
31.1						Certification of Chief Executive Officer.
31.2						Certification of Chief Financial Officer.
32.1						Certification of Chief Executive Officer.
32.2						Certification of Chief Financial Officer.
101.INS						Inline XBRL Instance Document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


	SENESTECH, INC.
	(Registrant)

Date: May 11, 2023	By:	/s/ Thomas C. Chesterman
		Thomas C. Chesterman
		Chief Financial Officer, Treasurer and Secretary
		(duly authorized officer and principal financial officer)

SEC Form 10-Q filed by SenesTech Inc.