SenesTech Inc.

03/13/2026 | Press release | Distributed by Public on 03/13/2026 04:00

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the sections of this report titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements."
Overview
We have developed and are commercializing products for managing animal pest populations through fertility control and population management strategies. Our current products focus on rat and mouse populations, and are known as: ContraPest, Evolve Rat, and Evolve Mouse.
During 2025, we experienced strong growth in our Evolve product line, which now represents the majority of our total revenue. Sales of Evolve Rat and Evolve Mouse increased across all major distribution channels, led by e-commerce, pest management professionals, and retail expansion. We also announced that our products are now available on retailer e-commerce sites, which we view as an important step toward broader brick-and-mortar retail availability.
Our focus remains on achieving sustainable revenue growth while progressing toward profitability. To that end, we continue to emphasize operational efficiency, manufacturing cost reductions, and sales channel optimization. Gross margins remain strong, reflecting the favorable economics of our Evolve products and improved manufacturing throughput.
We have also expanded our distribution reach and continued to support our international distribution partners as they introduce our fertility control technology to new markets.
We believe the market opportunity for non-poison rodent control remains significant and growing, driven by regulatory restrictions on traditional rodenticides and increasing demand for safer, sustainable pest-management alternatives. Our near-term priorities are to further scale our Evolve product family, expand e-commerce and retail and professional distribution channels, and strengthen our path to profitability.
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.
The results of operations are as following for the years presented (dollars in thousands):
Years Ended December 31,
Increase (Decrease)
2025 2024
Revenues, net $ 2,221 $ 1,857 $ 364
Cost of sales 833 853 (20)
Gross profit 1,388 1,004 384
Operating expenses:
Research and development 1,698 1,712 (14)
Selling, general and administrative 6,195 5,541 654
Total operating expenses 7,893 7,253 640
Loss from operations (6,505) (6,249) 256
Other income, net 122 65 57
Net loss $ (6,383) $ (6,184) $ 199
Revenues, net
Years Ended December 31,
2025 2024
Evolve
$ 1,809 81 % $ 1,229 66 %
ContraPest 412 19 % 628 34 %
Revenues, net $ 2,221 100 % $ 1,857 100 %
Revenues, which are net of any discounts and promotions, were $2.2 million for the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024. The $364,000, or 20%, increase in 2025 was driven by increasing unit demand for our Evolve products, partially offset by a decrease in the number of units sold of our ContraPest product offerings. 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 81%, or $1.8 million, of revenue for 2025 compared to 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. Limited erosion of demand for ContraPest products is expected to continue as Evolve products are accepted in the marketplace.
Cost of Sales
Cost of sales, consisting primarily of the cost of products sold, including scrap and reserves for obsolescence, was $833,000, or 37.5% of net sales, for the year ended December 31, 2025, compared with $853,000, or 45.9% of net sales, for the year ended December 31, 2024. The lower cost of net sales is largely due to a shift in the mix of products sold, with Evolve representing 81% of sales in 2025 compared to 66% in 2024. Additionally, cost of sales in 2024 was impacted during the first quarter 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.
Gross Profit
Gross profit for the year ended December 31, 2025 was $1.4 million, for a gross profit margin of 62.5%, compared with gross profit of $1.0 million, or a gross profit margin of 54.1%, for the year ended December 31, 2024. The increase in our gross profit margin was driven by the shift in the mix of our products sold, and increased due to our Evolve product offerings, which launched in January 2024. 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 of 2024, combined with an increased proportion of our sales coming from distributors, who are offered a lower price due to the quantities purchased.
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 our products and our other product candidates. Such costs include the following:
•employee related expenses, including salaries, related benefits, travel and stock-based compensation expense for employees engaged in research and development functions, including that portion of manufacturing not included in cost of goods sold;
•expenses incurred in connection with the development of our product candidates, including related regulatory and production expenses; and
•facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and supplies.
Research and development expenses consisted of the following (in thousands):
Years Ended December 31, Increase
(Decrease)
2025 2024
Personnel-related (including stock-based compensation) $ 894 $ 1,032 $ (138)
Facility-related 412 184 228
Supplies and maintenance 123 69 54
Depreciation 112 127 (15)
Professional fees 47 99 (52)
Other 110 201 (91)
Total $ 1,698 $ 1,712 $ (14)
Research and development expenses were $1.7 million for each of the years ended December 31, 2025 and 2024. The decrease in 2025 as compared to 2024 was primarily due to cost containment efforts, including lower personnel costs resulting from changes in headcount, as well as lower consulting and legal fees required for research and development purposes. These savings were partially offset by increased transitional facility expenses associated with our April 2025 move to a new facility, and included $135,000 in non-cash operating lease costs. Additionally, supplies and maintenance costs were higher in 2025.
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 free shipping offered in connection with marketing efforts, direct and allocated facility-related costs, franchise fees as well as professional fees for legal, consulting, accounting and audit services.
Selling, general and administrative expenses consisted of the following (in thousands):
Years Ended December 31, Increase
(Decrease)
2025 2024
Personnel-related (including stock-based compensation) $ 2,478 $ 2,630 $ (152)
Professional fees 2,135 1,240 895
Marketing 261 288 (27)
Franchise fees 202 51 151
Insurance 194 243 (49)
Licensed software 193 232 (39)
Travel and entertainment 180 230 (50)
Other 552 627 (75)
Total $ 6,195 $ 5,541 $ 654
Selling, general and administrative expenses were $6.2 million for the year ended December 31, 2025, compared to $5.5 million for the year ended December 31, 2024. The increase in selling, general and administrative expenses was due to higher legal fees related to an ongoing legal matter and totaled $631,000 in 2025. Additionally, franchise fees and corporate governance costs were higher in 2025 when compared with 2024. Overall, other operating expenses decreased as a result of our continued cost containment efforts.
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. For the year ended December 31, 2025, other income, net consisted of interest income of $144,000, partially offset by interest expense of $22,000. 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. Interest income was higher in 2025 due to a higher average balance of cash, cash equivalents and short-term investments in 2025 when compared to 2024, driven by the $13.2 million of net proceeds received from equity transactions in 2025.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses related to our research and development activities and commercialization efforts and expect such losses to continue for the near future. Through December 31, 2025, we had received net proceeds of $107.7 million primarily from the sales of our equity securities, including warrant exercises, an aggregate of $7.8 million in product sales, and an aggregate of $1.7 million from licensing fees. As of December 31, 2025, cash and cash equivalents and short-term investments were $8.6 million, compared to $1.3 million as of December 31, 2024. Net cash used in operations improved to $5.8 million in 2025, compared to $6.0 million in 2024 and from $7.6 million in 2023.
Based upon our current operating plan, we expect that our cash and cash equivalents and short-term investments as of December 31, 2025, in combination with anticipated revenue, will be sufficient to fund our current operations through approximately the second quarter of 2027. This estimate assumes continued execution of our current commercialization strategy, planned levels of operating expenses, and no significant changes in working capital requirements.
Our projected cash runway does not assume the receipt of additional capital from equity issuances, debt financings, strategic partnerships, or other external sources. If revenue growth does not occur at anticipated levels, or if expenses exceed current expectations, we may be required to seek additional financing sooner that currently anticipated.
We continue to evaluate various financing alternatives, including equity offerings under our existing ATM program, strategic partnerships, and other capital-raising transactions. There can be no assurance that additional capital will be available on acceptable terms, if at all.
Additional Funding Requirements
Our expenses may continue to increase in connection with our ongoing activities, particularly as we focus on marketing and sales of fertility control products. In addition, we will continue to incur costs associated with operating as a public company.
In particular, we may incur 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 our fertility control products 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 our fertility control products 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 our fertility control products and any other product candidates for which we receive regulatory approval;
•continue product enhancement and evolution of our existing fertility control products and advance our research and development activities and, as our operating budget permits, advance the research and development programs for other product candidates;
•maintain and protect our intellectual property portfolio; and
•add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and operations as a public company.
We believe we may need additional financing to fund these expenses.
Cash Flows
The following table summarizes our sources and uses of cash for each of the years presented (in thousands):
Years Ended December 31,
2025 2024
Cash and cash equivalents, beginning of year $ 1,307 $ 5,395
Net cash provided by (used in):
Operating activities (5,750) (6,033)
Investing activities (1,102) (56)
Financing activities 13,120 2,001
Net change in cash and cash equivalents 6,268 (4,088)
Cash and cash equivalents, end of year $ 7,575 $ 1,307
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 2025, net cash flows used in operating activities consisted of our net loss of $6.4 million offset by non-cash charges of $518,000 and changes in our operating assets and liabilities of $115,000. Our net loss was primarily attributed to expenses incurred related to our selling, general and administrative activities as we continued efforts to commercialize our products as well as research and development activities, as revenue from our product sales did not cover our operating expenses during the year. Changes to net cash used in our operating assets and liabilities primarily consisted of decreases of
$121,000 in accounts receivable, $80,000 in prepaid expenses and other current assets and $22,000 in other assets, and a net increase of $73,000 in accounts payable and accrued expenses, offset by an increase of $200,000 in inventory.
During 2024, net cash flows used in operating activities consisted of our net loss of $6.2 million and changes in our operating assets and liabilities of $297,000, offset by non-cash charges of $448,000. Revenue from our product sales did not cover our operating expenses during 2024. Our net loss was primarily attributed to expenses incurred related to our selling, general and administrative activities and our research and development activities. Changes to net cash used in our operating assets and liabilities primarily consisted of increases of $242,000 in accounts receivable and $36,000 in other assets related to the deposit on our new facility, and a net decrease of $25,000 in accounts payable and accrued expenses.
Cash Flows from Investing Activities-Cash flows from investing activities consist of held-to-maturity investment transactions, the purchase of property and equipment, and any proceeds received in connection with sales of property and equipment. In 2025, cash used in investing activities consisted of purchases of held-to-maturity investments of $3.0 million and property and equipment purchases of $138,000, offset by maturities of held-to-maturity investments of $2.0 million. In 2024, we had property and equipment purchases of $84,000 offset by 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. In 2025, net cash provided by financing activities consisted of $10.5 million from the exercise of warrants and $2.7 million from the issuance of common stock, partially offset by $56,000 of repayments of 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 from notes payable, partially offset by $42,000 of repayments of 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 preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
Inventory Valuation.We value inventory at the lower of cost or net realizable value. In addition, we write down any obsolete, unmarketable or otherwise impaired inventory to net realizable value. The determination of obsolete, or excess inventory requires us to estimate the future demand for our products. The estimate of future demand is compared to inventory levels to determine the amount, if any, of obsolete or excess inventory. If actual market conditions are less favorable than those we projected at the time the inventory was written down, additional inventory write-downs may be required. Inventory valuation is re-evaluated on a quarterly basis.
Stock-Based Compensation. Stock-based compensation expenses is measured at the grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for stock options and market price for restricted stock units. The use of the Black-Scholes option pricing model, requires certain estimates, including expected term of options granted, the method of calculating expected volatilities and the risk-free interest rate used in the option-pricing model. The resulting calculated fair value of stock options is recognized as compensation expenses over the requisite service period, which is generally the vesting period. 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. Additionally, any modification of an award that increases its fair value will require us to recognize additional expense.
Income Taxes. We record deferred income taxes for temporary difference between the amounts of assets and liabilities for financial and tax reporting purposes and we record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We also regularly conduct a comprehensive review of our uncertain tax positions. In this regard, an uncertain tax position represents our expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for
financial reporting purposes. 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.
SenesTech Inc. published this content on March 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT) on March 13, 2026 at 10:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]