SNES 10-K & 10-Q changes, risk factors and insider trading

The EPA granted registration approval for ContraPest effective August 2, 2016, and as of July 12, 2018, we havehad 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. Evolve,Evolve Rat and Evolve Mouse, as aminimum FIFRArisk pesticides under Section 25(b) minimumof riskFIFRA, pesticide, doesdo not require federal registration with the EPA but isare in the process of being registered in all 50 states, the District of Columbia, and fivetwo major U.S. territories. ToAs date,of the date hereof, we are authorized to sell Evolve Rat in 48 states,states and two major U.S. territories, Puerto Rico and TheEvolve U.S.Mouse Virginin Islands.37 states and territories. 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.

Market acceptance of our products and 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 our products and product candidates over alternative or complementary products;

•the efficacy and safety of such products and product candidates as demonstrated in trials;

•the uses, indications or limitations for which the product and product candidate isare approved;

•favorable or unfavorable publicity relating to the product.

If any of our products or future approved product candidates fail to achieve sufficient market acceptance, we will not be able to generate significantsufficient revenues orto become profitable. The commercial success of ContraPest and Evolve will depend on a number of factors, including the following:

•convincing PMPscustomers to deploy ContraPest and Evolve in quantity as an enhancement to, or replacement of, their current strategy of rodenticide use;

•a continued acceptable safety profile of Evolve and ContraPest.

Commercialization of ContraPest and Evolve and developing further product candidates, including conducting experiments and field studies, obtaining and maintaining regulatory approval and commercializing any products approved for sale, is a time-consuming, expensive and uncertain process that takes years to complete. We expect our expenses to continue and to increase in connection with our ongoing activities, particularly as we advance our commercialization activities. We may expand our operations, and as a result of many factors, some of which may be currently unknown to us, our expenses may be higher than expected. Securing additional financing may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products and 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. If we are unable to raise additional capital when required or on acceptable terms, we may be required to take certain actions, including the following:

•significantly delay, scale back or discontinue the development or commercialization of our products and product candidates, including ContraPest and Evolve;

If we are unable to establish and maintain an effective sales force and marketing and distribution infrastructures, or enter into and rely upon acceptable third-party relationships, we may be unable to generate anysufficient revenue.revenues to become profitable.

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.markets.

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. 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. WeOur business may be impacted by geopolitical tensionsevents, including military conflicts, threatened hostilities, conflicts or heightened tension among alliance countries and conflicts,other includinggeopolitical changes to trade policies and regulations, such as tariffs.conflicts. In addition, therematerials sourced from suppliers located outside the U.S. have or may become subject to tariffs under U.S. trade policies. 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.

Regulatory approval processes of the EPAEPA, state and comparable foreign regulatory authorities are lengthy, time-consuming and unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business may fail.

TheRegulatory EPA review processapproval for a product with one or more new active ingredients typically takes approximately two years to complete and approval is never guaranteed. In addition, we continue to seek approvals to expand labels and use designations for ContraPest to broaden its marketmarkets and usability. Our efforts could fail to receive approval from the EPA, with respect to ContraPest or our product candidates, or from a comparable foreign regulatory authorityauthorities for many reasons, including the following:

If the EPA or comparable foreign regulatory authorities become aware of new information after approval of ContraPest, Evolve, or any other product candidate, or if we are unable to adequately complete required testing and certification requirements, a number of potentially significant negative consequences could result, including the following:

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product or product candidate, if approved, and could significantly harm our business, results of operations and prospects.

Even followingafter receipt ofreceiving any regulatory approval or introduction ofintroducing products or product candidates, we will continue to be subject to regulation of our manufacturing processes and advertising practices.

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 approvedEPA-approved uses, consistent with the product’s approved labeling. Advertising and promotion of any product candidate that obtains approval in the U.S.United States will be heavilysubject scrutinizedto heavy scrutiny by the EPA, other applicable state regulatory agenciesagencies, and the public. Violations, including promotion of our products for unapproved or off-label uses, are subject to enforcement actions, inquiries and investigations, and civil, criminal and/or administrative sanctions imposed by the EPA.

To market and sell our products globally, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. Obtaining foreign regulatory approvals and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties, and cost for us, and could delay or prevent the introduction of our products in certain countries. Approval by the EPA does not ensure approval by regulatory authorities in other countries or jurisdictions, but EPA approval may influence decisions by the foreign regulatory authority. If we are unable to obtain approval of our products or product candidates by regulatory authorities in the world market, the commercial prospects of that product candidate may be significantly diminished, and our business prospects could decline.

OurWe believe that our existing internal manufacturing platformcapabilities isare adequatesufficient forto meetingmeet our current and near term forecasted demand for our products. WeHowever, to meet future demand, we may be requiredneed to spendexpand our manufacturing capability or rely upon third-party manufacturers. Expanding our internal facilities could require significant time and resourcesresources, toand expandthere thesecan manufacturingbe facilitiesno toassurance fullythat meetsuch futureefforts demand.will be successful or timely. If we are unable to develop full-scalesufficient manufacturing capabilities,capacity, wereliance on third-party manufacturers may not be able to meet demand of our products without relying on third party manufacturers,necessary, which could disrupt operations or adversely affect our operationsbusiness, financial condition, or financialresults condition.of operations. In addition, our manufacturing operations are currently concentrated in a single location, making them vulnerable to potential disruptions.

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 in a timely manner may be adversely affected, which would harm our sales and reputation. We only operate in a single location, which means we do not have back-upbackup facilities to produce our products during a time when our manufacturing facility becomes unavailable.

We will need to expand our operations and grow the size of our organization, and we may experience difficulties in managing this growth.

As of December 31, 2024,2025, we had 23 full-time employees.employees and one part-time employee. As our development and commercialization plans and strategies develop,develop and progress, 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. Future growth would impose significant added responsibilities on members of management, including the following:

Business or supply chain disruptions could seriously harm our future revenues and financial condition and increase our costs and expenses, particularly because we have limited suppliers and a critical ingredient for ContraPest is currently sourced from China.expenses.

A variety of risks associated with marketing our products and product candidates internationally could materially adversely affect our business.

We have begun to market Evolve products internationally through distributors and we may seek regulatory approval of our product candidates outside of the United StatesStates. and, in that case, weWe expect that we will be subject to additional risks related to operating in foreign countries ifwith werespect obtainto theEvolve necessaryand approvals,any other approved products, including the following:

With respect to patent rights, we do not know whether any of our pending patent applications for any of our technologies or products will result in the issuance of patents that protect such technologies or products, or if our licensed patent will effectively prevent others from commercializing competitive technologies and products. Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Further, the examination process may require us to narrow the claims for our pending patent applications, which may limit the scope of patent protection that may be obtained if these applications issue. Because the issuance of a patent is not conclusive as to its inventorship, scope, validityvalidity, or enforceability, issued patents that we own or have licensed from third parties may be challenged in the courts or patent offices in the U.S.United States and internationally. Such challenges may result in the loss of patent protection, the narrowing of claims in such patents, or the invalidity or unenforceability of such patents, which could limit our ability to stop others from using or commercializing similar or identical technology and products or limit the duration of the patent protection for our technology and products. Protecting against the unauthorized use of our patented technology, trademarkstrademarks, and other intellectual property rights,rights is expensive, difficult, and in some cases, may not be possible. In some cases, it may be difficult or impossible to detect third partythird-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.

•issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

•our competitors might conduct research and development activities in the U.S.United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

Our technology may be found to infringe third partythird-party intellectual property rights.

Third parties may in the future assert claims or initiate litigation related to their patent, copyright, trademarktrademark, and other intellectual property rights in technology that is important to us. The asserted claims and/or litigation could include claims against us, our licensors, or our suppliers alleging infringement of intellectual property rights with respect to our product candidates or components of those products. Regardless of the merit of the claims, they could be time consuming,time-consuming, resulting in costly litigation and diversion of technical and management personnel, or require us to develop non-infringing technology or enter into license agreements. We cannot assure you that licenses will be available on acceptable terms, if at all. Furthermore, because of the potential for significant damage awards, whichthat are not necessarily predictable, it is not unusual to find even arguably unmeritorious claims resulting in large settlements. If any infringement or other intellectual property claim made against us by any third party is successful, or if we fail to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, our business, operating resultsresults, and financial condition could be materially adversely affected.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

•the inability to commercialize our product candidates.products.

We may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing. Large judgments have been awarded in class action lawsuits basedarising onfrom products that had unanticipated side effects, including, without limitation, any potential adverse effects of our products on humans or other species. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.

Our Annual Report on Form 10-K for the year ended December 31, 20242025, does not include an attestation report of our registered public accounting firm due to our status as a transitionnon-accelerated period established by rules of the SEC for smaller reporting companies.filer. As a result, we have not yet fully assessed our internal control over financial reporting and are unable to assure that the measures we have taken to date, together with any measures we may take in the future, will be sufficient to remediate the control deficiencies that may have led to ourany material weaknesses in our internal control over financial reporting, or to avoid potential future material weaknesses.

Privacy breaches and other cyber securitycybersecurity risks related to our business and vulnerabilities through the use of evolving tools such as Artificial Intelligence could negatively affect our reputation, credibilitycredibility, and business.

We are making sales through our new e-Commerce tool, which depends on information technology systems and networks. 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. Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal informationdata transmitted over the Internet,Internet. consumerCyber-attacks, identitymalicious theftinternet-based activity, online and privacy.offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources. It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our efforts to do so may not be successful. We do not control our third-party service providers and cannot guarantee that they have implemented reasonable security measures to protect our employees’ and customers’ data, identity and privacy, or that no electronic or physical computer break-ins or security breachesincidents will occur in the future. Our systems and technology are vulnerable from time-to-time to damage, disruption or interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security breaches, “hackers,” email blocking lists, computer viruses, power outages and other failures or disruptions outside of our control. A significant breach of customer, employee or Companyconfidential data could damage our reputation and our relationship with customers, and could result in lost sales, sizable fines,fines or penalties, significant breach-notification costscosts, investigations, and lawsuits, as well as adversely affect our results of operations. We may also incur additional costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and privacy threats, or to comply with state, federal and international laws that may be enacted to address those threats.

Risks Related to our Capital Stock, FundingFunding, and Trading in our Stock

Investment in product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to become commercially viable or gain regulatory approval. To date, we have financed our operations primarily through the sale of equity securitiessecurities, including warrants exercises, and debtproduct financings as well as research grants.sales. We have not generated sufficient revenue from product sales to date to achieve profitability. We continue to incur significant sales, marketing, research, development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in every reporting period since our inception. For the years ended December 31, 20242025 and 2023,2024, we reported net losses of $6.2$6.4 million and $7.7$6.2 million, respectively. ThruAs of December 31, 2024,2025, we havehad an accumulated deficitsdeficit of $136.1$142.5 million since inception.million.

Since inception, we have dedicated a majority of our resources to the discoverydiscovery, and developmentdevelopment, and marketing of our proprietary products and product candidates. We expect to continue to incur significant expenses and operating losses forin the foreseeablenear future.term. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues. In particular, we expect to incur substantial and increased expenses as we perform the following:

•continue to establish an infrastructure for the sales, marketingmarketing, and distribution of our products and product candidates for which we may receive regulatory approval;

We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition. Our prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. If our products or product candidates do not gain or maintain sufficient regulatory approval, or if approved, failsfail 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. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the company’s value of our company could cause you to lose all or part of your investment.

Sales,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, compared to $1.2 million for the year ended December 31, 2023.2024. The $664,000,$364,000, or 56%,20%, increase in 20242025 was driven by theincreasing launchunit ofdemand for our latest Evolve product offerings,products, partially offset by a decrease in the number of units sold of our existing 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. Also in 2024, we had a shift in our sales channels, with distributors representing approximately 34% of revenues compared to 9% in 2023.

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, compared with $654,000, or 54.8% of net sales, for the year ended December 31, 2023.2024. The lower cost of net sales is largely due to a shift in the mix of products sold, andwith declinedEvolve duerepresenting 81% of sales in 2025 compared to our latest product offering, Evolve, which launched66% in January 2024. Furthermore,Additionally, cost of sales in 2024 was impacted during the first few monthsquarter 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.pricing.

Gross profit for the year ended December 31, 20242025 was $1,004,000,$1.4 million, for a gross profit margin of 54.1%,62.5%, compared with gross profit of $539,000,$1.0 million, or a gross profit margin of 45.2%,54.1%, for the year ended December 31, 2023.2024. The increase in our gross profit margin was driven by the shift in the mix of our products sold, and increased due to our latestEvolve product offering, Evolve,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,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, 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.purchased.

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

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 costscosts, franchise fees as well as professional fees for legal, consulting, accounting and audit services.

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. For the year ended December 31, 2023, other income, net consisted of interestInterest income of $26,000, partially offset by interest expense of $4,000. Interest expense was higher in 20242025 due to a higher average balance of cash, cash equivalents and short-term investments in 2025 when compared with 2023 due to new2024, financingdriven arrangements entered into forby the purchase$13.2 million of newnet manufacturingproceeds equipmentreceived beginningfrom equity transactions in late 2023 and continuing into 2024.2025.

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

In particular, we expect tomay incur substantial and increased expenses as we:

•manage the infrastructure for sales, marketing and distribution of ContraPestour andfertility Evolvecontrol 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 ContraPestour andfertility Evolvecontrol 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 ContraPestour andfertility Evolvecontrol products and any other product candidates for which we receive regulatory approval;

•continue product enhancement and evolution of ContraPestour andexisting Evolvefertility 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;

We believe we willmay need additional financing to fund these continuing and additional expenses.

During 2024,2025, net cash flows used in operating activities consisted of our net loss of $6.2$6.4 million andoffset by non-cash charges of $518,000 and changes in our operating assets and liabilities of $305,000, offset by non-cash charges of $456,000.$115,000. Our net loss was primarily attributed to expenses incurred related to our selling, general and administrative activities as we continuecontinued efforts to commercialize our products,products as well as research and development activities.activities, Revenueas revenue from our product sales did not cover our operating expenses during the year. NetChanges to net cash used by changes in our operating assets and liabilities largelyprimarily consisted of increasesdecreases of $242,000$121,000 in accounts receivablereceivable, $80,000 in prepaid expenses and $44,000other current assets and $22,000 in other assets.assets, and a net increase of $73,000 in accounts payable and accrued expenses, offset by an increase of $200,000 in inventory.

During 2023,2024, net cash flows used in operating activities consisted of our net loss of $7.7$6.2 million and by changes in our operating assets and liabilities of $544,000,$297,000, offset by non-cash charges of $688,000.$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. NetChanges to net cash used by changes in our operating assets and liabilities primarily consisted primarily of increases of $242,000 in accounts receivable and $36,000 in other assets related to the deposit on our new facility, and a $582,000net decrease of $25,000 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.expenses.

Cash Flows from Investing Activities—Cash flows used infrom investing activities primarily consist of held-to-maturity investment transactions, the purchase of property and equipment, offset byand any proceeds received in connection with sales of property and equipment. In 2024, the2025, cash outlayused forin ourinvesting activities consisted of purchases of held-to-maturity investments of $3.0 million and property and equipment purchases wereof $65,000$138,000, loweroffset thanby 2023.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,stock and $25,000 from proceeds received related tofrom notes payable, partially offset by $42,000 of repayments of notes payable. In 2023, net cash provided by financing activities largely consisted of $5.4 million of net proceeds from the issuance of common stock, $2.8 million from the exercise of warrants, and $114,000 from proceeds from notes payable.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operationsdiscussion should be read in conjunction with our condensed financial statements,statements and related notes and other information included in this Quarterly Report of Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 13, 2026.

The statements contained in this Quarterly Report on Form 10-Q that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended,amended (the “Exchange Act”). All statements other than statements of historical facts contained or incorporated herein by reference in this Quarterly Report on Form 10-Q, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “suggests,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “would,” “should,” “could,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

•our future financial performance, including our ability to fund operations.

These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and situations that are difficult to predict and that may cause our own, or our industry’s, actual results to be materially different from the future results that are expressed or implied by these statements. Accordingly, actual results may differ materially from those anticipated or expressed in such statements as a result of a variety of factors, including those discussed in Item 1A—“Risk Factors” of Part I of our Annual Report on Form 10-K,10-K for the year ended December 31, 2025, filed with the SEC on March 13, 2026, and those contained from time to time in our other filings with the SEC. A number of factors could cause our actual results to differ materially from those indicated by the forward-looking statements. Such factors include, among others, the following:

WeOver havethe developedpast andyear, areSenesTech commercializinghas productstransformed from a research-focused organization into a revenue-driven company with a strategy focused on the commercialization of its proprietary pest management technologies for managing animal pest populations through fertility control and population management strategies.control. Our current productsproduct focusofferings are focused on rat and mouse populations,population management and areconsist known as: ContraPest,of Evolve Rat, Evolve Mouse (collectively, “Evolve”), and Evolve Mouse.ContraPest.

Sales, net of sales discounts and promotions, were $493,000$770,000 for the firstsecond quarter of 2026, compared to $485,000$625,000 for the firstsecond quarter of 2025. The $8,000$145,000 increase was primarily driven by higher sales of our Evolve product offerings—Evolveofferings, Ratreflecting andcontinued growth in our e-commerce sales channels. Evolve Mouserepresented (collectively,approximately “86% of second quarter 2026 revenues, compared to 83% in the second quarter of 2025, reflecting the continued shift in our product mix toward Evolve”)—partially offsetand, bycorrespondingly, a declinegreater in units soldproportion of revenues generated through our existinge-commerce ContraPestsales product line.channel.

Cost of sales consists of costs related to products sold, including scrap and any reserves for obsolescence, as well as shipping costs when charged to the customer. Cost of sales was $155,000,$203,000, or 31.4%26.4% of net sales, for the firstsecond quarter of 2026, compared to $172,000,$216,000, or 35.5%,34.6%, for the firstsecond quarter of 2025. Cost of sales was $358,000, or 28.3% of net sales, for the six months ended June 30, 2026, compared to $388,000, or 35.0%, for the same period of 2025.

Gross profit for the firstsix quartermonths ofended June 30, 2026 was $338,000,$905,000, representing a margin of 68.6%,71.7%, compared to $313,000,$722,000, or 64.5%,65.0%, infor the firstsame quarterperiod of 2025. The improvement reflects athe combinationsame factors affecting the quarterly comparison and demonstrates continued progress in the execution of improvedour productioncommercialization efficiency and average selling prices.strategy.

Research and development expenses were $422,000$377,000 for the firstsecond quarter of 2026, compared to $418,000$427,000 for the firstsecond quarter of 2025, representing ana increasedecrease of $4,000.$50,000. Research and development expenses were $799,000 for the six months ended June 30, 2026, compared to $845,000 during the same period of 2025, representing a decrease of $46,000.

Selling, general and administrative expenses were $2.0$2.1 million for the firstsecond quarter of 2026, compared to $1.6 million for the firstsecond quarter of 2025, representing an increase of $477,000.$456,000.

For the firstsecond quarter of 2026, interest income, net was $56,000,$30,000, consisting of $60,000$35,000 in interest income and $4,000$5,000 in interest expense. This compares to interest expense, net of $2,000 in the firstsecond quarter of 2025, consisting of $3,000$6,000 in interest incomeexpense and $5,000$4,000 in interest expense.income. The increase in interest income in 2026 reflects a higher average balance of cash, cash equivalents and investments compared to the same period in 2025.

Since our inception, we have incurred operating losses related to our research and development activities and commercialization efforts, with a net loss of $2.1$3.9 million for the threesix months ended MarchJune 31,30, 2026, and we expect these losses to continue for the near future. Although sales of our product have increased over the last three years—20% in 2025, 56% in 2024, and 17% in 2023—we are not yet able to fund operations by product sales alone. We have primarily funded our operations through the sale of equity securities, including common stock and warrants to purchase common stock.

Through MarchJune 31,30, 2026, we received net proceeds of $117.2 million primarily from the sales of our equity securities, including warrant exercises, an aggregate of $8.3$9.0 million in product sales and an aggregate of $1.7 million from licensing fees. As of MarchJune 31,30, 2026, cash and cash equivalents were $5.1 million, compared to cash and cash equivalents and short-term investments were $6.8 million, compared toof $8.6 million as of December 31, 2025.

Based on our current operating plan, we expectbelieve that our cash and cash equivalents as of MarchJune 31,30, 2026, in combinationtogether with anticipatedcurrent revenue,revenues and operating expense levels, will be sufficient to fund our current operations intothrough the thirdend of the first quarter of fiscal 2027. This estimate assumes continued execution of our current commercialization strategy, planned levels of operating expenses, and no significantmaterial changes in working capital requirements. Increased revenues, reduced operating expenses, or additional financing, if obtained, would further extend our cash runway.

Our projected cash runway does not assume the receipt of additional capital from equity issuances, debt financings, strategic partnerships, or other external sources. While we have evaluated and continue to evaluate our operating expenses and have focused our resources on the successful commercialization of fertility control products in the United States, additional financing will be needed in order to fund our operating losses before achieving our revenue and margin targets and becoming profitable and generating positive cash flows. We may never achieve profitability or generate positive cash flows, and unless and until we do, we will continue to need to raise capital through equity or debt financing. If revenue growth does not occur at anticipated levels, or if expenses exceed current expectations, we may be required to seek additional financing sooner than currently anticipated.

We maywill need additional financing to fund these continuing and additional expenses.

During the threesix months ended MarchJune 31,30, 2026, operating activities used $1.9$3.6 million of cash, resulting from our net loss of $2.1$3.9 million and net changes in our operating assets and liabilities of $73,000,$19,000, partially offset by net non-cash charges of $61,000,$276,000, consisting primarily of stock-based compensation,compensation and depreciation and amortization and operating lease expenses.amortization. Our net loss was driven by costs related to our selling, general and administrative activities resulting from our continued efforts to commercialize our products, combined with research and development costs related to our continued efforts on formulations of new products and improvements to existing products. Net cash providedused by changes in our operating assets and liabilities consisted of increases in accounts receivable of $160,000 and prepaid expenses of $76,000 and a netdecrease in deferred revenue of $20,000, partially offset by an increase in accounts payable and accrued expenses of $142,000$212,000 and a decrease in accounts receivable of $32,000, partially offset by increases in prepaid expenses of $40,000 and inventory of $54,000.$25,000.

During the threesix months ended MarchJune 31,30, 2025, operating activities used $1.6$2.7 million of cash, resulting from our net loss of $1.7$3.3 millionmillion, partially offset by non-cash charges of $299,000 and net changes in our operating assets and liabilities of $22,000, partially offset by non-cash charges of $130,000,$275,000, consisting primarily of stock-based compensation andcompensation, depreciation and amortization expense.and operating lease expenses. Our net loss was driven by costs related to our selling, general and administrative activities resulting from our efforts to commercialize our products, combined with costs related to our research and development efforts. Net cash usedprovided by changes in our operating assets and liabilities consisted primarily of a net increase in accounts payable and accrued expenses of $194,000 combined with decreases in prepaid expenses of $139,000 and inventory of $83,000, partially offset by an increase in accounts receivable of $163,000 and a decrease in accounts payable accrued expenses of $19,000, partially offset by decreases in prepaid expenses of $119,000 and inventory of $41,000.$141,000.

Cash Flows from Investing Activities—Cash flows used in investing activities consist of held-to-maturity investment transactions and purchases of property and equipment. For the threesix months ended MarchJune 31,30, 2026, cash provided by investing activities consisted of the maturity of a held-to-maturity investment totaling $1.0 million compared to cash used in investing activities related to property and equipment purchases of $36,000$83,000 in the same period of 2025.

Cash Flows from Financing Activities—Financing activities provide cash for both day-to-day operations and capital requirements as needed. During the threesix months ended MarchJune 31,30, 2026, net cash provided by financing activities consisted of net proceeds received from the issuance of common stock under our ATM Facility of $173,000, partially offset by repayments on notes payable of $15,000.$30,000. During the threesix months ended MarchJune 31,30, 2025, net cash provided by financing activities consisted of net proceeds received from the exercise of warrants of $4.9 million and from the issuance of common stock under our ATM Facility of $1.1$2.7 million and from the exercise of warrants of $889,000,million, partially offset by the repayment of notes payable of $14,000.$28,000.