FLAGSTAFF, Ariz., Aug. 13, 2019 /PRNewswire/ -- SenesTech,
Inc. (NASDAQ: SNES), a developer of proprietary technologies for
managing animal pest populations through fertility control, today
announced financial and operational results for the second quarter
of fiscal 2019, which ended June 30,
2019.
"Since taking over as CEO three months ago, we have made a
number of significant changes in our go forward strategy intended
to drive commercial adoption of our highly disruptive technology,"
commented Ken Siegel, Chief
Executive Officer of SenesTech. "Specifically, we have narrowed our
focus to key market verticals and geographies that we believe are
most likely to generate near term results, focusing in on zoos and
sanctuaries, municipalities and government agencies, and food and
agriculture, with a significant amount of effort placed into
California. California, which currently has bill AB 1788
moving through its legislature to ban second generation
anticoagulant rodenticides in certain circumstances, would move
ContraPest from a disruptive innovation to what we believe will be
a potential necessity in the world's fifth largest economy."
"California's desire for a
better environment is evidenced by a growing demand for effective
and environmentally sound pest management solutions. AB1788 has
drawn attention to the critical role pest management strategies
play in the lives of people, pets, and wildlife. We have
recently undertaken one-on-one consumer interactions in our target
market segments to assess the demand. The shift to
ContraPest is underway. As AB1788 moves through its legislative
pathway, users are motivated now and are seeking our assistance in
planning near term deployments. We are ready to meet this growing
demand that is core to our mission," added Dr. Loretta Mayer, SenesTech's co-founder and Chief
Scientific Officer.
Second Quarter 2019 Financial Results
Revenues from
product sales during Q2 2019 ended June 30,
2019 were $24,000, compared to
$19,000 of revenue from product sales
during Q1 2019. Q2 2019 operating expenses were $2.3 million, significantly lower than the
$4.1 million in Q2 2018 of last year
and slightly lower than the $2.4
million in Q1 2019. Net loss for Q2 2019 was $(2.3) million, compared with a net loss of
$(4.1) million in Q2 2018 and
$(2.4) million during Q1 2019.
Adjusted EBITDA, which is a non-GAAP measure of operating
performance, was $(2.0) million
during Q2 2019, compared to $(1.9)
million in Q2 2018, and $(2.0)
million during Q1 2019.
The Company ended the quarter with $2.6
million in cash, or $6.2
million on a pro forma basis including the Company's
July 2019 public offering which
generated $3.6 million of net
proceeds.
Tom Chesterman, Chief Financial
Officer of SenesTech, commented, "During the second quarter, we
focused on California and the
continued adjustments we are making to our sales model, including
the use of a contract sales organization to further extend our
reach. Importantly, we took steps to reduce our monthly burn rate
as we shifted from our historic focus on R&D to an all-out
effort to commercialize ContraPest with a particular focus on the
anticipated impact from AB 1788. Finally, with the recent financing
anchored by a million dollar investment by our Chief Executive
Officer, Ken Siegel, and a revised
cost structure, we believe we have the necessary resources to
execute on our go forward strategy well into 2020."
Mr. Siegel concluded, "I believe strongly not only in the
mission that SenesTech and ContraPest is looking to achieve, but in
the opportunity it provides for shareholders as I personally
invested significantly in the most recent public offering. As
a company rich in scientific progress and success, the transition
to commercialization is never easy. However, my confidence is high
in our ability to bring this incredibly disruptive technology to
commercial success."
Use of Non-GAAP Measure
Adjusted EBITDA is a non-GAAP
measure. However, this measure is not intended to be a substitute
for those financial measures reported in accordance with GAAP.
Adjusted EBITDA has been included because management believes
that, when considered together with the GAAP figures, it provides
meaningful information related to our operating performance and
liquidity and can enhance an overall understanding of financial
results and trends. Adjusted EBITDA may be calculated by us
differently than other companies that disclose measures with the
same or similar term. See our attached financials for a
reconciliation of this non-GAAP measure to the nearest GAAP
measure.
Conference Call Details
Date and Time: 5:00 pm ET
(2:00 pm PT) on Tuesday, August 13, 2019
Call-in Information: Interested parties can access the
conference call by dialing (844) 308-3351 or (412) 317-5407.
Live Webcast Information: Interested parties can access
the conference call via a live Internet webcast, which is available
in the Investor Relations section of the Company's website at
http://senestech.investorroom.com/.
To Ask a Question: The conference call will be moderated
by Lytham Partners, an investor relations firm. There will be three
options to ask a question during the call:
- Questions can be asked live during the call-in portion of the
conference call.
- The live webcast will feature an option to submit questions in
writing during the event.
- If you are unable to attend the event, you can submit a
question in advance to Senestech@LythamPartners.com.
Replay:
A teleconference replay of the call will be available for three
days at (877) 344-7529 or (412) 317-0088, confirmation #10134038. A
webcast replay will be available in the Investor Relations section
of the Company's website at
http://senestech.investorroom.com/ for 90 days.
About SenesTech
SenesTech has developed and is in
the process of commercializing a proprietary technology for
managing animal pest populations, primarily rat populations,
through fertility control. For more information visit the SenesTech
website at www.senestech.com.
Safe Harbor Statement
The foregoing paragraphs
contain forward-looking statements that involve estimates,
assumptions, risks and uncertainties. Any statements about our
expectations, beliefs, plans, objectives, assumptions or future
events or performance are not historical facts and may be
forward-looking. "Forward-looking statements" may be preceded by
words such as "may," "future," "plan" or "planned," "will,"
"should," "expected," "anticipates," "continue," "eventually,"
"believes," or "projected." Forward-looking statements include
statements concerning target marketing and markets; continuing the
Company's vision; deployment of the Company's product; the
continuation or expansion of the use of ContraPest; demand for
ContraPest; the Company's expectations on regulatory developments,
such as AB 1788; the Company's continuing to control expenses and
cash; future financial results; and the Company's execution of its
strategic business plan.
Investors should not unduly rely on forward-looking
statements. Such statements are subject to a multitude of risks and
uncertainties that could cause future circumstances, events, or
results to differ materially from those made in the forward-looking
statements, including as a result of various factors and other
risks, such as market acceptance and demand for the Company's
products, customers completing order commitments, the Company's
ability to reduce costs and execute on its plans and continuing to
believe it is following the best strategy, the Company having
sufficient financing, and other factors identified in the Company's
filings with the Securities and Exchange Commission, including its
annual report on Form 10-K and quarterly reports filed on Form
10-Q. All forward-looking statements speak only as of the date on
which they were made based on management's assumptions as of such
date. The Company does not undertake any obligation to update any
forward-looking statements, whether as a result of the receipt of
new information, the occurrence of future events or
otherwise.
SENESTECH,
INC.
|
BALANCE
SHEETS
|
(In thousands,
except shares and per share data)
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
(Unaudited)
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash
|
$
2,575
|
|
$
4,920
|
Accounts
receivable
|
156
|
|
139
|
Prepaid
expenses
|
329
|
|
342
|
Inventory
|
1,331
|
|
1,261
|
Deposits
|
5
|
|
9
|
Total current
assets
|
4,396
|
|
6,671
|
|
|
|
|
Right to use
asset-operating leases
|
65
|
|
-
|
Property and
equipment, net
|
915
|
|
1,083
|
Total
assets
|
$
5,376
|
|
$
7,754
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
134
|
|
$
219
|
Accounts
payable
|
255
|
|
173
|
Accrued
expenses
|
790
|
|
771
|
Total current
liabilities
|
1,179
|
|
1,163
|
|
|
|
|
Long-term debt,
net
|
196
|
|
261
|
Operating lease
liability
|
65
|
|
-
|
Common stock warrant
liability
|
1
|
|
-
|
Deferred
rent
|
10
|
|
16
|
Total
liabilities
|
1,451
|
|
1,440
|
|
|
|
|
Commitments and
contingencies
|
-
|
|
-
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value, 100,000,000 shares authorized, 25,227,475 and
23,471,999 shares issued and
outstanding at June 30, 2019 and December 31, 2018,
respectively
|
|
|
|
25
|
|
24
|
Additional paid-in
capital
|
94,391
|
|
92,128
|
Accumulated
deficit
|
(90,491)
|
|
(85,838)
|
Total stockholders'
equity
|
3,925
|
|
6,314
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
5,376
|
|
$
7,754
|
SENESTECH,
INC.
|
STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
|
(In thousands,
except shares and per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
Ended June
30,
|
|
Ended June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Sales
|
$
24
|
|
$
36
|
|
$
43
|
|
$
55
|
Cost of
sales
|
21
|
|
20
|
|
33
|
|
39
|
Gross
profit
|
3
|
|
16
|
|
10
|
|
16
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
463
|
|
636
|
|
927
|
|
1,270
|
General and
administrative
|
1,831
|
|
3,465
|
|
3,735
|
|
5,493
|
Total operating
expenses
|
2,294
|
|
4,101
|
|
4,662
|
|
6,763
|
|
|
|
|
|
|
|
|
Net operating
loss
|
(2,291)
|
|
(4,085)
|
|
(4,652)
|
|
(6,747)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
11
|
|
1
|
|
26
|
|
7
|
Interest
expense
|
(11)
|
|
(22)
|
|
(24)
|
|
(44)
|
Other income
(expense)
|
2
|
|
(7)
|
|
(3)
|
|
6
|
Total other income
(expense)
|
2
|
|
(28)
|
|
(1)
|
|
(31)
|
|
|
|
|
|
|
|
|
Net loss
|
$
(2,289)
|
|
$
(4,113)
|
|
$
(4,653)
|
|
$
(6,778)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic and fully diluted
|
24,552,553
|
|
16,696,051
|
|
24,038,333
|
|
16,596,770
|
|
|
|
|
|
|
|
|
Net loss per common
share - basic and fully diluted
|
$
(0.09)
|
|
$
(0.25)
|
|
$
(0.19)
|
|
$
(0.41)
|
SENESTECH,
INC.
|
STATEMENTS OF CASH
FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
For the Six
Months
|
|
Ended June
30,
|
|
2019
|
|
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net loss
|
$
(4,653)
|
|
$
(6,778)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Gain on investments
held to maturity
|
-
|
|
(32)
|
Bad debts
expense
|
-
|
|
5
|
Depreciation and
amortization
|
213
|
|
224
|
Stock-based
compensation
|
471
|
|
2,735
|
Loss on sale of
equipment
|
2
|
|
15
|
Loss on early
extinguishment of debt
|
-
|
|
10
|
Loss on remeasurement
of common stock warrant liability
|
1
|
|
1
|
(Increase) decrease
in current assets:
|
|
|
|
Accounts
receivable
|
(17)
|
|
(21)
|
Prepaid
expenses
|
13
|
|
(32)
|
Inventory
|
(70)
|
|
(648)
|
Deposits
|
4
|
|
7
|
Increase (decrease)
in current liabilities:
|
|
|
|
Accounts
payable
|
82
|
|
70
|
Accrued
expenses
|
53
|
|
(97)
|
Deferred
rent
|
(6)
|
|
(12)
|
Net cash used in
operating activities
|
(3,907)
|
|
(4,553)
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Proceeds received on
sale of securities held to maturity
|
-
|
|
2,608
|
Proceeds received on
sale of equipment
|
-
|
|
185
|
Purchase of property
and equipment
|
(47)
|
|
(102)
|
Net cash provided by
(used in) investing activities
|
(47)
|
|
2,691
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Repayments of notes
payable
|
(112)
|
|
(198)
|
Repayments of notes
payable, related parties
|
-
|
|
(9)
|
Repayments of capital
lease obligations
|
(38)
|
|
(36)
|
Proceeds from the
exercise of warrants
|
1,783
|
|
2,213
|
Payment of deferred
offering costs
|
-
|
|
(335)
|
Payment of employee
withholding taxes related to share-based awards
|
(24)
|
|
(27)
|
Net cash provided by
financing activities
|
1,609
|
|
1,608
|
|
|
|
|
NET CHANGE IN
CASH
|
(2,345)
|
|
(254)
|
CASH AT BEGINNING OF
PERIOD
|
4,920
|
|
2,101
|
CASH AT END OF
PERIOD
|
$
2,575
|
|
$
1,847
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
INFORMATION:
|
|
|
|
Interest
paid
|
$
24
|
|
$
44
|
Income taxes
paid
|
$
-
|
|
$
-
|
|
|
|
|
NON-CASH INVESTING
AND FINANCING ACTIVITIES:
|
|
|
|
Purchases of
equipment under capital lease obligations
|
$
-
|
|
$
10
|
Common stock issued
on accrued bonus
|
$
32
|
|
$
-
|
|
|
|
|
SENESTECH,
INC.
|
ITEMIZED
RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED
EBITDA
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2019 AND 2018
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
For the Three
Months
|
|
For the Six
Months
|
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net Loss (As
Reported, GAAP)
|
(2,289)
|
|
(4,113)
|
|
(4,653)
|
|
(6,778)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Interest and
dividends
|
-
|
|
21
|
|
(2)
|
|
37
|
|
Stock-based
compensation
|
219
|
|
2,037
|
|
471
|
|
2,735
|
|
Loss on sale of
assets
|
2
|
|
15
|
|
2
|
|
15
|
|
Gain on investments
held to maturity
|
-
|
|
(19)
|
|
-
|
|
(32)
|
|
Loss on early
extinguishment of debt
|
-
|
|
10
|
|
-
|
|
10
|
|
Change in fair value
of derivative
|
(4)
|
|
1
|
|
1
|
|
1
|
|
Amortization and
accretion:
|
|
|
|
|
|
|
|
|
|
Amortization of
discounts on investments held to maturity
|
-
|
|
-
|
|
-
|
|
5
|
|
Depreciation
expense
|
102
|
|
107
|
|
213
|
|
224
|
|
|
Total of non-GAAP
adjustments
|
319
|
|
2,172
|
|
685
|
|
2,995
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Loss
(Non-GAAP)
|
(1,970)
|
|
(1,941)
|
|
(3,968)
|
|
(3,783)
|
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SOURCE SenesTech, Inc.