SenesTech Announces Warrant Exercise for $1.1 Million in Gross Proceeds

Rhea-AI Summary

SenesTech (NASDAQ: SNES) has announced warrant exercise agreements that will generate approximately $1.1 million in gross proceeds. The company, specializing in fertility control solutions for rodent populations, will allow the exercise of 374,718 outstanding warrants at a reduced price of $2.90 per share, down from the original $4.35.

As part of the transaction, SenesTech will issue new unregistered short-term warrants to purchase up to 1,498,872 shares at $2.90 per share, potentially generating an additional $4.3 million if fully exercised. These new warrants will be exercisable upon stockholder approval and expire 18 months thereafter. H.C. Wainwright is serving as the exclusive placement agent, with the transaction expected to close around March 11, 2025.

Positive

• Immediate capital raise of $1.1 million through warrant exercise
• Potential additional $4.3 million in proceeds if new warrants are fully exercised
• Registration statement already effective for resale of shares from existing warrants

Negative

• 33% reduction in warrant exercise price from $4.35 to $2.90 indicates potential share value decline
• Additional share issuance will lead to dilution for existing shareholders
• No guarantee that new warrants will be exercised, making the $4.3M potential proceeds uncertain

Insights

Financial Analyst

SenesTech's warrant exercise agreement provides $1.1 million in immediate capital, representing approximately 37% of the company's $3 million market cap - a substantial cash injection for this small-cap fertility control solutions provider.

The transaction structure reveals concerning elements that investors should note. The company had to reduce the warrant exercise price from $4.35 to $2.90 per share - a 33% discount and notably below the current $3.01 share price. This below-market pricing suggests urgency in capital raising efforts.

The dilutive impact is significant. The initial warrant exercise adds 374,718 shares, with potential for an additional 1,498,872 shares if the new warrants are fully exercised - potentially expanding the outstanding share count by over 50%.

The vague allocation of proceeds to "working capital and general corporate purposes" rather than specific growth initiatives raises questions about the company's immediate capital needs and operational burn rate. The requirement for stockholder approval also indicates the material nature of this financing action.

While the capital infusion provides necessary operating runway, the terms and structure suggest SenesTech faced financing options, potentially indicating cash flow concerns. The 18-month timeframe on the new warrants points to a medium-term financing strategy rather than a long-term solution.

PHOENIX, March 10, 2025 /PRNewswire/ -- SenesTech, Inc. (NASDAQ: SNES, "SenesTech" or the "Company"), a pioneer in fertility control solutions for managing rodent populations, announced today the entry into definitive agreements for the immediate exercise of certain outstanding warrants to purchase an aggregate of 374,718 shares of the Company's common stock originally issued by the Company on August 23, 2024, each having an original exercise price of $4.35 per share, at a reduced exercise price of $2.90 per share. In addition, the Company will issue new short-term warrants, as described below. The closing of the warrant exercise transaction is expected to occur on or about March 11, 2025, subject to Stockholder Approval (as defined herein) and satisfaction of customary closing conditions.

H.C. Wainwright is acting as the exclusive placement agent for the transaction.

The aggregate gross proceeds from the exercise of the existing warrants are expected to be approximately $1.1 million, before deducting placement agent fees and other offering expenses payable by the Company. The potential gross proceeds from the new short-term warrants, if fully exercised on a cash basis, will be approximately $4.3 million. No assurance can be given that any of the new short-term warrants will be exercised. The Company expects to use the net proceeds from the transaction for working capital and general corporate purposes.

The resale of the shares of common stock issuable upon the exercise of the existing warrants has been registered pursuant to an effective registration statement on Form S-3 (File No. 333-282286).

As consideration for the exercise of such existing warrants for cash, the Company will issue new unregistered short-term warrants to purchase up to an aggregate of 1,498,872 shares of common stock at an exercise price of $2.90 per share in a private placement, which will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares of common stock upon exercise of such warrants (the "Stockholder Approval") and will expire eighteen months following the date of the Stockholder Approval.

The new short-term warrants being offered have not been registered under the Securities Act of 1933, as amended, or under applicable state securities laws. Accordingly, the new short-term warrants and the shares of common stock issuable upon the exercise of the new short-term warrants may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act of 1933, as amended, and such applicable state securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About SenesTech

SenesTech is committed to creating healthier environments by humanely managing animal pest populations through fertility control. The company's groundbreaking products, including Evolve™ rodent birth control, integrate seamlessly into pest management programs, significantly enhancing their effectiveness while reducing reliance on traditional poisons. SenesTech's mission is to create cleaner cities, more efficient businesses, and healthier communities with products that are humane, effective, and sustainable.

For more information, visit https://senestech.com.

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Such forward-looking statements include, among others, the following: the satisfaction of customary closing conditions, the intended use of proceeds from the offering, the anticipated closing of the offering, the exercise of the new short-term warrants prior to their expiration and the receipt of Stockholder Approval. Forward-looking statements may describe future expectations, plans, results or strategies and are often, but not always, made through the use of words such as "believe," "may," "future," "plan," "will," "should," "expect," "anticipate," "eventually," "project," "estimate," "continuing," "intend" and similar words or phrases. You are cautioned that such statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, market and other conditions; the successful commercialization of our products; market acceptance of our products; our financial performance, including our ability to fund operations; our ability to maintain compliance with Nasdaq's continued listing requirements; and regulatory approval and regulation of our products and other factors and risks identified from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management's assumptions and estimates as of such date. Except as required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.

CONTACT: 

Investor Relations: Robert Blum, Lytham Partners, LLC, 602-889-9700, senestech@lythampartners.com

Company: Tom Chesterman, Chief Financial Officer, SenesTech, Inc., 928-779-4143

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SOURCE SenesTech, Inc.

FAQ

How much immediate capital will SNES raise from the warrant exercise?

SenesTech will raise approximately $1.1 million in gross proceeds from the immediate warrant exercise, before deducting placement agent fees and expenses.

What is the potential additional funding SNES could receive from the new warrants?

If all new short-term warrants are exercised, SNES could receive approximately $4.3 million in additional gross proceeds.

What is the new exercise price for SNES warrants compared to the original price?

The warrants' exercise price has been reduced from $4.35 to $2.90 per share.

When do the new SNES short-term warrants expire?

The new warrants will expire 18 months after receiving stockholder approval for the issuance of shares.