Financial Performance Overview

SenesTech, a company focused on developing proprietary pest management technologies, has transformed from a research-focused organization into a revenue-driven company over the past year. The company’s current product offerings are centered around rat and mouse population management, including Evolve and ContraPest.

SenesTech’s strategy is focused on three key priorities: (1) strengthening its e-commerce business to build the Evolve brand, educate the market, and establish credibility for a new category of pest management products; (2) expanding its direct business-to-business (B2B) operations through a professional sales organization targeting specific vertical markets for both Evolve and ContraPest; and (3) increasing its market opportunity through strategic partnerships, new products, and value-added services.

During the quarter ended June 30, 2026, the company made meaningful progress executing this strategy. Key highlights include:

• Completed the transition of its Amazon and Shopify operations to direct management, improving gross margins
• Increased the contribution of Evolve to overall revenue
• Continued to expand its commercial infrastructure across multiple sales channels

Revenue and Profit Trends

SenesTech’s sales, net of discounts and promotions, were $770,000 for the second quarter of 2026, compared to $625,000 for the second quarter of 2025 - a 23% increase. For the six months ended June 30, 2026, sales were $1.3 million, compared to $1.1 million in the same period of 2025 - a 14% increase.

The increase in sales was primarily driven by higher sales of the company’s Evolve product offerings, reflecting continued growth in its e-commerce sales channels. Evolve represented approximately 86% of second quarter 2026 revenues, compared to 83% in the second quarter of 2025, and 85% of revenues for the six months ended June 30, 2026, compared to 81% in the same period of 2025.

The increase in Evolve sales was partially offset by lower ContraPest sales, which primarily occur through the company’s B2B sales channel. B2B sales were impacted by personnel turnover within the sales and marketing organizations during the first half of 2026, but SenesTech expects an increase in B2B sales, including increased ContraPest sales, as the transition is now complete.

Cost of sales was $203,000, or 26.4% of net sales, for the second quarter of 2026, compared to $216,000, or 34.6%, for the second quarter of 2025. For the six months ended June 30, 2026, cost of sales was $358,000, or 28.3% of net sales, compared to $388,000, or 35.0%, for the same period of 2025.

Gross profit for the second quarter of 2026 was $567,000, representing a margin of 73.6%, compared to $409,000, or 65.4%, in the second quarter of 2025. Gross profit for the six months ended June 30, 2026 was $905,000, representing a margin of 71.7%, compared to $722,000, or 65.0%, for the same period of 2025. The improvement in gross margins was primarily due to the transition to selling directly on Amazon, which began in February 2026 and was completed during the second quarter.

Strengths and Weaknesses

Strengths:

• Successful execution of commercialization strategy, including strengthening e-commerce business, expanding B2B operations, and increasing market opportunities
• Improved gross margins, particularly from the transition to direct Amazon sales
• Increased contribution of higher-margin Evolve product line to overall revenue
• Diversification of sales channels, reducing reliance on any single customer or distribution partner

Weaknesses:

• Continued operating losses, requiring additional financing to fund operations and growth
• Reliance on external financing to support business, as revenue growth has not yet reached profitability
• Turnover in sales and marketing personnel impacting B2B sales in the first half of 2026
• Incremental costs associated with transitioning Amazon and Shopify operations to direct management

Outlook and Future Prospects

SenesTech believes its integrated strategy of building consumer awareness, expanding commercial sales, and offering differentiated products and services positions the company for sustainable long-term growth. The operational progress achieved during the quarter, combined with continued commercialization investments, reinforces management’s confidence in the execution of its strategy.

However, the company will require additional financing to fund its ongoing operating losses and growth initiatives. Based on its current operating plan, SenesTech believes its cash and cash equivalents as of June 30, 2026, together with current revenues and operating expense levels, will be sufficient to fund operations through the end of the first quarter of fiscal 2027.

To extend its cash runway and achieve profitability, the company will need to continue growing revenues, reducing operating expenses, or obtaining additional financing through equity issuances, debt financings, strategic partnerships, or other external sources. There can be no assurance that such financing will be available on acceptable terms, if at all. Failure to obtain additional capital could have a material impact on the company’s business, results of operations, and financial condition.

Overall, SenesTech has made significant progress in executing its commercialization strategy, as evidenced by improved financial performance and operational milestones. However, the company’s long-term success will depend on its ability to achieve sustainable revenue growth, control costs, and secure the necessary financing to fund its operations and growth initiatives until it reaches profitability.