SenesTech Inc. (NASDAQ:SNES)
SenesTech Inc. (NASDAQ:SNES) felt the wrath of Wall Street after pricing an initial public offering of its common shares at a discount. Shares of the company fell 36.7% in Friday’s trading session to end the week at $0.86 a share.
SNES Public Offering
The sell-off follows the pricing of 5.4 million shares of common stock at $1 a share. The developer of proprietary technologies for managing animal pest populations has also granted underwriters warrants for the purchase of an additional 4 million shares. The warrants are priced at $1.50 a share.
SenesTech Inc. (NASDAQ:SNES) expects gross proceeds of $5.4 million from the offering before deduction of underwriting discounts, commissions, and other estimated offerings. The offering should close on or about November 21, 2017.
“SenesTech intends to use the net proceeds from the offering for working capital and general corporate purposes, including those related to the commercialization of ContraPest,” SenesTech In a statement.
The pricing of the offering at a discount appears to have spooked investors seen by the stock plunging to a new 52-week low of $0.86 a share. SenesTech is currently trading in a downtrend after underperforming the overall industry. The stock is down by more than 80% for the year as it continues to record lower lows.
SenesTech Widening Net Loss
The pricing of the public offering comes just days after SenesTech Inc. (NASDAQ:SNES) reported disappointing financial results for the third quarter. A wider than expected net loss of (-$2.9) million or (-$0.28) a share compared to a net loss of (-$2.7) million reported last year did not go well with investors.
Operating expenses in the quarter increased to $3 million from $2.8 million attributed to the expansion of product commercialization activities. SenesTech generated revenues of $17,000 in the quarter. The company has signed long-term sales commitments that have the potential to generate over $200,000 and an additional $250,000 of proposals outstanding.
SenesTech Inc. (NASDAQ:SNES) also has an ongoing pilot program with total sales opportunities of $2.4 million on full deployment. The company has also signed two national distribution agreement with Univar and Target specialty products
“These agreements will accelerate our introduction to the professional pest control market. We will be working to fill their initial stocking orders, and providing training and materials to their sales forces. Additionally, we have seen the sales funnel filling up in a variety of segments and markets, although the purchase decision cycle is slower than we expected,” said CEO, Loretta Mayer.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.