As filed with the U.S. Securities and Exchange Commission on September 21, 2016.

Registration No. 333-      

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

SENESTECH, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		2879		20-2079805
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

 

3140 N. Caden Court, Suite 1
Flagstaff, AZ 86004
(928) 779-4143

(Address, including zip code and telephone number, including area code, of registrant’s principal place of business)

 

Loretta P. Mayer, Ph.D.
Chair of the Board, Chief Executive Officer and Chief Scientific Officer
SenesTech, Inc.
3140 N. Caden Court, Suite 1
Flagstaff, AZ 86004
(928) 779-4143

(Name, address, including zip code and telephone number, including area code, of agent for service)

 

Copies to:

Andrew W. Shawber Laura A. Bertin Summit Law Group, PLLC 315 Fifth Ave South, Suite 1000 Seattle, Washington 98104 (206) 676-7000		Michael T. Raymond Bradley J. Wyatt Dickinson Wright PLLC 2600 W. Big Beaver Rd., Suite 300 Troy, Michigan 48084 (248) 433-7200

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o
Non-accelerated filer (Do not check if a smaller reporting company) o		Smaller reporting company x

 

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered		Proposed maximum aggregate offering price (1) (2)				Amount of registration fee (3)
Common Stock, $0.001 par value per share (4)		$	28,750,000			$	2,895.13
Underwriters’ Warrants to Purchase Common Stock (5)			—				—
Common Stock Underlying Underwriter Warrants, $0.001 par value per share (6)		$	3,000,000			$	302.10
Total Registration Fee:		$	31,750,000			$	3,197.23

(1)

Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Pursuant to Rule 416, the securities being registered hereunder include such indeterminate number of additional securities as may be issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3)

Calculated under Section 6(b) of the Securities Act of 1933 as .0001007 of the proposed maximum aggregate offering price.

(4)

Includes the aggregate offering price of additional shares that the underwriters have the right to purchase from the Registrant, if any.

(5)

In accordance with Rule 457(g) under the Securities Act, because the shares of the registrant’s common stock underlying the Underwriter Warrants are registered hereby, no separate registration fee is required with respect to the warrants registered hereby.

(6)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. We have agreed to issue warrants exercisable within five years after the effective date of this registration statement representing 10% of the securities issued in this offering, or Underwriters’ Warrants, to Roth Capital Partners, LLC. The warrants are exercisable at a per share exercise price equal to 120% of the public offering price. The initial issuance of the Underwriters’ Warrants and resales of shares of common stock issuable upon exercise of the Underwriter Warrants are registered hereby. See “Underwriting — Underwriters’ Warrants.”

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

TABLE OF CONTENTS

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Preliminary Prospectus		SUBJECT TO COMPLETION, DATED            , 2016

Shares

SenesTech, Inc.

Common Stock

We are offering     shares of our common stock. This is our initial public offering and no public market currently exists for our common stock. We expect the initial public offering price to be between $     and $     per share. We intend to apply to list our common stock on the NASDAQ Capital Market under the symbol “SNES.”

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933 and will be subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”

Investing in our common stock involves a high degree of risk. Please read “Risk Factors” beginning on page 12 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

		Per Share				Total
Public offering price		$				$
Underwriting discount (1)		$				$
Proceeds, before expenses, to us		$				$
Net proceeds to selling stockholders		$				$

We and the two selling stockholders, which include our chair of the board and chief executive officer, and our president and director, have granted the underwriters an option to purchase up to an additional     shares and     shares, respectively, at the initial public offering price less the underwriting discount. We will not receive any proceeds from any sale of shares by the selling stockholders.

TABLE OF CONTENTS

TABLE OF CONTENTS

		Page
Prospectus Summary			1
The Offering			7
Summary Financial Data			9
Risk Factors			12
Special Note Regarding Forward-Looking Statements and Industry Data			27
Use of Proceeds			28
Dividend Policy			29
Capitalization			30
Dilution			32
Selected Financial Data			35
Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Business			50
Management			67
Executive Compensation			73
Certain Relationships and Related Party Transactions			81
Principal and Selling Stockholders			83
Description of Capital Stock			85
Shares Eligible for Future Sale			90
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock			92
Underwriting			95
Legal Matters			100
Experts			100
Where You Can Find Additional Information			100
Index to Financial Statements			F-1

We and the selling stockholders have not authorized anyone to provide you with any information or to make any representation, other than those contained in this prospectus or any free writing prospectus we have prepared. We and the selling stockholders take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only in circumstances and in jurisdictions where it is lawful to so do. The information contained in this prospectus is accurate only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock.

Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

TABLE OF CONTENTS

TABLE OF CONTENTS

Our Solution — Fertility Control

Our fertility control product candidate, ContraPest, targets the reproductive capabilities of rodents by inducing the gradual loss of eggs in female rodents and disruption of sperm in male rodents, resulting in contraception that can progress to sterility in both females and males. By targeting rodent fertility, our solution is:

Proprietary Technology

Our intellectual property portfolio supporting ContraPest and other product candidates consists of nine international patent filings addressing the ContraPest compound, and another patent application directed to field use of the product. Any issued claims would have a patent term extending to 2033 or longer based on patent term determinations in each of the filing countries. We have filed a provisional patent covering our novel bait station device to effectively and efficiently deliver our rodent bait at individual bait sites that would, if issued, offer patent term protection through at least 2036. In addition, we utilize proprietary data and trade secrets to further protect our product candidates.

We have an exclusive patent license with the University of Arizona for background intellectual property that we plan to employ for future product development in the domestic animal fertility control market. The patent claims in the United States, Australia and New Zealand cover the use of the 4-vinylcyclohexene diepoxide to deplete ovarian follicles in individual mammals and mammal populations. The license agreement, signed in 2005, will terminate with the last to expire patent claims, which have a term extending to 2026.

Our Strategy

Our goal is to become a leader in fertility control technology designed to promote food security and reduce infrastructure damage, disease outbreaks, environmental contamination and other costs associated with pest infestations and poor animal health. Key elements of our strategy are:

TABLE OF CONTENTS

Our Third Party Relationships and Commercialization Plans

To date, we have entered into arrangements with the following manufacturing, marketing and distributions partners:

To date, we have not generated any revenue from product sales, but we currently expect to commercialize ContraPest and begin to generate revenue from the sale of products or through the payment of royalties by our strategic partners beginning in the fourth quarter of 2016. Specifically, we anticipate that sales of ContraPest will commence in North America in late 2016 through our distribution relationship with Neogen, and that we will begin receiving royalty payments from Neogen thereafter. Subject to obtaining necessary regulatory approvals, we also intend to market ContraPest in international jurisdictions, including India, Argentina and the EU, directly and through our existing and future strategic relationships. Target markets for ContraPest include municipalities (e.g., subways, transit systems and public housing agencies); agriculture (e.g., farms, storage facilities and protein production facilities (including cattle, sheep, pig and poultry facilities)); food production (e.g., factories, meat-packing facilities, dairy production plants and vegetable and fruit preparation facilities); and commercial (e.g., major restaurant chains, retail locations, casinos and hotels). In addition, we intend to approach large pest management companies to pursue potential partnerships for the distribution and sale of ContraPest.

Regulatory Strategy

While the EPA has granted us exclusive-use status for ContraPest, this approval was granted on a restricted-use basis, including indoor and limited outdoor use, and is based on a liquid formation. We intend to diligently pursue additional related regulatory approvals from the EPA to support our product evolution, including seeking approval for full outdoor use, removal of the restricted-use status, alternative formulations and for additional species (utilizing approved active ingredients). In addition, we believe that the EPA will support us in facilitating regulatory reviews outside of the U.S., and we are exploring a relationship with the

TABLE OF CONTENTS

Danish Environmental Protection Agency to assist us with obtaining regulatory approvals in the EU. See “Business — Government Regulation and Product Approval” for additional information.

Other Potential Products

We have developed a pipeline of potential additional fertility control and animal health products, with diverse applications, as outlined in the following chart:

Product Candidate/Area		Development Status		Segment		Primary Target
ContraPest		Environmental Protection Agency (EPA) granted registration approval for ContraPest effective August 2, 2016; to commercialize following approval		Population management		Rodents
Plant-based fertility control		Pilot studies have been completed; additional testing required for the use of this product to manage pest populations in select sites such as schools and hospitals		Population management		Rodents
Feral animal fertility control		Pilot studies are in process to show efficacy of this product candidate; to complete larger pivotal studies and regulatory submission		Population management		Feral dogs and hogs
Non-surgical spay and neutering		Pilot studies completed show encouraging signs of efficacy; to complete additional studies and regulatory submission		Companion animal health		Companion dogs and cats
Boar taint		Additional scientific and field studies and regulatory submission required		Food production and safety		Boars
Animal cancer treatment		Proof of concept study to be performed to determine whether proprietary formulation may provide effective delivery of triptolide to dogs for cancer therapy		Companion animal health		Companion dogs

TABLE OF CONTENTS

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, and therefore we have elected to comply with certain reduced disclosure and regulatory requirements for this prospectus and future filings, including only presenting two years of audited financial statements and related financial information, not having our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and not holding a nonbinding advisory vote on executive compensation and any golden parachute payments. We may take advantage of these reduced requirements until we are no longer an “emerging growth company.” Under Section 107(b) of the JOBS Act, “emerging growth companies” may take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

Corporate and Other Information

We were incorporated in Nevada in July 2004 and reincorporated in Delaware in November 2015. Our principal executive offices are located at 3140 N. Caden Court, Suite 1, Flagstaff, Arizona 86004, and our telephone number is (928) 779-4143. Our corporate website address is www.senestech.com . Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

This prospectus contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Prior to the consummation of this offering, we intend to conduct a reverse stock split to reduce the aggregate number of outstanding shares of common stock from 41,090,203 shares on a pre-reverse split basis to a total of 8,218,041 shares on a post-reverse split basis. As a result of the reverse stock split, every five shares of our common stock, either issued or outstanding, immediately prior to the filing and effectiveness of our amended and restated certificate of incorporation filed with the Secretary of State of the State of Delaware, will automatically be combined and converted (without any further act) into one share of fully paid and

TABLE OF CONTENTS

nonassessable shares of common stock, with resultant fractional shares rounded to the nearest whole number of shares (and no consideration paid therefor). The reverse stock split will have the effect of reducing the percentage of common stock to be held by our existing stockholders on a post-offering basis from    % to    % (which assumes that the underwriters do not exercise their over-allotment option to purchase additional common stock from us). In addition, the reverse stock split will have the effect of increasing the percentage of common stock to be held by investors in this offering on a post-offering basis from    % to    % (assuming that the underwriters do not exercise their over-allotment option to purchase additional common stock).

TABLE OF CONTENTS

TABLE OF CONTENTS

The number of shares of our common stock to be outstanding after this offering is based on 8,218,041 shares of common stock outstanding as of August 31, 2016 on a post-reverse split basis, which reflects and assumes the conversion of all outstanding shares of convertible preferred stock and excludes:

Unless otherwise indicated, all information contained in this prospectus assumes:

TABLE OF CONTENTS

Summary Financial Data

You should read this summary financial data below together with our financial statements and related notes, “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus. The summary financial data included in this section are not intended to replace our financial statements and related notes.

The summary statements of operations data for the years ended December 31, 2014 and 2015 are derived from our audited financial statements appearing elsewhere in this prospectus. The summary statements of operations data for the six months ended June 30, 2015 and 2016 and the summary balance sheet data as of June 30, 2016 are derived from our unaudited condensed financial statements appearing elsewhere in this prospectus. In our opinion, the unaudited condensed financial statements have been prepared on a basis consistent with our audited financial statements and include all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of such financial data. Our historical results are not necessarily indicative of the results that may be expected in the future and results of interim periods are not necessarily indicative of the results for the full year.

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
		(in thousands, except shares and per share data)
Statements of Operations Data:
Revenue:
License revenue		$	116			$	186			$	93			$	93
Other revenue			83				55				—				37
Total revenue			199				241				93				130
Operating expenses:
Research and development (1)			3,196				7,221				1,134				1,135
General and administrative (1)			2,700				8,665				1,276				3,327
Total operating expenses			5,896				15,886				2,410				4,462
Loss from operations			(5,697	)			(15,645	)			(2,317	)			(4,332	)
Interest expense			(342	)			(418	)			(300	)			(43	)
Interest expense, related parties			(290	)			(437	)			(48	)			(34	)
(Loss) gain on extinguishment of notes and convertible notes, related parties			(902	)			569				—				—
Loss on extinguishment of NAU promissory note			—				(1,530	)			—				—
Loss on extinguishment of other promissory notes			—				(34	)			(231	)			(112	)
Other income (expense)			31				(678	)			(48	)			51
Total other income (expense)			(1,503	)			(2,528	)			(627	)			(138	)
Net loss and comprehensive loss			(7,200	)			(18,173	)			(2,944	)			(4,470	)
Accruing Series A convertible preferred stock dividends			—				17				—				60
Net loss attributable to common stockholders		$	(7,200	)		$	(18,190	)		$	(2,944	)		$	(4,530	)
Loss per share attributable to common stockholders, basic and diluted, on a post-reverse split basis (2)		$	(2.11	)		$	(4.71	)		$	(0.81	)		$	(0.89	)
Weighted average post-reverse split common shares outstanding, basic and diluted (2)			3,399,655				3,852,349				3,640,793				5,080,762

TABLE OF CONTENTS

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
		(in thousands, except shares and per share data)
Pro forma data – (Unaudited)
Loss per share attributable to common stockholders, basic and diluted (2)						$								$
Weighted average common shares outstanding, basic and diluted (2)

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
Research and development		$	1,622			$	4,931			$	43			$	174
General and administrative			888				6,331				196				1,299
Total stock-based compensation		$	2,510			$	11,262			$	239			$	1,473

		As of June 30, 2016
		Actual				Pro Forma (1) (2)				Pro Forma As Adjusted (3)
		(Unaudited)
		(In thousands, except shares and per share data)
Balance Sheet Data:
Cash			3,316
Working capital			1,702
Total assets			4,511
Notes payable, related parties			46
Convertible notes payable, related parties			200
Debt, excluding notes and convertible notes, related parties			61
Total liabilities			1,906
Series A convertible preferred stock			4,380
Series B convertible preferred stock			3,748
Common stock			7
Additional paid-in capital			49,269
Accumulated other comprehensive income, Series A convertible preferred stock dividend			77
Stock subscribed but not issued			11
Accumulated deficit			(54,887	)
Total stockholders’ (deficit) equity			(5,523	)

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the value of our company could cause you to lose all or part of your investment.

We will require additional capital to fund our operations. Failure to obtain this necessary capital when needed may force us to delay, limit, or terminate our product development efforts or other operations.

Developing product candidates, including conducting experiments and field studies, obtaining and maintaining regulatory approval and commercializing any products later approved for sale, is a time-consuming, expensive and uncertain process that takes years to complete. We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we advance our commercialization activities.

We estimate that we will receive net proceeds from the sale of shares of our common stock in this offering of approximately $     million, or $    million if the underwriters exercise in full their option to purchase additional shares from us, assuming an initial public offering price of $    , which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Based upon our current operating plan, we expect that the net proceeds from this offering, together with our cash and cash equivalents of approximately $3.2 million as of June 30, 2016, will be sufficient to fund our current operations for at least the next 12 months. However, we plan to substantially 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 product candidates, including ContraPest. 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:

The occurrence of any of the events described above would have a material adverse effect on our business, operating results and prospects and on our ability to develop our product candidates.

If we are unable to continue as a going concern, our securities will have little or no value.

Although our audited financial statements for the year ended December 31, 2015 were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the year ended December 31, 2015 contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on the financial statements at that time. Specifically, as noted above, we have incurred operating losses since our inception, and we expect to continue to incur significant expenses and operating losses for the foreseeable future. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. In addition, as noted above, continued operations and our ability to continue as a going concern are dependent on our ability to obtain additional financing in the near future and thereafter, and there are no assurances that such financing will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. Although we have raised additional capital since December 31, 2015 through private offerings of our equity securities, if we are unable to generate additional funds in the future through financings, sales of our products, licensing fees, royalty payments, or from other sources or transactions, we will exhaust our resources and will be unable to continue operations. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us.

TABLE OF CONTENTS

Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs primarily through the sale of equity securities, debt financings, credit facilities and government and foundation grants. We may also seek to raise capital through third-party collaborations, strategic alliances and similar arrangements. We currently do not have any committed external source of funds. Raising funds in the future may present additional challenges and future financing may not be available in sufficient amounts or on terms acceptable to us, if at all. The terms of any financing arrangements we enter into may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible debt securities would dilute all of our stockholders. The incurrence of indebtedness through credit facilities would result in increased fixed payment obligations and, potentially, the imposition of restrictive covenants. Those covenants may include limitations on our ability to incur additional debt, making capital expenditures or declaring dividends, and may impose limitations on our ability to acquire, sell, or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements or other marketing or distribution arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to expand our operations or otherwise capitalize on our business opportunities, our business, financial condition and results of operations could be materially adversely affected. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts, or grant others rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Risks Relating to the Development and Regulatory Approval of Our Product Candidates

Our future success is dependent on the regulatory approval and commercialization of ContraPest and any of our other product candidates.

The EPA granted registration approval for ContraPest effective August 2, 2016, but we must still obtain applicable state approval and will also seek regulatory approval in other jurisdictions. As a result, our near-term prospects, including our ability to finance our operations and generate revenue, are substantially dependent on our ability to obtain sufficient regulatory approval for ContraPest, and, if approved, to successfully commercialize ContraPest. We cannot commercialize ContraPest or our other product candidates in the U.S. without first obtaining regulatory approval for each product and each use pattern from the EPA or, if applicable, the Food and Drug Administration, or FDA, and from any related applicable state authorities. Before obtaining regulatory approvals for the commercial sale of any ContraPest or our other product candidates for a target indication, the law requires that applicants demonstrate through laboratory and field studies and related data that the product candidate will perform its intended function without causing unreasonable adverse effects on the environment. The EPA or a comparable foreign regulatory authority may require more information, including additional data to support approval, that may delay or prevent approval.

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

Although we obtained EPA approval for ContraPest in less than one year, the EPA review process for a product with one or more new active ingredients typically takes approximately two years to complete and approval is never guaranteed. Our other product candidates could fail to receive marketing approval from the EPA or, with respect to ContraPest or our other product candidates, from a comparable foreign regulatory authority for many reasons, including:

TABLE OF CONTENTS

Any of these factors, some of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market ContraPest or any of our other product candidates. Any such setback in our pursuit of regulatory approval would have a material adverse effect on our business and prospects.

Even following receipt of any regulatory approval for ContraPest and our other product candidates, we will continue to face extensive regulatory requirements and our products may face future development and regulatory difficulties.

Even following receipt of any regulatory approval for ContraPest or our product candidates, such products will be subject to ongoing requirements by the EPA and comparable state and foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising, promotion, recordkeeping, and reporting of safety and other post-market information. The safety profile of any product will continue to be closely monitored by the EPA and comparable foreign regulatory authorities after approval. If the EPA or comparable foreign regulatory authorities become aware of new safety information after approval of ContraPest or any other product candidate, a number of potentially significant negative consequences could result, including:

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

Moreover, existing government regulations may change and additional government regulations may be enacted that could prevent, limit, or delay regulatory approval of ContraPest or any other product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and/or be subject to fines or enhanced government oversight and reporting obligations, which would adversely affect our business, prospects, and ability to achieve or sustain profitability.

TABLE OF CONTENTS

Even following receipt of any regulatory approval for ContraPest and our other product candidates, we will continue to be subject to regulation of our manufacturing processes and advertising practices.

Manufacturers of pest control products are subject to continual government oversight and periodic inspections by the EPA and other regulatory authorities. If we or a regulatory agency discover problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing until certain procedural requirements have been met. The occurrence of any such event or penalty could limit our ability to market ContraPest or any other product candidates and generate revenue.

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 approved uses, consistent with the product’s approved labeling. Advertising and promotion of any product candidate that obtains approval in the U.S. will be heavily scrutinized by the EPA, other applicable state regulatory agencies 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.

Failure to obtain regulatory approval in foreign jurisdictions would prevent ContraPest or any other product candidates from being marketed in those jurisdictions.

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. The time required to obtain approval may differ substantially from that required to obtain EPA approval. 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 ContraPest or for any of our other 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.

Risks Relating to Our Dependence on Third Parties

We do not currently have internal full-scale manufacturing capability and we must rely upon third parties to manufacture our products or develop our own full-scale manufacturing capability.

Our existing internal manufacturing platform is not yet ready for full-scale production, but is adequate for supporting field trials and to meet a surge in production. We would be required to spend significant time and resources to expand these manufacturing facilities to obtain full-scale production capabilities. We have entered into an agreement with Neogen to provide us with full-scale manufacturing capacities within the United States. We intend to develop our own full-scale manufacturing capabilities or enter into additional agreements with third parties to provide full-scale manufacturing capabilities outside the U.S. Our reliance on third parties for the manufacture of our products, investigational new products and, in the future, any approved products, creates a dependency that could severely disrupt our research and development, our product testing, and ultimately our sales and marketing efforts if the source of such supply proves to be unreliable or unavailable. If the contracted manufacturing source is unreliable or unavailable, or if we are unable to develop our own full-scale manufacturing capabilities, we may not be able to manufacture supplies of our products, and our entire business plan could fail. If we are able to commercialize our products in the future, there is no assurance that our manufacturers will be able to meet commercialized scale production requirements in a timely manner or in accordance with applicable standards.

If a current or future strategic partner terminates or fails to perform its obligations under an agreement with us, the development and commercialization of our product candidates could be delayed or terminated.

We are currently party to various production, marketing and distribution arrangements, including strategic partnership agreements with Neogen, Bioceres and NeoVenta. Partnership agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all. If our partners

TABLE OF CONTENTS

do not devote sufficient time and resources to their strategic arrangement with us, we may not realize the potential commercial benefits of the arrangement, and our results of operations may be materially adversely affected.

Much of the potential revenue from our strategic partnerships consists of contingent payments, such as payments for achieving regulatory milestones or royalties payable on sales of our products. The milestone and royalty revenue that we may receive under these partnerships will depend upon our partners’ ability and willingness to successfully develop, introduce, market and sell ContraPest and any other product candidates for which we receive regulatory approval. Our partners may fail to develop or effectively commercialize products using our products or technologies because they:

Competition for our products and market forces in general may negatively impact any of our partners’ focus on and commitment to our relationship and, as a result, could delay or otherwise negatively affect the commercialization of our products, which would have a material adverse effect on our operating results and financial condition.

We face a number of challenges in seeking future strategic partnerships. Strategic partnerships are complex and any potential discussions may not result in a definitive agreement for many reasons. For example, whether we reach a definitive agreement for a future partnership will depend, among other things, upon our assessment of the potential partner’s resources and expertise, the terms and conditions of the proposed partnership, and the proposed partnership’s evaluation of a number of factors, such as the design or results of our field studies, the potential market for our product candidates, the costs and complexities of manufacturing and delivering our product candidates to customers, the potential of competing products, the existence of uncertainty with respect to ownership or the coverage of our intellectual property, and industry and market conditions generally. If we determine that additional partnerships for our product candidates are necessary and are unable to enter into such partnerships on acceptable terms, we might elect to delay or scale back the development or commercialization of our product candidates in order to preserve our financial resources or to allow us adequate time to develop the required physical resources and systems and expertise ourselves.

Risks Relating to Commercialization of Our Product Candidates

ContraPest and our other product candidates, if approved, may not achieve adequate market acceptance necessary for commercial success.

Even following receipt of any regulatory approval for ContraPest or any of our other product candidates, such product(s) may not gain market acceptance. Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including:

TABLE OF CONTENTS

If any of our product candidates are approved but fail to achieve market acceptance, we will not be able to generate significant revenues, which would compromise our ability to become profitable. Furthermore, the commercial success of ContraPest will depend on a number of factors, including the following:

Many of these factors are beyond our control. If we are unable to successfully commercialize ContraPest, we may not be able to earn sufficient revenues to continue our business.

We have never marketed a product before, and if we are unable to establish 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 any revenue.

We do not currently have an infrastructure for the sales, marketing, and distribution of our products and the cost of establishing and maintaining such an infrastructure may exceed the cost-effectiveness of doing so. In order to market ContraPest and any other products that may be approved by the EPA and comparable foreign regulatory authorities, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for which we would incur substantial costs. If we are unable to establish adequate sales, marketing, and distribution capabilities, whether independently or with third parties, we may not be able to generate product revenue and may not become profitable. Without an internal commercial organization or the support of a third party to perform sales and marketing functions, we may be unable to compete successfully against more established companies.

Risks Relating to Our Business Operations and Industry

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 August 31, 2016, we had 22 full-time and four part-time employees. As our development and commercialization plans and strategies develop, or as a result of any as yet unforeseen acquisitions, we will need additional managerial, operational, sales, marketing, scientific, 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:

TABLE OF CONTENTS

Our failure to accomplish any of these tasks could prevent us from successfully growing our business.

We depend on key personnel to operate our business. If we are unable to retain, attract, and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed.

We believe that our future success is highly dependent on the contributions of our significant employees, as well as our ability to attract and retain highly skilled and experienced sales, research and development, and other personnel in the U.S. and abroad. All of our employees, including our co-founders (one of which is also our chief executive officer), are free to terminate their employment relationship with us at any time, subject to any applicable notice requirements, and their knowledge of our business and industry would be difficult to replace. If one or more of our co-founders, executive officers or significant employees terminates his or her employment or becomes disabled or experiences long-term illness, we may not be able to replace their expertise, fully integrate new personnel or replicate the prior working relationships, and the loss of their services might significantly delay or prevent the achievement of our research, development and business objectives. Qualified individuals with the breadth of skills and experience in our industry that we require are in high demand, and we may incur significant costs to attract them. Many of the other companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles, and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for career advancement. Additionally, our facilities are located in Arizona, which may make attracting and retaining qualified scientific and technical personnel from outside of Arizona difficult. Our failure to attract or retain key personnel could impede the achievement of our research, development, and commercialization objectives.

We have identified material weaknesses in our internal control over financial reporting. If we fail to remedy these material weaknesses and develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares.

We have identified material weaknesses in our internal control over financial reporting as of December 31, 2015. As defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, we had the following material weaknesses in our internal control over financial reporting: (i) a system of internal controls (including policies and procedures) has neither been designed nor implemented; (ii) a formal, internal accounting system has not been implemented to ensure accurate accounting for stock-based compensation, payroll accruals, trade payables, deferred revenue, proper cutoff of revenue and accounts receivable, debt discounts on convertible notes payable and related amortization, fixed asset depreciation, and gain/loss on debt settlement; and (iii) segregation of duties in the handling of cash, cash receipt and cash disbursement is not formalized.

As noted above, we have not yet designed or implemented effective internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementations could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act or any subsequent testing by our independent registered public accounting firm may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or significant deficiencies, or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

TABLE OF CONTENTS

We may be subject to legal proceedings in the ordinary course of our business that could result in significant harm to our business, financial condition and operating results.

We could be subject to legal proceedings and claims from time to time in the ordinary course of our business, including actions arising from tort, contract or other claims. Litigation is expensive, time consuming, and could divert management’s attention away from running our business. The outcome of litigation or other proceedings is subject to significant uncertainty, and it is possible that an adverse resolution of one or more such proceedings could result in reputational harm and/or significant monetary damages, injunctive relief or settlement costs that could adversely affect our results of operations or financial condition as well as our ability to conduct our business as it is presently being conducted. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not be available on terms acceptable to us. In addition, regardless of merit or outcome, claims brought against us that are uninsured or underinsured could result in unanticipated costs, which could harm our business, financial condition and operating results and reduce the trading price of our stock.

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

We face an inherent risk of product liability exposure related to the use of ContraPest and any of our other products. If we cannot successfully defend ourselves against claims from our product users, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

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 based on 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.

Business disruptions, including supply-chain disruptions, could seriously harm our future revenues and financial condition and increase our costs and expenses.

Our operations could be subject to a variety of potential business disruptions, including power shortages, telecommunications failures, water shortages, floods, fires, earthquakes, extreme weather conditions, medical epidemics and other natural or man-made disasters or other interruptions, for which we are predominantly self-insured. We do not carry insurance for all categories of risk that our business may encounter. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. Moreover, we rely on various third parties to supply various ingredients and other items which are critical for producing our product candidates. Our ability to produce our product candidates would be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption. The ultimate impact on our operations from any business interruption impacting us or any of our significant suppliers is unknown, but our operations and financial condition would likely suffer adverse consequences. Further, any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, results of operations, financial condition, and cash flows from future prospects.

TABLE OF CONTENTS

We are dependent on a key ingredient for ContraPest, triptolide, which has limited sources and must be in a very refined condition.

If we are unable to develop additional sources of triptolide, which is one of the key ingredients for ContraPest, the long term ability to produce ContraPest at a cost effective price could be in jeopardy; the limited sources could restrict our production if supplies were reduced; another use of the ingredient could cause the price to increase beyond our ability to market at a competitive price; and increased demand for the ingredient could cause the quality of the refined ingredient to be less than needed for our production.

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

We plan to seek regulatory approval of our product candidates outside of the U.S. and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

We are subject to anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business.

We are subject to the FCPA, which is the U.S. domestic bribery statute contained in 18 U.S.C. §201, the U.S. Travel Act, the USA PATRIOT Act and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. As we commercialize our product candidates and eventually commence international sales and business, we may engage with collaborators and third-party intermediaries to sell our products abroad and to obtain necessary permits, licenses and other regulatory approvals. We or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can

TABLE OF CONTENTS

be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.

Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences. Responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.

Risks Related to Protecting Our Intellectual Property

If we are unable to obtain or protect intellectual property rights, our competitive position could be harmed.

We depend on our ability to protect our proprietary technology. We rely on trade secret, patent, copyright and trademark laws, and confidentiality, licensing, and other agreements with employees and third parties, all of which offer only limited protection. Our commercial success will depend in part on our ability to obtain and maintain intellectual property protection in the United States and other countries with respect to our proprietary technology and products. Where we deem appropriate, we seek to protect our proprietary position by filing patent applications in the U.S. and abroad related to our novel technologies and products that are important to our business. Patent positions of companies generally are highly uncertain, involve complex legal and factual questions and have, in recent years, been the subject of much litigation. As a result, the issuance, scope, validity, enforceability, and commercial value of our patents, including those patent rights licensed to us by third parties, are highly uncertain.

The steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights, both inside and outside the U.S. The rights already granted under any of our currently issued patents and those that may be granted under future issued patents may not provide us with the proprietary protection or competitive advantages we are seeking. If we are unable to obtain and maintain protection for our technology and products, or if the scope of the protection obtained is not sufficient, our competitors could develop and commercialize technology and products similar or superior to ours, and our ability to successfully commercialize our technology and products may be adversely affected.

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, validity, 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. and abroad. 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, trademarks, and other intellectual property rights, is expensive, difficult, and in some cases, may not be possible. In some cases, it may be difficult or impossible to detect third-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.

TABLE OF CONTENTS

Intellectual property rights do not necessarily address all potential threats to any competitive advantage we may have.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

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

Third parties may in the future assert claims or initiate litigation related to their patent, copyright, trademark 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, 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, which are not necessarily predicable, 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 results, and financial condition could be materially adversely affected.

If our product candidates, methods, processes, and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to:

TABLE OF CONTENTS

We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

A third party may hold intellectual property, including patent rights that are important or necessary to the development of our product candidates. It may be necessary for us to use the patented or proprietary technology of a third party to manufacture or otherwise commercialize our own technology or products, in which case we would be required to obtain a license from such third party. Licensing such intellectual property may not be available or may not be available on commercially reasonable terms, which could have a material adverse effect on our business and financial condition.

Risks Related to This Offering and Owning Shares of Our Common Stock

Purchasers in the offering will suffer immediate dilution.

If you purchase common stock in this offering, the value of your shares based on our actual book value will immediately be less than the offering price you paid. This reduction in the value of your equity is known as dilution. Assuming an initial public offering price of        per share, which is the midpoint of the estimated price range set forth on the cover of this prospectus, purchasers of common stock in this offering will experience immediate dilution of approximately $       per share. Based upon the pro forma net tangible book value of our common stock at June 30, 2016, your shares may be worth less per share than the price you paid in the offering. If the options and warrants we previously granted are exercised, additional dilution will occur. As of August 31, 2016, options to purchase 1,345,300 shares of common stock at a weighted-average exercise price of $0.80 per share (in each case, on a post-reverse split basis) were outstanding, and warrants to purchase 759,519 shares of common stock at a weighted-average exercise price of $9.69 per share were outstanding (in each case, on a post-reverse split basis). Furthermore, if the underwriters exercise the warrants to be issued to them as compensation in connection with this offering or if we raise additional funding by issuing additional equity securities, the newly-issued shares will further dilute your percentage ownership of our shares and may also reduce the value of your investment.

Our share price may be volatile, which could subject us to securities class action litigation and prevent you from being able to sell your shares at or above the offering price.

Our stock could be subject to wide fluctuation in response to many risk factors listed in this section, and others beyond our control, including:

TABLE OF CONTENTS

Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of shares of our common stock. In addition, such fluctuations could subject us to securities class action litigation, which could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. If the market price of shares of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

There was no public market for our common stock prior to this offering, and an active market in the shares may not develop in which investors can resell our common stock.

Prior to this offering, there was no public market for our common stock. We cannot predict the extent to which an active market for our common stock will develop or be sustained after this offering, or how the development of such a market might affect the market price for our common stock. The initial public offering price of our common stock in this offering was agreed between us and the underwriter based on a number of factors, including market conditions in effect at the time of the offering, which may not be indicative of the price at which our common stock will trade following completion of the offering. Investors may not be able to sell their common stock at or above the initial public offering price.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. We cannot assure that analysts will cover us or provide favorable coverage. If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

We currently intend to allocate the net proceeds that we will receive from this offering as described below in the “Use of Proceeds” section of this prospectus. However, our management will have broad discretion in the actual application of the net proceeds, and we may elect to allocate proceeds differently from that described in the “Use of Proceeds” if we believe it would be in our best interests to do so. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. The failure by our management to apply these funds effectively could have a material adverse effect on our business. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Future sales, or the possibility of future sales, of a substantial number of our common shares could adversely affect the price of the shares and dilute stockholders.

Future sales of a substantial number of our common shares, or the perception that such sales will occur, could cause a decline in the market price of our common shares. Following the closing of this offering, we will have      common shares outstanding. This includes the common shares sold in this offering, which may be resold

TABLE OF CONTENTS

in the public market immediately without restriction, unless purchased by our affiliates. Approximately    % of the common shares outstanding after this offering is expected to be held by existing stockholders. Each of our directors and executive officers, the selling stockholders and substantially all of our other security holders will be subject to the lock-up agreements described in the “Shares Available for Future Sale” section of this prospectus. If, after the end of such lock-up agreements, these stockholders sell substantial amounts of common shares in the public market, or the market perceives that such sales may occur, the market price of our common shares and our ability to raise capital through an issue of equity securities in the future could be adversely affected.

In addition, in the future, we may issue additional common shares or other equity or debt securities convertible into common shares in connection with a financing, acquisition, litigation settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our common share price to decline.

We are an “emerging growth company” as that term is used in the JOBS Act, and we intend to take advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our common stock being less attractive to investors and adversely affect the market price of our common stock or make it more difficult to raise capital as and when we need it.

We are an “emerging growth company” as that term is used in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved, and exemptions from any rules that the Public Company Accounting Oversight Board may adopt requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements. We currently intend to take advantage of some, but not all, of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an “emerging growth company.” For example, so long as we qualify as an “emerging growth company,” we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would have otherwise been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate us.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company, which in certain circumstances could be for up to five years. See “Prospectus Summary-Implications of Being an Emerging Growth Company.”

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company,” we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our business, results of operations, financial condition and cash flows, and future prospects may be materially and adversely affected.

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

CAPITALIZATION

The following table sets forth our capitalization at June 30, 2016, as follows:

•

On an actual basis.

•

On a pro forma basis to assume (i) the conversion of all outstanding shares of Series A convertible preferred stock into 400,000 shares of our common stock on a post-reverse split basis upon the closing of the IPO as the holder of the Series A convertible preferred stock has agreed to waive all accrued dividends on the Series A convertible preferred stock and convert all of its shares of Series A convertible preferred stock in connection with the IPO and (ii) the automatic conversion of all outstanding shares of Series B convertible preferred stock, including the receipt of net proceeds of $224,970 from 29,028 shares of Series B convertible preferred stock sold and issued in April 2016 into 483,609 shares of our common stock upon the closing of the IPO, in each case, on a post-reverse split basis.

•

On a pro forma basis to also reflect the aggregate consideration received of $6.2 million from 2,478,486 shares of common stock (on a post-reverse split basis) issued in the Rights Offering that closed in May 2016 and the repayment of the outstanding balance under the Revised Note, plus accrued and unpaid interest, totaling $381,749 as of June 30, 2016, as the consummation of the Rights Offering triggered an acceleration of the amounts due under the Revised Note. See Notes 7 and 16 to our audited financial statements and Notes 5 and 11 to our unaudited condensed financial statements included elsewhere in this prospectus for a description of the Rights Offering and Revised Note.

•

On a pro forma as adjusted basis to additionally reflect (i) the sale of     shares of our common stock in this offering at an assumed initial public offering price of $     per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us; and (ii) a cash payment by us in the amount of approximately $161,000 to the holder of our Series A convertible preferred stock for its agreement to waive all accrued dividends on the Series A convertible preferred stock and convert all of its shares of Series A convertible preferred stock into common stock immediately prior to the consummation of this offering, the exact amount of which will be determined at the time of conversion of such shares in connection with this offering.

You should read this information together with our financial statements and related notes, “Summary Financial Data, “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information, all included elsewhere in this prospectus.

As of June 30, 2016

(Unaudited)

Actual

Pro Forma

Pro Forma, As Adjusted

(In thousands, except shares and per share data)

Long-term debt (including current portion):

Notes payable, related parties

46

Convertible notes payable, related parties

200

Long-term debt

61

307

Series A Convertible Preferred Stock, $0.001 par value; 2,000,000 shares authorized, actual; 400,000 post-reverse split shares issued and outstanding, actual; liquidation preference of $2,074 at June 30, 2016; none issued and outstanding, for pro forma and pro forma, as adjusted

4,380

Series B Convertible Preferred Stock, $0.001 par value; 7,515,000 post-reverse split shares authorized, actual; 483,609 post-reverse split shares issued and outstanding, actual; none issued and outstanding, for pro forma and pro forma, as adjusted

3,748

TABLE OF CONTENTS

		As of June 30, 2016
		(Unaudited)
		Actual				Pro Forma				Pro Forma, As Adjusted
		(In thousands, except shares and per share data)
Stockholders' Equity (Deficit) (1)
Common Stock, $0.001 par value, 100,000,000 shares authorized, actual; 6,994,320 post-reverse split shares issued and outstanding, actual;      shares issued and outstanding, pro forma;      shares issued and outstanding, pro forma as adjusted			7
Additional paid-in capital			49,269
Accumulated other comprehensive income, Series A convertible preferred stock dividend			77
Stock subscribed but not issued			11
Retained earnings (accumulated deficit)			(54,887	)
Total stockholders' (deficit) equity			(5,523	)
Total capitalization		$	2,912

The number of shares of common stock in the table above excludes:

TABLE OF CONTENTS

TABLE OF CONTENTS

The following table illustrates this dilution on a per share basis to new investors:

Assumed initial public offering price per share		$
Historical net tangible book value (deficit) per share as of June 30, 2016		$	(1.09	)
Pro forma increase in net tangible book value per share attributable to the pro forma transactions described in the above paragraph
Pro forma net tangible book value per share, before giving effect to this offering
Increase in pro forma net tangible book value per share attributable to new investors purchasing shares in this offering
Pro forma as adjusted net tangible book value per share, after this offering
Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering		$

Each $1.00 increase (decrease) in the assumed initial public offering price of $    per share would increase (decrease) the pro forma net tangible book value, as adjusted to give effect to this offering, by $    per share and the dilution to new investors $    per share, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of our common stock offered would increase (decrease) the pro forma net tangible book value, as adjusted to give effect to this offering, by approximately $    per share and the dilution to new investors by $    per share assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise in full their option to purchase additional shares of our common stock from us, the pro forma net tangible book value per share, as adjusted to give effect to the offering, would be $    per share, and the dilution in pro forma net tangible book value per share to new investors participating in this offering would be $    per share.

The following table presents, on a pro forma as adjusted basis as of June 30, 2016, the differences between the number of common shares purchased from us, the total consideration paid or to be paid to us, and the average price per share paid or to be paid to us by existing shareholders and the new investors purchasing common stock in this offering at an initial public offering price of $     per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

		Shares Purchased								Total Consideration								Average Price Per Share
		Number				Percent				Amount				Percent
Existing stockholders								%		$						%		$
New investors
Totals							100.0	%		$					100.0	%		$

If the underwriters exercise in full their option to purchase additional shares of our common stock from us, our existing stockholders would own     % and our new investors would own     % of the total number of shares of our common stock outstanding upon completion of this offering. In this event, the total consideration paid by our existing stockholders would be approximately $    million, or     % and the total consideration paid by our new investors would be $     million, or     %.

TABLE OF CONTENTS

The foregoing tables and calculations as of June 30, 2016 exclude the following potentially dilutive shares of common stock:

To the extent that any outstanding common stock options and common stock warrants are exercised or there are additional issuances of common stock options, common stock warrants or shares of our common stock in the future, there will be further dilution to investors participating in this offering.

TABLE OF CONTENTS

SELECTED FINANCIAL DATA

You should read this selected financial data below together with our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus. The selected financial data included in this section are not intended to replace our financial statements and related notes.

The statements of operations data for the years ended December 31, 2014 and 2015 and balance sheet data as of December 31, 2014 and 2015 are derived from our audited financial statements appearing elsewhere in this prospectus. The statements of operations data for the six months ended June 30, 2015 and 2016 and the balance sheet data as of June 30, 2016 are derived from our unaudited condensed financial statements appearing elsewhere in this prospectus. In our opinion, the unaudited condensed financial statements have been prepared on a basis consistent with our audited financial statements and include all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of such financial data. Our historical results are not necessarily indicative of the results that may be expected in the future and results of interim periods are not necessarily indicative of the results for the full year.

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
		(in thousands, except shares and per share data)
Statements of Operations Data:
Revenue:
License revenue		$	116			$	186			$	93			$	93
Other revenue			83				55				—				37
Total revenue			199				241				93				130
Operating expenses:
Research and development (1)			3,196				7,221				1,134				1,135
General and administrative (1)			2,700				8,665				1,276				3,327
Total operating expenses			5,896				15,886				2,410				4,662
Loss from operations			(5,697	)			(15,645	)			(2,317	)			(4,332	)
Interest expense			(342	)			(418	)			(300	)			(43	)
Interest expense, related parties			(290	)			(437	)			(48	)			(34	)
(Loss) gain on extinguishment of notes and convertible notes, related parties			(902	)			569				—				—
Loss on extinguishment of NAU promissory note			—				(1,530	)			—				—
Loss on extinguishment of other promissory notes			—				(34	)			(231	)			(112	)
Other income (expense)			31				(678	)			(48	)			51
Total other income (expense)			(1,503	)			(2,528	)			(627	)			(138	)
Net loss and comprehensive loss		$	(7,200	)		$	(18,173	)		$	(2,944	)		$	(4,470	)
Accruing Series A convertible preferred stock dividends			—				17				—				60
Net loss attributable to common stockholders		$	(7,200	)		$	(18,190	)		$	(2,944	)		$	(4,530	)
Loss per share attributable to common stockholders, basic and diluted (2)		$	(2.11	)		$	(4.71	)		$	(0.81	)		$	(0.89	)
Weighted average common shares outstanding, basic and diluted (2)			3,399,655				3,852,349				3,640,793				5,080,762

TABLE OF CONTENTS

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
		(in thousands, except shares and per share data)
Pro forma data – (Unaudited)
Loss per share attributable to common stockholders, basic and diluted (2)						$								$
Weighted average common shares outstanding, basic and diluted (2)

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
										(Unaudited)
Research and development		$	1,622			$	4,931			$	43			$	174
General and administrative			888				6,331				196				1,299
Total stock-based compensation		$	2,510			$	11,262			$	239			$	1,473

		As of December 31,								As of June 30,
		2014				2015				2016
										(Unaudited)
		(In thousands, except share and per share data)
Balance Sheet Data:
Cash		$	821			$	141			$	3,316
Working capital			(3,905	)			(2,022	)			1,702
Total assets			1,529				941				4,511
Notes payable, related parties			345				496				46
Convertible notes payable, related parties			873				200				200
Debt, excluding notes and convertible notes, related parties			1,943				477				61
Total liabilities			7,253				4,787				1,906
Series A convertible preferred stock			—				4,380				4,380
Series B convertible preferred stock			—				3,096				3,748
Common stock			4				4				7
Additional paid-in capital			26,267				39,000				49,269
Accumulated other comprehensive income, Series A convertible preferred stock dividend			—				17				77
Stock subscribed but not issued			158				14				11
Accumulated deficit			(32,167	)			(50,340	)			(54,887	)
Total stockholders’ deficit			(5,724	)			(11,322	)			(5,523	)

TABLE OF CONTENTS

TABLE OF CONTENTS

As a result, a significant portion of our operating expenses includes stock-based compensation expense. Stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. Specifically, our stock-based compensation expense for the year ended December 31, 2015 and the six months ended June 30, 2016 was $11.3 million and $1.5 million, respectively, which represented 70.9% and 33.0%, respectively, of our total operating expenses for those periods.

We intend to use the net proceeds of this offering as follows:

The expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures will depend on numerous factors, including the progress of our product development efforts and market acceptance of our products. As a result, our management will have broad discretion in applying the net proceeds from this offering. Pending the use of proceeds described above, we intend to invest the net proceeds from this offering in interest-bearing, investment-grade securities.

We believe that the net proceeds from this offering, together with our existing cash resources, will be sufficient to enable us to fund our operations for at least 12 months following the completion of this offering, including funding the commercial launch of our first product candidate, ContraPest. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

Components of our Results of Operations

Revenue

To date, we have not generated any revenue from product sales, but we currently expect to generate revenue from the sale of products or royalties beginning in the fourth quarter of 2016. All of our revenue to date has been derived from payments received in connection with research grants and licensing fees received as a result of our execution of the license agreement with Neogen.

We recognized revenue of $83,000 and $55,000 for the years ended December 31, 2014 and 2015, respectively, and $37,000 for the six months ended June 30, 2016. In addition, under our license agreement with Neogen, we recognized revenue of $116,000 and $186,000 for the years ended December 31, 2014 and 2015, respectively, and $93,000 for the six months ended June 30, 2016. We anticipate minimal additional grant revenue under the NIH grants, but will continue to recognize $46,000 in revenue for each remaining quarter in 2016 under our license agreement with Neogen.

TABLE OF CONTENTS

TABLE OF CONTENTS

Income Taxes

Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from those items. As of December 31, 2015, we had federal and state net operating loss carryforwards of $28.0 million and $17.0 million, respectively, which begin to expire in 2021 and 2016, respectively, unless previously utilized.

Results of Operations

Comparison of the Six Months Ended June 30, 2015 and 2016

The following table summarizes our results of operations for the six months ended June 30, 2015 and 2016:

		Six Months Ended June 30,
		2015				2016
		(in thousands)
Revenue		$	93			$	130
Operating expenses:
Research and development			1,134				1,135
General and administrative			1,276				3,327
Total operating expenses			2,410				4,462
Loss from operations			(2,317	)			(4,332	)
Interest income			—				—
Interest expense			(348	)			(77	)
Loss on extinguishment debt			(231	)			(112	)
Other income (expense), net			(48	)			51
Net loss		$	(2,944	)		$	(4,470	)

Revenue

Revenue was $93,000 for the six months ended June 30, 2015 and $130,000 for the six months ended June 30, 2016. The increase of $37,000 was primarily a result of increased billings for services provided by us under the grant agreements, such as site evaluation, baiting and data collection and analysis.

Revenue earned under our license agreement with Neogen for the achievement of milestones and tasks under such license agreement was $93,000 for each of the six months ended June 30, 2015 and 2016.

Research and Development Expenses

		Six Months Ended June 30,								Increase (Decrease)
		2015				2016
		(in thousands)
Direct research and development expenses:
Unallocated expenses:
Personnel related (including stock-based compensation)			573				682				109
Facility related			98				106				8
Other			463				347				(116	)
Total research and development expenses		$	1,134			$	1,135			$	1

Research and development expenses were $1,134,000 for the six months ended June 30, 2015, compared to $1,135,000 for the six months ended June 30, 2016. Increases in personnel-related costs for the six months ended June 30, 2016 as compared to the same period in the prior year related primarily to additional stock-based compensation of $131,000 and increases in professional services, rent and utilities of $66,000, $5,000 and $3,000, respectively, offset by lower manufacturing costs of $204,000 due primarily to decreased costs associated with our bait-box design, supplies and other production costs. While we do not track research

TABLE OF CONTENTS

and development expenses on a project-by-project basis, the majority of our research and development efforts in 2015 and early 2016 were focused on pursuing regulatory approval of ContraPest. This effort included conducting and analyzing field studies and laboratory tests, and preparing the regulatory filing for ContraPest, which was completed in August 2015. To a lesser extent, we continue to investigate other applications of our core technology for other product candidates, which includes laboratory tests and academic collaborations. Finally, we also continue to develop our supply chain, particularly identifying and improving our sourcing of triptolide, a key active ingredient for our product candidates.

General and Administrative Expenses

General and administrative expenses were $1.3 million for the six months ended June 30, 2015, compared to $3.3 million for the same period in 2016. The increase of $2.0 million in general and administrative expenses was due to an increase in personnel-related costs of $1.6 million including $452,000 in additional salary costs and $1.1 million in stock-based compensation, $406,000 in increased legal, accounting and audit-related fees including $300,000 relating to stock issued to a former chief executive officer in resolution of a dispute and $96,000 in additional year over year travel related expenses.

Interest Expense

We recorded $348,000 of interest expense for the six months ended June 30, 2015, compared to $77,000 for the same period in 2016. The decrease was the result of interest accrued during the six months ended June 30, 2015 on the principal amount of our convertible promissory notes issued during 2015, prior to the exchange of these convertible promissory notes and accrued interest thereon into shares of Series B convertible preferred stock in December 2015.

Comparison of the Years December 31, 2014 and 2015

The following table summarizes our results of operations for the years ended December 31, 2014 and 2015:

		Year Ended December 31,
		2014				2015
		(in thousands)
Revenue		$	199			$	241
Operating expenses:
Research and development			3,196				7,221
General and administrative			2,700				8,665
Total operating expenses			5,896				15,886
Loss from operations			(5,697	)			(15,645	)
Interest expense			(632	)			(626	)
Loss on extinguishment debt			(902	)			(1,224	)
Other income (expense), net			31				(678	)
Net loss		$	(7,200	)		$	(18,173	)

Revenue

Revenue was $199,000 for the year ended December 31, 2014, compared to $241,000 for the year ended December 31, 2015.

We recognized revenue of $83,000 and $55,000 for the years ended December 31, 2014 and 2015, respectively, as a result of the services performed.

Under our license agreement with Neogen, we recognized revenue of $116,000 and $186,000 for the years ended December 31, 2014 and 2015, respectively. The increase in revenue from the licensing agreements was the result of the timing of our execution of such agreement and our related recognition of such revenue.

TABLE OF CONTENTS

Research and Development Expenses

		Year Ended December 31,								Increase (Decrease)
		2014				2015
		(in thousands)
Direct research and development expenses:
Unallocated expenses:
Personnel related (including stock-based compensation)		$	2,404			$	5,965			$	3,561
Facility related			157				190				33
Other			635				1,066				431
Total research and development expenses		$	3,196			$	7,221			$	4,025

Research and development expenses were $3.2 million for the year ended December 31, 2014, compared to $7.2 million for the year ended December 31, 2015. The $4.0 million increase in research and development expenses was primarily due to an increase of $3.6 million in personnel-related costs. This increase in personnel-related costs resulted from additional stock-based compensation expense of $3.3 million and increased research and development salaries of $253,000 due to three headcount additions in 2015. Manufacturing costs increased from $91,000 for the year ended December 31, 2014 to $310,000 for the year ended December 31, 2015. This $219,000 increase was primarily associated with increased bait-box design and production costs during 2015. Further, facility-related and other general research and development expenses for activities not directly associated with our principal research and development programs increased by $229,000 during 2015 as a result of a $105,000 increase in depreciation expense for our laboratory equipment, a $64,000 increase in consulting expenses and a $60,000 increase in non-rent occupancy costs and supplies.

While we do not track research and development expenses on a project-by-project basis, the majority of our research and development efforts in 2015 were focused on pursuing regulatory approval of ContraPest. This effort included conducting and analyzing field studies and laboratory tests, and preparing the regulatory filing for ContraPest, which was completed in August 2015. To a lesser extent, we continue to investigate other applications of our core technology to other product candidates, which includes laboratory tests and academic collaborations. Finally, we also continue to develop our supply chain, particularly identifying and improving our sourcing of triptolide, a key active ingredient for our product candidates.

General and Administrative Expenses

General and administrative expenses were $2.7 million for the year ended December 31, 2014, compared to $8.6 million for the year ended December 31, 2015. The increase of $5.9 million in general and administrative expenses was due to an increase of $384,000 in legal, accounting and audit-related fees and an increase of $5.5 million in personnel-related costs, including $270,000 in additional salary costs and $5.2 million in stock-based compensation expense during 2015.

Interest Expense

We recorded $632,000 of interest expense for the year ended December 31, 2014, compared to $626,000 for the year ended December 31, 2015. Interest expense consists primarily of interest accrued on $2.9 million in convertible and other promissory notes we issued during 2014 and 2015 that were exchanged for Series B convertible preferred stock in December 2015.

Other Income (Expense), Net

We recorded $31,000 of other income, net for the year ended December 31, 2014, compared to $678,000 for the year ended December 31, 2015. The $709,000 net increase in other expense was primarily due to the expense related to the year-over-year fair market value adjustment of our convertible promissory notes.

TABLE OF CONTENTS

TABLE OF CONTENTS

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

		Year Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
		(in thousands)
Cash used in operating activities		$	(2,527	)		$	(3,666	)		$	(1,991	)		$	(2,740	)
Cash used in investing activities			(614	)			(130	)			(117	)			(45	)
Cash provided by financing activities			3,820				3,116				1,405				5,960
Net increase (decrease) in cash and cash equivalents		$	679			$	(680	)		$	(703	)		$	3,175

Operating Activities .

During the six months ended June 30, 2016, operating activities used $2.7 million of cash, primarily resulting from our net loss of $4.5 million, partially offset by non-cash charges of $2.0 million and by cash provided by changes in our operating assets and liabilities of $225,000. Our net loss was primarily attributed to research and development activities and our general and administrative expenses, as we generated limited research grant and licensing revenue during the period. Net cash provided by changes in our operating assets and liabilities for the six months ended June 30, 2016 consisted primarily of a $93,000 decrease in deferred revenue related to our license agreement with Neogen and a $132,000 decrease in accrued expenses and accounts payable. The decrease in accrued expenses and accounts payable was due to increased payments as a result of the receipt of cash raised in financing activities.

During the six months ended June 30, 2015, operating activities used $2.0 million of cash, resulting from our net loss of $2.9 million partially offset by non-cash charges of $714,000 and by cash provided by changes in our operating assets and liabilities of $239,000. Our net loss was primarily attributed to research and development activities and our general and administrative expenses, as we generated limited research grant and licensing revenue during the period. Net cash used by changes in our operating assets and liabilities during the six months ended June 30, 2015 consisted primarily of a $93,000 decrease in deferred revenue related to our license agreement with Neogen offset by a decrease in accounts receivable and prepaid expenses of $37,000 and a $295,000 increase in accounts payable and accrued expenses. The increase in accrued expenses was due primarily to the timing of payments under our research and development programs.

During the year ended December 31, 2015, operating activities used $3.7 million of cash, primarily resulting from our net loss of $18.2 million, partially offset by non-cash charges of $13.9 million and by cash provided by changes in our operating assets and liabilities of $646,000. Our net loss was primarily attributed to research and development activities and our general and administrative expenses, as we generated limited research grant and licensing revenue during the year. Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2015 consisted primarily of a $151,000 decrease in deferred revenue related to our license agreement with Neogen offset by a $779,000 increase in accounts payable and accrued expenses and a decrease of accounts receivable of $18,000. The increase in accounts payable and accrued expenses was due to increased spending associated with research and development programs as well as the timing of vendor invoicing and payments.

During the year ended December 31, 2014, operating activities used $2.5 million of cash, primarily resulting from our net loss of $7.2 million, partially offset by non-cash charges of $4.5 million and by cash provided by

TABLE OF CONTENTS

changes in our operating assets and liabilities of $182,000. Our net loss was primarily attributed to research and development activities and our general and administrative expenses, as we generated limited research grant and licensing revenue during the year. Net cash provided by changes in our operating assets and liabilities during the year ended December 31, 2014 consisted primarily of a $200,000 increase in accounts payable and accrued expenses offset by increases to our accounts receivable and prepaid assets of $64,000. The increase in accounts payable and accrued expenses was due primarily to an increase in spending associated with research and development programs as well as the timing of vendor invoicing and payments.

Investing Activities.

During the six months ended June 30, 2016 and June 30, 2015, we used $45,000 and $117,000, respectively, of cash in investing activities, in each case consisting of purchases of property and equipment.

During the year ended December 31, 2015 and December 31, 2014, we used $130,000 and $614,000, respectively, of cash in investing activities, in each case consisting of purchases of property and equipment.

Financing Activities.

During the six months ended June 30, 2016, net cash provided by financing activities was $6.0 million as a result of $6.2 million of proceeds from the issuance of shares of common stock in our rights offering discussed elsewhere in this document, $436,000 of proceeds received from our issuance of notes payable, $896,000 of proceeds received from the issuance of Series B convertible preferred stock, and $410,000 of proceeds received from the exercise of stock options, all of which were partially offset by payments of $1.4 related to the notes, payable, notes payable related party and convertible notes payable, $10,000 of capital lease repayments and $444,000 of deferred offering cost payments.

During the six months ended June 30, 2015, net cash provided by financing activities was $1.4 million, primarily as a result of $1.5 million of proceeds received from our issuance of related party convertible promissory notes and convertible notes, partially offset by $44,000 of repayments of convertible and non-convertible promissory notes and payments under our capital lease obligations.

During the year ended December 31, 2015, net cash provided by financing activities was $3.2 million as a result of $3.1 million of proceeds received from our issuance of related party convertible and other promissory notes, $155,000 of proceeds received from the issuance of Series B convertible preferred stock, and $56,000 of proceeds received from the exercise of stock options, all of which were partially offset by payments of $132,000 related to the issuance costs for the convertible promissory notes and $100,000 in repayments of notes payable balances.

During the year ended December 31, 2014, net cash provided by financing activities was $3.8 million as a result of $834,000 of proceeds received from our issuance of convertible promissory notes and $3.1 million of proceeds received from the issuance of common stock, all of which were partially offset by $119,000 in repayments of notes payable balances and payments under our capital lease obligations.

Recent Developments

We have identified material weaknesses in our internal control over financial reporting as of December 31, 2015. See “Risk Factors —  We have identified material weaknesses in our internal control over financial reporting. If we fail to remedy these material weaknesses and develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares. ” While we have not yet designed or implemented effective internal control over financial reporting, we expect to develop and implement on or before March 31, 2017 a plan to address the material weaknesses described in the above referenced Risk Factor, including a fully documented system of internal controls with specific policies and procedures surrounding accurate and timely financial reporting, effective segregation of duties, and the timely and accurate accounting for all transactions of our business that ensures the safeguarding of our assets.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of our financial statements and related disclosures requires us to

TABLE OF CONTENTS

make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our audited financial statements included elsewhere in this prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

We recognize revenue in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”), Topic 605, Revenue Recognition . Accordingly, we recognize revenue from our licensing agreements and contracts to perform pilot studies when (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

We have generated revenue from a license agreement with a strategic partner pursuant to which we have granted to such partner an exclusive license in North America to manufacture, distribute and sell commercial control products based on our intellectual property, which includes ContraPest, for the later of 10 years or the expiration of the patent for ContraPest (if issued).

When we receive non-refundable, upfront license fee payments for the exclusive rights to licensing our intellectual property, management determines if such license has stand-alone value. Since management determined that the license to our intellectual property did not have stand-alone value, we recognize revenue attributable to that license on a straight-line basis over the estimated related performance period. Any changes in the estimated period of performance will be accounted for prospectively as a change in estimate.

Our licensing agreement also provides for a future fixed amount of contingent milestone payments and contingent sales-based royalties to be received upon the achievement of milestone events. We recognize revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved and the milestone payments are due and collectible. A milestone is considered substantive when the consideration payable to us for such milestone has all of the following characteristics: (1) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved; (2) the event can only be achieved based in whole or part on either our performance or a specific outcome resulting from our performance; and (3) if achieved, the event would result in additional payments being due to us. In making this assessment in the future, we will consider all facts and circumstances relevant to the arrangement, including whether any portion of the milestone consideration is related to future performance or deliverables. In addition, we will account for sales-based royalties as revenue upon achievement of certain sales milestones.

Stock-Based Compensation

We recognize compensation costs related to stock options granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures, in accordance with ASC Topic 718 —  Stock Compensation (“ASC 718”). We estimate the grant date fair value of the awards, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of stock-based awards is expensed on a straight-line basis over the vesting period of the respective award. We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these stock options is measured using the Black-Scholes option-pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option. The fair value of the stock options granted to non-employees is re-measured as the stock options vest and is recognized in the statements of operations and comprehensive loss during the period the related services are rendered.

TABLE OF CONTENTS

We recorded stock-based compensation expense of approximately $2.5 million and $11.3 million for the years ended December 31, 2014 and 2015, respectively, and $1.5 for the six months ended June 30, 2016. We expect to continue to grant stock options and other equity-based awards in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase.

The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards. If we had made different assumptions, our stock-based compensation expense, net loss and loss per share of common stock could have been significantly different. Our assumptions are as follows:

Significant Factors, Assumptions and Methodologies Used in Determining Fair Value of Our Common Stock

As noted above, we are required to estimate the fair value of the common stock underlying our stock-based awards when performing the fair value calculations using the Black-Scholes option-pricing model. In the absence of an active market for our common stock, we utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of our common stock. In addition, we have conducted periodic assessments of the valuation of our preferred stock and our common stock. Specifically, we obtained a report assessing the fair value of the common stock underlying our Series B convertible preferred stock as of December 31, 2015. This valuation performed a Monte Carlo option model to determine the fair value of the underlying common stock. A Monte Carlo option model is used to calculate the value of an asset with multiple sources of uncertainty or with complicated features. Based on this iterative analysis, and given that the Series B convertible preferred stock was issued at a fair value of $7.75 per share on a post reverse-split basis, the fair value of the common stock was determined to be $7.575 per share on a post reverse-split basis as of December 31, 2015, which valuation was used by us for purposes of our stock-based compensation calculations during 2015. A fair value of our common stock of $15.00 per share

TABLE OF CONTENTS

on a post reverse-split basis as of December 31, 2014, which valuation was used by us for purposes of our stock-based compensation calculations during 2014, was based on prior sales of common stock during 2013 for $15.00 per share on a post reverse-split basis.

The assumptions underlying these valuations represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. If we had made different assumptions than those used, the amount of our stock-based compensation expense, net income and net income per share amounts could have been significantly different. Following the completion of this offering, the fair value per share of our common stock for purposes of determining stock-based compensation expense will be the closing price of our common stock as reported on the applicable grant date. The compensation cost that has been included in the statements of operations and comprehensive loss for all stock-based compensation arrangements is as follows:

		Years Ended December 31,								Six Months Ended June 30,
		2014				2015				2015				2016
		(in thousands)								(in thousands)
General and administrative expenses		$	888			$	6,331			$	196			$	1,299
Research and development expense			1,622				4,931				43				174
Total stock-based compensation expense		$	2,510			$	11,262			$	239			$	1,473

Based on the initial public offering price of $     per share, the intrinsic value of stock options outstanding as of December 31, 2015 would be $     million, of which $     million and $     million would have been related to stock options that were vested and unvested, respectively, at that date.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements.

Recently Issued Accounting Standards

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). This standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date that defers the effective date of ASU 2014-09 for all public business entities by one year. As a result, this ASU is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are evaluating the impact of the adoption of ASU 2014-09 on our financial statements and related disclosures.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). This standard requires

TABLE OF CONTENTS

management to perform an evaluation in each interim and annual reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year of the date the financial statements are issued. If such conditions or events exist, ASU 2014-14 also requires certain disclosures of management’s plans and evaluation, as well as the plans, if any, that are intended to mitigate those conditions or events that will alleviate the substantial doubt. ASU No. 2014-15 is effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not been previously issued. We are evaluating the impact of the adoption of ASU No. 2014-15 on our financial statements and related disclosures.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments —  Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This standard affects the accounting for equity instruments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. ASU 2016-01 is effective in the first quarter of 2019. We are evaluating the impact of the adoption of ASU 2016-01 on our financial statements and related disclosures.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This standard also introduces new disclosure requirements for leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early adoption is permitted and the new standard must be adopted using a modified retrospective approach, and provides for certain practical expedients. We are evaluating the impact of the adoption of ASU 2016-02 on our financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). This standard involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods for public business entities. The method of adoption is dependent on the specific aspect of accounting addressed in this new guidance. Early adoption is permitted in any interim or annual period. We are evaluating the impact of the adoption of ASU 2016-09 on our financial statements.

TABLE OF CONTENTS

TABLE OF CONTENTS

decreased through poisoning by rodenticides, other rats will migrate to the unguarded food source and establish a new and expanding population.

Due to rebounding rodent populations exposed to rodenticides, property owners and pest management operators must continuously apply rodenticides in an effort to control these populations. This creates an ongoing cycle of rodenticide treatment, with the costs of rodenticides remaining constant. Moreover, rodenticides are often distributed indiscriminately, on a non-targeted basis, which likely decreases their effectiveness in controlling rat infestations. The following chart, which is based on data derived from our population models and current market pricing for rodenticides, demonstrates that the use of rodenticides does not sustainably reduce rat populations in the long term, while the cost of using rodenticides remains relatively constant over that same period.

Rodenticides are an ineffective delivery method for rodents

Due to their understanding of cause and effect, studies have shown that rodents will generally not consume food that they have seen adversely affect other rodents. When the adverse effects of rodenticides are displayed by other rodents, other rodents in the vicinity typically avoid the areas where the rodenticides were located.

Rodenticides are unsafe

Rodenticides contain lethal chemicals that can be toxic to humans and other animals. The EPA has observed that between 1993 and 2008, the American Association of Poison Control Centers logged between 12,000 and 15,000 reports of rat and mouse poison exposures each year in children under the age of six. These numbers and other concerns about pet and non-target wildlife exposures have spurred the EPA and similar authorities to renew its efforts to establish better protections for children and the environment. For example, the EPA and similar authorities in other jurisdictions have established stronger restrictions on the sale and use of ten active ingredients found in various registered rodenticide products. These restrictions prohibit the sale of “loose” rodenticide bait, such as pellets, powders, and liquids and require all such consumer-use baits be sold with protective bait stations. They also prohibited the use of second-generation anticoagulants, or SGARs, in any consumer-use product. In May 2014, the EPA and Reckitt Benckiser Group plc (a large manufacturer of rodenticides, including d-CON) reached an agreement to cancel 12 of their mouse and rat poisons that do not comply with the new EPA safety standards.

Rodenticides are harmful to the environment

Rodenticides are designed to cause the rodent pest to die over five or more days, permitting the target animal to continue to consume the rodenticide during that period. Since the target animal may consume significantly

TABLE OF CONTENTS

higher doses than are needed to be lethal, the lethal chemicals can accumulate in the target animal. This process is known as bio-accumulation. If the target animal is consumed by other animals (such as predators), other animals can become sick or die from the lethal chemicals remaining in the deceased animal. In addition, deceased animals contaminated by rodenticides can spread the lethal chemicals to the surrounding area.

Rodenticides are inhumane

The most common type of rodenticide prevents blood from clotting. Once the rodent has consumed the rodenticide, lethal chemicals cause the rodent to bleed internally and through its eyes, nose and ears, gradually culminating in death over 10 to 14 days from exposure. Therefore, rodenticides result in a long, painful death. This raises moral concerns, particularly in regions such as India, among people who do not want to cause unnecessary pain in animals.

Our Solution — Fertility Control

Our first fertility control product candidate, ContraPest, targets the reproductive capabilities of rodents by inducing the gradual loss of eggs in female rodents and disruption of sperm in male rodents, resulting in contraception that can progress to sterility in both females and males. By targeting rodent fertility, our solution is sustainably effective, directed, safe, environmentally friendly and humane.

Our solution is sustainable over the long term

ContraPest causes rodent populations to remain at a sustained low level. A third-party laboratory study in partnership with the United States Department of Agriculture National Wildlife Research Center, or NWRC, completed in December 2014 observed that 50 wild-caught rats treated with ContraPest resulted in a 95% reduction in litter sizes. A follow-up USDA study completed in June 2015 involving 50 wild-caught rats demonstrated a 96% reduction in litter size in female and male rats treated with ContraPest in an open arena study. We have also conducted open population studies, including in trash rooms in the New York City subway completed August 2013 and with the largest hog producer in the United States completed in March 2015, in which we have observed decreases in wild rodent populations of more than 40% over a 12-week period. We believe this decrease in population will continue and, based on studies conducted by third parties, will stabilize at an approximately 70% reduction in 12 months without rebound (based on an initial population of approximately 10,000 rats).

Consequently, rat populations treated with ContraPest do not experience the same “population rebound” effect as those treated with rodenticides. The rebound pattern is also significantly reduced in a rodent population treated with ContraPest because the non-reproductive rodents continue to defend their territory from invasion by other rodents. As a result, property owners and pest management operators may be able to substantially decrease the amount of ContraPest used over time, thus reducing the total cost of rodent population control in the long term. The following chart, which is based on data derived from our population models and field studies, predicts that as the use of ContraPest sustainably reduces rat populations over time and on an ongoing basis, the cost of ContraPest would be lower in the long term as compared to rodenticides.

TABLE OF CONTENTS

Our solution involves a targeted delivery

Our proprietary formulation appears to be attractive to rodents. To maintain proper hydration, rats drink 10% of their body weight in water each day; our product is a liquid bait and comprised mostly of water. Moreover, studies show that rats prefer eating sweet and fatty foods. ContraPest incorporates these elements, and our studies demonstrate that rats prefer ContraPest even when other familiar food and water sources were abundant, such as in indoor garbage collection areas of urban, industrial facilities. Once consumed, our product is designed to avoid first pass through the liver to deliver active ingredients directly to targeted reproductive organs, thus increasing its effectiveness and minimizing harm to the animal.

In addition, our solution utilizes a unique delivery system in the field that not only allows us to evaluate the effectiveness of our fertility control products, but also enables us to observe rodent pest behavior and determine the optimal locations for our proprietary bait stations. We also are able to customize the specific concentration of our product candidate to address the target pest.

Our solution is safe

Studies of ContraPest have demonstrated that doses of ContraPest are not lethal to rodents or harmful to people or other animals. The active ingredients in ContraPest are included at very low concentrations (together totaling less than 0.1% of the formulation) and have short half-lives of less than 20 minutes in the blood of rodents. Therefore, the active ingredients in ContraPest do not accumulate in tissues or organs of the rat (as poisons do) and thus do not sicken or kill predators or scavengers that eat a rat that has consumed ContraPest.

In addition, at the concentrations of active ingredients in our product, there is no potential for reproductive disruption in humans. A human would have to consume impossibly large amounts of the active ingredients in our product to have any effect. Further, the man-made chemical that is one of our active ingredients (4-vinylcyclohexene diepoxide, or VCD) has been used in manufacturing settings, and no toxic effects have been demonstrated in humans. The other active ingredient (triptolide) is a plant-derived ingredient used in traditional Chinese medicine to treat symptoms of rheumatoid arthritis.

Moreover, ContraPest is delivered in a ready-to-use and pre-packaged plastic container which is inserted into a tamper-resistant rodent bait station. As the container is inserted into the station, a spike punctures the foil-covered opening, allowing the liquid bait to flow into a tray within the bait station. The tank is a non-refillable container, which is recapped and disposed of when empty. Thus, as a “closed system,” there is little opportunity for handler exposure and virtually no opportunity for bystander exposure.

TABLE OF CONTENTS

Our solution is environmentally friendly

ContraPest does not contain poisons, and the ingredients in ContraPest target the reproductive organs of the rodent and do not accumulate in other tissues or organs of the rat. As a result, the ingredients in ContraPest do not cause illness or death in other animals that come into contact with or eat the rat that has consumed ContraPest, and there is no risk of secondary exposure expected from the use of ContraPest as a contraceptive. Also, the active ingredients in ContraPest are present in our product in very low concentrations, and break down into inactive, or inert, ingredients when they come into contact with soil or water in the environment. Moreover, ContraPest is packaged in a delivery system that dispenses the liquid bait directly into a tamper-resistant rodent bait station. These bait stations are limited to use only indoors and in the immediate perimeter of structures (no more than one foot from the exterior walls). As a result, ecological exposure of the liquid product will be limited to animals that directly contact or consume the bait, and there is little risk of exposure to non-target species or to the surrounding environment.

Our solution is humane

ContraPest does not cause rodent death and we have not observed any physical suffering in rodents exposed to ContraPest. ContraPest allows rodent pests to live out the course of their natural lives, while defending their territory and keeping out other invading rodents. By reducing rodents’ ability to reproduce, but keeping them alive, our product has the effect of humanely reducing rodent populations in the long-term.

Recent Research Regarding the Effectiveness of ContraPest

The majority of our research efforts have been focused on developing our lead product, ContraPest. We have completed studies regarding the effectiveness of our product, which were funded by and in cooperation with the NIH, the United States Department of Agriculture, or USDA, the NWRC, and the New York Metropolitan Transit Authority, or MTA, and other third parties. The following summarizes the results of these recent studies:

In September 2015 we initiated a research study with the Chicago Transit Authority, or CTA, to begin a field trial of our bait station. That study is now complete. While the observations and results are subject to a confidentiality agreement, the performance of the bait stations met expectations. We have additional field trials underway in Hawaii and Massachusetts (Somerville), and are contemplating further research trials in a variety of applications.

We have also begun exploring diverse applications with a variety of collaborators. We have conducted proof of concept studies with feral dogs on the Navajo Reservation in New Mexico with a grant from the USDA, and we have collected rabies and geographic data on stray dogs in the Tibetan refugee camps of Mainpat, India. We are currently collaborating with Texas A&M University to test the potential of our product candidates to manage feral pigs. Studies have also been conducted for proof of concept in Australia with wallaby, rat, and mouse populations and in New Zealand with brushtail possums. We have also conducted early trials with cats in collaboration with the University of Florida. These diverse studies seek to provide evidence of the potential for ContraPest and the continued development of fertility control technology in general.

TABLE OF CONTENTS

Business Strategy

Our goal is to become a leader in fertility control technology designed to promote food security and reduce infrastructure damage, disease outbreaks, environmental contamination and other costs associated with pest infestations and poor animal health. Key elements of our strategy are:

Manufacturing, Marketing and Distribution

Third-Party Relationships

We intend to continue to establish and develop relationships in the U.S. and internationally. To date, we have entered into the following arrangements:

Neogen  — In May 2014, we entered into a license agreement and began working with Neogen, a developer, manufacturer and marketer of a diverse line of products dedicated to food and animal safety. Pursuant to the agreement, we granted to Neogen an exclusive license in North America to manufacture, distribute and sell commercial rodent control products, which include ContraPest, for the later of 10 years or the expiration of the patent for ContraPest (if issued). Under the agreement, we retained rights to perform research and development on rodent control products and for all other scientific and non-commercial purposes. If Neogen fails to meet market demand, we can convert the license to a non-exclusive one. We also granted Neogen first right to license any additional commercial fertility control animal applications in North America other than rodents, and all commercial rodent control products sold outside the U.S. Under the agreement, Neogen will pay us certain fees and royalties, including a license fee payable over three years following EPA approval of ContraPest, and a semi-annual ongoing royalty based on a percentage of sales, which percentage varies depending on the amount and location of net sales pursuant to the agreement. Finally, both parties have agreed to non-competition clauses. Specifically, pursuant to the agreement, Neogen agreed that it will not, directly or indirectly, manufacture, cause to be manufactured, sublicense, use, market, distribute, resale or sell products that compete with or are intended, by applicable marketing and promotional programs directed to such products, to compete with the “Products” in the “Covered Fields” within the “Territory.” These capitalized terms are defined in the agreement as follows:

We and Neogen are currently engaged in ongoing discussions regarding manufacturing and commercialization plans, as well as the appropriate interpretation of the agreement, including the non-competition provisions set forth therein.

NeoVenta  — In September 2015, we entered into a sales and marketing agreement with NeoVenta Solutions, a sales and marketing company, for the sales of ContraPest in India and certain surrounding

TABLE OF CONTENTS

Southeast Asian countries. Under the agreement, NeoVenta will be responsible for seeking applicable regulatory approval to market ContraPest in these countries on our behalf. After such regulatory approval has been obtained, we have granted NeoVenta an exclusive license for 10 years to represent us in marketing, sales and distribution of ContraPest in these countries. We have retained all manufacturing responsibilities for ContraPest in these markets. NeoVenta has agreed to minimum sales commitments of rodent control products in the countries covered by the agreement, which total $23 million over the first five years. However, we believe that this understates the market potential for a non-lethal, effective and humane product in these countries.

Bioceres  — In January 2016, we signed an agency agreement with INMET, the research and development subsidiary of Bioceres, Inc., a leading agricultural biotechnology company in Argentina, to seek regulatory approval for and conduct pre-sales marketing of ContraPest in Argentina. Under the agreement, INMET, which specializes in bacterial fermentation solutions, will act as our exclusive agent to obtain necessary governmental approvals to sell and market ContraPest in agricultural, residential and public transport applications throughout the country of Argentina. The parties intend to create a joint venture entity which we will control. Sales in Argentina will occur only after regulatory approval is obtained and the joint venture entity is formed. Depending on governmental approvals, it is possible that Argentina will be the first country worldwide in which ContraPest will be commercially marketed. We have also entered into a services agreement with Bioceres and INMET to provide research and development services to develop an efficient production method for a bio-synthetic version of triptolide, one of the two active ingredients in ContraPest that also has pharmaceutical applications. The parties intend to create a second legal entity to pursue this triptolide research and development.

Subject to obtaining necessary regulatory approvals, we plan to market ContraPest in additional international jurisdictions. The expectation is that we will stage these market launches based on the length of time required to complete each country’s regulatory process, the market potential, identification and agreements with appropriate parties and the safety of our intellectual property.

We are currently exploring a potential relationship in Europe for the registration of ContraPest with EU regulatory agencies, the development of manufacturing in the EU, research and development of new products using our fertility control technology, and the granting of distribution rights in the EU. However, we have not yet entered into any binding agreements related to these matters.

Commercialization Plans

To date, we have not generated any revenue from product sales, but we currently expect to commercialize ContraPest and begin to generate revenue from the sale of products or through the payment of royalties by our strategic partners beginning in the fourth quarter of 2016. Specifically, we anticipate that sales of ContraPest will commence in North America in late 2016 through our distribution relationship with Neogen, and that we will begin receiving royalty payments from Neogen thereafter. Subject to obtaining necessary regulatory approvals, we also intend to market ContraPest in international jurisdictions, including India, Argentina and the EU, directly and through our existing and future strategic relationships. Target markets for ContraPest include municipalities (e.g., subways, transit systems and public housing agencies); agriculture (e.g., farms, storage facilities and protein production facilities (including cattle, sheep, pig and poultry facilities)); food production (e.g., factories, meat-packing facilities, dairy production plants and vegetable and fruit preparation facilities); and commercial (e.g., major restaurant chains, retail locations, casinos and hotels). In addition, we intend to approach large pest management companies to pursue potential partnerships for the distribution and sale of ContraPest.

Pricing and Value

We intend to value price our product candidate, ContraPest, such that our pricing strategy will take into account not only the cost of goods sold, but an understanding of the cost of competitive products and the value of our product candidate to the end user. We believe ContraPest will be perceived as a significant improvement over current products for managing rat infestations and, as such, should command a premium price. Our experience is that potential customers immediately understand the advantages of ContraPest and

TABLE OF CONTENTS

become enthusiastic about its use. We plan to use promotional efforts to support the value message and to justify our product candidate’s increased value and premium price, built around the following proposed advantages:

Also, we will focus on specific advantages for the individual customer and expect to position our product candidate as having the following additional general advantages:

Sales Approach

Because of the unique nature of our technology and the market demand for a non-lethal approach to rodent pest control, large pest management companies who we have approached about our product candidate have expressed interest in learning more about ContraPest. Consequently, we plan to continue to foster these discussions, to exchange data, and may negotiate agreements with carefully selected partners to maximize their appropriate deployment of our product candidate, when approved. The advantages to selling through a third party sales and service force include:

We plan to be deeply involved in the initial product launch and assist with in-depth product training, business development, co-travel with sales representatives and the creation of sales and marketing tools.

Raw Materials and Manufacturing Process

ContraPest contains two active ingredients, VCD, a manufacturing chemical, and triptolide, a plant derived chemical from the Thunder God Vine, Tripterygium wilfordii . ContraPest also contains several other inactive ingredients. Currently, we source VCD from a standard chemical supply provider. However, in the near future we will be qualifying additional suppliers for VCD. Triptolide is derived from the Thunder God Vine, which is commonly cultivated in southeastern China and other Asian countries, and is available from a variety of sources. Currently, we have one qualified source of purified triptolide, and are qualifying a second source. However, the process to purify triptolide for use in ContraPest is expensive, and we are seeking other, less costly methods of triptolide production, including bio-synthetic methods. See the discussion under the heading “Manufacturing, Marketing and Distribution” for more information about our agreement with Bioceres and INMET to provide research and development services to develop an efficient production method for a bio-synthetic version of triptolide. We believe that these and other initiatives may provide us with a more stable and less expensive source of triptolide for our own use, and for sale to our licensee(s), such as Neogen, and

TABLE OF CONTENTS

other potential consumers of triptolide, such as pharmaceutical companies. The inactive ingredients in ContraPest are sourced from standard chemical supply providers.

Our manufacturing process involves the incorporation of our two active ingredients, in low concentrations, into several inert ingredients. Once incorporated, the entire product goes through a micro-encapsulation process in order to stabilize the final formulation. Stabilizing the product in this manner allows it to be delivered to rodents in a safe and effective manner. After production, the manufacturing line is cleaned using environmentally safe methods and products.

Currently, we have production scale capability in our facilities in Arizona to manufacture and launch ContraPest. Our internal production capabilities allow us to meet our field research needs, while also having the ability to meet a surge in production. Having an internal manufacturing line allows us to scale up or scale down quickly based upon demand without involving a third-party contract manufacturer. Our manufacturing process has been designed in a modular, scalable and transportable fashion. This allows us to quickly respond to production requirements anywhere in the world.

In addition to our internal manufacturing facility, we have also entered into agreements with certain third parties to expand our manufacturing capacity, and intend to enter into additional manufacturing agreements in the future on an opportunistic basis.

Scientific Background Regarding our Product

ContraPest is a liquid bait containing the active ingredients VCD and triptolide. When consumed, ContraPest causes contraception that can progress to sterility in male and female rats beginning with the first breeding cycle following consumption.

The female rat is born with a finite number of eggs, also called oocytes, and she remains fertile and will reproduce until the day she dies. Within the ovary, eggs are contained in structures called follicles. The non-regenerating and most immature stage of follicles is called primordial. The primordial follicles mature through several stages from primary to secondary to antral follicles and ultimately ovulate. Once the primordial follicles have become depleted, ovarian failure occurs, which terminates reproductive capability.

VCD has been well studied and causes specific loss of ovarian small follicles (both primordial and primary); because oocytes do not regenerate, loss of these follicles leads to ovarian failure. Following repeated dosing, VCD causes ovarian failure in rats. However, daily dosing of mice and rats with VCD does not produce generalized toxicity nor does it affect other tissues. A VCD-dosed rat will continue to reproduce until the pool of secondary and antral follicles are depleted through ovulation or atresia, which is the natural death of the follicle, which can take up to three months.

The second active ingredient, triptolide, targets growing follicles and exerts a significant suppression of male fertility by disrupting sperm maturation and stopping the movement of sperm. Female rats treated with triptolide ovulate fewer eggs because the follicles stop growing. Triptolide does not affect primordial follicles, but when used in combination with VCD, the result is contraception that can progress to sterility in female rats.

Both VCD and triptolide are supported by evidence regarding their safety and mechanism of action. Additionally, recent studies, both in the lab and in the field, have documented their effect in fertility reduction and therefore reduction in rat populations. The graph below displays the total numbers of pups after two breeding rounds in one study.

TABLE OF CONTENTS

Figure:  Total number of rat pups born after consumption of ContraPest. Sixteen female rats (n=8 control and n=8 treatment) were provided ContraPest or inactive bait for 15 days and bred with proven male breeders. After two breeding rounds, the number of pups was totaled. The bar on the left shows the number of pups born to control females while the bar on the right shows the number of pups born to females that consumed ContraPest.

TABLE OF CONTENTS

Other Potential Products

We have developed a pipeline of potential additional fertility control and animal health products, with diverse applications, as outlined in the following chart and in more detail below.

Product Candidate/Area		Development Status		Segment		Primary Target
ContraPest		Environmental Protection Agency (EPA) granted registration approval for ContraPest effective August 2, 2016; to commercialize following approval		Population management		Rodents
Plant-based fertility control		Pilot studies have been completed; additional testing required for the use of this product to manage pest populations in select sites such as schools and hospitals		Population management		Rodents
Feral animal fertility control		Pilot studies are in process to show efficacy of this product candidate; to complete larger pivotal studies and regulatory submission		Population management		Feral dogs and hogs
Non-surgical spay and neutering		Pilot studies completed show encouraging signs of efficacy; to complete additional studies and regulatory submission		Companion animal health		Companion dogs and cats
Boar taint		Additional scientific and field studies and regulatory submission required		Food production and safety		Boars
Animal cancer treatment		Proof of concept study to be performed to determine whether proprietary formulation may provide effective delivery of triptolide to dogs for cancer therapy		Companion animal health		Companion dogs

Plant-based Fertility Control Product Candidate

While ContraPest is a liquid bait containing two active ingredients, we are also developing a fertility control product with only one of those two ingredients, botanically-derived triptolide. We anticipate this product candidate may be an option for customers who prefer a completely plant-derived product. We anticipate that we may need changes to the delivery format for deployment. However, the general mechanism of action for triptolide should suppress reproduction and control rodent pest populations, especially given the relatively short life span of rats and mice. As a follow-on product, with active ingredients that are already approved by the EPA, we would expect the EPA approval process to be rapid compared to the approval of ContraPest, which was approved in twelve months.

Boar Taint Product Candidate

Boar taint is the offensive odor or taste that can be evident during the cooking or eating of pork or pork products caused by hormones, called pheromones, present in non-castrated boars once they reach puberty. Castration without anesthesia shortly after birth is currently the standard procedure used to eliminate boar taint, but it results in lower meat production due to decreased weight gain, which is an effect of castration. This process also introduces a surgical risk of infection and can raise safety issues for workers.

If we are successful at developing a boar taint product candidate, we expect that it will target testosterone production and will be easily administered to feedlots and will have none of the safety issues associated with castration. The next step will be continued scientific and field studies followed by submission to and approval by the appropriate regulatory agencies. This process is expected to take approximately two years.

Feral Animal Fertility Control Product Candidate

Feral dogs and hogs present problems both in the United States and internationally. The negative impacts of feral dogs include threats to human health and safety, agriculture, natural resources and property. A 2005 study estimated monetary losses by feral dogs within the U.S. at $620 million annually. Feral pigs are can also be

TABLE OF CONTENTS

aggressive and are known for damaging crops and transmitting diseases to humans, livestock and other wildlife. Feral pigs are present across more than three quarters of the U.S. and are responsible for an estimated $1.5 billion in damages each year.

Current strategies for controlling feral animal populations are often ineffective, difficult to conduct and costly. Studies have shown that our fertility control technology is effective in both these species. Accordingly, we are currently conducting pilot studies to show efficacy of our approach prior to proceeding to larger pivotal studies and regulatory submission. We are currently completing specific development plans for this product candidate.

Companion Animal Product Candidates

We plan to develop the following products for use in companion animals such as domestic dogs and cats. However, applications for companion animals require FDA approval, which is a much longer and more expensive regulatory process. Our expectation is that we will pursue these technologies or through research and development partnerships with larger companies.

TABLE OF CONTENTS

Metal phosphides are considered single-dose fast acting rodenticides; death occurs commonly within one to three days after single bait ingestion. Death is caused by an acid in the digestive system of the rodent that reacts with the phosphide to generate the toxic phosphine gas. Metal phosphides have possible use in places where rodents are resistant to some of the anticoagulants. Zinc phosphide baits are also cheaper than most second-generation anticoagulants. They are marketed under brands that include Prozap, Eraze, and Ridall-Zinc by Neogen, MotomCo and Liphatech, respectively.

Rodenticide manufacturers compete by introducing new products to meet the changing demand of consumers, expansions and investments, acquisitions, and entering into strategic alliances with distributors and companies that have expertise in the rodenticide market. As a result, we believe the degree of competition in the rodenticide market is high. The market is highly concentrated among a few large rodenticide manufacturers, such as Syngenta, Bayer CropScience, BASF, Neogen and Liphatech. Also, there are high barriers to entry into the rodenticide market due to extensive capital investment and regulatory approval requirements.

Traps

Trapping is an option for those looking for a non-lethal way to manage a rodent infestation. There are several types of traps including spring, or snap, traps, cage traps, glue traps and electronic traps. Often traps merely injure and trap the rodent still alive. Trapped rodents will do anything to free itself, including chewing off its limbs. Also, rats are relatively intelligent animals and can learn to avoid traps. Further, the use of traps is less popular in urban centers and among pest control companies. Therefore, traps are a less common alternative to rodenticides as a form of rodent control. Companies that manufacture traps include Victor, Havahart, Rat Zapper, Real-Kill, J.T. Eaton and others.

Animal Fertility Control

Animal fertility control has been in research and development for almost 30 years. GonaCon(GnRH) is the current product for fertility control approved by the USDA. GonaCon is injected into an animal and the animal must receive a booster after two years to maintain efficacy. The formula is typically provided through a dart gun and the animals should be marked so that the booster can be given at a later date. This is an extremely challenging delivery method for any wild animal in a natural environment. ZonaStat-H (PZP), a fertility product used since the late 1980’s for wild horses and burros, is delivered in the same manner as Gonacon. The only oral fertility product on the market is an avian product, developed by Innolytics, LLC in collaboration with the USDA Animal and Plant Health Inspection Service, and is made specifically for pigeons.

Government Regulation and Product Approval

Federal, state and local government authorities in the United States regulate, among other things, the testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, distribution and marketing of the products we develop. Our wildlife and pest fertility control products must be approved by the EPA Office of Pesticide Programs, or OPP, before they can be legally marketed and sold in the United States. The process for obtaining regulatory approval and compliance with appropriate federal, state and local regulations is rigorous and requires the expenditure of substantial time and financial resources.

Additional product candidates in our pipeline may require approval from other government agencies, namely the USDA and FDA. In 2015, the FDA and EPA entered into a “data sharing” agreement to streamline data review and speed the regulatory process avoiding redundancy where possible.

United States Review and Approval Processes

In the United States, the EPA regulates the sale, distribution and use of any pesticide under the Federal Insecticide, Fungicide and Rodenticide Act, or FIFRA. The EPA defines a pesticide as “any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest.” FIFRA defines a pest as “any insect, rodent, nematode, fungus, or weed.” To register a new product, all active ingredients within the product must be registered with the EPA.

On August 23, 2015, we submitted a set of registration applications for two active ingredients and ContraPest for EPA review and approval. Our application for ContraPest was submitted as a restricted use, indoor only, application. A restricted use product can only be handled by a certified pest control operator. The requirements

TABLE OF CONTENTS

for an application are specified in detail by EPA regulations. These include requirements for data on which the EPA can evaluate the environmental effects, health effects, and safety of the product. The environmental effects data is reviewed by the Environmental Fate and Effects Division, or EFED. The health effects data is reviewed by the Health Effects Division, or HED.

Prior to submission, our active ingredients and product information was reviewed by the Hazard and Science Policy Council, or HASPOC, which includes HED members, and data waiver requests were granted for all of the required toxicology studies. EFED also reviewed the applications, and provided certain recommendations for testing, which were incorporated into our filing.

Upon filing an application with the OPP Registration Division (RD), there was a preliminary screen, where the application was initially reviewed for all required sections regarding chemistry, toxicity and environmental fate. Following this preliminary screen, the review period begins. Under the timelines set forth by the Pesticide Registration Improvement Extension Act (PRIA 3), RD has 20 months to review the application and reach a registration decision. Once the review period begins, RD will disperse the application to all the applicable science departments for an in depth review. For an application with an official review period greater than six months, OPP has 90 days in which it may identify any substantive science omissions and may reject the application unless the applicant can correct the omissions within 10 business days. This technical screening review period passed without EPA raising any issue. After completing the science reviews, each department will make its recommendations to RD. Based on these science recommendations, RD may decide it needs additional data and will contact the applicant with options for proceeding, which may include extending the review period until requisite data or other information can be developed and submitted for review. If RD has sufficient information, it will develop its initial risk and registration decisions, which it will articulate and publish in a document for public comment. RD has decided that it had sufficient data from the application and published the document for public comment on June 24, 2016. After the 30-day public comment period, OPP reviewed the public comments to address any additional concerns. This is considered one of the final steps prior to approval of a registration.

The EPA also requires that the following be submitted for review, in addition to data: a complete copy of the label proposed for the product, instructions for use and any claims that will be made by us, as well as, the complete formulation. We are also required to submit documentation describing the chemistry, manufacturing process and quality control parameters. This is done to ensure the product can be produced consistently. The entire submission must be reviewed and approved prior to any legal sales and distribution of the product. The EPA granted registration approval for ContraPest effective August 2, 2016. This EPA approval was granted on a restricted-use basis, including indoor and limited outdoor use, and is based on a liquid formation. We intend to diligently pursue additional related regulatory approvals from the EPA to support our product evolution, including seeking approval for full outdoor use, removal of the restricted-use status, alternative formulations and for additional species (utilizing approved active ingredients). In addition, we believe that the EPA will support us in facilitating regulatory reviews outside of the U.S., and we are exploring a relationship with the Danish Environmental Protection Agency to assist us with obtaining regulatory approvals in the EU.

We expect to pursue registration in each state, since product registration is required for every state in which the product will be distributed or sold. Each state has its own registration filing requirements. These registration programs are managed by state agricultural and/or environmental regulatory agencies. For some state registration applications, all that is required is the EPA stamped-approved label, a completed application form, and a fee payment. Other states, notably California, New York, and several others, require more robust registration applications and may require data not required by EPA. ContraPest has received state registration from Georgia, Illinois, Louisiana, Maryland, Minnesota, New Jersey, North Carolina, Virginia, West Virginia and Utah. Registrations in additional states are currently pending. States vary in the expected timing of approval, from a few weeks to several months or more.

International Review and Approval Processes

Canada —  Canada also has a product registration program similar to the U.S. program. Canada has entered into a data and review agreement with EPA intended to expedite the approval process.

European Union —  The European Chemicals Agency (ECHA) is a decentralized agency of the European Union, or EU. The agency is responsible for the scientific evaluation of chemicals intended for use in human

TABLE OF CONTENTS

health and the environment developed by companies for use in the EU. The agency has a biocidal product committee that is responsible for the review of any biocidal product and active substances. A biocidal product is used to control unwanted organisms that are harmful to human or animal health, or that cause damage to human activities. These harmful organisms include pests (e.g. insects, rats or mice) and microorganisms (e.g. molds or bacteria). Biocidal products include; insecticides, insect repellents, disinfectants, preservatives for materials, and anti-fouling paints. The biocidal product committee has similar requirements to those in the United States, requiring that evidence of purity, safety, efficacy, and consistency of manufacturing processes all be demonstrated.

The member state where the biocidal product will be placed on the market is responsible for authorizing the product. This is referred to as the ‘National authorization’. The process of national authorization relies however on the process of mutual recognition. Once a biocidal product is authorized by a first EU country (the ‘Reference Member State’), the other EU countries must, if requested to do so, authorize the biocidal products under the same terms and conditions. Some products can also be authorized at EU level, allowing the companies to place these on the entire EU market. In these cases, it is the European Commission that authorizes the products. This is referred to as the ‘Union authorization’.

In March 2016, ECHA decided to move toward a comparative assessment for rodenticides registered as a biocide. A comparative assessment will evaluate the risks and benefits of each rodenticide and a standard will be set for rodenticides based on this information. When a new rodenticide files for registration, it must meet this standard or best this standard to be accepted. This comparative assessment will be carried out by the Reference Member State. Representatives from various member states met in Helsinki the second week of June 2016 to determine which products or active ingredients will be used to set the standard for rodenticides. ECHA has moved to support the 5-year renewal, not the traditional 10-year renewal, of 8 anticoagulant rodenticides.

On July 4, 2016, we met with the Danish Environmental Protection Agency (DEPA) for a pre-meeting to discuss the registration of ContraPest in the EU. This meeting was to determine if DEPA was willing and capable to review and support a ContraPest dossier. DEPA agreed they would have the capacity to support a ContraPest dossier and they have executed their commitment as the competent authority to carry our EU registration application forward. We are engaged in ongoing discussions with DEPA to establish the application content.

United Kingdom  — In addition to registration routes listed above, the UK has a data sharing agreement with the United States, Australia, and New Zealand for any wildlife fertility management product, allowing for a potentially expedited registration process.

Australia —  The Australian Pesticides and Veterinary Medicines Authority, or APVMA, is an Australian government statutory authority established in 1993 to centralize the registration of all agricultural and veterinary products into the Australian marketplace. Previously each State and Territory government had its own system of registration. The APVMA assesses applications from companies and individuals seeking registration so they can supply their product to the marketplace. Applications undergo rigorous assessment using the expertise of the APVMA’s scientific staff and drawing on the technical knowledge of other relevant scientific organizations, Commonwealth government departments and state agriculture departments. If the product works as intended and the scientific data confirms that when used as directed on the product label it will have no harmful or unintended effects on people, animals, the environment or international trade, the APVMA will register the product. As well as registering new agricultural and veterinary products, the APVMA reviews older products that have been on the market for a substantial period of time to ensure they still do the job users expect and are safe to use. The APVMA also reviews registered products when particular concerns are raised about their safety and effectiveness. The review of a product may result in confirmation of its registration, or it may see registration continue with some changes to the way the product can be used. In some cases the review may result in the registration of a product being cancelled and the product taken off the market.

Rest of the World —  Country-specific regulatory laws have provisions that include requirements for certain labeling, safety, efficacy and manufacturers’ quality control procedures to assure the consistency of the

TABLE OF CONTENTS

products, as well as company records and reports. With the exception of the EU, most other countries’ regulatory agencies will generally defer to the EPA in establishing standards and regulations for pest management products.

Import Permits —  Field and laboratory proof of principle studies have been conducted in other countries. In each country, import regulations have been met for the shipment of active ingredients. To date we have received import permits from Australia, New Zealand, Indonesia, Laos, and the Philippines. We expect that additional import permits will be obtained for various field trials in countries prior to registration.

Intellectual Property and License Agreements

Maintaining a strong position in the rodenticide market requires constant innovation along with a healthy research program to evolve product lines to remain competitive and relevant to the needs of the changing global marketplace. We protect the intellectual property resulting from these efforts with the broadest international patent protections available. Our proprietary data and trade secrets are protected with vigilance and attention to data exchanges among employees, consultants, collaborators and research and trade partners. We further strengthen our market position employing international regulatory expertise.

Patent Filings

Our intellectual property portfolio supporting ContraPest consists of nine international patent filings (in the United States, Europe, Canada, Brazil, Russia, Japan, Mexico, South Korea, and Australia) addressing the ContraPest compound and field use of the product. Claims directed toward the compound include composition-of-matter involving a diterpenoid epoxide or salts thereof in combination with an organic diepoxide, use claims for inducing follicle depletion and for reducing the reproductive capability of a mammalian animal or non-human mammalian population. Issued claims will have a patent term extending to 2033 or longer based on patent term determinations in each of the filing countries. The novelty of ContraPest extends to its method of field distribution and has required innovation to perfect the dosing of our product candidate to rodents. We have filed a provisional patent covering our novel bait station device to effectively and efficiently deliver our rodent bait at individual bait sites that will upon issuance offer patent term protection through at least 2036.

License Agreements

We have an exclusive patent license with the University of Arizona for background intellectual property that we plan to employ for future product development in the domestic animal fertility control market. The patent claims in the United States, Australia and New Zealand cover the use of 4-vinylcyclohexene diepoxide to deplete ovarian follicles in individual mammals and mammal populations. The license agreement, signed in 2005, will terminate with the last-to-expire patent claims, which have a term extending to 2026.

Trade Secrets and Trademarks

Beyond our patent right holdings, we broaden our intellectual property position with trademark, trade secret, know-how and continuous scientific discovery to accompany our product development efforts. We protect these proprietary assets with a combination of confidentially terms in all partnership agreements or as stand-alone agreements along with rights-ownership agreements and structured information transfer understandings prior to beginning any collaborative projects. We maintain the ContraPest trademark and are registering new trademarks for products from our evolving rodenticide product line and for products for mammalian species beyond rodentia.

Data Sets

We have exclusive use status with the EPA for the data sets we have developed and submitted to the EPA as part of our application for ContraPest. The exclusive use status applies to new active ingredients and the final formulation of the ContraPest product for a period of 10 years. For five years after the 10-year period of exclusivity, if another applicant or the EPA Administrator chooses to rely on one or more data sets that we submitted in support of an application submitted by another applicant, the new applicant must make a binding offer to compensate us and certify to EPA that it has done so. If we and the offeror cannot reach agreement on the terms of the compensation for the use of such data sets, FIFRA requires resolution by binding arbitration. The EPA rules do not describe how the compensation should be determined, and there is publicly available information about some, but not all, binding arbitration decisions.

TABLE OF CONTENTS

TABLE OF CONTENTS

MANAGEMENT

Executive Officers and Directors

The following is a brief description of the principal occupation and recent business experience of each of our executive officers and directors and their ages as of September 15, 2016:

Name		Age		Position
Loretta P. Mayer, Ph.D.		67		Chair of the Board, Chief Executive Officer and Chief Scientific Officer
Cheryl A. Dyer, Ph.D.		64		President, Chief Research Officer and Director
Thomas C. Chesterman		56		Executive Vice President, Chief Financial Officer, Treasurer and Assistant Secretary
Kim Wolin		61		Executive Vice President, Operations, and Secretary
Grover Wickersham (1) (3)		67		Vice-Chair of the Board, Chair of Nominating and Corporate Governance Committee
Marc Dumont (1) (3)		73		Director
Bob Ramsey (2) (3)		71		Director
Matthew Szot (1) (2)		42		Director; Chair of Audit and Compensation Committees
Julia Williams, M.D. (2)		56		Director

(1)

Member of the audit committee.

(2)

Member of the compensation committee.

(3)

Member of the nominating and corporate governance committee.

Our executive officers are each appointed by the board and serve at the board’s discretion.

Executive Officers and Employee Directors

Loretta P. Mayer, Ph.D. is one of our co-founders, and has served as our chair of the board since our inception in July 2004. Since June 2009, Dr. Mayer has served as our chief scientific officer. In December 2015, she assumed the title of chief executive officer, a position she previously held from June 2011 to January 2015. She is a co-inventor on the patent licensed from the University of Arizona that formed the basis for the launch of our research and development efforts and continues to contribute as co-inventor on additional patent improvements and new technology. Prior to her career in medicine and science, from 1978 to 1991 Dr. Mayer served as CEO of Binnacle Development, Inc., a California-based Real Estate Development company, where she established the first Senior Citizen Housing project in the city of San Diego, developed $45 million in product and managed an annual budget of $10 million. Dr. Mayer also served as Vice President of Soroptimist International of the Americas from 1990 to 1991, where she was responsible for NGO representation at United Nations and international board meetings, Cambridge, UK 1990 – 1991. She also served Soroptimist International of the Americas as a federation board member from 1988 to 1990 and as regional governor from 1984 to 1986. She earned a master’s degree in 1997 and a Ph.D. in 2000 in Biology from Northern Arizona University. Dr. Mayer earned a bachelors degree in Sociology from University of California, San Diego in 1971. She accepted a post-doctoral appointment with the College of Medicine at the University of Arizona in 2000. We believe that Dr. Mayer is qualified to serve as a member of our board of directors because of her scientific experience, business background and her role as our co-founder.

Cheryl A. Dyer, Ph.D. is one of our co-founders and has served as our president and a member of our board of directors since our inception in July 2004. She has served as our chief research officer since 2004, where she oversees all of our research activities for relevance to our business goals, adherence to scientific standards and assurance of regulatory, legal and contractual compliance. From June 1990 to September 2010, Dr. Dyer served as a NIH-funded Principal Investigator at The Scripps Research Institute, La Jolla, California and Northern Arizona University, Flagstaff, Arizona where she maintained an independently-funded research program and laboratory. She was the first Research Professor in the Department of Biology at Northern

TABLE OF CONTENTS

Arizona University in 1995 and the first Established Investigator for the American Heart Association in the State of Arizona. Dr. Dyer earned a Bachelor’s degree in Biology from the University of California at San Diego in 1974 and a Ph.D. in Physiology and Pharmacology in 1986 in the School of Medicine at University of California at San Diego. Dr. Dyer was appointed as an Adjunct Member of the Graduate Faculty at Texas A&M University in 2015. We believe that Dr. Dyer is qualified to serve as a member of our board of directors because of her unique scientific background and her role as our co-founder.

Tom Chesterman joined our company in September 2015, and has served as our chief financial officer and treasurer since November 2015. He has over 20 years of experience as the chief financial officer of a public company in the life science, tech and telecommunications industries. Most recently, he was the vice president and treasurer of General Communication Inc., a telecommunications company in Alaska, from 2013 to 2015. Previously, he was the chief financial officer of life science companies Bionovo Inc. from 2007 to 2012, Aradigm Corp. from 2002 to 2007 and Bio-Rad Laboratories, Inc. from 1996 to 2002. Mr. Chesterman is adept at a variety of capital market access techniques, and has significant experience in developing the operational and financial infrastructures in companies to help support successful and rapid growth. Mr. Chesterman earned a bachelor’s degree from Harvard University and an MBA from the University of California at Davis.

Kim Wolin joined our company as a marketing technologist in May 2013, and in May 2014 was appointed executive vice president of operations. From January 2009 to May 2013, she was a vice president, branch sales and service manager of Sunwest Bank, a community bank located in Flagstaff, Arizona. From November 1996 to December 2009, Ms. Wolin held the positions of assistant vice president, branch manager and Licensed Financial Advisor at Wells Fargo Bank. She has owned and operated Creative Net Solutions, a website design and hosting business, since 1994. From 1984 to 1992, Ms. Wolin owned and operated Kodas Produce Market, a health food and organic produce store in Oakland, CA. Ms. Wolin earned a bachelor’s degree in Psychology from the State University of New York/Buffalo in 1977.

Non-Employee Directors

Marc Dumont was elected to our board of directors in January 2016. Mr. Dumont is chairman and chief executive officer of Chateau de Messey Wineries, Meursault, France, a position he has held since March 1995. Mr. Dumont served as the president of PSA International SA (a PSA Peugeot Citroen Group company) from January 1981 to March 1995. He is an international financial consultant and advisor for clients in Europe and Asia, as well as the United States. He has served as the chairman of Sanderling Ventures (a European affiliate of a U.S. venture capital firm) since 1996. In the past, Mr. Dumont has served as director of Finter Bank Zurich, Novalog/Winslow Corporation, NUKO Information Systems Inc. in San Jose, CA, and Banque Internationale in Luxembourg, all of which were public companies. Mr. Dumont holds a Degree in Electrical Engineering and Applied Economics from the University of Louvain, Belgium and an MBA from the University of Chicago. We believe Mr. Dumont is qualified to serve as a member of our board of directors because of his experience and knowledge of corporate finance, international business development and operations, and his experience as a past director of other public and private companies.

Bob Ramsey was elected to our board of directors in January 2016. Since 1978, Mr. Ramsey has served as chief executive officer of Starwest Associates, which develops and implements new business models in public partnerships for ambulance and EMS services. Mr. Ramsey also currently serves as chief executive officer of the Ramsey Social Justice Foundation, a non-profit organization that is dedicated to charitable work in the fields of global sustainability and affordable housing for at-risk and vulnerable populations, including women and children. The Ramsey Social Justice Foundation is a member of the Clinton Global Initiative. Mr. Ramsey has been appointed by six different Arizona governors to various Arizona state boards and commissions, including the Arizona Department of Health Services Emergency Medical Services Council on which he has served continuously since 1988. Mr. Ramsey holds a Bachelor of Arts from Arizona State University, and Arizona State University has named a school after Mr. Ramsey. We believe Mr. Ramsey is qualified to serve as a member of our board of directors because of his experience and knowledge of business development, global sustainability, charitable organizations and state and local government.

Matthew Szot was elected to our board of directors in December 2015 and appointed as the chairman of the audit committee of our board of directors in December 2015 and as the chairman of the compensation

TABLE OF CONTENTS

committee of our board of directors in July 2016. Since March 2010, he has served as the chief financial officer and treasurer of S&W Seed Company, a NASDAQ-listed agricultural seed company. From February 2007 until October 2011, Mr. Szot served as the chief financial officer for Cardiff Partners, LLC, a strategic consulting company that provided executive financial services to various publicly traded and privately held companies. From July 2011 until October 2011, Mr. Szot also served as the chief financial officer for CommerceTel Corporation N/K/A Mobivity Holdings Corp. From 2003 to December 2006, Mr. Szot served as chief financial officer and Secretary of Rip Curl, Inc., a market leader in wetsuit and action sports apparel products. From 1996 to 2003, Mr. Szot was a Certified Public Accountant with KPMG and served as an Audit Manager for various publicly traded companies. Mr. Szot has a Bachelor of Science degree in Agricultural Economics/Accountancy from the University of Illinois, Champaign-Urbana and is a Certified Public Accountant in the State of California. We believe that Mr. Szot is qualified to serve as a member of our board of directors because of his experience and knowledge of corporate finance, mergers and acquisitions, as well as other financial and accounting matters gained as a past and present chief financial officer of other public and private companies.

Julia Williams, M.D. was elected to our board of directors in August 2011. She has been an emergency department physician since 1989. She has worked at Flagstaff Medical Center since 1999. Dr. Williams is the founder and President of Humanitarian Efforts Reaching Out, or HERO, a non-profit 501(c)(3) organization that provides humanitarian services including medical and dental care, alternative power sources, solar cookers, vitamins, eye glasses, nutritional support and animal care. HERO’s mission is to help build healthy sustainable communities in underdeveloped Nations around the world. Dr. Williams has received her Doctor of Medicine from the University of Maryland School of Medicine and her Bachelors of Science from the University of Maryland. We believe that Dr. Williams is qualified to serve as a member of our board of directors because of her medical and scientific background, commitment to and experience with animal care, and long commitment to our vision.

Grover Wickersham was elected to our board of directors and appointed as its Vice Chairman in December 2015. Mr. Wickersham is also Vice Chairman of the board of directors of S&W Seed Company, a NASDAQ-traded agricultural company, Chairman of the Board of Eastside Distilling, Inc., an OTCQB-traded producer and “micro” distiller of spirits, a director of Verseon Corporation, a London AIM-listed pharmaceutical development company, and Vice Chairman of Arbor Vita Corporation, a private company that has developed a test for cervical cancer. Mr. Wickersham has been a director and portfolio advisor of Glenbrook Capital Management, the general partner of a partnership that invests primarily in securities, from 1996 to present. From 1996 to 2016, Mr. Wickersham has served as the chairman of the board of trustees of Purisima Fund, a mutual fund advised by Fisher Investments of Woodside, California. Mr. Wickersham is admitted to practice by the California State Bar and has specialized in securities law. From 1976 to 1981, Mr. Wickersham served as a staff attorney, and then as a branch chief, of the U.S. Securities and Exchange Commission. He holds an A.B. from the Univ. of California at Berkeley, an M.B.A. from Harvard Business School and a J.D. from Univ. of California (Hastings). We believe that Mr. Wickersham is qualified to serve as a member of our board of directors because of his experience and knowledge of corporate finance and legal matters, his experience and knowledge of operational matters gained as a past and present director of other public and private companies, and his knowledge of our company.

Family Relationships

Loretta Mayer, our co-founder, chair of the board and chief scientific officer and Cheryl Dyer, our co-founder, president, chief research officer and a director, are married.

Board Composition

Our board of directors currently consists of seven members, elected pursuant to our certificate of incorporation. All directors hold office until their successors have been elected and qualified or until their earlier death, resignation, disqualification, or removal. Board vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director or our entire board may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of at least a majority of our outstanding capital stock entitled to vote in the election of directors.

TABLE OF CONTENTS

Our board may establish the authorized number of directors from time to time by resolution. In accordance with our amended and restated certificate of incorporation to be filed in connection with this offering, immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:

We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of the directors. The division of our board of directors into three classes with staggered three-year terms and the requirement that a director may only be removed for cause may delay or prevent a change of our management or a change in control.

Director Independence

Generally, under the listing requirements and rules of NASDAQ, independent directors must comprise a majority of a listed company’s board of directors within one year of the closing of this offering. Our board of directors has undertaken a review of its composition, the composition of its committees and the independence of each director. Our board of directors has determined that Messrs. Dumont, Ramsey, Szot and Wickersham, and Dr. Williams are independent within the meaning of NASDAQ listing standards. Accordingly, a majority of our directors is independent, as required under applicable NASDAQ rules. In making this determination, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

Risk Oversight

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors will not have a standing risk management committee, but rather intends to administer this oversight function directly through our board of directors as a whole, as well as through various standing committees that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure and our audit committee will have the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures. The audit committee also will, effective on the closing of this offering, have the responsibility to issue guidelines and policies to govern the process by which risk assessment and management is undertaken, monitor compliance with legal and regulatory requirements. Our compensation committee will assess and monitor whether any of our compensation policies and programs have the potential to encourage excessive risk-taking.

Board Committees

Our board of directors includes an audit committee, a compensation committee and a corporate governance and nominating committee. Our audit, compensation and governance committees are comprised solely of independent board members.

TABLE OF CONTENTS

Audit Committee

Our audit committee currently consists of Matthew Szot, who is the chair of the committee, Grover Wickersham and Marc Dumont, each of whom has been determined by our board of directors to be independent in accordance with NASDAQ and SEC standards. Mr. Szot is an “audit committee financial expert” as the term is defined under the SEC regulations. The audit committee operates under a written charter. The functions of the audit committee include:

Both our independent registered accounting firm and internal financial personnel regularly meet with our audit committee and have unrestricted access to the audit committee.

Compensation Committee

Our compensation committee currently consists of Matthew Szot, who is the chair of the committee, Bob Ramsey and Julie Williams, each of whom has been determined by our board of directors to be independent in accordance with NASDAQ standards. Each member of our compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code. The compensation committee operates under a written charter. The functions of the compensation committee include:

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee currently consists of Grover Wickersham, who is the chair of the committee, Marc Dumont and Bob Ramsey, each of whom has been determined by our board of directors to be independent in accordance with NASDAQ standards. The corporate governance and nominating committee operates under a written charter. The functions of the corporate governance and nominating committee include:

TABLE OF CONTENTS

Director Compensation

The following table sets forth information regarding compensation earned by or paid to our non-employee directors during the year ended December 31, 2015. We do not currently provide any cash compensation to our non-employee directors, however we reimburse non-employee directors for reasonable travel expenses for participation in board meetings and for travel conducted on behalf of our business. We do not currently have a formal policy with respect to compensating our non-employee directors for service as directors.

Name		Option Awards ($)				Total ($)
Marc Dumont		$	—			$	—
Bob Ramsey		$	—			$	—
Matthew K. Szot		$	142,400			$	142,400
Julia Williams, M.D.		$	142,200			$	142,200
Grover Wickersham		$	2,278,400			$	2,278,400

Each of Dr. Mayer, who serves as our chair of the board, chief executive officer and chief scientific officer, and Dr. Dyer, who serves as our president and chief research officer, receives no compensation for her service as a director, and the compensation received by Drs. Mayer and Dyer as employees during 2015 is presented in “Executive Compensation — Summary Compensation Table.”

Following the closing of this offering, we intend to implement a formal policy pursuant to which our non-employee directors will be eligible to receive compensation for service on our board of directors and committees of our board of directors.

TABLE OF CONTENTS

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information regarding the compensation awarded to or earned by our principal executive officer and our two most highly compensated executive officers during our most recent fiscal year ended December 31, 2015. Throughout this prospectus, these officers are referred to as our named executive officers.

Name and Principal Position		Year				Salary ($)				Bonus ($)				Option Awards ($) (1)				All Other Compensation ($) (4)				Total ($)
Loretta P. Mayer, Ph.D., Chair of the Board, Chief Executive Officer and Chief Scientific Officer			2015			$	107,000			$	81,836			$	2,410,400			$	14,426			$	2,613,662
Cheryl A. Dyer, Ph.D., President and Chief Research Officer			2015			$	107,000			$	60,000			$	2,410,400			$	6,749			$	2,584,149
Thomas C. Chesterman (2) , Chief Financial Officer and Treasurer			2015			$	—			$	—			$	861,600			$	—			$	861,600
Thomas Ziemba (3)			2015			$	150,000			$	—			$	—			$	—			$	150,000

(1)

The amounts in this column reflect the aggregate grant-date fair value of stock option awards, determined in accordance with ASC 718 for stock-based compensation. The amounts included for a particular year reflect only the awards treated as granted in that year. Pursuant to SEC rules, the amounts shown disregard the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these award amounts are set forth in Note 12 (Stock-based Compensation) to the financial statements included elsewhere in this prospectus.

(2)

Mr. Chesterman was appointed as our executive vice president, chief financial officer, treasurer and assistant secretary in December 2015.

(3)

Mr. Ziemba resigned as president and chief executive officer and as a director in December 2015.

(4)

The amounts in this column reflect the payment by us of life insurance premiums for Dr. Mayer and Dr. Dyer pursuant to their respective employment agreements.

2015 Equity Awards

In July 2015, our board of directors granted to each of Dr. Dyer and Dr. Mayer options to purchase 300,000 shares of our common stock with an exercise price of $0.50 per share, in each case, on a post-reverse split basis, which options were fully vested on the date of grant. In addition, in July 2015, our board of directors granted to Mr. Ziemba an option to purchase 505,693 shares of our common stock with an exercise price of $0.50 per share, in each case, on a post-reverse split basis. The unvested portion of this option terminated on December 9, 2015, the date of Mr. Ziemba’s resignation, and the vested portion of this option expired on March 9, 2016, pursuant to the terms of the 2015 Plan. In October of 2015 per the terms of their then current employment agreements, Dr. Mayer and Dr. Dyer were each granted an option to purchase 40,000 shares of our common stock with an exercise price of $0.50 per share, in each case, on a post-reverse split basis, which options were fully vested upon grant. In connection with his service as a consultant, in October of 2015, Mr. Chesterman was granted an option to purchase 15,000 shares of our common stock with an exercise price of $0.50 per share, in each case, on a post-reverse split basis, which options fully vested upon his employment with us in December 2015. Further, in December 2015, in connection with the commencement of his employment, Mr. Chesterman was granted an option to purchase 120,000 shares of our common stock with an exercise price of $0.50 per share, in each case, on a post-reverse split basis, which option vests over a four-year vesting schedule, with  1/48 ^th of the option vesting monthly beginning on January 1, 2016, until such option is vested in full or Mr. Chesterman’s employment is terminated. The vesting of the option shall accelerate in full upon a change in control. Mr. Chesterman’s option may also be

TABLE OF CONTENTS

early exercised by entering into a restricted stock purchase agreement containing a right of repurchase in favor of us on any unvested portion of the shares subject to the option.

Outstanding Equity Awards at December 31, 2015

The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2015. All share amounts and exercise prices in the following table are on a post-reverse split basis.

		Option Awards
Name		Grant Date				Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date
Loretta P. Mayer			July 3, 2015				300,000				—			$	0.50				July 3, 2025
			October 15, 2015				40,000				—			$	0.50				October 15, 2015
Cheryl A. Dyer			July 3, 2015				300,000				—			$	0.50				July 3, 2025
			October 15, 2015				40,000				—			$	0.50				October 15, 2015
Thomas C. Chesterman (1)			December 1, 2015				—				120,000			$	0.50				December 15, 2025
			September 9, 2015				15,000				—			$	0.50				September 9, 2018
Thomas Ziemba			July 3, 2015				100,000				—			$	0.50				July 3, 2025

Pension Benefits

Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by us during the fiscal year ended December 31, 2015.

Nonqualified Deferred Compensation

Our named executive officers did not participate in, or earn any benefits under, a non-qualified deferred compensation plan sponsored by us during the fiscal year ended December 31, 2015.

Employment Agreements with Named Executive Officers

We have agreements with our named executive officers, which include provisions regarding post-termination compensation. We do not have a formal severance policy or plan applicable to our executive officers as a group.

Agreement with Dr. Mayer .  We have entered into an employment letter agreement with Dr. Mayer dated June 30, 2016. Pursuant to this agreement, Dr. Mayer is entitled to receive an annual base salary of $300,000, which will be reviewed and may be adjusted periodically by the our compensation committee or board of directors. Dr. Mayer was paid a signing bonus of $150,000 immediately following the signing of her employment letter agreement. By entering into the employment letter agreement and accepting the signing bonus, Dr. Mayer agreed to waive all rights to receive any compensation amounts provided for in her previous employment agreement dated October 16, 2013.

During the term of Dr. Mayer’s employment with us, Dr. Mayer is eligible receive an annual bonus in an amount of up to 50% of her annual base salary, provided that whether Dr. Mayer is entitled to receive any bonus in any given year, and the specific amount of such bonus, shall be determined annually by our board of directors, and shall be based upon mutually agreeable performance objectives and other criteria to be determined by the board of directors. Annual bonuses will be payable within thirty days after the board of director’s determination that an annual bonus shall be awarded.

Pursuant to the terms of her employment letter agreement, on June 30, 2016 we granted to Dr. Mayer an award of restricted stock units (RSU) under our 2015 Plan, representing the right to receive 220,000 shares of

TABLE OF CONTENTS

our common stock on a post-reverse split basis. The RSU award vests and will be settled over a three-year period, with one-third of the units vesting on the 12-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service.

Upon a change of control of our company, we have agreed to pay Dr. Mayer a bonus equal to (i) 1% of the amount of the net sale price (as such term is defined in her employment letter agreement) of our company that is $100,000,000 or less, plus (ii) an additional 0.5% of the amount of the net sale price of our company that is more than $100,000,000, payable in cash or other proceeds payable to our other stockholders. Under the terms of her agreement, Dr. Mayer shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of her employment by us without cause (as such term is defined in her employment letter agreement and excluding death or disability) or within 12 months following Dr. Mayer’s resignation for good reason (as such term is defined in her employment letter agreement), provided that Dr. Mayer remains in compliance with her confidentiality and other ongoing post-termination obligations under the employment letter agreement.

Dr. Mayer shall be entitled to accrue four weeks paid vacation and sick leave per calendar year, and may participate in our standard benefits plans. Dr. Mayer is also entitled to be reimbursed for reasonable out-of-pocket expenses incurred in the performance of her duties to our company in accordance with our rules and policies. We have agreed to pay the annual premiums (up to $10,000 per year) for a key person term life insurance policy of $1,000,000, subject to underwriter’s acceptance.

In the event that Dr. Mayer is terminated without cause (as such term is defined in her employment letter agreement) or if she resigns for good reason (as such term is defined in her employment letter agreement), then Dr. Mayer shall receive her base salary and health insurance benefits for a period of 12 months following the effective date of such termination. Dr. Mayer will also be entitled to any earned but unpaid annual bonus, and all of her outstanding equity awards will accelerate immediately upon the date of her termination without cause (excluding death or disability) or resignation for good reason.

Agreement with Dr. Dyer .  We have entered into an employment letter agreement with Dr. Dyer dated June 30, 2016. Pursuant to this agreement, Dr. Dyer is entitled to receive an annual base salary of $250,000, which will be reviewed and may be adjusted periodically by the our compensation committee or board of directors. Dr. Dyer was paid a signing bonus of $150,000 immediately following the signing of her employment letter agreement. By entering into the employment letter agreement and accepting the signing bonus, Dr. Dyer agreed to waive all rights to receive any compensation amounts provided for in her previous employment agreement dated October 16, 2013.

During the term of Dr. Dyer’s employment with us, Dr. Dyer is eligible to receive an annual bonus in an amount of up to 35% of her annual base salary, provided that whether Dr. Dyer is entitled to receive any bonus in any given year, and the specific amount of such bonus, shall be determined annually by our board of directors, and shall be based upon mutually agreeable performance objectives and other criteria to be determined by the board of directors. Annual bonuses will be payable within thirty days after the board of director’s determination that an annual bonus shall be awarded.

Pursuant to the terms of her employment letter agreement, on June 30, 2016, we granted to Dr. Dyer an RSU award under our 2015 Plan, representing the right to receive 220,000 shares of our common stock on a post-reverse split basis. The RSU award vests and will be settled over a three-year period, with one-third of the units vesting on the 12-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service.

Upon change of control of our company, we have agreed to pay Dr. Dyer a bonus equal to (i) 1% of the amount of the net sale price (as such term is defined in her employment letter agreement) of our company that is $100,000,000 or less, plus (ii) an additional 0.5% of the amount of the net sale price of our company that is more than $100,000,000, payable in cash or other proceeds payable to our other stockholders in such company. Under the terms of her agreement, Dr. Dyer shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of her employment by us without cause (as such term is defined in her employment letter agreement and excluding death or disability)

TABLE OF CONTENTS

or within 12 months following Dr. Dyer’s resignation for good reason (as such term is defined in her employment letter agreement), provided that Dr. Dyer remains in compliance with her confidentiality and other ongoing post-termination obligations under the employment letter agreement.

Dr. Dyer shall be entitled to accrue four weeks paid vacation and sick leave per calendar year, and may participate in our standard benefits plans. Dr. Dyer is also entitled to be reimbursed for reasonable out-of-pocket expenses incurred in the performance of her duties to our company in accordance with our rules and policies. We have agreed to pay the annual premiums (up to $10,000 per year) for a key person term life insurance policy of $1,000,000, subject to underwriter’s acceptance.

In the event that Dr. Dyer is terminated without cause (as such term is defined in her employment letter agreement) or if she resigns for good reason (as such term is defined in her employment letter agreement), then Dr. Dyer shall receive her base salary and health insurance benefits for a period of 12 months following the effective date of such termination. Dr. Dyer will also be entitled to any earned but unpaid annual bonus, and all of her outstanding equity awards will accelerate immediately upon the date of her termination without cause (excluding death or disability) or resignation for good reason.

Agreement with Mr. Chesterman .  We have entered into an employment offer letter with Mr. Chesterman dated November 20, 2015 to serve as our chief financial officer. Pursuant to this agreement, we pay Mr. Chesterman a salary of $250,000 per year, and in accordance with the letter agreement, Mr. Chesterman’s salary may be paid up to fifty percent (50%) in stock options until we are in the financial position to pay the salary entirely in cash, to be determined by the chief executive officer. In addition, Mr. Chesterman is eligible for a performance bonus, which amounts shall be determined at least annually by mutual agreement on achievement of personal and company goals, which bonus will be targeted to be no less than $200,000 per year. Per the offer letter, we granted Mr. Chesterman a stock option to purchase 120,000 shares of our common stock at an exercise price equal to $0.50 per share, in each case, on a post-reverse split basis, which option vests over a four-year vesting schedule, with  1/48 ^th of the option vesting monthly beginning on January 1, 2016, until such option is vested in full or Mr. Chesterman’s employment is terminated. The vesting of the option shall accelerate in full upon a change in control of us. Mr. Chesterman’s option may also be early exercised by entering into a restricted stock purchase agreement containing a right of repurchase in favor of us on any unvested portion of the shares subject to the option.

Employee Benefit Plans

We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees, consultants and directors with the financial interests of our stockholders. In addition, we believe that our ability to grant options and other equity-based awards helps us to attract, retain and motivate employees, consultants and directors and encourages them to devote their best efforts to our business and financial success. The principal features of our equity incentive plans are summarized below. These summaries are qualified in their entirety by reference to the actual text of the plans, which are filed as exhibits to the registration statement of which this prospectus is a part.

2015 Equity Incentive Plan

Our board of directors adopted our 2015 Equity Incentive Plan, or our 2015 Plan, in July 2015, and our stockholders approved the 2015 Plan in July 2015. Our 2015 Plan was amended by our board of directors in May 2016, and such amendment will be submitted to our stockholders for approval prior to the completion of this offering, to increase the maximum number of shares of our common stock that may be issued under our 2015 Plan from 2,000,000 to 3,000,000 on a post-reverse split basis. Our 2015 Plan allows for the grant of incentive stock options to our employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock awards to our employees, officers, directors and consultants.

Authorized Shares.   The maximum number of shares of our common stock that may be issued under our 2015 Plan is 3,000,000 on a post-reverse split basis.

To the extent that stock awards granted under our 2015 Plan expire or terminate without being exercised in full or are settled in cash, then any such expiration, termination or settlement will not reduce the number of shares available for issuance under our 2015 Plan.

TABLE OF CONTENTS

Additionally, shares issued pursuant to stock awards under our 2015 Plan that we repurchase or that are forfeited, as well as shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stock award, become available for future grant under our 2015 Plan, although such shares may not be subsequently issued pursuant to the exercise of an incentive stock option.

Plan Administration.   Our board of directors or a duly authorized committee of our board of directors administers our 2015 Plan and the stock awards granted under it. Under our 2015 Plan, the board of directors has the authority to determine and amend the terms of awards, including recipients, type of award, the exercise, purchase or exercise price of stock awards, if any, the number of shares subject to each stock award, the vesting schedule applicable to the awards, together with any vesting acceleration, and the form of consideration, if any, payable upon exercise or settlement of the award and the terms of the award agreements for use under our 2015 Plan. The board may amend the 2015 Plan in these and other respects with the consent of any adversely affected participant, although certain material amendments to the 2015 Plan require stockholder approval.

Under the 2015 Plan, the board of directors also has the authority to modify outstanding awards, reprice any outstanding option, cancel any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, although if any such action adversely affects a participant, the written consent of that participant is required.

Corporate Transactions.   Our 2015 Plan provides that in the event of certain specified significant corporate transactions, including: (1) a sale of all or substantially all of our assets, (2) the sale or disposition of at least 90% of our outstanding securities, (3) the consummation of a merger or consolidation where we do not survive the transaction and (4) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding prior to such transaction are converted or exchanged into other property by virtue of the transaction, each outstanding award will be treated as the administrator determines. The administrator may (1) arrange for the assumption, continuation or substitution of a stock award by a successor corporation, (2) arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation, (3) accelerate the vesting, in whole or in part, of the stock award and provide for its termination prior to the transaction, (4) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us, (5) cancel or arrange for the cancellation of the stock award prior to the transaction in exchange for a cash payment, if any, determined by the board or (6) make a payment, in the form determined by the board, equal to the excess, if any, of the value of the property the participant would have received upon exercise of the stock award prior to the transaction over any exercise price payable by the participant in connection with the exercise. The plan administrator is not obligated to treat all stock awards, even those that are of the same type, or all participants in the same manner.

In the event of a change in control, awards granted under the 2015 Plan will not receive automatic acceleration of vesting and exercisability, although this treatment may be provided for in an award agreement. Under the 2015 Plan, a change in control is defined to include (1) the acquisition by any person of more than 50% of the combined voting power of our then outstanding stock, (2) a merger, consolidation or similar transaction in which our stockholders immediately prior to the transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity), (3) our stockholders approve or our board of directors approves a plan of complete dissolution or liquidation or a complete dissolution or liquidation of us otherwise occurs except for a liquidation into a parent corporation, (4) a sale, lease, exclusive license or other disposition of all or substantially all of the assets to an entity that did not previously hold more than 50% of the voting power of our stock and (5) individuals who constitute our incumbent board of directors ceasing to constitute at least a majority of our board of directors.

Stock Options.   Incentive stock options and nonstatutory stock options are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2015 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2015 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.

TABLE OF CONTENTS

Restricted Stock Unit Awards.   Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.

Restricted Stock Awards.   Restricted stock awards are granted pursuant to restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to us or any other form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ceases for any reason, we may receive through a forfeiture condition or a repurchase right any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us.

Stock Appreciation Rights.   Stock appreciation rights are granted pursuant to stock appreciation grant agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under the 2015 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator.

Other Stock Awards.   The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.

Changes to Capital Structure.   In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of shares reserved for issuance under the 2015 Plan, (ii) the class and maximum number of shares that may be issued upon the exercise of incentive stock options and (iii) the class and number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Transferability.   Under our 2015 Plan, the board of directors may provide for limitations on the transferability of awards, in its sole discretion. Option awards are generally not transferable other than by will or the laws of descent and distribution, except as otherwise provided under our 2015 Plan.

Plan Amendment or Termination.   Our board of directors has the authority to amend, suspend or terminate our 2015 Plan, although certain material amendments require the approval of our stockholders, and amendments that would impair the rights of any participant require the consent of that participant.

TABLE OF CONTENTS

period: (i) $1,000,000; (ii) 15% of our total assets measured as of our most recent annual balance sheet date; or (iii) 15% of the outstanding amount of our common stock as of our most recent annual balance sheet date.

Plan Administration.   A committee of our board of directors administers our 2008 Plan and the stock options granted under it. The interpretation of the Plan by the committee shall be final unless otherwise determined by the board of directors.

Stock Options.   Nonstatutory stock options are granted under our 2008 Plan pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2008 Plan, provided that the exercise price of a stock option generally cannot be less than $15.00 per share on a post-reverse split basis or 100% of the fair market value of our common stock on the date of grant, unless otherwise determined in the committee’s discretion. Options granted under the 2015 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.

Changes to Capital Structure.   In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split or recapitalization, appropriate adjustments will be made to number of shares and exercise price or purchase price, if applicable, of all outstanding stock options.

Corporate Transactions.   Our 2008 Plan provides that in the event of specified significant corporate transactions, including the consummation of a merger or consolidation where we do not survive the transaction, a sale or transfer of all or substantially all of our assets, or a similar transaction, our board of directors may either provide for the accelerated exercisability or the assumption of outstanding options by the acquiring company in such transaction.

Insurance Premiums

We pay premiums for medical insurance and dental insurance for all full-time employees, including our named executive officers. We also offer high deductible plan options that include a healthcare flexible spending account component for all full-time employees, including our named executive officers. These benefits are available to all full-time employees, subject to applicable laws. We also pay premiums for life insurance and long-term disability insurance benefits for two of our named executive officers per the terms of their respective employment letter agreements, Loretta P. Mayer, Ph.D. and Cheryl A. Dyer, Ph.D., and we also pay premiums for long-term disability insurance benefits for Kim Wolin, our executive vice president — operations and secretary, per the terms of her employment agreement.

Limitation on Liability and Indemnification Matters

Our amended and restated certificate of incorporation, to be effective upon the completion of this offering, will provide, and our current bylaws provide, that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by the Delaware General Corporation Law. However, Delaware law prohibits our amended and restated certificate of incorporation from limiting the liability of our directors for the following:

If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. It also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under

TABLE OF CONTENTS

our bylaws, we are empowered to enter into indemnification agreements with our directors, officers, employees and other agents and to purchase insurance on behalf of any person whom we are required or permitted to indemnify.

In addition to the indemnification required in our amended and restated certificate of incorporation and bylaws, we have entered into indemnification agreements with each of our current directors and executive officers. These agreements provide for the indemnification of such persons for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were serving in such capacity. We believe that these certificate of incorporation and bylaws provisions and indemnification agreements are necessary to attract and retain qualified persons as directors, officers and employees. Furthermore, we have obtained director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to us and expect to increase the level upon completion of this offering.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

TABLE OF CONTENTS

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

We have been party to the following transactions since January 1, 2012, in which the amount involved exceeded or will exceed $120,000, and in which any of our executive officers, directors, promoters or holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than compensation, termination and change in control arrangements, which are described in this prospectus in the section entitled “Executive Compensation.”

Private Placements of Securities

Preferred Stock and Convertible Notes

The following table summarizes the shares of preferred stock and convertible notes issued since January 1, 2012 to any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, the value of which exceed or will exceed $120,000. All currently outstanding shares of Series A and Series B convertible preferred stock will be converted into common stock immediately prior to the closing of this offering.

All share amounts and exercise prices in the following table are on a post-reverse split basis.

Name of director, officer or 5% stockholder		Date issued				Number of shares of Series A Convertible preferred stock				Number of shares of Series B Convertible preferred stock				Aggregate purchase price paid
NAU Ventures, LLC			November 12, 2015				40,000				—			$	4,380,073
Lindsay Anne Wickersham 1999 Irrevocable Trust (1)			December 31, 2015				—				20,000			$	155,000
Glenbrook Capital LP (1)			January 7, 2016				—				40,000			$	310,000
Marc Dumont			December 31, 2015				—				52,761	(2)		$	408,898
NR Malibu Road LLC (3)			December 31, 2015				—				23,454			$	181,770

(1)

Grover Wickersham, our vice-chair, is affiliated with the Lindsay Anne Wickersham 1999 Irrevocable Trust and Glenbrook Capital LP.

(2)

These shares of Series B convertible preferred stock were issued upon conversion of the outstanding principal and accrued interest on a convertible promissory note issued to Mr. Dumont on June 11, 2015 in original principal amount of $400,000.

(3)

Bob Ramsey, a member of our board of directors, is affiliated with NR Malibu Road LLC.

Warrants to Purchase Common Stock

The following table summarizes the warrants to purchase common stock issued since January 1, 2012 to any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, the value of which exceed or will exceed $120,000.

All share amounts and exercise prices in the following table are on a post-reverse split basis.

Name of director, officer or 5% stockholder		Date issued				Number of shares of common stock				Exercise price
NAU Ventures, LLC			November 12, 2015				210,526			$	15.00
Marc Dumont			July 21, 2015				26,667			$	7.50
Yellowjacket, LP (1)			August 16, 2016				20,000			$	7.50
Glenbrook Capital, LP (1)			August 16, 2016				20,000			$	7.50

(1)

Yellowjacket, LP and Glenbrook Capital, LP are affiliates of Grover Wickersham, our vice-chair.

TABLE OF CONTENTS

Common Stock

The following table summarizes the common stock issued since January 1, 2012 to any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, the value of which exceed or will exceed $120,000.

All share amounts and exercise prices in the following table are on a post-reverse split basis.

Name of director, officer or 5% stockholder		Date issued				Number of shares of common stock				Aggregate purchase price paid
NR Malibu Road LLC (1)			July 15, 2014				11,667			$	175,002
Grover Wickersham			March 30, 2016				320,000			$	160,000
Bob Ramsey			April 7, 2016				20,000			$	150,000
Marc Dumont (2)			May 6, 2016				59,930			$	149,824
Glenbrook Capital LP (3)			May 6, 2016				144,000			$	360,000
NR Malibu Road LLC (1)			May 6, 2016				140,202			$	350,505
Julia A. Williams (4)			May 6, 2016				52,800			$	132,000

Executive Employment Arrangements

We have entered into employment agreements with certain of our executive officers. For more information regarding these agreements, see the section of the prospectus captioned “Executive Compensation —  Employment Agreements with Named Executive Officers.”

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. For more information regarding these agreements, see “Executive Compensation — Limitation on Liability and Indemnification Matters.”

TABLE OF CONTENTS

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth, as of August 31, 2016, information regarding beneficial ownership of our capital stock by:

•

Each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;

•

Each of our named executive officers;

•

Each of our directors;

•

All of our current executive officers and directors as a group; and

•

Each of the selling stockholders.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Shares of common stock issuable under options or warrants that are exercisable within 60 days after August 31, 2016 are deemed beneficially owned and such shares are used in computing the percentage ownership of the person holding the options or warrants, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial ownership of those shares.

Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and dispositive power with respect to their shares of common stock, except to the extent authority is shared by spouses under community property laws.

Our calculation of the percentage of beneficial ownership prior to this offering is based on 8,218,041 shares of our common stock (including preferred stock on an as-converted basis) outstanding as of August 31, 2016 on a post-reverse split basis. We have based our calculation of the percentage of beneficial ownership after this offering on      shares of our common stock outstanding immediately after the closing of this offering, which assumes (1) the issuance of 883,609 shares of common stock on a post-reverse split basis, upon the conversion of our convertible preferred stock, (2) the issuance of      shares of common stock that we are selling in this offering and (3) no exercise of the underwriters’ over-allotment option to purchase additional shares of common stock from us.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o SenesTech, Inc., 3140 N. Caden Court, Suite 1, Flagstaff, Arizona 86004.

All share amounts and exercise prices in the following table are on a post-reverse split basis.

Name of Beneficial Owner		Number of Shares Beneficially Owned Prior to the Offering								Shares Beneficially Owned After Offering Assuming No Exercise of Over-Allotment Option								Shares Offered in Over- Allotment Option				Shares Beneficially Owned After Offering Assuming Full Exercise of Over-Allotment Option
		Number				Percent				Number				Percent								Number				Percent
5% Stockholders:
Susan L. Dawson			420,928				5	%
NAU Ventures, LLC (1)			610,526				7	%
Directors and Named Executive Officers:
Loretta P. Mayer, Ph.D. (2)			823,276				10	%
Cheryl A. Dyer, Ph.D. (2)			825,716				10	%
Thomas C. Chesterman			40,000					*
Marc Dumont (3)			151,526				2	%
Bob Ramsey (4)			254,748				3	%