SenesTech, Inc.

Good day and welcome to the Senate's tech Inc reports fourth quarter and fiscal year 2020 financial results conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would like now to turn the conference over to Robert Bloom with Lithum Partners. Please go ahead.

All right. Thank you very much, Matt, and thank you all for joining us today to discuss the Synestec's fourth quarter in fiscal year 2020 financial results for the period ended December 31, 2020. With us on the call representing the company today are Mr. Ken Siegel, Synestec's Chief Executive Officer, and Tom Chesterman, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. Before we begin with prepared remarks, we submit for the record the following statement. Statements made by the management team of SNES Tech during the course of this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies, and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipate, draft, eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties, that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risk that actual results may differ materially from those projected in the forward-looking statements as a result of various factors and other risks identified in our filings with the Securities and Exchange Commission. All forward-looking statements contained during this conference call speak only as of the date in which they were made and are based on management's assumptions and estimates as of such date. The company does not undertake any obligation to publicly update any forward-looking statements, whether as the result of the receipt of new information, the occurrence of future events, or otherwise. With that said, let me turn the call over to Ken Siegel. Ken, please proceed.

Thanks, Robert. Good afternoon, and thank you all for joining us today. As you saw in the press release we issued after the close, we made good progress in 2020 in building awareness and adoption of ContraPest, as evidenced by a 97% year-over-year increase in revenue. We're obviously still operating from a relatively small revenue base, but we are making progress. While the pandemic has created hurdles for us in terms of visiting with potential customers face-to-face, we did manage to make progress on the six key areas of focus we have discussed in recent call. As a reminder, those include obtaining compelling real-world data, focusing our sales and marketing efforts towards high-value targets, launching an e-commerce platform, repositioning ContraPest as part of an overall integrated pest management strategy, focusing our R&D efforts on product improvement and enhancements, and maintaining fiscal discipline. Although we advanced in all six areas, the most significant progress was on point number one, as we recently concluded key studies for contrapest in both agricultural and urban settings with overwhelmingly positive results in reducing rat infestations and their enormous economic impact. So let's discuss the agricultural data first. As many of you are aware, rats in poultry facilities cause significant damage and can be hazardous to the health of flocks due to disease transmission, equipment impairment, pullet or chick predation, loss of grain, and in severe cases, production interruptions. In the first deployment, a West Coast egg farm, ContraPest was added to the existing integrated pest management program. The rat populations were surveyed monthly for over a year, using cameras to measure the reduction in rat activity throughout the ContraPest treatment. The final results confirmed that ContraPest cut the rat population in half within three months and produced a sustained 90% decline in rat activity over the 12-month study. In the second deployment, an East Coast pullet farm, again, ContraPest was added to the existing integrated pest management program. The staff tracked consumption rates and economic impact caused by the rats before and after the introduction of ContraPest. The staff reported an 88% improvement in pullet survival after reducing their rat population with ContraPest. The annual benefit projected by the customer of adding ContraPest to their pest management plan is over $600,000 in increased revenue and decreased costs. This is exactly the type of data we needed to show customers the unprecedented efficacy and cost effectiveness of ContraPest in real-world settings. And while these results were from deployments at poultry facilities, the results are immediately applicable to many other situations. Anywhere there is grain or feed, there is the potential for rat infestation. And ContraPest is now proven in the field to dramatically reduce those infestations. reduce their negative economic impact, and improve overall food security. Let's talk about urban deployment. We discussed this back in November after we had initial four-month data, but with the results now finalized and having 12 full months of data, we're even more gratified by the success of ContraPest in reducing rat populations. As we described in our recent press release, This urban city takes a comprehensive, integrated approach to rodent control and added ContraPest to their current program about a year ago. They deployed 139 bait stations at 13 different locations as an initial step. The goal was to determine the effectiveness of ContraPest at reducing the number of juvenile rats over time by preventing reproduction, which simultaneously lowers the growth of the population. Two of the baiting locations were monitored by Synestec using cameras to measure rat detection, counts, and age demographics during the 12-month period of the program. Data collected at month 12 from cameras showed that Site A had a 94% reduction in rat activity and a 98% decline in juvenile rats being detected since the start of monitoring. Site B had a 99% reduction in rat activity and 100% decline in juvenile rats being detected during the same period. If you recall, after our four-month study, these numbers were 51% to 88%. These results clearly showed that ContraPest was effective at lowering the rat population and limiting the number of juveniles born, thereby significantly enhancing the results of the city's rodent control program. As a reminder, the reduction in juveniles signifies that contraception is working. In effect, few, if any, rats are being born. As soon as the limitations from the pandemic ease, our field sales team will be able to share these results in more detail with governmental entities in person, including those in California who now face additional challenges with the implementation of legislation limiting or eliminating the use of common road innocence. We'll talk about California more in a moment. And while we're laser-focused on ramping adoption of ContraPest in commercial settings, we also have an eye toward the future. As I've stated in past calls, our R&D efforts have been largely focused toward making the product more user-friendly and available for use in increasing numbers of applications. In the past, I've talked about three current efforts in this area, including the addition of mice to the label, new dispensers, and finally, a non-liquid bait. On that final point, yesterday we announced a collaboration with LIFATEC to develop a new non-liquid formulation of contrapest. While our current liquid format is highly effective in a wide variety of applications, there are certain circumstances in which a non-liquid formulation might be preferable, such as locations that experience excessive heat or cold. In addition, Having a non-liquid formulation will give pest management professionals the option to use ContraPest in a familiar format, such as Leafatech's First Strike product line. Leafatech is a natural partner for us with their history of innovation in pest control. They recognize that ContraPest is a game-changer for the industry, and we look forward to working with Leafatech to develop this additional formulation for ContraPest as it opens up new addressable market opportunities for the company. So transitioning back to our commercial efforts. Clearly, products that have widespread market adoption for years have been able to continue selling throughout the pandemic. While those at earlier stages of their product commercialization cycles, such as Contrabest, have faced additional challenges. Mind you, we were able to grow revenues at 97% year over year. but we believe there was and is opportunity for accelerated growth from this point. So in addition to the trial data mentioned, which we believe is critical to our commercial efforts in 2021, we've also made progress on the following. First, we've put in place key market awareness campaigns to increase sales qualified leads using both digital and traditional outreach methods. Frequent advertising on Google and social platforms is driving traffic to our site. Targeted email and phone campaigns to highlight our outstanding field data results and the role of ContraPest in programs is creating word of mouth among customers and overall market awareness. Second, working with PMPs on product positioning, especially in light of the new prohibitions on commonly used rodenticides in California. PMPs are licensed to apply rodenticides in all our market verticals. Our overall positioning is ContraPest will increase their customer satisfaction, and thus the PMP's business. As a contraceptive, ContraPest requires continual deployment, albeit at reduced levels, increasing customer stickiness. Unlike traditional lethal products that have no long-term efficacy on rodent populations, PMPs are beginning to accept the value of our positioning that ContraPest can reduce and maintain low rat populations, and that our data shows this. ContraPest also benefits PMPs in their accounts that prefer a limited use of lethal control methods or with stubborn to control rat populations. Third, we've ramped up our e-commerce capabilities. We've streamlined the buyer's journey in the Synestec online store by creating targeted product bundles for residential and professional customers, simplified the checkout process, and developed an online chat box to rapidly address customer needs. We have also established relationships with online distributors to promote and sell our products on their sites, thus enhancing our reach. And finally, we've repositioned our field sales personnel. We are deploying two field sales reps to California, where opportunities are highest in our targeted markets of agribusiness, municipalities, and the PMPs that service those businesses. A third rep services the center of the country, and a fourth field sales rep manages key targets east of the Mississippi River. We also have a number of amendments to our label in progress that will improve reach into the important agricultural markets and that will require additional sales support later this year. With the light at the end of the tunnel from the pandemic, we're optimistic about our prospects in 2021. Operationally, we've taken significant steps to better position Semestec for the future. We've driven efficiencies in our operating structure, which significantly reduces our break-even point. We're utilizing cash more efficiently at approximately $1.6 million for just for the just concluded quarter. And we completed a $10 million private placement in February and a $4 million financing in March. This capital provides us with as much visibility as we've ever had to successfully drive adoption of the business. That said, we will continue to spend money wisely as we drive to reach profitability. So in closing, we're laser focused on commercial execution. The moves by California to ban the ESCAR should be a tailwind for us. The long-term study data were key events that we believe properly equip our sales personnel with the tools they need to confidently sell ContraPest in agricultural, commercial, and urban settings. We've restructured key messaging around the product, refocused our sales force, expanded our online direct-to-consumer channels, and continue to efficiently manage the business with a significantly enhanced balance sheet. Obviously, we still have a lot of work to do, but progress is being made and our optimism for 2021 is high. So with that, let me turn it over to Tom to review the financials.