SenesTech, Inc.

Good day and welcome to the CinesTech Incorporated Report's third quarter of 2022 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 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 now like to turn the conference over to Robert Bloom with Slessom Partners. Please go ahead.

All right. Thank you very much, Betsy, and thank you all for joining us today to discuss Synestec's third quarter 2022 financial results for the period ended September 30th, 2022. With us on the call today are Ken Siegel, Chief Executive Officer, Joel Fruent, the company's incoming 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 SenesTech during the course of this conference call may contain forward-looking statements within the meaning of Section 27 of the Securities Act of 1933 as amended and Section 21 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, anticipates, 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 risks 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 and our filings with the Securities 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 morning, everyone, and thank you all for joining us today. I'm pleased we get a chance to talk with you today as we report another quarter of strong revenue growth, but also my retirement from the company at the end of the year and the appointment of Joel Fruin as our new chief executive officer. Over the past three and a half years, it's been my objective as CEO to lay the groundwork for the successful commercialization of ContraPest, and I think we've achieved that goal. When I took over, we were a science-led organization with no commercial experience. Prior to my taking over, as the company embarked on its initial commercialization efforts, it found itself constantly pivoting from a distributor-led model to a PMP-led model to a replacement for rodenticide model to a green model to an animal-friendly model with many iterations in between. In certain instances, it had chosen to fight the industry that we would depend on for our long-term success. And that last point is one I will come back to in a moment because it leads us to Joel's appointment. We also didn't have the data to show how ContraCast worked in real-world situations or to demonstrate both its long-term efficacy and cost effectiveness. We have since completed the necessary long-term studies and fieldwork required by high-value customers particularly within agricultural and urban settings. As I mentioned a moment ago, we didn't truly have a commercialization strategy, and we certainly didn't have an e-commerce platform. Since then, we have launched a highly effective e-commerce platform that allows us to sell directly to customers. This has the dual effect of providing better service to customers and also providing some price discipline in the market. Further, through our collaboration or through the collaboration of some incredible people within the organization, we created and launched our award-winning Operation Rat Race campaign, which has driven strong increases in traffic. Today, about 50% of our sales are derived from the e-commerce platform. As my conversations with customers in the early days were occurring, it was obvious that we needed to create a delivery system that allowed for above-ground deployment of ContraPest for use in the agricultural segment and for the control of roof rats. In response, we created Elevate. There is simply no other product on the market quite like it, and I believe it will be a key driver to the future success of the company. Prior to coming on board, we also had the opportunity or actually the propensity to chase shiny objects. Over the past few years, we've streamlined our sales and marketing efforts to address key market verticals in which we have the greatest opportunity for success, including zoos and sanctuaries, municipalities, and agriculture. We've made great progress in each of these areas with key deployments in each. We've also focused our research development on attainable near-term product improvements. But coming back to the beginning, perhaps one of the most important things we needed to accomplish was to repair our relationship with the pest management industry. From a positioning standpoint, we recognize that attempting to position ContraPest as an exclusive solution to pest control was alienating our potential PMP customers and other major players in the industry because sustainable control requires the use of multiple pest management tools. We've since emphasized the important role that ContraPest can play as part of an integrated pest management or IPM solution. It can dramatically improve the effectiveness of other tools and generate sustained results. And because ContraPest is a contraceptive and not a sterilant, PMPs can improve their business models by providing a long-term solution that enables them to substantially reduce their servicing costs. In just the past year, we have started working more closely with PMPs, such as Renekil Terminex, Massey Services, and Agricons, who are now offering ContraPest as part of integrated test management, as well as continuing our joint development efforts with LeafaTech. With our e-commerce platform showing strength and growth, Tom will hit on all the numbers in a moment, but we did have a 173% increase year over year from our e-commerce platform. Our next focus area needs to be on further penetrating the test management professional vertical, and that's where Joel comes in. I'll let him expand a bit on his background, but I think as a company, we have tremendous opportunity to now take ContraPest to the next level, given the groundwork that has been laid over the past few years. Clearly, this is bittersweet for me. I have thoroughly enjoyed the opportunity to work with such amazing people and interact with many of you investors. I truly believe ContraPest is an industry-changing product. And set against a world backdrop of sustainability, it has the potential to reduce the tremendous infrastructure costs caused by rats, the destruction of the global food supply that is lost every year to infestations, the diseases that are spread through rats, which pose a dangerous risk to public health and safety, and the reduction of poisons from the environment, which impacts wildlife and humans alike. I will continue through the end of the year as an executive member of the board of directors, aiding Joel in the transition. I thank all of you for the opportunity to be CEO these last three and a half years and look forward to the tremendous future I believe is ahead for the company.