SenesTech, Inc.

Good afternoon, everyone, and welcome to the SNES Tech Incorporate Inc. Report's second quarter fiscal year 2023 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 and one using a touch-tone telephone. To withdraw your questions, you may press star and two. Please note that today's event is being recorded. And at this time, I'd like to turn the floor over to Robert Bloom with Lithum Partners. Sir, please go ahead.

Great. Thanks so much, Jamie. Thank you for joining us today to discuss Finestec's second quarter 2023 financial results for the period ended June 30th, 2023. With us on the call today are Joel Fruent, the company's chief executive officer, and Tom Chesterman, the company's chief financial officer. At the conclusion of today's prepared remarks, we'll 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 SNESTAG 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 1934 is 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 votes 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 on 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 Joel Fruent, Chief Executive Officer, Synestek. Joel, please proceed.

Good afternoon, everyone. Thank you all for joining us today. We are pleased with the progress we made across the enterprise during Q2. During the quarter, we continued to grow our revenue and customer base with record quarterly revenues of 31% sequentially. We also made significant progress reducing our adjusted EBITDA loss, which was the best it has been in two years as we brought efficiencies to many aspects of the organization, and we set in place key initiatives which are now showing results. Growth has since accelerated into the third quarter, with July 2023 monthly sales growing 126% compared to the year-ago period. Driven by the initiatives we have undertaken to drive sales, improve product quality, and expand product options, growth is clearly accelerating. While growth is important, profitable growth is paramount, especially in today's market. We have put in place key initiatives for both our field sales and e-commerce channels to improve the return on our sales and marketing investments. Within our field sales operation, we have redeployed and refocused our direct sales efforts to enhance our customer acquisition capabilities while also putting sales reps closer to the customers to focus on the numerous large opportunities that are available for our unique fertility control product. Further, We have also expanded our field sales organization, each deployed by a geography with leadership in both the eastern and western half of the US. This strong regional focus on new customer acquisition through an expanded commercial team and new depths of vertical industry knowledge to get in front of decision makers is all designed to tighten the sales cycle and ultimately drive revenue. Evidence here is the significant increases we are seeing within the government vertical driven by deployments in California and New England, and our experience that customers in the government sector require a longer sales cycle, but are very sticky once they are on board. Our traction within zoos and animal sanctuaries continues, and ContraPest is now a major IBM component in four out of the top 10 zoos in the U.S., and accounts for 14% of our revenues. In the agribusiness vertical, we initiated shipments to major companies in grain, and poultry. It's clear that rodent population control is becoming an increasingly important focus for pest management professionals in this vertical, especially where the risk of exposure to lethal rodenticides is critical. On the e-commerce site, we have reconfigured our marketing spend and have added additional products and options to our e-commerce site, such as a 12-month prepay subscription for e-commerce customers, along with convenience items. July was our largest e-commerce revenue month of the year. All of these initiatives to increase sales penetration are translating to the income statement. A quick look at the second quarter results will show that we decreased our SG&A by more than $500,000, but saw an increase in revenue. With this improved ROI being demonstrated, coupled with the strong growth out of the chute in the third quarter, it is clear our initiatives are taking hold. In addition to our domestic selling efforts, we also commenced our international expansion having entered into an agreement with PES of South Africa for the commercialization of ContraPest into South Africa. We were introduced to South Africa and PES by the South African National Council of SPCAs who are continuing to advise us and who clearly articulated their support for fertility control and ContraPest in particular. They have committed to recommend ContraPest to private and state entities and to assist with regulatory issues. We also announced entry into a distribution agreement with Pest Terminators of Maldives for the deployment of ContraPest into their country. As Pest Terminators is part of a multinational pest control organization, the potential expansion of the agreement throughout the region is contemplated in the agreement. Pest Terminators has secured import approval and has placed their order for the first deployment of over 150 stations, which we are shipping this week. They have subsequently placed another order due to their demand projections and the interest in our new product options. While I am certainly pleased with the growth we are seeing, especially in the first half of the third quarter, we all know that the objective here is to steepen the curve. One of the ways we plan to do that is to continue expanding our product options for consumers. To that end, we recently launched a new delivery system for ContraPest, the Isolate bait system, which has an integrated tank tray unit designed for ease of use, catering to both professionals and the do-it-yourself market. It is important to note that the design of the Isolate bait system comes directly from customer requests. who wanted to maintain the efficacy of ContraPest but make the deployment and servicing quicker and easier. The design combines the tank and tray into one unit, and the deployment and setup is done through a simple placement and peel-off seal, with users showing up to an 80% reduction in time and effort. We believe the introduction of Isolate should further accelerate the adoption of ContraPest by both professionals and do-it-yourselfers. We are accepting orders for isolate delivery starting next week, and we have over 1,500 isolate pre-orders, and we expect delivery of orders before the end of the month. Taking a step back, when we first introduced ContraPest, we needed to convince the pest control market of two things. One, the value of fertility control as a means of population control, and two, the applicability of a liquid bait into their procedures. At this point, there is growing acceptance of fertility control as part of integrated pest management, and there is still resistance from pest management companies to alter their established practices of utilizing non-liquid products. To address this resistance, we are in the final stages of releasing a softbait formulation, which provides unique attributes of proven fertility control in an industry-familiar softbait format demanded by many, including big box retailers, key e-commerce channels, and leading industry pest management professionals. When I first took over as CEO at Synestek, soft bait was one of the key items I quickly identified as a need for us to steepen the curve. I believe its introduction in the coming months will be transformative to our business. We expect to be announcing some exciting news on this topic soon. But let me state this. We expect to have this on the market by the fourth quarter. Finally, on the last imperative, to make better products. I mentioned the last quarter, this last quarter, but when I took over as CEO during the third quarter of last year, our customer complaints peaked at 35 complaints per month. Not that high, but we were doing an adequate job. But I knew we could improve it. During the second quarter, even amidst higher volumes, our complaints averaged less than five per month. Concurrent with the introduction of Isolate, we have implemented an enhanced formulation of ContraPest that should improve product quality and a wider variety of environmental conditions. I believe we have made great strides in the area of continuous improvement. But as I have stated since I took over as CEO, this is a results business. We know that. We need to steepen the adoption curve of ContraPest. We spent the first part of the year building the base, and now we are seeing rapid growth we all know is going to get better and better. With that overview, let me turn it over to Tom to review the financials. Tom?