SenesTech, Inc.

Good afternoon and welcome to the CMS Tech Reports Second Quarter Fiscal Year 2026 Financial Results Conference Call. After today's presentation, there will be an opportunity to ask questions. To submit a question, you may type it into the Ask a Question box on the webcast screen. Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with LiveMPartner. Please go ahead.

All right, thank you very much, Megan, and thank you all for joining us today to discuss the NesTech's second quarter 2026 financial results. Again, this is for the period that ended June 30th, 2026. With us on the call today are Michael Edell, the company's President and Chief Executive Officer, and Tom Chesterman, the company's Chief Financial Officer. As the operator indicated, at the conclusion of today's prepared remarks, we will open the call for a question and answer session. Again, if you are listening through the webcast portal and would like to ask a question, you can submit it through the Ask a Question feature in the webcast player there. 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, 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 our filings with the Securities and Exchange Commission. All forward-looking statements contained during this conference call speak only of the date in which they were made and are based on management's assumptions and estimates as of such dates. Thank you, Robert. And good afternoon to everyone joining us today. I appreciate you taking the time. This is my second earnings call as President and Chief Executive Officer of

and the tone of today's discussion is meaningfully different from last quarter. In May, I described the strategy we have begun putting in place and the early indicators that gave us confidence in the direction. Today, we can point to a full quarter of measurable commercial results. The strategic changes are working, and in several important areas, they are working faster than we had planned. Stepping back for a moment, the past year has been a transformation of this company from a primarily research-focused organization into a revenue-driven business with a clear strategy for sustainable long-term growth in a category that we are creating. The headline numbers are all very positive. Revenue increased 56% sequentially to a company record of $770,000. E-commerce revenue increased 186% to another record of $511,000. Amazon revenues increased 473% to a record $349,000 in our first full quarter of having this being managed in-house. Direct-to-consumer subscription revenues increased 89% to another record of 104,000, and gross margins reached another company record of 73.6%. First-half revenue reached another record of 1.26 million, up 14% year-over-year. Each of those results is important, but what excites me most is that they are connected. They reflect on a commercial model built around direct consumer relationships, data, analytics, recurring revenue, stronger brand control, and just a disciplined channel strategy. Q2 is the first full quarter in which we directly managed our Amazon and other e-commerce channels from beginning to end. During the quarter, Amazon established new records across major platform categories, performance categories including total orders, subscription revenue, subscription revenue or non-subscription revenue, total revenue, and subscriber counts. Amazon revenue has now grown every single month since we assumed direct control middle of February, culminating in a record June of $148,000. June was also the strongest e-commerce month in the company's history, with a total e-commerce revenue of $206,000. We now control the customer experience, advertising strategy, pricing, promotions, Subscription Programs, and the data that comes from each of these transactions. We can see what's working, make changes quickly, test new messages and offers, and allocate marketing dollars with much greater precision. But it's not simply a better Amazon model, it is the ideal operating model that we need to rapidly scale. Importantly, the e-commerce momentum broadened beyond Amazon. Non-Amazon e-commerce, which is primarily our own Synestech.com Shopify channel, saw revenues increase 31% sequentially to $155,000. And we ended the quarter with a record number of Shopify recurring revenue subscribers. In July, we also completed the launch and redesign of the CinesTech website on the schedule we have previously communicated. The new site places Evolve and Road & Birth Control at the center of the customer experience. It is designed to make the product easier to understand, easier to purchase, easier to reorder, while also providing a strong platform for digital marketing and subscription growth Customer Education, and Commercial B2B Lead Generation. If you have not done so yet, please take a look at the new site. We think you'll be impressed. Subsequent to the quarter end, July provided another encouraging data point for the e-commerce strategy. E-commerce revenues for July reached a record 245,000, up 19% from the 206,000 in June last year. and Subscription Revenue achieved a new record at 52,000, up 22% from the 43,000 in June. Subscription growth remains one of the most important components of the strategy. The evolved product is not intended to be a one-time purchase. It is designed to become part of an ongoing rodent management program Subscription revenue increased 89% to a record $104,000 in Q2 2026, compared to $55,000 in Q1 of 2026, and increased 142% compared to $43,000 in Q2 of 2025. Combined subscriber counts across Amazon and the company's e-commerce site increased 117% to new record levels, further strengthening the company's recurring revenue base and increasing revenue visibility. That creates more predictable revenue, improves customer lifetime value, and provides evidence that customers are incorporating the product into a recurring program. We are still early on, but the direction is exactly what we want. More customers, greater retention, more repeat purchasing, and larger recurring revenue base. There is a bigger strategy beyond the e-commerce results. The NASDAQ is creating an entirely new category of road infertility control. Before we can meaningfully scale the B2B opportunities that we have available to us, we need to build the awareness of the evolving ContraPest brands, educate the market further, establish credibility, and create demand. E-commerce is how we accelerate that process. Every customer review, Educational Campaign, Digital Advertisement, Subscription, and Repeat Order does two jobs. It generates consumer revenue today and it makes the brand more recognizable, understood, and trusted when our sales organization engages with a pest management company, a municipality, commercial operator, agriculture customer, big retailers, or distributors. Our growth strategy is therefore built around three priorities that reinforce each other. First, you use e-commerce to build the Evolve and ContraPest brands, establish the category, and create a growing recurring revenue base. Second, you grow B2B with both Evolve and ContraPest through a professional sales organization focused on targeted vertical markets. Third, expand our addressable opportunity through new products, new services, and separate initiatives. We designed them to build one on the other with customer awareness and data supporting B2B growth and with services and partnerships deepening customer relationships across the platform. Turning to B2B. Reported revenue was $259,000 for the quarter. The sequential comparison requires some context because the first quarter included an $81,000 international order carryover from 2025. So if we actually exclude these one-time events, core B2B revenue actually increased by 11%. Tom will walk through the full comparison in a moment. In June, we were proud to present that Jack Karabees is our new Executive Vice President of Sales and was brought in to lead the effort. Jack's mandate is to build a professional, commercial organization with clear vertical ownership, qualified pipelines, better forecasting, stronger follow-up, and accountability for conversion. We're moving away from a broad approach which in every prospect was treated the same. Each market now has different business challenges, buying criteria, decision makers, and sales cycles. Our sales process needs to reflect those differences. We have already begun adding to the team with a new regional sales manager and a Director of Marketing, both joining in July. To further support that strategy, we are developing dedicated sales presentations, ROI models for each vertical, case studies, technical support materials, and industry-specific messaging for each priority vertical. We do not want to lead only with product features or science. The science does matter, and it is a critical differentiator, but customers ultimately make purchasing decisions based on business outcomes and solving problems. Our objective is to demonstrate how evolving ContraPest can reduce damage, disruption, support sustainable objectives, improve pest management performance, and deliver measurable long-term value. We are concentrating our resources across eight strategic verticals. Third-party e-commerce, pest management, commercial, agribusiness, zoos, sanctuaries, government, retail, and international markets. Each represents a meaningful opportunity, but we will prioritize our efforts and resources based on the results we see in each vertical as we build out the new B2B organization. As we identify the greatest opportunities and strongest customer adoption, we will increase our investment and resources in those areas while continuing to build the foundation across the remaining markets. Third-party e-commerce partnerships, If leading online retailers and marketplace extend the reach of the Evolve brand well beyond our own channels, in retail, the consumer demand we're approving through e-commerce is what supports potential expansion into national, regional, and specialty retail partners. Test management is one of our highest priority verticals. Evolve and ContraPest are designed to complement integrated pest management programs rather than trying to replace them, which lets pest management professionals expand their service offerings, generate recurring and greater revenues, and differentiate themselves in an increasingly competitive market. Commercial and agribusiness customers can use fertility control to protect facilities, infrastructure, Stored commodities and operating continuity. Zoos and sanctuaries require solutions that fit sensitive animal environments. In government, we are starting to see cities and municipalities where demand continues to grow for environmentally responsible approaches that align with integrated pest management initiatives and help communities address public health concerns. Over time, that opens the door to state and federal agencies, military installations, public housing authorities, and other public institutions. Internationally, we will continue to favor experienced local partners who can lead the regulatory approval process while we contribute to the scientific, technical, and commercial expertise. That model lets us generate revenue supporting these partners through the approval process and it establishes the commercial relationships that position us for launch once approval is attained. The value of a vertical approach is that it allows us to convert broad interest into very specific economic proof. The agricultural deployment we discussed in July is a good example. at a 400-acre Texas operation. On-site observations indicated an estimated 80% reduction in rodent activity, together with a substantial decline in damage to underground irrigation infrastructure. That is the kind of result that we can support, or can support, a compelling case study and ROI discussion. The customer is not simply buying a product. The customer is addressing damage, maintenance costs, and operational risk. Our job is to identify more opportunities with that profile and turn them into larger, repeatable commercial relationships. We also launched our assessment services in July and have actually completed our first deployment. This is an important extension of the strategy because many customers simply don't have an objective baseline of data regarding the size, location, or severity of an infestation. These services are focused first on our B2B market verticals, where professional assessments deliver the most value, and over time we will evaluate simplified versions for our direct-to-consumer business. Our program combines trained field personnel with track plates, track tunnels, and a proprietary AI technology that we have launched. We can conduct an on-site assessment, identify areas of activity, establish a measurable baseline, and provide reporting that helps the customer understand the severity of the problem before selecting a treatment program. From there, we can offer implementation support based on this assessment. This can include a customized roadmap management plan, recommendations for the placement of our evolving ContraPest products, assistance with deployment, and ongoing monitoring to measure progress and optimize results. These services will generate additional revenue with limited incremental infrastructure to improve product placement and efficacy, strengthen customer confidence, and help us build a proprietary database of customer and performance results over time. Strategically, they also moved Synestec from being viewed as only a product company toward becoming a trusted expert in road and population with products and services. Partnerships and disciplined market expansion remain a third element of the strategy. Our direct e-commerce infrastructure gives us a much more efficient platform for launching related products and reaching new customers. Internationally, we expanded distribution into Bermuda through our partner Animal and Garden House, adding to activity in U.S. Virgin Islands and Belize. Our approach is to work with capable local organizations that can support regulatory and commercial execution without requiring a disproportionate amount of capital from Synestec. The quarter also demonstrated that growth can come with improved economics. Growth profit increased 68% sequentially to a record $560,000. while gross margins improved to 73.6%. Gross profit grew faster than revenue, reflecting the contribution of e-commerce and better channel economics, a much more disciplined approach to pricing, and favorable raw material purchasing conditions. The adjusted EBITDA loss also improved sequentially. We need to continue expanding revenue, but we also must do it in a way that creates operating leverage and moves us toward profitability. So, when I think about the next phase, the priorities are very practical. We need to keep scaling e-commerce. We need to improve conversions, subscriptions, retention, and repeat purchasing. We need to use the e-commerce awareness and brand building to help the B2B team close larger and more repeatable opportunities. We need to launch and continue with the assessment and implementation services model with a discipline. We need to develop the materials case studies and return on investment tools that support each of these verticals. and we need to protect gross margin and deploy capital only where we can measure a credible return. One quarter does not complete the transformation and I do not want to suggest that it does, but Q2 is the clearest evidence that the strategic trajectory is right. Last quarter we discussed moving from planning to execution. This quarter we can point to results which get me excited. The excitement is not based on a theory or a single announcement. It is based on record revenue, record channel performance, accelerating subscriptions, a stronger brand platform, improved economics, and a commercial organization is becoming more focused and accountable. Now the work is to repeat it, broaden it, and build a durable growth company around it. With that, let me turn the call over to Tom Chesterman to review the financial results in more detail. I will then return with a few closing comments before we open the call for questions.