All right. Hello, everyone, and welcome to the SenesTech Fireside Chat. Again, my name is Robert Blum, Managing Partner at Lytham Partners. Today I have the pleasure of moderating a Q&A discussion with the executive management team of SenesTech, including the company's Chief Executive Officer, Joel Fruendt, and the company's Chief Financial Officer, Tom Chesterman. Joel, Tom, welcome. Thank you, Robert. Fantastic. Let's start high level. For those not familiar, give us a few minutes on the history of the company. Absolutely. SenesTech went public in 2016. That's when our initial product, ContraPest, was registered. We're traded on the Nasdaq. SNES is the ticker symbol. What we do is our mission is to improve the health of our world by humanely managing animal pest populations through fertility control. Right now we really focus on rats and mice, rodent control, and certainly one of the world's oldest and most challenging problems. We do it in a little bit different way. We do it by focusing on the reproductive rate of rats and mice and how to control that, as opposed to the lethal side and trying to get rid of the problem by killing them off. If there's one thing out there that everyone should realize is that rats and mice are rapid reproducers. Two rats or two mice can become 15,000 in one year. They live to be roughly a year old. During that time, the females will have six to eight litters with six to ten pups per litter. You can see how they reproduce so fast that you just can't kill them, gas them, drown them, whatever you're going to do, fast enough. What we really do is we offer rodent birth control, and restricting rodent reproduction is the key to successful population control. It's always one of my favorite cocktail stories. The two turning 15,000 over a year. Everyone's always amazed by that. They are. Absolutely. You know, Joel, you've been with the company for what, a little over a year, almost two years now? No, about two and a half. Two and a half years now. Yeah. You know, and it's interesting because your background is from the industry, right? Sort of talk about how you talked about the original product ContraPest, and then let's sort of get into Evolve here, because I think it was your industry background that really helped to sort of guide this evolution and moving the product to a soft bait form. Talk about how sort of your experience led to that decision there. Absolutely. I spent 15 years in the mosquito control products area, vector control. Very similar part of the pest control world. The leading company in the industry is who I worked with. What's really interesting in the development of mosquito control products, I saw a lot of similarities there to the rodent control world. In the mosquito control world, when I first started in that industry, there was focus on adult mosquitoes, right? Flying mosquitoes. Let's spray them. Let's kill them. That was about 95% of the industry. The other part of the control method there was what they call larvicide. You put chemical products in the water and they control the larvae so they don't hatch off. That was roughly about 5% of the industry when I first started. Fifteen years later, it completely flip-flopped. Larval control is now up to 70% or so of that industry. The concept is pretty simple. It's how are you going to control the larva so that they don't hatch off into adults that you then have to worry about? Taking that concept and bringing it over to SenesTech, I saw that there was a real need for controlling the population and controlling reproduction similar to the mosquito control side. Once you do that, then the remaining adults are that much easier to fend off and to do away with. Having come over to SenesTech, I also looked at, okay, what does the industry demand? ContraPest is a great product, but it's in a liquid form. About 95% of the industry products are in some sort of solid form. Also needed a product that was easier to use and had a longer shelf life. That is when we decided that, okay, let's embark on a mission to create a solid product that we could then open up the global market as well as the domestic market here and give a product that had a long shelf life that was easy to use out in the field and that was at a price point that was advantageous. You have seen incredibly rapid growth here since you introduced the Evolve product here. Beyond sort of the Evolve Rat product, you have also launched a product for mouse as well. Maybe talk about the two products and sort of how they have grown here over the last few quarters. I mean, the Evolve has only been around for, I guess maybe we are going on about five quarters now. Talk about sort of how that has really driven the success going forward here at the company. Yeah, you know, we took 2023 to really develop the product and we developed it under the EPA's 25(b) exemption to registration, otherwise known as a minimum risk product. All the ingredients of Evolve are natural products or food additive ingredients, and all of them are on the list of approved products for use in the 25(b) exemption. We took 2023 to really test the product out, get it out in the field, see if it really worked, which it does, see if it's very palatable to the rats and mice that are out there. As we went along, we realized we had something very special here. We've officially launched the product, the rat product, in January of 2024. Subsequently, we launched a mouse product in May of 2024. In the first year that they were out there, they now account for about 70% of our total sales. You can see the rapid acceptance of the product out in the field and exactly how it works and the advantages of having a solid product out there and one that is very palatable to the rodents. Yeah, for those that haven't taken a look, it was during the most recent fourth quarter, the December ending quarter that you had 70% revenue growth here, again, largely driven by the growth of the Evolve product lines here. Talk about how you go to market here, the key distribution channels. It's sort of a multi-channel approach. Talk about online, brick and mortar, other ways in which you're distributing the product out there. Yeah, so when we started taking a look at, okay, how can we get the product out into the field? It's like, you know, typically before with the ContraPest product is that we were going a lot of direct sales to pest control companies and to agriculture companies. We had to do that because it wasn't a very efficient distributed product simply because of the lower shelf life. With Evolve, we were able to take the concept of, all right, let's identify the end markets and then what are the channels that we're going to use to get there. We came up with our six-channel strategy. Certainly, pest control distribution was the first and foremost that we looked at, and we identified the distribution companies that could help us get closer to the customers on a regional basis. We set that up. We have certain distributors that are in the agriculture industry. Our agribusiness distribution channel, we focused on that. Who do we need to get involved with? We have a product that is like now can be used globally. We immediately identified international distribution as one of the key points that we wanted to address. We have 11 exclusive international distributors in various parts of the world, places like Australia, New Zealand, Hong Kong, Singapore, and the Netherlands. That allowed us to really get set up. We have been working really hard over the course of 2024 to get set up in those areas. We identified those channels, and then we said, okay, now we also have our e-commerce business. Of course, SenesTech had e-commerce, our own e-commerce site now for the last five years, but we wanted more than that. We were able to get on Amazon in June of last year, really started selling on there in August, and now it is a really fast-growing channel. In fact, the last quarter of 2024, our e-commerce sales were up 206% quarter over quarter. Very fast-growing area. It gets the product out to consumers because not only is this now a business-to-business product, but it is also a really good consumer product. We have focused on that. We are now on Walmart.com and we are on TractorSupply.com. Really focused on that channel. Retail. We had interest from Ace Hardware initially. We are now in the Ace system. We have Ace stores buying the product. We're hoping to get into their warehouses here shortly, along with some other brick and mortars like Tractor Supply. We're in the process of discussing getting into their stores along with others. Of course, we have our direct sales, which direct sales is still a good part of our business because we want to be working with the largest and the most progressive companies and municipalities that are on the forefront in the war against rodents. We are working with people like in the agriculture industry, one of the world's largest sugarcane producers because they have $10 million-$15 million annually of damage to their sugarcane crop through rodents and are not using poisons anymore because of safety concerns. We are out in the field with them right now, proving the product out to be used on a large-scale basis. In addition to that, we're working with a lot of municipalities now. Of course, everyone's heard of the rat problem in New York City. We were able to work with them, and I'm pleased to say that we're going to be shipping our first product to New York City in April. They're going to start a pilot program. They call it their contraceptive program. I think that's been the result of over the years looking at how they've been attacking the rat problem there, you know, on the lethal side, and it's just not keeping up. Now I think they're realizing we've got to try to control the population as well as then continue on the lethal side for a complete program. That's what integrated pest management is all about. You can see through those channels, we've got some momentum in each of them and very specific strategies in each of those channels, and we're really excited about that. Yeah, you mentioned obviously the 206% revenue growth in e-commerce, again, driven by your own site, driven by Amazon, Walmart.com coming on board, Tractor Supply. There was talk on the last conference call as the e-commerce can have an effect on driving the brick and mortar sort of adoption, if you will, right? Walmart wants to see how it performs on Walmart.com in order to look at perhaps bringing it in stores. You know, for people not familiar with sort of that process, help just kind of walk through and what's some, I don't know, we'll call them benchmarks that might need to be achieved in order to see the product in stores here in the next 12 to 24 months and some of these bigger retailers. Yeah, it's interesting that, you know, all these retailers, they now have an online presence. That's just a natural. It gives them kind of a proving ground. It's not unusual for a company like ours that's bringing a new product, a new way of doing things in for them to put it on their e-commerce site first. It gets it out there fast. They can kind of gauge what the reaction is. You know, being on Walmart.com, being on TractorSupply.com, they have a way of looking at the product and how it's doing with the consumers. We expect those sites to really start accelerating here, similar to how it has been with Amazon. On Amazon, we started doing, you know, a few thousand dollars per month. You know, now we're up to the $35,000-$40,000 per month of product in really a short period of time because if you look at it, we really didn't get going until August of last year. That's pretty substantial growth. We're expecting to see that on these other sites as we learn about their system and start doing, you know, some search engine optimization work and those types of things. Once that's in place, they can really look at the effectiveness on the e-commerce sites and then start planning out, okay, where are we going to have this product available in certain locations, certain stores, or across the board? Yeah, you also thank for that. You sort of also talked about some of the municipalities, right? Over the years, we've seen, you know, I always love the Rattiest Cities list that gets put out there. Recently, we've had Los Angeles have some deployments of Evolve there, programs in Chicago and the Chicagoland area, Boston, Baltimore, in addition to obviously New York that you mentioned here. Talk through sort of the process of which they do sort of, I don't know, city block deployments, look at the data, look to perhaps expand beyond that. You know, talk through what investors should be looking for from those programs here going forward. Absolutely. We have, you know, ours is a regulated product, right? You have to go through the process. We went through the minimum risk process to get the product approved. That is great. You have to get the approval by state. Right now we have 45 states where we are allowed to be sold in. That is a process in itself. In some, it is easier than others. There are administrative things. All in all, we now have the approval in a majority of the states. Once you get that, it is the proof point out in the field, right? We have been talking to New York City for over a year about doing a program. They finally realized that we should get this going. They had to have a vote with their city councilman, and it passed. We are at the point where we've got product on order from New York City. What they'll do is they've taken two 10-block areas that they've identified, and we're helping them in the layout of where to deploy the product. You put the product in bait stations, and then you put it in, you know, a certain number per city block. What we'll find out is how much to put per city block once it's out there because it's all about consumption. The faster the consumption, the higher consumption, and we expect it to be 100% will tell you about your population that's out there, the rat population. You can adjust that accordingly per city block. If you look at it and just some of the potential that's out there is that a city block in the 10-block areas, we're probably going to have five bait stations per city block, and that will be filled with product. You want to have it on a continuous basis because that's how this product works. On the reproductive side is they start eating it, and ultimately then after four to six weeks of continuous consumption, the reproductive control starts to take place. If you just put some numbers to it and say, okay, so if we have five bait stations per block, it just said annual usage per block is, say, $1,000. In New York City, there's 120,000 city blocks. How fast and how rapid will they expand it to other areas? We're really excited about that. They're really excited about it because they believe that this is something that has been overlooked, and now it's a new tool in their integrated pest management toolbox that can be worked in conjunction. You know, $1,000 of product per city block per year with 120,000 blocks. Now, I'm certainly not suggesting they're going to use it in every city block, but how much, what percentage of blocks will get control? We'll wait and see, but there could be some tremendous upside there. You mentioned Chicago. I just want to touch on that briefly. That's another area, neighborhoods in Chicago. New York has boroughs, Chicago has neighborhoods, and some of the neighborhoods have been wanting to do this for years now. They finally got together along with the City of Chicago, and we just got our first order and our first shipment to a couple of those neighborhoods in the city. They're going to start deploying it the first week in April, which is here now. We're really excited about what the potential is there as well because big cities have huge rat problems. This is one way that they can start to really have an effective solution that goes right hand in hand with other methods that they've already been using. Very exciting. Very good. We're seeing growth on the e-commerce side. Sounds like a number of new deployments on the municipal side. I want to come back to international here for just a moment, right? You mentioned that you have a number of agreements in place. Similar to the state, you have to sort of go systematically one by one, get the country-specific registration approvals. However, you do have a number of them that you've already received approval for and ship product to. I think it's Hong Kong, UAE, Netherlands, Maldives. A couple of others are close. You know, talk about what the expectations are here for 2025 on the international front. We're really excited about the international front because now it gives us, you know, the rodenticide market in the U.S. is roughly $1 billion, you know, including traps and all those things. Globally, it's $5 billion. Certainly rat and mouse issues are not limited to the United States. In fact, in some areas, there's huge infestations that just need to have some type of solution. We're excited about the distribution that we already have set up. Just a little bit about how they came about is, you know, we have made contact with certain ones that we know of. Others have contacted us. Part of our exclusive distribution agreement is that it's upon them to help us get the approval in the specific country. In return, they get exclusive distributorship, and they have to bring product in. One of the first ones was Hong Kong. They realized the problem that they had in the wet markets there, and we got the product in with our distributor there. They started getting it out for trials. They had six to eight months. They expected it to be in it. After about six months, we were able to get the product approved for use. Now we're doing some very specific trials there and really expect that to expand. Same thing in the Netherlands. Europe's tough because of the biocide regulations that they have, but we got a distributor there that really understands how to put this concept of, you know, controlling reproduction in conjunction with other methods. They were able to work with the government to allow the product to be used. We shipped a container of material there, and now they're in the process of getting that deployed. Another exciting one is that we just received notification for New Zealand that they have passed the last major hurdle to getting the product approved. They expect to have that full approval in October. We're talking about, you know, shipping product over there so that when they do get full approval, they're ready to go and they've got customers lined up already. Word of mouth is key in that because they all hear about other things where it's in other parts of the world where it's been effective and where it's being approved, and then it's starting to snowball. Fantastic. Tom, let's turn to you on the financials in the few minutes we have left here. Q4, sort of records really across the board, cost cuts, improved margins, et cetera. Talk through some of the key highlights here of the fourth quarter numbers that were reported here a couple of weeks ago. Sure, thank you. Just kind of walking down the income statement there, you know, the next one down really is gross profit. ContraPest was a 40% gross margin type of product. We knew that Evolve had the potential for higher gross margins once it received steady state. We're definitely in steady state. We expect that, you know, we have the potential at the current pricing to meet or exceed 60% gross margin. Significant improvement there that really just makes it much, much easier to again to get to overall profitability as we move forward. Having it at or above 60% also gives us some pricing flexibility. If we come across unique opportunities, we can move quickly without damaging the cost structure significantly. On the operating expense side, we've also been steadily removing costs from the business, becoming more efficient, trying to be as prudent as we can in exactly where do we invest our limited funds. That's really been, if you look at last year, our, you know, burn rate, cash burn rate was about $1.5 million per quarter. We can do better. We've recently announced some initiatives to reduce that cost structure even further to $1 million a quarter. At that, you know, given our break-even, we used to talk about, you know, getting to break-even at somewhere $12 million-$14 million. We can now get to break-even at about $7 million, maybe even a little bit less of revenue on a per annum basis. Significant improvements in our ability to get near-term cash flow profitability, which is really our passion and our focus, is how quickly can we get there. You know, we talk about the fact that we can probably do it now in somewhere in fiscal year 2026. Frankly, because of the, you know, some of the unique opportunities, revenue opportunities that Joel touched on, you get a single full New York City order or you get a Costco order or you get, you know, this New Zealand order. Those kinds of orders can push you very, very rapidly over the threshold into profitability. It could be sooner. We'll see how those orders come in. All right, fantastic. We've got about a minute left here. Joel, maybe just some final takeaways to leave everybody here with. As you can see, we've been working in a lot of different areas, and we've done a lot of things in 2024. We launched Evolve, we launched Evolve Mouse. We got the product out in the field. People and companies and municipalities are using it. They're deploying it in test situations, right? Because everyone wants to know that it's going to work. We're really excited about wherever we have it deployed, we're getting 100% consumption of the product. We know if they consume the product that there's going to be control of the population. We really believe that 2025 is getting set up so that all the legwork that we did in 2024 is really going to pay off, and we're starting to see that. All right, fantastic. Joel, Tom, thank you very much for your time today. Thank you to everyone who is watching right now. If you have any questions or would like to schedule a meeting with management here, you can send me an email. That is Blum, B-L-U-M, at lythampartners.com. We do have additional presentations and fireside chats coming up next. Please stick around, everyone. Again, Joel, Tom, thanks so much for the time today. Thank you. Thanks, Robert. All right, thank you, Joel and Tom. It's always one of the more unique discussions we have talking about the opportunity SenesTech has to disrupt the rodent control market. Quick reminder, all of our webcasts will be available to watch on demand after the summit. Okay, up next, I'm going to sit down for a fireside chat with Joe Forkey, CEO of Precision.