Senestech Inc (SNES) 2023 Q3 法說會逐字稿

Good afternoon, and welcome to the SenesTech Reports Third Quarter Fiscal Year 2023 financial results conference call. ( Operator instructions)

下午好，歡迎參加 SenesTech 報告 2023 財年第三季財務業績電話會議。 （操作員說明）

I would now like to turn the conference over to Robert Blum of Lytham Partners. Please go ahead.

我現在想將會議轉交給 Lytham Partners 的 Robert Blum。請繼續。

All right. Thank you very much and thank you all for joining us today to discuss SenesTech's Third Quarter 2023 financial results for the period ended September 30, 2023.

好的。非常感謝大家今天加入我們討論 SenesTech 截至 2023 年 9 月 30 日的 2023 年第三季財務業績。

With us on the call are representing the Company today is Joel Fruendt, the Company'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.

今天代表公司參加電話會議的是公司執行長 Joel Fruendt 和公司財務長 Tom Chesterman。在今天準備好的演講結束後，我們將開始問答環節。

Before we begin with prepared remarks, we submit for the record the following statements. 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 A of the Securities Act of 1933 as amended, and Section 21 E of the Securities Exchange Act 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.

在我們開始準備好的評論之前，我們提交以下聲明以供記錄。 SenesTech 管理團隊在本次電話會議期間發表的聲明可能包含經修訂的 1933 年證券法第 27 A 條和經修訂的 1934 年證券交易法第 21 E 條含義內的前瞻性聲明此類前瞻性陳述是根據1995 年《私人證券訴訟改革法案》的安全港條款做出的。

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.

前瞻性陳述描述了未來的期望、計劃、結果或策略，通常前面有“可能未來計劃”或“計劃將”或“應該預期”、“預期”、“草案”、“最終”或“預期”等詞語。請聽眾注意，此類陳述面臨多種風險和不確定性，可能導致未來情況、事件或結果與前瞻性陳述中預測的結果有重大差異，包括實際結果可能與前瞻性陳述中預測的結果有重大差異的風險。前瞻性陳述是由於我們向美國證券交易委員會提交的文件中發現的各種因素和其他風險而得出的。

Our forward looking statements contained during this conference call speak only as of the date on which they are 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 a result of the receipt of new information, the occurrence of future events or otherwise.

我們在本次電話會議中包含的前瞻性陳述僅代表截至發布之日的情況，並且基於管理層截至該日期的假設和估計。本公司不承擔公開更新任何前瞻性陳述的義務，無論是由於收到新資訊、未來事件的發生或其他原因。

With that said, let me turn the call over to Joel Fruendt, Chief Executive Officer, SenesTech for Nasdaq. Joel please proceed.

話雖如此，讓我將電話轉給納斯達克 SenesTech 執行長 Joel Fruendt。喬爾請繼續。

Good afternoon, everyone. Thank you all for joining us today. The results of the third quarter highlight the progress we have made on the various initiatives implemented to drive sales improve our product quality and expand our product options. Specifically, we accelerated our growth trajectory during the third quarter with a strong 44% year-over-year growth in revenues coming in at a new all-time quarterly record of $360,000.

大家下午好。感謝大家今天加入我們。第三季的結果突顯了我們為推動銷售、提高產品品質和擴大產品選擇而實施的各種措施所取得的進展。具體來說，我們在第三季加速了成長軌跡，營收年增 44%，創下 36 萬美元的新季紀錄。

Sales growth during the third quarter was led by increases in nearly every key vertical market, including agribusiness, zoos, and sanctuaries and commercial. Lately in addition, we have been seeing a surge in demand from residential homeowners associations. This revenue growth, coupled with a number of operational improvements such as improvements in our return on marketing investment within our e-commerce platform helped lead to an improvement of nearly $700,000 in our net loss and adjusted EBITDA loss compared to the year ago period.

第三季的銷售成長是由幾乎每個主要垂直市場的成長所帶動的，包括農業綜合企業、動物園、保護區和商業市場。此外，最近我們也看到住宅業主協會的需求激增。這種收入成長，加上電子商務平台內行銷投資回報率的提高等一系列營運改進，幫助我們的淨虧損和調整後 EBITDA 虧損與去年同期相比減少了近 70 萬美元。

However, this is just the beginning because I believe our growth will further accelerate following the launch of the revolutionary Evolve Soft Bait product. Evolve is our all-new software product that has similar efficacy to ContraPest, but in a format that is easier to deploy that customers can use more efficiently in their integrated pest management programs and is offered at a competitive price to traditional rodenticides.

然而，這只是一個開始，因為我相信，隨著革命性的 Evolve Soft Bait 產品的推出，我們的成長將進一步加速。 Evolve 是我們的全新軟體產品，與 ContraPest 具有類似的功效，但其格式更易於部署，客戶可以在其綜合害蟲管理計劃中更有效地使用，並且以比傳統滅鼠劑具有競爭力的價格提供。

As with ContraPest evolve targets the root cause of pest problems. Rat's ability to rapidly reproduce. The solution controls the population by controlling the fertility of rats, in other words the birth rate rather than relying solely on trying to keep up with the growing numbers of an infestation by solely managing the death rate.

與 ContraPest evolve 一樣，它的目標是害蟲問題的根本原因。老鼠的快速繁殖能力。該解決方案透過控制老鼠的生育能力（即出生率）來控制人口，而不是僅僅依靠控制死亡率來跟上不斷增長的感染數量。

Evolve's Active Ingredient Catapult is derived from cottonseed. It has a well-documented record of efficacy affecting fertility in rats. Compound interferes with the reproductive mechanisms in both male sperm count and motility and longer extra cycles and reduced follicles for females, thereby controlling their population.

Evolve 的活性成分彈射器源自棉籽。它對影響大鼠生育能力的功效有詳細記錄。該化合物會幹擾雄性精子數量和活力的生殖機制，延長雌性的額外週期並減少卵泡，從而控制其數量。

Similar to ContraPest, the low gossypol levels in Evolve are designed for the body massive rats. So larger mammals would need to repeatedly ingest a substantial amount over several weeks to see any effects. Birds appear to be more tolerant of gossypol as they have different intestinal tracks and modes of digestion.

與 ContraPest 類似，Evolve 中的低棉酚水平是為體型巨大的老鼠設計的。因此，較大的哺乳動物需要在幾週內反覆攝入大量物質才能看到效果。鳥類似乎對棉酚更耐受，因為它們有不同的腸道軌道和消化方式。

It's important to point out the tremendous job our team has done in the development of this product. Our Chief Technical Officer, Dan Palaski and his team were able to develop Evolve under the EPA's minimum risk rules, also known as a 25b exemption. By leveraging this expedited pathway, we have been able to bring this innovative product to the market at a fraction of the time and investment it took to develop ContraPest.

需要指出的是，我們的團隊在該產品的開發過程中所做的巨大工作。我們的技術長 Dan Palaski 和他的團隊能夠根據 EPA 的最低風險規則（也稱為 25b 豁免）開發 Evolve。透過利用這一快速途徑，我們能夠以開發 ContraPest 所需時間和投資的一小部分將這種創新產品推向市場。

Dan and his team have published a white paper summarizing key data on our website as well as continuing to perform field test and further feed and breed laboratory tests. The results are impressive. Evolve can be used anywhere rats are found, simply place 2 to 12 pieces per location and an update based on rat activity levels. We recommend that Evolve be secured and tamper resistant bait stations in areas where there's potential exposure to children , pets wildlife further nontarget species.

丹和他的團隊在我們的網站上發布了一份白皮書，總結了關鍵數據，並繼續進行現場測試以及進一步的飼料和品種實驗室測試。結果令人印象深刻。 Evolve 可用於發現老鼠的任何地方，只需在每個位置放置 2 至 12 塊，並根據老鼠的活動量進行更新。我們建議在兒童、寵物、野生動物和非目標物種可能接觸的區域設置 Evolve 安全防篡改誘餌站。

Due to a soft paid format and label, Evolve offers convenience and application options and can be broadcast in areas such as agricultural fields in complexes. Another key differentiator for Evolve is that as priced competitively to rodenticide alternatives. As many of you know, ContraPest is a premium based product that is often priced two to three times over rodenticide. Let's take a step back why a Soft Bait product?

由於採用軟付費格式和標籤，Evolve 提供了便利性和應用選項，可以在綜合體的農田等區域進行廣播。 Evolve 的另一個關鍵區別在於其價格與滅鼠劑替代品相比具有競爭力。正如許多人所知，ContraPest 是一種優質產品，其價格通常是滅鼠劑的兩到三倍。讓我們退後一步，為什麼要選擇 Soft Bait 產品？

When the company 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's growing acceptance of fertility control as part of an integrated pest management, but there's still resistance from pest management companies to alter their established practices of utilizing non-liquid products.

當公司首次推出 ContraPest 時，我們需要讓害蟲防治市場相信兩件事。一是生育控製作為人口控製手段的價值，二是液體誘餌在其程序中的適用性。目前，人們越來越接受生育控製作為害蟲綜合治理的一部分，但害蟲防治公司仍然抵制改變其使用非液體產品的既定做法。

The current ContraPest delivery solutions we have in the market, ultimate, isolate and elevate are all currently delivered in a liquid form. As rats need to consume about 10% of their body weight in water every day, it is palatable to the rats and keeps them coming back for more. However, only about 5% of the current rodenticide market is a liquid formulation, if even that much. The remaining 95% is non-liquid Baits.

目前我們在市場上擁有的 ContraPest 輸送解決方案、終極、隔離和提升目前均以液體形式輸送。由於老鼠每天需要消耗其體重約 10% 的水，這對老鼠來說是美味的，並且會讓它們回來喝更多。然而，目前滅鼠劑市場中只有約 5% 是液體製劑，即使有這麼多。剩下的 95% 是非液體誘餌。

To this point, we believe the launch of the Evolve solution is expected to be a significant step in expanding SenesTech's reach within key market verticals including big box retailers, e-commerce channels and leading industry pest management professionals. We have already received a number of preorders and expect to start shipping product next week. And we are in negotiations with big box retailers in key e-commerce providers with the goal to develop partnerships that will dramatically increase the adoption of the Evolve solution.

到目前為止，我們相信 Evolve 解決方案的推出預計將成為擴大 SenesTech 在關鍵市場垂直領域（包括大型零售商、電子商務通路和領先的行業害蟲管理專業人士）影響力的重要一步。我們已經收到了一些預訂單，預計下週開始出貨。我們正在與主要電子商務提供者的大型零售商進行談判，目標是建立合作夥伴關係，從而大幅提高 Evolve 解決方案的採用率。

For example, we have initiated the process with Amazon with respect to big box retailers. We already have shelf space for isolate at a group of Ace Hardware stores. So, we expect to move quickly into big box with Evolve.

例如，我們已經與亞馬遜就大型零售商啟動了這項流程。我們已經在 Ace Hardware 商店群中擁有隔離物的貨架空間。因此，我們希望透過 Evolve 快速進入大盒子。

With a competitive price point and the format they are accustomed to we believe we have a recipe that will set us up for tremendous success in the future. The introduction of Evolve continues SenesTech for recent string of innovative products, offerings and that were designed to provide customers with the effectiveness of fertility control in the format that fits their needs.

憑藉著具有競爭力的價格點和他們所習慣的格式，我們相信我們有一個秘訣，將為我們在未來取得巨大的成功奠定基礎。 Evolve 的推出延續了 SenesTech 最新的一系列創新產品和服務，旨在以適合客戶需求的方式為客戶提供有效的生育控制。

In July 2023, the Isolate Bait System was launched as a more efficient and easier to use Bait System, which integrates both the tank and tray as a single unit. At present, Isolate represents nearly a third of all unit sales despite only being introduced in late August. Last year, the Company introduced Elevate and easily deployed system for mounting in the rafters of barns, granaries, attics, lofts and storage and manufacturing facilities. Here to date nearly 55 hundred Elevate systems were deployed in various agricultural settings.

2023 年 7 月，推出了隔離誘餌系統，這是一種更有效率、更易於使用的誘餌系統，它將水箱和托盤集成為一個單元。儘管 Isolate 在 8 月底才推出，但目前已佔總銷售量的近三分之一。去年，該公司推出了易於部署的 Elevate 系統，用於安裝在穀倉、穀倉、閣樓、閣樓以及儲存和製造設施的椽子上。迄今為止，近 5500 個 Elevate 系統已部署在各種農業環境中。

Product innovation is key to our future success, and I am pleased with the tremendous progress we have made on this front. To wrap things up before I turn it to Tom to run through the financials, we continue to execute on the three key imperatives I have outlined to drive success in SenesTech with the goal of steepening the adoption curve.

產品創新是我們未來成功的關鍵，我對我們在這方面所取得的巨大進步感到高興。在我把事情交給 Tom 處理財務狀況之前，我們將繼續執行我概述的三個關鍵要務，以推動 SenesTech 取得成功，目標是使採用曲線變得陡峭。

One, we're delivering to our new and existing customers flawless products at work every time while providing more product options that fit their needs. With Isolate recently launched Evolve shipping shortly and a product development team that is already working with over 25 potential development progress --projects in progress. We are certainly achieving our objectives.

第一，我們每次都在工作中向新舊客戶提供完美的產品，同時提供更多滿足他們需求的產品選擇。隨著 Isolate 最近推出 Evolve 運輸，產品開發團隊已經在處理超過 25 個潛在的開發進度 - 正在進行中的專案。我們確實正在實現我們的目標。

Two, we will penetrate and grow our targeted markets with a structured sales force, enhanced e-commerce platform and improved district distribution relationships. These distributors are focused on providing customers and partners value as part of their effective integrated pest management programs.

第二，我們將透過結構化的銷售團隊、增強的電子商務平台和改善的地區分銷關係來滲透和發展我們的目標市場。這些經銷商致力於為客戶和合作夥伴提供價值，作為其有效的綜合害蟲管理計劃的一部分。

And three, we will make better products concurrent with the introduction of Isolate, we have implemented an enhanced formulation that continues product quality in a wide variety of environmental conditions, making great strides in the area of continuous improvement. I believe we are successfully executing on these imperatives, which should help steepen the adoption curve, Nasdaq products and drive long-term value in SenesTech.

第三，我們將在推出隔離物的同時生產更好的產品，我們實施了增強的配方，可以在各種環境條件下保持產品質量，在持續改進領域取得巨大進步。我相信我們正在成功執行這些要求，這將有助於提高納斯達克產品的採用曲線並推動 SenesTech 的長期價值。

With that overview, let me turn it over to Tom to review the financials. Tom ?

有了這個概述，讓我把它交給湯姆來審查財務狀況。湯姆？

Thank you, Joel. As a reminder to our investors, the press release is available on our website in the Investor Relations section as will be a recording of this presentation. Further, we expect to file our 10 Q later today. So, I'll just touch on some of the high points right now.

謝謝你，喬爾。謹提醒我們的投資者，新聞稿以及本次簡報的錄音可在我們網站的投資者關係部分取得。此外，我們預計今天晚些時候提交 10 Q。所以，我現在只想談一些要點。

Revenue during the third quarter was a new quarterly record of $360,000 compared to $250,000 in Q3 of 22, an increase of 44% sequentially. Revenue was up 18% compared to second quarter 2023. Sales growth during the third quarter was led by increases in nearly every key market vertical, including agribusiness, zoos and sanctuaries and commercial applications. Gross profit during the third quarter was approximately $176,000 or 49% of total revenue compared to approximately $122,000 or 49% of total revenue in Q3 of last year.

第三季營收創季度新紀錄，達到 36 萬美元，而 22 年第三季營收為 25 萬美元，季增 44%。與 2023 年第二季相比，營收成長了 18%。第三季的銷售成長主要由幾乎所有關鍵垂直市場的成長帶動，包括農業綜合企業、動物園和保護區以及商業應用。第三季的毛利約為 176,000 美元，佔總收入的 49%，而去年第三季的毛利約為 122,000 美元，佔總收入的 49%。

Net loss during Q3 2023 was $1.9 million compared with a net loss of $2.6 million for Q3 2022. Adjusted EBITDA loss, which is a non-GAAP measure of operating performance for Q3 was $1.7 million compared to $2.4 million in Q3 of 2022.

2023 年第三季的淨虧損為190 萬美元，而2022 年第三季的淨虧損為260 萬美元。調整後EBITDA 虧損（非公認會計原則衡量第三季經營績效的指標）為170 萬美元，而2022 年第三季為240 萬美元。

Our current goal is to take $1 million out of the annual cash expenses, and we're well on our way to achieving that goal. Cash at the end of September 2023 was $2.1 million. As I'm sure you all are aware, we have filed an S-1 with the SEC to raise up to $7.5 million. In addition, we have warrants that are near enough the money that we may be able to raise cash through the exercise of warrants. Our goal is to raise enough cash to confidently execute our commercial plans, including the launch of a Soft Bait for a year or more.

我們目前的目標是從年度現金支出中扣除 100 萬美元，我們正在努力實現這一目標。截至 2023 年 9 月末，現金為 210 萬美元。我相信你們都知道，我們已向 SEC 提交了 S-1 申請，籌集最多 750 萬美元。此外，我們擁有足夠接近資金的認股權證，我們可以透過行使認股權證籌集現金。我們的目標是籌集足夠的現金來自信地執行我們的商業計劃，包括推出一年或更長時間的軟誘餌。

With that, let me turn it back over to Joel for remarks and then we will take your questions. Joel ?

接下來，讓我將其轉回喬爾發表評論，然後我們將回答您的問題。喬爾？

Thanks, Tom. Our humanity is currently responding to too many rodents is not working with many decades of effort and traditional responses to public health concerns and risks keep rising. There's also a growing realization that there's too much collateral damage in this war on rodents as evidenced by California's adoption of the ecosystems Protection Act, which banned under many circumstances the four major second-generation anticoagulant rodenticides, commonly used in and pest control.

謝謝，湯姆。我們的人類目前正在應對太多的囓齒動物，數十年的努力並沒有發揮作用，對公共衛生問題和風險的傳統應對措施不斷增加。人們也越來越認識到，這場針對囓齒動物的戰爭造成了太多的附帶損害，加州通過的《生態系統保護法案》就證明了這一點，該法案在許多情況下禁止了四種主要的第二代抗凝血滅鼠劑，通常用於害蟲防治。

These tailwinds are all in our favour. And most importantly, we are executing, we are delivering against our success imperatives by selling better, improving our products, and offering the customers more choices. As we stated last quarter, products that can be paradigm-changing don't come along very often, but when they do they have an opportunity to change the way things have been done for generations. I believe we have the type of opportunity by leading the way in fertility control for animal pest populations. I thank you all for your continued support. And with that, let me now turn it over for any questions.

這些順風都對我們有利。最重要的是，我們正在執行，我們正在透過更好地銷售、改進我們的產品並為客戶提供更多選擇來實現我們的成功要求。正如我們上個季度所說，能夠改變範式的產品並不經常出現，但當它們出現時，它們就有機會改變幾代人的做事方式。我相信，透過在動物害蟲族群的生育控制方面發揮領導作用，我們擁有這樣的機會。我感謝大家一直以來的支持。現在讓我把它轉過來以解答任何問題。

We will now begin the question-and-answer session. (Operator instructions)

我們現在開始問答環節。 （操作員說明）

Amy, this is Robert here. While we wait to see if there's any questions from the live dollars here, we did have one e-mailed question that I wanted to make sure we get post management. I guess to Joel or Tom here, question is congratulations on new product. It sounds like you are very excited by it. But from an investor standpoint, how big is it really?

艾米，這是羅伯特。當我們等待查看這裡的實時美元是否有任何問題時，我們確實收到了一封電子郵件問題，我想確保我們得到後期管理。我想對這裡的喬爾或湯姆來說，問題是祝賀新產品。聽起來你對此非常興奮。但從投資人的角度來看，它到底有多大？

I'll take that one, Tom. It is quite literally a game changer. For one most of the pest control market prefers a non-liquid product to best fit in their workflow, but they understand the need to add fertility control to their service offerings.

我要那個，湯姆。它確實是一個遊戲規則改變者。對於大多數害蟲防治市場而言，他們更喜歡非液體產品，以最適合其工作流程，但他們了解需要在其服務產品中添加生育控制。

Two this is truly consumer friendly products and can be sold on the shelves of your local hardware store, agricultural supply store or your favourite e-commerce portal.

第二，這是真正對消費者友善的產品，可以在當地五金店、農業供應店或您最喜歡的電子商務入口網站的貨架上出售。

Three Evolve may start with rats, but follow-on products for other species can be pursued immediately.

《Three Evolve》可能會從老鼠開始，但可以立即推出其他物種的後續產品。

And then finally, many other countries have similar expedited approvals to the EPA's 25 b. For example, we can start the process in Canada immediately. This is particularly timely, British Columbia has recently banned the use of second-generation anticoagulant rodenticides as did California, and they definitely did need a fertility control to fill the gap. So, from an investor standpoint, this means more press, more revenue, and a realistic shot at profitability by 2025.

最後，許多其他國家也有與 EPA 的 25 b 類似的快速批准。例如，我們可以立即在加拿大啟動流程。這尤其及時，不列顛哥倫比亞省最近和加州一樣禁止使用第二代抗凝血滅鼠劑，他們確實需要控制生育來填補這一空白。因此，從投資者的角度來看，這意味著更多的媒體報告、更多的收入以及在 2025 年實現盈利的現實機會。

Perfect, Joe. Thank you for that. Amy, I'll turn it back over to you.

完美，喬。謝謝你。艾米，我會把它還給你。

(Operator instructions) This concludes our question-and-answer session. I would now I turn the conference back over to management for any closing remarks.

（操作員說明）我們的問答環節到此結束。我現在將把會議轉回給管理階層，讓他們發表閉幕詞。

Thank you all for attending, and we look forward to our Q4 results after the first part of the year.

感謝大家的參與，我們期待今年上半年後的第四季結果。

Conference has now concluded. Thank you. For attending today's presentation. You may now disconnect.

會議現已結束。謝謝。出席今天的演講。您現在可以斷開連線。