All right. Thanks so much. And thank you all for joining us today to discuss SenesTech’s second quarter 2022 financial results for the period ended June 30, 2022. With us on the call today, Mr. Ken Siegel, the company's Chief Executive Officer; Mr. 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 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 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 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. With that said, let me turn the call over to Ken Siegel. Ken, please proceed..

the birth rate and the death rate. Up to now solutions have only focused on the death rate and ContraPest changes that. You all know the numbers by now that a single pair of rats can be responsible for up to 15,000 descendants in their one-year lifespan. We simply can't eliminate them fast enough to overcome that birth rate.

Only by controlling rat reproduction can you do that? And we have the only solution. Not only that, but we do this in a sustainable way as we are all well aware, society continues to focus on reexamining the tools and methods we use to see if they are truly the best we can do.

Concerns about the residual effects of introducing increasingly toxic poisons into pest control and the potentially deadly effects they have on kids, on pets and on the many animals who feed on rodents are becoming mainstream issues.

The characteristics of ContraPest yield themselves well to the move towards sustainability and with deployments like the one we had this quarter at the large Silicon Valley Campus, where they're increasingly concerned about the impact of poisons, we think this move towards sustainability will be a key factor in the future growth for ContraPest.

So with a product that works, that fits nicely into an integrated pest management approach and that does so in an environmentally sustainable way, we just feel we have the right product for the right time in history.

One more thing, it's with pleasure that I announce the addition of Dan Palasky to the SenesTech Executive Team as our Chief Technical Officer. Dan joins SenesTech Team with years of experience in leading technical teams through product development and aggressive growth strategies.

Dan will oversee the R&D, regulatory, quality and field development departments in his new role and will provide the strategic vision for the scientific arm in the company. In his most recent position, Dan held the title of Vice President Research & Development at PLZ Corp, a manufacturer of chemical consumer products.

Dan with the technical expert for their entire product portfolio, which included many EPA registered products, including pesticides, disinfectants, and germicidal cleansers. Dan joins the team at a great point and we all look forward to working with him to take ContraPest and SenesTech to the next level.

So I'm turning it over to Tom, let me quickly summarize. We had another quarter of record sales, which grew 73% year-over-year and 42% sequentially. Elevate has been launched and the early results are highly encouraging, which should only enhance our presence in key agricultural markets.

Our eCommerce platform is growing at an accelerated rate accounting for approximately 50% of our overall sales during the second quarter. We continue to gain traction within zoos and sanctuaries and are seeing the beginnings of what we hope is large scale deployments within environmentally focused corporations.

And finally, with a full quarter of Elevate ahead of us, including the recent ability for us to sell in California, we're optimistic that we will once again see strong growth in the third quarter. So thank you as always for your continued support of the company. And let me now turn it over to Tom for review of the numbers.

Tom?.

Thank you, Ken. A reminder to our investors, the press release is available on our website in the Investor Relations section. Further we expect to file our 10-Q within a day or two, so I will just touch on some of the high points right now.

Revenue during the second quarter was approximately $277,000 compared to approximately $160,000 in Q2 of 2021, an increase of 73% and compared to approximately $195,000 in Q1 of 2022. A sequential increase of 42%, this is again a record quarter for us with eight of the last 10 quarters at/or exceeding 2X growth.

We are still seeing 2X as our minimum goal for 2022 for all the reasons that Ken mention previously. Gross profit during the second quarter was approximately $136,000 or 49% of total revenue compared to approximately $41,000 or 26% of total revenue in Q2 of 2021. Our gross margin is trending well and in line with expectations.

Our goal is to be at or above 50%. Net loss during the second quarter was $2.6 million compared with a net loss of $1.7 million for Q2 of 2021. Adjusted EBITDA loss which is a non-GAAP measure of operating performance for Q2 with $2.3 million compared to $2.1 million in Q2 of 2021.

This reflects the restructuring of our pricing and incentives that I mentioned on our last call. We expect that the trend for the third quarter will be similar. Cash at the end of 2022 was approximately $5 million with continued fiscal discipline, this cash should be sufficient to growth – fuel our growth strategy for the rest of the year.

One additional note, we continue to have what NASDAQ refers to as a bid price deficiency. Our bid price for our common stock has been below $1 a share. We have until August 29th to regain compliance.

To regain compliance the closing bid price of our common stock must be $1 a share or more for a minimum of 10 consecutive business days at any time before August 29th. If we do not regain compliance by August 29th, we may be eligible for an additional 180 calendar day compliance period at which time we may need to contemplate a reverse split.

We will be working with NASDAQ over the coming days to address this. I will say though, that we have been and continue to be focusing on the execution of our business plan and prefer to regain compliance through success. With that let me open the call to questions.

Operator?.

[Operator Instructions] Our first question will come from Tucker Andersen with Above All Advisors. You may now go ahead..

Hello.

Can you hear me?.

We can..

Okay, good. Congratulations on your progress and especially on the introduction of Elevate. You have no need to convince me of the necessity of the use of your project, especially as somebody who runs rides to New York subway several times a week. And I hope at some point you really crack this metropolitan market.

My question is very simple that given the fact that this into the market in which investors are now demanding not only growth, but profitability.

Could you talk about your thoughts of how you bridge the way to cash flow breakeven that obviously your sales growth has been impressive, but at the current growth margins your sales would have to be about 20 times what they are to cover your current operating expenses.

And so while you have enough cash for the immediate future, I think the fact that people are looking at your cash position is one of the reasons why your stock is where it is and you're going to have trouble regaining compliance?.

Tom, I'll go off on tangent. So you want to take the first shot..

I'll take. Sure I'll take the first shot..

I'm happy to listen to. I'm happy to listen to tangents..

Well, I mean, again as I said in my remarks, we want to regain compliance and in fact we want to reach our profitability point through success. Our growth rate has been impressive.

It's been starting from a low base, but that growth rate is quite impressive and as more and more of the market recognize that, it's expected that that will be reflected in our market cap, which makes using such things as the shelf registration a lot easier than it would be right now. So again, it's a matter of executing the plan that we have.

We have as you said at the – right now in the market, there is a rush towards profitability and towards safe investments. That said there's also a lot of money being held at the – on the side, looking for good returns and we need to market ourselves and introduce ourselves to those people so that they can ride the elevator to the top with us..

Yes. I agree with that, but you're in the unfortunate position, what I would term being a public venture capital investment. And therefore when you go to investors, you are at the mercy of the current stock price. You can say we're working a lot more, but you're starting from this position.

And I think any serious investor who would want to bridge or group of investors who would want to bridge the gap to profitability or at least cash flow breakeven would want a pretty specific outline of the question I asked, that I'm saying, that's somebody who's been in the investment business for 60 years.

So I don't know whether you want to address it in any more detail, but as I said we're talking about with no increase in operating expenses and your current gross margins, your sales have to be 20 times what they are to be a cash flow breakeven.

And unless you were looking at them growing exponentially, you are going to have to bridge that with additional funding and everybody would want that funding to be as minimally dilutive as possible..

Completely agree Tucker and....

Okay, that's fine. I've had – I've had my say, and as I say, I congratulate you and I'm waiting for the product to be adopted right here on the east coast..

Yes. We're working hard within the city. We're trying to get traction again with MTA, so hopefully you'll start to see us in the subway at some point in the near future, but we know the politics in your city, so....

Yes. And I understand, but one big reference account like that could make all the difference related to intuition now..

Absolutely, yes..

Good luck..

Thank you much..

There are no further questions. This concludes our question-and-answer session. I'd like to turn the comments back over to management for any closing remarks..

Well again thank you much for your time, attention, for your support of the company. And I say it at the end of every quarter but this one, truly meaningful.

I really look forward to reporting on the results in the third quarter, particularly as we get to see a full quarter's worth of sales of Elevate and the continued adoption of the product around the country. So thank you again, and we'll talk to you again in – after the third quarter..

The conference is now concluded. Thank you for joining today's presentation. You may not disconnect..