Good day, and welcome to the SenesTech Reports First Quarter Fiscal Year 2019 Financial Results and the Appointment of Ken Siegel as the new – as the company’s new Chief Executive Officer. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I’d now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead, sir.

Thank you very much, Cole, and thank all of you for joining us today. As the operator indicated on today’s call, we will discuss SenesTech’s first quarter 2019 financial results for the period ended March 31, 2019, and discuss the appointment of Ken Siegel as the company’s new Chief Executive Officer. With us on the call today are Dr. Loretta Mayer, Chair and Co-Founder of SenesTech; Ken Siegel, the company’s newly appointed Chief Executive Officer; Dr. Cheryl Dyer, Co-Founder and Chief Research Officer; Edward Albe, the company’s recently appointed Senior Vice President of Commercialization; 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. Please note that listeners both on the live portion of the call, as well as webcast will be able to ask questions. If you are on the webcast, you can type your question into the question box and press submit. We will take as many questions as time will permit for. If you’re dialed in, you will have questions by pressing the star one button as usual. 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 risk 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 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 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 Dr. Loretta Mayer. Loretta, please proceed.

Thank you, Robert. I really appreciate this opportunity and having everybody out there in the call. I cannot hide how excited I’m, and I have been anticipating this call for quite sometime. In this company, since the day we founded it, we have been diligently working towards this tipping point moment. And for me tipping point is where opportunity meets preparedness and, of course, this defines success. On our last call, I announced our selection of Edward Albe, our new Senior Vice President of Commercialization. I scooped him a little on some of his ideas, but today, you’re going to hear directly from him about our commercialization, trajectory and our success. Also today, I’m going to personally introduce you to Ken Siegel, who’ll be joining Cheryl and I in this SenesTech journey of our new CEO. We’ve anticipated this moment for a long time, as I mentioned before, planning to capture the full potential of our platform technology, takes years of discovery, development, trial and error, scale up in every aspect of our commercial process and clearly, a tremendous amount of hard work. As you’re going to hear from Ken today, he is a founder’s choice, and we were so fortunate to be able to make that choice. Here’s what I mean by that. He is our choice, because he shares our dedication to a better world through sound science. There is no question that he is not totally aligned with the founding principles of this company. He is our choice, because we moved this R&D science company to prepare for what we have always believed in our hearts and know this is a billion-dollar company. And now, we have a seasoned multibillion-dollar executive to execute this plan, which is our dream. He is our choice, because he provides the…

Thank you so much, Loretta. Let me say, I’m truly honored to work with Cheryl and with Loretta to lead SenesTech in this new chapter of its evolution. As many of you who have seen, I’ve been on the Board of Directors for few months, and during that time, I’ve had the opportunity to see the significant progress that’s been made to this point and how everything is beginning to accelerate as we get ContraPest to penetrate markets, particularly around this country. In my opinion and this is obviously shared with people within the organization widely. ContraPest is a disruptive technology, one that has the ability to displace existing applications and shake up the entire industry. It’s one of the reasons why I’m so excited about this. Disruptive technology succeed, because the existing players in the market tend to focus on the advancement and improvement of their existing products. In fact, each iteration of their product is simply a variation on the same theme. The consequence, there’s tremendous built-in inertia. The major participants have built their organizations, they built their infrastructure, they built their sales strategies simply to support what’s worked for them historically and what they believe their customers need. A disruptive technology like ContraPest sneaks up on them. Disruptive technology start small, often entering markets that existing players have ignored, have abandoned or simply can’t service. They come in slowly, but relentlessly and they move up market ultimately displacing the established competitors. Again, ContraPest is exactly that type of product. It’s carving our niches in certain areas, points in sensitive locations, for example, such as zoos, such as food. It proves its safety and efficacy and then it’s going to expand into their core markets. So in my career and you’ll see from my bio, I’ve seen this…

Thank you, Ken, and congratulations on new role.

Thank you.

Thank you, Dr. Mayer, and thank you, Dr. Dyer. And to everyone in the audience, let me express my unbridled enthusiasm in joining SenesTech. As Dr. Mayer had mentioned during her conference call at the end of March, I originally joined SenesTech in a consulting capacity, sensibly to understand the product and the markets a little better. So I spent the better part of 90 days meeting with customers, prospective customers, stakeholders and trying to understand and remediate what I would consider to be our new commercialization strategy. This is a real critical investment in ourselves, essentially, ContraPest has no direct competitors. It effectively is creating a new market, that’s what I found. And if – and we are also – to use a vernacular in marketing were swimming in blue ocean. We have the ability to be a first mover in an area that has not seen anything like this before. So that’s pretty exciting, and I’m even that much more excited to be at this point in my career part of something that is going to make a change, not only for the shareholders, stakeholders, community and just about everyone else out there, but the environment and the secondary and the predators that feed off of rat. So this is more than exciting for me. So in our ongoing customer discovery and market validation phase, it became abundantly clear that pivoting to this revised strategy is not only welcome, but it’s demand. Our continued successful deployments in locations such as Washington D.C., San Francisco, Bay Area, Southern California, St. Louis, zoos, animal care facilities, protein production facilities, will enhance the market proliferation of our fertility control technology. We also heard quite clearly that our pest management professional or PMP partners need our direct support in communicating this novel approach to their customers as part of their integrated pest management protocol if novel to them as well. So we have to spend time with these select key partners in letting them understand just how this is applied in the marketplace. So the last point I can honestly make is that, we are highly focused, but very targeted on select verticals that we believe have a significant total addressable market. The future is bright for us. I’m looking forward to being part of that future and build that with SenesTech. So with that, let me turn the call over to Tom Chesterman, our CFO, for some remarks on the financial progress. There you go, Tom.

Thank you, Ed. Ad we’ve just released the full financials and the 10-Q we will be filed momentarily, I’m going to keep my remarks brief, so that we can get to any questions you have. As you saw in today’s press release, revenue for the quarter was $19,000, which was essentially flat from the year ago quarter, but were down from the most recent sequential quarter. This sequential decline is largely due to a change in the marketing approach that we’ve talked about that commenced at the beginning of the year, as well as the expected seasonal reduced rodent activity that is normal, and the transition to the removal of ContraPest restricted use only status at the state level. Adjusted EBITDA was a $2 million loss during the first quarter of 2019, compared to a $1.8 million loss during Q1 of 2018. As discussed in last quarter, we continue to drive improvements in our operating expenses and limit our cash utilization wherever possible. At this point, we currently expect cash expenses on a monthly basis to run approximately $600,000, down significantly from our spend last year. We ended the quarter with cash of $2.9 million. Additionally, subsequent to the end of the quarter, we have received accelerating warrant exercises amounting to over $1.6 million. At this time, in fact, we still have $8 million warrants outstanding that are in the money that if exercised would yield over $9 million. As I mentioned, we did file – or we are filing our 10-Q in a few moments and then we’ll have much more detail on our financial performance for your review. With that, let me turn the call back over to Loretta for some final comments and then questions.

Thank you, Tom. We are really excited to have you Ken and Ed joining us on these leadership roles absolutely who will allow us to capitalize on the opportunity before. We know that each of you shared with our commitment to SenesTech’s mission and passion for our product. We know there are extensive executive experience, corporate relationship and understating of these customers that are ideally suited to rapid driving of the adoption of ContraPest. Our philosophy is that, I’ve always stand to be a guiding light and again, today, it is top of mind, and that is, it’s all about the people. It’s been my letter to serve as CEO for SenesTech and represent our dedicated employees and again heartfelt dedicated shareholders, their loyalty has been with us for years. It’s even our greater pleasure for me today that call on Ken to take the baton. And with that, Ken, Ed, Tom, Cheryl and I will be available for questions. So I’m turning the call over to you, operator, for our questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question today comes from Kevin Ellich with Craig-Hallum. Please go ahead.

Good afternoon. Congratulations, Ken, on the new position with SenesTech and congratulations, Loretta, on going back to being Chief Scientific Officer and Chair. I guess, Ken, really good background on your view of the company, and how it plays your role as being a disruptor and not while it’s still very early days for you, but you did join the Board in February. Wondering what’s your strategic vision or plan to drive top line growth, earnings and cash flow? And then, given your background coming from the hospitality industry and actually purchase being on the other side of the table buying ContraPest, wondering if you’ll play more of a role on the sales front since you have that experience as well?

So let me answer the second part of the question first. And the answer to that is absolutely yes. One of the things I’m really hoping and planning to do is use my network in hospitality and other areas to help Ed and his team drive sales. So there’s isn’t simply a matter of opening doors. I plan on getting out on the road with the team and actually sitting down and seeing whether we can close some sales. In terms of the overall strategy and vision, I think that the strategy that Loretta and team articulated at the year-end call is the right strategy. What we’re doing now is given resources and given priorities, we’re focusing our firepower on the areas that we think have the highest probability of revenue generation in the shortest period of time. So California has become target number one for us, particularly given the potential passage of 1788, plus the fact that has one of the more progressive markets. They – with 16 counties already banning rodenticides, we know that we have a natural entrée there. It also happens to be the fifth largest economy in the world and heavily agricultural base, so it’s a natural target for our efforts. As we begin to get traction in those areas, I mean, one of the things that Ed is acutely focused on is getting early adopters, getting influencers to purchase, but also getting early adopters and influencers for large-scale. So that they can in turn help us drive additional players into the market, because you go from the adopters to the – ultimately, [to meet twos] [ph], but we want to get those adopters onboard first. Where we are fine-tuning the strategy is, particularly given my own background on heavily biased towards Corprus. [ph]. The municipalities are very compelling. They have a slower sales cycle and they have budget constraints. Corporations because of the flatter organizations have entirely make decisions more quickly and have an ability really for us to go with our total cost of ownership presentations. So we can identify for them how much SenesTech and ContraPest will ultimately benefit their businesses. So this isn’t simply a matter of coming up with something that’s new and interesting, simply coming up with something that is better for the environment, they’re getting something that works. And over a relatively short period of time, we’ll actually enhance the bottom line. So continuing to hammer those particular points to use California as a critical revenue base for us continue to expand across North America. And then as we get further on and we build our revenue base, begin to expand more broadly outside of the country. But that’s really it – at a very high level nutshell and hopefully, I’ll add more to talk to you about next quarter.

Nope, that – that’s really helpful. And I guess, you talked about the longer sales cycle with municipalities and governments. On top of that, what do you think the biggest challenges the company faces in terms of growing adoption of ContraPest? I mean, clearly, it’s a proven product and what we’re seeing in California will definitely help. But are there hurdles and issues that you think you’ll be able to help the company help overcome now that you’re in the driver seat?

The interesting piece of this thing is, this gets back to the disruption issue. The historic way that rodent control has been handled is, you throw out lots of poison in 25-foot spaces. And most customers are highly attuned to that particular methodology that the PPMs have robust businesses based on that. So, as Ed pointed out, there’s a bit of an education process here. What we are going to need to do is help the PPM, but also create much higher pull-through demand from the ultimate customers. We are creating dedicated field support teams that will help with the deployment, the implementation. We’re also working on our introductory pricing model, because the critical issue here is to get take, to get trial. And we believe once we get in, we will be able to dramatically expand. So this is not a radical departure from what we’ve done historically, but it’s using the tools that we have at hand simply get a crack to get a niche within these entities. And we believe in doing that, we’ll be able to expand quickly.

Sure. Nope, that all makes sense. I guess, Tom, going to some of those points that Ken just laid out, especially in terms of helping drive pull-through demand and the pricing model and the sales teams, will there be incremental costs associated with that, or you just gave us the $600,000 cash expense, I think, on a monthly basis. Is that going to be the plan going forward, or will that be changing do you think?

Well, I think that there will be some upward pressure in as we move more resources into the areas that Ed talked about. As we move more resources into California, I’m quite hopeful that we can time that. So that it also coincides with more production and more revenue, but there might be a slight pressure. I really don’t think it’ll be significant though. We’ve gone past all of the really heavy investments. And as Ed mentioned, the heaviest investment was this past quarter of intense scrutiny into what is the customer exactly means. So I think that investment will be recouped fairly quickly in terms of revenue take up.

Got it. And then, Tom, just real quickly, Q1 revenue came in a little lighter than we expected. You definitely gave the items in the press release as to why? Wondering, excluding those temporary disruptions and whatnot, how much did that affect your sales? And what would sales have been in the quarter without those issues?

Oh. Wow, that’s an almost impossible question to answer. The – I mean, it is known that there is seasonality to this business and to rodent activity. So and the harsh weather that we experienced throughout the country in the first quarter certainly had an impact – a significant impact. How much of that? Well, that’s impossible to tell at this time. I wish I could get you – once I get six, eight, 10 years worth of quarterly experience, I can get you a much better set of guidance numbers.

Got it. And then lastly, you made the comment on warrant exercises subsequent to quarter-end. Did I hear you correctly? Did you say, it was $1 million or was it $1 million warrants that were exercised?

We actually have $1.6 million in the door since the beginning of April.

Got it. Okay, thanks. I’ll follow-up offline. Thank you.

Sure. Thank you.

And I would like to turn the conference over to Robert Blum for any webcast questions.

Thanks so much for the call. And again, as a reminder, everyone on the webcast, if you would like to ask a question, you can submit it through the ask the question box there. Wanted to jump into a couple of them here that we’ve received. The first one here if demand were to double or triple, do you have the operational capacity and raw materials to meet the demand?

Thanks, Robert. I will take that. The short answer, yes. We have anticipated that our manufacturing is running at a very high efficiency rate. And we have stockpiled a lot of our inventories in the active ingredients. We are set to meet that demand.

All right. Our next question here and that’s a little bit of, I guess, it was a – from a national and geographic piece that went out recently, which stated scientists these days are working on what might the ultimate rate control, a genetic engineering technique that will spread infertility genes through a wild rat population. It fears of unintended consequences can be overcome. This method might one day enable us to wipe out rats on an unheard of scale without poison. Can you comment on this? Is there a competitor for ContraPest?

This is Cheryl. So I’ve first looked at this idea and the answer is no, and here is why? As this technology is developing, sometimes called gene drives, it will in essence, eliminate – it will prevent the passing on of the genes that cause the infertility, because they’re infertile, so it’s very circular. It’s the same as eliminating the genes of the rat that died, because it can no longer reproduce the rats that persists, because they’re resistant, will continue to pass on that resistance. So gene drive actually engages the same impact on the gene pool of the population of rat. And it too, will be selected against and it will no longer work very rapidly, and this is covered in Dr. Shuster’s paper where he talked about, what’s called, CRISPR/Cas9 technology. So bottom line, it will not compete with us, because it will put itself out of business.

All right. Thank you, Cheryl. Our next question here is, what is your plan for raising capital and for reducing cash burn until you’re able to show sustainable revenue?

Yes. I think we talked a little bit about this before. From a planning standpoint, obviously, the best way of reducing the burn is to get profitable revenue. And that is our number one priority. Second to that, exercising of warrants is also a fairly clean and efficient way of raising capital, and we’re seeing increasing productivity from that area. We do have a shelf. We could move to that, but that is not as efficient as either the idea of increasing revenues or getting warrants to exercise through the price of the stock going up.

All right. Thank you, Tom. Our next question here, any progress on a mice label or new formula?

This is Cheryl, again. So yes, we’ve been working with EPA to add mouse to the label. They have a data set, they requested from us, where we proved its efficacy here and house with research mice. So now if a product is waiting for them to do their review of that data set and they’re very anxious to put it on the label.

All right. Thanks, Cheryl. Our next question is, has there been any preliminary feedback from D.C. regarding the news article that was questioning the expense there?

Yes. There has been a fair amount of feedback, and I’m really glad to have the opportunity to answer this. First of all, the expense that was quoted in the news article that went out did not really address the point that Ed has been making and Ken spoke to, which is the total cost to the customer. And the cost that they related was a cost for a product – the Mayor and the City Council approved a $1 million experimental cost. And the reason they call it experimental is, because they need to determine their best practices to get their total cost. And it is just as simple as you can spend your current rodenticide budget of $1 million a year over and over and over again, or you can solve your problem and reduce your population in a sustainable manner and that’s what we offer. So this question of extraordinary cost in D.C. is really out of context.

All right. Thank you very much, Loretta. Cole, I would like to turn it back to you for any additional questions that might be through the teleconference.

Thank you. And our next question comes from [indiscernible]. Please go ahead. Mr. [indiscernible], your line is open.

Oh, sorry, the question was answered.

Hi, Brett [ph].

It was answered in a previous question. Thank you.

All right. Very good. Let me go ahead and take additional question then from the webcast here. Can you provide updated guidance or progress on California and New Zealand contracts. Have there been any new contract developments or opportunities for the coming rest of the year?

I want to split that, if I could, Robert. Let me take New Zealand and Ed, you can take California. We are not licensed or registered in the country of New Zealand. Therefore, we cannot engage in any contract. We have done with the Lincare Group down in New Zealand, preliminary work to establish the same efficacy that we have seen up here. What I can tell you is, we have been invited to New Zealand in December to present our success and progress with fertility control to their group. As you know, New Zealand has declared, it will be invasive species free by 2050. And I knew they were going to need our help, and I’m glad we’re going down there to do that. Ed, do you want to speak to California?

Sure. There’s – we publicized some of the efforts that are being going on in California in specific very iconic spots. Some of the information relative to the size and is 10 is, at this point, somewhat confidential. However, the situation in California – Loretta – Dr. Mayer likes it when I say that in California, the market is essentially going to have only two choices, ContraPest or nothing at all. So the reality is, we’re making tremendous groundswell in the San Francisco Bay area, and I look forward to that being just that absolutely fertile ground for us in going forward. So I hope that answers your question.

All right. Great. [Operator Instructions] We’ll go ahead and take an additional question from the webcast portal. Is there any updated guidance on Hawaii?

Sure, I can speak to that. In Hawaii, two weeks ago, we received our – the lifting of our restricted use. So that now allows us to sell to pest management companies who were not previously licensed to handle restricted use product, which is a significant amount. Most of the PMPs in Hawaii are not large corporations. They’re small local entrepreneur. So now that burden has been removed. We will be publishing or submitting for publication in the next 30 days the results of our work with the Army at – on Oahu. And those are some very positive results, which then will lead to many other Island locations moving forward. That was the primary drive in Hawaii, and we are having success on both of those fronts overcoming the hurdles of regulatory.

All right, great. Cole, I would like to go ahead and turn it back over to you for any questions from the teleconference.

Thank you. Our next question comes from Chris Piatt [ph] with Raymond James. Please go ahead.

Chris, your line is open. Cole, if there is another gentleman in the queue, please proceed.

Sure, thanks. Our next question comes from [Josh Bernie] [ph] with private investor. Please go ahead.

Actually, my question was answered. It was entirely about California deployment and Hawaii Oahu. But Mr. Siegel, welcome to the rat pack. We’re definitely happy to have you here.

Yes. My family is referring to me as rat man. I’m not sure I’m so happy about that. But thank you.

No, you’re the rat king now you see. You guys have done an absolutely wonderful job. Loretta, it’s been an absolute pleasure watching you work and grow SenesTech to where it is today. I can tell you as a private investor how excited I’m about the future of this company. And myself and my followers are definitely onboard 100%. So we’re with you. Keep up the fine work.

Thank you, Josh. You are a big piece of our success. It’s a long haul, and I’m just really excited for where we are today. It’s been a pleasure. Thank you.

All right. Thanks so much, Josh. We’re going to go to one final question from the webcast here. Are there any new developments in partnerships overseas that you speak on?

We’re – as Loretta alluded to in her remarks, we are working on partnerships in the Caribbean, given the significant issues they have with alien species infestation. Those are in early stages as we assess the true size and value of the markets. But there are clearly something that is very exciting to us, because once we have an in-road in one of those Islands, we believe they can cascade across many of them. So more to come on that in the future, but there’s nothing that we can specifically announce right now.

All right. Thanks so much, Ken. It looks like maybe we do have time for one more question. What is the plan for commercial deployment as far as selling at retail outlets?

Well, of course, our desire is to supplant as much poison from our environment as possible. The largest way to do that is to make it available to absolutely everyone. And in doing that, we must go through the process that we have gone through, which is maintaining sound science. And what we are doing is establishing best practices. So at the time we are ready to do that, we will be able to include in – on the label and in instructions for private consumers how to use the product in every situation. We do not have all of that data that we’re really comfortable with yet, and also we have to change our label with the EPA once again. And that is definitely on her blotter, by not yet.

All right. Thanks so much, Loretta. And with that, we have no further questions. Loretta, I would like to turn it back over to you for any additional or closing remarks.

Well, I think, my first closing remark is hallelujah. I’m thrilled and so happy to end this call and thank you all for being with us along the way.

Great. Thanks, everyone.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines at this time, and have a great day.