Good afternoon, and welcome to the SenesTech, Inc. Fourth Quarter and Fiscal Year 2019 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

Thank you very much, Gary, and thank all of you for joining us today as we discuss SenesTech's fiscal year 2019 financial results for the period ended December 31, 2019. With us on the call today are 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 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 the 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.

Thanks, Robert. Good afternoon, everybody, and thank you for joining the call in some trying time. As you saw from our earnings release, at a high level, we essentially met expectations for the quarter, and that included our third consecutive quarter of sequential revenue growth, albeit on a small base. And we successfully moved forward on a number of the initiatives we've been discussing since I came on board last May, which included the need to reevaluate our sales and marketing strategy in order to drive successful long-term adoption of ContraPest in the marketplace. To that point, as I've said in past calls, we needed to be more focused on our end-user verticals, we needed long-term studies showing efficacy in the field in addition to the mathematical models and laboratory studies that we've used before. And we needed to have experience-based models for their value and efficacy of ContraPest for pest management professionals and their customers. During the quarter, we made progress on all these important points, while simultaneously advancing additional strategies, including the launch of our brand-new direct-to-consumer e-commerce solution, which we're very excited about. I'll go through this in more detail in a few moments. But first of all, let me take you through my learnings after nearly 9 months on the job, provide some greater detail into why revenues have been taking some time to develop and remind you of our overall strategy in moving forward. I'll then ask Tom to provide some color on the financials and the other initiatives we're working on. The need to prove the economic value of ContraPest has been a key learning for us and is driving many of our current initiatives. As you know, the initial cost to deploy ContraPest is more than the cost of conventional rodenticide. Consequently, PMP,…

Thank you, Ken, and greetings to all. Let's start with revenue. Revenue during 2019 increased sequentially each quarter, $19,000 in the first quarter, then $24,000, then $36,000 and finally, $64,000 in the fourth quarter. This fourth quarter number could have been a little bit higher as a couple of late orders we expected did not materialize. Fiscal year 2019 totaled $143,000 versus $297,000 in fiscal year 2018. This decrease year-over-year is due primarily to a large sale in December of 2018 to a customer that did not place a reorder in 2019 as their deployment has been slower than they anticipated. What we all thought was a 6-month stocking order turned out to be more than a 12 months' supply. Turning now to the bottom line. On a GAAP basis, net loss for fiscal year 2019 was $10 million compared with a net loss of $11 million -- $11.9 million for fiscal year 2018. This reduction of loss was driven by a reduced stock-based compensation primarily. Adjusted EBITDA loss is a non-GAAP measure of operating performance that we think can enhance the understanding of operating performance and trends. For fiscal year 2019, adjusted EBITDA loss was $8.2 million versus $8.0 million in fiscal year 2018. Fiscal year 2018 results include about $300,000 of unusual and nonrecurring legal and litigation expenses. I would view this trend as neutral to perhaps a little down. This does not make evidence the shifts we have made to our cost structure, though. Throughout the year, we have been shifting resources from the pure science in the past to more focus on commercialization. Towards the end of the year, we expanded our goal of transition to include optimization. Specifically, we added a goal of reducing our burn rate by $1 million per year. Steps to support…

[Operator Instructions] The first question is from Ian Gilson with Zacks Investment Research.

Could you kind of expand basically on the -- basically, the San Francisco site. How many sites there are currently and we are adding 1 site -- or will be written here. What is the potential site number if San Francisco decides to go to a full coverage?

So Ian, it's Ken. Right now, we are in 2 sites in San Francisco, one is a park, one is a restaurant type complex. Essentially, we need those 2 in order to demonstrate to the manager a safety and effectiveness of the product. Once that's cleared, we're on the approved list for all locations in San Francisco. So it's essentially -- this is rather than simply a matter of incrementality, this is a gate to open the entire city to us. So I mean basically, it's every municipal building, every municipal location within the city.

Okay. Would that be a staged rollout out? I presume, that's more likely.

Well, essentially, what it is, as we get on the approved list, and then they are capable of buying it from us. We don't expect it will be a massive influx immediately. It will take some time as they become aware of the availability. But it really is a step change in terms of what it is we can do with them too.

Okay. You're going to have to market to each individual point of placement?

Similar to what we've been doing, essentially, we would continue with our marketing campaign together with e-mail and social media marketing. But this will end up on a list that every locality in -- every building, every building manager, the park officials, et cetera, will have access to. So they'll know immediately about the availability of ContraPest. It will be up to us to use our own marketing to make sure they start buying it.

Okay. And when you talk about a high consumption in Los Angeles, in general, this high consumption mean there are more rats in total or the fact there is a pathway that the rats use in that particular instance, more than other pathways, which may be in use in other areas?

It's a combination of factors. Very high -- the consumption we're doing on a base station by base station basis. So we would be putting base stations into the high-traffic areas where we expect rats to be located. And the number of base stations deployed also is based on an assumption of how many rats that are there. So when we talk about consumption, we're talking about the amount that's being consumed by each base station, which we believe is then indicative of the fact that a broad segment of the population within that text area -- of that test area is actually consuming the product. And then because we know consumption directly correlates with reduced fertility, we expect the next phase after we see the high consumption to see a drop in juveniles across the board.

Okay. The other items that you've spoken about in the past, including the Arch in that area? How are they doing?

The initial park is still clear as far as we know. They've moved to another park, where they're deploying now and they're seeing similar success. One of the things that we are working on with them is the continued deployment model because we're concerned that even now they have essentially eliminated the population there. If they don't continue to have ContraPest deployed, they'll ultimately start to see a rebound. So there's more work that has to go on in St. Louis, just to make sure that we're showing the long-term efficacy of the product. But right now, the rats are gone in the initial location and they're declining and the one that with recent deployment.

Let's say rats are gone, would the proprietor or the user of the site, decide that they no longer need to use base stations so you continue the education?

Yes. And this is where we need to educate them, okay? This is where the pest management professional there who happens to be a good customer of ours, believes that they can stop deployment. We know, particularly, given the fact that this isn't a municipality, you have edge effect issues. And that in order to avoid the rats coming back, they are going to need to deploy. So that's conversations we're having with them now. The other thing is we still need our own research to be completed in terms of at what level he needs to continue to deploy. So we're hoping that we can work with him to demonstrate how it is with a reduced amount of ContraPest, he can continue to maintain the level of 0.

This concludes our question-and-answer session. I would like to turn the conference back over to Ken Siegel for any closing remarks.

Well, thank you all again for joining us. I realize it's a very interesting time for everyone. In some respects, as terrible as the situation may be globally, this is actually an interesting opportunity for the company. In some ways, I wish I didn't have the ability to say that. But frankly, the whole issue of disease transmission is a critical element of what it is we do and what it is we are controlling for. So with that, again, thank you all for joining. I hope you all stay safe and you stay healthy, and look forward to talking to you again next quarter. Thanks, everybody.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.