Good afternoon, and welcome to the SenesTech Reports First Quarter Fiscal Year 2022 Financial Results. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead, sir.

All right. Thank you very much, Cole. And thank you all for joining us today. As Cole mentioned, to discuss SenesTech’s first quarter 2022 financial results for the period ended March 31, 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 the result of the receipt of new information, the occurrence of future events or otherwise. So with that said, let me turn the call over to Ken Siegel. Ken, please proceed.

Thanks Robert. Good afternoon. And thank all of you for joining us today. As you saw in the press release, we started 2022 where we left off in 2021 with another quarter of record product sales, which more than doubled from the same quarter last year. We have now had nine consecutive quarters of annual quarterly revenue growth, eight of those at 2x or greater since I took over as CEO. Importantly, the monthly sequential trends in the first quarter show continued acceleration of growth in our e-commerce business with sales in the month of March, up more than 80% compared to February. There are a number of reasons why we think this enhanced ramp is occurring, which I'll get into momentarily. But needless to say, we think it bodes well for a continuation of the recent sales growth trends. The other key development this month is the launch of our novel Elevate Bait System with ContraPest or what we're generally calling Elevate, which will begin shipping next week. We discussed during our March conference call the approval we had recently received from the EPA and are excited to announce today the formal commercial launch of the system. I believe the introduction of Elevate will be a defining moment where innovation enables us to accelerate our penetration into a number of key markets, particularly agriculture. I'll spend a few moments later in the call talking through our commercialization approach. As I believe Elevate has the capability to be a game changer for us in this market. So with those general highlights of strong sales acceleration and new product introductions, let's dive into a few more specifics. As I mentioned, sales for the quarter were up 122% compared to the year ago first quarter and up sequentially by 15%. This was…

Thank you, Ken. As 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 tomorrow. So we will – I will just touch on some of the high points right now. Revenue for the first quarter was approximately $195,000 compared to approximately $88,000 in the first quarter of 2020, an increase of 122%. This is the ninth consecutive quarter of growth with eight of those quarters representing a doubling or more of revenue. We believe this trend will continue and even accelerate with the launch of the Elevate Bait System. Gross profit for the first quarter was approximately $90,000 or 46% of total revenue compared to approximately $38,000 or 43% of total revenue in the first quarter of 2020. Our progress on gross margins continues as we seek to bring the cost of manufacturing below 50%. Net loss for the quarter was $2.3 million compared with a net loss of $1.8 million for the first quarter of last year. Adjusted EBITDA loss, which is a non-GAAP measure of operating performance for the first quarter was $2 million compared to $1.6 million in the first quarter of last year. We are continuing to invest in revenue generation, although we carefully monitor the specific programs for efficacy and cost effectiveness and main strict control over other aspects of the business. In the second quarter, for example, we have restructured our pricing and incentives across the board. We would therefore expect adjusted EBITDA loss to continue at approximately our current pace. Cash at the end of 2021 was approximately – at the end of the quarter was approximately $7.2 million. With continued discipline this cash should be sufficient to fuel our growth strategy for the rest of the year. That said, as mentioned previously, we have filed an S-3 for renewal of our shelf capacity, which expired earlier last year. A shelf for an S-3 is an SEC provision to register a new issue of shares without having to sell the offering at once. But instead offer portions of the issue selectively over a three year period. That is our intent to be selective about capital raises, balancing the need for resources with shareholder interests. With that, let me open the call to questions. Cole, could you please open it up?

[Operator Instructions] Our first question today will come from Tucker Andersen with Above All Advisors. Please go ahead.

Good afternoon.

Good afternoon.

Hi. Two questions. First, if you are success – congratulations on the progress you've made both on the sales front and more important on Elevate because I like you, I'm excited about that. If you are successful and your sales continue to ramp at this pace and perhaps even if we're all fortunate and do what we hope accelerate. Are there any constraints on the production capacity for the prospect? And I noticed you have a fair amount of inventory, but I don't know whether that's finished goods inventory or whether there would be more processes that needs to be done. But just in a world where supply chain constraints seem to be continuing to hurt people. I was just wondering if there would be any you would encounter.

Tom, why don't you take that, since it all rolls up to you.

Sure. Yes, so we have a long stockpiling raw materials that are hard to source quickly, so we have quite a sufficient stockpile of are two actives, for example. The other things that are necessary to meet demand, we have pretty carefully structured the supply chain so that we can meet a surge in demand, whether it be for the traditional ContraPest tank or for the Elevate Bait System. So we really don't see any constraints at this point on the supply chain.

Great, fantastic. The other question is a general question that you touched upon in your final comments and that is the cash burn versus the cash available. And are you – as you understand, we're in a much different market, which is much less forgiving of companies who are funding growth, while they remain unprofitable. And while you have sufficient cash for a reasonable period of time, you obviously want to keep a cushion. And clearly at these prices, issuance of common stock would be incredibly dilutive to current stockholders. So I'm just wondering how you balance all these factors and if there are other methods of financing you're thinking about and that sort of thing.

Well, I think that we certainly do not want to be raising money at these prices any more than we absolutely have to. And we don't have to immediately, we've got a good cash supply now and certainly through to the end of the year. That said, you're right, we do need to be very vigilant and very careful about opportunistically accessing the capital markets. That's why we have an S3 in place that allows us to opportunistically move as the stock moves. We also have a number of warrants and we've been fairly successful in the past at either inducing or finding people exercising their warrants at times during the year. So that would be another area, which would be certainly, it is dilutive, but the warrant overhang is also a concern for a lot of investors. So perhaps there's not as much of an issue with that.

Yes. Congratulations on your progress. And I hope maybe the next time I get to your area to come by and say, hello. Good luck on your continued progress, especially with Elevate.

Thank you much, definitely be keeping you posted.

And it appears there are no further questions. So this will conclude our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

Great. Thanks Cole. Again, good quarter for us, as you've seen, we continue to – at the revenue ramp that we've been talking about for a couple of quarters, as Tom and I both said, we think there's hopefully more to that to come in the near future. We are extraordinarily excited about Elevate. Again, it starts shipping next week. The materials are all in supply. We're ready to go and look forward to updating you on that as well as a bunch of other things that we have in the pipeline as soon as we can. But again, thank you for your attention. And I look forward to talking to next quarter, if not before.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.