SenesTech Announces Third Quarter Financial and Operational Results

FLAGSTAFF, Ariz., Nov. 8, 2017 /PRNewswire/ -- SenesTech, Inc. (NASDAQ: SNES), a developer of proprietary technologies for managing animal pest populations through fertility control, today announced its third quarter financial and operational results.

SenesTech, Inc. ("SenesTech" or the "Company") will hold a conference call tomorrow at 10:00 am Mountain Standard Time (12:00 noon EST) to discuss these results and expectations for the coming year.

Key commercial milestones and recent highlights:

• Signed national distribution agreements with Univar for ContraPest in October 2017 and Target Specialty Products in November 2017, which would result in an effective sales force of 75-100 selling ContraPest;
• Signed sales agreements during the third quarter for multiple key adoption accounts in the municipal, food production, and animal care markets;
• Expanded municipal programs to now include New York and Chicago, with additional proposals to several other key eastern municipal markets;
• Commenced delivery of ContraPest to a Hawaii natural resources program for the control of rodents in an outdoor setting under an experimental use permit; and
• Announced a corporate commitment to sustainability.

Management Discussion

"The benefits of ContraPest in the control of rat infestations was and remains evident in the animal care and other poison-averse markets. In the past quarter, it is becoming increasingly recognized that ContraPest plays an essential role in integrated pest management," said Dr. Loretta P. Mayer, Chair, CEO and Co-founder of SenesTech.

"We are pleased to have signed two significant national distribution agreements with Univar and Target Specialty Products during the last few weeks," said Andy Altman, Chief Operating Officer of SenesTech.  "These agreements will accelerate our introduction to the professional pest control market. We will be working to fill their initial stocking orders, and providing training and materials to their sales forces. Additionally, we have seen the sales funnel filling up in a variety of segments and markets, although the purchase decision cycle is slower than we expected. Of particular note are the number of projects and proposals we have recently delivered in the municipal market. We are also seeing widespread interest in the food production markets, where the economic value of a ContraPest program is more quickly understood. "

Financial Results and Guidance

Revenues for the third quarter were $17,000. The Company currently has signed long-term sales commitments totaling over $200,000, with an additional $250,000 of proposals outstanding, which, if converted to sales would be recognized over the next 12 to 24 months.  Further, the Company has ongoing pilot programs underway with total annual sales opportunities of approximately $2.4 million if full deployment were to occur. Since the agreements with both Univar and Target Specialty Products do not include minimums, revenues from these distributors are not included in sales commitments or potential backlog. These proposals and opportunities may not result in sales, so there has been no financial recognition of this potential in the financial statements.

The Company anticipates that revenues recognized for the year 2017 will be negligible, though sales commitments are expected to increase.

Operating expenses for the third quarter were $3.0 million, compared with $2.8 million for the third quarter of 2016. Operating expenses for the third quarter of 2017 included non-cash equity compensation of $0.9 million. The increase in operating expense was attributable largely to expansion of product commercialization activities.

Net loss for the third quarter of 2017 was $2.9 million or $0.28 per share, compared with $2.7 million, or $0.37 per share, for the third quarter of 2016.

Adjusted EBITDA, which is a non-GAAP measure of operating performance, was $(1.9) million for the third quarter of the current year, compared with $(1.6) million for the third quarter of 2016. The Company anticipates that Adjusted EBITDA loss will continue at or below $700,000 per month until additional revenue is generated.

Cash, cash equivalents and highly liquid investments at the end of the quarter were $3.6 million.

Conference Call Information

The Company has scheduled a conference call for tomorrow, November 9 at 12:00 pm Eastern Standard Time, to review these financial and operational results. Interested parties can access the conference call by dialing (844) 308-3351 or (412) 317-5407 or can listen via a live Internet webcast, which is available in the Investor Relations section of the Company's website at http://senestech.investorroom.com/.   

A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10114270. A webcast replay will be available in the Investor Relations section of the Company's website at http://senestech.investorroom.com/ for 30 days.

Use of Non-GAAP Measure

Adjusted EBITDA is presented herein and is a non-GAAP measure. However, this measure is not intended to be a substitute for those financial measures reported in accordance with GAAP. Adjusted EBITDA has been included because management believes that, when considered together with the GAAP figures, it provides meaningful information related to our operating performance and liquidity and can enhance an overall understanding of financial results and trends. See our attached financials for a reconciliation of this non-GAAP measure to the nearest GAAP measure.

About SenesTech 

SenesTech has developed an innovative technology for managing animal pest populations through fertility control as opposed to a lethal approach. 

ContraPest's novel technology and approach targets the reproductive capabilities of both sexes in rat populations, inducing egg loss in female rats and impairing sperm development in males. Using a proprietary bait delivery method, ContraPest is dispensed in a highly palatable liquid formulation that promotes sustained consumption by rat communities. ContraPest is designed, formulated and dispensed to be low hazard for handlers and non-target species such as wildlife, livestock and pets, where the active ingredients break down rapidly, unlike rodenticides. In contrast, the historical approach to managing rat pest populations, rodenticides, carries a high risk of environmental contamination and the poisoning of non-target animals, pets and children. ContraPest is a Restricted Use product.

We believe our innovative non-lethal approach, targeting reproduction, is more humane, less harmful to the environment, and more effective in providing a sustainable solution to pest infestations than traditional lethal pest management methods.  We believe ContraPest^® will establish a new paradigm in rodent control, resulting in improved performance in rodent control over rodenticides, without the negative environmental effects of rodenticides.  For more information visit the SenesTech website at www.senestech.com.

Safe Harbor Statement

This release contains "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." You 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 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. Forward looking statements include, but are not limited to, our expectation regarding sales commitments, our expectation regarding the conversion of sales commitments and programs to revenue, our belief that our product is more humane, less harmful to the environment and more effective than traditional methods, and our belief that ContraPest will establish a new paradigm in rodent control without environmental effects of rodenticides.  All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management's assumptions and estimates as of such date. We do 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.

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SOURCE SenesTech, Inc.