SenesTech Announces First Quarter Financial Results

FLAGSTAFF, Ariz., May 11, 2017 /PRNewswire/ -- SenesTech, Inc. (NASDAQ: SNES), a developer of proprietary technologies for managing animal pest populations through fertility control, today announced its first quarter financial results.

The Company will hold a conference call today at 5:00 pm ET (2:00 pm PT time) to discuss these results and expectations for the coming year.

Recent highlights and key milestones:

The Company began commercialization efforts for its recently approved product, ContraPest, in January 2017. Progress on commercialization included:

• ContraPest is now approved in 48 states, with Florida and California in the final approval steps.
• Product shipments have begun to customers, in our municipal, commercial and professional pest control operator (PCO) segments.
• Purchase proposals are out to additional customers in these segments, with expansion into animal health facilities (zoos and sanctuaries) and agriculture (protein production facilities).
• In Hawaii, a project is underway to assess ContraPest as a blocking strategy for rapid rodent increases in sensitive island ecologies.
• Discussions are proceeding in several European member states regarding conditional use in advance of full registration.
• News articles with global reach continue to be written on ContraPest's revolutionary technology, including Wired, UANews, Arizona Daily Sun, Pest Control Technology, Phoenix Business Journal, and New Scientist

Management Discussion

"In addition to our trials that are taking place in New York and other key early adopter sites, we have turned our focus on North America sales with the launch of our first marketing campaign, which we call Project Arizona," said Dr. Loretta P. Mayer, Chair, CEO and co-founder of SenesTech. "As we meet our partnership obligations in Hawaii it is validating our early predictions regarding rodent control - the public wants a safe and sustainable alternative to current strategies: poisons."

Dr. Mayer continued, "We anticipated that the first quarter would incur certain commercialization startup costs, as we regain the full rights to manufacture and market ContraPest. We anticipate that this will be offset by the increased cash flow from product sales later in the year, when compared to the royalties we might have earned from our licensee. Ultimately, moving from a royalty model to a revenue model is the right move, as we expect to demonstrate in future quarters."

Financial Results

Revenues for the first quarter were immaterial, as the Company only began commercialization efforts for its recently approved product, ContraPest, in January 2017.

Operating expense for the quarter was $3.5 million, compared with $2.4 million for the first quarter of 2016. Operating expenses for the first quarter included non-cash equity compensation of $1.1 million, which was roughly flat with the first quarter of 2016. The increase in operating expense was attributable largely to commercialization activities.

Adjusted Cash EBITDA, which is a non-GAAP measure of operating performance, was $(2.3) million for the quarter, compared with $(0.9) million for the first quarter of  2016. The Company anticipates that this will continue at approximately $750,000 per month until offset by revenue.

Net loss for the quarter was $3.5 million or $0.34 per basic and diluted share, compared with $2.5 million or $0.56 per basic and diluted share for the first quarter of 2016.

Cash, cash equivalents and highly liquid investments at the end of the quarter were $8.3 million. Extraordinary uses of cash included the payment of $1.0 million to the Company's former licensee, as a settlement to regain full rights to manufacture and market ContraPest, and $0.2 million in deposits on manufacturing equipment which is anticipated to be placed into service in the second quarter.

Conference Call Information

The Company has scheduled a conference call later today, at 5:00 pm ET, to review these 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 # 10106665. 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 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.

The Company's first fertility control product, ContraPest^®, is marketed for use initially in controlling rat infestations. ContraPest's novel technology and approach targets the reproductive capabilities of both sexes, inducing egg loss in female rodents and impairing sperm development in males. Using proprietary bait stations, ContraPest is dispensed in a highly palatable liquid formulation that promotes sustained consumption by rodent communities. ContraPest is designed, formulated and dispensed to be safe for handlers and non-target species such as wildlife, livestock and pets, in a biodegradable product. In contrast, the historical approach to managing rodent pest populations, rodenticides, carries a high risk of environmental contamination and the poisoning of non-target animals, pets and children.

We believe our 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. There is currently no other non-lethal fertility control product approved by the Food and Drug Administration (FDA), or the Environmental Protection Agency (EPA), for the management of rodent populations.  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. 

To read full press release, please click here.