SenesTech at Lytham Partners: Growth in Rodent Control Solutions

On Thursday, 29 May 2025, SenesTech (NASDAQ:SNES) presented at the Lytham Partners Spring 2025 Investor Conference. The company highlighted its innovative approach to rodent control, emphasizing both its strategic growth in revenue and initiatives to optimize costs. CEO Joel Fruent and CFO Tom Chesterman discussed the company’s financial performance and future plans, underscoring the potential market opportunities and challenges ahead.

Key Takeaways

• SenesTech’s revenue increased by 56% in 2024, driven by the Evolve product line.
• E-commerce is the company’s largest and fastest-growing distribution channel.
• Gross margins improved significantly to 64% in Q1 of the current year.
• The company aims for cash flow breakeven with reduced operating expenses.
• International expansion includes agreements in 12 countries, with approvals pending in Australia and New Zealand.

Financial Results

• 2024 revenue reached $1.9 million, marking a 56% increase from the previous year.
• Q1 revenue rose by 17%, with Evolve sales growing by over 40% year-over-year.
• Gross margins improved to 64% in Q1, up from 32% in the same quarter last year.

Operational Updates

• SenesTech is focused on a six-channel distribution strategy, with e-commerce leading the way.
• Municipal deployments of Evolve are increasing in major cities like Chicago and New York City.
• The company secured a new facility in Phoenix to meet future demand.

Future Outlook

• SenesTech aims for cash flow breakeven at slightly over $1.5 million per quarter.
• Cost optimization efforts include pausing new product development and bringing more functions in-house.
• International expansion is a key growth area, with exclusive agreements in 12 countries.

Market Opportunity

• The US rodenticide market is valued at $1 billion annually, with a global market of $4.5 billion.
• Significant opportunities exist in municipal, agricultural, and consumer sectors.
• Rats pose a societal problem, with infrastructure damage in the US estimated at $27 billion annually.

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - Lytham Partners Spring 2025 Investor Conference:

Robert Blum, Managing Partner, Lithum Partners: Alright. Hello, everyone, and thank you for, continuing to join us throughout the day here at the Lithum Partners Spring twenty twenty five Investor Conference. Again, my name is Robert Blum, managing partner here at Lithum. And today, I’ll be moderating a fireside chat, discussion, with the management team of SenesTech. I’ve got the CEO, Joel Fruent, and the Chief Financial Officer, Tom Chesterman with me.

Gentlemen, welcome.

Joel Fruent, CEO, SenesTech: Thanks, Robert. Thank you. Glad to be here.

Robert Blum, Managing Partner, Lithum Partners: Just as a reminder, SenesTech trades on the NASDAQ under the ticker symbol SNES. So let’s go ahead and jump right into it. Joel, starting things off for those that may not have seen one of our previous presentations or fireside chats, provide a brief overview of SenesTech.

Joel Fruent, CEO, SenesTech: Absolutely. So SenesTech, we’re a biotech and life sciences company that specifically operates a business in the rodent control products area, specifically controlling reproduction. So, having said that, here’s two things that to keep in mind as you as we go through this. The first is that two breeding rats can become 15,000 in one year with sufficient food, water, and harborage. And the other thing is that Rent A Kill, the largest pest control company in the world, did a study that showed that a pair of rats could actually become 500,000 in three years.

So with that being said, we tackle the rodent control problem by addressing the birth rate. So, most rodent control products and companies, they focus on the death rate, and that’s why you see there’s such an issue these days in the municipalities and in agriculture. So you really you can’t poison them, you can’t trap them, you can’t gas them fast enough in order to keep up with that substantial birth rate. So our approach is rodent birth control, and it’s a real novel, as you can imagine, novel method compared to those other solutions. They rely on poisons.

We rely on controlling the birth rate. Poisons are an issue because of a couple of things. One is the high reproductive rate. As I mentioned, rats can develop resistance to those poisons. They also have aversion to those poisons out in the field to so it keeps them from going where the poisons are.

And, of course, there’s increased social and political restrictions on poison use. So what we are finding and we have over the last twelve months for sure is that communities are really seeking, sustainable and effective pest control solutions, and our fertility control, birth control products line up with that demand for those sustainable pest management products. So, really, if you look at it is that controlling the rodent population is really a proactive approach compared to traditional methods. Yeah. You mentioned two the rhino kill study.

Robert Blum, Managing Partner, Lithum Partners: You said two breeding rats over three years. Is it 500,000 or 500,000,000 descendants?

Joel Fruent, CEO, SenesTech: It’s 500,000.

Robert Blum, Managing Partner, Lithum Partners: Five hundred thousand.

Joel Fruent, CEO, SenesTech: Okay. Just wanna confirm. Which is substantial.

Robert Blum, Managing Partner, Lithum Partners: Yep. Very good. You know, tell us a little bit about your flagship product, Evolve.

Joel Fruent, CEO, SenesTech: Yeah. So SenesTech has been around for, well since 2016, it went public and launched our ContraPest product. But real excited in 2024, we were able to launch Evolve, which is significantly changing, the company’s trajectory. So, it’s a soft bait. So, it’s a solid in a solid format compared to a liquid format.

It has proven efficacy, and it’s very common that that solid baits and soft baits are used out in the field. So there’s a a very much a familiarity with that type of product, which makes it then easier to deploy than the, liquid products, and it’s really competitively priced to traditional rodenticides. And the other great thing about it is the EPA has designated this as a minimum risk product under their section 25B regulation. It has quickly become our top selling product. It’s expanded our market and geographic reach.

In fact, in Q1 of this year, EVOLVE sales grew by 40% year over year. The active ingredient is cottonseed oil, and it’s known for effectively reducing fertility in rats. And the low level of cottonseed oil is tailored specifically to a rat’s body mass. So, large mammals would need to consume 50 to a hundred pounds of the product just to have a slight chance that it might reduce their fertility. So, we’re real excited about that, and it can be used really wherever rats are present.

The product form is in the shape of small sausages, and we did that on purpose to differentiate it from the rodenticide products that are out there. And our recommendations are you put two to 12 pieces inside of a bait station, and you want to use bait stations in areas where you tamper resistant bait stations, where there might be pets or wildlife or non targets there because you wanna make sure that it gets to the targeted audience. So, I think the key there is that it’s it’s an a minimum risk product. It’s not a poison. It has all natural ingredients in it.

Robert Blum, Managing Partner, Lithum Partners: And then, you know, is Evolve available for for well, I guess, confirm. Evolve is available for both rats and mice. Correct?

Joel Fruent, CEO, SenesTech: It is. We launched Evolve rat product in January of twenty twenty four, and we then followed it up with Evolve mouse, in June of twenty twenty four. So but that’s done. It’s allowed us to, significantly increase the addressable market there because there is a large marketplace for mice.

Robert Blum, Managing Partner, Lithum Partners: Alright. Fantastic. Let’s talk a little bit here about distribution. What channels is Evolve sold through today?

Joel Fruent, CEO, SenesTech: Well, we’ve, we’ve come up with a strategy that, covers a lot of different areas, and, we call it our six channel strategy. Certainly, e commerce is a big channel for us. That’s how that’s how we started selling the company’s flagship product ContraPest on our on our e commerce site. We also have, agriculture distributors for the large agriculture market. And the same thing for pest management, pest management distributors that will distribute the product to the pest operators that are out there.

We now are able to be able to get into retail, and so you’d be able to find our product in, places such as Ace Hardware stores. It also has allowed us to expand globally, And we have, international exclusive distributors that are out there. And then we also do our direct sales to, large customers like zoos, sanctuaries, and, of course, municipalities. But ecommerce is the is our largest channel currently, and it’s the fastest growing channel. So over the past twelve months, ecommerce has, expanded from our own web site, our own ecommerce site to now where we are on Amazon, and we’ve been on there since last August.

And we’re now approaching the 60 to $70,000 per month run rate. So we’ve we’ve taken that formula, and now we’ve we’ve expanded it to recently to walmart.com, as well as tractorsupply.com. In fact, in the first quarter, ecommerce sales, increased by over a 7%. And you say, okay. What does that do to it?

It’s like, well, these new platforms, enhance functionality on our own website, so we’re able to, do more for the ecommerce customer that’s out there to make it easier for them to purchase a product. And, of course, we have our our targeted marketing strategies for ecommerce, which are are proven to, be effective as well. But, really, what is what is the Evolve’s features that support ecommerce growth are the the fact that, as I mentioned, it’s a solid product. Of course, the price point is very important. We’ve got all our efficacy studies in line, so the is, it works really well and people keep coming back for it.

And the other thing is we have a long shelf life. We have a shelf life now on a product that is over eighteen months as compared to liquid product, which was about six months. So, e commerce is is moving along greatly. We’re starting to expand there. Another area that we’re really focused on is, in the last six months has really taken off, is on the municipal side.

So, on the municipal side, deployments of Evolve are increasing significantly. We’re doing a big project in the Chicago area with the Wicker Park and Bucktown Chamber of Commerce, where we now have repeat orders of pallets of product that are being deployed out in the neighborhoods to really control their rat populations there. They install the the crews install the product in the bait boxes out in the alleyways and wherever there’s food sources available, and they’re having great consumption of the product, which means in turn that they’re going to have great results. And these deployments have received extensive media coverage there. Every major news outlet in the Chicagoland area has been covering it.

And the repeat orders will tell us that the product’s working. And we’re excited about the rest of Chicago because this certain area, it’s a district called a special service area, and there’s 54 others in those areas, In New York City. So, we started initial deployment there just last week, and they’re deploying the product in West Harlem area. And it’s a pilot program that could possibly expand to the rest of the city as we go along and see the results. And additionally, we’ve received orders from Baltimore, from Los Angeles County.

We’ve got some repeat customers now, municipal customers that are in the Boston area. And we’ve done a nice project in San Francisco that we expect to be expanded on substantially in the near future. So, think municipal opportunities really indicate that we’re gaining traction and we’re gaining support behind our product and looking at it from how to control the birth rate rather than just what are you doing with the death rate. And, as we see the municipal success happen, it will only impact, all of our other channels positively.

Robert Blum, Managing Partner, Lithum Partners: Alright. That’s very helpful, very informative there. You know, maybe talk a little bit about some of the international opportunities that you have. How are sales trending there? You know, maybe talk a little bit about the approvals needed by by country and how that may differ from some of your US based sales.

Joel Fruent, CEO, SenesTech: Yeah. So we have a a a number of of opportunities internationally at the moment where distributors that we’ve signed up to handle our product on an exclusive basis to just the quantity of inquiries we’re getting about doing it. And it all came about because of Evolve. So, we’ve signed exclusive distribution agreements in 12 countries, And recently, we just signed an exclusive distribution agreement in Indonesia and expect one in The Philippines to be right behind it. We’ve done shipments to places such as Hong Kong, The Netherlands, The UAE, the mall The Maldives.

And with those, we’re expecting, reorders to really start ramping up. There’s a couple of key markets that we’re right at the tail end of getting our product registered in those, and that would be Australia and New Zealand. Both have significant programs designed at trying to eradicate rodents. And, we expect that, in October, we’ll get the full approval, and we expect to be shipping substantial amounts, container loads of product there, certainly later this summer. So those are those are some of the things that really have us focusing on, okay, what other international sites, international markets do we actually wanna get to?

Because those require navigating the regulatory processes. They’re different in each country. Some are easier than others. Some allow waivers. Some don’t.

But as I mentioned, this is substantial because once we get the approval, then it’s large orders to our distributors. And, we think that the second half of the year is gonna be really strong with our international presence.

Robert Blum, Managing Partner, Lithum Partners: You know, Joel, something I think you touched on briefly, but I wanna make sure we come back to this because I think it’s an important topic that sometimes can get lost here, is why is controlling rats important?

Joel Fruent, CEO, SenesTech: Well, first of all, it’s, you hear about it all the time. Right? They they pose a societal problem. So Orkin, the largest pest control company in the world, they come out with their 10 Rattiest Cities list in The United States. It’s an age old issue.

It’s one that’s been traditionally managed for the last fifty years with lethal solutions, things like poisons and inhumane traps. But there’s still this big problem. And that’s why, as rat infestations continue to worsen, they have great societal impacts. The first one is public health. They’re they’re they’re vectors for various diseases, that can be that humans can contact and also die from, are food supply.

They destroy about 20% of the world’s food supply, either through consumption or contamination. And infrastructure, the damage that they cause, it’s estimated in The US alone, is $27,000,000,000 annually. So, are real substantial things, whether they’re economic, whether they’re public health. Those are the things that we need to be concerned about, and how can we get rid of this problem? The other thing I wanted to mention with, you know, over the last fifty years in poisons, what’s your risk factor there?

So the risk factor there, people, pets, wildlife can be poisoned. And we’ve seen instances in each of those. And our alternative and what we focus on, the birth rate, controlling that so you can control your populations, it’s approached in a humane way through fertility control, and it’s really an environmentally friendly way compared to, compared to the alternatives.

Robert Blum, Managing Partner, Lithum Partners: You know, you you touched around some of the damage, you know, $27,000,000,000 infrastructure damage, you know, we talked about the food supply, but when it comes back to sort of the addressable market opportunity for your solutions, maybe give give folks a sense of what that opportunity is.

Joel Fruent, CEO, SenesTech: Yeah. It’s a it’s a large marketplace both domestically in The US and globally. It’s estimated that The US rodenticide market is about $1,000,000,000 a year, somewhere around there. Globally, it’s $4,500,000,000 And when you look at how is that divided up, well, mentioned the municipal market. The municipal market, roughly spending $400,000,000 a year on their rodent problems.

So, that’s everything from small towns, to large cities, to counties, to government agencies. And then you have the whole pest control industry, a 202 hundred million dollar marketplace just for products that are used in pest for pest control operators that are out there outside of the municipal market. Agriculture, two hundred and fifty million dollars. If there’s one marketplace that, when we look at, let’s say we have some tremendous opportunities there, it’s in agriculture because you can see some real economic damage, whether it’s in things like destroying sugar cane sugar cane, in egg production, really reducing the amount of eggs that are produced, as well as when you look at row crops and things like that, in addition to poultry houses. So, there’s a substantial there.

And then of course, we’re not even talking about consumers, Right? And that’s 50,000,000 that’s sold through big box stores online and in retailers.

Robert Blum, Managing Partner, Lithum Partners: Alright. That’s, that’s helpful. Good context here. Tom, let’s turn things over to you for, for a bit here on some of the financials. Saw, Joel mentioned this a moment ago, you saw sales of Evolve grow 40% during the first quarter, that’s the March ending quarter.

But the margin profile on Evolve is substantially higher than your, your earlier product, gross profit dollars. In fact, Rose, I think it was about a 30% during q one. You know, maybe for those not familiar, talk about the margin profile of Evolve and and how it’s driving those sort of, profit dollar increases.

Tom Chesterman, Chief Financial Officer, SenesTech: Absolutely, Robert. Thanks. I mean, we’ve deliberately placed equal efforts on growth and profitability. So let’s go into the two pieces of them. For 2024 as a whole, we had record revenue of 1,900,000.0, which was up 56% from the previous year.

In q one, as we continue to transition from ContraVest to our higher margin evolved product, total revenue growth was up 17%, but Evolve grew over 40% year over year. Now due to the high margin nature of the Evolve product line, comparatively, gross margins were 64% compared to 32% in q one of last year. And even looking at it sequentially, gross margin margins have improved compared to 60.9% in q four of last year. So you’re you can see we’re continually improving our gross margins. And as you said, from a gross profit dollar perspective, gross profit up to a 32% in q one.

So we’re really looking to drive the business towards profitability. You know, we always believe that our evolved product line would represent a higher margin opportunity for SenesTech, and it’s proving this out. And then further ever improving manufacturing operations gives us continued pricing and margin flexibility. We’re also increasing production capacity to meet future demand. We just, secured a newer, larger facility in the Phoenix area that will allow us to meet the next five years of increasing demand without dramatically increasing our facility costs.

And we’ve just moved into that facility within the past month.

Robert Blum, Managing Partner, Lithum Partners: Alright. Very good. You you know, you also, on I think it was the year end call, announced a series of initiatives to cut, operating costs. Maybe expand a little bit more there.

Tom Chesterman, Chief Financial Officer, SenesTech: Sure. Yeah. In March, we implemented a a new series of optimization initiatives to further reduce the operating expenses. These included the pausing of new product development to focus exclusively on the commercialization and growth of Evolve RAP and Evolve Mouse, bringing more marketing, regulatory, and intellectual property functions in house to reduce reliance on external consultants, and optimizing our direct sales efforts shifting to a focus on high value customer acquisition and key customer segments and commission only models. The benefit of these should be evident in the quarters to come in the operating expense line.

And all told, these savings, coupled with the higher gross margins and the operating efficiencies, are expected to move our cash flow breakeven to a little over 1,500,000.0 per quarter. We continue to move closer to that inflection point that many companies and investors, of course, are looking for. There’s still a lot of execution work to be done, but the pathway is clear for us.

Robert Blum, Managing Partner, Lithum Partners: Alright. That’s, that’s helpful to to everyone there. You know, Joel, let’s let’s come back to maybe the growth side of the equation, and Tom touched a little bit about it. You know, you touched upon a number of growth areas, ecommerce, municipal, international orders perhaps towards the end of the year here. In order to get the business to the inflection point that that Tom just mentioned there of, you know, maybe a little north of 1,500,000.0 per quarter, Again, you’re right around 500,000 per quarter today.

You know, what are the the sort of various pathways to get there? Well,

Joel Fruent, CEO, SenesTech: certainly, the success we’ve had in ecommerce, we continue to see that. You could see that since the end of the year, just our presence on Amazon has grown from, 20 to $30,000 per month up to now where we’re seeing $5,060,000, 70 thousand dollars per month. So we expect that to keep going. And as we get some time under our belt with, Walmart and with TractorSupply.com and some others that we’re looking to add, that that’s gonna be a big a big driver. I mentioned the municipalities.

They’re starting to recognize the need for rat control and not just using poisons. So, our deployments in the municipal market over the last sixty days more than doubled our deployments the previous year. So you can start to see some, transition there to, looking for alternatives that will work. Those deployments, they cover relatively small areas, a few blocks in the city, maybe three blocks, 10 blocks, 20 blocks. But expansion and the continued use of the product can generate millions in revenue for SenesTech.

So, you combine a few municipal, large large municipal orders or international orders, which are substantial. Those are in the hundred thousand dollar plus when we get these orders. And combined with the e commerce and then our distribution into the large pest control and ag markets, you know, you can really boost our prospects there. So, think when you look at it is agriculture along with zoos and animal sanctuaries are great areas because there’s a need, there’s some real economic value there, along with the need to make sure that there’s certain things that don’t go near poisons. And then when you look at things like, you know, the residential business, We’re doing some real nice projects right now with large apartment complexes where they’re using our product because of the fact that they don’t want poisons around their tenants.

Commercial buildings, food storage, warehouses, those are really emerging opportunities where they’re starting to realize that this alternative out there is something they’ve been looking for for a long time.

Robert Blum, Managing Partner, Lithum Partners: Alright. I’ve got a couple minutes left here. You know? Joel, just final takeaways for, for investors here today. Well, as I mentioned,

Joel Fruent, CEO, SenesTech: I hope everybody remembers it from the beginning of chat here, is that two can become 15,000 in one year. You cannot gas them, poison them, drown them effectively to keep up with that. Public health concerns are real concerns that are out there, because they continue to increase as we go along. There’s growing awareness of collateral damage in rodent control. Take, for example, the California’s, California’s Ecosystem, Protection Act.

It bans a lot of the second generation anticoagulant poisons. So if they’re banned, what’s gonna take the place? Because the rodents aren’t going away. So all those things trend in our favor, and we’re executing on a strategy. We spent 2024 building a new product line, getting it out there.

You know, our product’s a regulated product, so we had to get approvals in each one of the states that we can sell in. So that took some time. But now we’re ready to execute on our strategy. And you can see that the execution is starting to happen, and some of the the proof points are our record revenues, our increased gross profits, not a little bit. We went from the mid 40s to the mid 60s with our product lines.

We’re making a real effort to decrease our operating expenses and really reduce our cash burn till we get to break even. So, you know, they say that paradigm changing products don’t come along often. They’re very rare, but can transform long standing practices. And we really believe we have a transformative opportunity here by leading in a way that doesn’t keep doing the same thing over and over again, but does it differently. And that’s by controlling the populations, ending infestations that are out there, and keeping the populations low.

So we we’ve got a good start, and we’re really excited about what the future has to offer.

Robert Blum, Managing Partner, Lithum Partners: Alright. Fantastic. Well, we’ll we’ll go ahead and leave it there. We’re sort of at time. So, Joel, Tom, thank you so much for your participation in today’s conference here.

Thank you to everybody watching here as well. If you have any questions or perhaps would like to schedule a meeting with management, you can send me an email. That’s bloom blithempartners dot com. I’d like to learn more about lithium as well. You can visit our website or make sure you connect with us on LinkedIn so that you can learn more about future events such as the one today in fireside chat with Sonestech here.

So again, Joel, Tom, thank you so much for your time.

Tom Chesterman, Chief Financial Officer, SenesTech: Thank you.

Robert Blum, Managing Partner, Lithum Partners: Thank you.

Joel Fruent, CEO, SenesTech: Thanks, Robert.

Robert Blum, Managing Partner, Lithum Partners: All right, guys. Everyone enjoy the conference here and have a great rest of your day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.