SenesTech at Lytham Partners: Rodent Control Innovation Drives Growth

On Tuesday, 01 April 2025, SenesTech (NASDAQ: SNES) presented at the Lytham Partners 2025 Industrials & Basic Materials Investor Summit, showcasing its innovative rodent birth control solutions. The company highlighted strong revenue growth fueled by its Evolve product line and shared ambitious plans for international expansion. However, challenges remain as SenesTech works towards profitability and market penetration.

Key Takeaways

• SenesTech’s Evolve product line significantly boosted revenue, contributing to a 70% growth in Q4.
• E-commerce sales surged by 206% quarter-over-quarter, indicating strong online demand.
• The company aims for a 60% gross margin on Evolve products and is reducing its quarterly burn rate.
• International expansion is underway, with regulatory approvals in multiple countries and anticipated approval in New Zealand by October 2025.
• SenesTech targets profitability by fiscal year 2026 or sooner, leveraging groundwork from 2024.

Financial Results

• Q4 revenue growth reached 70%, driven primarily by Evolve products.
• Evolve products accounted for 70% of total sales in their first year.
• The company is targeting a gross margin of 60% or higher for Evolve products.
• Cost-cutting measures aim to reduce the quarterly burn rate to $1 million.
• Breakeven revenue is targeted at approximately $7 million annually, with potential profitability by fiscal year 2026.

Operational Updates

• Evolve products for rats and mice were launched in January and May 2024, respectively.
• Distribution channels include pest control, agribusiness, international distribution, e-commerce, retail, and direct sales.
• E-commerce sales increased by 206% quarter-over-quarter, with growth expected on platforms like walmart.com and TractorSupply.com.
• Municipal programs include a pilot in New York City and deployments in other major U.S. cities.
• SenesTech has 11 exclusive international distributors and is approved for sale in 45 U.S. states.

Future Outlook

• The company anticipates regulatory approval in New Zealand by October 2025.
• Municipal expansion could lead to significant revenue from city block deployments, particularly in New York City.
• SenesTech plans to leverage its 2024 groundwork for continued growth in 2025.

Q&A Highlights

• E-commerce success is seen as a precursor to potential in-store adoption by retailers.
• Municipal deployments focus on optimizing product consumption rates per city block.
• Exclusive international distribution agreements are contingent on assisting with country-specific registration approvals.
• Cost-cutting initiatives and revenue opportunities may accelerate the path to profitability.

SenesTech’s innovative approach to rodent control and strategic initiatives position it for future growth. For more details, refer to the full transcript below.

Full transcript - Lytham Partners 2025 Industrials & Basic Materials Investor Summit:

Robert Blum, Managing Partner, Lithium Partners: Alright. Hello, everyone, and welcome to the SenesTech fireside chat. Again, my name is Robert Blum, managing partner at Lithium Partners. And today, I have the pleasure of moderating a q and a discussion with the, executive management team of SenesTech, including the company’s chief executive officer, Joel Fruint, and the company’s chief financial officer, Tom Chesterman. Joel, Tom, welcome.

Joel Fruint, Chief Executive Officer, SenesTech: Thank you, Robert.

Robert Blum, Managing Partner, Lithium Partners: Fantastic. Let’s, let’s start high level. For those not familiar, give us a few minutes on the history of the company.

Joel Fruint, Chief Executive Officer, SenesTech: Absolutely. So, SenesTech went public in 02/2016. That’s when our initial, product ContraPest was registered. We’re traded on the Nasdaq. SNES, is the ticker symbol.

But really what we do is, is our mission is to improve the health of our world by humanely managing animal pest populations through fertility control. And right now, we really focus on rats and mice or rodent control, and certainly one of the world’s most, one of the world’s oldest and most challenging problems. And but we do it in a little bit different way. We do it by focusing on the reproductive rate of rats and mice and how to control that as opposed to the lethal side and trying to, get rid of the problem by killing them off. And there’s one thing out there that everyone should realize is that rats and mice are are rapid, reproducers.

Two rats or two mice can become 15,000 in one year. They live to be roughly a year old during that time. The females will have six to eight litters with six to 10 pups per litter. So you can see how they reproduce so fast that you just can’t kill them, gas them, drown them, whatever you’re gonna do, enough. So we what we really do is we offer rodent birth control, and, restricting rodent reproduction is the key to successful population control.

Robert Blum, Managing Partner, Lithium Partners: It’s always one of my favorite cocktail stores, the two, 215,000 over a year. Everyone’s always amazed by that.

Joel Fruint, Chief Executive Officer, SenesTech: They are. Absolutely.

Robert Blum, Managing Partner, Lithium Partners: You know, Joe, you’ve been with the company for, what, a little over a year, almost two years now?

Joel Fruint, Chief Executive Officer, SenesTech: No. About two and a half.

Robert Blum, Managing Partner, Lithium Partners: Two and a half years now. Yeah. You know? And and it’s interesting because your background is is from the industry. Right?

Sort of talk about how you talked about the original product ContraPest, and then let’s sort of get into Evolve here because I think it was your industry background that really helped to sort of guide this evolution and and and moving the product, to a soft bake form. Talk talk about how sort of your experience led to that decision there.

Joel Fruint, Chief Executive Officer, SenesTech: Absolutely. So I spent, fifteen years in the mosquito control products area, vector control. So very similar part of pest con the pest control world. The leader the leading company in the industry, is who I worked with. And what’s really interesting in the development of mosquito control products, I saw a lot of similarity similarities there to the rodent control world.

So in the mosquito control world, when I first, started in that industry, there was focus on adult mosquitoes. Right? Flying mosquitoes. Let’s spray them. Let’s kill them.

And that was about 95% of the industry. The other part of the control method there was what they call larvacide. So you put, chemical products in the water, and they control the larvae so they don’t hatch off. That was roughly about 5% of the industry when it first started. So fifteen years later, it completely flip flopped.

Larval control is now up to 70% or so of that industry, and the concept is pretty simple. It’s how are you going to control the, larva so that they don’t hatch off into adults that you didn’t have to worry about? So taking that concept and put bringing it over to SenesTech, I saw that there was a real need for, controlling the population and controlling reproduction similar to the mosquito control side. And once you do that, then the the remaining adults are that much easier to to fend off and to and to do away with. Having come over to to Nestech, I also looked at, okay, what does the industry demand?

And ContraPest is a great product, but it’s in a liquid form. About 95% of the industry products are in some some sort of solid form. Also needed a product that was easier to use and had a longer shelf life. And so that’s when we decided that, okay. Let’s embark on a a mission to create a solid product that we could then open up the global market as well as the domestic market here and give a give a product that had a long shelf life that was easy to use out in the field, and that was at a price point that was advantageous.

Robert Blum, Managing Partner, Lithium Partners: And and you’ve seen incredibly rapid growth here since you’ve introduced the, the Evolve product here. And and and beyond sort of the Evolve rat product, you’ve also launched a product for mouse as well. So maybe talk about the two products and and sort of how they’ve they’ve grown here over the last few quarters. I mean, the Evolve’s only been around for I guess, maybe we’re going on about five quarters now. Talk about sort of how that has really driven the success going forward here at the company.

Joel Fruint, Chief Executive Officer, SenesTech: Yeah. You know, we we took 02/2023 to really develop the product, and we developed it under the, EPA’s twenty five b exemption to registration, otherwise known as a minimum risk product. So all the ingredients of Evolve are natural products or food additive ingredients, and all of them are on the list of approved products, for use in the 25 b exemption. So we took 02/2023 to really test the product out, get it out in the field, see if it really worked, which it does, see if it’s very palatable to the, the rats and mice that are out there. And as we went along, we realized we had something, very special here.

And, we’ve officially launched the product in the rat product in January of twenty twenty four. Subsequently, we launched a mouse product in May of twenty twenty four. And in the first year that they were out there, they, now account for about 70% of our total sales. So you can see the the rapid, acceptance of the product out in the field and exactly how they how it works and the advantages of, having a solid product out there and one that is very palatable, to the rodents.

Robert Blum, Managing Partner, Lithium Partners: Yeah. For those that, haven’t taken a look, it was during the most recent fourth quarter, the the December quarter that you had 70%, revenue growth here, again, largely driven by the, the growth of the Evolve, product lines here. Talk about how you go to market here, the the key distribution channels. I I you know, it’s sort of a multichannel approach. Talk about online, brick and mortar, other ways in which you’re distributing the product out there.

Joel Fruint, Chief Executive Officer, SenesTech: Yeah. So when we started taking a look at, okay, how can we get the product out into the field? And it’s like, you know, typically before with, with ContraPest product is that we were going a lot of direct sales to pest control companies and to agriculture companies. And we had to do that because it it wasn’t a very efficient, distributed product simply because of the lower shelf life. So with Evolve, we were able to take the concept of, alright.

Let’s identify the end markets, and then what are the channels that that we’re we’re going to use to get there? So we came up with our six channel strategy. Certainly, pest control distribution was the first and foremost that we looked at, and we identified the, distribution companies that could help us get closer to the customers, in a on a regional basis. So we set that up. Then we have, certain distributors that, are in the agriculture industry, so our agribusiness distribution channel.

So we focused on that. Who do we need to get involved with? And then we have a product that is, like, now can be used, globally. And we immediately identified, international distribution as one of the key points that we wanted to address. And, now we have, 11, international exclusive international distributors, in various parts of the world, places like Australia, New Zealand, and Hong Kong, and Singapore, and The Netherlands.

And that allowed us to really get set up. So we’ve been working really hard over the course of 02/2024 to get set up in those areas. So we identified those channels, and then we said, okay. Now we also have, our ecommerce business. And, of course, Nestech, had ecommerce, our own ecommerce site now for the last five years, but we wanted more than that.

So we were able to get on Amazon Amazon, dot com, in June of of last year, really started selling on there in August, and now it’s a really fast growing channel. In fact, the last quarter of of two thousand twenty four, our ecommerce sales were up 206, quarter over quarter. So very fast growing area. It gets the product out to consumers because not only is this now a business to business product, but it’s also a really good consumer product. So we’ve focused on that.

We’re now in walmart.com, and we’re on, TractorSupply.com. So really focused on that channel. And then retail, we had interest from Ace Hardware initially, so we’re now in the Ace system. We’ve got Ace stores buying the product. We’re hoping to get into their warehouses here shortly along with, some other, other brick and mortars like Tractor Supply.

We’re we’re in the process of discussing getting into their stores along with others. And then, of course, we have our direct sales, which direct sales is still a a good part of our business because we wanna be working with the largest and the the most progressive companies and municipalities that are on the forefront in the war against rodents. And so we’re working with, people like in the agriculture, industry, one of the world’s largest sugarcane producers because they have 10 to $15,000,000 annually of damage to their sugarcane crop through rodents and, are not using poisons anymore because of safety concerns. So we’re out in the field with them right now, proving the product out to be used on a large scale basis. In addition to that, we’re working with a lot of, municipalities now.

And, of course, everyone’s heard of the rat problem in New York City. We were able to work with them, and, I’m pleased to say that we’re gonna be shipping our first product to New York City in April. And, they’re gonna start a pilot program. They call it their contraceptive program. And I think that’s been, the result of over the years looking at how they’ve been attacking the the rad problem there, you know, on the lethal side and just not keeping up.

So now I think they’re realizing is we gotta try to control the population, as well as then continue on the lethal side for a complete program. That’s what integrated pest management is all about. So you can see through those channels, we’ve got some, momentum in each of them and, very specific strategies in each of those channels, and we’re really excited about that.

Robert Blum, Managing Partner, Lithium Partners: Yeah. You mentioned, obviously, the 206% revenue growth in, in ecommerce, again, driven by your your own site, driven by Amazon, walmart dot com coming on board, Tractor Supply. There’s talk on the last conference call as the the ecommerce can have an effect on driving the brick and mortar, sort of adoption, if you will. Right? Walmart wants to see how it performs on walmart.com in order to, look at perhaps bringing it in in stores.

You know, for people not familiar with sort of the that process, help help just kinda walk through and and what some some some, I don’t know, call them benchmarks that might need to be achieved in order to, to see the product, in stores here in in in the next twelve to twenty four months in in some of these bigger retailers.

Joel Fruint, Chief Executive Officer, SenesTech: Yeah. It’s it’s interesting that, you know, all these retailers, they now have an online presence. That’s just just a natural. So it gives them kind of a proving ground, and it’s not unusual for a company like ours that’s bringing a a new product, a new way of doing things in for them to put it on their ecommerce site first. It gets it out there fast.

They can kinda gauge what the reaction is. And so, you know, being on walmart.com, being on tractorsupply.com, they they have, a way of of, looking at the product and and how it’s doing with the consumers. And and we expect those those sites to to really start accelerating here similar to how it has been with Amazon. On Amazon, we started doing, you know, a few thousand dollars per month and, you know, now we’re up to the the $3,540,000 dollars per month of product in in in really a short period of time because you if you look at it, we really didn’t go into it going until August of last year. That’s pretty substantial growth.

So we’re expecting to see that on these other sites, as we learn about their system and and start doing, you know, some search engine optimization work and those types of things. And then once that’s in place, then they can really look at the effectiveness on the ecommerce sites and then start planning out, okay, where are we going to have this product available in certain locations, certain stores, or across the board?

Robert Blum, Managing Partner, Lithium Partners: Now you you also thank you for that. You you sort of also talked about some of the municipalities. Right? Over the years, we’ve seen, you know, always love the the rattiest cities list, that gets put out there. Recently, we’ve had Los Angeles have some deployments of Evolve there, programs in Chicago, in the Chicago land area, Boston, Baltimore, in addition to to, obviously, New York that you mentioned here.

Talk through sort of the process of which they they they do sort of, I don’t know, city block deployments, look at the data, look to perhaps expand beyond that. You know, talk through what investors should be looking for from from those programs here going forward.

Joel Fruint, Chief Executive Officer, SenesTech: Absolutely. We have you know, ours is a regulated product. Right? So you have to go through the process. We went through the minimum risk process to get the product approved, and that’s great.

Then you have to get the approval by state. So right now, we have 45 states where we’re allowed to be sold in, and that’s a process in itself. In some, it’s easier than others. There’s administrative things. But all in all, we now have the approval in in a majority of the states.

Then once you get that, then it’s the the proof point out in the field. Right? And so we’ve been talking to New York City for over a year about doing a program. They finally realized that we should get this going, and they had to have a vote in with their, city councilman, and and it passed. And so now we’re at the point where we’ve got product on order from New York City.

And then what they’ll do is they’ve they’ve taken two ten block areas that they’ve identified, and we’re helping them, in the layout of where to deploy the product. So you put the product in bait stations, and then you put it in, you know, a certain number per city block. What we’ll find out is how much to put per city block once it’s out there because it’s all about consumption. So the faster the consumption, the higher consumption, and and we expect it to be 100%, will tell you about your population that’s out there, the rat population. And then you can adjust that accordingly, per city block.

But if you look at it and and just some of the potential that’s out there is that, a city block in in, the 10 block areas, we’re probably gonna have five bait stations per city block, and that will be filled with product. And you wanna have it on a continuous basis because that’s where how this product works. On the reproductive side is they start eating it, and ultimately, then after four to six weeks of continuous consumption, the reproductive control starts to take place. So if you just put some, numbers to it and say, okay. So each if we have five bait stations per block, with it it just say the annual usage per block is, say, a thousand a thousand dollars.

In New York City, there’s a 20,000 city blocks. So how fast and how rapid will they expand it to other areas? We’re really excited about that. They’re really excited about it because they believe that this is something that has been overlooked, and now it’s a new tool in their integrated pest management toolbox that can be worked in conjunction. But, you know, a thousand dollars of product per city block per year with a 20,000 blocks.

Now I’m certainly not suggesting they’re gonna use it in every city block, but how much? What percentage of blocks will get control? We’ll wait and see, but there could be some tremendous upside there. And then you mentioned you mentioned Chicago. I just wanna touch on that briefly.

So that’s another, area that, neighborhoods in Chicago. So New York has boroughs. Chicago has neighborhoods. And some of the neighborhoods have been wanting to do this for, years now, and they finally got together along with the city of Chicago. And we just got our first order and our first shipment, to a couple of those neighborhoods in the city.

They’re gonna start deploying it the first week in April, which is, here now. And, we’re really excited about what the potential is there as well because big cities, have huge rat problems, and this is one way that they can start to really have an effective solution, that goes right hand in hand with other methods that they’ve already been using. So very exciting.

Robert Blum, Managing Partner, Lithium Partners: Very good. So we we’re we’re seeing growth on the on the ecommerce side. Sounds like a number of new deployments on the municipal side. I wanna come back to international here for just a moment. Alright?

You’ve mentioned that you have a number of agreements in place similar to the stage. You have to sort of go systematically one by one, get the country specific registration approvals. However, you do have a number of them that you’ve already received approval for and and ship product to. I think it’s Hong Kong, UAE, Netherlands, Maldives. Couple of others are close.

You know, talk about what the expectations are here for ’25, on the, international front.

Joel Fruint, Chief Executive Officer, SenesTech: Well, we’re really excited about the international front because now it it gives us, you know, the the rodenticide market in The US is roughly a billion dollars, you know, including traps and all those things. Globally, it’s 5,000,000,000. So, certainly, rat and and mouse issues are not limited to The United States. In fact, in some areas, there’s a huge infestations that they that just need to have some type

Robert Blum, Managing Partner, Lithium Partners: of

Joel Fruint, Chief Executive Officer, SenesTech: solution. So we’re we’re excited about the the distribution that we already have set up. Just a little bit about how they came about is, you know, we’ve have made contact with certain ones that we know of. Others have contacted us. Part of our exclusive distribution agreement is that, it’s, upon them to help us get the approval in the specific country.

In return, they get exclusive distributorship, and they have to bring product in. One of the first ones was Hong Kong. They realized the the the problem that they have in the wet markets there, and, we got the product in with our distributor there. They started, getting it out for trials. They had, six to eight months.

They expected it to be in after about six months, we were able to get the the product approved for use. And now we’re doing some very specific trials there and, really expect that to expand. So same thing in The Netherlands. Europe’s tough because the the biocide regulations that they have, but we got a distributor there that, really understands how to, put this concept of, you know, controlling reproduction, in conjunction with other methods, and they were able to work with the government to allow the product to be used. We shipped container of material there, and now they’re in the process of getting that deployed.

So, another exciting one is that we just received notification, for New Zealand that, they have, passed the last major hurdle to getting the product approved. They expect to have that, full approval in October, and we’re talking about, you know, shipping product over there so that when they do get full approval that, they’re ready to go and they’ve got customers lined up already. So, word-of-mouth is, key in in that because they all hear about other things where it’s in other parts of the world where it’s been effective and, where it’s being approved, and then it’s starting to snowball.

Robert Blum, Managing Partner, Lithium Partners: Fantastic. Tom, let’s turn to you on the financials in, the few minutes we have left here. Q four sort of records, really across the board, cost cuts, improved margins, etcetera. Talk through, some of the key, highlights here of the, of the fourth quarter numbers that we, that were reported here a couple of weeks ago.

Tom Chesterman, Chief Financial Officer, SenesTech: Sure. Thank you. Just kind of walking down the, the income statement there. The, you know, next one on really is gross profit. ContraPest was a 40% gross margin type of product.

We knew that Evolve had the potential for higher gross margins once it receives steady state. We’re definitely in steady state. And we expect that, you know, we have the potential at the current pricing to, meet or exceed 60%, gross margin. So significant improvement there that really just makes it much, much easier to, again, to get to to overall profitability, as we move forward. Having it at or above 60% also gives us some pricing flexibility.

If we come across unique opportunities, we can we can move quickly without damaging the the the cost structure significantly. On the, operating expense side, we’ve also been steadily removing costs from the business, becoming more efficient, trying to be as prudent as we can in exactly where do we invest our our limited funds. And that’s really been if you look at last year, our, you know, burn rate catch burn rate was about 1 and a half million per quarter, but we we can do better. And we’ve we’ve recently announced some initiatives to reduce that cost structure even further to 1,000,000 a quarter. So at that, you know, given our breakeven, we used to talk about, you know, getting to breakeven at somewhere 12 to $14,000,000, but we can now get to breakeven at about $7,000,000, maybe even a little bit less, of revenue, on a pro annum basis.

So significant improvements in our ability to get near term cash flow profitability, which is really our passion, and and our our our focus is is how quickly can we get there. You know, we talk about the fact that we can we can probably do it now, in, in somewhere in fiscal year, 2026. But, frankly, because of the, you know, some of the unique opportunities, revenue opportunities that, Joel touched on, you got a big you got a single full New York order or you get a Costco order or you get, you know, this New Zealand order. The the those kinds of orders can push you very, very rapidly over the threshold into profitability, and so it could be sooner. We’ll see how those orders come in.

Robert Blum, Managing Partner, Lithium Partners: Alright. Fantastic. We’ve got about a minute left here. Joel, maybe just some some final takeaways to, to leave everybody here with.

Joel Fruint, Chief Executive Officer, SenesTech: As you can see, we’ve been working in a lot of different areas, and we’ve done a lot of things in 02/2024. We launched the we launched Evolve. We launched Evolve mouse. We got the product out the field. People and and companies and municipalities are are using it.

They’re deploying it in in test situations. Right? Because everyone wants to know that it’s gonna work. We’re really excited about, the wherever wherever we have it deployed, we’re getting a % consumption of the product. And we know if they consume the product that there’s going to be control of the population.

And, we we really believe that ’25 is, getting set up so that all the legwork that we did in 02/2024 is really gonna pay off, and we’re starting to see that.

Robert Blum, Managing Partner, Lithium Partners: Alright. Fantastic. Well, Joel, Tom, thank you very much, for your time today, and thank you to everyone who is watching right now. If you have any questions or would like to schedule a meeting, with management here, you can send me an email. That’s bloom,blum,@lithiumpartners.com.

We do have additional presentations and fireside chats coming up next, so, please stick around, everyone. Again, Joel, Tom, thanks so much for the time today.

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

Joel Fruint, Chief Executive Officer, SenesTech: Thanks, Robert.

Robert Blum, Managing Partner, Lithium Partners: All right. Thank you, Joel and Tom. It’s always one of the more unique discussions we have talking about the opportunity Sonesta has to disrupt the rodent control market. Quick reminder, all of our webcast will be available to watch on demand after the summit. K.

Up next, I’m gonna sit down for a fireside chat with Joe Forkey, CEO of Precision

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