Good afternoon, everyone, and welcome to the SenesTech Reports First Quarter Fiscal Year 2026 Financial Results Conference Call. Please note, today's event is being recorded. At this time, I'd like to turn the conference call over to Robert Blum with Lytham Partners. Please go ahead.

Thank you very much, Jamie, and thank you all for joining us today to discuss SenesTech's first quarter 2026 Financial Results for the period ended March 31, 2026. With us on the call today are Michael Edell, the company's newly appointed President and Chief Executive Officer; and Tom Chesterman, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we'll open the call for a question-and-answer session. As mentioned, if you are listening through the webcast portal and would like to ask a question, you can submit your question through the Ask a Question feature in the webcast player. Before we begin with prepared remarks, we submit for the record the following statement. 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 the company's filings with the Securities and Exchange Commission. All forward-looking statements contained during this conference call speak only of the date in which they were 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 a result of the receipt of new information, the occurrence of future events or otherwise. With that said, let me turn the call over to Michael Edell, President and Chief Executive Officer. Michael, please proceed.

Thank you, Robert, and good afternoon to everyone joining us today. As this is my first earnings call with SenesTech investors as President and Chief Executive Officer, I wanted to start by saying how excited I am to be formally joining the company. I accepted this role as CEO with SenesTech because my conviction in the products and markets is strong. However, my conviction in our ability to dramatically scale this business is even stronger. The work now is to translate product strength into commercial execution at scale. That is the central priority of this management team. Although I have just been appointed CEO, I'm not coming into this business cold. I began working closely with SenesTech mid-2025, initially in a consulting capacity to evaluate the business and build a strategic plan focused on commercial growth. In October, I became the Interim Chief Operating Officer to lead implementation of that strategic plan. Over the past several months, we have been taking a hard look at the business and making practical changes designed to create a more scalable, more accountable and more data-driven operating model. Those changes are not theoretical. We have streamlined operations. We have prioritized direct-to-consumer revenue as a core growth engine. We have moved the direct management of our Amazon account for the Evolve brand. We have restructured B2B processes and the sales organization to improve discipline, pipeline visibility, forecasting accountability and focus. We have advanced work on packaging, digital marketing efforts, subscription, customer education and our own e-commerce platform. The goal across all of these initiatives is quite simple: make the product easier to understand, easier to buy, easier to deploy and easier to reorder. The direct-to-consumer channel is central to that strategy. During the first quarter, direct-to-consumer revenue increased 42% to a record $194,000 despite the disruption associated with moving the Amazon operations in-house. That is an important result because the Amazon transition was a deliberate strategic move. It was not just a channel change. It changed what we can see, what we can control and how quickly we can respond. By managing Amazon directly, we gained better access to customer behavior, improved advertising performance, subscription data, pricing visibility, media buying efficiency and overall channel economics. We can learn faster, we can test faster, and we can improve conversion faster. We can test new products and new packaging more quickly, and that is the type of operating model that we need. We consider Amazon as a key pillar to our sales strategy. There was short-term disruption as we transitioned away from third-party e-commerce management and as existing third-party inventory continued to move through the channel. That was to be expected, but the early data after the transition are highly encouraging. April was the first full month following the completion of the Amazon transition, and e-commerce sales increased 163% to a record $146,000 compared with approximately $55,000 in April of 2025. Amazon retail sales of the Evolve brand were approximately $96,000 in April, while sales through our own SenesTech website were approximately $50,000. We began taking control of advertising execution in mid-February, completed the broader transition in March, and the early trend is exactly the kind of signal that we want to see. We are now moving to improve our website sales platform as well, that being the second pillar in our strategy. Products like Evolve are not one-time novelty purchases. They are intended to be part of an ongoing rodent management program. That is why recurring revenue is so important to our strategy with subscription revenue being a core part of the new direct-to-consumer strategy. We are now seeing meaningful evidence that this was the right focus. In just the first quarter, subscription revenue increased 44% to a new record at $56,000 compared with $39,000 in the prior year period, and subscriber counts increased more than 50%. Then in April, subsequent to the quarter end, subscription-based revenue increased 198% year-over-year to approximately $36,000, another record. Subscription-based customers increased 109%. Those are still early numbers, but they are important proof points. They indicate the product stickiness, the customer engagement and the potential to build a more predictable recurring revenue-based model. Now we need to build on that. We are tracking weekly sales, new-to-brand sales, subscription metrics, conversion metrics, media ad buying performance and customer behavior. We have reactivated our Google advertising in April to begin collecting search data to support online revenue. We are continuing to redesign our e-commerce website at senestech.com with a focus on reducing friction, simplifying navigation, improving conversion and supporting subscription growth. We are also refreshing our packaging to improve shelf visibility and simplify the consumer message. The updated packaging prominently features rat birth control messaging because we want customers to immediately understand what makes this product different. We do not want ambiguity at the point of a decision. We want clarity. The same principle applies to our B2B business, the third pillar to our commercial strategy. We believe there are large opportunities across pest management, agriculture, municipalities, distributors, commercial customers, national retailers and other professional channels. By capturing those opportunities requires focus and discipline. It is not enough to have a long list of prospects. We need a qualified pipeline, clear ownership, better forecasting and a standardized sales process. Over the past several months, we have restructured the entire B2B team and processes around those objectives. We are concentrating resources on the largest and highest-impact opportunities within each vertical while providing accountability around pipeline and forecast accuracy. Here again, we saw early proof in the quarter. B2B revenue increased 57% to $298,000 compared with approximately $190,000 in the first quarter of last year. We continue to see municipal deployment activity across major urban markets, including Chicago, Boston, Washington, D.C., and New York City. The previously announced 12-month New York City rat contraception pilot program is expected to conclude this month, and we look forward to those results. We are also continuing to support distributors, pest management professionals, commercial customers and agricultural opportunities where the product can fit into a broader integrated pest management program. We will remain selective and disciplined, deemphasizing the smaller or longer-term opportunities, but we believe the B2B opportunity is significant. In addition, the work that we are doing with our focus on direct-to-consumer will bring more brand awareness, which will support our continuing efforts in the B2B channel. We are already seeing an increase in inbound opportunities and leads from these efforts. Product expansion is another part of building a broader commercial platform. We plan to expand the Evolve brand with additional vertebrate control products that can broaden our offering and strengthen our position in the category. We are also advancing launch readiness around potential related products such as attractants and repellents. The idea is not to dilute the mission. It is to strengthen the ecosystem around the core fertility control solutions that give customers more tools to deploy with a complete program. I would note again, full control over Amazon and our own e-commerce website now gives us a very efficient launch platform for these potential new products, which have not been in place historically. We are also improving how field activity, sales support, regulatory and product development work together. The field and sales teams have been reintegrated, generating higher quality B2B opportunities to drive near-term revenues. Internationally, we're putting more structure around opportunity vetting to focus on opportunities that could produce near-term revenues. We shipped initial stocking orders to New Zealand and Bermuda during the quarter, and we will continue to pursue international opportunities where the regulatory process can move efficiently with limited incremental cost. Where a market requires significant regulatory investment for long periods of time, we will generally require local partners to assist us or fund that process. That is a disciplined approach to expansion. The first quarter also demonstrated the importance of operating discipline. Gross margin improved to a company record 68.6% compared with 64.5% in the prior year period. That reflects improved production efficiency and reduced reliance on discounted sales activity. We need to grow revenue, but we also need to protect the economics of the business as we grow. That is how we build a durable company, not just a bigger one. But when I think about SenesTech's future, I think in very practical terms. We need to sell more products. We need to improve conversion. We need to focus on subscriptions for recurring revenue. We need to build repeat purchasing behavior. And we need to win larger B2B opportunities. We need to make Amazon, our own website at senestech.com, our distributors, the municipalities, pest management professionals and commercial customers work together as a coherent growth strategy. And we need to measure progress with real operating metrics, not anecdotes. That is the vision I want investors to understand. We are building a more scalable, data-driven recurring revenue business around a differentiated product in a market that needs better solutions for overall pest management. We have a lot of work ahead of us, and I do not want to overstate early results, but I am very encouraged by what we are seeing. The record April e-commerce momentum, the record subscription growth, the B2B improvement, the record gross margins and the stronger operating infrastructure all point in the same direction. SenesTech is entering a new phase defined by commercial focus, execution discipline and accountability. And my job is to drive that every single day. With that, let me turn it over to Tom Chesterman to review the financials in more detail, and then I will come back with a few closing comments before turning the call over to your questions. Tom?

Thank you, Michael, and good afternoon, everyone. I will provide a brief review of our first quarter 2026 financial results and add context around the operating trends that Michael discussed as I can. Note that we will be filing our 10-Q later today for a more detailed look at our results to date. Revenue for the first quarter was $493,000, an increase of 2% compared with $485,000 in the first quarter of 2025. This result should be viewed in the context of our transition from third-party management to direct management of Amazon sales for the Evolve brand. That transition was substantially completed in mid-March. While it created short-term channel disruption, as Michael mentioned, it gives us greater control over customer data, advertising performance, pricing visibility, subscriptions and overall channel economics, which we believe will drive growth and profitability into the future. Direct-to-consumer revenue increased 42% to a record $194,000 compared with $137,000 in the prior year period. Of that, subscription revenue increased 44% to a record $56,000 compared to approximately $39,000 last year, while subscriber counts have increased more than 57%. These metrics support our view that recurring revenue can be a larger component of the business over time. Note that the year-ago metrics exclude third-party e-commerce revenue as we want to provide a clear understanding of the growth we are seeing. Third-party e-commerce revenue in the year-ago period was $158,000. We expect that third-party e-commerce revenue has strong potential for growth, and we expect future announcements about expansion in this area. B2B revenue increased 57% to $298,000 compared with $190,000 in the first quarter of 2025. We saw continued traction across distributor, municipal, professional and commercial channels. We're also improving process discipline in the B2B organization with a greater focus on standardized sales processes, pipeline validation, forecasting accuracy and larger dollar opportunities within the targeted verticals. Subsequent to quarter end, April provided an encouraging early proof point for the e-commerce transition. E-commerce sales increased 163% year-over-year to approximately $146,000 and increased 47% compared to March. Amazon retail sales of Evolve products were approximately $96,000 and sales through the senestech.com website were approximately $50,000. Subscription-based revenue also increased 198% year-over-year in April to approximately $36,000. While April was only one month, the early data supports the strategic rationale for direct management of our e-commerce channels. Gross profit increased 8% to $338,000 compared with $313,000 in the prior year period. Gross margin improved to 68.6%, another company record compared with 64.5% in the first quarter of 2025. This margin improvement reflected improved production efficiency and a lower reliance on discounted sales activity. We view this as an important indicator of the underlying economics of the business as we scale. This becomes manifest when gross profit dollars are growing faster than top-line revenue. Operating expenses reflected, among other factors, severance costs, one-time legal costs and other extraordinary one-time items associated with the organizational transition and strategic restructuring currently underway. First quarter 2026 results included approximately $443,000 of one-time expenses as mentioned above. On a pro forma basis, adjusting for these items, adjusted EBITDA loss, a non-GAAP measure, was $1.6 million compared with $1.5 million in the prior year period. Reconciliations on these non-GAAP measures are included in today's press release. Turning to the balance sheet. We ended the first quarter with $6.8 million of cash and cash equivalents. Based on our current operating plan, we believe this provides operating runway into the third quarter of 2027. We remain focused on managing expenses carefully while supporting the commercial initiatives that we believe can drive higher quality revenue growth over time. With that financial overview, I will turn the call back to Michael for closing remarks.

Thank you, Tom. I want to close by bringing the discussion back to the central point, which is our focus in driving revenues with a product that we know works and how we can disrupt this category. We have a product we believe in. We have a market that needs better options, and we have clear evidence that customers are engaging with Evolve through the direct-to-consumer channels, that subscription behavior is building, that Amazon has become a more effective channel under our direct management and that B2B opportunities are beginning to move with more discipline. But the company will not be defined by belief alone. It will be defined by execution. That means increasing revenue through channels where we can see the customer, understand performance and control the economics. It means improving conversion on Amazon and our own e-commerce website. It means increasing the number of subscription customers and retaining them. It means using the website redesign, packaging refresh, paid media, social efforts and customer education to reduce friction. It means going after the largest and most attractive B2B opportunities with a validated pipeline and accountability to the sales process. It means supporting municipalities, pest management professionals, agricultural customers, distributors and commercial accounts with a clear value proposition and better field support. It means expanding the Evolve platform in ways that make sense for the customer and for the company's economics. I'm very encouraged by the April data, but I view it as just the starting point. We need to convert early momentum into repeatable performance. We need to make every dollar of marketing, every customer interaction, every sales meeting and every product initiative contribute to growth. That is the standard I am setting for the organization. SenesTech's mission is to create cleaner cities, more efficient businesses and healthier communities through effective and sustainable pest management solutions. That mission is powerful, but it must be matched with disciplined commercial execution. As CEO, my commitment is to bring that discipline to this business every day. We will focus resources on the highest impact commercial opportunities, improve sales execution, build scalable operating processes and hold ourselves accountable to those metrics that matter. Thank you to our employees, our customers, our partners and our shareholders for your continued support. We are very excited about the path ahead, and we are focused on turning the opportunity in front of us into measurable growth. Robert, we're now ready to open the call for questions.

Very good. Thank you very much, Michael and Tom, for your prepared remarks there. First one is, given the early results from April, is it fair to expect quarter-over-quarter revenue growth and a reasonable chance at record revenue?

Thank you, Robert. I believe that from the results that we're already seeing and what we've talked about bringing in and direct control over our direct-to-consumer efforts, I do believe that we can see reasonable growth quarter-over-quarter. And I do believe that we will continue to break records.

All right. Very good. Next question here is, are you seeing any expansion internationally, especially with the Hantavirus breakout?

Thank you, Robert. That's a very interesting question. I think the Hantavirus really points out the potential risks involved with rodent infestations. Obviously, our position is that we have a solution that can address rodent infestations long term. Related to the international parts of our business, as I mentioned before, we really want to focus international efforts on those countries where we can make an impact in the short term. A lot of the regulatory requirements for certain parts of the world can take anywhere from two to three years to get through those processes. So unless we have a partner in place that's going to support and bear some of those costs, we are going to focus only on those international opportunities that could bring in near-term revenues.

All right. Very good. Next question here, sort of broadly relating to the New York City test or trial there. What sort of announcements do you expect them to make relating to the results? Anything more that you can add related to New York City?

There's nothing I can really speak to today on the New York City test or the trials at this point because we're preparing to announce some of the data and some of the results from the various areas that we've been testing. I would say that longer term, these types of solutions and pilot programs require partnerships in a city like New York that are willing to not only implement these pilots, but do all of the necessary work beyond just deploying Evolve products, because it's all about the environment that an area is creating for pests like rats. So we want to make sure that it's a unified approach and an approach where we have buy-in from the partners that we're working with on a trial or test like New York City.

Okay. Very good. Next question here is, can you please explain the rationale behind the direct-to-consumer focus?

Thank you. The company historically has led with B2B options. And I think what the company found and learned very quickly is that without brand awareness, it's very hard to drive partner business if consumers are not aware of the product. That is especially true in large brick-and-mortar retailers. So implementing the changes that we are leading with in D2C is going to create significant brand awareness. It's going to create significant exposure for the brand and the wins there, which then will carry over into the B2B efforts that we have going on right now.

All right. And sort of an extension of that, discuss the reviews regarding Amazon, quality control, and the broader work that's being done to ensure customers understand how the product is utilized.

That's a great question. It's been one of the main focuses for us in our online presence to really educate consumers on how the product works, how it's going to be impactful and how long it is going to take. It's not a matter of simply putting our product out in the field. It is a matter of deploying it in a manner that will be successful for the environment in which it's being used. So education is a key part of that effort. Historically, we've not provided as much information, whereas now we're providing significantly more information and trying to set the proper expectations for a long-term solution to solve this problem.

Okay. Next question here is, were these changes that are being discussed already in effect under your prior role? Or did they become more of a priority once Joel Fruendt retired?

It really was an early priority as I had come in initially as a consultant to help understand what was driving the business and what the strategic focus should be. We started to implement those changes very quickly. A lot of those changes were started back in Q4 and really took final shape as we moved into Q1 of this year. That's why we've been able to see some of the results that you're seeing now in Q1—very early, but significant in terms of the results we're seeing.

Okay. Very good. Our next question here is SG&A remains high for the level of revenue this quarter, including the one-time severance and legal that were discussed. Is there a plan to optimize SG&A to better match the levels of the business?

That's a great question. I'm going to let Tom take that question so he can speak more specifically to the amount of one-time out-of-the-norm costs that we were dealing with this quarter.

Yes. Thanks, Michael. I think it's important to view these as part of the investment we're making in this strategic transition. We're bringing in new personnel with new skills. We've taken litigation and other legal issues that were frankly just distracting to the business out of the picture. So yes, there was a bit of what I would call investment in SG&A in Q1. The focus now is that we've gotten those things out of the way, we're able to provide a more streamlined SG&A. That's one of the reasons why we wanted to make sure that we put in as much detail about those one-time expenses to provide a more normalized view of what the burn rate would look like as we move forward. So yes, there is a plan to optimize SG&A. We needed to take these expenses in Q1 in order to make this transition well and quickly so we can then move on to all of the growth initiatives that Michael has been talking about.

All right. Our next question. Michael and Tom, there's a follow-up here pertaining to Hantavirus. Has there been an uptick in incoming inquiries regarding the heightened Hantavirus awareness?

Yes. There's been a significant uptick in searches and inquiries for options to solve rodent and pest-related problems. We have seen an increase in incoming interest.

Okay. Very good. Next question here. Is there any update on brick-and-mortar, Home Depot, and other retailers moving from online to in-store?

That's a great question. What I will say about Home Depot and other brick-and-mortar retailers is this: large retailers are not in the business of promoting a product; they're in the business of selling product. What they look for in a brand is brand awareness. Consumers need to come into their stores, understand the product, look for it, ask for it and then purchase it in store. Historically, as I mentioned before, we didn't have the proper focus on creating brand awareness through our D2C and Amazon channels, which is a main focus we have been implementing. I do believe there is significant opportunity in large brick-and-mortar retailers, but we have to demonstrate clearly to them that consumers are looking for this type of product and that it can expand revenue in that category.

Very good. Again, just a quick reminder, everyone. Another question here. Has there been any thoughts on capital structure and valuing the company's equity? Is there any update on when the company might get close to self-funding or being able to adjust the capital structure so it's not purely equity funded?

Yes, Robert, thanks again. This is a great question. What I'd like to emphasize is that we are extremely focused on driving revenue. Revenue solves a lot of problems, and revenue that is recurring, like subscription revenue, is even better. The goal is to reduce the burn so that we're incrementally, over time, moving closer and closer to breakeven. If we focus on revenue, it solves a lot of problems. Tom, you can chime in and add to this.

Yes. I would echo Michael's point, which is that we're trying to provide as much information as possible about the trajectory we're following in terms of revenue growth and profitability growth to move toward breakeven. As we look at the capital structure, we are already looking at other options besides equity. We use equipment financing for capital equipment purchases, and we are getting closer to the point where we can utilize debt for more cash flow management purposes. This returns to the quality and predictability of revenue, which provides the cash flow information lenders need in order to provide debt financing rather than relying solely on shareholders.

All right. Very good. Next question here is regarding subscriptions. I think you touched a bit on this, Michael, but really talk about why subscriptions are an important part of the business going forward.

Thank you. This has been a major focus. Since I got involved with the company as a consultant early on, it became clear to me that the product is consumable and repeatable, and is well suited for establishing recurring revenue. A subscription model lowers the cost per customer over time because customer acquisition for one-time purchases is more expensive than acquiring a subscriber. Growing subscriptions will be critical to our business. The result of happy subscribers and increased stickiness creates a flywheel effect and builds momentum for the business. You can see that through the results we've been discussing on the D2C side.

All right. This will be the last question, it appears. I'm showing no further questions after this in the queue. Congratulations on the quarter and the successful transition. Again, a follow-up on the Hantavirus. The company seems to have a generational marketing opportunity to enter the conversation to build awareness around the product. Have you considered a different approach towards marketing and social to capitalize as one of the only pure rodent plays in the market?

Great question. Historically, marketing and social media efforts were not as focused as they could be. We're bringing in new teams to manage Amazon and our own website, and you'll be seeing quite a bit over the next quarter of new approaches to social media and digital marketing. We will be advertising and posting across channels to capitalize on these market opportunities.

All right. Very good. Well, I'm showing no further questions. So with that, Michael, I will turn it back over to you for any closing remarks.

Yes. Thank you, Robert. Thank you, Tom. I want to thank everybody for participating and taking the time out of your day to listen to what we have to say. We're very excited about the future, and we look forward to more updates as time marches on. Have a great day, and thank you.

The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.