SenesTech, Inc. (SNES) Q3 2026 Earnings Call Transcript

Operator: Good afternoon, and welcome to the SenesTech Reports Third Quarter Fiscal Year 26 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the After today's presentation, there will be an opportunity to ask questions. To withdraw your questions, you may press *2. Also note today's event is being recorded. I would now like to turn the floor over to Robert Blum, with Lytham Partners. Please go ahead.

Robert Blum: Alright. Thank you very much, and thank you all for joining us today to discuss SenesTech's Third Quarter 26 Financial Results for the period ended 09/30/2026. With us on the call today is Michael Edell, the company's president and chief executive officer, and Tom Chesterman, the company's chief financial officer. As the operator mentioned, at the conclusion of today's prepared remarks, we will open the call for questions. If you are dialed in through the traditional If you are listening through the webcast portal and would like to ask a question, you can submit it through the ask a question feature in the webcast player. Before we begin, we would like to remind everyone that our remarks today may include forward looking statements. Statements made by the management team at SenesTech during the course of this conference call may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1930 as amended, and Section 21E of the Securities Exchange Act of 1930 as amended, and such forward looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 2000. 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 our filings with the Securities and Exchange Commission. All forward looking statements contained during this conference call speak only as of the date on which they were made, and are based on management's assumptions and estimates as of such date. Except as required by law, the company does not undertake any obligation to update any forward looking statements, whether the results of the receipt of new information, occurrence of future events, or otherwise. We will also discuss adjusted EBITDA, a non-GAAP financial measure. This measure should be considered alongside our GAAP results. A reconciliation to the most directly comparable GAAP measure is included in today's earnings release available on the Investor Relations portion of our website. With that said, I will turn the call over to Michael Edell, Michael?

Operator: Please go ahead.

Michael Edell: Thank you, Robert, and thank you to everyone joining us today. This was a milestone quarter for SenesTech. We surpassed $1 million in quarterly revenue for the first time in our history. Delivered our second consecutive quarterly revenue record, and set new records for gross profit and subscription customers. We are reaching more customers, building more ongoing relationships, and seeing the commercial opportunity for rodent birth control take shape across both consumer and professional markets. Revenue reached approximately $1.1 million, growing 42% from the second quarter and 59% from a year ago. Gross profit reached a record $796,000 and combined subscription customers across Amazon and our website increased 72% in just 1 quarter. Those results give us a great deal to be excited about as we build a larger business with a growing recurring revenue base. On our last call, we discussed the opportunity to turn our ecommerce momentum into a broader platform for growth. This quarter, we made meaningful progress on that opportunity. Amazon continued to expand Our subscription base grew substantially, and our direct B2B business delivered sequential growth as we added sales capacity. Each of these areas plays an important role in where we go from here. Let me start with ecommerce. Revenue across our online channels increased 52% sequentially and 337% year over year. Representing 71% of total third quarter revenue. These channels serve both consumers and business customers. They make it easier for customers to discover our products understand how rodent birth control fits their needs, and establish a regular purchasing routine. Amazon was again a major driver. Revenue increased 76% from the second quarter and we established new quarterly records for orders, revenue, subscribe and save revenue, and subscribers. Revenue increased every month of the quarter. That sustained progress is particularly encouraging because it shows the opportunity to build on the demand we are generating. When we decide where to invest next, we look at pricing advertising costs, and the mix of channels where customers buy. We closely monitor acquisition cost which helps us direct our advertising dollars toward customers we can serve profit. Profitably over time. That sustained progress is particularly encouraging because it shows the opportunity to build on the demand we are generating. We are focused on the full customer relationship from the first time someone learns about EVOLVE to the decision to purchase again. Robert population management is an ongoing need. Helping customers understand the value of a sustained approach is central to how we market our products and support their use. Subscriptions bring that approach into the purchasing experience by making replenishment more convenient helping customers keep enough product on hand for the consistent use that effective rodent birth control requires. Amazon subscribed and saved subscribers increased 161% from the end of June to the end of September. Across Amazon and our website, subscription revenue grew 53% sequentially and 234% year over year. Our combined subscriber base increased 72% during the quarter, and subscription revenues were approximately 15% of total ecommerce revenues. For us, this is 1 of the most exciting developments in the business. Every ongoing customer relationship creates an opportunity to build repeat purchasing, and greater revenue visibility. We are investing in customer education acquisition, and retention with that long term relationship in mind. Our own website remains an important part of this effort giving customers another direct way to learn about our products buy them, and subscribe. We are also broadening our reach through third party ecommerce. The addition of Grove Collaborative brings EVOLVE to a highly engaged audience of sustainably focused consumers. It gives us another channel to introduce rodent birth control to customers who are actively looking for products that align with their priorities. To support the next stage of our brand and marketing work, we have engaged Sandstrom Partners as a strategic adviser. This Portland based brand development firm has worked with brands including Nike, Target, and Coca Cola to name a few. Our work with Sandstrom Partners is another element of our growth strategy. The focus is on sharpening our brand identity and creating a clear, more consistent way to communicate how and why our products work across consumer, B2B, and the investor audiences. From an in. An investor perspective, we view stronger brand positioning as a commercial tool rather than simply a marketing exercise. The objective is to build awareness and brand affinity improve customer retention and acquisition, and support more effective sales and marketing across ecommerce and B2B channels. Sandstrom's work will also help us better define target audiences and value propositions and improve how customers discover and understand our products. Similarly, goal is to translate a differentiated product and stronger brand identity into sustainable sales growth. Recurring customer relationships, and greater long term value as we scale. We are very excited about the growth potential leveraging the foundation we have built over the last 6 months. Amazon is bringing new customers to SenesTech, Subscriptions are turning more of those per. First purchases into ongoing relationships. And channels such as Walmart.com and Grove are expanding our reach. As we move through the fourth quarter, our focus is on building on that momentum by attracting more customers keeping them engaged, and making repeat purchasing a natural part of their rodent management routine. We believe that combination can make ecommerce an even more powerful driver of sustained growth for SenesTech. Let me turn to direct B2B, which we see as the significant driver of growth alongside ecommerce. Direct B2B revenue increased 19% sequentially as changes to our sales process help drive growth in our pest management, commercial and government verticals. We are building the sales capacity to pursue these opportunities with greater focus and more consistent follow through. Under Jack Carabees, our Executive vice president of sales, we now have 4 salespeople including 2 recent additions. We expect to add at least 1 more before the end of the year. This gives us more resources to best cover the number of territories in the US to engage prospective customers develop opportunities in our targeted vertical markets and build repeat business. Our goal is to turn growing awareness into practical adoption. For a business or municipality, that means understanding the site, explaining where our products fit within its rodent management program, and supporting an ongoing approach. The expanded team gives us a greater capacity to have those conversations develop those relationships, and build the pipeline. In July, we began deploying assessment and monitoring services across our targeted B2B verticals. These services help customers measure rodent activity and understand the scope of an infestation before we recommend a solution. Customers can choose a turnkey assessment performed by SenesTech or deploy our tracking products themselves with the data analyzed using our internally developed AI analysis tools. These services also help us to reduce the sales cycle and the potential of each and every opportunity. Together with our existing implementation, deployment services, assessments give us another way to support customers throughout their rodent management programs and create additional revenue opportunities. The connection between ecommerce and B2B is important to understand. As more customers discover EVOLVE, and become familiar with rodent birth control, we believe that awareness can support our direct sales effort. We have an opportunity to build a recognizable brand while developing deeper relationships with professional and municipal buyers. The municipal results we recently announced provide compelling examples of how our products can fit into integrated pest management programs. In Chicago's Wicker Park, Bucktown deployment, a program incorporating our assessment services, and Evolve reduced average rodent activity intensity by 88% over 12 months. Rodent-related 311 calls in the area declined 36%. Evolve has now expanded to 6 Chicago special service areas and wards. Q3 was the highest revenue in municipalities in the company's history. Those results are supported by another encouraging example in Swampscott, Massachusetts. There, Evolve-RAT combined with sanitation and waste management improvements helped reduce measured rodent activity by 43% over just 6 months. Together, these programs demonstrate the role rodent birth control can play within a sustained integrated approach to manage rodent activity. For our sales team, these are useful examples to bring into discussions with prospective customers. They help make the concept tangible by showing how communities have incorporated EVOLVE into their programs and measured progress over time. We are excited to build on that experience as we pursue additional municipal professional, and commercial opportunities. As we look ahead, our priorities are clear. Continue growing ecommerce, build our subscription relationships, equip our expanded B2B team to drive revenues, and communicate the value of rodent birth control in a way that makes it easier for customers to understand and adopt our products. We have reached an important milestone and we see meaningful opportunities to build from here. Our team is focused on turning this momentum into continued revenue growth and a much stronger business. With that, I will turn the call over to Tom to review the financial results. Tom?

Thomas C. Chesterman: Thank you, Michael, and good afternoon, everyone. The third quarter established new records for revenue and gross profit, it also reflected the work we are doing to direct more of our resources toward commercial growth and use our cash more efficiently. I will walk through our results and then discuss that progress. Total revenue was $1.1 million compared with 770,000 in the second quarter of 26, and 690,000 in the third quarter of 2025. That represents 42% sequential growth and 59% year over year growth. The result was consistent with the preliminary revenue of approximately $1.1 million we announced on October 15. As Michael discussed, e commerce revenue increased 52% sequentially and 337% year over year. Direct B2B revenue which excludes e-commerce B2B and third-party ecommerce sales, increased 19% sequentially and 2% year over year. By product, EVOLVE revenue increased 67% year over year to $979,000 and represented 89% of product revenue. ENTREPEST revenue increased 13% to $118,000 driven by higher Refill sales. Gross profit reached a record $796,000 up 40% from $567,000 in the second quarter and up 84% from $433,000 in the prior year quarter. Gross margin was 72.6% compared with 73.6% in the second quarter and 62.8% a year ago. The combination of revenue growth and strong gross margin is an important foundation for our financial model. Total operating expenses were 2.8 million compared with $1.8 million in the third quarter of 2025. Research and development expense was $418,000. Sales and marketing expense was $1.1 million. Reflecting the shift to managing Amazon in house and our investment in commercial growth. 1 note about Amazon. Our selling price on Amazon is higher than our B2B pricing, which gives the channel a higher gross margin. Much of that advantage though is offset by Amazon fees, direct advertising and other selling expenses which we record in operating expenses rather than cost of sales. After those costs though, the channel's net margin remains positive. We have also increased certain expenses such as incremental marketing, and advertising to drive growth. We manage those investments carefully so the customers we acquire are profitable on the margin. This is also evident in how we deploy our resources. With a significant shift towards sales and marketing. Sales and marketing represented a higher percentage of operating expenses this quarter, matched with the decline in the proportion of operating expenses categorized as G&A. This reflects our focus on putting more of our resources behind customer acquisition retention, and the development of our B2B business. We are evaluating those investments alongside our customers alongside customer economics and cash use with the objective of building sustainable growth and a more efficient business over time. Net loss for the third quarter was approximately $2.2 million or $0.36 per share compared with $18 million in the second quarter. And $1.3 million or $0.28 per share in the third quarter of 2025. Adjusted EBITDA loss was approximately $1.4 million compared with $1.4 million in the second quarter, and $1.1 million in the prior year quarter. Please refer to today's press release for the reconciliation of adjusted EBITDA to GAAP net loss. Turning to liquidity, we ended September with approximately $4 million in cash and cash equivalents, compared with $5.1 million at the end of June Subsequent to quarter end, we raised $1.2 million in gross proceeds from our ATM facility. Net cash used in operating activities has improved in each quarter since the end of 2025. Operating cash use was $1.9 million in the first quarter, $1.7 million in the second quarter and $1.3 million in the third quarter. That progression is an important measure of our focus on cash management as we build the business. As we evaluate future financing options, we are weighing the cash we need to support growth against the cost of capital and potential dilution to shareholders. Glenbrook Capital Management a SenesTech investor since before our IPO, has provided useful input on the timing and structure of potential financings. Glenbrook has participated in nearly all of our financing including every round in which. To which it was invited beginning before and including our IPO. Glenbrook has also expressed its intention to remain a supportive long term investor and to consider further investments subject to mutually acceptable terms and market conditions. We value that perspective and support as we evaluate the timing and structure of future financings with the objective of supporting our growth plans while remaining disciplined about shareholder dilution and long term value creation. Our focus remains on translating commercial momentum into sustained financial progress. Record gross profit a larger subscription base and a more focused allocation of resources, give us a foundation to build on. We will continue to pair investment and growth with disciplined spending and careful cash management as we advance our path towards profitability. With that, I will turn the call back to Michael.

Michael Edell: Michael? Thank you, Tom. We are very proud of what the team has been able to deliver this quarter. Our first quarter above $1 million in revenue, is an exciting milestone for SenesTech. So our record profit and substantial growth in our subscription customer base. Together, these results show how progress. Show the progress we are making in bringing rodent birth control to a broader market. Our opportunity now is to build on that progress and momentum. Ecommerce is helping us reach a very large audience of customers and building the brand. Subscriptions are growing and reaffirming the stickiness of the products. Our expanded B2B team is pursuing opportunities across targeted vertical markets and the results in Chicago alone practical examples of the efficacy of the products as part of integrated pest management. We are entering the next stage of our growth with clear priorities and a team focused on execution. Thank you to our employees, our customers, partners, shareholders for being part of this progress. We look forward to sharing more as we continue to build SenesTech. Operator, let's open the call for questions.

Operator: At this time, we will begin the question and answer session. If you are using a speakerphone, we do ask that you please pick up the handset before pressing the keys. To withdraw your questions, you may press star. and 2. Again, that is *1. To join the question queue. Our first question today comes from Sameer Joshi from H. C. Wainwright.

Sameer Joshi: Hey. Good afternoon, Michael. Tom, thanks for taking my questions. First of all, congratulations on a solid $1 million quarter the first such quarter. Thank you. I have a few questions. Yes. I have a few questions. Sort of related to some of the items that you already discussed. Especially the sales. Right? You have Amazon. You have other third-party e-commerce. You have your own website. And now the B2B with the new reps hired. So how do these compare in terms of like, customer acquisition costs, return on those costs, And how are you managing, which ones to prioritize I understand B2B is a different ballgame, but on Amazon Yeah. Third party as well as your own website, how do you do that?

Michael Edell: Well, the first thing we did was we took over and brought Amazon in house, and that is been a little over 7, 8 months now. 1 of the things that we had to do is we have been building out that channel We have been investing in our marketing ad spend. Dollars And as we have been increasing the dollars of spend, we are keeping an eye, and we monitor it literally daily and weekly to understand what is the acquisition cost of a customer and is that profitable for us either from an immediate sale or related to the long term value of that customer? Those are the things that you have to keep your eye on because if you are not marketing in a manner that you can be profitable on customers that you are acquiring you have a big-- you have a much bigger problem. We just have been able to be profitable in our acquisition cost and also for the long term value of those customers that build over time we are we are doing we are doing quite well in terms of the spend versus acquired customers.

Sameer Joshi: Is it is it fair then to say that as time progresses and you have repeat subscribers, that you will have leverage and your margins will increase or at least should increase as we retain more customers.

Michael Edell: I think the margins on the B2B side are going to fluctuate a little bit over time depending on our approach to building up the subscriber base. Because we. As we have gathered more information over time, we know the value of subscribers. And 1 of the things that we are going to be testing as we come up into Q4 is gonna be testing different pricing strategies to see if we could even accelerate the subscription revenues and subscription adoption. Over a period of time which would require a little bit more of an investment but the long term value of those customers is much higher.

Sameer Joshi: Got it. On the. Just moving to fourth quarter now, I know last year's quarter. Fourth quarter was sort of weaker. There was some seasonality and some other factors going into that. Are you expecting a flat or a lower quarter for the fourth quarter this year, 2026.

Michael Edell: that is a great question. What you are gonna find is that just a year ago, the ecommerce parts of the business were so small and the B2B parts of the business were what was what was seasonal in Q4. But what you find now that ecommerce makes up 72% of our biz. Of our of our quarter. The seasonality is not gonna play as much of a part as we go into Q4. Because the ecommerce is just far larger than the B2B at this point. What we will see on the B2B side is that there is just a number of business days is less and that will impact some of your B2B you have to squeeze more business into a shorter time frame. But it has nothing to do with anything about the weather or anything other than just the holidays themselves and the shorter number of business days.

Sameer Joshi: Understood. I just have 2 quick questions. In the-- you mentioned the Chicago site. You mentioned the assessment services-- around assessment services, do you have any revenues do you charge? Okay. Good. And then, of course, these result in, should result in orders that are more meaningful and with higher gross margins.

Michael Edell: Yes. And actually, since July and August, as we have been rolling out multiple deployments in Chicago, there is revenues on every 1 of those opportunities from the assessment and monitoring services.

Sameer Joshi: Got it. Understood. And then last question is, maybe if you have a crystal ball. Do you know at what level of revenues would you be EBITDA breakeven? Do. Like, I know there are many factors going into this, but do you have sort of a targeted revenue at which you think you can be EBITDA positive? Or breakeven?

Michael Edell: Yeah. We do not provide guidance. Future guidance on that. But what we can tell you is if you take a look at the net cash used in operating activities hopefully, the investors are seeing a fairly consistent theme in terms of the cash used in the operating activities of the business. And Yes. That has. As you look at the numbers, each quarter, it is getting better and better because we are focusing on top line revenues. And we are also focusing on top line revenues that are not are not heavily discounted just to get the business. So by maintaining our margin profile, increased activity in the channels that we are going into and driving top line revenues that is what you are gonna see continue to make an impact on operating cash.

Sameer Joshi: Yes. Thanks for that. Yeah. Tom did mention the cash used in operating activities go down from 1.9, 1.7, 1.3 over the last 3 quarters. So that is good to see. Thanks for taking my questions. And once again, congrats on a really good quarter. And good luck. Thank you.

Michael Edell: We appreciate it. We have a lot more work that we can do, but we are excited about it. Thank you.

Operator: Once again, if you would like to ask withdraw your questions, you may press *2. Our next question comes from M. Marram from Jack. Please go ahead with your question.

M. Marram: Thank you. So I wanted to follow-up on some of the things that you discussed in the press release, the prepared remarks and now in the Q&A session. You have long talked about how important it is to educate the consumer and the prospective consumer. About how best to use the products. And I think that you cited that being 1 important priority that you plan to work with Sandstrom on. Where do you think. Particularly with, you know, a b to c consumer Where do you think you are in that process? Do you think that there is a good understanding there that this is a product that has to be used on a regular basis, a recurring basis, and over time, which I think would also play into your goal of driving subs. Subscriber growth.

Michael Edell: that is a great question. And the education of the consumers and the customers is absolutely top of mind. We have to make sure that consumers and users of our product understand that unlike a trap, you are-- you have to have a period of time to let the product be effective to where you can actually see the results. And it does not happen overnight. It will start working as soon as the rodents are eating the bait, but in terms of the number of cycles that you go through, in terms of new rodents coming into the population that just takes a little bit longer period of time. And the education in the last 8 to 9 months an interesting thing occurred when we redid the entire ecommerce, both Shopify and Amazon and Walmart, and Home Depot we made a huge shift into the product descriptions and how to use and deployment. And where you would think that being more and more transparent with our customers and our consumers might negatively impact the business, the exact opposite thing occurred. And as you can see by the ecommerce revenues, the revenues and the number of subscribers is growing at a very fast pace because consumers are getting that education. But we need to do more. We need to continue to make sure that our pricing models our subscription models fit the time frames so that the customers get the best experience from using our products. And that is things that you are going to start to see as we work with Sandstrom and our customers to understand that more. And those are some changes that you will start to see coming in Q4 and Q1.

M. Marram: Mhmm. Okay. Thanks for that answer. So the subscriber growth, you know, very impressive. But as you rightly point out, subscriber growth alone does not really tell the whole story. it is retention and churn. it is early, early days, but do you have any sense of what your, you know, your churn has been? And what you said a few minutes ago about the Amazon fees and the economics? Do you feel comfortable that you can offer, you know, price points and, you know, create economies of sales for the B2C customer. That incentivizes becoming a long term subscriber.

Michael Edell: Yes. I do firmly believe that. And to your point, on churn, if your customers are churning, your percentages and your. Both the number of subscribers that you have and the dollars you are generating, would drop. What we are seeing is the exact opposite. Happening. Even though revenues are growing on ecommerce at a very, very fast pace, the percentage of revenue is not diminishing that is subscriber revenue. it is still. Even though sales and top line are growing exponentially, the percentage of revenue that is coming from subscription base is still growing at 15-16%. it is still maintaining a 15% to 16% level. We think we can grow that even further. With these changes that we just described in doing more in terms of how we price and how we package certain of these options available to consumers for the subscription part of the business.

M. Marram: Mhmm. Okay. Thank you. You mentioned during the Q&A earlier, you mentioned Glenbrook and some of the dialogues that you have been engaged in and how valuable that is been But another thing that I believe Glenbrook had cited was potentially, you know, selectively using equity based comp. Instead of cash compensation, you know, up to the same level that you currently are, which I think would also play into your goal or align with your goal of conserving cash. Is this something you think the board is willing to take a look at and your any color you could provide on that. Thank you.

Michael Edell: Yeah. Yeah. Absolutely. That is a focus and it is being discussed at the board level. 1 of the things that we have to do is make sure that there is enough options in the pool to allow us to move certain things from cash to equity based. So if we can work on that, and get the options pool such that we can offer more and create more opportunities for equity based I think we can go a long way with that. Everybody's very, very receptive to that.

M. Marram: Okay. Thanks. And my last question is sort of a follow-up to something that you have already discussed. Specifically relative to Sandstrom. You mentioned, you know, the help you expect to obtain initially on you know, figuring out retention? What about some of the key verticals that you have identified as your initial priority? Do you expect that Sandstrom will be able to help with some of those larger, you know, B2B verticals.

Michael Edell: I think the. Achieving additional clarity and having messaging at each of the different verticals that we are in on the B2B side is going to help dramatically. In terms of what is going on out in the field. And I will give you an example of 1 of the things that we just at Pest World, which is the largest pest trade show in the country. And during Pest World, we announced and started to show pest management organizations programs that they can incorporate this into their offering so that they can go and add these types of services to provide additional streams of revenue for them that they may not have access to today with current offerings. And it was a big hit at Pestworld. And doing more of that work and having Sandstrom come in and help clarify the around that in those programs. We think is gonna give us an even bigger boost going down the path.

M. Marram: Thanks. And 1 last follow-up. I know I said the previous question was the last. This is really the last. Okay. You get more you get more. Okay. So in the past, you had talked about increasing your outreach and your promotional activities around social media and, you know, online. Is that a process that you have already started? You know, how do you see that going? If that has in fact started? And if you can, you know, provide any kind of color on that and feedback you might be getting from the channels.

Michael Edell: Yes. In as I might have mentioned, it was either 1 or 2 quarters ago I do not remember. But we needed as we are rebuilding the B2B team, and relaunching our efforts into B2B, 1 was that as we brought Jack Carrabies on as our EVP who came on full time in July. But prior to that, Jack and I had been working on what the strategy was going to be and the number of people that we needed to support those territories but also how we were going to access and drive inbound so that it is not all outbound effort in lead gen. And during that time, what we have done is pretty much the first time, I think, in the last 3 to 4 years, Jack and the team have built outreach programs that now we are sending outbound to tens of thousands of prospective opportunities whereas that had not been going on at all. Prior. To Jack and the team coming on board. So there is a significant outreach that is going on and it is being reflected in the pipeline and the opportunities that are building over the last second, third, and fourth quarters. And as we move into Q1 and Q2, again, I do not wanna give guidance, but I will just tell you that the only way that your B2B parts of your business are going to grow is if your pipeline is growing. And without that, you are. You really do not have a shot of growing your business. So all of the activities all of the opportunities, the number of quotes that are going out, all of that has to be driving to build the pipeline. And all of those activities are well underway.

M. Marram: Okay. Thank you so much.

Michael Edell: You are welcome.

Operator: And our next question comes from Richard Rudgeley from Glenbrook Capital. Please go ahead with your question.

Richard Rudgeley: Yes. Sorry. I just wondered if you could give some color on the results that we have seen some good sales momentum in the reported quarter. I just wondered if you could give some kind of color on how it is going so far in this quarter, not just with Amazon, but more generally?

Michael Edell: Do you mean it going into Q4? Yes. Yeah. I cannot really speak to any specifics because, again, we are not giving any forward guidance. But I can tell you that the things that I was just describing about the pipeline on the B2B, the pipeline growth in the activity, is moving along quite nicely. And the fact that we are moving from 2 sales reps in the field to. We will have 5, hopefully, by the end of the year is really helping to drive that activity on the B2B side.

Richard Rudgeley: Okay. Thanks. And I have a couple of questions about the ATM because in the prepared remarks and the news release, I did not see any about whether you checked the ATM in the quarter. And also wondered if you are gonna just disclose the average price of what was raised, the $1.2 million post quarter Yeah.

Michael Edell: I will let Tom take that 1. Tom?

Thomas C. Chesterman: Yeah. We had as I mentioned in the prepared remarks, and I think we mentioned in the press release as well, we did have some activity during the quarter, but not as much, and then we did have some activity after the end of the quarter. So the. We will provide a lot more detail in the 10 q But just to-- I am sorry. I am just trying to pull up the numbers to answer your question. The. In terms of the you know, the amount that we raised we mentioned that. But we also pointed out that we have now got. We have issued about 1.3 million shares and for that $1.2 million. The you know, average price, I am gonna have to take out my calculator to figure that out. But the it is a little less than $1. Do not know if you remember we had that day where we had over 50 million shares traded. We took part in that rally on the ATM. She would like. Seemed appropriate at the time.

Richard Rudgeley: Okay. So it-- yeah, you are saying so it is 1.3 million shares post quarter But unless I am missing it, I do not see any anything to do with the third quarter. Use of the ATM.

Thomas C. Chesterman: There was not much. I will have the we will be filing the Q, which will have the amounts that were raised but it was not much. We did not have many opportunities for that.

Richard Rudgeley: Yeah. Sure. Okay. that is fine. Thank you. I will let someone else ask some questions now. Thanks very much, guys.

Thomas C. Chesterman: Yeah. Thanks for the question.

Robert Blum: Alright. Gentlemen here, I will jump in while we wait to see if anyone else comes into the live dial in here to ask their questions. We have some webcast questions. Building off the last 1 there, Tom, what is the outstanding share count currently based on the activity of the ATM after the quarter end?

Thomas C. Chesterman: Yeah. The current share count is approximately 6.8 million shares.

Robert Blum: Okay. Next question here is could you speak to the expenses? What drove the absolute dollar increase in Q3 G&A? And why has not G&A declined in dollar terms now that the earlier CEO leadership transition and lethality litigation settlement costs are behind the company.

Thomas C. Chesterman: Yes. The biggest driver really was a combination of share based compensation expense. For example, the. We have made the grant, the annual grant to the board. They received a significant portion of their compensation in shares instead of cash. So you are gonna see that in there. In addition, we also recognized the potential for paying a bonus across the company, was not quite clear that we were gonna be hitting our numbers until the third quarter. So there is actually a bit higher than usual and out of kind of out of period expense there. So that in terms of accruing for a potential bonus, as we begin to get closer to being sure that we are gonna hit our numbers, So thinking of taking them together, it really was about $524,000 in both combination of the stock based and the bonus non-cash compensation. Both of those were noncash. that is why the cash in the quarter actually went down even though the recognized operating expenses went up.

Robert Blum: Okay. And, Michael, I know you touched on this, but I will ask the question. What quarterly revenue milestone will incremental gross profit dollar growth exceed incremental operating expense growth, between Q3 25 and Q3 of 26 gross profit increased $363,000 while operating expenses increased by about $1 million.

Michael Edell: Yeah. This, again, is the question it is a great question in terms of, you know, when are we gonna achieve profitability. Right? that is the main theme. And, again, I cannot really give you any guidance on that other than to say that because we are focusing on top line revenues and growing that number still maintaining some of the other KPIs that we described We are on that path and we just have to continue to execute like we are doing now And we are going to get to that point where we are crossing over into profitability. I think that I would like to add something to this concept The key of what we are what we are what we are what we are doing right now the path to profitability is just a gate along the way, so to speak. The bigger target is can we can we grow the business to be a substantial company in this category. Can we and are we moving? And are we putting those things in place as a company, the foundation to be able to support that. And the answer to that question is yes. Those are the things that we are focused on that are gonna get us to cash flow positive but far beyond that. As we expand our B2B team, and we go far beyond the 5 people that we are looking to bring on board into the territories in The United States that is when you are going to really see a substantial growth as we get into 2027 and 2028, that is where you are going to see the B2B parts of the business far exceed what we are doing on the ecommerce side.

Robert Blum: Alright. Our next question here, and again, this is somewhat touched on, how are trends in the current quarter? Can we expect continued sequential growth? With $1 million as the new floor?

Michael Edell: Well, the trends are-- that is a great question. Ties right into my prior answer. The trends that we are seeing are activity and pipeline expanded B2B sales team, those trends are not just continuing what was historically in Q2 and Q3. They are far surpassing the activity in these prior quarters because of the number of people that we have is growing exponentially. The trends that we are seeing on various platforms on the ecommerce side those are. Amazon is more mature now because we are now 8 months 9 months into it. We are still seeing how big where's the upper end, where's the ceiling on that. Terms of current. You know, doing currently what we are doing? And our new to brand is still significantly it is still a significant percentage. We have not even gotten to the point yet in terms of new to brand customers being. Or showing that it is mature enough that we are we are tapping out or we are getting to the top end of that. We are not going to hit that as we go into Q4 for sure. The other trends in terms of what we are seeing on average order size and number of subscribers and recurring revenue that trend is continuing and is very, very strong.

Robert Blum: Alright. that is all the questions we have on the webcast portal. Jamie, I will turn it back to you for any additional questions on the live teleconference line.

Operator: We do have an additional question. This comes from Grover Wickersham from Glenbrook. Please go ahead with your question.

Grover Wickersham: Yeah. Thanks, guys. Appreciate you taking the time. I am also glad you guys are doing following in live interviews I think it was really helpful to get the feedback from both the analysts. I will say, I am kind of concerned by the heavy topping of the ATM. I was not surprised to see the ATM tapped, but I think, you know, 1.2 million shares or that is the number is. You know, I mean, you are pushing. What is that? 25% dilution and I. My understanding is on the ATM on the baby S-3 form s 3. You can only do 33% of the shares out outstanding during a 12-month rolling period. So I had hoped that, you know, you would continue to see a higher stock price than you would possibly. If you did trap tap into the ATM, you would be doing it at a higher price So I guess. I do not know if there is a question, just a comment, but my impression is that you do not have very much headroom left in the ATM at this point. Is that correct?

Thomas C. Chesterman: that is actually not correct. Grover. We have about 6 million. A little over $6 million left in the capacity. The way that ATM rules work is that you can kind of lock in that baby shelf limit and we did so at a higher price earlier. So we actually locked in at the time over $7 million worth of capacity and we have not. So we only used a portion of it. So we still have a lot of capacity. But, Grover, you-- the other point is right. We certainly would like to be tapping into it at higher prices. But at 50 million-share day is very, very tough to really ignore that opportunity for what can be some relatively Well, I. expensive capital. I am-- yeah.

Grover Wickersham: I am-- well, I just said that, you know, personally, I hold just disappointed to hear that because, I think that you should start prioritizing shareholder value in terms of limiting the dilution, The other comment I would make is that. Or question is, that you indicated that your I guess, was Michael's comment that you indicated that you are focused on the top line. I would say that, you know, just as 1 of the larger shareholders, that you know, I see the priority being marked market penetration, market adoption. I personally do not put a high value on the on the top line versus market penetration And my concern is that with the B2C business, to consumers that you are you are currently. If I have this correctly pricing the product at $35, for a 1.5 pound portion, which I think would last maybe depending on how much the rat activity is, as little as a week and a half for 2 weeks and maybe as long as a month, But $35 for a product, as was pointed out by Zach, so you need to use for 4 to 5 months where I think following the science and selling the product in a way so that people do not get you know, essentially something that does not do anything. Since it. it is like so many other, you know, pharmaceutical or other products, they do not work. It does not work if you just use it for 1 dose. You need to be using it for an extended period of time. So and we know that we have the science. We have the data. We know that is a minimum of 3 months, but preferably 6 months. In the case of your Chicago study, it was 12 months. So I would just. You know, as a significant shareholder, voice my disapproval of that approach and encourage you to rethink it, especially since you are working with Sandstrom now.

Michael Edell: Well, actually, what you are saying and as I mentioned, the lining the subscription and the pricing, we are saying the same thing. Where we align the price and the time frame for the subscriptions to give enough time for the product to meet customer expectations. So we agree with you. Right.

Grover Wickersham: But that is only 15% of the business. That means 85% of the people are getting a product that is not being sold in a way that is suitable for the science and the data, namely multiple use. I just-- I only.

Michael Edell: Yeah. We only took over Amazon beginning mid March. So we had to get that up and running and make those changes to the business to really start that forward momentum. And now is the time to your point to go back in and say, how can we optimize that, make it more efficient, and grow it even further? So now we are right in the middle of those efforts as we speak.

Grover Wickersham: Because we want. I am glad to hear that. Got it.

Michael Edell: Yeah. Gotta give the customer a. We want the customer have a better experience as they incorporate this into their IPM. So we agree with you. We are not we are not gonna hear any argument on this front. I am glad to hear that, especially for the, you know, the consumer business where you are not selling to. You are not using a PCA or a pest service where they are going to go out once a week or once a month and you know, fill the bait box. And. But instead, you are going with the consumer that just buys the product and thinks they can use it And expects it to work. Yep. We agree with you. We. That is definitely a major focus for us And that ties into also the education and making sure that all of those pieces are aligned We have had you know, when I came on board, and Jack came on board and the new the new team that I have put in place We just have to make these adjustments as we learn more and more And then directionally, Sandstrom is gonna be able to help define that and then we can adopt some of those changes But we still believe that we can continue the growth and then make these adjustments. We do not have to stop you know, change the tires and then start going again. We can continue the momentum. And this is just 1 way that it should help quite a bit.

Grover Wickersham: Well, thank you, Michael. Yeah. Thanks, Grover.

Operator: And with that, ladies and gentlemen, we will conclude today's question and answer session. I would like to turn the floor back over to management for closing remarks.

Michael Edell: Thank you, Robert, and everybody for joining us today. We appreciate everyone's interest in SenesTech. We look forward to updating you on our progress next quarter. We just really appreciate everybody's time and focus and energy on this, and we hope everybody has a great evening. Thank you.

Operator: And with that, we will conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.