SenesTech, Inc. NASDAQ: SNES INVESTOR PRESENTATION - February 2020 - Investors
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SenesTech, Inc.
NASDAQ: SNES
February 2020
INVESTOR PRESENTATION
SenesTech Disclaimer
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
The following information and the statements made during this presentation 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." You 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 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.
Forward-looking statements include, but are not limited to, our expectation regarding sales commitments, our expectation regarding the conversion of sales commitments and programs
to revenue, our belief that our product is more humane, less harmful to the environment and more effective than traditional methods, and our belief that ContraPest will establish a new
paradigm in rodent control without environmental effects of rodenticides.
All forward-looking statements contained in this presentation speak only as of the date on which they were made and are based on management's assumptions and estimates as of such
date. We do 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.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
2
Recent Events
• Q419 Preliminary Results: Q419 revenue of approximately $70,000 is nearly double Q319 revenue of $36,000.
• Washington D.C.: Deployment continues to meet our expectations, as supported by camera studies.
• Feather Facilities: Our projects in poultry farms expected to demonstrate both the economic value and efficacy of ContraPest as these
projects reach six to nine months of deployment.
• National Retail: Our project in national retail continues to expand to additional locations.
• California AB1788: We continue to believe that AB1788 will resume its legislative progress in the current legislative session.
• California Deployments: Our deployments in San Francisco and Los Angeles continue, with good consumption and possible expansion.
• Sales & Marketing: We have identified and recruited a new head of sales and marketing with extensive experience in commercializing
environmentally responsible pest control products.
• Cost Control: Our goal has been to remove $1 million from the annual burn rate, and we are tracking well on that goal.
• Registered Direct Stock Offering: On January 28, 2020, we announced the closing of a registered direct stock offering. Cash at the end of
2019, pro forma for the inclusion of that offering, was $3.1 million.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
3
The Addressable Challenges
Challenge #1 Food Security
Rodents destroy food through consumption and
contamination. In 2014, 20% of stored food worldwide was The total
lost due to rodent activity. 2 addressable rodenticide
market is about $1 Billion
Challenge #2 Infrastructure Damage annually. 1
Rats damage public infrastructure, estimated by the
National Wildlife Research Center (NWRC) at over $27
billion annually in the U.S. 3
How much more is it
Challenge #3 Disease and Poison
worth to effectively and
safely address these
Rodents transmit disease (>200 million deaths historically 4),
deadly pathogens and poisons to animals and humans. challenges?
1 Derived from Markets and Markets press release titled “Rodenticides Market worth 1.23 Billion USD by 2022”: https://www.marketsandmarkets.com/PressReleases/rodenticides.asp
2 QA Magazine, Commensal Rodents Eat at Our Tables, http://www.qualityassurancemag.com/article/qa1014-rodents-control-management/
3 ENVIRONMENTAL AND ECONOMIC COSTS OF VERTEBRATE SPECIES INVASIONS INTO THE UNITED STATES, DAVID PIMENTEL, College of Agriculture and Life Sciences, Cornell University, Ithaca, New York, USA.
https://www.aphis.usda.gov/wildlife_damage/nwrc/symposia/invasive_symposium/content/Pimentel2_8_MVIS.pdf
4 BBC News, Decoding the Black Death, http://news.bbc.co.uk/2/hi/health/1576875.stm
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
4
Reproduction is the Source of Infestations
Chicagomag.com 2015; National Geographic How two rats become 15,000 in one year. [Video file]. (2013). Retrieved February 15, 2018, from https://www.youtube.com/watch?v=RJA4IW_pkeo
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
5
Lethal Campaigns Can Leave Opportunity for Rebound
120
100
Population Abundance (%)
Rebound
80
Rat population
response to
60 ContraPest®
following lethal
campaign.
40
20
Lethal campaign not 100% effective due to
resistance, avoidance, etc.
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Month
Innes et al. 1995; SenesTech Internal Data Populations can rebound to initial size in 3-6 months, driving incremental costs,
increased damage, and unforeseen resource allocation.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
6
Our Solution
ContraPest is a highly attractive, liquid bait containing the active ingredients
(“AI”) 4-vinylcyclohexene diepoxide, or VCD, and triptolide, a plant-derived VCD
chemical, with a high fat content and sweet taste.
• Rats repeatedly feed, and their fertility is reduced as they consume the bait. The
active ingredients target both male and female rodents resulting in sustained
contraception with continued consumption
Triptolide
• Sustained impact and avoids population “rebound”
• When lethal means are used, the death rate is always less than birth rate
for rats
• Designed To Minimize Risk to Handlers, Non-targets And Other Animals
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
7
Delivering an Effective Product: Lab Studies
• Multiple, free-choice laboratory studies have repeatedly demonstrated efficacy.
• No observable adverse effects.
“If a rat consumes This has been confirmed in
ContraPest, they do not laboratory and third party
reproduce.” studies. (1)
(1) Witmer, G., S. Raymond-Whish, R. Moulton, B. Pyzyna, E. Calloway, C. A. Dyer, L. P. Mayer, and P. Hoyer. 2017. Compromised fertility in free feeding of wild-caught Norway rats (Rattus norvegicus)
with a liquid bait containing 4-vinylcyclohexene diepoxide and triptolide. Journal of Zoo and Wildlife Medicine 48:80-90.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
8
Delivering an Effective Product: Field Studies
URBAN STUDIES
Results
• Rats repeatedly consumed ContraPest® in the
presence of rodenticides, trash, other food sources,
exclusion strategies, and abundant water options.
• Reductions of up to 40-60% in 12 weeks.
• Non-standard spacing did not impact efficacy.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
9
Delivering an Effective Product: Field Studies
AGRICULTURAL STUDY
Results
• Rats consumed ContraPest® in the presence of
rodenticides, animal feed, and abundant water options.
• Sites with ContraPest® displayed 46% lower signs of
activity than just rodenticides alone.
• 100% of mature female rats on sites with rodenticide
alone were found to be pregnant or lactating, versus 33%
on sites with ContraPest.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
10Case Studies and Success Stories
• Hospitals
• Apartment buildings
• Zoos
• Animal sanctuaries
• Animal research and care facilities
• City parks
• Islands
• Food production facilities
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
11EPA Approved
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
12Commercialization Strategy
ContraPest: The Anchor to IPM
Prevention
Chemical Biological
ContraPest®
ContraPest can be used as a standalone
solution or within an Integrated Pest
Management (IPM) plan to help reduce
Physical Sanitation reproduction and magnify the success of
Mechanical
infestation control methodologies.
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
14Market Approach
ContraPest®
Distributors
Pest Management Professionals (PMPs)
Integrated Pest Management: ContraPest is one tool in the PMP toolbox.
Pull
Commercial / Corporate Social
Residential Government Agriculture Responsibility (CSR)
• Integrated Pest • Transit systems • Protein production • Eco-sensitive
Management through • Public Housing • Grain or food • NGO partners
Pest Management • Recycling/waste storage • Sustainability
Professionals (PMP) facilities • Organic • Natural preserves and
• Commercial zoos
• HOAs, theme parks,
animal care
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
15Evolved Market Approach
SenesTech Technical Account Sales, Pest Management Organizations
Pull Customer Demand and Impact
Structural/ Animals Food Production/ National Retailers Hospitality
Municipalities Zoo, Sanctuaries Food Storage
• Commercial Structures • Zoos • Protein production • Distribution Centers • Eco-sensitive
• HOAs • Animal Parks • Grain or food • Pet/Feed stores • Island Locations
• Industrial • Animal Sanctuaries storage • Fast Food Operations • Theme Parks
• Cities, Transits • Animal Research • Organic, Free Range • Mixed Commercial • Convention Centers
Facilities • Packing, Shipping, • Hotels
Storage
ContraPest®
Ship Direct Distributors
Internal Staff (Non- RUP) Pest Management Professionals (PMPs)Focus
“Focus” is the key to evolving from “emerging” to
“commercial”
• Three very specific target verticals, with specific
messaging and marketing
• California is a great geography for focus.
• AB1788 may accelerate penetration of that
geography, but we are not waiting for legislation
• Control costs in order to spend wisely and strategically
• Avoid “shiny objects” - all else is on hold until we
demonstrate successProduct Enhancements and Extensions
• Bait Stations • Non-Liquid Formulations • Mice
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
18Pipeline
PRODUCT PRIMARY TARGET(S) MARKET OPPORTUNITY
Additional Rodents Mice, voles >60% of overall rodent market1
Boar taint Boars $1.2 billion 2
Feral animal fertility control Feral Dogs, Cats and Hogs $1.5 billion 3
Large Animal Whitetail Deer ?
Companion Animals Dogs and/or Cats ?
1 2017 State of the Rodent Market, PCT Magazine
2 Internal estimate
3 ENVIRONMENTAL AND ECONOMIC COSTS OF VERTEBRATE SPECIES INVASIONS INTO THE UNITED STATES, DAVID PIMENTEL, College of Agriculture and Life Sciences, Cornell University, Ithaca, New York, USA. https://www.aphis.usda.gov/wildlife_damage/nwrc/symposia/invasive_symposium/content/Pimentel2_8_MVIS.pdf
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
19Balance Sheet
($ in Millions) September 30, 2019
On January 28, 2020, Cash, cash equivalents and highly liquid investments $3.9
we announced the
closing of a registered
direct stock offering. Total Assets $6.6
Cash at the end of 2019,
pro forma for the
Debt $0.4
inclusion of that
offering, was $3.1
million. Common Equity $5.1
Shares Outstanding 28.3
Warrants Outstanding 9.6
Pro forma including July public offering
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
20Income Statement
($ in Millions, except per share data) Q3 2019 Q2 2019
Revenue $0.04 $0.02
Preliminary
unaudited revenues Operating Expenses 2.6 2.3
for the fourth
quarter were
approximately Net loss (2.6) (2.3)
$70,000
Net loss per share $(0.09) $(0.09)
Adjusted EBITDA Loss (Non-GAAP) $(2.3) $(2.0)
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
21SenesTech Investment Highlights
• A billion-dollar market with a multi-billion dollar impact
• A proprietary technology that has no direct competition
• Meets customer need for efficacy as well as service
provider need for efficiency and profitability
• A management team that blends sound science, disruptive
product commercialization and pest control industry
experience
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
22Thank You
SenesTech
23460 N 19th Ave., Suite 110
Phoenix, AZ 85027
Facebook.com/senestech
Twitter.com/senestech
LinkedIn.com/company/senestech-inc-/
info@senestech.com
928-779-4143
www.senestech.com
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
23Appendix
Management
Kenneth Siegel
Kim Wolin Charmonte Watkins
Chief Executive Officer,
Tom Chesterman Executive Vice Director of Regulatory
Director
Chief Financial Officer President Operations Affairs
Bill Baker Paul M. Palz Brandy Pyzyna Nick Murphy
Vice President Finance Vice President, Corporate Vice President, Scientific Vice President,
Controller Operations Manufacturing
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
25Board of Directors
Jamie Bechtel, JD, PhD Delphine Francois Chiavarini Matthew Szot
Chair and Director Director Director, Chair of the Audit Committee
Kenneth Siegel Marc Dumont Julia Williams, M.D.
CEO and Director Director Director
ContraPest® is registered federally as a General Use Product when used as directed. However, in some states, due to applicator expertise, it is a Restricted Use Product.
Please check with your local state regulatory agency to determine restriction status. Read and follow all label instructions for target species Norway and roof rats.
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