Semios advancing on multiple fronts

The past few months have been highlighted by strong progress in product development, regulatory approvals and commercial traction. We are deep into the growing season, and have now begun to discuss initial levels of interest for 2016 orders with existing North American customers in order to both forecast demand, but also to attempt to get customers to agree to installations in late 2015 in order to smooth out demand. To date, we have already pencilled in orders for more than 100% annual acreage growth from existing customers in Washington, Michigan and California.Product DevelopmentWe launched new modules for disease and irrigation mgmt. The disease modules are based on leaf wetness sensors in the fields combined with big data algorithms to measure and predict risk associated with diseases such as fireblight and alterneria. For irrigation, we place soil moisture sensors at 1 and 3 depths and 10-min interval data is fed into models that look at 3 water mgmt states, field capacity (FC), available water and permanent wilting point (PWP), based on soil type. The increased concern with the cost and environmental impact of fungicide sprays for disease and a prolonged drought on the west coast, especially in California, will continue to help drive sales f these modules and the overall packages.Regulatory ApprovalsThe US EPA approved our:Navel Orangeworm (NOW) PLUS for almond and pistachio for conventional productionNavel Orangeworm (NOW) STD for almond and pistachio for organic productionOblique Banded Leaf Roller (OBLR) Plus for pome (apples and pears) for conventional productionOblique Banded Leaf Roller (OBLR) STD for pome (apples and pears) for organic productionThe EPA has also indicated that our bedbug repellent product will receive a conditional approval in mid-September, pending additional statistical analysis and 1 additional report (study already completed).We expect to get our first EU approval in the central zone (Germany, France, Belgium, Netherlands, etc) by Q1 2016.Commercial ProgressOverall, the most important news from the 2015 deployment season was the highly successful roll-out of Arlet, which is the software platform through which our customer views and analyzes the farm's data in real-time. The release of Arlet modules relating to frost, tree disease, weather, soil moisture, and pest management won plaudits from customers, pest control advisors and industry experts. This progress did not go unnoticed by the press as Semios was the subject of numerous features and news articles from the Smithsonian Institute Magazine (http://ow.ly/QWMz2) to the Good Fruit Grower (http://ow.ly/QWMPM) and many other publications. Perhaps most importantly, we observed our customers averaging once or twice-daily logins, proving that Semios has become part of the regular workflow at many of North America's largest and most productive fruit orchards.Our customers and partners are starting to provide guidance on next year’s sales. We are tracking 3 types of important metrics:renewals of current acresexpansion of acres on current customer propertiesnew acres with new customer.To date, all customers are indicating that they will stick with the system (ie 100% customer retention). We expect growth in all of our current markets. Some current customers are indicating large increase in acreage, up to 10X year over year. Our team is also building a pipeline of new customers with shared connections to our current customer base.Semios is working with both Wilbur Ellis ($3B+ sales) and BASF ($100B+ in sales) on distribution strategies for select markets in the US and EU, respectively. The partners buy Semios systems for commercial deployment and/or demonstrations in their markets but we have not signed anyone as an exclusive partner. The Semios mgmt team is considering different channel and market strategies, including multiple channel partners per market and direct sales (eg California).