NovaBay Pharmaceuticals, Inc.

Good afternoon, and welcome to NovaBay Pharmaceutical's first quarter 2022 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 star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jody Kane. Please go ahead, ma'am.

This is Jody Kane with LHA. Thank you for participating in today's call. Joining me from Nova Bay are Justin Hall, Chief Executive Officer and General Counsel, and Andy Jones, the company's Chief Financial Officer. I'd like to remind listeners that comments made during this call by management will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. In particular, there is uncertainty about the integration of the derma doctor into NOFA-based operations and circumstances beyond the company's control that could impact the broader economy, such as COVID-19 pandemic and the conflict between Russia and Ukraine. This means that results could change at any time, and the contemplated impact of the Dermadoc acquisition, COVID-19, and circumstances that impact the broader economy on Nova Bay's operations, its financial results, and its outlook is the best estimate based on the information available for today's discussion. For a list and description of risks and uncertainties, please review Nova Bay's filings with the Securities and Exchange Commission at sec.gov. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, May 12, 2022. Nova Bay undertakes no obligation to revise or update any statements to reflect events or circumstances except as required by law. And now I'd like to turn the call over to Justin Hall. Justin?

Thank you, Jody. Good afternoon, everyone, and thank you for joining us. I'm pleased to begin by reporting another quarter of record high Avanova spray unit sales through our over-the-counter channel, which increased by 16% year-over-year and by 7% from Q4. We are also reporting progress in integrating NovaBay and Dermadoctor operations, and I'd like to welcome the Dermadoctor team to today's call. Importantly, we are aggressively executing on various initiatives to drive further top-line gains as we build on our presence in the large and growing eye care and skin care markets. A key component of our strategy is expanding our Avanova and Dermadoctor portfolios with highly effective problem-solving products for common conditions. Earlier this week, we announced the launch of new, next-generation, cutting-edge anti-aging products within two of our most popular Dermadoctor collections. Our newest products were created by our Chief Product Officer, Audrey Kunin, who is a board-certified dermatologist and founder of Dermadoctor. Using her extensive knowledge of skincare, She devised these unique and clinically proven formulas to help reduce the appearance of wrinkles, fine lines, pores, and discoloration for a brighter, more youthful appearance. Joining our top-selling Kakadu C product family is Kakadu C with Retinol. This new product combines high-potency retinol to resurface and exfoliate skin with vitamin C, ferulic acid, and vitamin E. The combination of these particular ingredients creates a highly effective hydrating emulsion to fight free radical damage caused by environmental toxins or ultraviolet light. You may know that the Kakadu plum, which is harvested in a remote Australian territory, contains on average 55 times more vitamin C than Florida oranges. Our new Calm, Cool, and Corrected Bacuchiol Retinol Alternative Serum is specifically created for those with sensitive skin, rosacea, or eczema-prone skin and marks the third expansion this year of our Calm, Cool, and Corrected collection. This new product features high-performance Bacuchiol, which is a natural plant-based alternative to retinol that gently increases cellular turnover and collagen production. This ingredient is combined with a moisturizer and gentle natural exfoliants into a luxe serum with skin-soothing and calming benefits. Also, since our last call in late March, we launched Calm Cool and Corrected Hydrating Cleansing Oil. That's a soap-free and pH-balanced product designed to moisturize skin and remove makeup while keeping the skin hydrated. All told, so far in 2022, we have introduced five new products. and have several more that are under development or are being prepared for commercial launch. All of our new offerings complement our corporate vision and purpose of offering proprietary OTC products that are effective, scientifically developed, and clinically proven, yet gentle, and importantly, address common yet underserved conditions. All of our products are conveniently available through Amazon.com. However, they are, of course, available through our own websites, avanova.com and dermadoctor.com. All launches are being executed under our low-cost model, which allows us to test market acceptance before committing to a larger investment associated with a broader commercial launch. Beyond our product pipeline, we're pursuing growth by tapping into the complementary skill sets of our NovaBay and Dermadoctor teams to expand marketing and distribution of our existing products. This includes leveraging our collective expertise in developing robust social media programs and our strong marketing presence across all digital channels to create programs that allow consumers to engage with our brand through social media and influencer campaigns. Among these, we are building upon Audrey's position as a skincare thought leader through interviews with popular online consumer publications. Just in the past month, Audrey has been quoted in articles appearing in Woman's Wear Daily, Good and Well, and Oprah Daily. Audrey also made her second appearance this year as a guest on the QVC Network featuring derma doctor, calm, cool, and corrected, eczema bomb, this time on the program entitled Get Ready, Gorgeous with Ali. We expect Audrey to make additional QVC appearances later this year. Expanding marketing activities to international markets is a key priority. To this end, our new partner in China is now managing Dermadoctor's flagship store on Tmall.com, which is the leading business-to-consumer online retailer in China. Social media platforms like TikTok are effective ways to attract new customers in China, and our marketing partner brings an extensive network of bloggers and influencers along with strong social media brand-building capabilities. We continue to evaluate ways to leverage our network of international distributors and retailers to drive sales of our products throughout the world. And lastly, we are now offering Avanova spray bottles, three Avanova spray bottles, as a kitted bundle on Amazon, which is particularly appealing to those who tell us that they simply can't live without our product. We have more loyal customers now than ever before. The bundle is sold at a slight discount, providing savings to our most loyal customers. We're taking advantage of this bundled sale to include a Dermadoctor product sample to encourage cross-selling opportunities. Our kitted bundle is a high-margin sale that allows us to capitalize on the operational synergy with Dermadoctor of consolidating our warehouse operations. All orders placed through our Avanova website are now being fulfilled by Dermadoctor's facility in Kansas City. By combining warehouse operations, we gain greater control over product fulfillment in our supply chain. This is especially critical during a time when many companies have been struggling with supply chain issues and the related effect on fulfillment, inflation, and margins. Now I'd like to turn the call over to Andy Jones to review our Q1 financial performance. Andy?