NovaBay Pharmaceuticals, Inc.

Good afternoon and welcome to the Novo Bay Pharmaceuticals Third 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.

This is Jody King 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, 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 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 circumstances beyond the company's control that impact the broader economy, such as the COVID-19 pandemic and the conflict between Russia and Ukraine. This means that results could change at any time and the contemplated impact of 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-based 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, November 14, 2022. NOVA may undertake no obligation to revise or update any statements to reflect events or circumstances, except as required by law. 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 delighted to report a 69% increase in product revenue over the prior year period, mostly driven by our acquisition of Dermadoctor and diversified product revenue streams. On recent conference calls, we had projected that revenue growth in 2022 would accelerate in the second half of the year, as many of our initiatives we implemented throughout the year gained traction. It is highly gratifying to deliver on this expectation during the third quarter and our outlook for accelerated growth to continue in Q4 as well. One of our highlights of the quarter was that we again achieved year-over-year growth in online Avanova unit sales. Another tremendous achievement was that we delivered our highest sales quarter for Dermadoctor products since the acquisition a year ago. While revenue increased 69%, our ability to optimize digital marketing led to an 11% decrease in sales and marketing spend, even with the additional expenses for promoting Dermadoctor products. I'm excited about our prospects for continued growth. We have established brands in three large and growing verticals, eye care, skin care, and wound care. Now I'd like to share updates on each one of our three verticals, beginning with Avanova and our eye care products. Avanova is the number one antimicrobial lid and lash spray in the US dry eye market. And as mentioned, online Avanova Online Avanova Spray unit sales increased year over year as we continued the successful shift to this more efficient online sales channel. For the quarter, more than two-thirds of unit sales were generated online, which is a testament to the effectiveness of our digital advertising. For example, we recently completed a Fall for Eyes sweepstake, which drove 10,000 new email subscribers and 2,500 new Instagram followers. Now we have Black Friday, Cyber Monday, and December holiday promotions on tap to further drive sales for a strong end-of-year push. During the past several years, we've capitalized on the recognition of the Avanova brand by commercializing companion products that help with our blepharitis and dry eye customers. These include Nova Wipes, the Avanova Warm Eye Compress, Avanova Lubricating Drops, and the Eye Check. I'm pleased to report that this strategy is working well and our companion products made a notable contribution to the third quarter revenue number. Moving on to Dermadoctor and our collection of skin care products. You may recall that we identified growth opportunities for Dermadoctor with a trend towards more beauty products being purchased online. In fact, the research firm Insider Intelligence expects cosmetics and beauty e-commerce sales in the U.S. to reach $18 billion this year. By 2026, e-commerce sales are expected to account for nearly a third of the category's total. With our digital focus, we are well positioned to tap into this ongoing market trend. Last month, we announced significant orders for a top-selling derma doctor product, Kakadu C Anti-Aging Serum, with these orders being placed just ahead of the holiday season. Some revenue from these large orders was recognized in the third quarter, with more to come in the fourth quarter. We also have a number of promotional activities around the holidays, including a discount feature in the Costco holiday mailer. Since the beginning of the year, we've introduced six new skincare products to the ever-popular Derma Doctor collections, and plans are underway to introduce more products in the future. These new products keep us highly relevant in an industry characterized by the constant emergence of new formulations, and importantly, they keep the Derma Doctor brands in the mind of the consumers. As Andy will discuss in a moment, we have commercialized these new products while holding R&D and sales and marketing expenses in check with our launches executed under our low-cost model. Among upcoming promotions for our Dermadoc products are additional appearances by Audrey Kunin on the QVC network with several shows already booked. Increasing Dermadoc's presence in international markets is a key priority. As you may know, NovaBay has excellent relationships in China, and we know that success in that country is based on having strong local business partners who understand the market and have the ability to create positive brand awareness. We now have an updated derma doctor store on Tmall, which is China's largest B2C network. And through our local marketing partner, we have an expanded network of bloggers and influencers. We also have strong media presence and brand building capabilities on such key platforms as TikTok. Our ability to capture even an extremely modest share of the Chinese market would have a considerable impact on our revenue. We also offered special promotions on select Dermadoctor products during the Double 11 event, so named because it occurs on November 11th each year. Double 11 is similar to our Black Friday, but it grosses several times more in revenue. We are also working towards distribution agreements in Europe and plan to expand the geographic reach of Dermadoctor even further. Now turning to our wound care vertical. We manufacture and sell a proprietary wound care product under the Phase I brand that is distributed in the U.S. for professional use by our commercial partner, Phase I Health. Products under our NutraPhase brand are distributed in China by our partner, Pioneer Pharma. These products are used for cleansing and irrigating post-surgical wounds, minor burns, and superficial abrasions. We have an advantage in this market as our product is made without the toxic chemicals found in many other wound care products. It is gentle, non-irritating, non-sensitizing to skin and new tissue. Like our Avanova spray, our wound care products are formulated with our FDA-cleared, proprietary, antimicrobial, pure form of hypochlorous acid. Our formulation exhibits broad-spectrum activity against a range of gram-positive and gram-negative bacteria, making it highly effective. Among the advantages of hypochlorous acid is the ability to penetrate and kill biofilm which represents a significant barrier to wound healing. Among various promotional activities, Phase One Health has refreshed their website, including recent blog postings from industry key opinion leaders. The most recent post is by Dr. Jack Fisher, a past president of the American Society for Aesthetic Plastic Surgery and author of more than 120 publications, a frequent speaker at medical conferences around the world, and an ardent supporter of Phase One. He has used our product with his patients for more than a decade. Before reviewing our financial results, I want to thank our stockholders for their continued support. Last Thursday, we held a special meeting of stockholders, and I'm pleased to report that all proposals passed, including the proposal authorizing our board to effect a reverse stock split. This is critical in regaining compliance with the NYSE American listing and completing the previously announced private placement for gross proceeds of $3.25 million. Our Board of Directors has approved a 1 for 35 reverse stock split that will become effective tomorrow, Tuesday, November 15th, with our common stock trading on a split-adjusted basis Wednesday, November 16th. The increased market price resulting from the reverse split will improve the marketability of our stock and should encourage additional interest and trading. Now I'd like to turn the call over to Andy to review our Q3 financial performance. Andy?