NovaBay Pharmaceuticals, Inc.

Hello and welcome to the NOVA Bay Pharmaceuticals fourth quarter and full year 2023 financial results conference call. All participants will be in 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. And to withdraw from the question queue, you may press star, then two. As a reminder, this conference is being recorded. I would now like to hand the call to Jody Kane. Please go ahead.

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 Tommy Law, Interim 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's uncertainty about circumstances beyond the company's control that impact the broader economy. This means that results could change at any time, and the contemplated impact of such circumstances on NOFA-based operations, financial results, and outlook is a best estimate based upon information available for today's discussion. For a list and description of risks and uncertainties, please review NOFA-based filings with the Securities and Exchange Commission, which are available at sec.gov. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, March 26, 2024. NOVA Bay undertakes no obligation to revise or update 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. We took a major step in streamlining our business and better positioning NovaBay to pursue higher growth opportunities with the recent sale of our skincare business. The divestiture of Dermadoctor reduces our operating expenses, which aligns with our priority of extending our cash runway in this continued challenging capital market environment. NovaBay acquired Dermadoctor in November 2021 to expand our direct-to-consumer product lineup during the height of the COVID-19 pandemic. Our expectation was that e-commerce sales would continue to grow post-pandemic. Unfortunately, like many other companies that pursued a similar strategy during the pandemic, our projections were not realized. The financial results that we're reporting today show a year-over-year decline in sales from our skincare segment, which was a major factor in our decision to divest Derma Doctor. Our focus is now on opportunities in our core eye care business. Avanova Spray is established as the number one doctor-recommended antimicrobial lid and lash solution, providing us a platform of loyal customers from which to grow. This customer loyalty is evidenced by the 64% year-over-year increase in online subscription-based unit sales and the 38% increase in the number of subscription-based sales on Amazon and Avanova.com, our two most productive OTC sales channels. a substantial 24% of all online sales were from prescribers in 2023. That's up from approximately 14% in 2022. Notably, we accomplished this while reducing sales and marketing spend for the year by 17% through our digital marketing expertise. Our physician dispense channel also contributed to the growth of our eye care business in 2023 as we worked to deepen relationships with eye care professionals. Beyond just revenue, This channel creates a halo effect around our direct-to-consumer sales by establishing Avenova as a doctor-recommended brand. Last year, we launched two promotional programs aimed at further rewarding our network of physicians who help their patients manage the symptoms of chronic dry eye with Avenova-branded products. Last year, we also launched our new Avenova Allograft through the Physician Dispense Channel. This prescription-only allograft provides a protective environment for covering for the repair of the cornea and conjunctiva, helping the ocular surface return to a healthier state. It's the only optic allograft manufactured using the patented six-step bioretain process that preserves the natural integrity of the placental tissue. To further support the use of optic allografts, we sponsored a free CME webinar featuring key opinion leaders discussing optimal ocular surface conditions for the use of allografts in candidate selection. More recently, we executed on our growth strategy through a new co-marketing agreement with Inovia. Inovia recently announced FDA approval of prescription-only Clobetasol, a unique and differentiated steroid prescribed by cataract surgeons. Clobetasol provides ophthalmologists and ocular surgery patients with a compelling, rapid, sustained, and more convenient solution for post-operative inflammation and pain. In fact, FDA approval was based on stellar clinical results showing nearly 9 out of 10 patients achieved complete absence of post-surgical pain, and 6 out of 10 patients achieved total absence of inflammation within 15 days of ocular surgery. This is the first new ophthalmic steroid to enter the U.S. market in more than 15 years. Under our co-marketing agreement, We will leverage our established relationships with thousands of eye care professionals to market the newly approved Cloverisol product. Our channel provides a ready-made opportunity to accelerate this product's commercialization, which is complementary to our Avanova line of products. In addition, Inovia will market our prescription Avanova spray through its nationwide sales representatives who are targeting ophthalmic surgeons. This is a considerable opportunity to generate additional professional awareness and grow sales of Avanova. We're excited to partner with Inovia, which shares our commitment to scientifically developed, cutting-edge, and high-quality ophthalmic products. Our co-marketing agreement is yet another example of how our physician dispense channel has become increasingly important in building our Avanova business. The Clobetasol product is expected to receive a trade name as soon as the summer, with co-marketing initiatives expected to begin in the coming months. Now I'd like to turn the call over to Tommy Law to review our financial results. Tommy?