cbdMD, Inc.

Good afternoon. Welcome to the CBDMD Incorporated's March 31st, 2021 second quarter fiscal 2021 earnings call and update. This afternoon, the company issued a press release that provided an overview of its second quarter fiscal 2021 results, which followed the filing of its quarterly report on Form 10-Q. Today's conference call is being recorded and will be available online at cbdmd.com in accordance with CBDMD's retention policies. All participants on this call will be in a listen-only mode. The call will be followed by a question-and-answer session. At this time, I would like to turn the conference over to Ronan Kennedy, the company's Chief Financial Officer and Chief Operating Officer. Ronan, please go ahead.

Thank you, Catherine, and thank you all for joining the CBDMD's March 31, 2021, Second Quarter Fiscal 2021 Earnings Call and Update. On the call today, we also have our chairman and co-CEO, Marty Sumacrest. Following the Safe Harbor, Marty will provide an overview of our business, then I'll provide a summary of quarter financial results. Following that, we'll open up the call for questions. We'd like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. CBDMD cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated, including risks described in the company's quarterly report on Forum 10-Q for the quarter ending March 31, 2021, annual report on Forum 10-K for the year ending September 30, 2020, and our other filings with the SEC. all of which can be reviewed on the company's website at www.cbdmd.com or on the SEC's website at www.sec.gov. Any forward-looking statements made on this conference call speak only as of today's date, Wednesday, May 12, 2021, and CBDMD does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today's date, except as may be required by federal securities laws. With that, I'd like to turn the call over to CBDMD's chairman and co-CEO, Marty Sumacros.

Thank you very much, Ronan, and good afternoon, everyone. We appreciate you joining us today. We're very excited about the long-term vision to be the leading global CBD consumer branded company. Despite the impact to our business, from the COVID-19 pandemic and the duration and magnitude of the lockdowns that were greater than we initially anticipated, we believe that our responsiveness and our ability to make adjustments to our business has allowed us to successfully deliver the largest fiscal Q2 net sales in our history. CBDMD increased its year-over-year net sales in Q2 by 26% to 11.8 million. while virtually maintaining almost a 70% gross profit margin. This growth rate was exceptional, considering our March quarter net sales have historically been impacted by seasonality. I want to thank our team for their hard work and dedication to keeping the health and safety of our employees a top priority, while also delivering these results. We believe our business is at the precipice of more significant growth. We believe substantial net sales growth is achievable in the near term based on anticipated launch of a variety of new products, new partnerships and sponsorships, new channels of distribution, and new international markets. We're excited about the long-term potential to grow our core U.S. business and increase our wholesale footprint as the FDM channel opens up to CBD products, particularly our ingestible lines. Based on this outlook, we are now providing net sales guidance of $15.5 million to $16.25 million for the first quarter of fiscal 2022, ending December 31, 2021, end of this calendar year. We entered calendar 2020 with a very healthy cash position. of $28.3 million and opportunistically deployed capital in our Q2 into new product development, new channel distribution, our new science division, CBDMD Therapeutics, marketing, and related infrastructure. We believe this investment has created a solid foundation for future top-line growth. We remain confident that we will continue to gain market share in the total addressable global CBD market. while at the same time delivering on positive non-gap adjusting operating income during this fiscal year. We believe the strength of our balance sheet and access to capital will continue to be our key competitive strength and differentiator in the CBD industry, helping us to support our long-term financial flexibility. We seek to continue to evolve our business to stay at the forefront of our industry. We remain focused on maximizing our growth in net sales, achieving profitability, and most importantly, our cost containment. Our brands continue to lead the market in brand awareness and social media reach, as our Meltwater M score, which measures editorial mentions, reach, tonality, was a 78 for fiscal Q2, which was eight points ahead of our nearest competitor. We continue to strengthen our portfolio of strategic athletes and sponsorship programs, We recently extended our sponsorship with professional rally driver megastar Ken Block. We signed an exclusive sponsorship agreement to be the official CBD partner of the Noble CrossFit Games and signed Masters champion and nine-time PGA winner Patrick Reed, who we are thrilled to have on Team CBDMD. We continue to achieve product awards, and we are proud to announce that both of our CBD product line and our CBD pet product line, PawCBD, were 2021 Product of the Year winners, with CBDMD serving as the first CBD brand to ever earn the prestigious award in back-to-back years. Along with serving as the first CBD company to win Product of the Year since the CBD category was introduced in 2020, this year's CBDMD CBD Gummies were named the most innovative product in the CBD ingestibles category. In addition, PawCBD's hard shoes for dogs earned 2021 Product of the Year honors in the CBD pet category, a Product of the Year award first for the pet-friendly brand powered by CBDMD. Our goal is to foster a robust culture of innovation and brand development. We are continuously evaluating options to connect with consumers through our compelling brand propositions and delivering compelling innovation so that CBDMD can meet the needs of ever-evolving consumer preferences in the marketplace. To further expand our demographic, we successfully launched our CBDMD botanicals earlier this year. Next month, we'll be launching three new CBDMD gummies, one for sleep, one for recovery, and my personal favorite, our apple cider vinegar flavor. In addition, next month, we'll also be launching our new CBDMD drink mixes, which will be available in basic, energy, and recovery flavors. Internationally, we're expanding our presence as well. Today, we've sold our products in over 31 countries. We are leveraging our success in the U.S. market as we find significant opportunities internationally. With more than 500 million people across the United Kingdom and the European Union, we've officially filed our novel food application with the United Kingdom's Food Standard Agency. The application includes all requisite data to allow for the validated submission and thorough scientific assessment. A similar submission was simultaneously made to the European Food Safety Authority to ensure compliance for the European markets. Our products have been offered for sale in the UK since mid-2019. Our application is currently undergoing a review process, which we will believe will be completed by the end of 2021, although no assurances can be made. This application includes detailed analysis of ingredient characterization, quality and stability of our product, hemp sourcing, extraction controls, labeling, testing requirements, and the underlying intake and toxicological data related to safe consumption of the proprietary cannabinoid blend ingredients in our CBDMD product line. CBDMD believes this step is important as a precursor for its preparation of its FDA NDIN submissions, Australian TGA submissions, various sanitary regulations in Latin America, and other regulatory submissions throughout the world. We believe that completion of this extensive preclinical research required to support the application provide CBDMD with a valuable tool for other regulatory approvals around the world. Our team at CBDMD understands the importance of brand equity in selling good quality and safe products. As one of the leading consumer CBD brands in the world, we believe CBDMD is in a unique position to explore the therapeutic potential of CBD and the other lesser known cannabinoids to support scientific advancement through clinical trials and to perform toxicity studies to demonstrate the safety of cannabinoids as novel therapies. In order to isolate and quantify the company's ongoing investments in science related to its existing and future products, including research and development, activities for therapeutic applications, and with the mission to provide our customers with therapeutic options to replace opioids and other prescription painkillers and bring to market novel therapies for conditions where people suffer from pain, inflammation, sleeplessness, or anxiety, such as osteoarthritis, fibromyalgia, insomnia, and anxiety disorders, In March 2021, we formed CBDMD Therapeutics LLC, a new wholly owned subsidiary. We're also thrilled to have appointed Dr. Sybil Swift, a former US Food and Drug Administration official, to serve as our co-chair of CBDMD Therapeutics, as well as our new vice president for scientific and regulatory affairs. These new novel therapies will be the first identified through the core of CBDMD's current dietary supplement science and research to further expand our brand's use and acceptance by consumers worldwide. We believe that the launch of the CBDMD Therapeutics signals to the marketplace that CBDMD is committed to providing the necessary resources to ensure the success of this mission. We envision that the work we are embarking upon at CBDMD Therapeutics may lead to partnerships with some of the most preeminent companies and universities in the world, and that the science we expect to develop at CBDMD Therapeutics will not only further distance our brand from our competitors, but will also build a significant lead on any new entrants in the market. I am proud of all of our employees and our board for their contribution to further CBDMD's vision, especially during the difficult COVID-19 pandemic. We take great pride in leading with strong values. We are committed to advancing the health and wellness of people's lives to the better by investing in our products, our brands, our people, and the world we live in. With that, I'll now turn the call over to Ronan, who will take you through the financial results. Ronan, go ahead.