cbdMD, Inc.

Good afternoon. Welcome to the CBDMD Inc. fourth quarter and fiscal 2023 earnings call and update. This afternoon, the company issued a press release that provided an overview of the results for its fourth quarter and 12-month fiscal period ended September 30th, 2023, which followed the filing of its annual report on Form 10-K. Today's conference call is being recorded and will be available online along with our earnings press release covering our financial results and non-GAAP presentations at cbdemd.com in accordance with CBDMD's retention policies. All participants on this call will be in listen-only mode. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. At this time, I'd like to turn the conference over to Brad Whitford, this company's Vice President of Finance. Brad, please go ahead.

Thank you, Gaylene, and thank you all for joining CBDMD's September 30th, 2023 fourth quarter and fiscal 2023 earnings call and update. On the call today, we also have Ronan Kennedy, our Interim CEO and Chief Financial Officer, and Dr. Sybil Swift, our Chief Science Officer. We'd like to remind everyone that various remarks without 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 our actual results to differ materially from those indicated. including risks described in the company's annual report on Form 10-K for the year ended September 30th, 2023, 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, Friday, December 22nd, 2023. 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 security laws. And with that, I'd like to turn the call over to Ronan. Ronan?

Thank you, Brad. Good afternoon, everyone. During fiscal 2023, CBDMD has navigated through a transformative phase, making significant strides in our operational turnaround plan. Despite facing headwinds with revenue declines, we successfully enhanced our overall operation and significantly curtailed our cash burn, particularly in the third and fourth quarters. The CB market, while challenging, remains ripe with opportunities. Our focus is steadfast on reversing the revenue trend in 2023 and achieving positive EBITDA in 2024. Our diligent efforts this year have led to a $55.8 million improvement in gap loss from operations for the full year 2023, and a non-GAAP operating adjusted loss improvement of $7.7 million for the year. This fiscal discipline coupled with strategic decisions resulted in $15.8 million year-over-year reduction in cash SG&A costs for 2023 and $3 million for the fourth quarter. While overall revenues declined sequentially, we continue to make incremental improvements to our adjusted EBITDAI cash price. On our last call, we were excited about the transition to our e-commerce platform. We continue to see benefits from the lower cost structure and an increase in our base of loyal subscribers since making the conversion. Our November site refresh aims to further optimize conversion rights, extend customer lifetime value, and acquire new customers efficiently. Despite experiencing downtime issues at Meta again, our marketing team continues to focus on elevating our brand image and quality of content with everything we do. We regularly reassess every line item, channel, and vendor for performance. On the wholesale front, we continue to focus on developing new strategic relationships and selling into larger accounts and leveraging distribution networks to expand our reach. We are excited to announce that CBDMD launched in 160 Sprouts market stores across the nation this month. We are continually engaging with new retailers and focused on incremental opportunities during calendar 2024. Internationally, our brand reputation, clinical data, and safety data continue to create opportunities. Our Paul CBD products are now registered in Central America, and we began shipping Costa Rica in December. We continue to grow our business in Brazil and are working on other actionable international distribution opportunities. Despite the longer lead times in the international sales cycle, we see these high entry barrier markets as promising avenues for sustained growth. Last quarter, I stated that product development and innovation are important tenants. We continue to invest in our core CBD and Paul CBD brands, and are excited about the new CBD, MD, and policy B products that we have in store for 2024. That said, we recently took the opportunity to survey the landscape, ingredient trends, and review our customer feedback, and our team made the decision to launch two new brands, HempMD and ATRX, during this current quarter. Both brands provide new opportunities for growth, but do not face the same regulatory and channel impediments as CBDs. HempMD is a collection of curated hemp products primarily designed for sale on Amazon. ATRX is a new nutraceutical brand that will provide functional, non-cannabinoid health solutions to our customers with an initial focus on the emerging functional mushroom market. As mentioned in our press release, we are excited to announce the launch of our first ATRX product, the Ultimate Mushroom Daily Gummy. The Ultimate Mushroom Daily Gummy's proprietary blend is designed to enhance focus, memory, support gut health, reduce inflammation, and boost immunity, and pairs well with our core CBD and B products as part of an everyday routine. We've received positive feedback and growing interest from several retailers and are already in discussions about expanding the ATRX line into multiple brick-and-mortar retailers. These new brands not only complement our core offerings, but also open up new channels for growth beyond the regulatory confines of CBDs. Since our last call, we invested significant management resources on both M&A opportunities as well as our special meeting of shareholders and proxy statements to convert our Series A preferred stock and address our capital structure. It is clear from discussions within our industry we have a great platform and there are significant synergies that exist with a roll-up or other M&A. However, complexity and procedural challenges associated with our multi-class equity structure continue to be problematic to advancing the transaction. With respect to our proxy vote, we were unsuccessful achieving the preferred votes necessary to pass the proposed resolution. We believe our current structure has a negative impact on the combined market capitalization of the company and significant limits our ability to raise capital, ultimately putting the company and NYSE listing at risk. We received feedback from shareholders during the last proxy process, and I'm working with our board members on alternatives. Cleaning up our capital structure is one of our highest priorities going into calendar 2024. With that, I'll turn the call over to Dr. Stegall-Swester.