cbdMD, Inc.

Good afternoon. Welcome to the CBDMD Inc. Second Quarter Fiscal 2024 Results Conference Call. This afternoon, the company issued a press release that provided an overview of the second quarter results, which followed the filing of its quarterly report on Form 10Q. 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 presentation 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. To join the question queue, you may press star then one on your telephone keypad. At this time, I would now like to turn the conference over to Brad Whitford, the company's Chief Accounting Officer. Brad, please go ahead, sir.

Thank you, Carl, and thank you all for joining CBDMD's March 31st 2024 Second Quarter Fiscal 2024 Earnings Call and Update. On our call today, we also have Ronan Kennedy, our CEO and Chief Financial Officer. 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 our actual results to differ materially from those indicated, including risks described in the company's Form 10-K annual report for the fiscal 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, Wednesday, May 15, 2024, 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 Ronan.

Thank you, Brad. Good afternoon, everyone. We've come a long way in the last two years. Although our results for the second quarter of fiscal 2024 did not meet our expectations, we are confident that the operational changes we have implemented will drive significant progress moving forward. First, we've bolstered our wholesale leadership, as mentioned on our prior call. Our quality products, regulatory resume, including our clinicals and safety data, along with the additional leadership depth, is having an impact, and we are seeing our pipeline increase. Our direct-to-consumer business faced challenges last quarter. Admittedly, we scaled back our marketing spend too much, and our customer journey and messaging missed the mark. The CBDMD brand, known for promoting an active lifestyle and addressing specific consumer needs, remains uniquely positioned to leverage our clinical studies and safety data to communicate the tangible benefits of our products. In response, we have revitalized our marketing strategy. We've strengthened our team by bringing on a seasoned performance marketer, or streamlining our marketing vendors in refocusing our message on a need-based functional solutions that enhance our customers' active lifestyles. These changes have already yielded an improvement in our meta-engagement rates on Instagram from the second quarter, signaling more effective communication. Our next goal is to convert these engagement gains into tangible revenue increases. Despite a decline in overall direct-to-consumer revenue, our subscription base not only held firm but expanded. Maintaining customer retention is paramount We are actively enhancing our subscription program and prioritizing the customer experience to support this goal. During our last call, we discussed our strategy to diversify into non-cannabinoid markets, particularly through our functional mushroom brand, ATRX Labs. We're excited to report the launch of our ATRX Platinum line, now available in 1,500 GNC corporate stores nationwide. We believe the significant retail presence boosts the brand's credibility and and marks a confident step in the functional mushroom category, which faces fewer regulatory hurdles than CBD. As we continue to ramp up marketing for ATRX, we are optimistic about its potential in the expanding natural products market. We believe the best way to drive shareholder value is to run a profitable business and simplify our capital structure. Our team continues to make expense rationalizations a priority quarter after quarter. In March, we consolidated our executive offices and warehouse and entered into agreements with our current landlord on our historical executive offices. When the company fulfills its obligations in these agreements, including making payments through July, the headquarter lease will terminate at the end of July 2024. The savings from exiting this lease make up a good portion of the $2.4 million in annualized expense cuts we have enacted. We started realizing the benefits in April and expect these savings to be fully realized by August with the lease termination. Although the recent proxy vote regarding the conversion of our Series A preferred did not go as hoped, we have deepened our engagement with shareholders and have taken their feedback seriously. Clearly, there is more work to be done to present the right solution, communicate effectively with all shareholders, and secure the necessary support. We remain convinced that converting the preferred shares is the optimal route for enhancing long-term shareholder value and should aid to increase share appreciation and liquidity. Adopting an all-common capital structure will not only strengthen our book value of equity, but also improve our company's ability to attract and execute strategic opportunities, providing clear pathways for potential transactions. The feedback from the vote has galvanized our commitment to reach short-term profitability. Based on the initiatives in place, we believe CBDMD is in a great position to make significant P&L improvements to the remainder of the fiscal year. With that, I'll turn the call back over to Brad to provide more detail on the quarter and our cost initiatives.