ChromaDex Corporation

with the forward-looking statements, actual results, or to changes in its expectations. In addition, certain of the financial information presented in this call references non-GAAP financial measures. The company's earnings presentation and earnings press release, which were issued this afternoon and are available on the company's website, present reconciliations to the appropriate GAAP measures. Finally, this conference call is being recorded via webcast. The webcast will be available at the investor relations section of our website at www.chromadex.com. With that, it's now my pleasure to turn the call over to our Chief Executive Officer, Rob Fried. Rob?

Thank you, Brianna. Good afternoon, everyone, and thank you for joining our third quarter 2020 investor call. I'm pleased to say that Chromadex had another strong quarter, financially and strategically. E-commerce sales grew by 7% sequentially, and 21% year-over-year. Sales to Watsons grew 93% sequentially and 10% year-over-year. True nitrogen overall net sales were up 22% year-over-year. In addition, we delivered an adjusted EBITDA loss, which we define as EBITDA excluding legal expense, of only $125,000 in the third quarter and break-even year-to-date. an important achievement for this company. The science on Niagen has been very strong since our last update. We announced completed clinical and preclinical research in areas such as autism, cardiovascular and immune health, telomere health, and most recently on coronavirus. Frank will go through this research in more detail shortly, as well as some additional preclinical research showing that Niagen may have an impact on several of the nine hallmarks of aging, which are gaining the attention of the scientific and investment communities of late. Earlier this year, we committed to advancing collaborative COVID-19 research on Niagen and sharing the findings when appropriate. I'm very proud to say that we have delivered on this commitment and have more studies in the pipeline. This includes our collaboration with the National Institutes of Allergy and Infectious Diseases, or NIAID, the division of the NIH, to assess the therapeutic potential of Niagen in COVID-19 animal models. And last month, we announced results of a controlled clinical study in Turkey showing that a nutritional protocol which included nicotinamide riboside in combination with the therapeutic standard of care reduced recovery time in COVID-19 patients by nearly 30%. from 9.3 days to 6.6 days. This study included 100 patients with mild to moderate COVID-19. Researchers are now enrolling for a Phase III clinical trial with 300 patients. We are very proud to support research to find answers to this global pandemic, and we look forward to sharing more results of these endeavors in future updates. Chromadex also delivered on our launch expectations for TruNiagen with Nestle Health Science, one of the world's great food science companies. Last month, Nestle launched Celtrient Cellular Energy, a protein-based flavored drink mix featuring TruNiagen. This is one of three products under the new Celtrient brand, which will help address the effects of age-associated cellular decline, or AACD. Nestle began marketing in August by launching a new unbranded website, myaacd.com, to educate consumers about AACD. According to that site, AACD is the time-related deterioration in the way our cells function as we age. Often begins in our 40s and accelerates in our 60s. This partnership with Nestle Health Science to launch Celtrian Energy is an exciting opportunity to reach a new base of consumers. and introduce them to the cellular health and healthy aging benefits of TrueNiogen. We're proud to be in business with Nestle, and we are encouraged by their commitment to this new product launch. Two additional accomplishments in our core e-commerce business this quarter were, one, the relaunch of our USTrueNiogen.com website, which features our full suite of products and improved customer experience, and two, a record-breaking Labor Day promotional event leveraging our new CRM, which enabled us to customize emails and offers by audience segmentation. We appointed a new head of marketing earlier this year who has assembled a strong new team with expertise in acquisition, retention, creative, and third-party marketplaces. Going forward, we see opportunities to optimize each of these areas. We also continue to build upon and protect our intellectual property, which includes our ongoing litigation against Elysium Health. In Delaware, the patent case is scheduled for trial in September of 2021 with a Markman hearing in December of this year, where the judge will rule on claims construction arguments. We remain as confident as ever in the strength of our licensed patents following Elysium's unsuccessful attempts to invalidate them. with the PTAB office and the U.S. Court of Appeals. We are also very confident in the other litigation against Elysium. They never paid for the NR that Chromadex applied to them. W.R. Grace, which holds patents on the two known nicotinamide riboside chloride morphologies and sells this ingredient, Niagen, exclusively to Chromadex, has also sued Elysium for patent infringement. We are encouraged to see a blue-chip manufacturer like WR Grace protect the intellectual property surrounding Niagen. WR Grace is an important partner of ours, and we see a tremendous opportunity to grow the true Niagen business with them over time. Comadex will not be incurring legal fees for that case, and it does not impact our litigation against Elysium, although we believe it further validates Elysium's egregious behavior. As I reflect on the quarter and the year to date, I'm extremely proud and grateful. I'm proud of the entire team at Chromadex who pivoted quickly when the coronavirus hit, adjusting marketing messaging, advancing the science, adjusting to a virtual work environment, and reducing costs. This is reflected in the stability of our operations as well as our strong financial results year to date. I'm also proud of our science and to be part of the conversation around potential solutions to the COVID-19 global pandemic. This is unique for a dietary supplement company, and it is thanks to our deep commitment to science and our hundreds of research collaborations globally that we've been able to quickly put together these studies. We will continue to invest in the science behind Niagen and fiercely protect our intellectual property against infringers, which we believe creates long-term value for our shareholders. And I am grateful to our business partners, Watson, Nestle Health Science, and W.R. Grace, among many others, who believe in true Niagen and have committed to building the business with us. With that, I will pass the call over to our Chairman, Frank Jacks, for an update on scientific research.

Thank you, Rob. Since our last update, peer-reviewed publication of research on NR and NAD has continued to accelerate. In addition, there were two newly registered clinical studies on NR, and Chromadex signed nine new research collaborations as part of our CERT program. There are now 43 ongoing, completed, or published clinical trials currently registered on clinicaltrials.gov to investigate the pharmacokinetics and health benefits of NR. In addition, 11 clinical trials are registered to test NR in combination with other ingredients for a total of 54. Earlier this year, we committed to advancing research on NR related to COVID-19 and are encouraged that our ingredient is being studied as a potential nutritional solution. As Rob noted, we recently announced initial results of an open-label randomized placebo-controlled Phase II study, which included 100 COVID-19 positive patients with mild to moderate symptoms, and were published in MedArchive, a preprint server for health sciences. This clinical study was registered in October by Scandi Biotherapeutics and conducted at the University Health Sciences Istanbul Training and Research Hospital in Turkey. The objective was to assess the clinical efficacy, tolerability, and safety of the combination of a nutritional protocol including nicotinamide riboside and the local standard of care that includes hydroxychloroquine compared to a placebo and the local standard of care. The key findings were the combination treatment reduced average recovery time by 29% compared to the placebo group. There was an improvement in markers of liver function for a combination of treatment on day 14 compared to day zero as measured by plasma ALT, AST, and LDH. And adverse events were uncommon, benign, and self-limiting. According to the investigators conducting the study, the phase three trial will be double-blinded and include 300 patients at eight clinical sites in Turkey. We are currently exploring other research opportunities to see how NR may be part of the solution to the COVID-19 pandemic. A second clinical study was registered in August by the National Heart, Lung, and Blood Institute, part of the NIH, and the University of Washington to assess the mechanisms by which raising blood and heart NAD levels in humans helps mediate changes in mitochondrial function, protein and epigenetic modifications, as well as inflammation. If the results are positive, this would provide evidence to proceed with additional studies of NR as a potential nutritional solution for heart failure patients. In August, we announced the results of a pilot study which indicated that Niagen may reduce inflammatory cytokines in stage D heart failure patients. This marked the 11th published clinical study and the second study focused on the potential cardiovascular benefits of Niagen in humans. According to the lead researchers, by increasing mitochondrial health of peripheral blood mononuclear cells, or PBMCs, in the study patients, pro-inflammatory cytokine production was reduced. A key marker studied was IL-6, a known pro-inflammatory molecule that was suggested to play an important signaling role between mitochondrial function and inflammation in PBMCs. These new findings build upon a growing body of evidence identifying how Niagen may support cardiovascular health. Rob mentioned the nine hallmarks of aging in his remarks, a reference to the landmark article called The Nine Hallmarks of Aging, published seven years ago. The group of researchers identified nine cellular and molecular hallmarks of aging that contribute to the aging process and together determine aging. Many listening may be familiar with some of these, such as cellular senescence, telomere attrition, stem cell exhaustion, and of course, mitochondrial dysfunction, our strategic focus. I'll briefly highlight two important preclinical studies that were published in October, which are related to the nine hallmarks of aging, stem cell exhaustion and telomere attrition. First, a mouse study published in Nature Immunology found that NR improved T cell function, which is a component of new cancer immunotherapies. T cells are immune cells tasked with recognizing and eliminating affected, damaged, or cancerous cells. This research built upon a previous preclinical study that found NR could improve cancer treatment by preventing chemotherapeutic-induced stem cell depletion, including T cells. We know mitochondrial function is essential to the function of energy-expensive cells, including stem cells and immune cells. The results of these recent preclinical studies suggest that NR can support these cells. However, further research is required to verify this. Proper immune cell function in turn may play a key role in a wide array of diseases, including many forms of cancer. Stem cell exhaustion, as explained in the nine hallmarks of aging, is the age-related deficiency of stem cells, which contribute to many of the physical problems associated with aging, including a weak immune system. As such, while early, this is an interesting area of research for NR. Second, a preclinical study from the National Institute of Aging at NIH published in the European Molecular Biology Organization Journal found that replenishing NAD with NR alleviated telomere damage, providing a protective effect to DNA as cells replicate. Telomere attrition, or shortening, is another of the nine hallmarks of aging, which refers to the gradual loss of protective caps of chromosomes. It is well accepted that telomeres play a significant role in aging and nutrition has been linked to many age-related health conditions. These promising findings suggest that NAD repletion with NR may play a role in maintaining healthy telomere function, however additional research is needed. In summary, we are committed to remaining a global scientific authority on NR and NAD research and being an innovative science-based responsible company. The growing body of clinical research supports the potential for sales of our patented NAD-boosting ingredient, Niagen, and our consumer product, TruNiagen. I look forward to sharing more in future updates. With that, I'll pass the call to Kevin Farr. Kevin?