ChromaDex Corporation

ladies and gentlemen thank you for standing by and welcome to chromadex corporation first quarter 2022 earnings conference call my name is stephanie and i will be the conference operator today at this time all participants are in a listen only mode and as a reminder this conference call is being recorded this afternoon chromadex issued a news release announcing the company's financial results for the first quarter of 2022. if you have not reviewed this information Those are available within the investor relations section of Chromadex website at www.chromadex.com. I would now like to turn the conference call over to Brianna Gerber, Vice President of Finance and Investor Relations. Please go ahead, Ms. Berger.

Thank you. Good afternoon and welcome to Chromadex Corporation's first quarter 2022 results investor call. With us today are Chromadex's Chief Executive Officer, Rob Freed, Chief Financial Officer, Kevin Farr, and Chairman and Co-Founder, Frank Jacks. Today's conference call may include forward-looking statements, including statements related to Chromadex's research and development and clinical trial plans and the timing and results of such trials, the timing of future regulatory filings, the expansion of the sale of TruNiagen in new markets, business development opportunities, future financial results, cash needs, operating performance, investor interest, and business prospects and opportunities, as well as anticipated results of operations. Forward-looking statements represent only the company's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause Chromadex's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These risk factors include those contained in Chromadex's quarterly report on Form 10-Q, most recently filed with the SEC, including the effect of the COVID-19 pandemic on our business, results of operations, financial condition, and cash flows. Please note that the company assumes no obligation to update any forward-looking statements after the date of this conference call, to conform with the forward-looking statement's 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 be 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 Freed. Rob?

Thanks, Diana, and good afternoon, everyone, and thanks for joining our first quarter 2022 investor call. Since the beginning of this year, we've made some very important strides in building our True Nottingham brand. Our new TV commercial, which many of you have seen, began airing in late March, and it was followed by the U.S. launch of our new product, True Niagen Immune, in April. And we're very encouraged by the recent trends in the second quarter and have other brand-building activities on our roadmap later this year. Beyond the near-term brand-building initiatives, but strategic to our long-term plan, We were granted yet another U.S. continuation patent that significantly reinforces Chromadex's intellectual property portfolio, which now is over 40 patents. The scientific momentum on Niagen has never been stronger. As many of you have seen, we recently announced the results of a peer-reviewed study on Parkinson's disease patients, and there are now two additional clinical studies underway on Parkinson's. Importantly, the growing body of evidence on niogen suggests with great consistency that metabolically active tissues are heavily NAD dependent, including the brain, muscle, heart, liver, skin, among others, which continues to validate the tremendous market opportunity for niogen. The science continues to show that true niogen is certainly among the most important dietary supplements that people concerned about the way their bodies age should be taking. We began to scale the new TV campaign in the second quarter, so it did not have a material impact on the first quarter results, which Kevin will discuss in a moment. Our new commercial is now aired on major networks, including Fox News, Fox Business, CNN, the Science Channel, MSNBC, ABC, Bloomberg TV, and certainly SPN channels. As I said last quarter, this commercial is intended to educate a broader group of potential consumers about the benefits of taking TruNiagin. Our marketing team took great care to distill the deep science behind our ingredient into a 30-second spot based on extensive testing. While it is early, we believe the message is resonating with consumers and sales trends are encouraging in the second quarter. Later on the call, Kevin will discuss some of the leading indicators of TV performance that we are tracking for our e-commerce business. As expected, this campaign is also improving brand awareness and sell-through at Walmart. Although the timing of the campaign is a little later than we had initially anticipated, the results are promising. Another exciting moment was seeing TrueNiogen featured on the April 25th episode of Dr. Phil during his interview with Brooke Burke. Brooke, as many of you know, is a celebrity health and fitness expert as well as one of our original True Believers. The segment was highly impactful, reaching over 2 million viewers and re-aired across several markets, driving an increase in sales and exposure for the brand. As I said, we also launched TrueNiogen Immune in April. Our very loyal community asked for a holistic, all-in-one daily immune supplement versus taking individual supplements. Based on that feedback, our launch of TrueNiogen Immune was targeted to existing U.S. subscribers as a companion to TrueNiogen Immune. with the recommendation that both products be taken together. TruNiogen Immune is the first of its kind combination of proven immune-boosting nutrition with NAD support via Niogen. Our team of scientists were meticulous and strategic in creating this formula to ensure high bioavailability and efficacy of the ingredients and selected from the highest of quality suppliers. In addition, there's a larger market opportunity with TruNiogen Immune, It helps us target consumers who are focused on a clear benefit, like immune health. And importantly, Niagen is the hero ingredient, so the emphasis is on healthy aging, which reinforces the True Niagen brand message. It's time to launch. Brooke Burke participated in several interviews highlighting True Niagen Immune for publications, such as Swimsuit Illustrated and Daily Mail. It's early in the launch, and we look forward to sharing updates as it progresses. Finally, we are working on initiatives to educate and consistently engage our consumers, including an expanded loyalty or brand ambassador program. We anticipate this will roll out later in the year. The science on Niagen is very promising, which Frank will discuss in a moment. I mentioned the recently published clinical study on Parkinson's, which will include two additional studies by the same group of researchers. In the phase two study, 400 patients will be given a gram of NR per day. Well, the Phase III study will administer the highest daily dose of NR in any clinical study to date at 3,000 milligrams per day. We also made significant progress strengthening our patent portfolio this quarter. Our two recently granted NRT patents add protection of the manufacturing process of NR in its various salt forms through 2037. In short, the process to manufacture NR chloride or nitrogen requires the manufacturing process for NRT as an intermediate step. The same is true for other salt forms of NR. We now have over 40 patents on NR and other NAD precursors, and we continue to strengthen this portfolio. I'd like to also give a brief update on our new strategic partnerships. First, Sinopharm Xinjiang. We continue to finalize the commercial plans and supply agreement for initial cross-border sales, as well as our approach to pursuing Blue Hat approval in parallel. While we and Sinopharm are eager to progress toward launch, Recent lockdowns due to COVID have slowed the progress. We've been impressed by their comprehensive plan to differentiate our science-based brand from NMN, a large and growing category in China. We remain optimistic about the future. Of course, another strategic partner in Asia is H&H Group, and they're close to launching a Swiss product formulation for nitrogen for the China cross-border market and Australian market. It's early in the relationship, and we're already in discussion about how to make the partnership more impactful over time. And, of course, we are having similar conversations with established strategic partners like Nestle. In the U.S., our strategic partnership with Designs for Health, a premium dietary supplement supplier in the healthcare practitioner channel, is off to a strong start. And they will offer specially formulated products with Niagen exclusively to these HCPs. As I said last quarter, designs for health will complement our internal sales team and help us leverage the tremendous body of preclinical and clinical research on this amazing ingredient. And as many of you know, another U.S. partner, Rho, launched Roman Life and True Niogen in late 2021. We're engaged in discussions with their marketing team to share insights on how best to articulate the benefits of this incredible ingredient to our respective consumers. All of our new partnerships are in various stages of product development, but we expect them to contribute to increase sales in 2022. As I look at the biz dev team and the pipeline, I'm excited about the recent energy and initiative to grow the B2B side of our business. In particular, there's a renewed focus on building relationships with professional sports teams and athletes, as well as ongoing focus on healthcare practitioners. two key influencer groups that are important to our long-term strategy. The changes we are making internally are not designed to deliver short-term growth, perhaps, but I believe they position us very well for an inflection in growth long-term. As I think about how far the company has come and where it is headed, I am very proud of our execution and more confident than ever about the market opportunity for True Niogen. Before I hand the mic over to Frank to talk about the scientific developments. I just want to make one quick comment about the macroeconomic environment in which we live. Chromadex has shown in the past an ability to control costs and show financial discipline. We've been cash flow break-even without legal for several quarters in the past. Our existing customer base is extremely loyal. Our retention rates are very, very high. People who take TruNiogen continue to take TruNiogen. If you take it for two to three months, you understand the benefits are there. Should the company need to put more focus and attention into the bottom line, we feel that we have shown that we can do that and we will do that, and we feel that the customers that we have established will be there with us. Now I'd like to pass the call to Frank Jacks, our chairman and co-founder, to share more about the promising research on Niagen.