Niagen Bioscience, Inc.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chromadex Corporation third quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. We ask that you please limit yourself to one question and one follow-up. I would now like to turn the conference over to Kendall Knish, Head of Public Relations and Partnerships. Please go ahead.

Thank you. Good afternoon, and welcome to Chromadex Corporation's third quarter 2023 results investor call. With us today are Chromadex's Chief Executive Officer, Rob Freed, Chief Financial Officer, Brianna Gerber, and Senior Vice President of Scientific and Regulatory Affairs, Dr. Andrew Hsiao, who will join the call for Q&A. 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 filing, the expansion of the sale of TruNiagen in new markets, business development opportunities, future financial results, cash needs, operating performance, investor interests, 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 results of operations, financial condition, cash flows, as well as global market and economic conditions on our business. 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 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 reconciliation 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 is now my pleasure to turn the call over to our Chief Executive Officer, Rob Freed.

Thanks, Kendall. Good afternoon, everyone, and thank you for joining us on today's investor call. For the third quarter, we delivered another solid quarter with $19.5 million in revenue, a 14% increase year over year. coupled with another quarter of positive adjusted EBITDA of $500,000 and net positive operating cash flow of $400,000. Year-to-date revenues are up 22% and we have generated 6.5 million of positive cash flow from operations. We ended the third quarter with 26.8 million in cash and no debt. These continued achievements are a testament to our commitment in maintaining fiscal discipline and in driving profitable growth for the business. The e-commerce business continues to be our largest and most consistent source of revenue. E-commerce net revenue is up 13% year over year as our marketing team continues to focus on initiatives and campaigns that drive direct and efficient returns. For the total company, sales and marketing expense was 31% of net revenues, which was down sequentially and a significant reduction from 34.4% in the prior year quarter. We recognize that building a strong subscription base on our own website is critical to driving long-term customer value, and we have identified important fundamental changes to rebuild this growth engine for the business. To deliver on this key objective for 2024, We will look to increase resources to optimize our retention strategy, our content, and our social media presence beginning in the fourth quarter. We will also look to increase resources to support the launch of new innovations in 2024. Of course, with any transition, it will take time for the improvements in strategy and execution to be reflected in the net revenues and further efficiencies. We remain committed to being disciplined in our investments And we believe that the resources we are investing in will amplify our message and our vision that Chromadex is the gold standard in the NAD space. And TruNigin continues to be the best NAD product on the market. Turning to our strategic partnerships, Watson's remains a strong contributor to growth with third quarter revenues of $3.1 million, a 19% increase year over year. As I mentioned last quarter, Watson's has been promoting the stacking concept, which involves combining true nitrogen with true nitrogen immune and or true nitrogen beauty. This continues to be an effective message for consumers. We're exploring the opportunity to better implement the stacking concept in other markets to similarly promote the true nitrogen immune product. The partnership with Sinopharm in China remains one of great opportunity and importance. The process to pursue Blue Hat approval continues to take longer than anticipated, but that is not stopping our teams from continuing to work closely with Sinopharm to execute campaigns and initiatives to capture the market opportunity in the country. Encouragingly, last month, TruNiagen was featured as the best NR supplement in 2023, in an article through Health Products Association China. Last quarter, I highlighted our new partnership with iHerb. While the partnership is still in the early stages of growth, we have been pleased with the performance so far. As expected, around 80% of Trunide's in sales through iHerb have been to international consumers. We continue to be optimistic in the partnership with iHerb to drive expanded international presence for TruNiagen and are actively working with them on campaigns to feature our brand more prominently on the platform. With our Niagen ingredient partners, there are two significant milestones I'd like to announce. First, we are partnering with Zesty Paws, the number one selling pet supplement brand in the US, to make Niagen available to benefit the healthy aging for dogs with the launch of the Healthy Aging NAD Plus Precursor. We are proud to partner with Zesty Paws to extend the benefit of Niogen to all members of our families, including our canine companions. As the global authority on NAD and healthy aging research, this is a breakthrough in the company's mission to improve as many lives as possible with the transformative power of Niogen. While we are in the early stages of the first product launch, we look forward to future innovations in the pet supplement space in partnership with Zesty Paws, who placed the second order of Niagen last month. Second, Nestle Health Science launched its Solgar cellular nutrition line of supplements, featuring a multi-ingredient product that incorporates Niagen to support cell energy repair and vitality. The cellular energy product combines Niagen with sources of vitamin C and B to support energy metabolism, immune, heart, and nerve health. It is inspiring and encouraging to continue to work with the passionate teams at Nestle to launch innovative products to optimize cellular health and promote longevity. I look forward to announcing future innovative product launches under the Nestle Health Science portfolio of well-known brands. And finally, we are pleased to announce the launch of our TruNiagen Pro 1000 milligram product line, introducing a clinical strength dose. that empowers consumers to improve their NAD levels in a more efficient and more efficacious way. Among published clinical studies to date, the most extensively researched daily dose of Niagen is 1,000 milligrams, with 2,000 milligrams as the highest dose with established safety. 1,000 milligram dosage has been clinically proven to be safe, elevating NAD levels up to 150% after just two weeks. compared to 40 to 50% improvement in NAD levels with the 300 milligram daily dosage. We're excited to introduce this new addition to our product portfolio, aimed at consumers looking to take aging into their own hands and improve their livelihoods. Chromadex continues to be in its strongest financial position to date, and we're building momentum toward growth opportunities. While certain commercial opportunities are taking more time to unlock, I am impressed with the progress in our innovation pipeline. Brianna will touch on the updated outlook for 2023, but I am increasingly confident that we are setting the stage for further growth opportunities in 2024 and beyond. We are building on our powerful scientific foundation as the world's leading NAD company, maintaining our position as a paragon of scientific integrity. Through the Chromadex External Research Program, or SERP, We continue to foster our relationship of trust and integrity in the scientific community, and we continue to drive scientific innovation. Since our last update, four additional human trials on nicotinamide riboside have been registered, one of which I want to highlight. It aims to explore how NR affects the energy and immune-related features of specific immune cells, myeloid cells, in different populations. Inflammation, or the concept of inflammaging, remains an important area of research on how NR can play an active and beneficial role in reducing inflammation as a healthy aging benefit. In August, the results of a clinical study published in the peer-reviewed journal Cell Reports indicated that NR was successful in reducing inflammation in both healthy subjects and in cells derived from psoriasis patients. This marks a significant achievement in NAD research, as it further validates NR as a proactive safeguard against inflammatory cytokines in healthy individuals and in those with inflammation-related disorders. To further emphasize the magnitude of this study, Helio, a leading medical media company and trusted platform physicians and healthcare professionals, featured the results of the study along with commentary from Dr. Charles Brenner. The results of a clinical study that investigated the safety benefits of long-term NR supplementation in individuals with ataxia, a rare genetic neurodegenerative disorder, were published in October. Previous studies have shown that NAD deficiency plays a role in disease mechanisms underlying DNA repair disorders, such as AT. The results of this clinical study build on those from a previously published short-term trial. and confirmed that long-term supplementation of NR was safe and well-tolerated and improved motor coordination and eye movements in the patients with AT of various ages. CIRP remains committed to conducting research to uncover different ways Niagen can benefit consumers, including therapeutic benefits for consumers coping with different ailments. Today, we have announced two published peer-reviewed clinical studies on Parkinson's disease, by a group of researchers led by Dr. Tzouzoulis, one of our esteemed SERP investigators. A third study of Parkinson's disease by Dr. Tzouzoulis' lab was recently completed. This study investigated the safety of supplementing 3,000 milligrams per day of NR to PD patients, the highest dose studied to date. We eagerly await publication of the study results and are excited to share more. in future updates. At Chromadex, we continue to work with esteemed leaders in the field of aging. Earlier this year, we announced the appointment of leading aging and neurodegenerative disease researcher Dr. Wilhelm Bohr to our scientific advisory board. Dr. Bohr joins a distinguished board, which includes two chemistry Nobel Prize winners and Dr. Roger Kornberg and Professor Sir John Walker. and includes the world's foremost authority on NAD metabolism, Dr. Charles Brenner. In October, the National Academy of Medicine announced that Dr. Rudolph Tanzi, another member of our Scientific Advisory Board, was elected as a member of the Academy, recognizing his contributions as a pioneer and leader in research in Alzheimer's disease. We applaud this achievement as the election to the Academy is recognized as one of the highest honors in the field of health and medicine. We continue to defend our achievements and inventions and to take action to prevent infringement. As mentioned in our prior calls, last year we were granted a series of new critical patents, which in combination with existing IP and patents from W.R. Grace, who has supplied to Chromadex exclusively for the last decade, would protect our NRIP for at least the next decade. Last month, a jury in the U.S. District Court of Delaware decisively found that Elysium Health willfully infringed on WR Grace patents, protecting NR supplied exclusively to Chromadex. Additionally, I'm proud to announce that we have extended our 10-year collaboration with WR Grace to continue delivering the highest quality NAD precursor in the world. Finally, I want to briefly comment on the recent favorable decision to Chromadex in the U.S. District Court of Appeals in New York. The court affirmed that our settlement with Elysium is enforceable. We look forward to collecting the $2.5 million that Elysium owes, plus the terms of the settlement and putting this behind us. At Chromadex, we are all true believers and are extremely passionate about bringing NR to consumers in innovative ways to benefit their lives. Partnership with Zesty Paws, as I mentioned, is a start for our company to extend NR as a benefit beyond human supplementation. We also continue to have untapped potential in NAD precursors beyond NR, which are protected by Cromedex's deep intellectual property portfolio. Some of these novel NAD precursors may have significant prophylactic and therapeutic value in the pharmaceutical space. We will continue to use our position as the global authority in NAD science and as a trusted partner to researchers, regulatory authorities, and world-class business partners to drive innovation and improve as many lives as possible. While certain R&D innovations have been in development for quite some time and may take a little bit longer to commercialize, we are excited as we look to the future. We look forward to sharing more details on future updates. I would now like to turn the call over to Brianna to discuss the quarter's results in more detail, and then on to Q&A and closing remarks. Brianna?