NAGE - NASDAQ

Ladies and gentlemen, thank you for standing by, and welcome to ChromaDex Corporation's Fourth Quarter of 2024 Earnings Conference Call. My name is Phil, and I will be your 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 fourth quarter of 2024. If you have not reviewed this information, both are available within the Investor Relations section of ChromaDex' website at www.chromadex.com. I would now like to turn the conference over to Ben Shamsian, Vice President of Lytham Partners. Please go ahead, Mr. Shamsian.

Thank you. Good afternoon, and welcome to ChromaDex Corporation's fourth quarter of 2024 results conference call. With us today are ChromaDex's Chief Executive Officer, Rob Fried; Chief Financial Officer, Ozan Pamir; and Senior Vice President of Scientific and Regulatory Affairs, Dr. Andrew Shao, 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 filings, the expansion of the sale of Niagen products and ingredients 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 reports and Form 10-K most recently filed with the SEC, including results of operations, financial condition, cash flows, as well as impact of global markets 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 forward-looking statements, actual results or to changes in its expectations. In addition, certain financial information presented in this call reference non-GAAP financial measures. The company's earnings presentation and earnings press release, which were issued this afternoon are available on the company's website, present reconciliations to the appropriate 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.chromadeex.com. With that, it's now my pleasure to turn the call over to our Chief Executive Officer, Rob Fried.

Thank you, Ben, and welcome, everybody. In the fourth quarter, we delivered record revenues of $29.1 million, a 37% increase year-over-year and net income of $7.2 million. For the full year, we delivered net revenues of $99.6 million, a 19% growth year-over-year and net income of $8.6 million. We generated $12.1 million in positive cash flow from operations in 2024, and we ended the year with $44.7 million in cash and no debt. It appears that the world is finally catching on to the importance of NAD and the fact that Niagen is the safest and most effective way to increase NAD levels, particularly in damaged cells. In the fourth quarter, our e-commerce channel experienced robust organic growth with net sales of $17.3 million, a 30% increase year-over-year. Our food grade and pharmaceutical-grade Niagen ingredient business had net sales of $5.3 million, a 96% increase year-over-year. Tru Niagen distribution through our strategic partners, partners like Watsons remained consistently solid. As the demand for NAD boosting products continues to grow, we're seeing a proliferation of companies entering the arena that pursue misleading and dangerous practices. There are companies that knowingly infringe on the hard-earned patents of others. There are companies that make false label claims, companies who sloppy manufacturing processes introduce dangerous endotoxins, companies that claim to be science-based, but have never conducted a single study. We're encouraged to see that Amazon and other marketplaces have taken some steps to police this activity. We do hope to see more. We need to see more action taken by the FDA and the FTC to prevent companies from deceiving consumers. And we'd also like to see the experts who give advice on podcasts and newsletters to be more vigilant in screening brands. We plan to use our position as a leader in the industry to drive awareness to consumer safety and product excellence. To be candid, I personally would not take a supplement that did not say ChromaDex or Niagen on the label. Last August, we launched our Niagen Plus product line and introduced Niagen IV and injections at clinics through a compound pharmacy network. The launch started off very strong with pharmaceutical-grade ingredient quickly selling out. But due to issues in the supply chain, we were delayed 2 to 3 months in pharmaceutical grade availability. We have now since resolved these issues. Today, Niagen IV is available in about 500 clinics nationwide. Niagen IV and Niagen injections are on pace for great growth in the second half of this year. Last year, ChromaDex initiated communication with the FDA as part of the company's effort to pursue an investigational new drug application for the use of NR in the treatment of ataxia telangiectasia, AT. We continue to work with the agency to address its comments and its feedback. With regard to the NO-PARK study for the use of NR in the treatment of Parkinson's disease, the last participant was enrolled last June. So we expect that the study will be completed by June of this year. We will not be able to see results for some time thereafter, but we very much look forward to sharing more updates on this and other pharmaceutical plans in the near future. In the coming weeks, we will be making an announcement that we are changing the company's name to better represent the evolution of the company and the strategic direction of the company. This has been a major undertaking internally, and we're excited to finally share the company name. I believe this past year marks an inflection point for this company and that it is the right time to change our name to better align with our mission. In summary, your company is healthy. Your company is growing, and your company is very well positioned for the future. Let's now turn it over to Ozan. Ozan?

Thank you, Rob. It is a pleasure to speak to our investors, partners and employees who are here with us today. Having joined ChromaDex just a few months ago, I've been deeply impressed by the team's dedication and the clear vision driving this company forward. It's a privilege to be part of a team that is so committed to innovation and excellence. 2024 was a strong year for ChromaDex as the company exceeded all targets on its financial outlook. As Rob mentioned, this past year was pivotal in building momentum for even greater success. In both the fourth quarter and full year of 2024, we delivered outstanding financial performance while advancing key strategic initiatives. Before diving into the details of the quarter, I want to take a moment to highlight our full year performance. For the full year, we delivered total net sales of $99.6 million, a 19% year-over-year increase. Gross margins of 61.8%, reflecting continued operational efficiency. Selling and marketing expenses down approximately 200 basis points as a percentage of net sales, an increase in R&D investments of $1.1 million and a decrease in general and administrative expenses of $6.6 million year-over-year, better than our outlook of down $1.5 million. And we achieved net income of $8.6 million, a sharp turnaround from a net loss of $4.9 million for the fiscal year 2023 and generated $12.1 million in operating cash flows. Our results are a testament to the company's strong financial discipline and focused execution through diligent cost management and strategic resource allocation, we have driven growth, improved profitability and enhanced operational efficiency, all while continuing to invest in innovation and the future of our business. Now let's review the fourth quarter financial performance. ChromaDex achieved total net sales of $29.1 million, up 37% compared to the fourth quarter of 2023. Our Tru Niagen-related sales increased by 29%, driven by a 30% growth in e-commerce and a 26% increase in combined Watsons and other B2B sales. Our total Niagen ingredient sales, including food grade and pharmaceutical grade increased by 96%. Gross margins improved by 150 basis points to 62.5% compared to 61% in the fourth quarter of 2023. This improvement is attributable to changes in our product and business mix, driven by higher e-commerce sales and additional sales of pharmaceutical-grade Niagen to support the Niagen Plus expansion and driven by efficiencies in supply chain due to scale, improvements in operational fixed costs and other savings initiatives. Selling and marketing expense as a percentage of net sales improved 90 basis points to 29.9% compared to 30.8% in the fourth quarter of 2023 as we continue to make measured investments to grow our sales channels efficiently. Research and development expenses were largely stable year-over-year as we steadily advanced development of new NAD precursors. As reported, general and administrative expenses decreased by $4.4 million, driven by a $3.5 million reversal of royalties and fees related to our agreement with Dartmouth. In December 2024, we announced a supplemental agreement with Dartmouth that waived these obligations and a $1.3 million recovery of credit losses following the initial payment from the legal settlement with Elysium, recovering bad debt written off in 2019. The second and final payment is expected in the first quarter of this year. In the fourth quarter of 2024, we delivered operating income of $7.1 million versus a $200,000 operating loss in the fourth quarter of 2023. Total net income in the fourth quarter was $7.2 million or $0.09 earnings per share, a substantial increase from $0.1 million or approximately breakeven earnings per share in the prior year period. Moving to the balance sheet and cash flow. Our balance sheet is stronger than ever. As a result of this year's growth, our balance sheet reflects a higher cash balance of $44.7 million with no debt, lower liabilities and higher equity, reinforcing the financial stability and resilience of our business. For the full year 2024, our net cash provided by operations was $12.1 million, up from $7.1 million in the prior year. The increase was primarily driven by a $13.5 million improvement in net income, partially offset by a $3.5 million reversal of accrued royalties and $2.2 million in lower provisions for credit losses, reflecting the recovery of losses from the legal settlement rather than provisions as in the prior year. Additionally, various changes in working capital contributed to the overall improvement in net cash provided by operations. Finally, I would like to share our 2025 full year outlook. Detailed information on key financial metrics can be found in our earnings press release along with the slide presentation. As it relates to our full year 2025 net sales, we expect to maintain the momentum we built last year, projecting approximately 18% growth year-over-year. This outlook reflects continued expansion in our e-commerce business, growth in established partnerships and further progress in our pharmaceutical-grade ingredient business. We anticipate a modest improvement in gross margins as we continue to execute on supply chain optimizations and ongoing cost-saving initiatives. Selling and marketing expenses are expected to increase year-over-year in absolute dollars, but will remain stable as a percentage of net sales, which was 29.6% in 2024. As Rob mentioned, we will be announcing our company name change in the coming weeks with targeted marketing investments to support the rebrand. At the same time, we will continue investing in resources to drive sales growth while maintaining operational efficiency. R&D expenses are also expected to increase year-over-year in absolute dollars, while remaining stable as a percentage of net sales at 6% as we continue to invest in NAD precursor development to support our innovation pipeline. General and administrative expenses are expected to increase by approximately $5 million to $6 million, primarily due to investments in business growth and the absence of the reversal of royalties and fees related to Dartmouth that I mentioned earlier. In summary, 2024 was a defining year for ChromaDex, driving profitable growth through operational excellence and fiscal discipline. The company's financial position is stronger than it has ever been, and I'm confident that we can continue to carry the momentum into 2025 and beyond. As Rob mentioned earlier, we will soon be changing the name of ChromaDex to better align with the company's mission and strategic direction, and I look forward to joining him and the rest of the leaders here to share the exciting announcement in the coming weeks. Operator, we are now ready to take questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Hello, Robin, Ozan. Thanks for taking our questions. Just a few on our end. Hey, Rob. So firstly, could you talk about the stick packs a little bit, as far as give us a sense of pull-through on Amazon or your website and a sense of what's the milligram size? And any comments as far as pricing?

It's 300 milligrams per stick pack. It also has inulin in it. So it actually has other fiber benefits. We haven't really emphasized the stick pack. It's interesting, it's very rare that people ask us about stick packs, but sales of stick packs have, over the last couple of quarters, begun to increase. So we expect in 2025 to initiate more of a marketing campaign behind it. We've noticed that the consumers for stick packs tend to be younger. And they also tend to be more in the exercise workout cohort group.

Okay. Got it. That's helpful. Ozan, a quick one for you. The 1.3 adjustment on the royalties for the fourth quarter, you expect - you said the second and final in the first quarter, that will also be 1.3 as well.

So just to clarify, that's not a royalty adjustment. That's the Elysium settlement. The royalty adjustment relates to Dartmouth. We reversed $3.5 million in Q4 with regards to Dartmouth. That's not going to reoccur. However, the $1.3 million received from Elysium, the second payment of that is we are expecting by the end of March. That's going to be again 1.3.

Okay. Perfect. That's helpful. Rob, on the NO PARK study, we would - should we expect a readout or some commentary from the company in the third quarter or the fourth quarter?

We really don't know. It's a double-blinded study. We expect them to share it with us, but we don't know for sure that they will once they have the data compiled. So if I gave you a rough estimate, it would probably be end of the third quarter, fourth quarter, beginning of fourth quarter. But that doesn't necessarily mean we'd go public with it. There are factors like they may be submitting for publication and they may feel that it would impact their chances of getting published. So I don't want to really create expectations around when you will hear. The only thing we feel comfortable saying right now is the last participant will be completed in June of this year.

Got it. And then lastly for us, could you talk about the food grade Niagen segment sticking out because it's been extremely strong in the back half of 2024. So anything to call out there? Any sense of how that looks for '25 as a segment?

Yes, we expect it to continue to grow. We've added a couple of other partners. As you know, we're extremely selective about to whom we supply Niagen as an ingredient. There are a handful of very good companies to whom we supply, including Nestlé, H&H, Life Extension, Thalia [ph] We'll add 1 or 2 more. And those companies themselves are growing. We're seeing an increased awareness level of - certainly of NAD, but of Niagen in particular. So we expect the ingredient business, the food-grade ingredient business to grow nicely in 2025.

Perfect. That's it for us. Thanks for taking the questions.

Thanks, Jeff.

Your next question comes from the line of Mitchell Pinheiro with Sturdivant. Please go ahead.

Yeah. Hey. Good afternoon.

Hi, Mitch.

Could you just expand a little bit on the drivers of your strong e-commerce performance in the fourth quarter?

Well, as you know, we've always done extremely well on Amazon. But we've also now seen a nice improvement in our Shopify performance. And you know for several quarters, we've been talking about it as an underperformer. But you can't really flip a switch and improve your website e-commerce performance. It's - it's a function of many variables that take time to add up, SEO, search engine optimization, ads, localizing the ads. So it's a combination of us improving our performance on Shopify, general increased awareness of NAD in general, which is in large part because of the launch of our Niagen IV business and then a tremendous amount of publicity that ChromaDex and Tru Niagen have received over the last several months.

Okay. And then I always ask this, but was the growth driven by strong new customers, recurring? How would you characterize that?

There is a slight increase in recurring customers, but it's mostly new to brand.

Okay. And then obviously, the Niagen IV, the injectables, I'd love to learn a little more about maybe what you learned on your initial ramp, maybe where the pace of clinic additions throughout 2025, perhaps where you would expect to end roughly in the number of clinics? And then - and finally, how confident are you in your supply chain ability to keep up with demand? I know it had a little bit of a slower start. I'm just curious where - are we up to speed? Or are there always going to be risks related to supply chain supply?

I think there will always be risks. But you have to recognize that the pharma grade supply chain is completely different than the food grade supply chain. It's a different group of companies. The process is somewhat different. It's - everything has to be FDA approved and tested and sterilized and retested. So it's a new area for us, and we've now been working on it for actually several years. And we had a couple of hiccups. The hiccups that we had had nothing to do with the quality. We always reach the absolute tip top highest level of purity and quality whenever we do the test. It has to do with things like having the appropriate license to warehouse the product before you ship it to a pharmacy or ship it to a clinic. These are technical things or filling out the right paperwork when you're transferring it from one place to another. And these are the kinds of things that have been a learning experience for us and have been frustrating for us because the demand is there. But we think we've resolved it. And so we expect in the second quarter, certainly by the third quarter that we'll really get back going in terms of sales. I don't think that we will have a problem with supply. Right now, our manufacturing partners, in this case, it's Dr. Reddy's. And we have a nice rhythm going. And of course, we still have the relationship with W.R. Grace, who's also capable of doing pharma grade if needed. We think we smoothed out the difficulties and look at - we've been at it for a couple of years here. And we've ordered an ample amount for certainly for the next year or probably 2 years. So we think we're in pretty good shape in terms of supply. But yes, it's - anything could happen. There could be problems. We try to anticipate as much as we can. We beefed up our staff and internal staff in that area, putting much more focus on it. We expect that to be an important growth area for the company in the coming years.

And what have you learned with the - just as from the clinics, the customers at the IV clinics? And what - any learnings there? I mean, is it an easy switch for people that were doing the NAD+ IV? Are people aware of your new product? Are they selling it in the clinics where you're presently have product? And like I'm just curious what the learnings might be or do you need to step up marketing? If you could talk about that, I'd appreciate it.

That's like a whole smorgasbord of questions loaded into one. I suppose I'll ask one question, Mitch.

Okay.

No, you have learned quite a bit. Yes, it is an easy transfer from NAD IV consumers to Niagen. In fact, I can tell you with confidence that anybody who has experienced NAD IV that then tries Niagen IV is hooked.

Okay.

They're used to taking hours to get the NAD IV ingested and they're used to experiencing these terrible side effects, nausea, sweats. They take Niagen IV, it takes a few minutes with no - none of those side effects and much higher NAD levels. So over the next day or 2, they experience the much greater level of benefits than they might with just pure NAV. There are - we had announced back in November, I think, 300 clinics. I think this morning, we announced that we're up to around 500. Our expectation is we'll be at least double that by the end of the year. There are plenty of clinics that are interested in this. One of the issues is what they call the BUD, the expiration date. And that just takes time to make sure that when the pharmacy ships it to the clinic, that the clinic has enough time to sell it. And that's just time. So I think sometime in the second quarter that there will be ample time for the clinics to sell out. And so right now, they're somewhat reluctant to order. They generally will order once a consumer comes in - a patient comes in and requests it, but they don't want to inventory it because the expiration date is fairly short. But that will correct itself in the next month or 2. And many of them are already quite aggressively marketing it to their consumers. We work with these clinics. Our marketing department coordinates with some of these clinics like Restore is one clinic, one franchisee that has - franchiser that has numerous clinics. We work with them to create some consumer marketing campaigns, and we expect to do more of that coming into the future. You may also have heard many people who have experienced NAD IV just on their own talking about it on podcasts or on social media. There's Whitney Cummings and Kathy Hilton. We've heard them speak about it. There are - there is a fertility clinic, a well-known podcaster has got one called The Egg Whisperer who's written quite a bit about it, saying that her patients have benefited by taking Tru Niagen. So it's sort of picking up a little bit of organic awareness on its own even without us doing much marketing. But yes, we plan to market the Niagen IV and the Niagen shots. In the coming months, we will be able to release an at-home version where people can inject a Niagen shot, a smaller dose of a Niagen shot to themselves subcu at home. And we are very hopeful that, that will hit a nice market. We know that the GLP-1 agonists are doing quite well. We think that most of these people that want to stay thin also want to stay young. So we think that there's space for Niagen IV as well.

All right. Well, thanks for the answers. Much appreciated.

Thank you, Mitch.

Your next question comes from the line of Susan Anderson with Canaccord Genuity. Please go ahead.

Hi. Good afternoon. Alec on for Susan. A question on every day, there's a new headline on tariffs. Any thoughts on how it might potentially impact sourcing or even parts of your international business like Watsons in Hong Kong? And if so, do you have any plans or what actions could you take to mitigate that?

It's possible that tariffs, and I'll let Ozan if you want to answer this as well. It's possible that tariffs will have a small impact on the Watson business and on the food grade - the pharma-grade Niagen business. But we think we're talking about a very small amount, won't have a meaningful impact on our business overall. The bulk of our material, the food-grade Niagen material is made all here in the United States, and the vast majority of our sales are also here in the United States.

And just to add to that. With regards to Canadian tariffs that were just passed today, if you look at the list of products that are - that are having tariffs on from the Canada side, supplements are not part of that list. So we don't expect any impact on our sales to Canada as well.

Got it. And then just a follow-up on innovation. You mentioned the future subcutaneous injection. I guess any other innovations that you're able to talk about plan for the year? Thanks.

We do plan to either introduce 1 or 2 new formulations that are - of supplements that are complementary to Tru Niagen or reformulate a couple of the formulations that we have, such as the Tru Niagen Immune product, and we do have a product that we refer to as Tru Niagen Beauty that we sell in Asia. So we are - and then there was one question about stick pack. So these are 3 other product innovations that we're working on and expect to have some update developments later in the year.

That's very helpful. Best of luck - best of luck to persevere.

Thank you.

Your next question comes from the line of Bill Dezellem with Tieton Capital Management. Please go ahead.

Thank you. Congratulations on a terrific quarter. A group of questions. Let's start with the food grade ingredient, if we could, being up over 60%, along with your e-commerce sales being very strong. Is this just another data point indicating that you're hitting that tipping point with awareness? Or were there some initial orders or non - orders that don't happen every quarter, maybe that just popped into the fourth quarter that led to a larger - that larger 60% plus sort of growth on that line item?

Well, sort of it's more difficult to predict the ingredient business because it's a B2B business. The order comes in, you fill the order. But this has been steadily going on now for several quarters. Our partners to whom we're supplying Niagen are doing quite well, and they extend their forecast for the year are pretty aggressive, too. So we expect this Niagen ingredient business to continue to grow.

Thank you. Then I want to talk a bit about the IV business for a moment. Has the shortage of the IV product accelerated interest at all? And where I'm going with this question is sometimes scarcity is the single best selling point. And have you seen any of that take place?

Initially, we saw a little bit of that of people ordering it and clamoring for it and e-mailing about it and saying they want it and they want it. But the thing is this problem we've experienced has been going on for a few months. So yes, at first, but no after a while. We need to just - what we did. We solved the supply chain problem and get back to marketing and selling a great product.

Great. And as for the supply chain problem, Rob, I apologize. my schedule did not allow me to come to this properly prepared. But what was the impact in the fourth quarter and what you would anticipate in the first quarter from the supply chain issues with the IV?

Well, the pharma ingredient business is part of the overall ingredient business, but we do break it out. And you could see that in the third quarter and the fourth quarter was in the area of about $1 million a quarter, maybe even a little less. Then my expectation is we'll probably be in that neighborhood in the first quarter or two. But then I think starting in the second quarter, maybe as late as the third quarter, you're going to start seeing a more dramatic rise in sales of Niagen - pharma Niagen ingredient to the IV space. So I think that if we're right and that growth happens, let's say, in the third quarter, it's growth that would have been experienced in the first quarter. It was just about a several month delay.

And I did hear you say that, that is now completely behind you at this point.

With the exception of this thing called BOD, the expiration date, which just takes time. It has nothing to do with the supply chain manufacturing process. But we haven't experienced any supply chain issues in several weeks, and we have plenty of material now. So I think it's all behind us.

Great. Thank you and congratulations again on a great quarter.

Thank you, Bill.

Your next question comes from the line of Ram Selvaraju with H.C. Wainwright. Please go ahead.

Thank you so much for taking my questions and congrats on all the progress. Really impressive operational performance.

Thank you.

Firstly, I was wondering if you - thank you. And I was wondering if could comment on potential tailwinds in 2025 from two areas in particular. One is Niagen IV uptake and the other is potential accession of NR adoption to what was previously the segment of the market that was being served by nicotinamide mononucleotide, or NMN.

We still do see some NMN in the market, but much, much less than we did. And as you know, the FDA has been very consistent about upholding its ruling that there's a drug preclusion application in NMN and not a legal dietary supplement that is reserved only for drug use. There is a group that was selling NMN that has funded a lawsuit against the FDA, and the FDA has said that they will issue a final ruling on this in July. But you could see both ChromaDex and the drug company that was the reason for the drug preclusion called Metro Biotech have published statements to the FDA against the claims made by this group. We are confident that the FDA will show the integrity and continue to keep NMN out of the market. We're not seeing NMN as a major force in the marketplace presently. There are, though, as I alluded before, dozens of companies jumping on the NAD bandwagon these days. Some are just blatantly infringing on patents, blatantly missing label claims and just selling the ingredient. There are companies out of Asia that claim to be selling some NAD precursor of some sort at cheap prices. So we are - and we're seeing some really egregious fraudulent acts in the marketplace of people trying to get a piece of what is really an exciting and growing market. That's an issue for us. And we're working very hard to identify these bad actors and notifying companies inside the industry, regulatory authorities and the retailers like Amazon to limit that. And some of them are taking action. We'd love to see TikTok shop pay attention to this. There are many of these infringers and fraudulent players selling on TikTok Shop. TikTok Shop doesn't seem to care. I would think that they would, given the state of their company right now and the scrutiny they're getting from the government. And anybody who's listening to this call who feels like writing a letter or an e-mail to TikTok app informing them that they are not policing and they are creating real risk to consumers in America for allowing these fraudulent companies to sell their products on TikTok Shop, that would be one way that you guys could help your company. But NMN isn't a big deal of these others. There's another thing we're seeing is a lot of companies selling "NAD. Yeah, NAD itself, the molecule NAD is not bioavailable. So there are exactly zero studies that show that swallowing NAD increases NAD levels. It doesn't. It's just simply too large a molecule and has a similar problem to NMN and that it's a nucleotide, meaning there's a phosphate group on the perimeter, blocking entry into the cell. So people who are hearing about NAD going out and buying a supplement that says NAD, it's not even just that you're taking a product that doesn't do anything, you probably are doing some harm. Why do I say that? Well, these people who get NAD IV and it takes 3 hours and they have these cramps and stomach eggs and sweats and fevers, there's a reason why. Because NAD endeavoring to get into the cell creates friction. It creates this friction that leads to inflammation. Taking NAD, the one study we did where we compared NAD IV to Niagen IV showed all the biomarkers of inflammation in NAD. So it not only doesn't do much, it also creates inflammation. But that doesn't stop dozens of companies from jumping on the NAD bandwagon and selling NAD. The fact of the matter is there's really only one good, safe, trustworthy company in the NAD space that does the studies, that meets label claims, that has a top-shelf quality department, that gets regulatory approvals, that gets intellectual property and that you can trust and it's a company. And to the extent that you guys can help us spread that word, I think you'd be very helpful to the general consumer base that's now growing - of growing interest in the NAD space.

Thank you very much for that. Just two related things, if I may. Firstly, I was wondering if you could comment on the potential market opportunity, the size of the total addressable market and what you expect to be possible upside scenarios if the Parkinson's disease study that's currently ongoing were to report positive data and what implications that might have for ChromaDex. And also, if you could maybe talk about future potential avenues to positioning NR as an Rx product, if that might include a possible spinout, a pharmaceutical initiative of some kind or indeed a broader corporate rebranding? Thank you.

Yes. Well, as you know, we are planning to do a corporate rebrand, and we expect in the next few weeks to announce the new name. Stay tuned for that. And thank you for asking about Rx. The Parkinson's study, as we said, will be completed in the protocol in June. We won't know the data for quite a while, but there are 10 million people globally diagnosed with Parkinson's disease. And I ask you this question, Ram, if you were somebody diagnosed with Parkinson's disease or a family or related to somebody with Parkinson's disease, and you read that there was a Phase III clinical study completed from a very reputable Parkinson's researcher and you read it in a very reputable journal, Parkinson's journal or you read it in maybe one of the foundation websites or you read it in the news media of a dietary supplement that had statistically significant therapeutic value for Parkinson's that was completely safe and was on the market. What percentage of those 10 million do you think would go out or whose doctors would recommend them to go out and seek that dietary supplement. Seek the one that actually did the study, seek the one that has the intellectual property, seek the one that is safe and that approved by all of the regulatory bodies. If it was just 5%, you're talking about very, very dramatic significant numbers. You could do the math. I'm sure you have. It's a very significant math. Now that obviously, there's an assumption there that the study is going to come back positive, but we have no knowledge of it. It's a double-blinded study. We don't know the results at all nor are the researchers. But the earlier studies, the Phase I studies that were published and even the preclinical studies and the mechanisms of action suggest that there's a pretty good chance. So we think that, that's one area with great upside potential for Tru Niagen. But as you said, in terms of Rx, in terms of drug approval, as you know, Ram, ChromaDex has a large portfolio of precursors for NAD, not just nicotinamide riboside or nicotinamide riboside chloride. We have other precursors, some of which are bioequivalent or even biosuperior that we think might be better candidates for drug approval. So ChromaDex could conceivably use one of those other molecules that we have many, many years of patents on for actual drug approval separate from sales of dietary supplement for Parkinson's disease or the other diseases. Remember, ataxia telangiectasia, which is another one that we've already published a Phase II clinical on that orphan disease. These are two diseases which are high profile for us. Now - so then you asked the question, will there be a spin-off? So we have said in the past that we don't intend to dilute our investors further by raising money to pursue drug approval. So if it turns out that the capital that we have is insufficient to get there because we didn't get a licensing deal from a pharma company or the cost of the study is too much. If we were in that place, yes, we would do a spinout- and perhaps just simply raise money for the spinout if needed. I don't expect that to happen, but it is a possibility. The other reason for considering the spinout would be that certain pharma companies are not as interested in a supplement business as they are in the pharmaceutical business and are very interested in both ataxia and Parkinson's and our molecule or our molecules for that pursuit. And they might be interested in doing business with us just for those businesses and those molecules. So that's another reason potentially to do a spinout. But I appreciate you bringing it up because between Parkinson's and ataxia and the Rx strategy and the Niagen injection strategy and the Niagen IV strategy as well as just increased awareness and brand awareness for Niagen and Tru Niagen, we think we have several possible shots on goal for this company, ChromaDex to realize its potential, all the while - while we are focused on operating a good, healthy business that's cash flow positive and growth.

Thank you. And your next question comes from the line of Sean McGowan with ROTH Capital. Please go ahead.

Thank you. Hi, guys. A couple of questions. One, Ozan, could you just clarify I think I know the answer, but could you clarify on the G&A expectation for the year? Do you mean $5 million to $6 million higher than the reported GAAP number for full year 2024?

Yes, I do. And let me clarify that. So we reported almost $18.4 million in G&A expenses. That includes the reversal of that $3.5 million of Dartmouth royalties and the receipt of $1.3 million from Elysium. So if you adjust for those for normal operations from that, it would be about $1 million to $2 million increase based on reported numbers, 5 to 6.

Right. It turned out to be a lower full year number for '25 than I had expected. So I'm pleased. On that Elysian - not Elysian, on the Dartmouth royalty thing, is there going to be any effort to get back any prior paid and booked royalties on that? Or is that water of the bridge at this point?

The Dartmouth royalties, all of the previously accrued ones have been reversed, and we're no longer accruing any royalties. So there's really nothing left there.

Right. But those were accrued but unpaid, right, is my understanding. If you go back - I'm talking about back to the point where you were not only accruing them, but you were paying them. You're not going to go back and try to get previously paid.

No, we're not going to go after them for that. No, that's not our goal.

Right. Got it. I just want to be clear on that. In terms of relative margin contribution, I believe we've talked about this before that Niagen IV is higher margin than the overall average. That's right?

Correct.

And is - when the Niagen injectable at-home injectable, would that be comparable to Niagen IV?

It will probably be lower.

Probably lower. Okay. That's helpful. And did you offer any specifics on the timing of when that home injection kit would be available?

We didn't, but we're circling third quarter.

Okay. Very helpful. And last question. Can you comment on the frequency of people doing Niagen IV? Like what portion of them are coming back? Are they coming back once a month? Or any kind of update on that would be helpful.

So we were able to make a small amount of pharma-grade material for Niagen, and we went out into the marketplace in September, and we sold really well for the first 2.5 months, but then we ran out of material. So we really don't know about repeat users because we didn't have material to supply to the clinics. So we really can't answer that question right now.

Okay. All right. Fair enough. All right. That's it for me. Talk to you guys later. Thanks.

Thanks.

Your next question comes from the line of J.P. Mark with Farmhouse Equity Research. Please go ahead.

Hi, Robin, Ozan. Thanks very much for taking my question. And congratulations on a great quarter.

Thank you.

So quickly, I'm wondering about the possibility of a partnership with a clinical lab for NAD+ testing. And my thought was that maybe there's no financial - necessarily financial benefit or upside. But if you had more data from lots and lots of patients who were taking NAD+ or doing infusions, would that be helpful? Have you looked into partnerships with clinical labs for doing blood testing and checking that sort of thing? Is that something on your agenda or not?

Are you talking about NAD or are you talking about Niagen?

Well, I guess the NAD+ products, so NAD+ levels?

It's very important for people to understand that NAD itself is not bioavailable. So these people that are - I'm sorry, go ahead.

Go ahead. No, please.

Yeah. So people who are getting NAD IV or even taking NAD, there is an increase - a small increase in their NAD levels, but the reason for that is because the NAD molecule is breaking down in the bloodstream into smaller molecules. And one of the smaller molecules it breaks down into is NR. And then the NR will be - a small amount of NR will then get taken up into the cell. But they have to go through quite a process to get it there, which creates a lot of agony and inflammation and other issues. The other issue about - you see a lot of companies emerging talking about NAD levels in the blood. And we do, in fact, have a kit that we sell to some people who are constantly asking what my NAD levels. The problem with measuring your NAD levels in the blood is it really isn't a great indicator of much. You really want to measure your NAD levels in the cells, in the tissue cells. But even then, you really want to measure them in the damaged tissue cells, which is very difficult to do in humans. It's kind of easy to do in rats and mice. But unless you're going to do a biopsy, it's quite difficult to do in a human. You can do it in the brain with an MRI. You can measure NAD levels in the brain with MRIs, and we've done that. And it's one of the reasons we're so aggressive with these neurodegenerative diseases like ataxia and Parkinson's and Alzheimer's because they're all neurodegenerative diseases, and we can measure NAD levels, as well as the therapeutic benefits of taking Tru Niagen. So we could conceivably partner with some of these clinics that are out there in the NAD business or selling NAD or doing NAD IV. But we're not very confident in the quality of the data that it would deliver. So it might be more of a marketing exercise than a science exercise. Andrew, is there anything you want to add to that?

I think you covered it, Rob. Yeah, you covered it, yeah.

Okay, great. Thanks.

Just to see if I can summarize. So if you actually had an MRI, that could actually give you some useful information then. And that's obviously going to be super expensive. But is there a point in doing that for people who are really, really interested in knowing?

Andrew, do you want to take that?

Well, I think one of the challenges there is the availability of that technology. So it's noninvasive. But today, it's quite expensive to do that. So it would be the availability and the affordability. But certainly would be preferred from an invasiveness standpoint because it doesn't require a biopsy.

Right. So if someone has a real keen interest and money is not an object here, right? That's an avenue that they could theoretically pursue. Is that right?

Yes. Yeah. The group in Norway that Rob referred to earlier that's doing the Parkinson's disease research has routinely implemented this technology in measuring brain NAD levels. I don't know that it's a good large portion of the NO PARK study, but they have done it in smaller studies, and they continue to implement it in smaller studies.

Right. So I wasn't thinking about like research or clinical settings. I'm talking about individuals who - and as Rob alluded to, there are people who are really keen to know their levels, right? So in theory, if you have the money and you want to do this, you can do it and there might be some benefit, obviously, to getting the data from ChromaDex's point of view that you can actually prove things or show things or market things or whatever. Is that right? Or am I missing the boat?

No, I guess that's theoretically an idea. It's expensive, but there are people out there that are so committed to anti-aging research and their body that they might actually do that. So let's - we'll think about that.

Okay. Great. Thank you so much. I appreciate you taking my long winded call here.

Thanks for the questions.

And that concludes our question-and-answer session. I will now turn the conference back over to Ben Shamsian for closing remarks.

Thank you, operator. There will be a replay of this call beginning at 7:30 p.m. Eastern Time today. The replay number is 1 (800) 770-2030, and the replay ID is 858-4242. Thank you, everyone, for joining us today and for your continued support of ChromaDex.

And this concludes today's conference call. You may now disconnect.