Ladies and gentlemen, thank you for standing by and welcome to the ChromaDex Corporation’s Second Quarter 2016 Earnings Conference Call. My name is Vinct 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 second quarter 2016 and filed our Form 10-Q. If you have not reviewed this information, both are available within the investor relations section of ChromaDex’s website at www.chromadex.com and the Form 10-Q is also available on the SEC’s website. I would now like to turn the conference call over to Andrew Johnson, Director of Investor Relations. Please go ahead.

Thank you Vinct and good afternoon and welcome to ChromaDex Corporation Second Quarter 2016 Results Conference Call. With us today are ChromaDex’s Founder and Chief Executive Officer, Frank Jaksch and Chief Financial Officer, Tom Varvaro. Today’s conference call may include forward-looking statements including statements related to ChromaDex’s search and development and clinical trial plan, future financial results, business development opportunities, future cash needs, ChromaDex’s operating performance in the future, future investment interest and analyst coverage of ChromaDex, the market ChromaDex’s products will address and the expected revenue growth of ChromaDex products that are subject to risk and uncertainties relating to ChromaDex’s future business prospectus 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 annual report on Form 10-K and quarterly report on Form 10-Q most recently filed with the SEC. 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 release, which was issued this afternoon and is available on the company’s website, presents reconciliations to appropriate GAAP measure and explains why the company believes such non-GAAP financial measures are useful to investors. 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 over the call over Frank Jaksch and Tom.

Thank you, Andrew. Despite the challenges we had dealing with the shorter check in June, I am very happy to report another record quarter in Q2 which was a substantial improvement over what was a great result in Q1. Non-engine [ph] continues to be the star performer and we’re still in the early stages of developing and commercializing this game changing ingredient technology. Now before I get into the highlights of the business and our summary of Q2 in 2016, I would like to turn over the call the Tom, so he can provide you with details on our second quarter 2016 financial results. Tom?

Thank you, Frank and good morning everyone. I am very happy to report that for the three months ended July 2, 2016 ChromaDex reported record net sales of $8.8 million an increase of 45% as compared to $6.1 million for the three months ended July 4, 2015. This is also an increase of 20% over the $7.3 million reported for the three months ended April 2, 2016 Q1 2016. The ingredient segment generated record net sales of $6.2 million for Q2 2016 an increase of 83% compared to $3.4 million for Q2 2015. This represents a 35% increase over $4.6 million reported for Q1 2016. The core standards and service segment also posted a 4% growth as it generated net sales of $2.5 million for Q2 2016 compared to $2.4 million for Q2 2015. The scientific and regulatory consultant segment net sales decreased 64% from $318,000 for Q2 2015 to $113,000 for Q2 2016, as this segment put a further emphasis on intercompany work supporting our ingredient segment. Our gross margin for the quarter was 47% versus 40% for Q2 2015. Net loss attributable to common stockholders for Q2 2016 was $83,000 or $0.00 per share as compared to a net loss of 315,000 or $0.01 per share for Q2 2015. EBITDA adjusted for non-cash charges associated with share-based compensation which is a non-GAAP measure for the quarter was $496,000 as compared to 404,000 for Q2 2015. Cash on hand at the end of the quarter was $3.4 million which will provide us with sufficient cash on hand to fund operations through August 2017. I next want to highlight some of the expenses occurred in Q2 that were discussed in a recent quarterly report filed with the SEC on our Form 10-Q. The company incurred $752,000 in research and development expenses for Q2 2016 an increase of 330% compared to $175,000 for Q2 2015 and an increase of 62% as compared to $464,000 for Q1 2016. These charges include human clinical trial fees and new ingredient development costs. As revenue and available financial resources continue to grow, the company plans to continue to increase research and development efforts with a focus on the ingredient segment. For the six-month period ended July 2, 2016 our patent maintenance expenses increased to 343,000 compared to approximately 156,000 for the comparable period in 2015. As we continue to enhance our patent portfolio for ingredient segment, we expect these expenses to continue to increase as well. During Q2, the company also retired the Hercules debt facility which resulted in one time additional non-operating charges of $313,000 related to the difference between the net carrying amount and the payoff amount. With that I will now turn the call back over to Frank so he can provide our Q2 2016 highlights, Frank.

Thanks Tom. As Tom highlighted, we had a very busy and productive quarter and not just with our substantial revenue growth. In Q2, we saw a tremendous amount of significant peer-reviewed published research validating the importance of NAD and the effectiveness of NR. There was also an uptick in media attention to NR mainly related to these important scientific studies. I’m also pleased to report in Q2 2016 that the activity in new business development remains robust as we continue to expect strong revenue growth in 2016. However, before we discuss that I would like to address the recent short attack against ChromaDex. As all of you are probably aware on June 20, Bleecker Street published a misleading factually inaccurate article on Seeking Alpha. This whole short attack was a real what I call an eye-opening experience for me. This is the first attack that we’ve experienced like this since the company became public in 2008. Personally is a large shareholder and also as the CEO of the company I was highly disappointed and I was outraged by the fact that this is even possible for an anonymous party to blatantly publish a false and highly misleading article so short-sellers can profit from the decline in share price. The good news is that we are able to move quickly and the article was removed on June 29 and it was replaced by a message and an apology from the author. For all those, all of you who may not be aware this outcome was a tremendous success for the company as its extremely rare to get a retraction and an apology like we got in this case. We are going to keep a close eye on the current litigation against Bleecker Street and we will continue evaluating our legal options…

Thank you. [Operator Instructions] Our first question is from Ram Selvaraju of Rodman & Renshaw. Your line is open sir.

Can you hear me now? Is this okay, can you hear me?

Yes, I can hear you.

Sorry about that, my apologies. So I have two questions, firstly can you give us some color as to what percentage of the R&D expense associated with the second quarter were directly related to clinical trial expenditures and what specifically those clinical trial activities were. And secondly as a further end to that, do you have a better sense now of what is likely to be clinical development path forward in cockayne syndrome specifically? And just give us a sense of what the discussions may have been with regulators regarding what that clinical developed pathway might look like, how large the trials might be, what the evaluation period with the end point might represent, thank you.

Thanks, so to answer the first question, I don’t have an exact percentage for you in terms of what it represents and what that of the $700,000 plus budget that we had for Q2. Majority of it was most likely related to the clinical trial that we are running currently at KGK. And I would expect moving forward that a big chunk of our R&D budget is going to allocated towards the clinical development path not only on the types of trials in this case the KGK trial which is 140 person double-blind placebo-controlled study is a you know that most of that should be were about just over 50% of the way not only enrolled but are actually about 50% of the way through so the rest of the payments will stage out as we move towards – getting towards the end of that trial so I would expect that there is still additional spend that’s related to that that will budget out as we progress through that trial over the course of 2016. The balance really of the spend was associated with new, what I would call new ingredient development. We have a lot of new technology development related not only to NR but also related to other new ingredient technologies as well

Okay that’s very helpful. And with respect to cockayne syndrome, do you have additional details worth there regarding what the clinical development path could look like and what do you using as evaluatory endpoints?

Sure, right now. We are still going through what I call the IND process with NIH. As a matter of fact we had our guys were at NIH this week working on that. We are trying to get through the rather cumbersome pathway of getting to what will have as a final IND for submission to the FDA and that right now, that’s where a majority of the time is and most of the clinical side of it, it’s going to be a small first trial of well there is two pieces to it one organ have to do a smaller or we will do a small pharmacokinetic study which is really going to be more of a dose rangefinder in the kids in that particular disease and that will be followed by what I call a Phase 2 trial. And the Phase 2 is going to be larger considering that it’s a small population you know we are probably looking at your know 40 to 60 approximately kids all participate in the trial just based on the relative small size of the disease in this case. And the primary endpoint right now we are trying to focus on what I will call more measurable endpoints in areas where we know that there is already some good supporting data on nicotinamide riboside and its effect as an NAD precursor and that I would say is going to be focusing on hearing loss and measuring impact on hearing loss which is a measurable endpoints, that’s a – also a good proxy for the effect that is going to have in the cognitive area, two of the main problems with cockayne kids is that they showed neurogenic degenerative type symptoms at a very early age and they start showing symptoms of hearing loss at a very early age and we been given guidance that that’s probably one of the more measurable routes to go to demonstrate some benefits. So there’s probably more to it and that sets us a quick summary for you.

Okay thank you. And then two very quick minor items. Can you comment on the mix of customer, how many customers there were, what the percentage breakdown was specifically in the ingredient segment and then give us a sense of what contribution do you expect from non-cash compensation going forward relative to the difference between adjusted and GAAP?

What I will do is Tom should be on the phone and I will hand that question over to Tom real quick if he can handle that? Tom you on?

Yes, I am. From a customer taken in two parts Ram, from a customer standpoint, you know on the ingredient side, you know we have a variety of customers and you know our sales and marketing team right now is continually ramping on new customers. And we expect to as we continue to penetrate the market throughout the end of 2016 and 2017 for the number of those customers to grow. So we can’t comment on the number of customers or where the concentrations are but suffice it to say that you know our – we have more than five or six large customers and we expect that number to continue to grow in the ingredient side. From a difference between the EBITDAS number and net loss, net income number as far as the difference going forward, again we haven’t given any guidance on that. But historically, you can go and look at where our expenses have been? We expect the 2016 and 2017 to be in line with our historical.

Okay, thank you, very helpful. I will jump back in the queue, thanks.

Thank you. Our next question is from Chris Dado [ph] of JPMorgan. Your line is open.

Yes, I had a question in reference to the $5.25 million registered directed offering that took place on June 6 of this year, you referenced in the press release that one existing shareholder had purchased $5.25 million of the company’s common stock and you know I know that the Seeking Alpha article has since been retracted but what’s that one particular investor Barry Honig and does ChromaDex have investments or other dealings with Barry Honig?

Well I mean, I will answer it. Barry Honig is still an active investor of the company. He has been actively involved as an investor since they did a – there was a deal that was done with a group of investors back in 2010. So the answer is yes, he is still actively involved only as an equity holder. He is an investor and a long-term holder of ChromaDex stock and we expect him to continue to be a long-term holder of the stock because I hope he believes in where we are going with it. But he dropped off the board more than a year and a half ago and has not been actively involved outside of the fact that he’s a shareholder.

But he was not the individual shareholder that purchased the stock on that in that one transaction?

We haven’t disclosed the investor that was involved in that, that single transaction that we did back in June.

Okay thank you.

Thank you, our next question is from Michael Kay of Kay Associates. Your line is open.

Hello, thank you very much. Prior to all of the good news about NR, there was a lot of you know studies and good news about pterostilbene and you hardly mentioned it in the – in your report. I was wondering and I have been seeing more and more studies coming out about the efficacy of Blueberry, Blueberry powder for increased cognitive function. So I am wondering could you comment upon the sales of pterostilbene and do you think that pterostilbene resveratrol and NR if they were put together in a formula, you get a positive synergistic effect that you wouldn’t get if you just had one of the ingredients separately?

Well it’s hard to say synergistic effects from combinations of ingredients is definitely something that we have – we definitely support and definitely have seen through things, through data but and there are actually some clinical trials going on with combinations of ingredients, there’s a clinical trial ongoing right now with the combination of nicotinamide riboside pterostilbene as an example. So the answer is yes, we do look at that and we are actually now looking at combinations of all of our ingredients including nicotinamide riboside obviously being the primary one to look at ways of combining with some something that would potentially modulate or improve the benefit by using and combination with something else which which is largely the importance of that is for the dietary supplement market because dietary supplement market in general like to use combinations of ingredients in some cases rather than just single stand-alone ingredient and of course there is the ability for additional intellectual property that can come from the combination of various ingredients in some cases as well. So we are going to continue to look at that not only in light of just nicotinamide riboside, other NAD precursors we are looking at and also other new ingredients where we think that there is going to be potentially significant benefits through that combinatorial effect through those, so I mean that’s a very valid point.

And also does the company, do you have other products I once read on your PowerPoint slides a type of curcumin which has advantages in terms of bioavailability regarding other brands and also some type of rights you know, could you give update on those other product?

Sure. Well on the curcumin, we haven’t really done much with the curcumin especially since NR has taken off. We did have a high purity version of curcumin basically a synthetic version of curcumin that was high purity and essentially that that curcumin offers significant advantages over what I’ll call just regular turmeric extract curcumin. However the problem there is it’s kind of a saturated market, there’s a lot of competition and space and quite frankly our efforts were better from our R&D and the developmental standpoint, we are better focused on other areas where we have better sort of control in this NR. So you know that’s essentially what we will just focus more on stuff like NR in developments where we can get more benefit out of but anthoorigin [ph] is the latest ingredient that were and that’s our anthocyanin related ingredient that’s based on purple corn and we are still in the early stages of rollout of anthoorigin and the anthoorigin anthocyanin we got from purple corn is going to be a pretty big focus for us, as we continue to scale up the compound. Right now, I mean it’s primarily most of our revenue on that is coming from really just a single customer who takes everything that we have. So we’ve been out there really talking about that very much but we plan on doing that as we expand with that brand, so.

Is there research indicating some benefits of this purple corn that the other substances don’t have?

Well the advantage of purple corn is that it’s a more cost-effective way of delivering an anthocyanin. The traditional anthocyanin sources are typically berries, berry biomass, blueberries or cranberry or grape or these other. Those are not what I will call exactly inexpensive fruit biomass. And so I mean we are trying, this is what I would call the start of an anthocyanin program for us and we do, we are working on other new technologies in the anthocyanin space. We are huge a believer and the anthocyanin is an under tapped and underserved market right now. And that’s largely because of cost issues associated with the production of high purity anthocyanins and that’s an area that we think can be leveraged. I mean, if you take a parallel market, the carotenoid market, beta-carotene, lycopene, lutein just to name a few, that’s you know more than $1 billion, $1.5 billion supply market just on the ingredient supply side of things and that’s a plant pigment story as well. And that was an underserved category that got tapped and we believe the anthocyanin one is the next big category because a lot of the health benefits you read about coming from these pigmented fruits is coming from these compounds. And the clinical research without high purity available – the availability of high purity materials is difficult to do clinical research and so that we have to start with that. The same thing with NR, it was difficult to find milligrams of NR until we launched the stuff and then we launched it and then the clinical research and preclinical research of course took off after we did that, and we expect similar things to happen hopefully with anthocyanins, so.

Thank you very much for a very detailed and substantive response to my question.

Thanks for asking. So I can’t see any other calls getting picked up here, so I guess we will close it off. You know thanks everybody for taking the time to participate in our call. We are very pleased with our quarter Q2. We are very pleased with the results that we’ve been seeing not only with the growth of not all of our businesses but especially with nicotinamide riboside and you know again we are still at a very early stages of what we see with NR and the development of NR and I look forward to you know future quarterly calls with everyone.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Everyone have a great day.