believe it can become a meaningful contributor to the business over time as we look beyond 2026 our revenue streams from these core verticals will be the foundation for our continued growth in 2027 and beyond we expect operating expenses to increase as we execute on these strategic priorities selling and marketing expense will reflect our broader brand initiative refresh creative assets, and support for new and developing channels. R&D spending will increase as we advance NB4168 and continue research related to our topical and injectable opportunities. G&A expense is also expected to increase as we build the infrastructure needed to support these programs and our broader market expansion. We will phase these investments thoughtfully, measure their performance, and maintain the financial discipline that has enabled us to generate positive cash flow and preserve balance sheet strength. This year is an important investment year as we allocate resources toward new market verticals, pharmaceutical development, and greater brand awareness. We view 2026 as a springboard for faster growth and value creation, and we believe that we have created a business model set up for greater success. Our core business remains cash generative, giving us the flexibility to invest selectively across the broader NIAGEN platform. We remain confident in our ability to strengthen the brand, advance NIAGEN+, and NB4168, and create long-term value for our customers, partners, and shareholders. Operator, we are now ready to take questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up only. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ram Salvaraju with H.C. Wainwright. Ram, your line is open. Go ahead.

Thanks so much for taking our questions. Firstly, I was wondering if you could provide us with any update on the lawsuit filed against the FDA and when you anticipate any potential further progress on that front and the possibility of some decision in that proceeding. Secondly, I was wondering if you could comment on the outlook for the Asia Pacific business, particularly the partnership with Watson's. And then lastly, with respect to any future initiatives or endeavors in the RX or pharmaceutical space, I wanted to see if you could give us some insight into how many additional novel analogs of nicotinamide riboside you may have in addition to the disclosed one and if you have any pharmaceutical development initiatives intended for these analogs, as well as whether you have any plans to move into other areas of the space in between supplements and wellness products and the Rx space, like for example, wellness peptides. Thank you.

Does that count as one question? Thank you, Ram. Those are good questions and very relevant. Let me address. First of all, with regard to the FDA, the FDA had filed a motion to dismiss several months ago. We replied to that. We expect the judge to rule on that motion to dismiss within the next two, maybe three months. We feel very confident about that and the facts overall in the case. With regard to Asia Pacific and Watsons, also another great and relevant question. Watsons is back and making purchases and they've sold through the excess inventory that they had at the end of last year and looking quite strong. We're very confident with Watsons. We've, as you know, been launching some new SKUs here in the U.S. and Watsons is interested in carrying those as well. Nano clouds, beauty, etc. We also expect to be expanding into to other countries with Watsons. We're hoping to receive regulatory approvals soon in Taiwan and Korea, and we hope to pursue those channels with Watsons. We recently received regulatory approval for skincare product in mainland China, which could be a significant opportunity, and we hope to pursue that with Watsons as well. With regard to the Rx Pharma Analogs, there are actually quite a few, as you know, And we have conducted studies on several of those, and there's reason to believe that they may actually even be more potent than NB4168 and NR chloride in elevating NAD. So we are excited about developing those for potential therapeutic use as well. And we have had discussions with certain larger companies in the pharma space about those other molecules. The space in between dietary supplements and pharmaceuticals for us is what we call Niagen Plus, the IV and the injection business. We are more bullish on that Niagen Plus business today than we have ever been. As you know, Ram, Niagen is significantly superior to NAD. We believe that the NAD IV injection market is about $500 million, probably a bit more, and it's almost all in the United States at this point. This is the market for people who self-inject NAD or who get IVs of NAD either through their physician or at clinics. And we've done head-to-head comparisons. We know Niagen is superior. It takes several hours to get an IV of NAD. It takes minutes to get Niagen. That's because NAD is not bioavailable. people who get the nad ivs it often takes three four hours for them to ingest they have stomach pains they have sweats they have fevers there are side effects that do not exist when you do niagen but perhaps most importantly niagen is far more effective at elevating nad so we see this as a significant opportunity and as you know ron we've spent years developing this business. We got on the category one list of the FDA for compound pharmacy. We've produced pharmaceutical grade Niagen that we make available. And we've developed the commercial infrastructure and supply chain for serving this market. The reason Niagen Plus hasn't yet taken over that $500 million market has related to price. Niagen is more expensive than NAD. And if you go to the clinic and get a niogen IV, it's priced not to meet the average consumer. It really just focuses on the very wealthy or on the extreme biohackers at this point. And as you know, we've discussed this in the past. One of the reasons why we added Olympia as a second compound pharmacy to Wells, who has done very good work with us, was to create a little bit of price compression. We believe that we have solved the pricing problem, but we don't believe it will be solved for the next two or three months. We think that within the next two or three months, we will be able to reduce the price to the clinics and still make it satisfactory for the compound pharmacies and for Niagen and its shareholders to make plenty of profit and bring the price down to the average consumer. So this is one of the reasons that we are expecting the big revenue push in the Niagen Plus category to happen in 2027 and not in the second half of 2026. But we are very excited. In fact, some of these clinics, a couple of these large clinic franchises have contacted us and said, if we could get the price down to a certain level, that they would like to make Niagen the flagship ingredient in the entire chain, not just instead of NAD, but overall as their flagship ingredient. And we've been contacted by several of the larger telehealth companies that are presently selling NAD as an at-home injection product or are contemplating that. So we expect some good things for Niagen Plus next year, and we're developing these things, but we don't expect it to hit its stride in 2026.

That's really helpful. Thank you so much.

Your next question comes from the line of Jeffrey Cohen with Leidenberg Thalman. Jeffrey, your line is open. Please go ahead.

Hi, Rob and Ozan. Thanks for taking the questions. I guess, firstly, Rob, can you talk a little bit more about PRV and a potential priority review for the NB4168? Do you have to request that now or does that request come later and just prior to an NDA or a BLA? When will we hear about or know more about the clarity on that pathway?

Jeff, I'll take that question. So the Priority Review Voucher is a program that's dedicated for rare pediatric diseases and orphan drugs. Once you receive those designations and you receive approval by the FDA for that drug, there's no reason for the company to not receive that voucher. And once a company receives that voucher, it is exchangeable for money. And, you know, the recent transactions we're seeing, it's ranging between $150 to $180 million for that voucher. It essentially is a voucher to incentivize pharma companies to develop drugs for rare diseases and create instant value. And you can recover, you know, your RN costs through that mechanism and make a profit.

Okay, got it. That's helpful. And I guess as a follow-up, could you talk a little bit more about NanoCloud and preparations and work that you'll be doing in the back half this year or prior to more of a full-blown launch into the marketplace?

So as I think you know, Jeff, one of the properties of Niagin, which makes it challenging in certain markets, is that it's highly sensitive to water. so we need we need to solve the problem of putting it in a water-based cream nanoclouds is one solution to that problem where it's essentially pillows the covering of which are made out of hyaluronic acid and we sell them as individual little discs we call them pillows or nanoclouds which when combined with liquid a cream or water can then be applied to the face and is stable. So we developed it as an experiment to see if it worked and if it was stable. And we've done numerous user studies to see if consumers liked it. They do a lot. And then we tested it on the market. We only made 3,000 or 4,000 of these things, but they sold out very quickly. And what else is encouraging is that many of the customers that bought them repeat purchased and asked when it will be back on the market. So we're encouraged by this. Those aren't gigantic numbers, but those are numbers that indicate that there's real demand and real interest. One of the things that we also found interesting about nanoclouds, it was a very high percentage of new-to-brand customers. It wasn't necessarily customers who are already buying True Knives and that bought it. So all of these data points suggest that there's a market here for skincare for us so we're also developing other skincare products under the true niagen brand name that do come in sort of a combined oil-based cream we expect to launch the additional nano clouds that we are making right now in october it might be november depending on when they get delivered and there'll be a marketing campaign associated with that and of course as As you know, the way our business model works, we develop our own consumer brands and our own consumer products, but at the same time, we supply the ingredient to other quality brands. And there are several of the best-known skincare brands globally who have expressed, I would say, very strong interest in including Niagen and some of their well-known brands.

Okay, perfect. Thanks for taking the questions, and congrats on the quarter. Thanks, Jeff.

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

Hi, thanks for taking my question. I guess I just wanted to follow up on the skincare business. I guess, how are you thinking about it longer term? Do you think selling the ingredient to beauty companies, which they sound very interested in, will be bigger than your own products at some point, or, you know, do you think it'll be more balanced? And then I think you had mentioned in the past that you're looking at another topical, I guess, is that still?

Yes. Thank you, Susan. It really is an economic question. At least one, perhaps two of these skincare companies are very, very large companies and have expressed interest in a significant exclusive deal. The economics would have to be very, very significant for us to agree to something like that and of course it would be subject to some studies that we would have to co-conduct and then there's the possibility of co-exclusive we made a deal with them and the only other brand that could exist would be ours so at this point it's too early to say but we think that one way or the other the skin care market looks fairly substantial for us in the long term what was the second question um oh the second question Which was the second product.

Yeah, exactly.

I expect that second product to be launched around April of next year.

Great. That sounds good. And then maybe just another follow-up to, I think you guys had talked about bringing the supplements to retail. Maybe you had moved into a club, I thought. Maybe just wanted to get an update on that. And then on the marketing expense, I guess, Should we think about this as a new, the selling and marketing, a new benchmark going forward, or is it one quarter, or how should we think about that? Thanks.

Well, the first question, we are expanding into certain selected retail outlets. We just went into Sam's Club, I think, a couple of months ago, and several others. We're in GNC, Vitamin Shop, Sam's Club, Sprouts, and we're in discussions with a few other retailers. It was too early for us to say how it's doing at this point. But we are planning a brand campaign with a series of celebrities to support our retail distribution presently. So we expect that to happen toward the end, probably in the fourth quarter.

What was the second part of that question? just on the selling and marketing expense, if we should expect that to kind of that run rate kind of the rest of the year, the 34%.

Well, we're very focused on maintaining a cash flow positive business. You know, we have these verticals that we look at, which all have very, very dramatic, significant upside potential. What we're endeavoring to do here is to minimize the downside and maximize the upside. We think that the pharma space could be very big. We think the Niagen Plus business could be extremely big. And we think the skincare market could be big. But we want to pursue all of these while still being cash flow positive and improving our balance sheet. So the answer to the question is yes, we are going to carefully increase marketing spend, especially as we roll out retail distribution and more global distribution, but always trying to maintain cash flow positive. One other thing I want to point out that might be worth mentioning, which is this core business that we have of TrueNiogen, our dietary supplement business. You know, there was a company that I read today sold called Thorne that sold to P&G for $3.8 billion. You know, one of the things that people like about Thorne is that it's considered a science-based brand. But I think that even if you spoke to the people at Thorne, they would say the most science-based brand is Niagen Bioscience. They've made a habit of endeavoring to poach Niagen Bioscience people. We think that the true Niagen business that we have, which as you know, is really based on very few SKUs and primarily one ingredient, is a very respected brand with very respected, loyal consumers and is very much primed for expansion in that space. If Thorne can do it, we do it better. So we talk a lot about pharma, we talk a lot about Niagen Plus, and we talk about skincare, but the true Niagen Core supplement business is very ripe for expansion and growth. But again, we are always very focused on profitable growth and not just spending too much on marketing at risk of our balance sheet.

Okay, great. That's good to hear. That's all. I'll pass it on to the next person. Thanks for all the details. Good luck.

Thank you, Susan. Thank you.

Your next question comes from the line of Sean McGowan with Roth Capital Partners. Sean, your line is open. Please go ahead.

Thanks. Hi, Rob. Hi, I was on James. So, my question is about how – what can you help us with on framing the spending plans as it relates to exploiting NB4168? You know, I know you've talked about spinoffs or partnerships, but in terms of sitting here now, you know, in the middle of 26, what should we be expecting will be incremental spending related to that effort?

You want to take it? I can take that. Thanks, Sean, for the question. So, with NB4168, we're approaching it the way we approach the rest of the business. We're not going to be spending millions and millions of dollars to bring ourselves to cash flow negative. We are looking to spend not a very significant amount for the rest of the year on efficacy studies and developing this candidate to an IND stage. I expect that we'll have first in human studies done next year. The overall program, if you take it from today to approval, is not so significant like some of the other drug development programs. It's a $30 million spend spread across four years compared to some of the larger trials you may do, which a single trial would cost more than that. This is one of the primary reasons why we selected to approach rare diseases, and specifically ataxia trajectasia. First of all, we understand biology, but secondly, from an economic standpoint, it makes a lot The way we approach spin-outs and partnerships is we continue to have these dialogues, but we feel comfortable developing this molecule to a certain point ourselves we think that we will be able to generate significantly more value for our shareholders you know when we generate a little bit more data okay thank you and if i could follow up with a question on a spending question so you commented on opera on sales and marketing you know being and you talked about this beginning

last year you're going to invest in sales and marketing so no surprise there r d fluctuates you commented on that but is this i mean the gna was actually a little lower than i would have thought is there anything in the quarter that kind of offset normal spending or is this a base from which you know this is kind of a level we should expect to see in the next couple of quarters um yeah what you see is um reasonable for the next few quarters there may be a slight increase.

I mean, we gave guidance in the past that GNA will increase year over year. The GNA expense will still increase, but at a smaller amount. We expect it to increase $2 to $3 million year over year for the full year, not for the second half.

Okay. Thank you very much.

Your next question comes from the line of Bill DeZellum with Titan Capital. Bill, your line is open. Please go ahead.

Thank you. In your opening remarks, You discussed that you have kind of new ingredient partners that you're planning on bringing into the fold over time here. Would you please walk us through where you see those next ingredient partners that you bring on board fitting into the Niagen ecosystem, and whether that be geographic-focused or some target market otherwise focused? Walk us through how you were thinking about that, please.

We are looking at geographic partners, particularly in the EU, and one or two also in Asia. The EU is just waking up to NAD, and we have been having some discussions with potential partners there. You know, the ingredient business is very – we are very careful with the ingredient business. it was very strategic for us to get into that business because we felt that we needed to get the word out that NAD was important, but also that Niagen is the best way to elevate NAD, and we knew that that would be expensive, and we thought that getting the right partners in would help us communicate that message, and it did. But, you know, one or two of those partners became a little larger than we would have expected, so we think a balance would be a little bit healthier for us rather than having one or two that are very large, maybe four or five that are a bit smaller but still even. So we may add one or two more in the U.S. as well.

That's helpful. Thank you, Rob. And then I'd like to switch to China if we could. A couple of different questions there. The first one is relative to cross-border sales activities. Walk through that in a bit more detail than you did in your opening remarks, and then you threw out the nugget of skin care product approval in China and would like more detail on that, please.

Well, you know, when you enter a new country, you have to get the ingredient approved, and then you have to get the product registered. And we've had a challenge in certain countries in Asia getting Niagen as an ingredient approved in certain countries. It has to do with the manufacturing process that we use, and they would want us to replicate many of the studies that we've already done in the U.S. to get that approval. So it's taken so long, and China in particular is difficult. But we were able to get topical approval in China, not dietary supplement approval as the ingredient but the ingredient approved as a topical product in china and we still have to get the product registered of true nitrogen as a topical product and we're also interested in potentially partners for that territory but that is a good milestone for a important milestone for us in the skincare market in china uh in terms of cross-border um do you answer that yeah i can answer that so Bill, thanks for the question.

Last year, China Cross Border is the first year that we started it. We started China Cross Border in Q2 of 2025. This year, I mentioned it in my opening remarks, by May, we have already surpassed the revenue that we had in China Cross Border, and we expect that business to significantly increase. Last year, it was under a million dollars of business in 2025. This year, we expect it to be significantly more.

Okay, thank you. And I assume that this traction that you have gained, you are benefiting from NMN having been banned in China. And if that is the case, is there a general awareness with the Chinese consumer that Niagen is actually a better NAD precursor than NMN?

Well, it is a better precursor than NMN. I don't know if the general public in China is aware of that fact. There was a point in time where the CFDA, the China FDA, did ban NMN. We see it creeping back into the marketplace, so I'm not sure what the current status is. In China, it's very small, but it's still there. But we do think that there's serious demand in mainland China and awareness of True Niagen. I mean, they're aware of the popularity of the product in Hong Kong. So we think that there's a great opportunity. We're seeing the growth there through our cross-border sales of True Niagen into China. we expect to continue to invest in that and develop.

Okay. So the reason I continue to push on this is it is our sense that that market is so large and the supplement market in general is very large in China. And therefore, this could grow very fast and maybe even surpass U.S. actual dollar sales levels given enough time. Is that a fair assessment or are we a little over-exuberant with our perspective?

Well, the population is much larger in China and it's a sophisticated population and they are aware of NAD. At one time, cross-border sales of NAD, we saw a report that showed that they believe, this report believed that cross-border NMN sales was between $500 billion and a billion dollars. I mean, that's a fraction of that today since they were making false claims and the CFA acted upon that. But that's a fairly large market and that's a market we would like to be in. But as I say, for selling in-country, it requires a level of ingredient approval that we have not yet been able to achieve, but we're working on it.

We have reached the end of our Q&A session. I will now turn the call back to Lauren Borzanski for closing remarks.

Thank you, Jillian. There will be a replay of this call beginning at 7.30 p.m. Eastern Time Day. The replay number is 1-833-461-5787, and the replay ID is 879-107-368. Thank you all for joining us today. We look forward to updating you again next quarter.

This concludes today's call. Thank you for attending. You may now disconnect.