Good morning everyone and welcome to the Biofrontera Inc. Second Quarter 2023 Financial Results and Business Update Conference Call. [Operator Instructions] Please also note today’s event is being recorded. And at this time, I would like to turn the floor over to Tirth Patel with LHA Investor Relations. Please go ahead.

Good morning and welcome to Biofrontera Inc.’s second quarter 2023 financial results and business update conference call. Please note that certain information discussed during today’s call by management is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that Biofrontera’s management will be making forward-looking statements and that actual results may differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company’s business. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera’s press releases and SEC filings. Also, this conference call contains time-sensitive information that’s accurate only as of the date of the live broadcast, August 11, 2023. Biofrontera undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today’s call, there will be references to certain non-GAAP financial measures. Biofrontera believes these measures provide useful information for investors yet should not be considered as a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in this morning’s press release. More specifically, management will be referring to adjusted EBITDA, a non-GAAP financial measure defined as net income or loss excluding interest income and expense, income taxes, depreciation and amortization and certain other non-recurring or non-cash items. With that, I would now like to turn the call over to Hermann Luebbert, CEO, Chairman and Founder of Biofrontera. Hermann?

Yes, thank you, Tirth. And my thanks to everyone joining us this morning. On today's call I'll provide an overview of our growth strategy and our accomplishments during the second quarter that helps lay the groundwork for many value-driving initiatives. Fred Leffler, our CFO, will follow with a discussion on financial results, and then both of us will be available to answer questions. Starting with the business update, we have made tremendous progress across three critical areas, including expanding our sales force, optimizing our cost structure, and advancing R&D and clinical initiatives. Regarding sales, I would like to commend the team as we announced net revenue of $5.8 million, a 31% increase for the quarter year-over-year. While Ameluz makes up the vast majority of the revenue, we are proud to also share that 55 BF-RhodoLED lamps placed at physician offices during the quarter, more than twice the number a year ago. The growing number of lamps in the field reflects both first-term installations and adding lamps among dermatologists already familiar with Ameluz-PDT. More specifically, of the 55 installations, approximately 20 sites already had one lamp in place and bought a second lamp to provide more Ameluz-PDT to their patients. The remaining about 35 offices are now set up to start Ameluz BF-RhodoLED-PDT. Clearly, lamp placements are a proxy for future growth, and we are delighted with the increasing recognition of Ameluz-PDT as an effective and patient-friendly treatment for actinic keratosis. During last quarter's call, we introduced our strategy for growing the sales team. We had achieved our goal of reaching 40 members. Subsequent to growing the sales force, we have also grown the medical and, with a new focus, reimbursement support. On today's call, I'll share some of the strategic shifts in our approach and how we intend to best…

[Operator Instructions] Our first question today comes from Jonathan Aschoff from ROTH MKM. Please go ahead with your question.

Thank you, guys, and good morning. Sorry if you've mentioned this in the call. I'm juggling three calls myself. Did you update acne and trunk extremity enrollment? Or if you did not, can you repeat it?

We updated enrollment of the trunk and extremities. And that study has enrolled by now 58 patients. We did not update the acne enrollment. I would have to look at that for a few minutes. Maybe if you go on with the questions, I'll…

Yes, Herman, I can buy you that time by asking a financial question. The SG&A how is that going to look to the best that you can -- that you're comfortable giving? That was a decent top second quarter. So, how much of that is one-time stuff?

So, one-time, I don't have that number off of the top of my head, i.e., the severance. But the run rate savings that's excluding the increase in sales force is expected to be about $1.8 million after the -- severance is cleared out and we hire one more physician that we were in the reimbursement area.

Okay. So, it could be a little more than, say, $10 million a quarter. Something like that, maybe.

Maybe a little less than $10 million a quarter.

Okay. All right. Even better. So, do you think the third quarter sequentially goes up, given that there was no 1Q price hike? Do you think that is something that will facilitate a bit more smooth revenue than you've had in prior years?

Yes. We are expecting the third and fourth quarter to be higher.

Okay. Hopefully, the fourth quarter is substantially higher.

Yes.

Because that should be a very strong bit of growth. Herman, if you still want some more time, I can ask…

I can give you the number.

All right. Okay. For acne, what is it?

It's 56 out of 126.

Thank you very much. And the 58 patients of trunk extremities, out of how many wanted?

165.

165. Great. So, my last question is, did you guys lose any of the people you hired when you hired that bolus of sales and marketing people?

We always have -- like every company, we have a certain turnover of people, but not higher than other companies. We are pretty much on the average of companies of all kinds. We did not specifically lose people when we realigned the sales regions, no.

Okay. That's all I have. Thank you very much.

Our next question comes from Bruce Jackson from The Benchmark Company. Please go ahead with your question.

Good morning and thank you for taking my questions. I wanted to get back to the seasonality in sales, just so I understand this correctly. Now with the price increase, you were talking about, is it this year or next year? You're not taking the price increase.

Hi, Bruce. So, we have not taken a price increase since April 1st of 2022, and we are evaluating when we should do that and what that should be.

Okay. And then -- and so, when we're looking at the back half of this year, will it follow that standard pattern where the fourth quarter is the biggest quarter of the year? Because in the past, sometimes, we had the forward buying in anticipation of the price increase in the following year. So, I'm just trying to kind of get my arms around this.

Understood. So, if there is some sort of price increase, we would expect to see significant buy-in, as we mentioned, that happened in the March -- late February, early March of 2022. But typically, business goes up in the third and fourth quarter, naturally, as well. So, like I said, we're evaluating different scenarios as far as the price increase goes. And – but regardless, we expect the third quarter and fourth quarter to have significant growth.

Okay, good. That's helpful. Then, I wanted to just congratulate you on getting the BCC trial enrolled. That's been a major ordeal for you. Nice to have that complete. Can you help me understand how the pieces are going to come together with this approval? You said that the next step is field treatment. With the BCC lesions included, do you -- do you have to get a separate label for that? Or with the data that you have now from this trial, can you immediately go to doing the field therapy with the different lesion types?

We have field therapy with Ameluz in the label already for actinic keratosis. And what it basically means is that we can -- if we have a piece of skin, an area of skin with several actinic keratosis lesions, then we can treat that entire area, but not only the diseased spots. So, we can basically treat healthy skin, assuming that maybe under that healthy skin, there is -- there are other things hiding that are not yet visible. So, that's what we have in the label. And getting BCC approval, what that means is that if one of these areas, which is heavily sun damaged, has multiple AKs and other sun damage, cosmetic sun damage maybe, if that also has superficial BCCs, then they can be treated along with the field treatment that we provide to the patient. So, we do not need field treatment specifically for BCC.

Okay. And then, when we get the three-tube data submitted, then theoretically then sometime -- if that's end of the year then, it's pretty much all systems are go for the field treatment then in 2024 and getting that out to the physicians?

Yes. So, the three-tube is important, has been holding us back since a number of years, the fact that we can only do one tube. And so, this is the final study. If we get that into the label towards the middle of next year, this should be a big jump in end sales actually.

Okay. Great. All right. That's it for me. Thank you.

And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Herman for any closing remarks.

Yes. Thank you all for those questions. And thank you to all the listeners. To summarize, I'm very encouraged by the strong sales growth we have delivered this past quarter and the increase in the number of BF-RhodoLED lamp installations. As mentioned, we remain on track to grow revenues by 25% this year driven primarily by Ameluz sales and the maturing sales force. We look forward to speaking with you again when we report our third quarter 2023 results. Thank you and have a nice day.

Ladies and gentlemen with that we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.