Welcome to the Biofrontera Inc. Third Quarter 2024 Financial Results and Business Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Andrew Barwicki with Barwicki Investor Relations. Please go ahead.

Good morning, and welcome to Biofrontera Inc.'s third quarter 2024 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 is accurate only as of the date of this live broadcast, November 14, 2024. Biofrontera undertakes no obligations 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 today's press release. More specifically, management will be referencing 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 nonrecurring or noncash items. With that said, I would like to turn the call over to Hermann Luebbert, CEO, Chairman and Founder of Biofrontera. Hermann?

Yes. Thank you, Andrew, and my thanks to everyone joining us this morning. On today's call, I'll provide an overview of our accomplishments during the third quarter and first nine months of 2024. Fred Leffler, our CFO, will follow with a discussion on financial results. Both of us will be happy to answer questions after our prepared remarks. Let me start by highlighting the tremendous progress we made in previous months. First, comparing the first nine months of 2024 with 2023, the total number of Ameluz tubes ordered by our customers has slightly increased while we significantly reduced costs. Second, we improved our FDA label, adding value to our product. Third, we got outstanding clinical results for a new indication. Four, we launched our RhodoLED XL lamp. And finally, fifth, we transferred all clinical trial activities on Ameluz to Biofrontera Inc. About the first point of increasing revenue and reducing cost. Revenues in the third quarter increased by 1.5% to $9 million. Furthermore, delivery of 4,640 tubes of Ameluz, valued at $1.5 million, was delayed to October due to Hurricane Milton. Without this delay, our Q3 growth had been 19% compared to the previous year. All the delayed product was shipped to customers early in October and will be recognized as sales in the current quarter. For the first nine months, our sales grew by $1.3 million to $24.8 million, an increase of 5.6%. Without the impact of Hurricane Milton on delivery of Ameluz, the growth would have been 12%. While growing our business, we strongly controlled our cost and were able to reduce our SG&A expenses by 14% in the first nine months of the year compared to last year. About the second point, the improvement of our FDA label. FDA decided on October 4 to approve the use…

Thank you, Hermann, and it's great to be talking with everyone again. I will start with our third quarter 2024 results. Total revenues for the third quarter of 2024 were $9.0 million compared with $8.9 million for the third quarter of 2023. This increase was driven by a $600,000 increase from sales of devices, specifically the RhodoLED XL lamp since its launch in June of 2024. This was offset by a net decrease in the sales of Ameluz of $0.5 million. The decrease of Ameluz sales in units was impacted by the delayed shipping of 4,640 units at the end of September 2024 due to Hurricane Milton forcing office closures and shipping delays throughout the Southeast. Had the orders been delivered in the third quarter, revenues would have been about $10.5 million or growth of about 19% quarter-over-quarter. Total operating expenses were $14 million for the third quarter of 2024 compared with $13.5 million for the third quarter of 2023. Cost of revenues were $4.9 million for the third quarter of 2024 compared with $4.6 million for the prior year quarter. This was driven by an increase of $0.5 million due to the increase in RhodoLED product revenue, partially offset by a decrease of $0.2 million due to the weather-related delays in the sales of Ameluz, which I just mentioned earlier. We will see the impact of both the revenue and the associated cost of goods for these delayed shipments in the fourth quarter. Selling, general and administrative expenses were $8.4 million for the third quarter of 2024 compared with $8.6 million for the third quarter of 2023. The decrease was primarily driven by about a $0.5 million decrease in general business administration expenses as well as a decrease of nonpersonnel sales and marketing expenses of about $0.2 million and…

[Operator Instructions] The first question comes from Jonathan Aschoff with ROTH Capital. Please go ahead.

Thank you. Good morning, guys. I was curious at first, when will the cost of revenue start to better reflect the 25% that you said is valid through next year rather than more closely reflect the older 50% that we still see?

Jonathan, Fred here. We expect that -- to see that impact in the fourth quarter. We needed to go through our older inventory first.

Okay. Do you still expect to be cash flow breakeven by the end of next year and to still grow revenue this year 20% over 2023?

We expect to be in -- yes, have revenue growth similar to prior years this year, so mid- to high teens. And then cash flow breakeven, we'll -- we expect that towards the end of 2025 into 2026.

Okay. That's totally helpful. Were the orders that -- actually with the shipments that fell into October, did you stick them with the October 1 price hike? Or did you grandfathered in the older price?

We grandfathered in the older price. All the orders were placed in Q3. It was just that whether it was office closures in Florida, Georgia, et cetera, or FedEx having delayed, they just got there, and therefore, just RevRec'd in Q4. But we -- all the orders were placed in Q3 and had the price -- pre-price increase as of October 1.

Okay. Lastly, can I just have the enrollment numbers for the acne and the peripheral AK trials?

Yes. So the enrollment for the peripheral AK is now 130 or 165 patients. And the enrollment of the acne study is 106 of 126.

Thank you very much, Hermann. That's all from me.

Thank you, Jonathan.

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

Hi. Good morning. Congratulations on all of the progress. Two questions around the fourth quarter. So traditionally, with revenue forecasting after a price increase, it's a little bit difficult to know what the drop-off might be. So I'm curious to know, given the dynamics with the delayed order and everything, how you see the fourth quarter developing in terms of revenue after the price increase? And also, can you tell us -- remind us what the price increase amount was?

Sure. So the price increase was 5%, similar to what we did in 2023. We expect -- like I mentioned just a moment ago, we expect growth to be in line with prior years, not high teens. So we expect to have a very strong Q4. Traditionally, Q4 is typically our strongest quarter as its "PDT season." Hermann, if you want to layer anything on there, I'll pause.

Yes. You know that Q4 is always the strongest quarter. And the question is, of course, how much has been pulled into Q3 because of the price increase. We did the same kind of price increase also for the same 5% last year. So we can use that year as something to orient ourselves. And in spite of the price increase in Q3 and higher sales in Q3, Q4 was still, with quite some distance, the strongest quarter. So the factors that are actually important for Q4, and those factors are probably that doctors tend to do more PDT during the winter so that they order more -- they use and order more in Q4, but also there may be tax reasons why they tend to order before the end of the year. So those reasons still -- are still the same in spite of the price increase. So even with the price increase, we expect a very strong Q4. And on top of that, we have the 4,000-plus tubes that add to the normal development and come on top.

Okay. And then one other element to the fourth quarter is the new 3-tube approval. So I'm kind of curious to know if you've seen any customer response yet to the new labeling, and if that's had any impact on the orders?

Well, we have not so far because we didn't want to, and we actively prevented it. The reason is that having the three tubes in the label doesn't automatically mean that the doctors also get reimbursed. And we wanted to avoid a situation where a doctor believes that because of the label change, he can now do it and then he doesn't get paid. And so before we wanted to go ahead with this, we had to remove the so-called MUE at CMS. Now, this has happened, so there is no MUE anymore on Ameluz so that from now on, and all the insurance companies, also the private payers have been notified that they should change their systems. So we believe that starting next week, we can actually actively promote the possibility of using three tubes. And then in December, we hopefully see the uptake based on this.

Okay, great. That's it for me. Thank you for taking my questions.

Thank you.

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Yes. Well, thank you, operator. So as you heard, the third quarter and the first nine months of this year have been very positive with the significant increase in Ameluz tubes ordered even if a few thousand couldn't be delivered due to the hurricane. And taking into account the FDA approval and outstanding clinical results, we are very optimistic about the future of Biofrontera. I would like to thank everyone for participating in this call, and we look forward to speaking with you again when we report our fourth quarter 2024 results. Thank you, and have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.