Welcome to the Biofrontera Inc. First Quarter 2023 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 Tirth Patel with LHA Investor Relations. Please go ahead.

Good morning and welcome to Biofrontera Inc.’s first 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, May 12, 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. I would like to turn the call over to Hermann Luebbert, Executive Chairman and Founder of Biofrontera. Hermann?

Yes. Thank you, Tirth and thanks to everyone joining us today. I am here together with our CFO, Fred Leffler. We appreciate your interest in Biofrontera. And before we move on to more details on our sales performance, I would like to inform you that Erica Monaco has resigned from the company as CEO. Erica has been part of Biofrontera’s team for 7 years, starting as Director of Finance and Operations and growing to then a company – the company’s IPO as Chief Financial Officer. Following the IPO, I stepped back from the role of CEO, which I had to go held to become Executive Chairman and Erica led Biofrontera as CEO since. We thank Erica for her great contribution to building this company and wish her all the best in future endeavors. As Executive Chairman, I am taking over the responsibilities of the CEO to ensure we maintain uninterrupted focus on our core business priorities and signal confidence to the stock market. With that, I look forward to reviewing our strong start to the year and our plans going forward. I’m proud of all our teams for supporting sales execution. There are a number of factors that will drive our goals both near and long term. Today, I’ll discuss our progress across several of these areas, including expanding Ameluz use, the growth and maturation of our sales force and Ameluz label expansion studies. Let me begin with first quarter revenues. Total revenues for Q1 2023 were $8.7 million. Our prior year results were boosted by customer buy-in ahead of the publicized April 1, 2022, price increase. We didn’t have such a price increase this year, so we did not experience a similar buy-in effect. As a result, the year-over-year comparison is not a very useful indicator of actual business…

Thank you, Hermann. Total revenues for the first quarter of 2023 were $8.7 million, and this compares with $9.8 million for the first quarter of 2022. As Hermann mentioned, because we did not increase the price of Ameluz on April 1 of this year, we did not benefit from the buy-in effects we experienced last year in 2022. Yes. This 11% year-over-year revenue decline includes record sales volumes for the month of January and February. We routinely analyze various trends in order to provide – in order to get a better understanding of the strength of the underlying business. The key metric we examined is monthly tube volumes. In fact, March of 2023 this year, was the 5 highest volume month ever exceeded only by months that preceded buy-ins ahead of price increases. Our first quarter volume was clearly strong and provides good evidence that we are executing well. We are comfortable with the very positive underlying trends in the business. Total operating expenses were $14.2 million for the first quarter of 2023 compared with $12.9 million for the first quarter of 2022. Cost of revenue was $4.6 million, which was about 11% lower than the prior year due to lower Ameluz revenue driven by the buy- in 2022 ahead of the price increase that’s been previously mentioned. Total selling, general and administrative expenses were $9.8 million in the quarter, up 27% versus first quarter of last year. This increase was primarily driven by increased legal expenses resulting primarily from a legal settlement in the first quarter. Net loss for the first quarter of 2023 was $7.5 million or $0.28 per share compared with a net income of $5.6 million or $0.32 per diluted share for the prior year quarter. Adjusted EBITDA was negative $4.0 million for the quarter compared…

[Operator Instructions] Your first question is coming from Bruce Jackson of Benchmark Company. Bruce, your line is live.

Good morning and thank you for taking my questions. I wanted to talk about the sales cadence. The timing of the price increases has often been kind of a moving target in terms of modeling the revenue and I understand you had some impact this quarter with the timing of last year’s price increase. In terms of future price increases, are you going to like try to time those in like for the same quarter every year, or is this something where it’s going to continue to be a moving target?

Good morning Bruce. We have not yet decided on the next price increase. Obviously, other price increases are going to come. But at this point in time, we cannot answer your question.

Okay. Fair enough. And then in terms of the sales force, you have been expanding the – have plans to expand the sales force. I am just wondering what is your current thinking on the staffing levels with the field sales force? And do you – and are you planning to do any further expansion?

What we have now, as we reported, expanded the sales force to 40 territories in five regions. And every sales force expansion is also, I mean strengthens the sales force, but it’s also a disruption because sales regions have to be realigned, so our new customer relationship has to be built. So, this is not something that you do on a regular basis and frequently. So, for the time being, we have to stabilize all the new customer relationships. And then we can see at what point it makes sense to grow the sales force further, but certainly not in the course of the next year.

Okay. So, no changes to the sales force, and that’s going to be stable. Last question for me, I am sorry if I missed this in the opening comments. With the trial for acting, what’s the current status on the enrollment?

With the – the acne trial is now actually recruiting quite speedily. As you know, it started out a bit slow, which was related to the relationship between clinical diagnosis and the diagnosis that was set with an automated computerized imaging system, which we used to make the diagnosis more objective. And in the beginning, we had quite some discrepancies between the clinical picture and what the computer said, which led to dropouts of patients. Now, this has been fixed, which was a major endeavor and a major step. And since then, the recruitment is actually speeding up greatly so that we are now at a – looking forward to finalize the study at this patient recruitment early next year.

Alright. That’s it for me. Thank you very much.

Thank you, Bruce.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Yes. Thank you for those questions, and thanks again to our listeners. With strong momentum from the first quarter sales volumes, we are focused on commercial and operational execution to hit our full year goals and maintain our path towards being cash flow positive. We look forward to speaking with you again when we report our second quarter 2023 results. Thank you and have a nice day.

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