Good day and welcome to BioFrontera Inc. First Quarter 2026 Financial Result and Business Update Conference Call. All participant line will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would like to turn the conference over to Ben Shamsian, Investor Relations. Please go ahead.

Good morning and welcome to BioFrontera Inc.'s first quarter 2026 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 security 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 BioFanteras press releases and SEC filings, including the company's quarterly report on Form 10-Q for the quarter ended March 31, 2026, and the company's annual report on Form 10-K for the year ended December 31, 2025. Also, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast. 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 the press release issued today and is available on the company's website at www.biofrantera-us.com under the Investor Relations section. Please note, 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 non-recurring or non-cash items, including changes in fair value of warrant liabilities and stock waste compensation. With that said, I would like to now turn the call over to Herman Lubert, CEO, Chairman and Founder of BioFrontera.

Yeah, thank you, Ben, and thank you to everyone joining us this morning. The first quarter of 2026 was strong across our key metrics. we delivered product revenues of 10.1 million dollars an increase of approximately 17 percent compared to 8.6 million dollars in the first quarter of 2025. this marks the first full quarter reflecting our new cost structure following the strategic transaction with biofrontera ag and the results demonstrate that our business model transformation is delivered as planned. These results further demonstrate the strength of our commercial execution and the growing adoption of Amelous PDT across the dermatology community. George Jones, our CCO, will follow up about this in more detail. As a reminder, the strategic transaction which closed in October 2025, gave BioFrontera Inc. full ownership and control of all U.S. rights, approvals and patents for amelous and rhodolet, including the new drug application, the investigational new drug application, all manufacturing rights and contracts, and all intellectual property. The FDA formally transferred the NDA and IND to us in December 2025. Under the new Aeronaut structure, we pay 12% of net sales when annual U.S. MLO's revenues are at or below $65 million, and 15% when they exceed that threshold. This replaced a transfer pricing model that previously was 25 to 35 percent of revenue the impact of this is clearly visible in our q1 results our gross margin expanded to approximately 80 percent compared to approximately 62 percent in the prior year quarter and our cash used in operations was near zero at just 70 000 a dramatic improvement from 4.1 million used in operations in Q1 2025 and sets the path for cash flow break even this year. Fred Leffler, our CFO, will provide more detail on the financial performance in a few moments. Let me now turn to the significant clinical and regulatory progress we have made during and since the first quarter. First, in superficial-based cell carcinoma. In February 2026, we announced that the FDA completed its filing review and accepted our supplemental NUDREC application for Amelous PDT for the treatment of superficial-based cell carcinoma. The PDUFA target action date is September 28, 2026. If approved, Amelose would be the first PGT drug approved to treat a cancer in the United States, representing a significant additional commercial opportunity for our platform and providing a significant advantage to what our direct competitor can do. Second, inactinic keratosis on the extremities, neck, and trunk. In February 2026, we announced positive and statistically significant top-line results from our Phase III clinical trial. The study met its primary endpoint, demonstrating highly statistically significant superiority for amelous versus vehicule gel gel. Additionally, we announced the database log of the Phase I pharmacokinetic study required for our FDA filing. Combined, these data support our plan to file a supplemental NDA in the third quarter of 2026 to expand the amylus label for the treatment of AK beyond the face and scalp on a treatment field of up to 240 square centimeters. With approximately 58 million American adults having at least one AK lesion, treating extensive fields on the extremities, neck, and trunk represents a very large addressable market for our installed base of Rodolet lambs. Third, in moderate to severe acne vulgaris. In March 2026, we announced the results of our phase two study with amelose PDT. The three-hour incubation protocol demonstrated a 58% reduction in inflammatory lesions with amelose compared to 37% with vehicle gel in the per-protocol population. Patient satisfaction was very high, with 86% of patients stating they would choose PDT treatment again based on these data we plan to discuss the design of future phase 3 program with the fda in the second half of 2026 acne vulgaris is a chronic condition affecting millions of adults and adolescents and we believe amelous pdt has the potential to offer a differentiated treatment option for the moderate to severe form of the disease on the corporate front I am pleased to report that on May 6, 2026, we received written notification from NASDAQ confirming that the company has regained compliance with the minimum bid price requirement under Listing Rule 5550A2. The closing bid price of our common stock was at or above $1 per share for the required 10 consecutive business days. Finally, I want to note that we continue to monitor the evolving global trade environment, including recently imposed tariffs on imports from certain countries. As all products are exclusively imported from Europe, we are routinely assessing the potential impact on our supply chain, product cost, and pricing strategy. I would now like to turn the call over to George Jones, our Chief Commercial Officer, to provide a more detailed update on our commercial execution. George?

Thank you, Herman, and good morning, everybody. I'm pleased to walk you through our commercial progress for the first quarter of 2026. As Herman noted, we delivered product revenues of $10.1 million, an increase of approximately 17% year-over-year. The revenue increase was primarily driven by approximately 16% growth in Amelou's unit volume, as well as a price increase that we implemented in the fourth quarter of 2025. Looking at the Amelou's unit volume growth, Amelou's unit volumes for the first quarter of 2026 increased from approximately 25,000 tubes in Q1 2025 to approximately 29,000 tubes of amalus in q1 2026 translating to an approximately 16 percent year-over-year growth this follows our record sales and q4 this continued volume momentum reflects the impact of the executional improvements we have implemented and the growing adoption of amalus pdt turning to lamps uh the roto roto led lamp placements uh during q1 of 2026 we shipped approximately 32 lamps, increasing our installed base to approximately 773 lamps across 709 dermatology offices as of March 31st, 2026. When we look at our Salesforce execution, our focused commercial strategy is delivering the momentum we're seeing. The strategy is centered on increased accountability across our commercial organization, refined customer segmentation, and data-driven targeting assisted by AI. We continue to focus on increased in-person sales activity because we know this drives the highest impact with our customers. We also saw the benefits of lower salesforce turnover in Q1 2026 versus Q1 2025. As our newer reps have been able to get to know their customers and their territories, they're better able to drive results. I also wanted to follow up on something we discussed during our last call. In Q4 2025, we launched an inside sales pilot to cover vacant territories, white space, and smaller accounts. I'm excited to share that in Q1 we've begun the full rollout of this program and it's already started to deliver results for us. The growing installed lamp base, lower sales force turnover, expanded customer adoption, along with the potential for expanded uses for Ameloo's with the near-term label expansion in FBCC and AK in the trunk and extremities, as well as the advancement of the ACNE program, give us multiple vectors for continued growth and tailwinds for our business. I look forward to updating you on our progress in coming quarters. With that, I'll turn the call over to Fred Leffler, our Chief Financial Officer, to walk through the financial results.

Thank you, George, and good morning, everyone. I'll walk through our financial results for the first quarter ended March 31, 2026. All comparisons are to the prior year period unless otherwise noted. A full reconciliation of our GAAP to non-GAAP measures is included in the press release we issued earlier today and also available on our website. Okay, so starting with first quarter 2026 results. Revenues for the first quarter were approximately $10.1 million compared with approximately $8.6 million in the first quarter of 2025, an increase of 17%. The increase was primarily driven by the 16% growth in AMELU's unit volume and the impact of the price increase we implemented in the fourth quarter of 2025, which contributed about $0.2 million in additional revenue. This was the first full quarter, reflecting our new cost structure under the strategic transaction mentioned earlier, and our cost of revenues decreased by approximately 40% year-over-year from $3.1 million to $1.8 million. Under the new earn-out agreement, our cost of revenue as a percentage of product revenue declined significantly compared to the 25% transfer price that was in effect during Q1 of 2025. During the quarter, we recognized $1.2 million of earn-out expense under this new agreement. As a result, our gross profit on product sales improved significantly with a gross margin of approximately 80% compared with 62% in the first quarter of 2025, an improvement of 18%. This is consistent with our expected annualized benefit of the new cost structure that will be reflected throughout 2026 and is tracking towards our longer-term gross margin target of 80% to 85%. Total operating expenses for the first quarter of 2026 were $14.4 million compared with $13.1 million in the first quarter of 2025. Excluding cost of revenues, operating expenses were $12.3 million compared to $9.9 million in the prior year. Operating expenses for the quarter include a $0.4 million patent remediation expense, which I will discuss further when I get to operating loss. Selling general and administrative expenses were $11.0 million for the first quarter of 2026, compared with $8.7 million in the prior year quarter, an increase of $2.3 million, or about 27%. I'll walk through and highlight the key components. Selling and marketing expenses increased about $0.8 million, reflecting the full deployment of our direct sales team and higher sales activity levels, including sales meetings, conferences, and exhibits. General and administrative expenses increased about $0.8 million as well, primarily driven by legal expenses associated with ongoing patent-related claims. Additionally, in connection with the strategic transaction, we assumed responsibility for the manufacturing operations in the fourth quarter of 2025. Because we were in the process of securing approvals and licenses to commence manufacturing later in 2026, these manufacturing-related costs of $0.6 million were reflected in FG&A during this quarter. Research and development expenses decreased $0.3 million to $0.9 million for the first quarter of 2026, down from $1.2 million in the prior year quarter. The decrease was primarily attributable to certain clinical trials reaching substantial completion during the quarter. And during the quarter, we invested in our AK, acne, superficial basal cell carcinoma, and LAMP development programs. Operating loss for the first quarter of 2026 was $4.3 million compared with a loss of $4.5 million in the first quarter of 2025. The quarter included the $0.4 million of patent remediation expense, which we exclude because they relate to discrete adverse legal and regulatory matters that are not indicative of the company's ongoing operating performance. Excluding this expense, our underlying operating loss for the first quarter of 2026 would have been approximately $3.9 million and an improvement of $0.7 million, driven by a $2.7 million increase in gross profit and partially offset by a $2.3 million increase in SG&A. Net loss for the first quarter of 2026 was $4.8 million, or $0.41 per share. compared with a net loss of $4.2 million or $0.47 cents per share in the prior year quarter. The net loss comparison was impacted by two non-recurring items, the patent remediation I just discussed, and a $0.8 million swing in the non-cash change in the fair value of warrant liabilities. A $0.5 million gain in Q1 of 2025 compared to a $0.2 million loss in Q1 of 2026. Adjusting for these items, the underlying improvement is reflected in our adjusted EBITDA, which I'll turn to now. Turning to adjusted EBITDA, our non-GAAP measure, the first quarter was negative $3.6 million compared with a negative $4.4 million in the prior year quarter, an improvement of approximately $0.8 million. Our adjusted EBITDA margin improved to negative 35% from negative 51% in the prior year. The improvement was primarily driven by the $2.7 million increase in gross profit offset by the $2.3 million increase in SG&A. As a reminder, adjusted EBITDA excludes interest taxes, depreciation, and amortization, certain other non-recurring or non-cash items, including changes in fair value of warrant liabilities, stock-based comps, and the patent remediation expense and inventory write-down recognized during the quarter. A full reconciliation from gap net loss to adjusted EBITDA is included in the press release we filed earlier today and will be filed as part of our Form 10-Q. Now, turning to balance sheet and liquidity, as of March 31st, 2026, we had cash and cash equivalents of $6.3 million compared to $6.4 million as of December 31st, 2025. Cash used in operating activities for the first quarter was just $70,000 compared with $4.1 million in the prior year quarter. This near-breakeven cash performance represents a dramatic improvement and reflects the combined impact of higher revenues, the significantly lower cost structure under the new or not agreement, and favorable working capital changes, including a $3.4 million collection of accounts receivable. As we have disclosed in our filings, the company has included a going concern qualification in its statements. while we have demonstrated meaningful progress towards cash flow breakeven, our current capital resources require us to continue expanding our commercial operations while controlling expenses. We plan to address this through continued AMALU's revenue growth, the realization of the next milestone payment of $1 million from the Zephi divestiture that happened in 2025, and if necessary, securing a working capital line of credit or the like. So with that overview of our financial results and business activities, we are now ready to take questions from our covering analysts. Thank you, sir. Thank you.

We will now begin the question and answer session. To ask a question, you may press star and 1 on your touchstone phone. If you're using a speakerphone, please pick up your handset before pressing the case. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Jonathan Ascoff with Roth Capital Partners. Please go ahead.

As to what you might know about off-label use, particularly...

Jonathan, I'm sorry, you were not audible. Can you start again, please?

Can you hear me now?

Yes.

Congrats on the next quarter. can you guys help me understand the extent to which there's off-label use and to probably the least risky is AK, you know, in the extremities? Do you have any decent sense as to ammo use outside of what's on label?

There's certainly some off-label use. However, since some payers are quite sensitive to that and refuse to reimburse the doctors when they do this, doctors are usually hesitant doing off-label use. So while we don't have access to any clear numbers, we don't expect that the current of label use outside AK on the face and scalp, at least in the AK business, is small.

Okay. Can you give us a sense of what kind of directions the acne, the subsequent clinical development in acne could go? I mean, are you definitely expecting to already be teed up for a phase three trial or do you think you could actually have to do some phase two development again?

That's difficult to say because it needs to be discussed with the FDA. I don't think we need phase two again. I think we got the information we need to go into phase three. there have been quite a number of learnings the and the and the clinical results are well in line with the with the best other topical products that are out there so we think if the unless the FDA has a different idea we could go straight into phase three.

Okay thanks guys.

And Jonathan I just wanted to add that you know while we've heard of some off-label use we market and ensure that everyone at BioFrontera you know markets the product on label and doesn't encourage anything that's outside of the label.

Thank you. Our next question comes from Bruce Jackson with StoneX. Please go ahead.

Hi, good morning. So looking at the supplemental NDA for the superficial BCC, I believe we've got a PDUFA date of September 28th. So if you do get the approval, are you ready to launch like the next day or is there any other additional preparation that needs to take place before you can go out and start marketing aggressively.

I could take that, Herman. This is George.

We, there is... Sorry, Trent, your voice is breaking. Can you check, please?

Can you hear me?

Yes.

Okay, perfect. We, there is no additional work or preparation that has to be done. we're actively preparing for the launch of of that indication right now and we're going to start some initial rollout with our with our medical team and some some light rollout from our commercial team in q4 really accelerating into the launch into q1 of next year but we're we're ready to go and and starting in right after the the approval okay got it and then um the question about the SG&A expenses.

So, Fred, you did a nice job of kind of breaking that out. Is this kind of the run rate we should be looking at for the remainder of the year, or were there any other types of sort of one-time things embedded in there that might roll off?

No, well, as you know, we've discussed before, there is a bit of seasonality to our to our business. So, like, the cash use and operations will most likely dip negative in Q3 and Q4 unless, you know, we blow it out of the water and then be positive in Q4. And altogether, we're still expecting to hit cash flow, break even. That said, you know, the run rate that I did mention, we don't expect anything to drastically move off of that.

Okay. Okay. And then last question on gross margins. It's nice to see the new agreements having some impact on the year-over-year improvement. How does this unfold for the remainder of the year as you try to get closer to your new target?

I think that, you know, we're in the range, and we will continue to look at the GPOs. We will continue to look at our discounting and, you know, manage that because our goal, and I think it's very, very achievable, is to stay within the 80% to 85%, and that can shift around because of those and the mix of AMALUs and LAMP sales as they develop throughout the year. So, it's something we'll look at. It's very manageable, and we expect to, you know, easily stay in those within that range. Okay.

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

Thank you. So, it appears we have no further question at this time. I would like to return the program to management for the closing box. Over to you, team.

Yeah, thank you, operator. And thank you to everyone who joined us today. Let me leave you with a few key takeaways. The first is that our first quarter, 2026, demonstrates the full impact of our transformed business model. Revenue grew 17% year over year, gross margin expanded to approximately 80%, and our cash consumption was near zero, validating the strategic transaction and giving us confidence in our path to sustain profitability. Second, our clinical pipeline continues to deliver results at an accelerated pace. We have a PDUFA date for SPCC in September 2026, positive phase 3 results for AK on neck, trunk, and extremities that position us for an SNDA filing in Q3, and encouraging phase 2 data in acne that we will discuss with the FDA later this year. Looking further ahead, we have planned studies in squamous cell carcinoma in situ and reduced pain PDT. BioFrontera is the only company in the United States actively running FDA-controlled clinical clinical studies in PDT for dermatology and our patent protection extends through 2043. And finally, the combination of revenue growth, the full benefit of our new cost structure and disciplined expense management is driving meaningful improvement in our financial trajectory. We remain focused on our goal of reaching cash flow break even and building long-term value for our shareholders. I want to thank our entire team for their dedication and hard work. I also want to thank our shareholders, the healthcare professionals who use our products, and most importantly, the patients whose lives we are helping to improve in their fight against skin disease. Thank you for your continued support. Have a wonderful day.

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