8-K
Biofrontera Inc. (BFRI)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Dateof Report (Date of earliest event reported): May 8, 2023
BiofronteraInc.
(Exactname of registrant as specified in its charter)
| Delaware | 001-40943 | 47-3765675 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 120 Presidential Way, Suite 330<br><br> <br>Woburn, Massachusetts | 01801 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’stelephone number, including area code: (781) 245-1325
NotApplicable
(Formername or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.001 per share | BFRI | The Nasdaq Stock Market LLC |
| Preferred Stock Purchase Rights | The Nasdaq Stock Market LLC | |
| Warrants, each warrant exercisable for one share of common stock, each at an exercise price of $5.00 per share | BFRIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”) (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On May 12, 2023, Biofrontera Inc. (the “Company”) issued a press release announcing its financial and operational results for the first quarter ended March 31, 2023. A copy of the press release is being furnished as Exhibit 99.1 attached hereto to this Current Report on Form 8-K.
The Company’s press release contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. Pursuant to the requirements of Regulation G, the Company has provided within the press release quantitative reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
The information contained in this Item 2.02 in the Current Report on Form 8-K (including Exhibit 99.1 attached hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
|---|
On May 8, 2023, Erica Monaco, Chief Executive Officer of the Company notified the Company’s Board of Directors that she intends to resign from the Company to pursue other opportunities. The Company and Ms. Monaco have agreed to discuss an appropriate transition period, including the effective date of her resignation.
| Item 7.01 | Regulation FD Disclosure |
|---|
On May 12, 2023, the Company issued a press release announcing Ms. Monaco’s resignation, a copy of which is attached here as Exhibit 99.2.
The information in Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| 99.1 | Press release dated May 12, 2023 relating to the Company’s results for the quarter ended March 31, 2023 |
| --- | --- |
| 99.2 | Press release dated May 12, 2023 relating to Ms. Monaco’s resignation |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| May<br> 12, 2023 | Biofrontera Inc. |
|---|---|
| (Date) | (Registrant) |
| /s/ E. Fred Leffler | |
| E.<br> Fred Leffler, III | |
| Chief Financial Officer |
Exhibit99.1
BiofronteraInc. Reports First Quarter 2023 Financial Results and Provides a Business Update
Conferencecall begins at 8:30 a.m. Eastern time today
WOBURN,Mass. (May 12, 2023) – Biofrontera Inc. (Nasdaq: BFRI) (the “Company”), a biopharmaceutical company specializing in the commercialization of dermatologic products, today reported financial results for the three months ended March 31, 2023 and provided a business update.
Highlights from the first quarter of 2023 and subsequent weeks included the following:
| ● | Total<br> revenues for the first quarter of 2023 were $8.7 million with both January and February at record-high monthly sales volumes |
|---|---|
| ● | Cash<br> and cash equivalents were $13.5 million as of March 31, 2023, compared with $17.2 million on December 31, 2022 |
| ● | Equity<br> investment in shares of Biofrontera AG were $7.6 million as of March 31, 2023 |
| ● | Entered<br> into secured line of credit with borrowing up to $6.5 million |
| ● | Significantly<br> strengthened the commercial team including adding a new sales region and increasing the size of the salesforce by nearly 30%, now<br> covering 40 territories |
| ● | Announced<br> first patient dosed in a pivotal Phase 3 clinical study evaluating Ameluz^®^-PDT for the treatment of actinic keratosis<br> (AK) on the extremities, neck and trunk |
| ● | Announced<br> last patient out in a Phase 1 clinical study evaluating the safety and tolerability of treating AK using three tubes of Ameluz^®^ |
ManagementCommentary
“Our sales team kicked off the year by producing record-high results in January and February, while quarterly sales growth is against a prior-year comparison that included considerable buy-in ahead of the April 2022 price increase. In fact, Ameluz tube volumes for the first quarter of 2023 exceeded any other first quarter that was not aided by a pending price increase, by at least 30%,” said Fred Leffler, Chief Financial Officer of Biofrontera Inc. “These metrics reflect the effective integration and mobilization of our recently bolstered sales force and give us confidence in affirming our full-year revenue expectations.”
“As we continue gaining market share for Ameluz-PDT, we look to a number of upcoming milestones from ongoing clinical trials to further expand the FDA label for Ameluz. These 2023 catalysts include reporting topline results from a three-tube study and completing enrollment in the Phase 3 extremities, neck and trunk clinical study and the Phase 3 basal cell carcinoma study,” he added.
FirstQuarter Financial Results
Total revenues for the first quarter of 2023 were $8.7 million compared with $9.8 million for the first quarter of 2022. The decrease is due to customer buy-in during the first quarter of 2022 prior to a planned price increase on April 1, 2022. The Company did not increase the price of Ameluz in 2023, and therefore did not see a similar buy-in effect from customers. First quarter 2023 revenues were 30% higher than any prior first quarter that did not benefit from a price increase.
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 revenues was $4.6 million for the first quarter of 2023 compared with $5.2 million for the prior-year quarter, with the decline driven by lower Ameluz product revenue. Selling, general and administrative expenses were $9.8 million for the first quarter of 2023 compared with $7.7 million for the first quarter of 2022. The increase was primarily due to higher legal expenses resulting from a legal settlement in the first quarter.
The net loss for the first quarter of 2023 was $7.5 million, or $(0.28) per share, compared with net income of $5.6 million, or $0.32 per diluted share, for the prior-year quarter.
Adjusted EBITDA for the first quarter of 2023 was negative $4.0 million compared with negative $2.4 million for the first quarter of 2022, reflecting lower revenues in the 2023 quarter. Adjusted EBITDA, a non-GAAP financial measure, is 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.
The below table presents a reconciliation from net income (loss) to Adjusted EBITDA for the first quarters of 2023 and 2022:
| Three<br> Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Net income (loss) | $ | (7,478 | ) | $ | 5,561 | |
| Interest expense, net | 35 | 33 | ||||
| Income tax expenses | 5 | 30 | ||||
| Depreciation and amortization | 266 | 131 | ||||
| EBITDA | (7,172 | ) | 5,755 | |||
| Change in fair value of contingent consideration | (200 | ) | - | |||
| Change in fair value of warrant liabilities | (1,028 | ) | (8,711 | ) | ||
| Change in fair value of investments | 2,941 | - | ||||
| Legal settlement expenses | 1,118 | - | ||||
| Stock based compensation | 351 | 517 | ||||
| Adjusted EBITDA | $ | (3,990 | ) | $ | (2,439 | ) |
| Adjusted EBITDA margin | -45.7 | % | -25.0 | % |
As of March 31, 2023, Biofrontera had cash and cash equivalents of $13.5 million compared with $17.2 million as of December 31, 2022. In addition, the Company had a $7.6 million investment in shares of Biofrontera AG as of March 31, 2023, and recently entered a $6.5 million secured line of credit. The Company believes its cash and cash equivalents are sufficient to fund operations for at least the next 12 months. Based on current operating plans and financial forecasts, we expect that our revolving line of credit and expected proceeds from the sale of our investment in Biofrontera AG in addition to our current cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months from the date of issuance of our financial statements. However, we expect to have to obtain either equity or additional debt financing to support our future long-term growth and to mitigate the risk of our operating costs significantly exceeding the amounts currently estimated.
FinancialExpectations
Biofrontera Inc. affirms its previously announced expectations for full-year 2023 growth in revenue to be at least 25% compared with 2022 and expects to be cash flow positive within approximately two years.
ConferenceCall and Webcast
Biofrontera Inc. will hold a conference call today at 8:30 a.m. Eastern time to discuss these results and answer questions.
| Date: | Friday,<br> May 12, 2023 |
|---|---|
| Time: | 8:30<br> a.m. Eastern time |
| Conference Call: | 1-888-506-0062<br> (U.S. toll-free) |
| 1-973-528-0011<br> (international) | |
| Access<br> Code: 104591 | |
| Webcast: | Live<br> and 90-day replay webcast are available here and at investors.biofrontera-us.com. |
AboutBiofrontera Inc.
Biofrontera Inc. is a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatologic conditions with a focus on photodynamic therapy (PDT) and topical antibiotics. The Company’s licensed products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. For more information, visit www.biofrontera-us.com and follow Biofrontera on LinkedIn and Twitter.
Forward-LookingStatements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended to date. These statements include, but are not limited to, statements relating to the growth strategy for Biofrontera Inc.’s (the “Company”) 2023 revenue guidance, liquidity, proceeds from the sale of equity investments, clinical trials for Ameluz^®^ and potential for label expansion, improved market opportunities, growth of the Company’s salesforce and its sales territories and the impact of expanding the Company’s salesforce on growth. We have based these forward-looking statements on our current expectations and projections about future events, nevertheless, actual results or events could differ materially from the plans, intentions and expectations disclosed in, or implied by, the forward-looking statements we make. These risks and uncertainties, many of which are beyond our control, including, but not limited to, the impact of any extraordinary external events; any changes in the Company’s relationship with its licensors; the ability of the Company’s licensors to fulfill their obligations to the Company in a timely manner; the Company’s ability to achieve and sustain profitability; whether the current global disruptions in supply chains will impact the Company’s ability to obtain and distribute its licensed products; changes in the practices of healthcare providers, including any changes to the coverage, reimbursement and pricing for procedures using the Company’s licensed products; the uncertainties inherent in the initiation and conduct of clinical trials; availability and timing of data from clinical trials; whether results of earlier clinical trials or trials of Ameluz^®^ in combination with BF-RhodoLED^®^ in different disease indications or product applications will be indicative of the results of ongoing or future trials; uncertainties associated with regulatory review of clinical trials and applications for marketing approvals; whether the market opportunity for Ameluz^®^ in combination with BF-RhodoLED^®^ is consistent with the Company’s expectations; the Company’s ability to comply with public company requirements; the Company’s ability to regain compliance with Nasdaq continued listing standards, the Company’s ability to retain and hire key personnel; the sufficiency of cash resources and need for additional financing and other factors that may be disclosed in the Company’s filings with the SEC, which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. The Company does not plan to update any such forward-looking statements and expressly disclaims any duty to update the information contained in this press release except as required by law.
Contact:
LHAInvestor Relations
Tirth T. Patel
212-201-6614
tpatel@lhai.com
(Tablesfollow)
CONSOLIDATEDBALANCE SHEETS
(Inthousands, except par value and share amounts)
| December<br> 31, 2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 13,505 | $ | 17,208 | ||
| Investment in equity securities | 7,596 | 10,548 | |||
| Accounts receivable, net | 4,116 | 3,748 | |||
| Other receivables, related party | 3,750 | 3,658 | |||
| Inventories | 6,670 | 7,168 | |||
| Prepaid expenses and other current assets | 1,586 | 810 | |||
| Total current assets | 37,223 | 43,140 | |||
| Other receivables long term, related party | - | 2,813 | |||
| Property and equipment, net | 197 | 204 | |||
| Operating lease right-of-use assets | 1,234 | 1,375 | |||
| Intangible asset, net | 2,927 | 3,032 | |||
| Other assets | 384 | 320 | |||
| Total assets | 41,965 | $ | 50,884 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 887 | 1,278 | |||
| Accounts payable, related parties | 912 | 1,312 | |||
| Acquisition contract liabilities, net | 7,032 | 6,942 | |||
| Operating lease liabilities | 484 | 498 | |||
| Accrued expenses and other current liabilities | 11,135 | 10,864 | |||
| Total current liabilities | 20,450 | 20,894 | |||
| Long-term liabilities: | |||||
| Acquisition contract liabilities, net | 2,200 | 2,400 | |||
| Warrant liabilities | 1,815 | 2,843 | |||
| Operating lease liabilities, non-current | 725 | 848 | |||
| Other liabilities | 24 | 21 | |||
| Total liabilities | 25,214 | 27,006 | |||
| Stockholders’ equity: | |||||
| Preferred Stock, 0.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding<br> as of March 31, 2023 and December 31, 2022 | - | - | |||
| Common Stock, 0.001 par value, 300,000,000 shares authorized; 26,699,002 shares issued and outstanding<br> as of March 31, 2023 and December 31, 2022 | 27 | 27 | |||
| Additional paid-in capital | 103,721 | 103,370 | |||
| Accumulated deficit | (86,997 | ) | (79,519 | ) | |
| Total stockholders’ equity | 16,751 | 23,878 | |||
| Total liabilities and stockholders’<br> equity | 41,965 | $ | 50,884 |
All values are in US Dollars.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(Inthousands, except per share amounts and number of shares)
(Unaudited)
| Three<br> Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Products revenues, net | $ | 8,715 | $ | 9,736 | ||
| Revenues, related party | 18 | 15 | ||||
| Total revenues, net | 8,733 | 9,751 | ||||
| Operating expenses | ||||||
| Cost of revenues, related party | 4,547 | 4,975 | ||||
| Cost of revenues, other | 51 | 175 | ||||
| Selling, general and administrative | 9,800 | 7,616 | ||||
| Selling, general and administrative, related party | 27 | 95 | ||||
| Change in fair value of contingent consideration | (200 | ) | - | |||
| Total operating expenses | 14,225 | 12,861 | ||||
| Loss from operations | (5,492 | ) | (3,110 | ) | ||
| Other income (expense) | ||||||
| Change in fair value of warrant liabilities | 1,028 | 8,711 | ||||
| Change in fair value of investments | (2,941 | ) | - | |||
| Interest expense, net | (35 | ) | (33 | ) | ||
| Other income (expense), net | (33 | ) | 23 | |||
| Total other income (expense) | (1,981 | ) | 8,701 | |||
| Income (loss) before income taxes | (7,473 | ) | 5,591 | |||
| Income tax expense | 5 | 30 | ||||
| Net income (loss) | $ | (7,478 | ) | $ | 5,561 | |
| Income (loss) per common share: | ||||||
| Basic | $ | (0.28 | ) | $ | 0.33 | |
| Diluted | $ | (0.28 | ) | $ | 0.32 | |
| Weighted-average common shares outstanding: | ||||||
| Basic | 26,699,002 | 17,104,749 | ||||
| Diluted | 26,699,002 | 17,133,218 |
Exhibit 99.2
BiofronteraInc. Announces Resignation of CEO
ExecutiveChairman Hermann Luebbert to Assume CEO Responsibilities, Reaffirms the Company’s Strategic Plan and 2023 Commercial Goals
WOBURN,Mass. (May 12, 2023) – Biofrontera Inc. (Nasdaq: BFRI) (the “Company”), a biopharmaceutical company specializing in the commercialization of dermatologic products, announces the resignation of Erica Monaco as Chief Executive Officer, which will be effective pending the completion of a near term transition of responsibilities with the Board of Directors. Hermann Luebbert, Biofrontera’s Executive Chairman and founder, will assume the CEO responsibilities. Ms. Monaco intends to pursue other professional opportunities and her resignation did not result from any disagreement with the Company on any matter, including any matter relating to its operations, policies or practices.
“Since founding Biofrontera in 1997, I have met few leaders like Erica who are capable of building a high-performance salesforce and carry out a commercial vision inspired by medical education. On behalf of the Biofrontera board of directors and my colleagues, I wish Erica all the best in her future endeavors. Biofrontera is fortunate to have a strong, capable team in place to continue driving our business forward without disruption. Our company’s strategic plan and our 2023 commercial goals remain unchanged,” said Mr. Luebbert.
“Tendering my resignation was a difficult, personal decision that I reached after much reflection. It has been a privilege to serve as Biofrontera’s CEO and to work closely with my inspiring colleagues,” said Ms. Monaco. “I am grateful for my time contributing to the growth and success of Biofrontera for the last seven years. I am proud of what our company and our people have accomplished as a team focused on bringing unparalleled therapies to the dermatology community. I wish my Biofrontera colleagues tremendous success and look forward to seeing them continue to grow and make an impact.”
AboutBiofrontera Inc.
Biofrontera Inc. is a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatologic conditions with a focus on photodynamic therapy (PDT) and topical antibiotics. The Company’s licensed products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. For more information, visit www.biofrontera-us.com and follow Biofrontera on LinkedIn and Twitter.
Forward-LookingStatements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended to date. These statements include, but are not limited to, statements relating to the growth strategy for Biofrontera Inc.’s (the “Company”) strategic plan, 2023 commercial goals and potential for growth, and the transition of responsibilities at the Company. We have based these forward-looking statements on our current expectations and projections about future events, nevertheless, actual results or events could differ materially from the plans, intentions and expectations disclosed in, or implied by, the forward-looking statements we make. These risks and uncertainties, many of which are beyond our control, including, but not limited to, the impact of any extraordinary external events; any changes in the Company’s relationship with its licensors; the ability of the Company’s licensors to fulfill their obligations to the Company in a timely manner; the Company’s ability to achieve and sustain profitability; whether the current global disruptions in supply chains will impact the Company’s ability to obtain and distribute its licensed products; changes in the practices of healthcare providers, including any changes to the coverage, reimbursement and pricing for procedures using the Company’s licensed products; the uncertainties inherent in the initiation and conduct of clinical trials; availability and timing of data from clinical trials; whether results of earlier clinical trials or trials of Ameluz^®^ in combination with BF-RhodoLED^®^ in different disease indications or product applications will be indicative of the results of ongoing or future trials; uncertainties associated with regulatory review of clinical trials and applications for marketing approvals; whether the market opportunity for Ameluz^®^ in combination with BF-RhodoLED^®^ is consistent with the Company’s expectations; the Company’s ability to comply with public company requirements; the Company’s ability to regain compliance with Nasdaq continued listing standards, the Company’s ability to retain and hire key personnel; the sufficiency of cash resources and need for additional financing and other factors that may be disclosed in the Company’s filings with the SEC, which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. The Company does not plan to update any such forward-looking statements and expressly disclaims any duty to update the information contained in this press release except as required by law.
Contact:
LHAInvestor Relations
Tirth T. Patel
212-201-6614
tpatel@lhai.com