UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40943

Biofrontera Inc.

(Exact name of registrant as specified in its charter)

Delaware		47-3765675
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

120 Presidential Way, Suite 330, Woburn, Massachusetts		01801
(Address of principal executive offices)		(Zip Code)

(781) 245-1325

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the 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 to purchase common stock	BFRIW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 9, 2023 there were 1,367,628 shares outstanding of the registrant’s common stock, par value $0.001 per share.

TABLE OF CONTENTS

	PART 1. FINANCIAL INFORMATION

ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 (unaudited) and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 (unaudited) and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 (unaudited) and 2022 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30

	PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	31
ITEM 1A.	Risk Factors	31
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
ITEM 3.	Defaults Upon Senior Securities	31
ITEM 4.	Mine Safety Disclosures	31
ITEM 5.	Other Information	31
ITEM 6.	Exhibits	32
Signatures		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOFRONTERA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

	June 30, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,453		$	17,208
Investment, related party		5,935			10,548
Accounts receivable, net		2,193			3,748
Other receivables, related party		4,001			3,658
Inventories, net		14,785			7,168
Prepaid expenses and other current assets		929			810

Total current assets		32,296			43,140

Other receivables long term, related party		-			2,813
Property and equipment, net		175			204
Operating lease right-of-use assets		1,107			1,375
Intangible asset, net		2,823			3,032
Other assets		504			320

Total assets	$	36,905		$	50,884

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		1,243			1,278
Accounts payable, related parties		4,657			1,312
Acquisition contract liabilities, net		7,121			6,942
Operating lease liabilities		489			498
Accrued expenses and other current liabilities		10,736			10,864
Line of credit		1,106			-

Total current liabilities		25,352			20,894

Long-term liabilities:
Acquisition contract liabilities, net		2,300			2,400
Warrant liabilities		1,440			2,843
Operating lease liabilities, non-current		600			848
Other liabilities		40			21

Total liabilities		29,732			27,006

Commitments and contingencies (Note 18)		-			-

Stockholders’ equity:
Preferred Stock, $0.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2023 and December 31, 2022		-			-
Common Stock, $0.001 par value, 15,000,000 shares authorized; 1,367,628 and 1,359,040 shares issued and outstanding as of June 30, 2023 and December 31, 2022		27			27
Additional paid-in capital		103,980			103,370
Accumulated deficit		(96,834	)		(79,519	)

Total stockholders’ equity		7,173			23,878

Total liabilities and stockholders’ equity	$	36,905		$	50,884

The accompanying notes are an integral part of these condensed consolidated financial statements.

BIOFRONTERA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts and number of shares)

(Unaudited)

	2023			2022			2023			2022
	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022

Product revenues, net	$	5,830		$	4,441		$	14,544		$	14,177
Revenues, related party		18			16			36			31

Total revenues, net		5,848			4,457			14,580			14,208

Operating expenses
Cost of revenues, related party		2,772			2,402			7,319			7,377
Cost of revenues, other		116			152			167			327
Selling, general and administrative		11,456			9,669			21,254			17,285
Selling, general and administrative, related party		92			346			119			441
Research and development		11			-			11			-
Change in fair value of contingent consideration		100			(1,900	)		(100	)		(1,900	)

Total operating expenses		14,547			10,669			28,770			23,530

Loss from operations		(8,699	)		(6,212	)		(14,190	)		(9,322	)

Other income (expense)
Change in fair value of warrants		375			5,371			1,403			14,082
Change in fair value of investment, related party		(1,482	)		-			(4,424	)		-
Interest expense, net		(79	)		(38	)		(114	)		(71	)
Other income, net		62			29			30			52

Total other income (expense)		(1,124	)		5,362			(3,105	)		14,063

Income (loss) before income taxes		(9,823	)		(850	)		(17,295	)		4,741
Income tax expense		14			-			20			30

Net income (loss)	$	(9,837	)	$	(850	)	$	(17,315	)	$	4,711

Income (loss) per common share:
Basic	$	(7.23	)	$	(0.90	)	$	(12.73	)	$	5.24
Diluted	$	(7.23	)	$	(0.90	)	$	(12.73	)	$	5.22

Weighted-average common shares outstanding:
Basic		1,360,739			941,175			1,359,894			898,444
Diluted		1,360,739			941,175			1,359,894			902,209

The accompanying notes are an integral part of these condensed consolidated financial statements.

BIOFRONTERA INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except number of shares)

(Unaudited)

Three and Six Months Ended June 30, 2023

	Shares		Amount		In Capital		Deficit			Total
	Common Stock				Additional Paid-		Accumulated
	Shares		Amount		In Capital		Deficit			Total
Balance, March 31, 2023		1,359,040	$	27	$	103,721	$	(86,997	)	$	16,751
Issuance of shares for vested restricted stock units		8,588		-		-		-			-
Stock based compensation		-		-		259		-			259
Net loss		-		-		-		(9,837	)		(9,837	)
Balance, June 30, 2023		1,367,628	$	27	$	103,980	$	(96,834	)	$	7,173

Balance, December 31, 2022		1,359,040	$	27	$	103,370	$	(79,519	)	$	23,878
Issuance of shares for vested restricted stock units		8,588		-		-		-			-
Stock based compensation		-		-		610		-			610
Net loss		-		-		-		(17,315	)		(17,315	)
Net income (loss)		-		-		-		(17,315	)		(17,315	)
Balance, June 30, 2023		1,367,628	$	27	$	103,980	$	(96,834	)	$	7,173

Three and Six Months Ended June 30, 2022

	Common Stock				Additional Paid-		Accumulated
	Shares		Amount		In Capital		Deficit			Total
Balance March 31, 2022		855,238	$	17	$	90,717	$	(73,318	)	$	17,416
Issuance of common stock and warrants under private placement, net of issuance costs		92,500		2		114		-			116
Issuance of shares for vested restricted stock units		2,835		-		-		-			-
Stock based compensation		-		-		551		-			551
Net loss		-		-		-		(850	)		(850	)
Balance, June 30, 2022		950,573	$	19	$	91,382	$	(74,168	)	$	17,233

Balance, December 31, 2021		855,238	$	17	$	90,200	$	(78,879	)	$	11,338
Issuance of common stock and warrants under private placement, net of issuance costs		92,500		2		114		-			116
Issuance of shares for vested restricted stock units		2,835		-		-		-			-
Stock based compensation		-		<

SEC Form 10-Q filed by Biofrontera Inc.