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, 2024

☐	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 12, 2024 there were 5,543,518 shares outstanding of the registrant’s common stock, par value $0.001 per share.

TABLE OF CONTENTS

	PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	34
ITEM 4.	Controls and Procedures	34

	PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	35
ITEM 1A.	Risk Factors	35
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
ITEM 3.	Defaults Upon Senior Securities	35
ITEM 4.	Mine Safety Disclosures	35
ITEM 5.	Other Information	35
ITEM 6.	Exhibits	36
Signatures		37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOFRONTERA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

	June 30, 2024			December 31, 2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,379		$	1,343
Investment, related party		10			78
Accounts receivable, net		3,504			5,162
Inventories, net		3,946			10,908
Prepaid expenses and other current assets		473			425
Other assets, related party		5,159			5,159

Total current assets		17,471			23,075

Property and equipment, net		101			134
Operating lease right-of-use assets		1,230			1,612
Intangible asset, net		2,448			2,629
Other assets		324			482

Total assets	$	21,574		$	27,932

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		2,413			3,308
Accounts payable, related parties		2,265			5,698
Operating lease liabilities		701			691
Accrued expenses and other current liabilities		3,593			4,487
Short term debt		296			3,904

Total current liabilities		9,268			18,088

Long-term liabilities:
Warrant liabilities		921			4,210
Operating lease liabilities, non-current		443			804
Other liabilities		31			37

Total liabilities		10,663			23,139

Commitments and contingencies (Note 18)		-			-

Stockholders’ equity:
Series B Convertible Preferred stock, $0.001 par value, 20,000,000 shares authorized, no Series B-1, 4,806 Series B-2 and 7,998 Series B-3 shares issued and outstanding as of June 30, 2024 and no shares issued and outstanding as of December 31, 2023		-			-
Common stock, $0.001 par value, 35,000,000 shares authorized; 5,094,184 and 1,517,628 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		5			2
Additional paid-in capital		121,250			104,441
Accumulated deficit		(110,344	)		(99,650	)

Total stockholders’ equity		10,911			4,793

Total liabilities and stockholders’ equity	$	21,574		$	27,932

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)

	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023

Product revenues, net	$	7,831		$	5,830		$	15,732		$	14,544
Revenues, related party		8			18			18			36

Total revenues, net		7,839			5,848			15,750			14,580

Operating expenses
Cost of revenues, related party		4,092			2,772			8,038			7,319
Cost of revenues, other		250			116			421			167
Cost of revenues		250			116			421			167
Selling, general and administrative		7,915			11,456			17,163			21,254
Selling, general and administrative, related party		32			92			29			119
Research and development		621			11			637			11
Change in fair value of contingent consideration		-			100			-			(100	)

Total operating expenses		12,910			14,547			26,288			28,770

Loss from operations		(5,071	)		(8,699	)		(10,538	)		(14,190	)

Other income (expense)
Change in fair value of warrants		5,438			375			2,009			1,403
Change in fair value of investment, related party		(14	)		(1,482	)		(11	)		(4,424	)
Loss on debt extinguishment		-			-			(316	)		-
Interest expense, net		(596	)		(79	)		(2,003	)		(114	)
Other income, net		6			62			186			30

Total other income (expense)		4,834			(1,124	)		(135	)		(3,105	)

Loss before income taxes		(237	)		(9,823	)		(10,673	)		(17,295	)
Income tax expense		20			14			21			20

Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)

Loss per common share:
Basic and diluted	$	(0.05	)	$	(7.23	)	$	(2.45	)	$	(12.73	)

Weighted-average common shares outstanding:
Basic and diluted		5,091,353			1,360,739			4,357,474			1,359,894

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)

	Shares		Amount		Shares		Amount		Capital		Deficit			Total
	Three and Six Months Ended June 30, 2024
	Preferred Stock				Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, April 1, 2024		-	$	-		5,089,413	$	5	$	104,666	$	(110,087	)	$	(5,416	)
Balance		-	$	-		5,089,413	$	5	$	104,666	$	(110,087	)	$	(5,416	)
Conversion of Series B-1 Preferred into Series B-2 Preferred		4,806		-		-		-		3,570		-			3,570
Issuance of Series B-3 upon exercise of warrants		7,998		-		-		-		12,810		-			12,810
Issuance of RSUs		-		-		4,771		-		-		-			-
Stock based compensation		-		-		-		-		204		-			204
Net loss		-		-		-		-		-		(257	)		(257	)
Balance, June 30, 2024		12,804	$	-		5,094,184	$	5	$	121,250	$	(110,344	)	$	10,911
Balance		12,804	$	-		5,094,184	$	5	$	121,250	$	(110,344	)	$	10,911

Balance, January 1, 2024		-	$	-		1,517,628	$	2	$	104,441	$	(99,650	)	$	4,793
Balance		-	$	-		1,517,628	$	2	$	104,441	$	(99,650	)	$	4,793
Exercise of pre-funded warrants		-		-		1,055,000		1		(

SEC Form 10-Q filed by Biofrontera Inc.