Q3 2023 Biofrontera Inc Earnings Call
Speaker 1: Good day and welcome to the BioFrontera Inc. 3rd quarter 2023 Financial Results and Business Update Conference call. All participants will be in
Good day and welcome to the Bio Frontier, Inc. Third quarter 2023 financial results and business update conference call.
All participants will be in a listen only mode.
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Speaker 1: I would now like to turn the conference over to Ters Patel with LHA Investor Relations. Please go ahead.
I would now like to turn the conference over to tourists Patel with L. H eight Investor Relations. Please go ahead.
Speaker 2: Good morning and welcome to BioFrontera Inc. 3rd quarter 2023 financial results and business update conference call.
Good morning, and welcome to bio Terror, Inc's third quarter 2023 financial results and business update conference call.
Speaker 2: 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.
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 bio friend terrorists 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.
Speaker 2: Be caution listeners that BioFran Terrace Management will be making forward-looking statements and then actual results may differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties of so stated with the company's business.
Oh stated with the company's business all risks and uncertainties are detailed in and are qualified by the cautionary statements contained by a friend terrorists press releases and SEC filings.
Speaker 2: All risks and uncertainties are detailed in and are qualified by the cautionary statements contained by referentaires, press releases, and SEC filing.
Speaker 2: Also, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, today, November 10, 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.
Also this conference call contains time sensitive information that is accurate only as of the date of the lifeblood cast today November 10, 2023 bio for Antero 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.
Speaker 2: During today's call, there will be references to certain non- GAAP financial measures.
During today's call there'll be references to certain non-GAAP financial measures by a friend Terra believes these measures provide useful information for investors yet they 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 yesterday Afternoon's press release.
Speaker 2: Biofrantera believes these measures provide useful information for investors, yet they should not be considered as a substitute for GAP, nor should they be viewed as a substitute for operating results determined in accordance with GAP.
Speaker 2: A reconciliation of non-gap to gap results is included in yesterday afternoons press release.
Speaker 2: More specifically, 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, amortization, and certain other non-recurring or non-cash-up.
More specifically 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 amortization and certain other nonrecurring and noncash items.
Speaker 2: With that said, I would now like to turn the call over to Herman Loubert, Chairman, CEO , and Founder of BioFrontera. Herman? Yeah. Thank you, Seth.
That said I would now like to turn the call over to Hermann Lebaron, Chairman and CEO and founder of bio Frontera Herman.
Yeah. Thank you Chuck.
And many thanks to everyone joining us this morning.
Speaker 3: On today's call, I'll provide an update on biophontera's growth strategy and detail how improvements to our organization have positively impacted the top-end broadened line.
On today's call I'll provide an update on Biopharma telescope strategy in detail the whole improvements to organization has positively impacted the top and bottom line.
Speaker 3: Fred Leffler, our CFO , will follow with a discussion of our QPU-3 financial results and will conclude with questions and answers.
The slow our CFO will follow with a discussion of our Q.
Q3 financial results, and we'll conclude with questions and answers.
Speaker 3: During the third quarter of 2023, we continued to execute on our strategy to optimize our organization.
During the third quarter of 2000, Twenty's sleeve, we continued to execute on our strategy to optimize the organization.
Speaker 3: This initiative has been transformative for the company. We have shifted resources and costs from administration to sales, sales training, marketing, medical and reimbursement support.
This initiative has been transformative for the company.
We have shifted resources and cost from administration to sales sales training marketing medical and reimbursement support.
Speaker 3: Specifically, we increased the size of our sales force by nearly 30%, and this not only expanded our coverage to 40 territories, but also brought over 140 years of healthcare and dermatology experience into our ranks.
Specifically, we increased the size of our sales force by nearly 30% of this not only extended over a couple of extra Orbitale choice, but also bought over 140 years of health care and dermatology experience and through all of that.
Speaker 3: Furthermore, we grow our medical liaison team to seven, working alongside sales on medical education.
Furthermore, we grew our medical liaison team to seven working alongside savings on medical education.
Speaker 3: Lastly, we initiated building an in-house field reimbursement team helping doctors officers on-site to solve issues. They may face a free reimbursement and we increased our staff for sales training.
Lastly, we initiated building an in house field reimbursement team, helping doctors offices on such to solve issues. They may face with reimbursement and we increased all our staff for sales planning.
Speaker 3: The investment in our commercial organization is a cornerstone of our growth strategy and our path towards becoming a cash flow positive.
The investment in all our commercial organization is a cornerstone of our golf in the world.
Our path towards becoming a cash flow.
Strong positive.
Speaker 3: It is an ongoing effort in any commercial organization to find the optimal balance between sales and sales support for the respective state of the organization, and we have made significant adaptations this year, which we believe drove our revenue growth.
It is an ongoing effort and our new commercial organization to find the optimum balance between sales and sales support for the respective state of the organization.
We have made significant adaptations this year, which we believe the whole all of a nickel.
Speaker 3: This expansion has been crucial for continued education of dermatologists and patients about actinic keratosis and the many benefits of treatment with Amelus BDT.
This expansion has been crucial for continued education of dermatologists and patients bold actinic keratosis and the many benefits of treatment with a manaus PDT.
Speaker 3: With the expansion, we significantly improved our regions' strategic accounts across the United States.
With the extension, we significantly improved our leach and strategic accounts across the United States.
Speaker 3: The key elements of our strategy include the following.
The key elements of our strategy include the following.
Speaker 3: First, expanding our US sales of amelus in combination with the auto-let lamps for the treatment of our tinnicaratosis on the phasal skull, and positioning amelus to be the standard of care by growing our dedicated commercial and medical infrastructure.
First expanding our U S sales of I'm going to lose in combination with the auto led lamps for the treatment of actinic keratosis on the phase in Scotland.
Positioning <unk> to be the standard of scale by growing our dedicated commercial and medical infrastructure.
Speaker 3: Second, leveraging the potential of future FDA approvals and label extensions of our portfolio products.
Second level, reaching the potential future of SBA approvals label extensions of all portfolio products.
Speaker 3: And third, opportunistically adding complementary product or a portfolio to leverage our established commercial infrastructure and strong customer relations.
Until it opportunistically, adding complementary product portfolio to a level, that's all well established commercial infrastructure and strong customer relationships.
Speaker 3: Under our sales strategy, we have focused on certain metroponid regions that have consistently shown greater potential. And we have been successful in generating higher sales from those territories.
And also strategy, we have focused on certain metropolitan allegiance that has consistently shown great potential.
And we have been successful in generating higher sales from those territories we.
Speaker 3: We have boosted both human capital and medical affairs support in those territories.
We have boosted both human capital and medical affairs support in those territories.
Speaker 3: Our commercial infrastructure was recently fortified by the addition of the mental overcome via senior directors strategic accounts and communications.
Or commercial infrastructure long sleeves simply fortified by the addition of Samantha really couldnt be a senior.
The strategic accounts and communications.
Speaker 3: We make this higher in response to the growing demand and opportunity for specialized sales and marketing approaches for the ongoing consolidation of medical practices into larger integrated organizations.
We made the soil in response to the growing demand and opportunity for especially the sales and marketing approaches for the ongoing consolidation of medical practices into larger integrated organization.
Speaker 3: These large organizations have very specific needs and expectations.
These are large organizations have very specific needs and expectations.
Speaker 3: And we have been successful in securing large and durable contracts that contributed to biofantara selling approximately 28,000 tubes of almond use in the third quarter up from about 13,000 units in the third quarter of 2022. This goes this group goes. Drove our third quarter revenue to 8.9 million dollar, which represents a hundred six percent increase from the third quarter last year.
And we have been successful in securing large and durable contracts that contributed to biopharma selling approximately 20, I told him tubes of unusuals in the third quarter up from about 13000 units in the third quarter of 2022.
This goes the school Gulf Gulf or third quarter revenue to $8 $9 million, which represents a 6% increase from the third quarter last year.
Speaker 3: Our sharp year-over-year revenue increase is also driven in part by this year's Amelus pricing.
Our sharp year over year revenue increase is also developing in part but this is on the loose.
Yes.
Speaker 3: As with many other industry, we are facing higher costs in many areas of our company. Yet the Q3 price increase was our first in 18 months.
As with many other industry, we are facing higher costs in many areas of all company, yes. The Q fleet policy. Please also are first in the 18 months.
Oh October one.
Speaker 3: 5% price increase costs some dermatologist at generalized approaches of amandus into the third quarter.
Plus percent Pos increase caused some dermatologist shallowest approaches and so I'm gonna doors into the third quarter.
Speaker 3: As we look to the future, why are Frontier-Rostans at an infact reflection point? Our expanded commercial organization is well positioned to accelerate growth and continue our market share gain.
As we look to the future well it was one.
And in fact that inflection point.
Our expanded commercial organization is well positioned to leverage.
Coal and continue our market share gains.
Speaker 3: As an example of our growing market share for Omnibus PDT and PDT in general compared to cryo, we onboarded significantly more physician offices throughout the country with the capabilities for field therapy to treat AK.
As an example of all the market share for all of them loose PTT and PDT in general are compelled to koyo.
We onboard it's significantly more physician offices, who also come to look at capability useful cookie to treat 8-K.
Speaker 3: Field therapy is an important medical need for treating AK, and amulose is the only PDT drug approved for that by the FDA.
First of all Pete it's an important medical need for treating AK and I'm a little since the only PDT drug approved by the FDA.
Speaker 3: Year to date, we shipped a record 101 BF Odeolat Lams as of September 30th, reflecting a 180% increase over the prior year period, including to many offices where we installed a BF Odeolat for the first time.
Year to date, we shipped a record 101 beautiful.
As of September 30th, reflecting 180% increase over the prior year period, including to many offices will be installed in beautiful overlap for the first time.
Speaker 3: These outcomes underscore the effectiveness of our enhanced sales strategy. And we are confident that our strategic investments will eat long-term benefits for our stakeholders.
These outcomes underscore the effectiveness of our enhanced sales strategy.
We're confident that our strategic investments Bluejeans long term benefits for all stakeholders.
Speaker 3: Innovation is at BioFrontera's core, and I'm proud of our work in advancing key label expansion clinical trials for amelus.
Innovation is that's probably from last call and I'm coach all book and advancing key label expansion political call, that's what I'm gonna lose.
Speaker 3: and also of the formulation of amelus itself.
And also off the formulation of I'm going to lose it said.
Speaker 3: following a four-year research project together with our partner BioFrontera Bios.
Following a four year research project together with our partner BARDA frontier, how vital signs are pooled with most recently received from the FDA for a new formulation that eliminates potential risks of propylene glycol.
Speaker 3: approval was recently received from the FDA for a new formulation that eliminates potential risks of propylene glycol, an ingredient found in multiple semi-solid formulations.
And then Collegium phoned in multiple and seeing these solid formulations, but we actually place due to accept exhibiting allergic potential chemicals easy acting with other components closing, so 10 minutes to accumulate overtime.
Speaker 3: We have replaced due to exhibiting allergic potential and chemically reacting with other components causing certain contaminants to accumulate over time.
Speaker 3: This new formulation improves the safety profile and stability of our maloose. And we are planning to implement this change in all US Maloose production in 2024.
This new formulation and push the safety profile and stability of the loose.
We're planning to implement this change and all you is on the gross production in 2024.
Speaker 3: This updated formulation also positively impacts our patent protection.
This updated formulation also positively impacts all off patent protection.
Speaker 3: A patent application was filed to protect the new formulation and if it's granted, protection for amelose could be extended until at least 2043.
Patent application was filed to protect the new formulation and if it's granted protection for I'm going to lose could be extended until at least 2043.
Speaker 3: Let me now turn to more innovation and on the taking place at BioFront Air Force together with our partners.
Let me now turn into more innovation in the R&D taking place in Biopharma.
All of our partners.
Speaker 3: A key value driver is the potential to capture additional growth from the portfolio of the active label extension studies for AMLUs conducted together with BioFonterra Bioscience.
Key value driver is the potential to capture additional well.
For the all the extra flavor extension studies for on the loose conducted two goes a little bit.
Until our bioscience.
Speaker 3: In August , we announced positive top-line results from the non-randomized open-label multisvelter phase one study evaluating the safety and tolerability of free tubes of amelus.
In August we announced positive top line results from the normalized the most open label multi center phase one study.
The only thing the safety and Tolerability of troops up I'm gonna lose.
Speaker 3: Demonstrating the treatment was generally well-tolerated and treatment-emergent at-risk ends were consistent with the US prescribing information for 12.
Demonstrating the treatment was generally well tolerated and treatment emergent adverse events were consistent with the U S prescribing information for one tube.
Speaker 3: There are benefits of treatment with free tubes for both physicians and patients because of the ability to treat a larger surface area while potentially requiring fewer officers.
The benefits of treatment with <unk> tubes for both physicians and patients because of the ability to treat a larger surface LEL would potentially requiring fewer office visits.
Speaker 3: With no additional safety or tolerability issues, the findings of this safety study and an earlier pharmacokinetic study will be submitted to the FDA in the course of this month.
The only additional safety or tolerability issues. The findings of the safety studies and early of Pharmacokinetics studies will be submitted to the FDA in the course of this month.
Speaker 3: These safety studies have the potential to be the final studies required by FDA for approval of the 3-tube treatment, and we expect to hear back from the FDA by June 2024, which is approximately six months after submission.
These safety studies has the potential to be the final studies required by FDA for approval of the <unk> treatment and we expect to hear back from the FDA by June 'twenty 'twenty, four which is approximately six months after submission.
Speaker 3: We also announced that enrollment of all 186 patients is now complete and the phase 3 clinical study evaluating amylose in combination with via Rodolat for the treatment of superficial basal sarcoma or SBCC.
We also announced that in all of them and of all 186 patients. It's not complete in the face of sleep clinical study evaluating <unk> in combination with <unk>. We have all the labs all the treatment of superficial basal cell carcinoma or S. P. C C.
Speaker 3: Approximately two-thirds of non-melanoma skin cancer cases in the U.S. are BCC, leading to a significant unmet medical need for more efficacious, cost-effective, and less invasive therapies to treat BCC, together with underlying premalignancies without ionizing radiation.
Approximately two thirds of non melanoma skin cancer cases in the U S. B C C.
Leading to a significant unmet medical need for a more efficacious cost effective and less invasive therapies to treat B C C.
That's all with underlying politically malignancies with al <unk>.
Ladies nation.
Speaker 3: We look forward to sharing results from this first-presterly in March 2024.
We look forward to sharing results from this phase III study in mid 2024.
Speaker 3: In addition to trading individual SBCC lesions,
In addition to treating individuals S BCC lesions.
Speaker 3: Adding this indication to the label of amelus will allow physicians to include SPCC, lesions into the treatment of larger sun damage fields with amelus ptg as it is currently approved for autinicate keratose.
This indication to the label of loose will allow physicians to include SBC C lesions into the treatment of larger some damaged fields with a loose BTG as it is currently approved for actinic keratosis. This.
Speaker 3: This is the next logical step in our goal to offer one field-directed treatment for all sun-induced neoplastic skin damage of a larger surface area.
This is the next logical step and all go to offer one field selected treatment for all I meant you still plastic skin damage of a larger pool of Italians.
Yeah.
Speaker 3: Regarding expanding the amelus labe within the acrostic eratosis, there is a large and growing demand for highly effective therapy to treat acrostic eratosis beyond the phasence skull.
Regarding expanding the I'm, a loose labor, but they're not to excuse me couple of doses.
It's a large and growing demand for our highly effective selling pizza treat auction Nicola told us it's beyond the phase one Scott.
Speaker 3: Together with BioFrontera Bioscience, we have an ongoing phase 3 study evaluating the use of amylose PDT in the extremities, neck, and trunk that's currently enrolling. To date, 72 patients have been dosed with the aim to enroll 165 subjects stratified by body region.
I guess I'll just tell our bioscience, we have an ongoing phase III study evaluating the use of a loose P. J T and the extremities Mack Tung that's currently on the holding.
To date 72 patients have been dosed with the aim to a lot of 165 subjects stratified by going to leach them.
Speaker 3: Lastly, a phase two study is actively recruiting for the treatment of moderate to severe acne with amylose.
Lastly, our phase two study is actively recruiting for the treatment of moderate to severe acne, but I'm a dose.
Speaker 3: Year 65 of 126 patients have been those today.
He 60 526 patients have been dosed to date please.
Speaker 3: Treatment of moderate to severe acne without the side effects of current treatment options is a significant, unmet medical need in a major indication that the notologist see and an approval in this indication was substantially raised the market potential for a minute.
Treatment of moderate to severe acne, but all the.
Side effects of columns treatment options is a significant unmet medical need in the major indications that Donato logistics C.
And on approval in this indication, but it's substantially less the market potential for our minerals.
Speaker 3: As a final topic, I would like to update you on where we stand with our second FDA approved prescription drug, SAPI. This is a topical cream that inhibits bacterial growth.
As a final topic I would like to update you on Bellevue stands with our second FDA approved prescription block Cepheid.
Is this a topical cream that inhibits spoke to earlier the golf.
Speaker 3: Currently now antibiotic resistance against therapy is known and it has been approved by the FDA for the treatment of Inputivo, which has a common skin infection due to staphilococcus aureus and staphilococospia piongginus.
Currently no antibiotic resistance, except he is known and that has been approved by the FDA for the treatment of impetigo, which is a common skin infection due to stuff helical cause all wheels and stuff. We look of course, probably owned channels.
Speaker 3: There has been very limited revenue from SAP to bio-fontea. Of us from time as problematic developments with the third party manufacturer that was providing all of supply have resulted in delays to our commercialization of the product.
There has been very limited loved the new products that would be to buy a phone tail off for some time.
It's problematic developments with a third party manufacturer.
I think all of our supply.
It resulted in delays to commercialization of the product.
Speaker 3: Our licensor Ferrer has been developing a new manufacturer which now allows us to actively explore the options with this product, including a potential relaunch of the drug in early 2024.
Our license of <unk> has been developing a new manufacturer, which now allows us to actively explore the options with its products, including a potential launch of the talk and the early 'twenty 'twenty four.
Speaker 3: With that, I turn the call over to Fred to review the financial details of this quarter.
With that I'll turn the call over to flat to leave you with the financial details of the quarter.
Speaker 4: Thank you, Herman, and good morning, everyone. So, it's good to be chatting here and...
Thank you Carmen and good morning, everyone.
So it's it's good to be chatting here and are you now.
Speaker 4: looking at a strong third quarter, beating our estimates, so starting with the top line.
Looking at our strong third quarter, beating our estimates so starting with the top line.
Speaker 4: Net revenue for the three months ended September 30th, 2023, was $8.9 million, an increase of $4.3 million, or about 106% over the prior year.
Net revenue for the three months ended September 30th.
2023 was $8 9 million, an increase of $4 3 million or about 106% over the prior year.
Speaker 4: For the first nine months of 2023, Net revenue was 23.5 million up from 18.5 million last year. This growth was driven by
For the first nine months of 2023 net revenue was $23 5 million up from $18 5 million last year. This growth was driven by.
Speaker 4: commercial expansion that Herman described, increased adoption by dermatologists, and buy-in ahead of a price increase for amelus on October 1st.
The commercial expansion that Herman described increased adoption by dermatologists and are buying ahead of a price increase for analysts on October 1st.
Speaker 4: Operating expenses were $13.5 million for the third quarter of 2023, compared with $8 million for the third quarter of 2022. The $5.2 million increase included approximately $3 million due to our commercial expansion, increased investment in medical affairs and reimbursement, along with some severance as we pivoted resources to more revenue-generating roles, and of course, the addition and the increase of cost of revenue, which I'll touch on in a moment.
Operating expenses were $13 5 million for the third quarter of 2023, compared with 8 million for the third quarter of 2022.
The $5 2 million increase included approximately $3 million due to our commercial expansion and increased investment in medical affairs and reimbursement.
Along with some severance as we pivoted resources to more revenue generating roles.
And of course, the addition, and the increase of cost of revenue, which I'll touch on in a moment.
Speaker 4: year-to-date operating expenses were $42.3 million, and this compares with $31.5 million for the first nine months of last year. About $2.2 million of this increase was due to legal fees, primarily from settlement of litigation in the first half of 2023, along with severance expenses and the commercial expansion that's mentioned earlier, and the increased cost of revenue. So, moving to...
Year to date operating expenses were $42 3 million and this compares with $31 5 million for the first nine months of last year.
About $2 2 million of this increase was due to legal fees, primarily from the settlement of litigation in the first half of 2023, along with severance expense <unk> expenses.
In the commercial expansion that that's mentioned earlier and the increased cost of revenue.
Moving to cost of revenue.
Speaker 4: For the third quarter, it was $4.6 million compared to $2.2 million last year, which reflects the higher sales of Amble.
For the third quarter. It was $4 6 million compared to $2 2 million last year, which reflects the higher sales of campus.
Speaker 4: Cost of revenue for the first nine months was $12.1 million compared to $9.9 million last year.
Cost of revenue for the first nine months was $12 1 million compared to $9 9 million last year.
Speaker 4: SGNA expenses were 8.7 million for the third quarter of 2023, compared with 7.9 million for the third quarter of 2022.
SG&A expenses were $8 7 million for the third quarter of 2023, compared with $7 9 million for the third quarter of 2022.
Speaker 4: with the increase primarily driven by higher personnel costs due to the commercial expansion, severance, and some legal expense.
With the increase primarily driven by higher personnel costs.
Due to the commercial expansion severance and some legal expense.
Speaker 4: The net loss for the third quarter of 2023 was $6.3 million or $4.64 per share, and this compares with a net loss of $2.6 million or $2.26 per share for the prior year quarter.
The net loss for the third quarter was Oh, sorry.
Net loss for the third quarter of 2023 was $6 3 million or four four.
$4.64 per share and this compares with a net loss of.
$2 6 million or $2 26 per share.
For the prior year quarter.
Speaker 4: I will note that these figures are in a with adjusted base.
I will note that these figures are not adjust.
Adjusted basis.
Speaker 4: Net loss for the first nine months of 2023 was 23.7 million compared with net income of 2.1 million for the first nine months of 2022. As net income or loss comprises of multiple non-cash items, I'll refer you to, or we refer to the adjusted EBITDA as a clear reflection of the business's status.
Net loss for the first nine months of 2023 was $23 7 million compared with net income of $2 1 million for the first nine months of 2022.
As net income or loss comprises of multiple noncash items.
I refer you to our we refer to the adjusted EBITDA is a clear reflection of the business the status.
Speaker 4: The adjusted EBITDA was negative 3.9 million for the quarter compared with negative 5 million last year. The decrease was primarily driven by increased revenues partially offset by higher S-GNA expense.
Adjusted EBITDA was negative $3 9 million for the quarter compared with negative $5 million last year.
The decrease was primarily driven by increased revenues.
Partially offset by higher SG&A expense adjusted.
Speaker 4: Adjusted EBITDA for the first nine months of the year was negative $15.8 million compared with negative $4.1 million during the same period in 2022.
Adjusted EBITDA for the first nine months of the year was negative $15 8 million.
Compared with negative $4 1 million during the same period in 2022.
Speaker 4: I refer you to the table in the press release that was issued yesterday afternoon for a reconciliation of gap to non- GAAP financial measure.
I refer you to the table in the press release that was issued yesterday afternoon for a reconciliation of GAAP to non-GAAP financial measures.
Speaker 4: Turning to our balance sheet, as of September 30, 2023, we had cash and cash equivalents of $3.4 million, compared with $17.2 million as of December 31, 2022. In addition, we had a $3.3 million investment in shares of BioFrontera AG as of September 30.
Turning to our balance sheet as of September 30th 2023, we had cash and cash equivalents of $3 4 million compared with $17 2 million as of December 31, 2022.
In addition, we had.
A $3 3 million dollar investment and shares of bio from Terra a G as of September 30th.
Speaker 4: Subsequent to the close of the quarter, we raised $4.5 million in a registered direct offering priced at the market.
Subsequent to the close of the quarter, we raised $4 5 million in a registered direct offering priced.
At the market.
Speaker 5: As we'll end the year with a significant stock of inventory, we are not anticipating making any inventory purchases for at least the first half of 2024 and will continue to manage our working capital very closely.
As we'll end the year with a significant stock up inventory, we are not anticipating making any inventory purchases for at least the first half of 2024.
And we'll continue to manage our working capital very closely.
Speaker 5: Based on the quarter's strong results, we are in track to hit our previously announced goals.
Based on the quarter's strong results, we are on track to hit our previously announced goals.
Speaker 5: with the seasonally strongest quarter ahead of us, which is fourth quarter.
With the seasonally strongest quarter ahead of us which is fourth quarter.
Speaker 5: And based on multiple positive indicators, such as land placements that Herman mentioned, we expect revenue for the full year of 2023 to be at least 25% compared with 2022. And we expect to be cash flow positive within approximately one to one and a half years.
And based on multiple positive indicators.
Such as lamp placements that Herman mentioned we.
We expect revenue for the full year of 2023 to be at least 25% compared with 2022, and we expect to be cash flow positive within approximately one to one and a half years.
Speaker 5: So, with that overview of our business and the recent financial performance, Herman and I are now ready to take questions from our covering analysts. Operator?
So with that overview of our business and the recent financial performance permanent I are now ready to take questions from our covering analysts operator.
We will now begin the question answer session.
Speaker 1: To ask a question, you may press star, then 1 on your touch-tone phone.
To ask a question you May Press Star then one on your Touchtone phone.
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If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker 1: At this time, we will pause momentarily to assemble our roster.
At this time, we will pause momentarily to assemble our roster.
Speaker 1: The first question today comes from Jonathan Askross with Rasp, please go ahead.
The first question today comes from Jonathan Aschoff list.
Please go ahead.
Speaker 6: Well, it's enough, but thanks. Hi guys, good morning. I have a bunch of lamp questions. Just kind of wondering the extent to which the lamp...
Well that's enough.
Hey, guys. Good morning, I have a bunch of lamp questions I'm, just kind of wondering the extent to which the lamp.
Speaker 6: is, you know, the thing other than amelus that might be more hindering of, you know, any growth that could otherwise be if there were more lamps out there. So, are there any residual supply chain constraints that hinder the XL lamp production? You know, is the smaller lamp production hindered also by any similar issues, you know, if any such issues still exist?
Is you know the thing other than animals lose that might be more I'm wondering of any growth that could otherwise be if they were more lamps out. There. So are there any residual supply chain constraints that hinder the XL lamp production you know is a smaller lamp production hindered also by any similar.
Their issues, if any such issues still exist.
Yeah.
Speaker 3: We are not aware of any supply chain issues with the small land, so that has always been delivered according to our.
Well, we are not aware of any supply chain issues with a small loan.
That's that's all that's being delivered according to all.
Speaker 3: our orders. With the large lamps, the supply chain issues should all be solved.
Oh all of those.
With the <unk>.
Large lumps the supply chain issues should all be solved.
Speaker 3: There are still two or three minor questions out there, but we are confident that we'll be able to launch that lamp in Q2 next year.
So all students to clean minor questions also.
But so we are confident that we'd be able to.
To launch that in Q2 next year.
Speaker 7: Okay, and when you say in the first nine months of 2023 you increased, you know, the smaller lamp, the BF Roto LED, by 101, up sharply from 55 in the preceding quarter. That preceding quarter is, you know, at the end of the year last year was 55, to which you added 101, and now you have 156 lamps out there commercially as of the end of September . Is that correct?
Okay, and when you say in the first nine months of 2023, you increased you know the smaller lamp BF Roto L E D.
By 101 up sharply from 55 and of course, keeping quarter that preceding quarter is.
At the end of the year last year. It was 55, two which you added 101 and now you have a 156 lamps out there commercially as of the end of September is that correct.
No we have lumps alltel.
Before.
So the total the total number of names we have Walter is actually much higher.
Okay, but yeah as a fee.
Jonathan add at the end of the quarter being approximately 650 lamps out in the.
Out in the field.
Okay, because that statement and it's quite confusing it makes it sound like as far fewer labs out there than there actually are.
Well, we play sorry, we replaced our 101 additional new lamps.
Year to date in 2023 as of September 30th.
Oh the.
My takeaway is that we're really pushing that as a as a catalyst for adding new customers growing those customers in the field therapy. So we want to get our footprint and our roto Leds on X valves out in the field as much as possible.
So is there you know with that in mind as their immediate market demand for every single LCD and every single L. D X L ramping Meg Hoover it up by the dorms or do any of them sit around after manufacturer.
But it's close.
Oh go ahead.
Oh I was going to say we.
We've been placing them pretty quickly and last year well.
We are.
Definitely had a push this year on on lamps, and I will say, we are moving very quickly and we are expecting to sort of ramp down on the on the roto Leds as were planning.
The launch of the X L I would not characterize it as sitting there theyre sitting around we're expecting to deploy everything we have in stock.
And at least you know this is just hearing from the field, we haven't taken any orders, obviously, but there is decent excitement and we believe that we're gonna be able to move the <unk> quickly next year as well, they're not going to be sitting.
Sitting around and warehouses.
Question, Okay, so as far as like manufacturing share of small to XL, it's still overwhelmingly small because of the little bit of of our supply chain residual on the XL or whats kind of that manufacturing ratio.
You mean on the XL, it's all the small ones so far but what's the ratio of smalls to X sales that you're getting into the field.
Over any period of time.
What do you expect the next.
Next the majority of the alarm so we will go to into the fields or actually the accidents.
Okay, and you don't know so waiting waiting for that.
That's one one.
One more statement you'll further question so that's never been.
All of those stock situations pull the small loan.
Okay. That's helpful and portable Lance did you say earlier in the call when they were to be available or is it still kind of hard to tell when they will first be available.
Well, that's still hard to tell it's also Christian I'll see a multiple Mondays will become the best in.
Into this project because suddenly speed it up if we have performance available for that.
So that is still subject to.
At least one or two years old.
Okay, and you would expect the portable to eclipse. The two current currently available lamps, right or as the surface area not as big as the XL.
It's not clear to us.
It's oh so much.
Because with the but took are armed with a small number so.
So somehow.
Some of the two thoughts in between towards the XO.
Okay.
Thanks, It sounds like that's moving along nicely.
The next question comes from Bruce Jackson with the Benchmark Company. Please go ahead.
Hi, Good morning, and thank you for taking my questions I wanted to start off with that'd be.
So is the new contract manufacturer qualified yet.
I'm the new manufacturer.
It's qualified so sort of a pilot that's just has been done.
And the manufacturer.
Has been.
Oh, the pilot batches have been submitted to the FDA on the Pud.
So what comes next is easy.
The full qualification batches.
And they would be.
Produced this.
This month.
Hum with clean month's stability on these batches, we can actually start selling with them.
Okay and that was going to be my next question about Zappy. So you said you were contemplating a relaunch do you have any more specificity on.
Are you going to relaunch the product in and win during 2020 four would you be doing that if you do it.
Oh that hasn't been determined yet.
Oh, two big like the use of the product portfolio.
Portfolio.
Hum.
Oh, the many options that we are currently looking at several options that were looking up. So this would it be decided when I looked at pretty shortly.
Police and for the opportunity to launch.
Okay, Great and then a quick question about the the three tubes data has that been submitted to the FDA yet.
Not yet would it be submitted through the course of this month.
Okay, Great and then last question about the price increase and a 25% or better guidance for the year. So.
How much of the Rev.
Revenue got pulled forward due to the price increase do you think.
In the third quarter.
Okay.
Yeah.
It's always difficult to say how much more spooked forward.
We look at some.
Uh Huh, our historic experience with price increases.
And buy in into that.
It's a it's almost a couple of thousand tubes.
However, given the fact that Q4 is a strongest quarter.
We don't expect a few fallen at all would it be a bad quarter, because everybody bought everything in Q3.
I assume that this is really a question of setting up so we still expect.
We still expect a significant increase in in the fourth quarter, but not anything like the 100% we saw in Q fleet.
Okay.
Got it so still it's still up year.
Year over year and sequentially over the third quarter.
Yes.
Okay, Great alright, thank you very much.
Thank you everyone.
This concludes our question and answer session I would like to turn the conference back over to Hermann Lew Barrett for any closing remarks.
Yeah. Thank you all.
Paul the questions to two analysts and things for everybody again.
Paul listening in.
To summarize valued in college for the strong growth, we delivered this past quarter and for the increase in the number of loads to bulldoze all the left lung.
Installations.
I've mentioned.
We remain on track to go all the revenues of at least 25% of this year.
The living primarily by I'm, a little sense of the maturing commercial organization.
So we look forward to speaking with you again.
Paul or fourth quarter, and full year 2020 school results.
Thank you and have a nice day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.
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