Biofrontera Inc. 10-Q

Item 5. Other Information Pursuant to the Commitment Letter with MidCap Business Credit LLC (“MidCap”) previously disclosed in Item 9B of our Annual Report on Form 10-K, on May 8, 2023, we entered into a Loan and Security Agreement (the “Loan Agreement”) with MidCap, providing us with a revolving line of credit in the aggregate principal amount of up to $6.5 million, subject to a borrowing base and an availability block. The Loan Agreement allows us to request advances thereunder and to use the proceeds of such advances for working capital purposes until the maturity date of May 8, 2026. The Loan Agreement is secured by a lien on substantially all of the assets of the Company, subject to customary exceptions. Advances under the Loan Agreement shall bear interest at the 30-Day Adjusted Term SOFR Rate, set monthly on the first day of the month based on 30-Day Term SOFR plus a spread adjustment of 15 basis points and subject to a floor of 2.25%, plus 4.00% calculated and charged monthly in arrears. In the event of a called event of default, a default interest rate of 3.00% percent shall be added to the aforementioned rate. Under the terms of the Loan Agreement, amounts available for advances would be subject to a borrowing base, which is a formula based on certain eligible receivables and inventory , and a block on such availability in the amount of $650,000 (the “Availability Block”). The Loan Agreement also includes an Unused Line Fee Rate of 0.375% of the Credit Limit (as defined in the Loan Agreement) less all outstanding advances, which shall be paid on a monthly basis. The Loan Agreement also provides for the issuance of letters of credit with a $250,000 sublimit. We do not currently have any letters of credit outstanding. The Loan Agreement includes customary covenants, including limitations on liens, indebtedness, restricted payments and a financial maintenance covenant requiring maintenance of minimum revenue from our licensed product Ameluz® tested on a quarterly basis. In addition, at our election, we may remove the Availability Block by electing to become subject to a minimum EBITDA (as defined in the Loan Agreement) maintenance financial test, to be tested quarterly following such election. The Loan Agreement also contains customary events of default provisions. The Loan Agreement may be terminated prior to its maturity date, (i) by MidCap as a result of the occurrence of an Event of Default (as defined in the Loan Agreement) or (ii) by us at any time upon thirty days written notice, subject to an early termination fee in certain circumstances. If the Loan Agreement is terminated by the Lender following the occurrence of an Event of Default or if we terminate the Loan Agreement more than sixty days before the third anniversary of the Loan Agreement, we are required to pay an early termination fee of up to $150,000 according to the formula for the early termination fee set forth in the Loan Agreement. The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement, a copy of which is filed herewith as Exhibit 10.3 and incorporated herein by reference. 30 Item 6. Exhibits The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC. Exhibit No. 4.1 Amendment No. 1 to the Stockholder Rights Agreement, dated as of April 26, 2023, between Biofrontera Inc. and Computershare Trust Company, N.A., as Rights Agent (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed on April 28, 2023). 10.1*#† Settlement Agreement dated April 11, 2023 between Biofrontera Inc., Hermann Luebbert, John J. Borer, Loretta M. Wedge, Beth J. Hoffman, Kevin D. Weber and Biofrontera AG 10.2* Commitment Letter dated as of March 9, 2023 between the Company and MidCap Business Credit LLC. 10.3*# Loan and Security Agreement, dated as of May 8, 2023, between the Company, as Borrower, and MidCap Business Credit LLC, as Lender. 31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 32.1* Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 32.2* Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101) * Filed herewith. † Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. # The schedules (and similar attachments) to this exhibit have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish a supplemental copy of any omitted schedule (or similar attachment) to the SEC upon request 31 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIOFRONTERA INC. Date: May 12, 2023 By: /s/ Erica L. Monaco Name: Erica L. Monaco Title: Chief Executive Officer ( Principal Executive Officer) Date: May 12, 2023 By: /s/ E. Fred Leffler Name: E. Fred Leffler, III Title: Chief Financial Officer (Principal Financial Officer) 32