What changed in this filing

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Item 9A. Controls and Procedures

2024-03-15 compared with 2023-03-13 · 93 added, 822 removed, 112 unchanged (89% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period

covered by this Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under

the Exchange Act).

Based on that evaluation, our Chief Executive Officer and

Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at the reasonable

assurance level.

Identified Material Weaknesses in Internal Control Over Financial Reporting

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is

a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected

on a timely basis.

connection with the audits of our financial statements as of and for the years ended December 31, 2021 and December 31, 2020, we identified

a material weakness in our internal control over financial reporting.

The previously identified material weakness pertains to our oversight

of work being performed for the Company by third-party service providers;

as the Company’s management review control over information

produced by third-party service providers was not sufficiently precise to identify errors.

Specifically, as part of the valuation of

an intangible asset in connection with the acquisition of Cutanea, we failed to identify a computational error within the valuation model

for the Xepi ® intangible asset.

In addition, in 2021 an error in the valuation of the same intangible asset was identified

relating to insufficient information being provided to the third-party consultant in connection with an impairment assessment.

have continued our remediation work by adding steps to the engagement of third-party specialists who provide assistance with complex

or judgmental accounting areas, including checks and balances over the proper flow of information to the specialist to allow for an adequate

understanding of the transaction.

have also continued to assess the competency of any third-party specialists prior to engagement to ensure that the Company is

utilizing appropriate firms and individuals with regard to technical accounting matters.

Annually, this assessment is documented to

support the Company’s assessment of third-party specialists used as part of the financial reporting process.

have implemented controls and procedures to ensure that an appropriate and sufficient review is being performed over both the data being

provided to and from any third-party specialists.

These checks are designed to ensure that the Company is providing all relevant data

to third-party specialists, and that sufficient procedures are being performed to validate and challenge the assumptions in any valuation

reports, validate that the detail in the valuation is accurate, and that any formulas and calculations are validated for clerical accuracy.

As a result of the remediation activities

and controls in place as of December 31, 2022 described above, we have remediated this previously disclosed material weakness.

completion of remediation does not provide assurance that our remediated controls will continue to operate properly or that our financial

statements will be free from error.

management, including our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by

this Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the

Exchange Act).

Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded

that, as of December 31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.

Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules

management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules

13a-15(f) and 15d-15(f) of the Exchange Act.

Our management, under the supervision and with the participation of our principal executive

officer and principal financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting

as of December 31, 2022 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission (2013 Framework).

Based on the results of its evaluation, management concluded that our internal control over

financial reporting was effective as of December 31, 2022.

of Prior Material Weakness

effective implementation of the Company’s remediation plan, the Company has strengthened its internal control environment and has

addressed the material weaknesses that were identified at December 31, 2021.

Our management assessed the effectiveness of our internal

control over financial reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee

of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework (2013).

assessment, the Company concluded that the material weakness has been remediated as of December 31, 2022.

Our management, under the supervision and with the participation of our Chief Executive

Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting

as of December 31, 2023 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission (2013 Framework).

Based on the results of its evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our

internal control over financial reporting was effective as of December 31, 2023.

Report of the Registered Public Accounting Firm

6 unchanged sentences

affected, or is reasonably likely to materially affect, our internal control over financial reporting (as defined in Rule 13a-15(f) under

the Exchange Act), other than the certain internal controls implemented in connection with our remediation efforts described above.

the Exchange Act).

Other Information

March 9, 2023, we entered into the Commitment Letter with MidCap, in respect of MidCap’s commitment to provide us with the Revolving

Facility, subject to the borrowing base formula, minimum excess availability and other terms and conditions thereof, in the aggregate

principal amount of up to$6.5 million.

The Revolving Facility shall be secured by a lien on substantially all of the assets of the Company,

subject to customary exceptions.

proceeds of the loans under the Revolving Facility shall be used by the Company to provide working capital.

to the Commitment Letter, the final documentation for the Revolving Facility shall include conditions to borrowings, representations

and warranties, affirmative and negative covenants and other terms and conditions, each to be negotiated and mutually agreed and customary

for financings of this type and size.

Revolving Facility shall bear interest at the 30-Day Adjusted Term SOFR Rate, set monthly on the first day of the month and subject to

a floor of 2.25%, plus 4.00%.

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 Revolving Facility, amounts available for advances would be subject to a borrowing base,

which is a formula based on certain eligible receivables and reserves.

Company also is obligated to pay MidCap certain fees and charges, including (i) at closing, a facility fee equal to 2.00% times the commitments

under the Revolving Facility, (ii) an annual fee equal to 1.00% times the commitments under the Revolving Facility, (iii) audit fees

in connection with any audits or inspections by MidCap or its agents of collateral or the Company’s operations or business (not

to exceed $10,000 per year), (iv) a collateral monitoring charge of $2,000 per month and (v) an unused line fee of 0.375% per annum on

the daily average of the undrawn portion of the commitments under the Revolving Facility.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

Officers and Directors

following table provides information regarding our executive officers and members of our board of directors (ages as of the date of this

Hermann Lübbert Ph.D.

Chairman and Director

Executive Officer

Frederick Leffler III

Financial Officer

Wedge, CPA, CCGMA

Hoffman, Ph.D.

Hermann Lübbert, Ph.D.

founded Biofrontera AG in 1997 and has served as Biofrontera Inc.’s Executive Chairman since November

2021 and as chairman of its board of directors since March 2015.

Until December 2021, Prof.

Lübbert had served as the chief

executive officer of Biofrontera AG, chairman of the management board of Biofrontera AG, and as a managing director of all subsidiaries

of Biofrontera AG.

Lübbert has also served as the chief executive officer of Biofrontera Inc.

(March 2015 – January

March 2021-November 2021) and as the chairman of Biofrontera Inc.’s board of directors (March 2015-present).

He studied biology

in his hometown of Cologne and received his doctorate there in 1984.

Following 3.5 years in academic research at the University of Cologne

and the California Institute of Technology, he gained experience in managing a global research organization during 10 years at Sandoz,

where he served as Head of Genome Research, and Novartis Pharma AG, where he served as a member of the global Neuroscience Research Management

He qualified as a university lecturer at the Swiss Federal Institute of Technology (ETH) Zurich and in addition to his engagements

at Biofrontera held a professorship for animal physiology at the Ruhr-University Bochum from which he retired on February 28, 2022.

Monaco has served as Biofrontera Inc.’s Chief Executive Officer since November 2021.

She has held senior leadership positions

since joining Biofrontera in 2016, including as Chief Financial Officer and Chief Operating Officer and acted as a member of Biofrontera

Inc.’s Board of Directors from January 2020 until November 2021.

Erica previously held financial leadership roles with SUN Pharma

from 2013 to 2016 where she directed financial operations for two GMP facilities specializing in PDT, sterile injectable diagnostics

and contract manufacturing.

Prior to 2013, Erica worked for WGBH Educational Foundation managing financial planning and analysis for

public media production and broadcasting and for Deloitte providing audit, assurance and tax consulting services for public companies.

Erica received her Bachelor of Business Administration with an Accounting concentration and her Master of Science in Accounting (M.S.A)

from The Isenberg School of Management at the University of Massachusetts.

She holds an active CPA license.

Leffler has served as Biofrontera Inc’s Chief Financial Officer since October 2022.

Leffler is an experienced financial

executive with 15 years of leadership, financial management, consultancy and operations experience across a range of private and public

organizations, including growth-stage, private equity and Fortune 100 companies.

Prior to joining the Company, Mr.

Leffler served as

a Senior Manager at McKinsey & Company since January 2022 as well as in different capacities, including Associate and Senior Manager

from September 2015 to November 2019.

Prior to rejoining McKinsey & Company, Mr.

Leffler served as the Senior Director, Corporate

Finance & Restructuring of FTI Consulting from August 2020 to January 2022.

Prior to joining FTI Consulting, he served as Vice President,

Data & Analytics of Rockcreek from November 2019 to August 2020.

Earlier in his career, Mr.

Leffler held various financial positions

at General Electric and Sun Edison.

Fred received his Bachelor of Science, Business Administration (BSBA) degree from the Ohio State

University Fisher School of Business, and his Master of Business Administration (MBA) from Duke University’s Fuqua School of Business.

Borer III, J.D.

became a member of our board of directors in November 2021.

Since 2012, he has been the Senior Managing Director

and Co-Head of Investment Banking at The Benchmark Company, LLC.

He was formerly the Chief Executive Officer and Head of Investment Banking

at Rodman & Renshaw and has held senior positions at Security Pacific Business Credit and Barclays American Business Credit.

Borer has also served on the Supervisory Board of Biofrontera AG since May 2016 until December 2021.

He holds a Doctor of Law degree

(J.D.) from Loyola Law School in Los Angeles, California and a degree in Agricultural Economics from The University of California, Davis.

Wedge, CPA, CCGMA became a member of our board of directors in November 2021.

She has been the Managing Partner of SemperFi Accounting

Services, LLC since July 2019.

Prior to that, from February to October 2017 she was the Vice President, Finance & Controller of Velcro

Companies and between June 2015 and February 2017, she was the Vice President & Controller of CRISPR Therapeutics.

financial executive with over 25 years of both public and private sector experience including extensive manufacturing, utility, medical

device, bio-pharma and experience.

She has an M.B.A.

from California State University in Sacramento, California.

She holds an active

CPA license and is also a Certified Chartered Global Management Accountant.

Hoffman, Ph.D.

became a member of our board of directors in November 2021.

Hoffman is the founder, and, since 2015, has been

the President and Chief Executive Officer, of Origami Therapeutics, Inc., in San Diego, California.

Hoffman has over 20 years of

experience in drug discovery and development.

Hoffman has made major contributions to the launch of two first-in-class drugs and

two best-in-class drugs for Cystic Fibrosis.

Beth holds her Ph.D.

in Biology from The Johns Hopkins University in Baltimore, Maryland.

Weber became a member of our board of directors in March 2022.

Weber is an experienced pharmaceutical executive who brings

to Biofrontera more than 30 years of executive and commercialization experience with a particular expertise in product marketing.

has worked in a range of therapeutic areas including clinical and aesthetic dermatology, pain management, inborn errors of metabolism

and respiratory medicine.

He recently retired from his position as a Principal at Skysis, a biotech-focused brand management consulting

practice, and previously served as CEO of Paraffin International.

Prior to Paraffin, Mr.

Weber served in senior executive and marketing

roles at Depomed, Hyperion Therapeutics and Medicis Pharmaceuticals.

From 2016 to 2021 Mr.

Weber served as a member of the supervisory

board of Biofrontera AG.

Weber previously served on the Boards of Directors of the American Academy of Pain Medicine Foundation,

the American Chronic Pain Association and the Arizona Bioindustry Association.

He holds a B.S.

in Business Administration from Western

Michigan University.

Relationships

are no family relationships between any director or executive officer.

in Certain Legal Proceedings

of our directors, executive officers or control persons have been involved in any of the following events during the past ten years:

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the

time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,

permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or

banking activities;

being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated

a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Section 16(a) Reports

16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common

stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership

and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively.

officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a)

reports that they file.

solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe

that during fiscal year ended December 31, 2022 our officers, directors and greater than 10% percent beneficial owners were in compliance

with all applicable filing requirements except for (a) a late Form 4 filed for Prof.

Lübbert on January 19, 2022

to report employee stock grants, (b) late Form 4s filed for Prof.

Borer on May 26, 2022 to report equity compensation and (c) a late Form 4 filed for Prof.

Lübbert and Ms.

Monaco on September

19, 20222 to report the vesting of restricted stock units.

of Ethics and Code of Conduct

have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal

executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of the code is posted on our website at https://investors.biofrontera-us.com/wp-content/uploads/2021/10/Code-of-Conduct.pdf .

In addition, we post on our website all disclosures that are required by law or the Nasdaq listing standards concerning any amendments

to, or waivers from, any provision of the code.

The information on or accessed through our website is deemed not to be incorporated in

this Form 10-K or to be part of this Form 10-K.

for Shareholders to Recommend Director Nominees

have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

have an audit committee of the board of directors, which consists of Mr.

Hoffman and Ms.

Before the expiration of the

phase-in period applicable to initial public offerings under SEC and Nasdaq rules, all members of our audit committee will be independent

for audit committee purposes.

The board of directors has determined that Ms.

Wedge qualifies as an “audit committee financial expert,”

as defined under rules and regulations of the SEC.

audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board

whether the audited financial statements should be included in our Form 10-K

with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation

of our financial statements;

with management major risk assessment and risk management policies;

the independence of the independent auditor;

the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible

for reviewing the audit as required by law;

and approving all related-party transactions;

and discussing with management our compliance with applicable laws and regulations;

pre-approving

all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the

services to be performed;

or replacing the independent auditor;

the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and

the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls

or reports which raise material issues regarding our financial statements or accounting policies.

required by this Item is incorporated by reference to

our Proxy Statement for our

Annual Meeting of Stockholders for the fiscal year ended December 31, 2023, which will be filed with the Securities and Exchange Commission,

pursuant to Regulation 14A, no later than 120 days after the end of the 2023 fiscal year covered by this Form 10-K,or alternatively,

by amendment to this Form 10-K under cover of Form 10-K/A no later than the end of such 120 day period.

Executive Compensation

Compensation Table

Compensation during the years ended December 31, 2022 and 2021 was as follows:

Name and principal position

Stock awards ($)

Option awards ($)

All other compensation ($)

Erica Monaco, CPA, Chief Executive Officer

Eugene Frederick Leffler III

Hermann Lübbert Ph.D., Executive Chairman

for services during December 14, 2021 – December 31, 2021

services during October 24, 2022 – December 31, 2022

Equity Incentive Plans and Share-Based Payments of the Notes to the Financial Statements for all assumptions

used in the valuation of the stock awards and option awards.

Disclosure to Summary Compensation Table

Compensation Arrangements

following summarizes the material terms of the employment offer letters and employment agreements with each of our named executive officers.

Employment Agreement

October 21, 2019, we entered into an employment agreement with Erica Monaco pursuant to which she agreed to continue to serve as our

Vice President of Finance and Operations.

This agreement was amended on January 6, 2020, pursuant to which she agreed to serve as our

Chief Financial Officer in consideration for an annual base salary of $270,000 and eligibility to receive a cash bonus of up to 30% of

her base salary and to participate in any benefit programs we make available to our employees.

Monaco’s employment agreement

is for no particular terms and provides “at will” employment, provided that, if we terminate Ms.

Monaco without “cause”

(as such term is defined in Ms.

Monaco’s employment agreement), we must provide her with ninety (90) days’ notice.

August 11, 2021, we entered into a new employment agreement with Ms.

The agreement provides that Ms.

Monaco will serve as our

Chief Executive Officer with a base salary of $300,000 as well as provides a signing bonus of $75,000 paid in two installments.

of this agreement are otherwise substantially the same with those of her current employment agreement.

On April 1, 2022, we entered into an amendment to the employment agreement with Ms.

The agreement was amended

to provide for an annual base salary of $450,000 and eligibility to receive a cash bonus up to 60% of base salary upon the attainment

of performance goals set in advance by the Board of Directors.

The actual amount of the bonus shall depend upon the level of achievement

of set targets, however, no bonus shall be paid if the level of target achievement is below 70%.

Upon termination of employment by the Company other than termination for “Cause”, Ms.

Monaco shall be entitled to a severance payment equal to one twelfth of her then-current annual base salary for each full year of employment;

provided, however, that such payment shall not exceed two full years of Ms.

Monaco’s then-current base salary.

Employment Agreement

October 1, 2021, we entered into an amended employment agreement with Prof.

Lübbert that became effective on December 14, 2021,

the day after his last day of employment with Biofrontera AG.

The agreement provides that Prof.

Lübbert will continue to serve

as our Executive Chairman and devote 100% of his time to his role as Executive Chairman.

Subsequently, Prof Dr.

agreement was further amended on March 2, 2022 (effective retroactively to December 15, 2021) to establish his base salary of $468,500,

with eligibility to receive a cash bonus of up to 65% of his base salary upon the attainment of performance goals set in advance by the

The actual amount of any bonus shall depend upon the level of achievement of set targets.

No bonus will be paid if our board of

directors determines that the target achievement of the respective year was below 70%.

We also agree to allow Prof.

to participate in any benefit programs we make available to our employees.

Upon termination of employment by the Company other

than termination for “Cause”, Mr.

Lübbert shall be entitled to a severance payment equal to one twelfth of his then-current

annual base salary for each full year of employment (including Biofrontera AG, as a past affiliate of the Company);

provided, however,

that such payment shall not exceed two full years of Mr.

Lübbert’s then-current base salary.

Employment Agreement

October 3, 2022, we entered into an employment agreement with Mr.

Leffler to serve as our Chief Financial Officer.

The agreement provides

for an annual base salary of $355,000, with a one-time signing bonus of $25,000, receipt of 100,000 stock options and eligibility to

participate in any benefit programs we make available to our employees.

Leffler may receive a bonus of up to 40% of his base salary

upon attainment of performance goals set in advance by the Chief Executive Officer.

the event that Mr.

Leffler experiences a termination of his employment without “cause” or he resigns for “good

reason” outside of a period during which provisions related to a “change in control” (as such terms are defined in

the employment agreement) are in effect, provided that he executes and makes effective a release of claims against the Company and

its affiliates, Mr.

Leffler will become entitled to a lump sum payment in an amount equal to one-twelfth of his annual base salary

for each full year of employment;

further provided that such payment will not be less than six months of his then-current base

salary, and shall not exceed two full years of, his then-current base salary.

Leffler experiences a termination of his

employment without “cause” or he resigns for “good reason” within a certain period of a “change in

control,” he will be entitled to certain benefits and an enhanced severance payment.

Equity Awards

Chief Executive Officer and Executive Chairman hold outstanding options and restricted stock unit awards that were awarded in the fiscal

years ending December 31, 2022, and 2021, following our initial public offering.

These awards are described in more detail in the “Outstanding

Equity Awards at Fiscal Year End” table below and in Note 20, Equity Incentive Plans and Share-Based Payments of the Notes to the

Financial Statements for additional information.

maintain the 2021 Omnibus Incentive Plan, which provided for the issuance of stock option awards to our eligible employees (including

our named executive officers).

See additional details in the “ General Information About the 2021 Omnibus Incentive Plan”

Monaco’s Stock Option Award

December 9, 2021, Ms.

Monaco was granted an option to purchase 56,689 shares of our common stock under the terms of the 2021 Omnibus

Incentive Plan, as described below, at an exercise price of $4.77 per share.

Subject to Ms.

Monaco’s continued employment through

the applicable vesting date, the option will vest and become exercisable in three equal annual installments, beginning on December 9,

In the event of Ms.

Monaco’s death, disability, or termination for good reason while any portion of the option remains unvested,

the option will become immediately vested and exercisable with respect to 100 percent of the option shares as of the date of such occurrence.

In the event of termination for cause, Ms.

Monaco will forfeit the vested and unvested portions of the option.

In the event of termination

for any other reason, the unvested portion of the option will be forfeited as of the termination date, and the vested portion will expire

on the earlier of the last day of the applicable option period or the 90 th day following the termination date.

Monaco’s Award of Restricted Stock Units

December 9, 2021, Ms.

Monaco also received a grant of 56,689 restricted stock units under the terms of the 2021 Omnibus Incentive Plan,

as described below, and subject to the applicable award agreement between Ms.

Monaco and the Company.

Each restricted stock unit represents

a contingent right to receive one share of our common stock.

The restricted stock units vest on June 9, 2022, subject to Ms.

continued employment through the vesting date.

Each vested restricted stock unit will be settled, at the Company’s discretion,

in shares, cash or a combination of shares and cash, within 60 days of the vesting date.

Monaco is entitled to dividend equivalents

with respect to the restricted stock units.

In the event of Ms.

Monaco’s death, disability, or termination for good reason while

the restricted stock units remain unvested, 100 percent of the restricted stock units will become immediately vested as of the date of

such occurrence.

In the event of termination or cause, the unvested and vested portion of the restricted stock units will be cancelled

immediately and any rights to the underlying shares of stock will be forfeited.

Lübbert’s Stock Option Award

December 9, 2021, 2021, Prof.

Lübbert was granted an option to purchase 113,379 shares of our common stock under the terms of

the 2021 Omnibus Incentive Plan, as described below, at an exercise price of $4.77 per share.

Subject to Prof.

continued employment through the applicable vesting date, the options will vest in three equal annual installments beginning on December

In the event of the Prof.

Lübbert’s death, disability, or termination for good reason while any portion of the

option remains unvested, the option will become immediately vested and exercisable with respect to 100 percent of the option shares as

of the date of such occurrence.

In the event of termination for cause, Prof.

Lübbert will forfeit immediately the vested and

unvested portions of the option.

In the event of termination for any other reason, the unvested portion of the option will be forfeited

as of the termination date, and the vested portion will expire on the earlier of the last day of the applicable option period or the

90 th day following the termination date.

Lübbert’s Award of Restricted Stock Units

December 9, 2021, Prof.

Lübbert also received a grant of 113,379 restricted stock units under the terms of the 2021 Omnibus

Incentive Plan, as described below, and subject to the applicable award agreement between Prof.

Lübbert and the Company.

restricted stock unit represents a contingent right to receive one share of our common stock.

The restricted stock units vest on June

9, 2022, subject to Prof.

Lübbert’s continued employment through the vesting date.

Each vested restricted stock unit will

be settled, at the Company’s discretion, in shares, cash or a combination of shares and cash, within 60 days of the vesting date.

Lübbert is entitled to dividend equivalents with respect to the restricted stock units.

In the event of Prof.

death, disability, or termination for good reason while the restricted stock units remain unvested, 100 percent of the restricted stock

units will become immediately vested as of the date of such occurrence.

In the event of termination for cause, the unvested and vested

portions of the restricted stock units will be cancelled immediately and any rights to the underlying shares of stock will be forfeited.

Information About the 2021 Omnibus Incentive Plan

July 23, 2021, our board of directors adopted and our sole shareholder at the time approved the 2021 Omnibus Incentive Plan.

of the 2021 Omnibus Incentive Plan is to enable the Company to attract, retain and motivate its employees by providing for or increasing

their proprietary interests in the Company.

2021 Omnibus Incentive Plan is a stock incentive plan under which we may offer securities of the Company to our employees.

The 2021 Omnibus

Incentive Plan is not subject to any provisions of the U.S.

Employee Retirement Income Security Act of 1974 and is not qualified under

Section 401(a) of the Code.

The 2021 Omnibus Incentive Plan permits Biofrontera to satisfy any awards under the 2021 Omnibus Incentive

Plan by distributing to participants (1) authorized and unissued shares of Biofrontera common stock, (2) shares of common stock held

in the Biofrontera treasury, (3) shares of Biofrontera common stock purchased on the open market or (4) shares of Biofrontera common

stock acquired through private purchase.

directors, officers and consultants or advisors of the Company and its affiliates are eligible for awards under the 2021 Omnibus Incentive

The Committee (as discussed below) has the sole and complete authority to determine who will be granted awards under the 2021 Omnibus

Incentive Plan.

Administration

2021 Omnibus Incentive Plan is administered by the Committee, which consists of the members of our compensation committee, or if our

board of directors is acting as our compensation committee, the individuals constituting “eligible” directors of our board

of directors.

The Committee administers the 2021 Omnibus Incentive Plan, except in the case of awards to non-employee directors.

to non-employee directors are administered by our board of directors.

The Committee in its discretion may delegate any and all of its

duties to officers of the Company.

The Committee or, in the case of awards to non-employee directors, our board of directors, has the

authority to determine the terms and conditions of any agreements relating to awards granted under the 2021 Omnibus Incentive Plan (agreements

may differ among participants), and to adopt, alter and repeal rules, guidelines and practices relating to the 2021 Omnibus Incentive

The Committee or, in the case of awards to non-employee directors, our board of directors, has full discretion to administer and

interpret the 2021 Omnibus Incentive Plan, and to adopt whatever rules, regulations and procedures it deems necessary or advisable.

Plan Amendments

2021 Omnibus Incentive Plan expires by its terms on the tenth anniversary of the Plan Effective Date.

However, our board of directors

may terminate the 2021 Omnibus Incentive Plan before that date.

No awards can be granted under the 2021 Omnibus Incentive Plan after

the 2021 Omnibus Incentive Plan has terminated.

However, awards granted prior to the date on which the 2021 Omnibus Incentive Plan terminates

will not be affected by the termination and the terms and conditions of the 2021 Omnibus Incentive Plan will continue to apply to those

Available for Awards

Available for Issuance

maximum number of shares of common stock that may be issued pursuant to awards granted under the 2021 Omnibus Incentive Plan is

2,750,000, subject to certain adjustments for corporate transactions, as described in the section entitled

“— Adjustments ” below.

On December 12, 2022, the stockholders of the Company approved an amendment to

increase the number of shares authorized for issuance by 2,589,800 from 2,750,000 to 5,339,800 shares.

No participant may be granted

awards of options and/or stock appreciation rights or performance compensation awards with respect to more than 900,000 shares of

common stock in any one year.

On termination, forfeiture, or expiration of an unexercised stock option grant or other award, in

whole or in part, the number of shares of common stock subject to such unexercised stock option grant or other award will become

available again for grant under the 2021 Omnibus Incentive Plan.

Also, shares subject to a stock option grant or other award that

are not delivered to a participant because they are used to satisfy a tax withholding obligation or that are withheld to pay all or

a portion of an option’s exercise price will again become available for grant under the 2021 Omnibus Incentive Plan.

addition, shares of Biofrontera common stock will not be considered used if the award to which they relate is settled in cash.

Further, shares subject to awards granted in assumption or substitution of outstanding awards of an acquired entity shall not be

counted against the shares of our common stock available for issuance under the 2021 Omnibus Incentive Plan.

or incentive stock options may be granted under the 2021 Omnibus Incentive Plan.

The Committee sets the terms of the stock option grant

at the time the grant is made.

These terms are described in a stock option agreement.

stock awards may be granted under the 2021 Omnibus Incentive Plan.

The Committee will set the terms of the restricted stock award at

the time of grant and will describe these terms in a restricted stock award agreement.

the specified performance criteria are not achieved within the established time frame, the shares will be forfeited, unless the terms

of the applicable restricted stock award agreement also provide for service-based vesting, catch-up vesting or otherwise specifically

alter this treatment.

stock unit awards may be granted under the 2021 Omnibus Incentive Plan.

The Committee will set the terms of the restricted stock unit

award at the time of grant and will describe these terms in a restricted stock unit agreement.

may receive under the 2021 Omnibus Incentive Plan a grant of unrestricted shares of Biofrontera common stock or other awards, including

fully-vested deferred stock units, denominated in common stock, as determined by the Committee.

may also receive under the 2021 Omnibus Incentive Plan a cash bonus award.

No cash bonus award to any one Participant (as defined in

the 2021 Omnibus Incentive Plan) in any calendar year can exceed $1,500,000.

2021 Omnibus Incentive Plan provides for appropriate adjustments in the number of shares of common stock subject to awards and available

for future awards, the exercise price of outstanding awards, as well as the maximum award limits under the 2021 Omnibus Incentive Plan,

in the event of changes in our outstanding common stock by reason of a merger, stock split, reorganization, recapitalization or similar

The Committee may also make these types of adjustments if a change in law or circumstances would result in any substantial dilution

or enlargement of the rights of participants under the 2021 Omnibus Incentive Plan.

of options and SARs is generally prohibited under the 2021 Omnibus Incentive Plan without approval of our stockholders.

the applicable award agreement provides otherwise, in the event of a “change in control” of Biofrontera (as defined in the

2021 Omnibus Incentive Plan),

Committee may in its discretion determine that all options and SARs will become vested and immediately exercisable, and/or the restricted

period with respect to any restricted shares or restricted stock units will expire immediately (including a waiver of any applicable

performance goals);

incomplete performance periods in effect on the date the change in control occurs will end on the date of the change in control,

and the Committee will determine the extent to which performance goals with respect to each such award period have been met based

upon such audited or unaudited financial information then available as it deems relevant;

and each participant will be paid partial

or full awards with respect to performance goals for each relevant award period based upon the Committee’s determination of

the degree of attainment of any performance goals;

respect to a Senior Participant (as defined in the 2021 Omnibus Incentive Plan) who is terminated by the Company or its affiliates

without “cause” (as defined in the 2021 Omnibus Incentive Plan):

(i) within twelve months following a change in control

or, (ii) in contemplation of a change in control, all awards will become fully vested and exercisable immediately, irrespective of

vesting schedules and the restricted period shall end at the time of the termination.

the event of a change in control, the Committee may in its discretion also make adjustments to the stock options and other awards granted

under the 2021 Omnibus Incentive Plan.

The Committee may substitute shares of the surviving entity or another corporation that is party

to the transaction for shares of Biofrontera common stock.

In connection with such an event, the Committee may also determine that outstanding

awards will be cancelled in return for a cash payment equal to the value of the cancelled awards.

In the event that the Committee decides

to cancel outstanding awards, holders of outstanding awards will receive ten days’ advance notice.

in the 2021 Omnibus Incentive Plan must make a cash payment to us, or make other arrangements satisfactory to the Committee, to satisfy

the tax withholding obligations that arise under applicable law with respect to a stock option or other award granted under the Plan,

including without limitation any U.S.

federal income and employment taxes and other applicable state and local taxes.

Under certain circumstances,

participants may be permitted to satisfy their tax withholding obligation, in whole or in part, by having us withhold from the shares

of common stock otherwise deliverable to them on the exercise of a stock option, restricted stock unit or SAR, or by surrendering shares

having a fair market value on the date of exercise equal to the exercise price.

Transferability

and assignment

general, participants in the 2021 Omnibus Incentive Plan can exercise an option or other award received under the 2021 Omnibus Incentive

Plan only during their lifetime.

Unless the agreement under which the stock option or other award was granted provides otherwise, participants

cannot transfer stock options or other awards (except for shares that are not subject to a restricted period), except by will or the

laws of descent and distribution or pursuant to a domestic relations order issued by a court of competent jurisdiction.

Committee will have full power and authority to determine whether, to what extent and under what circumstances any award will be terminated

or forfeited.

To the extent provided in the award agreement, if a participant is terminated for “cause” (as defined in the

2021 Omnibus Incentive Plan) or if they engage in certain activities after termination as determined by the Committee, then any outstanding

stock options or other awards granted to such participant may be cancelled, and under certain circumstances, they may be required to

return the gain received from certain awards.

Awards granted under the 2021 Omnibus Incentive Plan are also subject to any compensation

recovery policy or minimum stock holding period requirement adopted by Biofrontera.

Equity Awards at Fiscal Year End

following table sets forth as of the end of fiscal year 2022 all outstanding equity awards held by our named executive officers:

Option Awards

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Options (#) Exercisable

Equity incentive plan awards:

number of securities underlying unexercised unearned options

Option Exercise Price

Option Expiration

Number of Unearned Shares or Units That Have Not Vested (#)

Market or Payout Value of Unearned Shares or Units That Have Not Vested ($)

Stock options (1)

Stock options (3)

Restricted stock units (2)

Hermann Lübbert

Stock options (1)

Stock options (3)

Restricted stock units (2)

Eugene Frederick Leffler III

The option vests in three equal annual installments beginning on December 9, 2022.

Each restricted stock unit represents a contingent right to receive one share of BFRI common stock.

The restricted stock units vest in

two equal annual installments beginning on May 18, 2023.

Each vested restricted stock unit will be settled, at the Company’s discretion,

in shares, cash or a combination of shares and cash, within 60 days of the vesting date.

The option vests in three equal annual installments beginning on May 18, 2023.

Narrative Disclosure

Information About the Employee Stock Purchase Plan (the “ESPP”)

will use the ESPP to provide eligible employees with the opportunity to purchase our common stock, thereby encouraging employees to share

in the economic growth and success of the Company through stock ownership.

The ESPP was adopted by our board of directors on July 23,

2021 and became effective upon approval of our shareholders on July 23, 2021, although we have not allocated any shares to the program

at this time.

At a future date, we will seek shareholder approval to authorize the offering of shares of our common stock pursuant to

The ESPP is not qualified under Section 401(a) of the Code, which deals with the tax treatment of qualified retirement plans.

The ESPP is intended to constitute an “employee stock purchase plan” within the meaning of Section 423 of the Code.

is not subject to any provisions of the U.S.

Employee Retirement Income Security Act of 1974, as amended.

The ESPP is administered by

our compensation committee, or a duly-authorized delegate.

The administrator has full and exclusive authority to interpret the terms

of the ESPP and determine eligibility.

general, unless the administrator determines otherwise, all full and part-time employees who are employed by us or a designated subsidiary

are eligible to participate in offerings under the ESPP.

The administrator may exclude the following employees from offerings under the

employees who have been employed for less than two years, are highly compensated or subject to Section 16 of the Exchange Act,

or who are citizens or residents of certain foreign jurisdictions.

In addition, employees who beneficially own 5% or more of the total

combined voting power of all classes of our capital stock, who are customarily employed 20 hours or less per week, or are customarily

employed for not more than five months during the year are excluded from participating in the ESPP.

When shares are available, employees

may acquire shares of our common stock through payroll deductions, which may not exceed 15% of their compensation during any pay period.

The purchase price of the shares in each qualified offering will be 85% of the fair market value of our closing common stock price on

the last day of a designated offering period.

Information About the 401(k) Plan

sponsor a 401(k) defined contribution plan in which our named executive officers may participate, subject to limits imposed by the Code,

to the same extent as our other full-time employees.

Currently, we match 50% of contributions made by participants in the 401(k) plan

up to a maximum of 6% of the employee’s base salary per year.

All matching contributions are subject to vesting at the rate of

25% per year of service.

Leffler, and Ms.

Monaco receive severance benefits pursuant to their employment agreements, which have been

explained in detail starting on page 65 in the section “Narrative Disclosure to Summary Compensation Table.”

compensation for the year ended December 31, 2022, which was pro-rated for board members who served less than the entire service period

during fiscal 2022, are shown on the table below:

Fees earned or

paid in cash ($)

Stock awards ($)

Hermann Lübbert (1)

Wedge, CPA, CCGMA

Hoffman, Ph.D.

As described above in this Item 11, Prof.

Lübbert was granted a stock option award and restricted stock units in his capacity

as an employee of the Company, not for his service as a director.

to Director Compensation Table

non-employee director compensation policy is designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee

Under the policy each director who is not an employee is paid cash compensation as set forth below as well as reimbursed for all reasonable travel and other expensed incurred in connection with attending Board and

Committee meetings:

Annual Retainer

April 1 – May 18, 2022

May 19 – December 31, 2022

Board of Directors:

All non-employee members

Additional retainer for non-executive chairperson

Audit Committee:

Additional retainer for chair

Compensation Committee:

Additional retainer for chair

Nominating and Corporate Governance Committee:

Additional retainer for chair

fees are payable in four equal quarterly installments, provided that the amount of such payment will be prorated for any portion of such

quarter that the director is not serving on our board of directors or any committee of the board of directors.

We also reimburse our

non-employee directors for reasonable travel and other expenses incurred in connection with attending our board of directors and committee

required by this Item is incorporated by reference to

our Proxy Statement for our

Annual Meeting of Stockholders for the fiscal year ended December 31, 2023, which will be filed with the Securities and Exchange Commission,

pursuant to Regulation 14A, no later than 120 days after the end of the 2023 fiscal year covered by this Form 10-K,or alternatively,

by amendment to this Form 10-K under cover of Form 10-K/A no later than the end of such 120 day period.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Compensation Plan Information

following table summarizes our equity compensation plan information as of December 31, 2021:

Plan Category

Securities to Be

Options, Warrants

and Rights (a)

Exercise Price of

Number of Securities

Remaining Available

for Future Issuance

Compensation Plans

(excluding securities

reflected in column

2021 Omnibus Incentive Plan

Ownership of Certain Beneficial Holders and Management

following table sets forth information with respect to the beneficial ownership of our common stock as February 28, 2023, for each person

or group known to us who beneficially owns more than 5% of our common stock, each of our directors and director nominees, each of our

named executive officers and all of our directors, director nominees and executive officers as a group.

ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC.

generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting

thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days.

Our common stock subject

to options or RSUs that are currently exercisable or exercisable within 60 days of February 28, 2023 are deemed to be outstanding and

beneficially owned by the person holding the options or RSUs.

These shares, however, are not deemed outstanding for the purposes of computing

the percentage ownership of any other person.

Except as disclosed in the footnotes to this table and subject to applicable community

property laws, we believe that each shareholder identified in the table possesses sole voting and investment power over all common stock

shown as beneficially owned by the shareholder.

otherwise noted below, the address of each person listed on the table is c/o Biofrontera Inc., 120 Presidential Way, Suite 330, Woburn,

Massachusetts 01801.

Name of beneficial owner

Common Stock beneficially owned

% of Common Stock Owned

Options exercisable within 60 days(1)(2)

5% or more stockholders:

Biofrontera AG

Hemmelrather Weg 201

Leverkusen, Germany(3)

Abshagen Consulting GmbH

Burgunderweg 8

Weinheim, Germany, 69469(4)

Named executive officers and directors:

Eugene Frederick Leffler III

Hermann Lübbert

Wedge, CPA, CCGMA

Hoffman, Ph.D.

All current directors and executive officers as a group (7 persons)

beneficial ownership of less than 1% of outstanding shares of our common stock.

(1) On December 9, 2021, the Company granted options to purchase shares of common stock at an exercise price of $4.77 per share up to (a) in the case of Prof.

Lübbert, 113,379 shares and (b) in the case of Ms.

Monaco, 56,689 shares.

The options vest in three equal annual installments beginning on December 9, 2022.

The 37,415 shares for Prof.

Lübbert and the 18,707 shares for Ms.

Monaco represent the options under such grants that will have vested within 60 days of the date of this proxy statement.

(2) On May 18, 2022, the Company granted non-qualified stock options to each of the non-employee directors to purchase 22,000 shares of common stock with an exercise price of $2.61.

The non-employee director options vest in equal monthly installments following the date of grant.

The 20,166 shares reported in the table above for each non-employee director represent the options that will have vested within 60 days of the date of this proxy statement.

(3) Information is based upon a Schedule 13G/A filed with the SEC on February 10, 2022 by Biofrontera AG.

According to a Schedule 13D/A (“Zours Schedule 13D”) filed by Deutsche Balaton Aktiengesellschaft (“DB”), VV Beteiligungen Aktiengesellschaft (“VVB”), Delphi Unternehmensberatung Aktiengesellschaft (“DU”), Wilhelm Konrad Thomas Zours, Alexander Link and Rolf Birkert on September 19, 2022, Mr.

Zours owns a majority interest in DU and is the sole member of the boards of management of VVB and DU.

DU owns a majority interest in VVB.

VVB owns a majority interest in DB and DB holds 1,177,676 shares of common stock representing 4.41% of the Company’s outstanding stock.

In the Zours Schedule 13D, Mr.

Zours also includes the shares of Biofrontera Inc.

held by Biofrontera AG, but disclaims beneficial ownership.

Zours was deemed to have voting and dispositive voting power over the shares held by Biofrontera AG, then Mr.

Zours would be the beneficial owner of 34.4% of the Company’s outstanding stock.

(4) Information is based upon a Schedule 13G filed with the SEC on November 4, 2022 by Abshagen Consulting GmbH.

required by this Item is incorporated by reference to

our Proxy Statement for our

Annual Meeting of Stockholders for the fiscal year ended December 31, 2023, which will be filed with the Securities and Exchange Commission,

pursuant to Regulation 14A, no later than 120 days after the end of the 2023 fiscal year covered by this Form 10-K,or alternatively,

by amendment to this Form 10-K under cover of Form 10-K/A no later than the end of such 120 day period.

Certain Relationships and Related Transactions, and Director Independence

following are summaries of certain provisions of transactions within the past three years to which we have been a party, in which the

amount involved exceeds or will exceed $120,000 and in which any of our directors, executive officers or holders of more than 5% of our

capital stock, or immediate family member thereof, had or will have a direct or indirect material interest, and are qualified in their

entirety by reference to all of the provisions of such agreements.

believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below

were comparable to terms available or the amounts that we would pay or receive, as applicable, in arm’s-length transactions.

Lübbert used to be Chief Executive Officer and Chairman of the management board of Biofrontera AG, our former parent and currently

a significant stockholder.

Following his resignation from Biofrontera AG in December 2021, he will begin to receive compensation from

us for his services to our company as determined in accordance with the terms of his amended employment agreement.

Party Agreements

License and Supply Agreement

July 15, 2016, we executed an exclusive license and supply agreement with Biofrontera Pharma, which was amended in July 2019 to increase

the Ameluz ® transfer price per unit from 35.0% to 50.0% of the anticipated net selling price per unit as defined in the

Under the agreement, we obtained an exclusive, non-transferable license to use Biofrontera Pharma’s technology to market

and sell the licensed products in the United States and certain of its territories, Ameluz ® and the RhodoLED ®

lamp, and must purchase the licensed products exclusively from Biofrontera Pharma.

There was no consideration paid for the transfer

of the license.

June 16, 2021, we entered into the Ameluz LSA with Biofrontera Pharma and Biofrontera Bioscience.

Under the terms of the Ameluz LSA,

we were granted an exclusive, non-transferable license to use Biofrontera Pharma and Biofrontera Bioscience technology to use, import,

export, distribute, market, offer for sale and sell Ameluz ® and the RhodoLED ® lamp series for its approved

indications within the United States and certain of its territories.

the terms of the Ameluz LSA as entered into on June 16, 2021, we agree to purchase from Biofrontera Pharma a minimum number of units

of Ameluz ® per year according to an agreed schedule at fifty percent of our anticipated net price per unit for Ameluz ® .

On October 8, 2021, we entered into an amendment to the Ameluz LSA under which the price we pay per unit will be based upon our sales

history, although the minimum number of units to purchase per year remains unchanged.

See “ Business—Commercial Partners

and Agreements—Biofrontera Pharma and Biofrontera Bioscience” for further details.

of the licensed products during the years ended December 31, 2022 and 2021 were $16.6 million and $9.4 million, respectively, and

recorded in inventories in the consolidated balance sheets, and, when sold, in cost of revenues, related party in the consolidated

statements of operations.

Amounts due and payable to Biofrontera Pharma as of December 31, 2022 and 2021 were $1.3 million and $0.3

million, respectively, which were recorded in accounts payable, related parties in the consolidated balance sheets.

December 2021, we entered into an Amended and Restated Master Contract Services Agreement, or Services Agreement, which provides for

the execution of statements of work that will replace the applicable provisions of our previous intercompany services agreement dated

January 1, 2016, or 2016 Services Agreement, by and among us, Biofrontera AG, Biofrontera Pharma and Biofrontera Bioscience, enabling

us to continue to use the Biofrontera Group’s IT resources as well as providing access to the Biofrontera Group’s resources

with respect to quality management, regulatory affairs and medical affairs.

We currently have

statements of work in place regarding IT, regulatory affairs, medical affairs, pharmacovigilance, and investor relations services, and

are continuously assessing the other services historically provided to us by Biofrontera AG to determine 1) if they will be needed, and

2) whether they can or should be obtained from other third-party providers.

related to the service agreement were $0.8 million and $0.7 million for the years ended December 31, 2022 and 2021, which were recorded

in selling, general and administrative, related party.

Management asserts that these expenses represent a reasonable allocation from

Biofrontera AG.

Amounts due to Biofrontera AG related to the service agreement were $0.2 million for each of the years ended December 31, 2022 and 2021,

which were recorded in accounts payable, related parties in the consolidated balance sheets.

Assurance Agreement

November 1, 2016, we entered into a quality assurance agreement (“QAA”) with Biofrontera Pharma GmbH in connection with the

Under the Ameluz LSA, Biofrontera Pharma GmbH agreed to supply products under the LSA of the quality and according to the

specifications agreed upon with the FDA in the respective approvals.

The QAA allocates quality and regulatory responsibilities including,

but not limited to manufacturing, packaging, labeling, complaints, change control and any applicable requirements and is incorporated

by reference herein as Exhibit 10.9 to this Form 10-K.

The QAA has remained in effect following our initial public offering.

Lamp Lease Agreement

August 1, 2018, the Company executed a clinical lamp lease agreement with Biofrontera Bioscience to provide lamps and associated services.

revenue related to the clinical lamp lease agreements was approximately $0.1 million for each of the years ended December 31, 2022

and 2021 and is recorded as revenues, related party.

Amounts due from Bioscience for clinical lamp and other

reimbursements were approximately $0.1 million and $0.1 million as of December 31, 2021 and 2020, respectively, which were recorded as

accounts receivable, related party in the consolidated balance sheets.

Reimbursements

from Maruho Related to Cutanea Acquisition

to the Cutanea acquisition share purchase agreement, we received start-up cost financing and reimbursements for certain costs.

restructuring costs Maruho agreed to pay are referred to as “SPA costs” under the arrangement and are to be accounted for

as other income.

Refer to Note 3, Acquisition Contract Liabilities.

were no amounts reimbursed relating to SPA costs for the year ended December 31,2022.

For the year ended December 31, 2021 the amounts

reimbursed relating to SPA costs were $0.5 million and were recorded as other income in the consolidated statements of operations as

the related expenses were incurred.

The amounts due from Maruho, primarily relating to SPA cost reimbursements, were $0.1 million for

each of the years ended December 31, 2022 and 2021 and were recorded in other receivables, related parties in the consolidated balance

The Company has recorded a receivable of $6.4 million and $11.3 million

as of December 31, 2022 and December 31, 2021 due from Biofrontera AG for its 50% share of the balance of a legal settlement for

which both parties are jointly and severally liable.

to Note 8, Other Receivables, Related Party.

The Company has recognized $0.1 and $0.0 million of interest income for the years ended December

31, 2022 and 2021 in connection with this receivable.

Our board of directors has undertaken

a review of the independence of our directors and considered whether any director has a material relationship with us that could

compromise that director’s ability to exercise independent judgment in carrying out that director’s responsibilities.

Our board of directors affirmatively determined that each of Dr.

Borer and Ms.

“independent director,” as defined under the Exchange Act and the rules of Nasdaq.

required by this Item is incorporated by reference to

our Proxy Statement for our

Annual Meeting of Stockholders for the fiscal year ended December 31, 2023, which will be filed with the Securities and Exchange Commission,

pursuant to Regulation 14A, no later than 120 days after the end of the 2023 fiscal year covered by this Form 10-K,or alternatively,

by amendment to this Form 10-K under cover of Form 10-K/A no later than the end of such 120 day period.

Principal Accountant Fees and Services

Fees and Services

Thornton LLP was our independent registered public accounting firm for the years ended December 31, 2022 and December 31, 2021.

following table summarizes the fees Grant Thornton billed to us for the last two fiscal years.

All services and fees related to our

2022 and 2021 audits were either approved by our audit committee or our Board of Directors for work prior to November 2, 2021.

Years Ended December 31,

Audit Fees (1)

Audit-Related Fees

All Other Fees

fees consist of fees billed for professional services rendered by Grant Thornton LLP for the audits of our annual financial statements,

the reviews of our interim financial statements, and related services that are normally provided in connection with statutory and

regulatory filings or engagements, including our registration statements on Form S-1.

formal written charter for our audit committee requires that the audit committee pre-approve all audit services to be provided to the

Company, whether provided by the Company’s principal auditor or other firms, and all other services (review, attest and non-audit)

to be provided to the Company by its independent registered public accounting firm.

During the approval process, our audit committee

considers the impact of the types of services and the related fees on the independence of the independent registered public accounting

The services and fees must be deemed compatible with the maintenance of that firm’s independence, including compliance with

rules and regulations of the SEC.

required by this Item is incorporated by reference to

our Proxy Statement for our

Annual Meeting of Stockholders for the fiscal year ended December 31, 2023, which will be filed with the Securities and Exchange Commission,

pursuant to Regulation 14A, no later than 120 days after the end of the 2023 fiscal year covered by this Form 10-K,or alternatively,

by amendment to this Form 10-K under cover of Form 10-K/A no later than the end of such 120 day period.

Exhibit and Financial Statements

3 unchanged sentences

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2022 and 2021

Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021

Statements of Cash Flows for the years ended December 31, 2022 and 2021

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

10 unchanged sentences

Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 3, 2021).

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Biofrontera Inc.

(incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2023

Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2024).

Description of Securities

9 unchanged sentences

and Computershare Trust Company, N.A., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed with the SEC on October 14, 2022)

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).

Form of Common Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2023)

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2023)

Form of Series B-3 Convertible Preferred Stock Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2024)

Amended and Restated License and Supply Agreement dated June 16, 2021 by and among Biofrontera Pharma GmbH, Biofrontera Bioscience GmbH and Biofrontera Inc.

44 unchanged sentences

Form of Exchange Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on October 31, 2022)

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 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the SEC on May 12, 2023)

Securities Purchase Agreement, dated October 30, 2023, by and between Biofrontera Inc.

and an institutional investor (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2023)

Placement Agency Agreement, dated October 30, 2023, by and between Biofrontera Inc.

and Roth Capital Partner, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on November 2, 2023)

Amendment to Common Stock Purchase Warrants, dated October 30, 2023, by and between Biofrontera Inc.

and institutional investor (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on November 2, 2023)

Amendment No.

1 to Settlement Agreement dated as of October 12, 2023, between Biofrontera Inc., Hermann Luebbert, John J.

Borer, Loretta M.

Wedge, Beth J.

Hoffman, Kevin D.

Weber and Biofrontera AG (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 13, 2023)

Addendum to Amended and Restated License and Supply Agreement, dated as of December 12, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2023)

Amended and Restated Business Loan and Security Agreement between Biofrontera Inc.

and Agile Capital Funding, LLC and Agile Lending, LLC, dated as of December 21, 2023

Business Loan and Security Agreement between Biofrontera Inc.

and Cedar Advance, LLC, dated as of December 21, 2023

Confidential Settlement Agreement and Mutual Release, dated as of December 27, 2023 and effective as of December 22, 2023, by and between the Company and Maruho (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2024)

Amended and Restated Addendum to Amended and Restated License and Supply Agreement, dated January 29, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2024)

Second Amended and Restated License and Supply Agreement, dated February 19, 2024, between the Company, Pharma and Bioscience.

(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 20, 2024)

Release of Claims, dated February 13, 2024, between the Company, Pharma and Bioscience.

(incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on February 20, 2024)

Form of Securities Purchase Agreement, dated February 19, 2024, by and amount Biofrontera Inc.

and the purchasers named therein (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2024)

Placement Agency Agreement, dated February 19, 2024, by and between Biofrontera Inc.

and Roth Capital Partners, LLC (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2024)

List of Subsidiaries of the Company

Consent of Grant Thornton LLP, independent registered public accounting firm

Consent of Marcum LLP, independent registered public accounting firm

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

2 unchanged sentences

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002

Compensation Clawback Policy, as approved by the Board of Directors on November 29, 2023

XBRL Instance Document

11 unchanged sentences

on its behalf by the undersigned, thereunto duly authorized in the City of Woburn, Commonwealth of Massachusetts, on March 15, 2024.

Erica L Monaco

Executive Officer

Erica L Monaco

Executive Officer

March 13, 2023

Executive Officer)

Chief Financial Officer

March 13, 2023

( Principal Financial Officer)

(Principal Accounting Officer)

Hermann Lübbert

of the Board of Directors

March 13, 2023

Executive Officer and Chairman

Hermann Lübbert

Executive Officer and Chairman

Executive Officer)

Financial Officer

Financial Officer)

Accounting Officer)

Heikki Lanckriet

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures