aibioBiofrontera agrees $11.0 million preferred stock sale to fund U.S. Ameluz rights deal
Tickers BFRI
The company will sell up to 11,000 Series C preferred shares to fund the purchase of U.S. rights to Ameluz from its former parent. Its royalty falls to 12% or 15% of U.S. sales, while the parent takes a 10% post-money stake.
Key facts
- Company
- Biofrontera Inc. (NASDAQ: BFRI)
- News type
- Financings
- Primary source
- Biofrontera Inc. 8-K (2025-07-01)
Biofrontera Inc. (Nasdaq: BFRI) signed a securities purchase agreement on June 27, 2025 for a private placement of up to 11,000 shares of Series C Convertible Preferred Stock at $1,000 per share, or $11.0 million in aggregate. The offering closes in two tranches. The first, of $8.5 million, was expected on July 1, 2025. The second, of $2.5 million, is due once the company and its former parent sign a detailed asset transfer agreement, which the company expected by September 30, 2025. The company said it will use the net proceeds for the acquisition and transfer costs of the deal and for general corporate purposes.
The deal behind the financing
The financing is a condition of a Strategic Transaction. On June 30, 2025, the company signed an agreement with its former parent, Biofrontera AG, and its subsidiaries to acquire all U.S. rights to Ameluz and RhodoLED. Under the agreement, the company will pay a royalty of 12% in years when U.S. Ameluz revenue is less than $65.0 million, and 15% in years when it exceeds that amount. The royalty replaces a transfer pricing model under a license and supply agreement dated February 13, 2024. The press release describes the old model as requiring payment of 25% to 35% of the net sales price per tube, depending on timing and indication.
The company also takes over U.S. manufacturing and all regulatory, quality, pharmacovigilance and commercial responsibilities for the U.S. market. The agreement also includes a transfer of all costs associated with the U.S. business, and Biofrontera AG will receive 3,109 shares of Series D Convertible Preferred Stock, which the release and the 8-K say represent a 10% post-money equity stake.
Conversion terms and limits
The Series C shares convert into common stock at $0.6249 per share, the price the release gives as the market price at the close on June 26, 2025. Until stockholders approve the issuance, conversions are capped at 19.99% of the common stock outstanding on June 27, 2025. The Series D shares carry voting and conversion rights on an as-converted basis, but holders may not exercise them until the same stockholder approval is given.
Before approval, the Series C holders get a liquidation preference of three times the original price, with any accrued dividends, or the as-converted amount if greater. The purchase agreement requires a resale registration statement for the conversion shares within 15 days after the initial closing, or within a period agreed with the investors. The 8-K's Series D section designates 3,019 shares, while its deal summary says 3,109 shares were issued.
Who is named
The 8-K does not name a placement agent or any counsel for the private placement. The press release says the $11 million investment was led by Rosalind Advisors, Inc. and AIGH Capital Management LLC, which funded the acquisition and transfer costs.
What the company says it expects
The release says the transaction, together with the financing, is expected to fund Biofrontera Inc. to profitability, and that the lower royalty and cost reductions will let the company reach breakeven more quickly. Chief Executive Officer Hermann Luebbert made the second claim.
The same release lists among its risks the company's ability to achieve and sustain profitability, the sufficiency of its cash resources and the need for additional financing. The release does not give a breakeven date, a cash balance or a revenue forecast, and the 8-K does not give any of them either.
The business behind the deal
The annual report filed in March 2025 describes Biofrontera as selling licensed dermatological products, mainly Ameluz with the RhodoLED lamps for actinic keratoses. The report says the Biofrontera Group held more than 5% of the company's common stock until December 10, 2024, and that the company continues to rely on the group as the sole supplier of Ameluz and the RhodoLED lamps. The group is treated as a related party.
The former parent, which is also the company's supplier, both sells the rights to the company and takes a 10% post-money stake in it.