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Biofrontera Inc. (BFRI) Announces $16M Private Placement

February 20, 2024 8:10 AM EST

‚ÄčBiofrontera Inc. (NASDAQ: BFRI) today announced it has entered into a securities purchase agreement with healthcare-focused institutional investors led by Rosalind Advisors. Pursuant to the securities purchase agreements, the Company will issue to the purchasers (a) an aggregate $8.0 million in shares of the company's Series B-1 Convertible Preferred Stock and (b) warrants to purchase shares of the Company's Series B-3 Convertible Preferred Stock with an aggregate exercise price of $8.0 million exercisable until the earlier of (i) five days after achievement of certain operational and commercial milestones, expected in Q2 of 2024, the approval by the Company's shareholders of an increase in authorized shares and other proposals, and the effectiveness of a registration statement with the U.S. Securities and Exchange Commission covering the resale of the Common Stock underlying all shares of preferred stock that may be issued under the securities purchase agreement or (ii) the five-year anniversary of the issuance of the warrants.

Shares of Series B-1 and Series B-3 Convertible Preferred Stock will be issued at a price of $1,000.00 per share. Conversion of all of the shares of Series B-3 Convertible Preferred Stock into shares of common stock of the Company is subject to approval by the Company's stockholders of an increase in the Company's authorized shares of common stock. The shares of Series B -1 Convertible Preferred Stock convert into 9,310,677 shares of common stock at a conversion price of $0.7074. The shares of Series B -3 Convertible Preferred Stock to be issued upon exercise of all of the warrants convert into 11,309,019 shares of common stock (disregarding any conversion or beneficial ownership limitations) at a conversion price of $0.7074. The consideration for each warrant is $0.125 per share of common stock that each share of Series B-3 Convertible Preferred Stock may be converted into.

Biofrontera anticipates that aggregate gross proceeds will be up to $16 million, if all warrants are exercised, before deducting fees to the placement agents and other estimated offering expenses payable by the Company. This private placement is expected to close on or about February 21, 2024, subject to customary closing conditions.

The Company agreed to appoint up to two directors nominated by the lead investor to the board of directors of the Company.

The Company intends to use the upfront net proceeds from the private placement to fund the Company's general business operations and ongoing activities related to expediting the development and approval of additional indications for the Company's lead product Ameluz. The product is currently approved in conjunction with the BF-RhodoLED lamp series for the treatment of mild to moderate actinic keratosis on the face and scalp (AK).

The securities to be issued in connection with the private placement described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act of 1933 and such applicable state securities laws. The Company has agreed to file a resale registration statement with the U.S. Securities and Exchange Commission (SEC), for purposes of registering the resale of the common stock issued or issuable in connection with the private placement.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

For further information, please see the Company's current report on Form 8-K to be filed with the SEC following the closing of the transaction.



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