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Related Party Transactions
 9 Months Ended
Sep. 30, 2025
Related Party Transactions [Abstract]  
Related Party Transactions

11. Related Party Transactions

 

We consider Biofrontera AG and its consolidated subsidiaries to be a related party, as prior to the Strategic Transaction closing on October 20, 2025, we relied on the Biofrontera Group as the sole supplier of Ameluz® and the RhodoLED® Lamps.

 

Amounts due and payable to Biofrontera Group as of September 30, 2025 and December 31, 2024 were $2.0 million and $5.3 million, respectively, and were recorded in accounts payable, related parties net of applicable accounts receivable in the condensed consolidated balance sheets.

 

Strategic Transaction with Biofrontera Group

 

On June 30, 2025, the Company signed a binding Term Sheet with the Biofrontera Group pursuant to which the Company agreed to acquire all rights in the United States to Ameluz® and RhodoLED®. In connection with the Strategic Transaction, additional agreements were executed, and the transfer of the U.S. Rights was completed on October 20, 2025. As a result of these actions, the Company will pay a monthly earnout of 12% in years where Ameluz® revenue in the United States is at or below $65.0 million and 15% in years where Ameluz® revenue in the United States exceeds $65.0 million. The earnout replaces the transfer pricing model under the Company’s Second A&R Ameluz LSA effective as of February 13, 2024 by and among the Company, and the Biofrontera Group. See Note 17. Subsequent Events.

 

In exchange for the U.S. Rights, in addition to the aforementioned earnout and an agreement to transfer all costs associated with the U.S. business, the Biofrontera Group received 3,019 shares of Series D Preferred Stock on July 2, 2025, par value $0.001 per share, which represents a 10% post-money equity stake in the Company. See Note 12. Stockholders Equity.

 

In addition, the Company agreed to assume the defense of co-defendant Biofrontera Group and all costs associated therewith in connection with certain legal actions pending in the United States which will be paid directly to the legal advisors by the Company. Details of the legal claims are disclosed in Note 15. Commitments and Contingencies – Legal Claims.

 

Effective as of the date of the Strategic Transaction and for the following three years, as long as Biofrontera AG holds any shares of Series D Preferred Stock (or shares of Common Stock that were converted from Series D Preferred Stock), Biofrontera AG shall have the right to appoint (i) one individual to the Company’s board of directors if the board consists of seven or fewer members; or (ii) if the board consists of eight or more directors the right to appoint two individuals. No appointments have been made through the filing date.

 

Inventory Purchases

 

Purchases of the licensed products (inclusive of estimated and actual purchase price adjustments) were $2.7 million and $7.7 million during the three and nine months ended September 30, 2025, respectively, and $2.2 million and $3.3 million during the three and nine months ended September 30, 2024, respectively. These purchases were recorded in inventories in the condensed consolidated balance sheets, and, when sold, in cost of revenues, related party in the consolidated statements of operations.

 

Other

 

Total amounts paid to the Biofrontera Group for expenses related to sales of products in the US, including but not limited to product production, quality control, pharmacovigilance, regulatory activities as well as rent for the three and nine months ended September 30, 2025 were $0.3 million and $0.5million, respectively.