Biofrontera Inc. (BFRI) Adopts Limited Duration Shareholder Rights Plan

Biofrontera Inc. (Nasdaq: BFRI) (the “Company”), a biopharmaceutical company specializing in the commercialization of dermatological products, announced today that its Board of Directors has adopted a limited duration shareholder rights plan (the “Rights Plan”), and declared a dividend distribution of one preferred stock purchase right on each outstanding share of common stock, in order to protect the interest of all of the Company’s shareholders. The rights will be issued to shareholders of record on October 24, 2022 and will expire on October 13, 2023.

The Board believes that the current price of the Company’s common stock is not reflective of the Company’s intrinsic or long-term value. The Board further believes the Rights Plan is an effective course of action to fulfill its fiduciary duties to the Company and its shareholders, and to enable shareholders to realize the long-term value of their investment. The Rights Plan was adopted following a careful evaluation and consultation with the Company’s external legal and financial advisors.

“We see tremendous value in Biofrontera Inc. today and in the future, and by enacting this Rights Plan we are protecting our shareholders while continuing to pursue commercial success. We’ve made significant progress in establishing our commercial footprint and other operational improvements, and management remains highly committed to driving growth. The Board of Directors believes Biofrontera Inc.’s stock is significantly undervalued as a result of the current market environment. Upon evaluation of all opportunities, by executing this plan we’re protecting shareholders’ ability to benefit from our creation of long-term value,” stated Erica Monaco, Chief Executive Officer of Biofrontera Inc.

“This Rights Plan was implemented by our Board to safeguard the interest of all shareholders against undervalued, unsolicited or inadequate partial tender offers should they arise,” she added.

The Rights Plan is similar to plans adopted by other publicly traded companies. Pursuant to the Rights Plan, the Company will distribute one right for each share of common stock outstanding as of the close of trading on October 24, 2022. While the Rights Plan is effective immediately, the rights would become exercisable only if a person or group, or anyone acting in concert with such a person or group, acquires beneficial ownership, as defined in the Rights Plan, of 20% or more of the Company’s issued and outstanding common stock in a transaction not approved by the Company's Board of Directors. In that situation, each holder of a right (other than the acquiring person or group, or anyone acting in concert as defined in the Rights Plan with such person or group), will have the right to purchase a number of shares of Company common stock at an exercise price of one-half the market value of the right. In addition, at any time after a person or group acquires 20% or more of the Company’s common stock, unless such person or group acquires 50% or more, the Company’s Board of Directors may exchange one share of the Company’s common stock for each outstanding right, other than rights owned by such person or group, which would have become void.

Under the Rights Plan, any person, entity or group that owns more than the triggering percentage at the time of the public announcement of the Rights Plan will not trigger the exercisability of the rights and may continue to own its shares of common stock. However, as long as such person or group holds 20% or more of the Company’s common stock, the acquisition of one additional share of common stock at any time after the public announcement of the Rights Plan, including any shares acquired by another person acting in concert (as defined in the Rights Plan) with such person or the formation of a group with another owner of common stock, will trigger the Rights Plan.

Stockholders are not required to take any action to receive the distribution of their rights.

The Rights Plan will expire on October 13, 2023. The Company’s Board of Directors may extend the existing Rights Plan, authorize a new Rights Plan or consider an earlier termination of the Rights Plan if market and other conditions warrant. Further details of the Rights Plan will be contained in a Current Report on Form 8-K and in a Registration Statement on Form 8-A that the Company will be filing with the U.S. Securities and Exchange Commission.

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