Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40943

Biofrontera Inc.

(Exact name of registrant as specified in its charter)

Delaware		47-3765675
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

120 Presidential Way, Suite 330, Woburn, Massachusetts		01801
(Address of principal executive offices)		(Zip Code)

(781) 245-1325

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001 per share	BFRI	The Nasdaq Stock Market LLC
Preferred Stock Purchase Rights		The Nasdaq Stock Market LLC
Warrants to purchase common stock	BFRIW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 12, 2024 there were 5,543,518 shares outstanding of the registrant’s common stock, par value $0.001 per share.

TABLE OF CONTENTS

	PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 (unaudited) and 2023 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	34
ITEM 4.	Controls and Procedures	34

	PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	35
ITEM 1A.	Risk Factors	35
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
ITEM 3.	Defaults Upon Senior Securities	35
ITEM 4.	Mine Safety Disclosures	35
ITEM 5.	Other Information	35
ITEM 6.	Exhibits	36
Signatures		37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOFRONTERA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

	June 30, 2024			December 31, 2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,379		$	1,343
Investment, related party		10			78
Accounts receivable, net		3,504			5,162
Inventories, net		3,946			10,908
Prepaid expenses and other current assets		473			425
Other assets, related party		5,159			5,159

Total current assets		17,471			23,075

Property and equipment, net		101			134
Operating lease right-of-use assets		1,230			1,612
Intangible asset, net		2,448			2,629
Other assets		324			482

Total assets	$	21,574		$	27,932

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		2,413			3,308
Accounts payable, related parties		2,265			5,698
Operating lease liabilities		701			691
Accrued expenses and other current liabilities		3,593			4,487
Short term debt		296			3,904

Total current liabilities		9,268			18,088

Long-term liabilities:
Warrant liabilities		921			4,210
Operating lease liabilities, non-current		443			804
Other liabilities		31			37

Total liabilities		10,663			23,139

Commitments and contingencies (Note 18)		-			-

Stockholders’ equity:
Series B Convertible Preferred stock, $0.001 par value, 20,000,000 shares authorized, no Series B-1, 4,806 Series B-2 and 7,998 Series B-3 shares issued and outstanding as of June 30, 2024 and no shares issued and outstanding as of December 31, 2023		-			-
Common stock, $0.001 par value, 35,000,000 shares authorized; 5,094,184 and 1,517,628 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		5			2
Additional paid-in capital		121,250			104,441
Accumulated deficit		(110,344	)		(99,650	)

Total stockholders’ equity		10,911			4,793

Total liabilities and stockholders’ equity	$	21,574		$	27,932

The accompanying notes are an integral part of these condensed consolidated financial statements.

BIOFRONTERA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts and number of shares)

(Unaudited)

	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023

Product revenues, net	$	7,831		$	5,830		$	15,732		$	14,544
Revenues, related party		8			18			18			36

Total revenues, net		7,839			5,848			15,750			14,580

Operating expenses
Cost of revenues, related party		4,092			2,772			8,038			7,319
Cost of revenues, other		250			116			421			167
Cost of revenues		250			116			421			167
Selling, general and administrative		7,915			11,456			17,163			21,254
Selling, general and administrative, related party		32			92			29			119
Research and development		621			11			637			11
Change in fair value of contingent consideration		-			100			-			(100	)

Total operating expenses		12,910			14,547			26,288			28,770

Loss from operations		(5,071	)		(8,699	)		(10,538	)		(14,190	)

Other income (expense)
Change in fair value of warrants		5,438			375			2,009			1,403
Change in fair value of investment, related party		(14	)		(1,482	)		(11	)		(4,424	)
Loss on debt extinguishment		-			-			(316	)		-
Interest expense, net		(596	)		(79	)		(2,003	)		(114	)
Other income, net		6			62			186			30

Total other income (expense)		4,834			(1,124	)		(135	)		(3,105	)

Loss before income taxes		(237	)		(9,823	)		(10,673	)		(17,295	)
Income tax expense		20			14			21			20

Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)

Loss per common share:
Basic and diluted	$	(0.05	)	$	(7.23	)	$	(2.45	)	$	(12.73	)

Weighted-average common shares outstanding:
Basic and diluted		5,091,353			1,360,739			4,357,474			1,359,894

The accompanying notes are an integral part of these condensed consolidated financial statements.

BIOFRONTERA INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except number of shares)

(Unaudited)

	Shares		Amount		Shares		Amount		Capital			Deficit			Total
	Three and Six Months Ended June 30, 2024
	Preferred Stock				Common Stock				Additional Paid-in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, April 1, 2024		-	$	-		5,089,413	$	5	$	104,666		$	(110,087	)	$	(5,416	)
Balance		-	$	-		5,089,413	$	5	$	104,666		$	(110,087	)	$	(5,416	)
Conversion of Series B-1 Preferred into Series B-2 Preferred		4,806		-		-		-		3,570			-			3,570
Issuance of Series B-3 upon exercise of warrants		7,998		-		-		-		12,810			-			12,810
Issuance of RSUs		-		-		4,771		-		-			-			-
Stock based compensation		-		-		-		-		204			-			204
Net loss		-		-		-		-		-			(257	)		(257	)
Balance, June 30, 2024		12,804	$	-		5,094,184	$	5	$	121,250		$	(110,344	)	$	10,911
Balance		12,804	$	-		5,094,184	$	5	$	121,250		$	(110,344	)	$	10,911

Balance, January 1, 2024		-	$	-		1,517,628	$	2	$	104,441		$	(99,650	)	$	4,793
Balance		-	$	-		1,517,628	$	2	$	104,441		$	(99,650	)	$	4,793
Exercise of pre-funded warrants		-		-		1,055,000		1		(1	)		-			-
Conversion of Series B-1 Preferred into Series B-2 Preferred and common stock		4,806		-		2,516,785		2		3,568			-			3,570
Issuance of Series B-3 upon exercise of warrants		7,998		-		-		-		12,810			-			12,810
Issuance of RSUs		-		-		4,771		-		-			-			-
Stock based compensation		-		-		-		-		432			-			432
Net loss		-		-		-		-		-			(10,694	)		(10,694	)
Balance, June 30, 2024		12,804	$	-		5,094,184	$	5	$	121,250		$	(110,344	)	$	10,911
Balance		12,804	$	-		5,094,184	$	5	$	121,250		$	(110,344	)	$	10,911

	Shares		Amount		Capital		Deficit			Total
	Three and Six Months Ended June 30, 2023
	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, April 1, 2023		1,334,950	$	1	$	103,747	$	(86,997	)	$	16,751
Issuance of shares for vested restricted stock units		8,588		-		-		-			-
Stock based compensation		-		-		259		-			259
Net loss		-		-		-		(9,837	)		(9,837	)
Balance, June 30, 2023		1,343,538	$	1	$	104,006	$	(96,834	)	$	7,173

Balance, January 1, 2023		1,334,950	$	1	$	103,396	$	(79,519	)	$	23,878
Balance		1,334,950	$	1	$	103,396	$	(79,519	)	$	23,878
Issuance of shares for vested restricted stock units		8,588		-		-		-			-
Stock based compensation		-		-		610		-			610
Net loss		-		-		-		(17,315	)		(17,315	)
Balance, June 30, 2023		1,343,538	$	1	$	104,006	$	(96,834	)	$	7,173
Balance		1,343,538	$	1	$	104,006	$	(96,834	)	$	7,173

The accompanying notes are an integral part of these condensed consolidated financial statements.

BIOFRONTERA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	2024			2023
	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:

Net loss	$	(10,694	)	$	(17,315	)

Adjustments to reconcile net loss to cash flows used in operations:

Depreciation		42			44
Amortization of right-of-use assets		358			265
Amortization of acquired intangible assets		216			209
Realized/unrealized (gain)/ loss in investment, related party		11			4,424
Change in fair value of contingent consideration		-			(100	)
Change in fair value of warrant liabilities		(2,009	)		(1,403	)
Stock-based compensation		432			610
Allowance for credit losses		77			64
Loss on debt extinguishment		316			-
Non-cash interest expense		246			190

Changes in operating assets and liabilities:
Accounts receivable		1,581			1,491
Other receivables, related party		3			2,397
Prepaid expenses and other assets		(28	)		(302	)
Inventories		6,961			(7,617	)
Accounts payable and related party payables		(4,330	)		3,380
Operating lease liabilities		(334	)		(255	)
Accrued expenses and other liabilities		(893	)		(107	)

Cash flows used in operating activities		(8,045	)		(14,025	)

Cash flows from investing activities
Sales of equity investment, related party		57			178
Purchase of intangible assets		(50	)		-
Purchases of property and equipment		(9	)		(14	)

Cash flows provided by (used) in investing activities		(2	)		164

Cash flows from financing activities
Proceeds from issuance of series B-1 preferred stock and warrants to purchase series B-3 preferred stock, net of issuance costs		7,662			-
Proceeds from issuance of series B-3 from exercise of warrants		7,438			-
Proceeds from line of credit		-			5,700
Payment to extinguish line of credit		(357	)		-
Payment of principal short-term debt		(3,660	)		(4,594	)

Cash flows provided by financing activities		11,083			1,106

Net increase (decrease) in cash and cash equivalents		3,036			(12,755	)
Cash, cash equivalents and restricted cash, at the beginning of the period		1,543			17,408

Cash, cash equivalents and restricted cash, at the end of the period	$	4,579		$	4,653

Supplemental disclosure of cash flow information
Interest paid	$	1,701		$	-
Income taxes paid, net	$	21		$	-

*Supplemental non-cash financing activities*
Conversion of warrant liability to equity	$	5,372		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

Biofrontera Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Business Overview

Biofrontera Inc., a Delaware Corporation (the “Company” or “Biofrontera”), is a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatological conditions with a focus on photodynamic therapy (“PDT”) and topical antibiotics. The Company’s licensed products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions as well as impetigo, a bacterial skin infection.

The Company includes its wholly owned subsidiary, Biofrontera Discovery GmbH (“Discovery”), formerly known as Bio-FRI GmbH, a limited liability company organized under the laws of Germany, formed on February 9, 2022, as a German presence to facilitate our relationship with Biofrontera Pharma GmbH (“Biofrontera Pharma”) and Biofrontera Bioscience GmbH (“Biofrontera Bioscience,” and, together with Biofrontera Pharma, the “Ameluz Licensor”), both of which are related parties as they are wholly owned subsidiaries of Biofrontera AG, a company holding more than five percent of the Company’s common stock.

Our principal licensed product is Ameluz^®, which is a prescription drug approved for use in combination with PDT (when used together, “Ameluz^® PDT”) using the BF-RhodoLED^®and the RhodoLED^®XL lamps (the “RhodoLED^®Lamps”). In the United States, the PDT treatment is used for the lesion-directed and field-directed treatment of actinic keratoses of mild-to-moderate severity on the face and scalp. We are currently selling Ameluz^® for this indication in the U.S. under an exclusive license and supply agreement, the Second Amended and Restated License and Supply Agreement, effective February 13, 2024 (the “Second A&R Ameluz LSA”), with the Ameluz Licensor.

Our second prescription drug licensed product is Xepi^® (ozenoxacin cream, 1%), a topical non-fluorinated quinolone that inhibits bacterial growth. Currently, no antibiotic resistance against Xepi^® is known and it has been specifically approved by the Food and Drug Administration (the “FDA”) for the treatment of impetigo, a common skin infection, due to Staphylococcus aureus or Streptococcus pyogenes. It is approved for use in the United States in adults and children 2 months and older. Our exclusive license and supply agreement, as amended (“Xepi LSA”) with Ferrer Internacional S.A. (“Ferrer”), assumed by the Company on March 25, 2019 through our acquisition of Cutanea Life Sciences, Inc. (“Cutanea”), enables the Company to market and sell this product in the United States. The Company has generated limited revenue from sales of Xepi during the current reporting periods and recent developments with the third-party manufacturer that was providing our supply of Xepi^® have resulted in further delays of our commercialization of the product. However, Ferrer is in the process of qualifying a new contract manufacturer. Once the new contract manufacturer is qualified, we expect the supply of Xepi^®will meet the future market demand.

Liquidity and Going Concern

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

Since we commenced operations in 2015, we have generated significant losses. We incurred net cash outflows from operations of $8.0 million and $14.0 million for the six months ended June 30, 2024 and 2023, respectively. The Company had an accumulated deficit as of June 30, 2024 of $110.3 million. The Company’s primary sources of liquidity are its cash collected from the sales of its products, and cash flows from financing transactions. As of June 30, 2024, we had cash and cash equivalents of $4.4 million, compared to $1.3 million as of December 31, 2023. These conditions and current cash flow projections raise substantial doubt about our ability to continue as a going concern for at least twelve months from the issuance date of this report. However, management believes that its plan alleviates the substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date these financial statements are issued.

Management’s plans include adhering to the 2024 budget approved by the Board of Directors (the “Board”), which includes significant sales and marketing, medical affairs, and dermatology community outreach efforts as we seek to expand the commercialization of Ameluz^®in the United States while decreasing discretionary expenses by approximately $5.5 million when compared to 2023.

In addition, the terms of the Second A&R Ameluz LSA are expected to reduce our cost of inventory in the future (See Note 12 Related Party Transactions), with gross margins of its primary product, Ameluz®, anticipated to be approximately 75% as opposed to the current 50%, beginning with inventory purchases after the execution date. This should reduce our cash needs for inventory, which will be partially offset by increased R&D costs, resulting in expected net savings of $2.7 million through August 2025.

The Company also has discretionary marketing, personnel, software, and other expenses budgeted in fiscal year 2024, which the Company has the ability and intent, commencing in January 2025, to reduce such spending and cash outflows by $5.8 million through August 31, 2025 without materially impacting planned revenues.

Based on the plans described above, management believes that the Company will have sufficient liquidity to meet its funding requirements for at least one year from the date these financial statements are issued. However, this will depend on several factors, including executing on its sales plan and planned cost reductions within the time period needed, as well as other possible challenges and unforeseen circumstances. A lack of execution or unforeseen circumstances may require the Company to raise additional capital or debt, which may not be available on acceptable terms, or at all, which could result in a material adverse effect on the Company, as well as its business, financial condition, results of operations, growth prospects and financial statements.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

2. Summary of Significant Accounting Policies

Basis for Preparation of the Financial Statements

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the Company’s opinion, the unaudited condensed consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2024, the Company’s operating results for the three and six months ended June 30, 2024 and 2023, and the Company’s cash flows for the six months ended June 30, 2024 and 2023. The accompanying financial information as of December 31, 2023 is derived from audited financial statements. Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024.

All amounts shown in these financial statements and tables are in thousands and amounts in the notes are in millions, except percentages and per share and share amounts.

Reverse Stock Split

On July 3, 2023, the Company effected a 1-for-20 reverse stock split (the “Reverse Stock Split”) of the issued and outstanding shares of the Company’s common stock, $0.001 par value (the “Common Stock”). The Common Stock began trading on the Nasdaq Capital Market on a post-split basis on July 5, 2023.

All information included in these consolidated financial statements has been adjusted, on a retrospective basis, to reflect the Reverse Stock Split as if it had been effective from the beginning of the earliest period presented, unless otherwise stated. All outstanding securities entitling their holders to purchase shares of Common Stock or acquire shares of Common Stock, including stock options, restricted stock units, and warrants, were adjusted as a result of the Reverse Stock Split, as required by the terms of those securities.

With the exception of the accounting policies below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the year ended December 31, 2023.

Research and Development Costs

Research and development expenses include costs directly attributable to the clinical development of Ameluz^®, including personnel-related expenses, the cost of services provided by outside contractors, including services related to the Company’s clinical trials, facilities, depreciation, and other direct and allocated expenses. All costs associated with research and development are expensed as incurred.

Clinical trial costs are a significant component of our research and development expenses and include costs associated with third-party contractors. The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as Clinical Research Organizations (“CROs”), independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. We record accruals for estimated costs under these contracts. When evaluating the adequacy of the accrued liabilities, we analyze the progress of the studies or clinical trials, including the phase or completion of events, invoices received, contracted costs and purchase orders. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period based on the facts and circumstances known at that time. Although we do not expect the estimates to be materially different from the amounts actually incurred, if the estimates of the status and timing of services performed differs from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period. Actual results could differ from our estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates and record any necessary adjustments in the period such variances become known.

We estimate clinical trial and research agreement related expenses based on the services performed, pursuant to contracts with the CROs, independent clinical investigators, and other vendors that conduct clinical trials and research on our behalf. In accruing clinical and research related fees, we estimate the period over which services will be performed and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we will adjust the accrual accordingly. Payments made under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.

Use of Estimates

The preparation of the financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions by management that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities, as reported on the balance sheet date, and the reported amounts of revenues and expenses arising during the reporting period. The main areas in which assumptions, estimates and the exercising of judgment are appropriate relate to, valuation allowances for receivables and inventory, valuation of contingent consideration and warrant liabilities, realization of intangible and other long-lived assets, product sales allowances and reserves, share-based payments, accrual of research and development expenses and income taxes including deferred tax assets and liabilities. Estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. They are continuously reviewed but may vary from the actual values.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The guidance is effective for the Company in the first quarter of fiscal year 2024. The adoption of ASU 2020-06 did not have a material impact on our results of operations or financial position.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This standard update requires additional interim and annual disclosures about a reportable segment’s expenses, even for companies with only one reportable segment. The Company is required to adopt the guidance for its 2024 annual report filed on Form 10-K, though early adoption is permitted. The Company is currently evaluating the impact of these amendments on its disclosures, but this standard update will not impact the Company’s results of operations or financial position.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. We are currently evaluating the effect of adopting the ASU on our disclosures.

3. Fair Value Measurements

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

(in thousands)	Level		June 30, 2024		December 31, 2023
Assets:
Investment, related party		1	$	10	$	78
Liabilities:
Warrant liability – 2022 Purchase Warrants		3	$	72	$	328
Warrant liability - 2022 Inducement Warrants		3	$	90	$	412
Warrant liability – 2023 Purchase Warrants		3	$	759	$	3,470
Warrant liability		3	$	759	$	3,470
Total Liabilities			$	921	$	4,210

Investment, related party

As of June 30, 2024 and December 31, 2023, the Company held as an investment, 3,019 (as adjusted for a reverse stock split on May 14, 2024) and 177,465, respectively, common shares of Biofrontera, AG, a company who holds a greater than five percent of our Common Stock and is traded on the Frankfurt Stock Exchange. The fair values of these investments were determined with Level 1 inputs through references to quoted market prices. See Note 12. Related Party Transactions.

Warrant Liabilities

The warrant liabilities are comprised of (i) outstanding warrants to purchase 170,950 shares of Common Stock originally issued in a private placement on May 16, 2022, as amended on November 2, 2023 to extend the expiration date until November 2, 2028 and revise the exercise price to $3.55 per share (the “2022 Purchase Warrants”), (ii) warrants to purchase 214,286 shares of Common Stock issued on July 26, 2022, as amended on November 2, 2023 to extend the expiration date until November 2, 2028 and revise the exercise price to $3.55 per share (the “2022 Inducement Warrants”), and (iii) warrants to purchase 1,807,500 shares of Common Stock issued on November 2, 2023 expiring five years following the date of issuance and with an exercise price of $3.55 per share ( the “2023 Purchase Warrants”).

The 2022 Purchase Warrants, the 2022 Inducement Warrants and the 2023 Purchase Warrants were accounted for as liabilities as these warrants provide for a redemption right in the case of a fundamental transaction which fails the requirement of the indexation guidance under ASC 815-40. The warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value is recognized in the Company’s consolidated statement of operations.

The fair value for the Level 3 2022 Purchase Warrants, 2022 Inducement Warrants and the 2023 Purchase Warrants was estimated using a Black-Scholes-Merton (“BSM”) model. Certain inputs utilized in our BSM model may fluctuate in future periods based upon factors which are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may cause a significant change to the fair value of our warrant liabilities which could also result in material non-cash gain or loss being reported in our consolidated statement of operations. The fair value of these warrants was determined using the BSM option pricing model based on the following assumptions for the three and six months ended June 30, 2024: fair value of the underlying common stock of $0.90 to $1.54, expected volatility of 95% to 100%, risk free rate of 4.20% to 4.35%, remaining contractual term of 4.34 to 4.59 years and a dividend yield of 0%. The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

The warrants to purchase 8,000 shares of Series B-3 Convertible Preferred Stock, par value $0.001 per share (the “2024 Preferred Warrants”), were also accounted for as liabilities, as they were redeemable in the event of a change in control, which was not solely within the control of the Company (see Note 13. Stockholders’ Equity). The 2024 Preferred Warrants were issued in the first quarter of 2024 and exercised prior to the end of the second quarter of 2024. The fair value for the Level 3 2024 Preferred Warrants was estimated utilizing a probability weighted average approach, which incorporated two scenarios. In scenario one, the warrant value was based on the underlying value of the convertible preferred stock, using an option-pricing model backsolve that solved for the value of our publicly traded equity on the valuation date to obtain the valuation date fair value of the Series B-3 Convertible Preferred Stock, then applied the Series B-3 Convertible Preferred Stock value into the BSM model equation to determine the value of the Series B-3 convertible warrants. In scenario two, the warrant value was based on the underlying value of the publicly traded common equity value. Scenario two assumes the preferred stock will be converted into Common Stock prior to a liquidity event. A simple BSM model was utilized to value the warrant under scenario two, using the closing price of our Common Stock as an input to the model.

The BSM model used the following range of inputs and assumptions for the 2024 Preferred Warrants at the issuance date of February 22, 2024, for the three months ended March 31, 2024 and at the exercise date of May 13, 2024: (i) expected stock price volatility of 79.3% to 105%; (ii) risk-free interest rate of 5.39%; to 5.54%; (iii) expected life of the warrants of 0.003 to 0.21 years; and (iv) dividend yield of 0.0%.

The following table presents the changes in the Level 3 warrant liabilities measured at fair value (in thousands):

	2024			2023
	Six Months Ended June 30,
	2024			2023
Fair value at beginning of period	$	4,210		$	2,843
Issuance of new warrants		4,092			-
Exercise of warrants		(5,372	)		-
Change in fair value of warrant liabilities		(2,009	)		(1,403	)
Fair value at end of period	$	921		$	1,440

4. Revenue

We generate revenue primarily through the sales of our licensed products Ameluz^®, RhodoLED^® Lamps, and Xepi^®. Revenue from the sales of our lamps and Xepi^® are relatively insignificant compared with the revenues generated through our sales of Ameluz^®.

Related party revenue relates to an agreement with Biofrontera Bioscience for BF-RhodoLED^® leasing and installation service associated with the clinical lamps, which, due to the Second A&R Ameluz LSA is no longer effective as of June 30, 2024. Refer to Note 12, Related Party Transactions.

An analysis of the changes in product revenue allowances and reserves is summarized as follows:

(in thousands):	Returns			Co-pay assistance program			Prompt pay discounts			Government and payor rebates			Total
Balance at December 31, 2022	$	48		$	9		$	5		$	20		$	82
Provision related to current period sales		3			62			3			134			202
Credit or payments made during the period		-			(71	)		(2	)		(59	)		(132	)
Balance at June 30, 2023	$	51		$	-		$	6		$	95		$	152

Balance at December 31, 2023	$	52		$	-		$	6		$	54		$	112
Balance	$	52		$	-		$	6		$	54		$	112
Provision related to current period sales		32			-			-			112			144
Credit or payments made during the period		(7	)		-			(6	)		(90	)		(103	)
Balance at June 30, 2024	$	77		$	-		$	-		$	76		$	153
Balance	$	77		$	-		$	-		$	76		$	153

5. Investment, Related Party

As of June 30, 2024 and December 31, 2023, our investments in equity securities consisted solely of 3,019 shares (as adjusted for a 1 for 21 reverse stock split on May 14, 2024) and 177,465 shares, respectively, of common shares of Biofrontera AG. (See Note 12. Related Party Transactions). Equity securities gains and losses include unrealized gains and losses from changes in fair values during the period on equity securities we still own, as well as gains and losses on securities we sold during the period. As reflected in the consolidated statements of cash flows, we received proceeds from sales of equity securities of approximately $0.1 million and $0.2 million during the six months ended June 30, 2024 and 2023, respectively.

Gain/(loss) on investment, related party, was comprised of the following:

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Net loss recognized during the period on equity securities	$	(14	)	$	(1,482	)	$	(11	)	$	(4,424	)
Less: net realized loss on equity securities sold		-			75			98			75
Unrealized gain (loss) recognized during the reporting period on equity securities still held at the reporting date	$	(14	)	$	(1,407		$	87		$	(4,349	)

6. Accounts Receivable, net

Accounts receivables are mainly attributable to the sale of Ameluz^®. It is expected that all trade receivables will be settled within twelve months of the balance sheet date. Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects our best estimate of expected credit losses of the receivables determined on the basis of historical experience and current information. In developing the estimate for expected credit losses, trade accounts receivables are segmented into pools of assets depending primarily on delinquency status, and fixed reserve percentages are established for each pool of trade accounts receivables.

In determining the reserve percentages for each pool of trade accounts receivable, we considered our historical experience with certain customers, regulatory and legal environments and other relevant current and future forecasted macroeconomic factors. If we become aware of any customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded.

The allowance for credit losses was $0.3 million and $0.2 million as of June 30, 2024 and December 31, 2023, respectively.

7. Inventories

Inventories are comprised of Ameluz^®, RhodoLED^® Lamps, and immaterial amounts of Xepi^®finished products.

There was no provision for obsolescence recorded for the three and six months ended June 30, 2024 and 2023. As of December 31, 2023, in connection with the voluntary recall by the Ameluz Licensor, we recorded an inventory write-off of $5.2 million with a corresponding asset for the anticipated replacement from the licensor to other assets, related party, as the recalled lots of Ameluz^® products were to be replaced by the Ameluz Licensor at no additional cost in accordance with the Ameluz License and Supply Agreement (the “Ameluz LSA”). See Note 12. Related Party Transactions for further discussion of the voluntary recall. As of July 23, 2024, we have received the full amount of the replacement inventory for the recalled Ameluz^®. See Note: 19. Subsequent Events.

8. Intangible Asset, Net

Intangible asset, net consists of the following:

Schedule of Intangible Asset Net

(in thousands)	June 30, 2024			December 31, 2023
Capitalized software	$	50		$	15
Xepi^® license	$	4,600		$	4,600
Less: Accumulated amortization		(2,202	)		(1,986	)
Intangible asset, net	$	2,448		$	2,629

The Xepi^® license intangible asset was recorded at acquisition-date fair value of $4.6 million and is amortized on a straight-line basis over the useful life of 11 years. Amortization expense was $0.1 million for each of the three-month periods ended June 30, 2024 and 2023 and $0.2 million for the six months ended June 30, 2024 and 2023.

The Company capitalizes the application development phase costs of internal use software in accordance with ASC 350-40, “Intangibles-Goodwill and Other-Internal Use Software.” Capitalized costs will be amortized on a straight-line basis over the estimated useful life of the asset upon completion. There was minimal amortization expense for the three and six months ended June 30, 2024 and none for the three and six months ended June 30, 2023.

9. Cash Balances and Statement of Cash Flows Reconciliation

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). At June 30, 2024, approximately $4.0 million of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks with respect to these accounts.

Restricted cash consists primarily of deposits of cash collateral held in accordance with the terms of our corporate credit cards. Long-term restricted cash was recorded in other assets in the consolidated balance sheet.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash that sum to the total shown in the statements of cash flows:

(in thousands)	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	4,379	$	1,343
Long-term restricted cash		200		200
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$	4,579	$	1,543

Long-term restricted cash was recorded in other assets in the consolidated balance sheet.

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

(in thousands)	June 30, 2024		December 31, 2023
Employee compensation and benefits		1,989		2,185
Professional fees		391		1,064
Research and development		376		-
Product revenue allowances and reserves		188		149
Distribution and Storage		50		118
Legal settlement		-		403
Other		599		568
Total	$	3,593	$	4,487

11. Debt

Line of Credit

Effective as of January 4, 2024, we voluntarily terminated the Loan and Security Agreement with Midcap Business Credit LLC (the “Loan Agreement”), paying a total of approximately $0.4 million, consisting of (1) the outstanding principal of and interest balance due under the Loan Agreement, aggregating approximately $0.2 million, and (2) early termination fees of approximately $0.2 million.

As a result of the termination of the Loan Agreement, the Company recognized a $0.3 million loss related to prepayment fees and the write-off of deferred financing costs, in the accompanying consolidated statement of operations for the six months ended June 30, 2024.

Loan Facilities

On December 21, 2023, we entered into credit facilities with two different lenders (the “Loans”), each pursuant to a Business Loan and Security Agreement providing for a term loan in the principal amount of $2,000,000. Each of the Loans is evidenced by a Secured Promissory Note, effective as of December 21, 2023. Each of the Loans requires the Company to make weekly payments of principal and interest in the amount of approximately $102,857 through July 5, 2024, the maturity date. There were approximately $0.3 million of related issuance costs, recognized as a debt discount (contra liability against the debt balance), that are being amortized as interest expense over the life of the loan using the effective interest method. During the three and six months ended June 30, 2024 the Company recognized interest expense of approximately $0.2 million and $1.7 million, respectively and discount amortization of $0.1 million and $0.3 million, respectively. As of June 30, 2024 the aggregate amount of principal outstanding under the Loans was $0.3 million, which is shown net of the remaining unamortized issuance cost.

Each of the Loans is secured by a security interest in substantially all of the Company’s assets (the “Collateral”). The Company will pay interest in the aggregate amount of $880,000 on each of the Loans, assuming all payments under the Loans are made on a timely basis.

Each of the Business Loan and Security Agreements includes limitations on the Company’s ability to sell, lease, transfer, or otherwise dispose of its assets outside the ordinary course of its business; or to create, incur, allow or suffer to exist any lien on any of its assets other than liens in favor of either lender and certain other permitted liens. Each of the Business Loan and Security Agreements also contains customary representations and warranties and customary events of default, upon the occurrence of which, after any applicable grace period, the applicable lender would have the ability to accelerate its loan and exercise remedies with respect to the Collateral.

Interest expense is recognized using the effective interest method, such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period until maturity.

12. Related Party Transactions

License and Supply Agreement

Under the Ameluz LSA, the Company obtained an exclusive, non-transferable license to use Biofrontera Pharma’s technology to market and sell the licensed products, Ameluz^® and RhodoLED^® Lamps and must purchase the licensed products exclusively from Biofrontera Pharma. The Second A&R Ameluz LSA, among other things, amended the Ameluz LSA to:

(i) update the price we pay per unit, based on certain percentages of the anticipated net selling price, (the “Transfer Price”) that covers the cost of goods, royalties on sales, and services, including all regulatory efforts, agency fees, pharmacovigilance, and patent administration, as follows:

	●	Twenty-five percent of the anticipated net selling price per unit through 2025;
	●	Thirty percent of the anticipated net selling price per unit for 2026 to 2028;
	●	Thirty-two percent of the anticipated net selling price per unit for 2029 to 2031;
	●	Thirty-five percent of the anticipated net selling price per unit for 2032 and beyond, subject to a minimum dollar amount per unit; and
	●	The Transfer Price for sales related to acne, another indication currently in development, will remain at twenty-five percent of the anticipated net selling price per unit indefinitely.

(ii) provide for the transfer of responsibilities for clinical trials relating to Ameluz^® in the US on or before June 1, 2024, including the Company assuming related contracts and transferring key personnel from the Ameluz Licensor to the Company.

Also, in connection with the Second A&R Ameluz LSA, the Company entered into a Release of Claims, with the Ameluz Licensor, dated February 13, 2024, pursuant to which the Company agreed to release the Ameluz Licensor from all claims and liabilities arising out of or relating to any failure by the Ameluz Licensor to perform certain obligations under the Second A&R Ameluz LSA with respect to clinical trials for which the Company assumed responsibility under the Second A&R Ameluz LSA.

Purchases of the licensed products during the three and six months ended June 30, 2024 were $0.8 million and $1.1 million, respectively, and $10.4 million and $13.7 million for the three and six months ended June 30, 2023, respectively. Amounts due and payable to Biofrontera Pharma as of June 30, 2024 and December 31, 2023 were $2.2 million and $8.5 million, respectively, which were recorded net in accounts payable, related parties in the consolidated balance sheets.

On February 9, 2024, Biofrontera was notified that the Ameluz Licensor had initiated a voluntary recall of a limited number of lots of Ameluz^®due to a manufacturing defect in the impacted product’s packaging, which is provided by an unaffiliated supplier. In its communications, the Ameluz Licensor confirmed that the recalled product is not likely to cause adverse health consequences. Pursuant to the Ameluz LSA, the Company will not bear any financial responsibility for the costs associated with this recall. As such, the Company does not anticipate a material financial impact on its business as a result of the recall. As of December 31, 2023, in connection with the voluntary recall by the Ameluz Licensor, the Company recorded an inventory write-off of $5.2 million with a corresponding asset for the anticipated replacement from the licensor to other assets, related party. As of July 23, 2024, we received the full amount of the replacement inventory for the recalled Ameluz^®. See Note: 19. Subsequent Events.

Service Agreements

In December 2021, we entered into an Amended and Restated Master Contract Services Agreement (the “Services Agreement”), which provides for the execution of statements of work, by and among the Company, Biofrontera AG, Biofrontera Pharma and Biofrontera Bioscience, primarily for regulatory support and pharmacovigilance. The Services Agreement enables us to continue relying on Biofrontera AG and its subsidiaries for various services it has historically provided to us for as long as we deem necessary. We currently have statements of work in place regarding pharmacovigilance, regulatory affairs, medical affairs, and investor relations services and are continuously assessing the other services historically provided to us by Biofrontera AG to determine (i) if they will be needed, and (ii) whether they can or should be obtained from other third-party providers.

We have migrated away from Biofrontera AG to third party providers for most of our significant information technology services. Expenses related to the Services Agreement were negligible for the three and six months ended June 30, 2024 and $0.1 million for the three and six months ended June 30, 2023, which were recorded in selling, general and administrative, related party. Amounts due to Biofrontera AG related to the Services Agreement were negligible and $0.1 million as of June 30, 2024 and December 31, 2023, which were recorded in accounts payable, related parties in the consolidated balance sheets.

Clinical Lamp Lease Agreement

On August 1, 2018, the Company executed a clinical lamp lease agreement with Biofrontera Bioscience to provide lamps and associated services. Due to the Second A&R Ameluz LSA, this agreement is no longer effective as of June 30, 2024.

Total revenue related to the clinical lamp lease agreement was minimal for the three and six months ended June 30, 2024 and 2023, and was recorded as revenues, related party. Amounts due from Biofrontera Bioscience for clinical lamp and other reimbursements were negligible and $0.2 million as of June 30, 2024 and December 31, 2023, respectively, which were recorded as other receivables, related party in the consolidated balance sheets.

Others

The Company receives expense reimbursement from Biofrontera AG and Biofrontera Bioscience on a quarterly basis for costs incurred on behalf of these entities, which are netted against expenses incurred within selling, general and administrative expenses. Total expense reimbursements were $0.2 million and $0.3 million for the three and six months ended June 30, 2024 respectively. Total expense reimbursements for the three and six months ended June 30, 2023 were $0.2 million and $0.4 million, respectively.

The Company recorded a receivable of $2.8 million as of December 31, 2023, due from Biofrontera AG (presented net in accounts payable, related party) for its 50% share of the balance of a legal settlement for which both parties are jointly and severally liable. The Company had a contractual right to repayment of its share of the settlement payments, plus interest and other miscellaneous settlement costs, from Biofrontera AG under the Settlement Allocation Agreement entered into on December 9, 2021 and as amended on June 30, 2022, which provides that the settlement payments would first be made by the Company and then reimbursed by Biofrontera AG for its share. There was no interest income recognized for the three and six months ended June 30, 2024 and 2023, in connection with this receivable and the $2.8 million balance was net settled against payments for inventory in February 2024.

As of June 30, 2024, our investment, related party was valued at a negligible amount and consisted of 3,019 common shares of Biofrontera AG (as adjusted for a reverse stock split on May14, 2024). As of December 31, 2023, our investment in equity securities was valued at $0.1 million and consisted of 177,465 common shares of Biofrontera AG. See Note 5. Investment, Related Party.

13. Stockholders’ Equity

Under the Company’s Certificate of Second Amendment to the Amended and Restated Certificate of Incorporation (“Certificate”), effective April 25, 2024, the Company is authorized to issue 35,000,000 shares of Common Stock and 20,000,000 shares of preferred stock, par value $.001 per share.

On February 19, 2024, the Company entered into the Preferred Purchase Agreement, pursuant to which the Company agreed to issue and sell, in a private placement (the “Offering”), (i) 6,586 shares of Series B-1 Convertible Preferred Stock, par value $0.001 per share (the “Series B-1 Preferred Stock”), and (ii) the 2024 Preferred Warrants to purchase 8,000 shares of Series B-3 Convertible Preferred Stock, par value $0.001 per share (the “Series B-3 Preferred Stock”) for an aggregate offering price of $8.0 million. Each share of Series B-1 Preferred Stock was sold for $1,000 per share and the consideration for each 2024 Preferred Warrant was $0.125 per share of common stock that each share of Series B-3 Preferred Stock may be converted into (or 11,309,019 common stock shares). The conversion price of Series B Preferred Stock is $0.7074 per share of Common Stock, such that each Series B share is convertible into 1,413.6 shares of the Common Stock. The net proceeds received were approximately $7.3 million, after deducting fees paid to the placement agent and other offering expenses payable by the Company.

On February 22, 2024, concurrent with the closing of the Offering, in exchange for the conversion of 1,780 shares of Series B-1 Preferred Stock, the Company issued 2,516,785 shares of common stock. Pursuant to the Certificate, upon the Company’s stockholders’ May 2024 approval of an increase in the authorized shares of Common Stock (“Stockholder Approval”), the remaining 4,806 shares of Series B-1 Preferred Stock automatically converted into Series B-2 Preferred Stock (as a conversion to common stock would have caused the holders to exceed their respective beneficial ownership limitations), with 6,793,893 shares of common stock issuable upon conversion of the Series B-2 Preferred Stock. Also, following the Stockholder Approval, upon any liquidation event, the assets of the Company available for distribution to its stockholders will be distributed among the holders of the shares of Series B Preferred Stock and Common Stock, pro rata, based on the number of shares held by each such holder, treating for this purpose, all shares of Series B Preferred Stock as if they had been converted to Common Stock. With the removal of the liquidation preference to Series B Preferred, the requirement for mezzanine classification was eliminated and the Series B Preferred Stock is classified as permanent equity as of June 30, 2024. (See Note 14. Redeemable Preferred Stock.)

On May 13 and 14, 2024, of the 8,000 2024 Preferred Warrants, 7,998 were exercised to purchase shares of the Company’s Series B-3 Convertible Preferred stock, par value $0.001 per share, for net proceeds of $7.4 million, net of fees paid to the placement agent, while two warrants expired due to non-issuance of fractional shares. All 2024 Preferred Warrants issued in the Offering have now been exercised or expired, with 11,306,192 shares of common stock issuable upon conversion of the 7,998 shares of Series B-3 Convertible Preferred Stock.

Pursuant to the Preferred Purchase Agreement, the Company is entitled to appoint two independent directors designated by Rosalind Advisors, Inc to the Company’s Board.

Amendment to Articles of Incorporation – Series B Preferred Stock

Pursuant to the terms of the Preferred Purchase Agreement, on February 20, 2024, the Company filed the Certificate of Designation with the Delaware Secretary of State designating 6,586 shares of its authorized and unissued preferred stock as Series B-1 Preferred Stock, 6,586 shares as Series B-2 Preferred Stock and 8,000 shares as Series B-3 Convertible Preferred Stock, with a par value of $0.001 per share (collectively the “Series B Preferred Stock”).

Series B Preferred Stock Rights:

Voting Rights. Subject to certain limitations described in the Certificate of Designation, the Series B Preferred Stock is voting stock. Holders of the Series B Preferred Stock are entitled to vote together with the Common Stock on an as-if-converted-to-Common-Stock basis. Holders of Common Stock are entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders. Accordingly, holders of Series B Preferred Stock will be entitled to one vote for each whole share of Common Stock into which their Series B Preferred Stock is then convertible on all matters submitted to a vote of stockholders.

Conversion. Subject to certain beneficial ownership limitations, at the option of the Holder, each share of Series B Preferred Stock is convertible into shares of Common Stock at the applicable Conversion Price, rounded down to the nearest whole share. The conversion price for the Series B Preferred Stock is $0.7074 per share of Common Stock, subject to adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization. Following the Stockholder Approval, each share of Series B-1 Preferred Stock was automatically converted into either Common Stock or, to the extent the conversion would cause a holder to exceed its beneficial ownership limitation, shares of Series B-2 Preferred Stock.

Liquidation.

Following the Stockholder Approval, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, including a change of control transaction, or Deemed Liquidation Event, as defined in the Certificate of Designation (any such event, a “Liquidation”), the assets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series B Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series B Preferred Stock as if they had been converted to Common Stock pursuant to the terms of the Certificate of Designation immediately prior to such Liquidation, without regard to any limitations on conversion set forth in the Certificate of Designation or otherwise.

Participation Right. For a period of one year following the closing of the Offering, the purchasers will have the right to participate as an investor in any securities offering consummated by the Company.

Common Stock:

The holders of Common Stock are entitled to one vote for each share held. Common Stockholders are not entitled to receive dividends, unless declared by the Board. The Company has not declared dividends since inception. In the event of liquidation of the Company, dissolution or winding up, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities. The Common Stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock. The outstanding shares of Common Stock are fully paid and non-assessable. As of June 30, 2024, there were 5,094,184 shares of Common Stock outstanding.

Issuance of Common Stock Pursuant to the Exercise of 2023 Pre-Funded Warrants and Conversion of Series B-1 Preferred Stock

On January 8, 2024 and February 2, 2024, an investor exercised 167,000 and 888,000 pre-funded warrants to purchase the Company’s common stock, par value $0.001 per share (the “Pre-Funded Warrants”), respectively, and purchased a total of 1,055,000 shares of common stock at an exercise price of $.0001 per share, resulting in negligible net proceeds.

14. Redeemable Preferred Stock

Prior to the Stockholder Approval, Series B-1 Preferred Stock was redeemable at the option of the holder and Series B-2 and B-3 Preferred Stock were redeemable in the event of a change in control. ASC 480-10-S99-3A(2) of the SEC’s Accounting Series Release No. 268 (“ASR 268”) requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (i) at a fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder, or (iii) upon the occurrence of an event that is not solely within the control of the issuer. Preferred securities that are mandatorily redeemable are required to be classified by the issuer as liabilities whereas under ASR 268, an issuer should classify a preferred security whose redemption is contingent on an event not entirely in control of the issuer as mezzanine equity. The Series B-1 Preferred Stock was redeemable at the option of the holder, B-2 and B-3 were redeemable, upon a change in control that was not solely within control of the Company. Prior to the Stockholder Approval, the Series B Preferred Stock was considered senior to the Common Stock and all other series of the Company with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. As such, the Company determined that mezzanine treatment was appropriate for the Series B Preferred Stock at issuance in February 2024 and as of March 31, 2024, and the Series B Preferred Stock was presented as such in our consolidated balance sheets and consolidated statements of changes in stockholders’ equity and mezzanine equity for periods prior to the Stockholder Approval. The Series B Preferred Stock was not considered mandatorily redeemable.

Upon the Stockholder Approval, each share of Series B-1 Preferred Stock automatically converted into either Common Stock or, to the extent the conversion would cause a holder to exceed its beneficial ownership limitation, shares of Series B-2 Preferred Stock, thereby removing the redemption feature at the option of the holder (which was only present for Series B-1) and eliminating one of the requirements for classification as mezzanine equity.

Following the Stockholder Approval, upon any liquidation, the assets of the Corporation available for distribution to its stockholders will be distributed among the holders of the shares of Series B Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series B Preferred Stock as if they had been converted to Common Stock pursuant to the terms of the Certificate of Designation filed on February 20, 2024. Accordingly, the Series B Preferred stock is classified as permanent equity on our consolidated balance sheets and consolidated statements of change in stockholders’ equity as of June 30, 2024, due to the limited exception under ASC 480-10-S99-3A(3)(f).

15. Equity Incentive Plans and Share-Based Payments

2021 Omnibus Incentive Plan

In 2021, our Board adopted, and our shareholders approved, the 2021 Omnibus Incentive Plan (“2021 Plan”), under which the maximum contractual term is 10 years for stock options issued. On June 12, 2024, the stockholders of the Company approved an amendment to the Biofrontera Inc. 2021 Omnibus Incentive Plan to increase the number of shares authorized for issuance by 3,483,010 shares, from 266,990 shares to 3,750,000 shares. As of June 30, 2024, there were 3,636,788 shares available for future awards under the amended 2021 Plan.

Non-qualified stock options

We maintain the 2021 Plan for the benefit of our officers, directors and employees. Employee stock options granted under the 2021 Plan generally vest in equal annual installments over three years and are exercisable for a period of up to ten years from the grant date. Non-employee director options vest in equal monthly installments following the date of grant and will be fully vested on the one-year anniversary of the date of grant. All stock options are exercisable at a price as set by the Company at the time of the grant but shall not be less than the market value of the common shares underlying the option on the grant date.

The Company recognizes the grant-date fair value of share-based awards granted as compensation expense on a straight-line basis over the requisite service period. The fair value of stock options is estimated at the time of grant using the BSM option pricing model, which requires the use of inputs and assumptions such as the fair value of the underlying stock, exercise price of the option, expected term, risk-free interest rate, expected volatility and dividend yield. The Company elects to account for forfeitures as they occur.

The fair value of each option was estimated on the date of the grant using the BSM option pricing model. There were no equity grants during the three and six months ended June 30, 2024.

Share-based compensation expense related to stock options of approximately $0.2 million and $0.3 million was recorded in selling, general and administrative expenses, with a negligible amount recorded as research and development on the accompanying consolidated statement of operations for the three and six months ended June 30, 2024, respectively. Share-based compensation expense of $0.2 million and $0.4 million related to stock options for the three and six months ended June 30, 2023,

respectively, was recorded in selling, general and administrative expenses.

Options outstanding and exercisable under the employee share option plan as of June 30, 2024, and a summary of option activity during the six months then ended is presented below.

Schedule of Stock Option Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2023		99,486		$	39.26
Granted		-		$	-
Exercised		-		$	-
Canceled or forfeited		(11,954	)	$	11.58
Outstanding at June 30, 2024		87,532		$	42.64		8.26	$	-
Exercisable at June 30, 2024		39,809		$	58.47		7.86	$	-

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that were in the money at June 30, 2024.

As of June 30, 2024, there was $0.6 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 1.51 years.

Share-Based Compensation (RSUs)

Restricted Stock Units (“RSUs”) will vest annually over two years, subject to the recipient’s continued service with the Company through the applicable vesting dates. The fair value of each RSU is determined based on the closing market price of the Company’s Common Stock on the grant date.

Share-based compensation expense for the RSUs was negligible and $0.1 million for the three and six months ended June 30, 2024, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2023 respectively, and was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Schedule of Restricted Stock Units

	Shares			Weighted Average Remaining Contractual Term		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023		4,771			-	$	52.20
Awarded		-			-	$	-
Vested		(4,771	)		-	$	52.20
Canceled or forfeited		-			-	$	-
Outstanding at June 30, 2024		-			-	$	-

As of June 30, 2024, there was no unrecognized compensation cost related to RSUs.

16. Interest Expense, net

Interest expense, net consists of the following:

Schedule of Interest Expense

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Interest expense	$	(620	)	$	(32	)	$	(2,041	)	$	(33	)
Contract asset interest expense		-			(89	)		-			(179	)
Interest income		24			42			38			98
Interest expense, net	$	(596	)	$	(79	)	$	(2,003	)	$	(114	)

Interest expense is comprised primarily of interest on our short-term loans and line of credit, including amortization of deferred costs.

Contract asset interest expense related to a $1.7 million contract asset in connection with a $7.3 million start-up cost financing received from Maruho Co., Ltd. (“Maruho”) under a share purchase agreement. The contract asset was amortized on a straight-line basis using a 6% interest rate over the financing arrangement contract term, which ended on December 31, 2023.

Interest income relates primarily to interest earned on funds deposited in our bank accounts.

17. Net Earnings (Loss) per Share

The Company uses the two-class method to calculate net income (loss) per share. No dividends were declared or paid for the three and six months ended June 30, 2024 and 2023. Undistributed earnings for each period are allocated equally to common shareholders and participating securities based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. Under the two-class method, the undistributed losses will be allocated entirely to the common stock shareholders. Basic net earnings (loss) per common share are calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net earnings per common share are calculated by dividing net income (loss) by the diluted weighted average number of common shares outstanding during the period. The diluted shares include the dilutive effect of stock-based awards based on the treasury stock method.

In periods where a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be anti-dilutive.

The following table sets forth the computation of the Company’s basic and diluted net earnings (loss) per share attributable to common stockholders (in thousands, except share and per share data):

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)
Weighted average common shares outstanding, basic and diluted		5,091,353			1,360,739			4,357,474			1,359,894
Net loss per share, basic and diluted	$	(0.05	)	$	(7.23	)	$	(2.45	)	$	(12.73	)

The following table sets forth the securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future:

June 30,	2024		2023
Common stock warrants		2,269,356		1,877,630
Common stock options and RSUs		87,532		106,034
Unit Purchase Options		20,182		20,182
Shares related to Series B-2 convertible preferred stock		6,793,893		-
Shares related to Series B-3 convertible preferred stock		11,306,191		-
Total		20,477,154		2,003,846
Anti-dilutive securities		20,477,154		2,003,846

Common Stock warrants include Purchase Warrants, Inducement Warrants and warrants issued in the Company’s initial public offering.

18. Commitments and Contingencies

Leases

The Company leases its corporate headquarters under an operating lease that expires in August 2025. The Company has the option to extend the term of the lease for one five (5)-year period upon written notice to the landlord. The extension period has not been included in the determination of the ROU asset or the lease liability as the Company concluded that it is not reasonably certain that it would exercise this option. The Company provided the landlord with a security deposit in the amount of $0.1 million, which was recorded as other assets in the consolidated balance sheets.

The Company has also entered into a master lease agreement for its vehicles. After an initial non-cancelable twelve-month period, each vehicle is leased on a month-to-month basis. Based on historical retention experience of approximately three years, the vehicles have varying expiration dates through March 2027.

Future lease payments under non-cancelable leases as of June 30, 2024 were as follows (in thousands):

Years ending December 31,	Future lease commitments
Remainder of 2024	$	382
2025		582
2026		238
2027		31
Thereafter		-
Total future minimum lease payments	$	1,233
Less imputed interest		(89	)
Total lease liability	$	1,144

Schedule of Operating Lease Liability

Reported as:
Operating lease liability, current	$	701
Operating lease liability, non-current		443
Total	$	1,144

Ameluz LSA Sales Commitment

The term shall renew automatically for a period of five years, in perpetuity, so long as we have earned revenues from Ameluz product and lamps equal to or greater than $150 million over the preceding five years. If we fail to earn $150 million in revenues from Ameluz^®and the RhodoLED^® Lamps over the preceding five (5) year period prior to the Ameluz LSA’s termination date, Biofrontera Pharma has the right to terminate the Ameluz LSA by providing one (1) year written notice.

In addition, starting in 2025, under the Second A&R Ameluz LSA, we agree to purchase the higher of a minimum quantity of tubes of Ameluz^®per year or at least a minimum 75% of the annual average of audited Ameluz^® tubes sold during the preceding four (4) full calendar years (“Annual Minimum Sales”). If we fail to achieve the respective Annual Minimum Sales for any calendar year, such failure will constitute a termination event, unless waived by the Ameluz Licensor.

Ameluz^® Minimum Research and Development Costs (“Minimum R&D Costs”)

During the years 2025 through 2030, we will be required to fund Minimum R&D Costs in an amount that is at least 85% of the difference between (i) the Transfer Price for product, effective February 13, 2024 and (ii) the Transfer Price for product as it would have been determined under the previous Ameluz LSA, dated October 8, 2021. If we fail to meet the minimum requirement, the difference shall be paid to Biofrontera Pharma on February 15, 2031, in either cash or our Common Stock, at our discretion.

Licensing Agreement with Optical Tools

On December 2, 2022, the Company entered into the technology transfer agreement with Optical Tools LLC (“Optical Tools”), Stephen Tobin and Paul Sowyrda (the “Agreement”). The Agreement allowed for the transfer of the assigned patents and trademarks, and upon notification by the Company to Optical Tools, the research and development of certain prototypes. The Company paid a licensing fee of $0.2 million which was expensed during the year ended December 31, 2022.

On May 28, 2023, the Company authorized Optical Tools to design, develop, manufacture, and deliver at least two portable photodynamic therapy lamp prototypes (“PDT Device”) using the technology in the assigned patents. The PDT Device provides illumination, based on different light profiles, to the external skin surface of the human body. The Company is to reimburse Optical Tools for all reasonable out-of-pocket, material and labor costs per the Agreement.

As part of the Agreement, Optical Tools will be eligible to receive regulatory and sales milestone payments totaling up to $1.0 million, and royalties of up to 3% of net revenue of certain products developed under this Agreement.

The Company did not make any milestone or royalty payments or accruals for such payments during the three and six months ended June 30, 2024 or 2023.

Milestone payments with Ferrer Internacional S.A.

Under the Xepi LSA, we are obligated to make payments to Ferrer upon the occurrence of certain milestones. Specifically, we must pay Ferrer (i) $2,000,000 upon the first occasion when annual net sales of Xepi^® under the Xepi LSA exceed $25,000,000, and (ii) $4,000,000 upon the first occasion annual net sales of Xepi^®under the Xepi LSA exceed $50,000,000. No payments or accruals for such payments were made during the three and six months ended June 30, 2024 or 2023 related to Xepi^® milestones.

Research and Development Arrangements

In the course of normal business operations, the Company enters into agreements with contract research organizations (“CROs”) to assist in the performance of research and development activities. Expenditures to CROs represent a significant cost in clinical development for the Company. The Company may be obligated to make future payments should certain developments be achieved. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the timing of receipt of invoices and payment of invoices and are reflected in the financial statements as a prepaid or accrued expense. The Company could also enter into additional contract research agreements in the future, which may require upfront payments and long-term commitments of cash.

Legal proceedings

At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of FASB ASC Topic 450, Contingencies. The Company expenses as incurred the legal costs related to such legal proceedings.

Legal Claims

On September 13, 2023, Biofrontera was served with a complaint filed by DUSA Pharmaceuticals, Inc., Sun Pharmaceutical Industries, Inc. (“Sun”), and Sun Pharmaceutical Industries LTD in which DUSA alleges breach of contract, violation of the Lanham Act, and unfair trade practices. All claims stem from allegations that Biofrontera has promoted its Ameluz^® product in a manner that is inconsistent with its approved FDA labeling. Though this complaint was originally filed in the U.S. District Court for the District of Massachusetts, this matter has been transferred by agreement of the parties to the U.S. District Court for the District of New Jersey. Biofrontera filed a partial motion to dismiss the Lanham Act and unfair trade practices claims on April 8, 2024. This motion remains pending, and fact discovery commenced on August 1, 2024.

On June 26, 2024 and June 27, 2024, Sun filed two additional complaints against Biofrontera, Biofrontera AG, Biofrontera Pharma, and Biofrontera Bioscience with the United States District Court for the District of Massachusetts and the International Trade Commission, respectively, both alleging infringement of two patents held by Sun.

The Company denies these claims and intends to defend these matters vigorously. Based on the Company’s assessment of the facts underlying the above claims, the uncertainty of litigation and the preliminary stage of the case, the Company cannot estimate the possibility of a material loss, nor the potential range of loss that may result from this action. If the final resolution of the matter is adverse to the Company, it could have a material impact on the Company’s financial position, results of operations, or cash flows.

19. Subsequent Events

We have completed an evaluation of subsequent events after the balance sheet date of June 30, 2024 through the date this Quarterly Report on Form 10-Q was submitted to the SEC, and determined that the following material subsequent event required disclosure.

As of July 23, 2024, we have received the full amount of replacement inventory for the recalled Ameluz® (See Note 12 Related Party Transactions).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis (“MD&A”) provides supplemental information, which sets forth the major factors that have affected our financial condition and results of operations and should be read in conjunction with the Condensed Consolidated Financial Statements and related notes. The following information should provide a better understanding of the major factors and trends that affect our earnings performance and financial condition, and how our performance during the first quarter of 2024 compares with prior-year periods. Throughout this section, Biofrontera Inc., including its wholly owned subsidiary, Biofrontera Discovery GmbH (“Discovery” or “subsidiary”), is referred to as “Company,” “we,” “us,” or “our.”

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain statements in this Form 10-Q constitute “forward-looking statements”. Such statements include estimates of our expenses, future revenue, capital requirements, our need for additional financing, statements regarding the efficacy and intended use of our technologies under development, the timelines and strategy for bringing licensed products to market, the timeline for regulatory review and approval of our licensed products, and other statements that are not historical facts. The words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential”, “target”, “goal”, “assume”, “would”, “could” or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. You should read this Form 10-Q and the documents that we have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. While we have based these forward-looking statements on our current expectations and projections about future events, we may not actually achieve the plans, intentions or expectations disclosed in or implied by our forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions about us and accordingly, actual results or events could differ materially from the plans, intentions and expectations disclosed in or implied by the forward-looking statements we make.

Factors that may cause such differences include, but are not limited to:

	●	our reliance on sales of products we license from other companies as our sole source of revenue;

	●	the success of our competitors in developing generic topical dermatological products that successfully compete with our licensed products;

	●	the success of our principal licensed product Ameluz^®;

	●	the ability of Biofrontera Pharma GmbH (“Biofrontera Pharma”), Biofrontera Bioscience GmbH (“Biofrontera Bioscience”) and Ferrer Internacional S.A. (“Ferrer”), referred to collectively as our (“Licensors”) to establish and maintain relationships with contract manufacturers that are able to supply us with enough of the licensed products to meet our demand;

	●	the ability of our Licensors or our Licensors’ manufacturing partners, as applicable, to supply Ameluz^®, RhodoLED^®Lamps, Xepi^® or other licensed products that we market in sufficient quantities and at acceptable quality and cost levels, and to fully comply with current good manufacturing practice or other applicable manufacturing regulations;

	●	the ability of our Licensors to successfully defend or enforce patents related to our licensed products;

	●	the availability of insurance coverage and medical expense reimbursement for our licensed products;

	●	the impact of legislative and regulatory changes;

	●	competition from other pharmaceutical and medical device companies and existing treatments, such as simple curettage and cryotherapy;

	●	our success in achieving profitability;

	●	our ability to obtain additional financing as needed to implement our growth strategy;

	●	the effect of the COVID-19 global pandemic, including mitigation efforts and economic effects;

	●	our ability to retain and recruit key personnel;

	●	such other risks identified in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2024, the “Form 10-K”), Item 1A of Part II of this Quarterly Report on Form 10-Q and any other filings with the SEC.

More detailed information about us and the risk factors that may affect the realization of forward-looking statements, including the forward-looking statements in this Quarterly Report on Form 10-Q, is set forth in our filings with the SEC, including our Form 10-K. We urge investors and security holders to read those documents free of charge at the SEC’s web site at www.sec.gov. We do not undertake to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Note About Reverse Stock Split

All information included in this section has been adjusted, on a retrospective basis, to reflect our 1-for-20 Reverse Stock Split as if it had been effective from the beginning of the earliest period discussed, unless otherwise stated.

Overview

We are a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatological conditions with a focus on photodynamic therapy (“PDT”) and topical antibiotics. The Company’s licensed products are used for the treatment of actinic keratoses (“AKs”), which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. Our subsidiary, Discovery, was formed on February 9, 2022, as a German presence to facilitate our relationship with Biofrontera Pharma and Biofrontera Bioscience (together, the “Ameluz Licensor”), both of which are related parties as they are wholly owned subsidiaries of Biofrontera AG.

Our principal licensed product is Ameluz^®, which is a prescription drug approved for use in combination with PDT (when used together, “Ameluz^® PDT”) using the BF-RhodoLED^®and the RhodoLED^®XL lamps (the “RhodoLED^®Lamps”). In the United States, the PDT treatment is used for the lesion-directed and field-directed treatment of AKs of mild-to-moderate severity on the face and scalp. AKs are premalignant lesions of the skin that can potentially develop into skin cancer (squamous cell carcinoma) if left untreated. International treatment guidelines list PDT as the “gold standard” for treating AK, especially multiple AKs and the surrounding photodamaged skin.¹We are currently selling Ameluz^®for this indication in the U.S. under an exclusive license and supply agreement, the Second Amended and Restated License and Supply Agreement, effective as of February 13, 2024 with the Ameluz Licensor (the “Second A&R Ameluz LSA”).

Effective June 1, 2024, we assumed control of all clinical trials relating to Ameluz^®in the United States, allowing for more effective cost management and direct oversight of trial efficiency. Our research and development (“R&D”) program is focused on label expansion for Ameluz^® as well as supporting PDT growth by improving the capabilities of our RhodoLED^® Lamps to better fulfill the needs of dermatologists. Our goal is to improve the effectiveness of our commercial team by allowing sales representatives to carry approved devices with them allowing for easier product demonstrations and evaluations.

Effective with the Second A&R Ameluz LSA, the price we pay per unit, based on certain percentages of the anticipated net selling price, (the “Transfer Price”) of Ameluz^®was reduced from 50% to 25% for all purchases through 2025. Starting on January 1, 2026, until 2032 there will be stepwise increases in the Transfer Price from 25% to 35% for sales related to AK and, if approved by the Food and Drug Administration (the “FDA”), basal cell carcinoma and squamous cell carcinoma. The Transfer Price for sales related to acne, another indication currently in development, will remain at 25% indefinitely. The Transfer Price covers the cost of goods, royalties on sales, and services including all regulatory efforts, agency fees, pharmacovigilance, and patent administration. The reduced LSA Transfer Price will allow the Company to finance the R&D activities assumed as of June 1, 2024, and continue our commercial growth trajectory.

Our second prescription drug licensed product in our portfolio is Xepi^® (ozenoxacin cream, 1%), a topical non-fluorinated quinolone that inhibits bacterial growth. Currently, no antibiotic resistance against Xepi^® is known and it has been specifically approved by the FDA for the treatment of impetigo, a common skin infection, due to Staphylococcus aureus or Streptococcus pyogenes. It is approved for use in the United States in adults and children 2 months and older. Our exclusive license and supply agreement, as amended (“Xepi LSA”), with Ferrer that we assumed on March 25, 2019 through our acquisition of Cutanea Life Sciences, Inc. (“Cutanea”) enables us to market and sell this product in the United States.

¹Werner RN, Stockfleth E, Connolly SM, et al. Evidence- and consensus-based (S3) Guidelines for the Treatment of Actinic Keratosis - International League of Dermatological Societies in cooperation with the European Dermatology Forum - Short version. J Eur Acad Dermatol Venereol. 2015;29(11):2069-2079. doi:10.1111/jdv.13180.

Our principal objective is to increase the sales of our licensed products in the United States. The key elements of our strategy include the following:

●	expanding our sales in the United States of Ameluz^® in combination with the RhodoLED^® Lamps for the treatment of minimally to moderately thick AKs of the face and scalp and positioning Ameluz^® to be the standard of care in the United States by growing our dedicated sales and marketing infrastructure in the United States;

●	leveraging the potential for future approvals and label extensions of our portfolio products that are in the pipeline for the U.S. market through the license and supply agreements with our Licensors; and

●	opportunistically adding complementary products or services to our portfolio by acquiring or licensing IP to further leverage our commercial infrastructure and customer relationships.

We devote a substantial portion of our cash resources to the commercialization of our licensed products , Ameluz^® and the RhodoLED^®Lamps. We have financed our operating and capital expenditures through cash proceeds generated from our product sales, our line of credit, short-term debt and proceeds received in equity financings.

We believe that important measures of our results of operations include product revenue, operating income (loss) and adjusted EBITDA (a non-U.S GAAP measure as defined below). Our sole source of product revenue is sales of products that we license from certain related and unrelated companies. Our long-term financial objectives include consistent revenue growth and expanding operating margins. Accordingly, we are focused on licensed product sales expansion to drive revenue growth and improve operating efficiencies, including effective resource utilization, information technology leverage, and overhead cost management.

Key factors affecting our performance

As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting our results of operations.

Seasonality

Because traditional photodynamic therapy treatments using a lamp are performed more frequently during the winter, our revenue is subject to some seasonality and has historically been higher during the first and fourth quarters than during the second and third quarters.

Supply Chain

While our Licensors take reasonable precautions to ensure the successful production of our commercially licensed products, their contract manufacturers may experience a myriad of business difficulties (i.e., workforce instability, supply chain issues, erosion of customer base, etc.) that could impact their financial solvency. As previously disclosed since 2021, the Xepi product has experienced manufacturing delays at Ferrer’s third-party manufacturer, which have not yet been resolved. We expect to receive commercial product in the second or third quarter of 2025. In addition, we launched the commercial distribution of the RhodoLED^® XL on June 10, 2024. However, we have historically experienced delays due to supply chain issues, and there is a possibility that there are additional supply chain challenges, or our orders are fulfilled at a slower rate than expected. Despite these historic and possible future delays, we expect total revenues will not be significantly impacted (i.e., we experience less growth than expected vs. declining sales) since the majority of our revenues are from sales of Ameluz^® and we have RhodoLED^® Lamps on hand and on order. We continue to monitor the impacts of the supply chain on our business and are focused on ensuring the stability of the supply chains for Ameluz^® and RhodoLED^®Lamps.

Components of Our Results of Operations

Product Revenue, net

We generate product revenues through the third-party sales of our licensed products Ameluz^®, RhodoLED^® Lamps and to a much lesser extent Xepi^®covered by our exclusive license and supply agreements with our Licensors. Revenues from product sales are recorded net of discounts, rebates and other incentives, including trade discounts and allowances, product returns, government rebates, and other incentives such as patient co-pay assistance. Revenue from the sales of our RhodoLED^®Lamps and Xepi^®are relatively insignificant compared with revenues generated through our sales of Ameluz^®.

The primary factors that determine our revenue derived from our licensed products are:

●	the level of orders generated by our sales force;

●	the level of prescriptions and institutional demand for our licensed products; and

●	unit sales prices.

Related Party Revenues

Prior to June 1, 2024, the date on which we took over clinical trials, we generated insignificant related party revenue in connection with an agreement with Biofrontera Bioscience to provide BF-RhodoLED^®lamps and associated services for the clinical trials performed by Biofrontera Bioscience. In the future, we do not expect to receive related party revenue regarding lamps and associated services for clinical trials.

Cost of Revenues, Related Party

Cost of revenues, related party, is comprised of purchase costs of our licensed products, Ameluz^® and RhodoLED^®Lamps from Biofrontera Pharma and insignificant inventory adjustments due to scrapped, expiring and excess products.

The Transfer Price we paid for inventory purchased through February 12, 2024, was based on the Ameluz LSA as amended on October 8, 2021, under which the price paid per unit was based upon our sales history. The purchase price we paid the Ameluz Licensor for Ameluz^® was determined in the following manner:

●	fifty percent of the anticipated net selling price per unit until we generate $30 million in revenue from sales of the products we license from the Ameluz Licensor during a given Commercial Year (as defined in the Ameluz LSA);

●	forty percent of the anticipated net selling price per unit for all revenues we generate between $30 million and $50 million from sales of the products we license from the Ameluz Licensor; and

●	thirty percent of the anticipated net selling price per unit for all revenues we generate above $50 million from sales of the products we license from the Ameluz Licensor.

Effective February 12, 2024, the Second A&R Ameluz LSA, among other things, was amended to change the Transfer Price to 25% of the anticipated net selling price per unit through 2025 and then increasing over time pursuant to the schedule set forth in the Second A&R Ameluz LSA to a maximum of 35% of the anticipated net selling price starting in 2032, subject to a minimum dollar amount per unit.

Cost of Revenues, Other

Cost of revenues, other, is comprised of purchase costs of our licensed product, Xepi^®, third-party logistics and distribution costs including packaging, freight, transportation, shipping and handling costs, and inventory adjustment due to expiring Xepi^®products.

Selling, General and Administrative Expense

Selling, general and administrative expenses consist principally of costs associated with our sales force, commercial support personnel, personnel in executive and other administrative functions, and medical affairs professionals. Other selling, general and administrative expenses include marketing, trade, and other commercial costs necessary to support the commercial operation of our licensed products and professional fees for legal, consulting and accounting services. Selling, general and administrative expenses also include the amortization of our intangible assets and our legal settlement expenses.

Selling, General and Administrative Expenses, Related Party

Selling, general and administrative expenses, related party, relate to the services provided by our significant stockholder, Biofrontera AG, primarily for regulatory support and pharmacovigilance. These expenses are charged to us based on costs incurred plus 6% in accordance with the Amended and Restated Master Contact Services Agreement entered into on December 2021 (the “2021 Services Agreement”). The 2021 Services Agreement enables us to continue relying on Biofrontera AG and its subsidiaries for various services it has historically provided to us, including regulatory and pharmacovigilance support for as long as we deem necessary. We currently have statements of work in place regarding, 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 (i) if they will be needed, and (ii) whether they can or should be obtained from other third-party providers. As of June 30, 2024, we have eliminated the need for information technology services from Biofrontera AG.

Research and Development

Effective June 1, 2024, we took control of all clinical trials for Ameluz^® in the Unites States, allowing for more effective cost management and direct oversight of trial efficiency. Our R&D expenses include costs directly attributable to the clinical development of Ameluz^®, including personnel-related expenses, the cost of services provided by outside contractors, including services related to the Company’s clinical trials, facilities, depreciation, and other direct and allocated expenses. Along with our Ameluz^® clinical trials, our R&D program also aims to improve the capabilities of our RhodoLED^® Lamps to better fulfill the needs of dermatologists and improve the effectiveness of our commercial team by letting sales representatives carry approved devices with them, allowing for easier product demonstrations and evaluations. All costs associated with research and development are expensed as incurred.

Change in Fair Value of Contingent Consideration

In connection with the Cutanea acquisition, we recorded contingent consideration related to the estimated profits from the sale of Cutanea products to be shared equally with Maruho. The fair value of such contingent consideration was determined to be $6.5 million on the acquisition date of March 25, 2019 and was re-measured at each reporting date until the contingency was resolved as of December 31, 2023.

Change in Fair Value of Warrant Liabilities

For warrants that are classified as liabilities, the Company records the fair value of the warrants at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statements of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liabilities to be reclassified to stockholders’ equity or deficit.

Change in Fair Value of Investment, Related Party

Our investments are comprised of equity securities in shares of Biofrontera AG, which are initially recorded at cost, plus transaction costs, and subsequently measured at fair value, based on quoted market prices, with the gains and losses reported in the Company’s consolidated statement of operations. For the investments held in foreign currencies, the change in fair value attributable to changes in foreign exchange rates is included in gains and losses in the consolidated statement of operations.

Interest Expense, net

Interest expense, net, primarily consists of interest on our debt instruments, as well as amortization of the contract asset related to the start-up cost financing from Maruho under a share purchase agreement, offset by immaterial amounts of interest income earned on our financing of customer purchases of BF-RhodoLED^®lamps.

Other Income (Expense), net

Other income (expense), net primarily includes (i) gain (loss) on return of leased assets and (ii) gain (loss) on foreign currency transactions.

Income Taxes

As a result of the net losses we have incurred in each fiscal year since inception, we have recorded no provision for federal income taxes during such periods. Income tax expense incurred relates to state income taxes.

Results of Operations

Comparison of the Three Months ended June 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended June 30, 2024 and 2023:

(in thousands)	2024			2023			Change

Product revenues, net	$	7,831		$	5,830		$	2,001
Related party revenues		8			18			(10	)
Revenues, net	$	7,839		$	5,848		$	1,991

Operating expenses:
Cost of revenues, related party		4,092			2,772			1,320
Cost of revenues, other		250			116			134
Selling, general and administrative		7,915			11,456			(3,541	)
Selling, general and administrative, related party		32			92			(60	)
Research and development		621			11			610
Change in fair value of contingent consideration		-			100			(100	)
Total operating expenses		12,910			14,547			(1,637	)
Loss from operations		(5,071	)		(8,699	)		3,628
Change in fair value of warrant liabilities		5,438			375			5,063
Change in fair value of investment, related party		(14	)		(1,482	)		1,468
Interest expense, net		(596	)		(79	)		(517	)
Other income (expense), net		6			62			(56	)
Loss before income taxes		(237	)		(9,823	)		9,586
Income tax expenses		20			14			6
Net loss	$	(257	)	$	(9,837	)	$	9,580

Product Revenue, net

Net product revenue for the three months ended June 30, 2024 increased by $2.0 million, or 34.3% as compared to the three months ended June 30, 2023. This increase was driven by both a 5% higher unit sale price and a higher volume of Ameluz^® revenue in the second quarter of 2024. The higher sales volume was primarily caused by (i) the impact of the Change Healthcare cybersecurity attack that occurred in the first quarter of 2024 causing reimbursement delays for our customers, which in turn shifted sales from the first quarter of 2024 to the second quarter of 2024; and (ii) more promotions and corresponding discounts offered in the second quarter of 2024, compared to the same period in 2023.

Operating Expenses

Cost of Revenues, Related Party

Cost of revenues, related party for the three months ended June 30, 2024 increased by $1.3 million, or 47.6% as compared to the three months ended June 30, 2023. This was driven by the increase in Ameluz^® product revenue. Cost of revenues, related party, is directly correlated to the selling price of Ameluz^® under the Ameluz LSA. There has been no impact from the change in the transfer pricing under the Second A&R Ameluz LSA, as we have yet to purchase inventory under the new terms.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2024 decreased by $3.5 million, or 30.9% as compared to the three months ended June 30, 2023. The decrease was primarily driven by a $1.5 million decrease in legal costs, due to lower legal activity level, especially since the settlement with Biofrontera AG in April 2023, as well as a decrease of non-personnel sales and marketing expenses of $0.8 million, and a decrease in general business consulting expense of $0.4 million. The decrease was further attributable to a $0.8 million decrease in personnel costs due to change in headcount and reduced severance, which was offset by a $0.2 million increase in accrued bonus compared to the three months ended June 30, 2023 due to the use of a higher performance factor for the calculation.

Research and Development Expenses

R&D expenses for the three months ended June 30, 2024 increased by $0.6 million as compared to the three months ended June 30, 2023. The increase was attributable to our assumption of all clinical trial activities for Ameluz^® in the United States effective June 1, 2024, allowing for more effective cost management and direct oversight of trial efficiency. This increase to R&D expenses should be offset by a reduction in the Transfer Price of Ameluz^® from 50% to 25% for all future purchases made in 2024 and 2025. No such inventory purchases were made as of June 30, 2024. The following table summarizes our research and development expenses:

	Three Months Ended June 30,
	2024		2023
Superficial basal cell carcinoma	$	108	$	-
Actinic keratosis		133		-
Moderate to severe acne		93		-
Personnel-related costs		254		-
Other research and development		33		11
	$	621	$	11

Change in Fair Value of Warrant Liabilities

The change in fair value of warrant liabilities was $5.4 million for the three months ended June 30, 2024, as compared to $0.4 million for the three months ended June 30, 2023. The change in fair value of warrant liabilities was driven primarily by a mix of an increased population of outstanding warrant liabilities coupled with a drop in the underlying value of the Company’s Common Stock during the second quarter of 2024 as compared to the second quarter of 2023. The change was primarily due to the drop in fair value of $4.3 million related to warrants for preferred stock acquired in 2024 and an additional $1.0 million drop in fair value for warrants acquired in November of 2023.

Change in Fair Value of Investment, Related Party

As of December 31, 2023, the Company had transferred substantially all of its investment in Biofrontera AG to Maruho in exchange for the release of certain obligations, in accordance with the Settlement Agreement and Mutual Release (the “Release”), dated December 27, 2023. As a result, during the second quarter of 2024, the net balance of our investment in Biofrontera AG was minimal as was the related change in fair value.

Interest expense, net

The increase of interest expense of $0.5 million was driven by the interest and debt discount recognized on the loans issued on December 21, 2023, for an aggregate principal balance of $4.0 million. The loans required the Company to make weekly payments of principal and interest in the amount of approximately $0.2 million through July 5, 2024, the maturity date. Interest expense is recognized using the effective interest method, such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period until maturity.

Comparison of the Six Months ended June 30, 2024 and 2023

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023:

(in thousands)	2024			2023			Change

Product revenues, net	$	15,732		$	14,544		$	1,188
Related party revenues		18			36			(18	)
Revenues, net	$	15,750		$	14,580		$	1,170

Operating expenses:
Cost of revenues, related party		8,038			7,319			719
Cost of revenues, other		421			167			254
Selling, general and administrative		17,163			21,254			(4,091	)
Selling, general and administrative, related party		29			119			(90	)
Research and development		637			11			626
Change in fair value of contingent consideration		-			(100	)		100
Total operating expenses		26,288			28,770			(2,482	)
Loss from operations		(10,538	)		(14,190	)		3,652
Change in fair value of warrant liabilities		2,009			1,403			606
Change in fair value of investment, related party		(11	)		(4,424	)		4,413
Loss on debt extinguishment		(316	)		-			(316	)
Interest expense, net		(2,003	)		(114	)		(1,889	)
Other income (expense), net		186			30			156
Loss before income taxes		(10,673	)		(17,295	)		6,622
Income tax expenses		21			20			1
Net loss	$	(10,694	)	$	(17,315	)	$	6,621

Product Revenue, net

Net product revenue for the six months ended June 30, 2024 increased by $1.2 million, or 8.2% as compared to the six months ended June 30, 2023. This increase was driven by both a higher unit sale price and higher sales volume of Ameluz^® revenue in the first half of 2024. The higher sales volume of Ameluz^® was due to more promotions and corresponding discounts that were offered to customers, which extended into April 2024.

Operating Expenses

Cost of Revenues, Related Party

Cost of revenues, related party for the six months ended June 30, 2024 increased by $0.7 million, or 9.8% as compared to the six months ended June 30, 2023. This was driven by the increase in Ameluz^® product revenue. Cost of revenues, related party, is directly correlated to the selling price of Ameluz^® under the Ameluz^® LSA.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2024 decreased by $4.1 million, or 19.2% as compared to the six months ended June 30, 2023. The decrease was primarily driven by a $2.5 million decrease in non-recurring legal costs due to the settlement with Biofrontera AG in April 2023, a decrease of non-personnel sales and marketing expenses of $1.1 million, and a net decrease of $0.3 million in personnel expenses.

Research and Development Expenses

R&D expenses for the six months ended June 30, 2024 increased by $0.6 million as compared to the six months ended June 30, 2023. The increase was attributable to our assumption of all clinical trial activities for Ameluz^® in the United States effective June 1, 2024. The following table summarizes our research and development expenses:

	Six Months Ended June 30,
	2024		2023
Superficial basal cell carcinoma	$	108	$	-
Actinic keratosis		133		-
Moderate to severe acne		93		-
Personnel-related costs		254		-
Other research and development		49		11
	$	637	$	11

Change in Fair Value of Warrant Liabilities

The change in fair value of warrant liabilities was $2.0 million for six months ended June 30, 2024, as compared to $1.4 million for the six months ended June 30, 2023. The change in fair value of warrant liabilities was driven primarily by a decrease in the underlying value of the Company’s Common Stock paired with a higher population of warrants outstanding for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Change in Fair Value of Investment, Related Party

As of December 31, 2023, the Company had transferred substantially all of its investment in Biofrontera AG to Maruho in exchange for the release of certain obligations, in accordance with the Release. As a result, during the second quarter of 2024, the net balance of our investment in Biofrontera AG was minimal as was the related change in fair value.

Loss on Debt Extinguishment

Effective as of January 4, 2024, we voluntarily terminated the Loan and Security Agreement (the “Loan Agreement”) with Midcap Business Credit LLC. The Company recognized a $0.3 million loss on debt extinguishment upon the early termination of the Loan Agreement related to prepayment fees and the write-off of deferred financing costs.

Interest expense, net

The increase of interest expense of $1.9 million was driven by the interest and debt discount recognized on the loans issued on December 21, 2023, for an aggregate principal balance of $4.0 million. The loans required the Company to make weekly payments of principal and interest in the amount of approximately $0.2 million through July 5, 2024, the maturity date. Interest expense is recognized using the effective interest method, such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period until maturity.

Net Loss to Adjusted EBITDA Reconciliation for the Three and Six Months Ended June 30, 2024 and 2023

We define adjusted EBITDA as net income or loss before interest income and expense, income taxes, depreciation and amortization, and other non-operating items from our statements of operations as well as certain other items considered outside the normal course of our operations specifically described below. Adjusted EBITDA is not a presentation made in accordance with U.S. GAAP. Our definition of adjusted EBITDA may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. Adjusted EBITDA should not be considered as an alternative to net income or loss, operating income/(loss), cash flows from operating activities or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or liquidity. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

Loss on debt extinguishment: Effective as of January 4, 2024, we voluntarily terminated the Loan Agreement and recognized a $0.3 million loss on debt extinguishment upon the early termination of the loan. We exclude the impact of this loss as it is attributed to the prepayment fee, which is considered non-recurring, and the write-off of deferred financing costs, which is considered non-cash.

Change in fair value of contingent consideration: Pursuant to a share purchase agreement with Maruho, the profits from the sale of Cutanea products were to be shared equally between Maruho and Biofrontera until 2030. The fair value of the contingent consideration was determined to be $6.5 million on the acquisition date and was re-measured at each reporting date. We exclude the historical impact of the change in fair value of contingent consideration as this is non-cash. We were relieved of our obligations relating to the contingent consideration under the Release. As such, our results of operations for the three and six months ended June 30, 2024 were not impacted by the change in fair value.

Change in fair value of warrant liabilities: The warrants issued in conjunction with our private placement offerings and registered public offerings are accounted for as liabilities in accordance with ASC 815-40. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations. We exclude the impact of the change in fair value of warrant liabilities as this is non-cash.

Change in fair value of investment, related party: The Company accounts for its investment, related party in accordance with ASC 321, Investments — Equity Securities. Equity securities, which are comprised of investments in common stock, are initially recorded at cost, plus transaction costs, and subsequently measured at fair value, based on quoted market prices, with the gains and losses reported in the Company’s consolidated statement of operations. For the investments held in foreign currencies, the change in fair value attributable to changes in foreign exchange rates is included in gains and losses in the consolidated statement of operations. We exclude the impact of the realized gain as this is non-recurring and the unrealized change in fair value of investments is excluded as this is non-cash.

Legal settlement expenses: To measure operating performance, we exclude legal settlement expenses. We do not expect to incur these types of legal expenses on a recurring basis and believe the exclusion of such amounts allows management and the users of the financial statements to better understand our financial results.

Stock-Based Compensation: To measure operating performance, we exclude the impact of costs relating to share-based compensation. Due to the subjective assumptions and the variety of award types, we believe that the exclusion of share-based compensation expense, which is non-cash, allows for more meaningful comparisons of our operating results to peer companies. Share-based compensation expense can vary significantly based on the timing, size and nature of awards granted.

Expensed issuance costs: To measure operating performance, we exclude the portion of issuance costs allocated to our warrant liabilities. We do not expect to incur this type of expense on a recurring basis and believe the exclusion of these costs allows management and the viewers of the financial statements to better understand our financial results.

Adjusted EBITDA margin is adjusted EBITDA for a particular period expressed as a percentage of revenues for that period.

We use adjusted EBITDA to measure our performance from period to period and to compare our results to those of our competitors. In addition to adjusted EBITDA being a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors regarding financial and business trends related to our results of operations and that when non-U.S. GAAP financial information is viewed with U.S. GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance.

The below table presents a reconciliation from net loss to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)
Interest expense, net		596			79			2,003			114
Income tax expenses		20			14			21			20
Depreciation and amortization		130			253			258			518
EBITDA		489			(9,491	)		(8,412	)		(16,663	)
Loss on debt extinguishment		-			-			316			-
Change in fair value of contingent consideration		-			100			-			(100	)
Change in fair value of warrant liabilities		(5,438	)		(375	)		(2,009	)		(1,403	)
Change in fair value of investment, related party		14			1,482			11			4,424
Legal settlement expenses		-			107			-			1,225
Stock based compensation		204			259			432			610
Expensed issuance costs		-			-			354			-
Adjusted EBITDA	$	(4,731	)	$	(7,918	)	$	(9,308	)	$	(11,907	)
Adjusted EBITDA margin		-60.3	%		-135.4	%		-59.1	%		-81.7	%

Adjusted EBITDA

Adjusted EBITDA increased from ($7.9) million for the three months ended June 30, 2023 to ($4.7) million for the three months ended June 30, 2024. The increase was driven by an increase in revenue of $2.0 million and a decrease of $3.0 million in various sales, general and administrative expenses, partially offset by an increase in our cost of revenues of $1.5 million.

Adjusted EBITDA increased from ($11.9) million during the six months ended June 30, 2023 to ($9.3) million for the six months ended June 30, 2024. The increase in Adjusted EBITDA was primarily driven by an increase in revenue of $1.2 million and a decrease in selling, general and administrative expenses of $3.0 million, due primarily to decreased level of marketing activities and savings in legal expenses. This is partially offset by an increase in our cost of revenues of $1.0 million and an increase in R&D expenses of $0.6 million.

Liquidity and Capital Resources

Management’s plans include adhering to the 2024 budget approved by the Board of Directors, which includes significant sales and marketing, medical affairs, and dermatology community outreach efforts as we seek to expand the commercialization of Ameluz® in the United States while decreasing discretionary expenses by approximately $5.5 million when compared to 2023.

In addition, the terms of the Second A&R Ameluz LSA are expected to reduce our cost of inventory in the future (See Note 12 Related Party Transactions), with gross margins of its primary product, Ameluz®, anticipated to be approximately 75% as opposed to the current 50% beginning with inventory purchases after the execution date. This should reduce our cash needs for inventory which will be partially offset by increased R&D costs, resulting in expected net savings of $2.7 million through August 2025.

The Company also has discretionary marketing, personnel, software, and other expenses budgeted in fiscal year 2024, which the Company has the ability and intent, commencing in January 2025 to reduce such spending and cash outflows by $5.8 million through August 31, 2025 without materially impacting planned revenues.

Based on the plans described above, management believes that the Company will have sufficient liquidity to meet its funding requirements for at least one year from the date these financial statements are issued. However, this will depend on several factors, including executing on its sales plan and planned cost reductions within the time period needed, as well as other possible challenges and unforeseen circumstances. A lack of execution or unforeseen circumstances may require the Company to raise additional capital or debt which may not be available on acceptable terms, or at all, which could result in a material adverse effect on the Company, as well as its business, financial condition, results of operations, growth prospects and financial statements.

Cash Flows

The following table summarizes our cash provided by and (used in) operating, investing and financing activities:

	Six Months Ended June 30,
(in thousands)	2024			2023
Net cash used in operating activities	$	(8,045	)	$	(14,025	)
Net cash provided by (used) in investing activities		(2	)		164
Net cash provided by financing activities		11,083			1,106
Net increase (decrease) in cash and restricted cash	$	3,036		$	(12,755	)

Operating Activities

During the six months ended June 30, 2024, operating activities used $8.0 million of cash, primarily resulting from our loss from operations of $10.7 million, adjusted for non-cash expense of stock-based compensation of $0.4 million, non-cash interest expense of $0.2 million, loss on debt extinguishment of $0.3 million, depreciation and amortization in the aggregate of $0.6 million, and net cash used by changes in our operating assets and liabilities of $3.0 million, offset by the change in fair value of warrant liabilities of $2.0 million,.

During the six months ended June 30, 2023, operating activities used $14.0 million of cash, primarily resulting from our loss from operations of $17.3 million, adjusted for non-cash expense of stock-based compensation of $0.6 million, non-cash interest expense of $0.2 million, depreciation and amortization in the aggregate of $0.5 million, and the change in fair value of investment, related party of $4.4 million, offset by net cash used by changes in our operating assets and liabilities of $1.0 million, the change in fair value of contingent consideration of $0.1 million and the change in fair value of warrant liabilities of $1.4 million.

Investing Activities

During the six months ended June 30, 2024, net cash used in investing activities consisted of $0.1 million of capitalized software and computer purchases, which were partially offset by the proceeds from the sales of equity investments.

During the six months ended June 30, 2023, net cash provided by investing activities consisted of the proceeds from the sales of equity investments, partially offset by the purchase of machinery & computer equipment.

Financing Activities

During the six months ended June 30, 2024, net cash from financing activities consisted of proceeds of $7.7 million, net of capitalized issuance costs, from the issuance of preferred stock and warrants, and $7.4 million from the exercise of warrants for preferred stock, offset by repayments of $3.7 million on our short-term loan, repayments of $0.2 million on our line of credit and prepayment fees of $0.2 million to extinguish our line of credit. See Note 11 Debt.

During the six months ended June 30, 2023, net cash from financing activities consisted of a net $1.1 million of proceeds from our line of credit.

Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting principles of the United States, or U.S. GAAP. The preparation of the financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions by management that affect the value of assets and liabilities, as well as contingent assets and liabilities, as reported on the balance sheet date, and revenues and expenses arising during the reporting period. The main areas in which assumptions, estimates and the exercising of a degree of judgment are appropriate relate to contingent consideration, fair value measurements, valuation of intangible assets and impairment assessment, and stock compensation. Estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. They are continuously reviewed but may vary from the actual values.

Our significant accounting policies are described in more detail in Note 2 – Summary of Significant Accounting Policies, to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data in our Form 10-K.

Critical Accounting Estimates

A summary of our critical accounting estimates is discussed in the section entitled “Critical Accounting Estimates” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K. There were no material changes to our critical accounting estimates for the six months ended June 30, 2024, except for the following:

The warrants for convertible preferred stock issued in conjunction with our private placement offering conducted pursuant to the securities purchase agreements entered into on February 19, 2024 with institutional investors were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations. Due to the uncertainty of the how the convertible preferred warrants would ultimately settle, the Company used a probability-weighted approach along with a Black-Scholes-Merton (“BSM”) model equation to estimate the fair value of the preferred warrants under different scenarios. While we believe these assumptions were reasonable, the manner or timeframe in which the warrants ultimately settle may differ. The BSM model also considers several variables and assumptions in estimating the fair value of financial instruments, including the per-share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected stock price volatility over the expected term, and expected annual dividend yield. Certain inputs utilized in our BSM pricing model may fluctuate in future periods based upon factors which are outside of the Company’s control. A significant change in one or more of these inputs used in the calculation of the fair value may have caused a significant change to the fair value of our warrant liability which could also have resulted in material non-cash gain or loss being reported in our consolidated statement of operations.

Off-balance Sheet Arrangements

Other than those items reflected in Note 17. Commitments and Contingencies we did not have during the periods presented, and we do not currently have, any other off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to take advantage of such extended transition period, which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our 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-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the most recent fiscal quarter ended June 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings in which we are involved, (see Note 18. Commitments and Contingencies under the subsection titled “Legal Proceedings” in our Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q).

Item 1A. Risk Factors

Not applicable; as a smaller reporting company, we are not required to provide disclosure pursuant to this item in this Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.

Exhibit No.

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

31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

32.1*		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002

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

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)

*	Filed herewith.
#	Indicates a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIOFRONTERA INC.

Date: August 14, 2024	By:	/s/ Hermann Luebbert
	Name:	Hermann Luebbert
	Title:	Chief Executive Officer & Chairman (Principal Executive Officer)

Date: August 14, 2024	By:	/s/ E. Fred Leffler III
	Name:	E. Fred Leffler, III
	Title:	Chief Financial Officer (Principal Financial Officer)

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Hermann Luebbert, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Biofrontera Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or person performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2024	By:	/s/ Hermann Luebbert
		Hermann Luebbert
		Chief Executive Officer & Chairman
		(Principal Executive Officer)

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Eugene Frederick Leffler, III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Biofrontera Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2024	By:	/s/ E. Fred Leffler III
		E. Fred Leffler, III
		Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

In connection with the Quarterly Report of Biofrontera Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Hermann Luebbert, Chief Executive Officer of the Company, do hereby certify, to my knowledge:

1. The Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by the Quarterly Report.

Date: August 14, 2024	By:	/s/ Hermann Luebbert
		Hermann Luebbert
		Chief Executive Officer & Chairman
		(Principal Executive Officer)

This certification accompanies the Quarterly Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Biofrontera Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report), irrespective of any general incorporation language contained in such filing.

Exhibit 32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

In connection with the Quarterly Report of Biofrontera Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Eugene Frederick Leffler, III, Chief Financial Officer of the Company, do hereby certify, to my knowledge:

1. The Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

Date: August 14, 2024	By:	/s/ E. Fred Leffler III
		E. Fred Leffler, III
		Chief Financial Officer
		(Principal Financial Officer)

Cover - $ / shares	6 Months Ended
Cover - $ / shares	Jun. 30, 2024	Aug. 12, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-40943
Entity Registrant Name	Biofrontera Inc.
Entity Central Index Key	0001858685
Entity Tax Identification Number	47-3765675
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	120 Presidential Way
Entity Address, Address Line Two	Suite 330
Entity Address, City or Town	Woburn
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01801
City Area Code	(781)
Local Phone Number	245-1325
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,543,518
Entity Information, Former Legal or Registered Name	Not Applicable
Entity Listing, Par Value Per Share	$ 0.001
Common stock, par value $0.001 per share [Member]
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	BFRI
Security Exchange Name	NASDAQ
Warrants to purchase common stock [Member]
Title of 12(b) Security	Warrants to purchase common stock
Trading Symbol	BFRIW
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 4,379	$ 1,343
Accounts receivable, net	3,504	5,162
Inventories, net	3,946	10,908
Prepaid expenses and other current assets	473	425
Total current assets	17,471	23,075
Property and equipment, net	101	134
Operating lease right-of-use assets	1,230	1,612
Intangible asset, net	2,448	2,629
Other assets	324	482
Total assets	21,574	27,932
Current liabilities:
Operating lease liabilities	701	691
Accrued expenses and other current liabilities	3,593	4,487
Short term debt	296	3,904
Total current liabilities	9,268	18,088
Long-term liabilities:
Warrant liabilities	921	4,210
Operating lease liabilities, non-current	443	804
Other liabilities	31	37
Total liabilities	10,663	23,139
Commitments and contingencies (Note 18)
Stockholders’ equity:
Series B Convertible Preferred stock, $0.001 par value, 20,000,000 shares authorized, no Series B-1, 4,806 Series B-2 and 7,998 Series B-3 shares issued and outstanding as of June 30, 2024 and no shares issued and outstanding as of December 31, 2023
Common stock, $0.001 par value, 35,000,000 shares authorized; 5,094,184 and 1,517,628 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	5	2
Additional paid-in capital	121,250	104,441
Accumulated deficit	(110,344)	(99,650)
Total stockholders’ equity	10,911	4,793
Total liabilities and stockholders’ equity	21,574	27,932
Related Party [Member]
Current assets:
Investment, related party	10	78
Other assets, related party	5,159	5,159
Current liabilities:
Accounts payable, related parties	2,265	5,698
Nonrelated Party [Member]
Current liabilities:
Accounts payable, related parties	$ 2,413	$ 3,308

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	5,094,184	1,517,628
Common stock, shares outstanding	5,094,184	1,517,628
Series B Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Series B-1 Preferred Stock [Member]
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B2 Preferred Stock [Member]
Preferred stock, shares issued	4,806	0
Preferred stock, shares outstanding	4,806	0
Series B-3 Preferred Stock [Member]
Preferred stock, shares issued	7,998	0
Preferred stock, shares outstanding	7,998	0

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Defined Benefit Plan Disclosure [Line Items]
Product revenues, net	$ 7,831	$ 5,830	$ 15,732	$ 14,544
Revenues, related party	8	18	18	36
Total revenues, net	7,839	5,848	15,750	14,580
Operating expenses
Selling, general and administrative, related party	32	92	29	119
Research and development	621	11	637	11
Change in fair value of contingent consideration		100		(100)
Total operating expenses	12,910	14,547	26,288	28,770
Loss from operations	(5,071)	(8,699)	(10,538)	(14,190)
Other income (expense)
Change in fair value of warrants	5,438	375	2,009	1,403
Change in fair value of investment, related party	(14)	(1,482)	(11)	(4,424)
Loss on debt extinguishment			(316)
Interest expense, net	(596)	(79)	(2,003)	(114)
Other income, net	6	62	186	30
Total other income (expense)	4,834	(1,124)	(135)	(3,105)
Loss before income taxes	(237)	(9,823)	(10,673)	(17,295)
Income tax expense	20	14	21	20
Net loss	$ (257)	$ (9,837)	$ (10,694)	$ (17,315)
Loss per common share:
Basic	$ (0.05)	$ (7.23)	$ (2.45)	$ (12.73)
Diluted	$ (0.05)	$ (7.23)	$ (2.45)	$ (12.73)
Weighted-average common shares outstanding:
Basic	5,091,353	1,360,739	4,357,474	1,359,894
Diluted	5,091,353	1,360,739	4,357,474	1,359,894
Related Party [Member]
Operating expenses
Cost of revenues	$ 4,092	$ 2,772	$ 8,038	$ 7,319
Nonrelated Party [Member]
Operating expenses
Cost of revenues	250	116	421	167
Selling, general and administrative	$ 7,915	$ 11,456	$ 17,163	$ 21,254

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022		$ 1	$ 103,396	$ (79,519)	$ 23,878
Balance, shares at Dec. 31, 2022		1,334,950
Issuance of shares for vested restricted stock units
Issuance of shares for vested restricted stock units, shares		8,588
Stock based compensation			610		610
Net loss				(17,315)	(17,315)
Balance at Jun. 30, 2023		$ 1	104,006	(96,834)	7,173
Balance, shares at Jun. 30, 2023		1,343,538
Balance at Mar. 31, 2023		$ 1	103,747	(86,997)	16,751
Balance, shares at Mar. 31, 2023		1,334,950
Issuance of shares for vested restricted stock units
Issuance of shares for vested restricted stock units, shares		8,588
Stock based compensation			259		259
Net loss				(9,837)	(9,837)
Balance at Jun. 30, 2023		$ 1	104,006	(96,834)	7,173
Balance, shares at Jun. 30, 2023		1,343,538
Balance at Dec. 31, 2023		$ 2	104,441	(99,650)	4,793
Balance, shares at Dec. 31, 2023		1,517,628
Conversion of Series B-1 Preferred into Series B-2 Preferred and common stock		$ 2	3,568		3,570
Conversion of Series B-1 Preferred into Series B-2 Preferred, shares	4,806	2,516,785
Issuance of Series B-3 upon exercise of warrants			12,810		12,810
Issuance of Series B-3 Preferred for warrants, shares	7,998
Issuance of shares for vested restricted stock units
Issuance of shares for vested restricted stock units, shares		4,771
Stock based compensation			432		432
Net loss				(10,694)	(10,694)
Exercise of pre-funded warrants		$ 1	(1)
Exercise of pre-funded warrants, shares		1,055,000
Balance at Jun. 30, 2024		$ 5	121,250	(110,344)	10,911
Balance, shares at Jun. 30, 2024	12,804	5,094,184
Balance at Mar. 31, 2024		$ 5	104,666	(110,087)	(5,416)
Balance, shares at Mar. 31, 2024		5,089,413
Conversion of Series B-1 Preferred into Series B-2 Preferred and common stock			3,570		3,570
Conversion of Series B-1 Preferred into Series B-2 Preferred, shares	4,806
Issuance of Series B-3 upon exercise of warrants			12,810		12,810
Issuance of Series B-3 Preferred for warrants, shares	7,998
Issuance of shares for vested restricted stock units
Issuance of shares for vested restricted stock units, shares		4,771
Stock based compensation			204		204
Net loss				(257)	(257)
Balance at Jun. 30, 2024		$ 5	$ 121,250	$ (110,344)	$ 10,911
Balance, shares at Jun. 30, 2024	12,804	5,094,184

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (10,694)	$ (17,315)
Adjustments to reconcile net loss to cash flows used in operations:
Depreciation	42	44
Amortization of right-of-use assets	358	265
Amortization of acquired intangible assets	216	209
Realized/unrealized (gain)/ loss in investment, related party	11	4,424
Change in fair value of contingent consideration		(100)
Change in fair value of warrant liabilities	(2,009)	(1,403)
Stock-based compensation	432	610
Allowance for credit losses	77	64
Loss on debt extinguishment	316
Non-cash interest expense	246	190
Changes in operating assets and liabilities:
Accounts receivable	1,581	1,491
Other receivables, related party	3	2,397
Prepaid expenses and other assets	(28)	(302)
Inventories	6,961	(7,617)
Accounts payable and related party payables	(4,330)	3,380
Operating lease liabilities	(334)	(255)
Accrued expenses and other liabilities	(893)	(107)
Cash flows used in operating activities	(8,045)	(14,025)
Cash flows from investing activities
Sales of equity investment, related party	57	178
Purchase of intangible assets	(50)
Purchases of property and equipment	(9)	(14)
Cash flows provided by (used) in investing activities	(2)	164
Cash flows from financing activities
Proceeds from issuance of series B-1 preferred stock and warrants to purchase series B-3 preferred stock, net of issuance costs	7,662
Proceeds from issuance of series B-3 from exercise of warrants	7,438
Proceeds from line of credit		5,700
Payment to extinguish line of credit	(357)
Payment of principal short-term debt	(3,660)	(4,594)
Cash flows provided by financing activities	11,083	1,106
Net increase (decrease) in cash and cash equivalents	3,036	(12,755)
Cash, cash equivalents and restricted cash, at the beginning of the period	1,543	17,408
Cash, cash equivalents and restricted cash, at the end of the period	4,579	4,653
Supplemental disclosure of cash flow information
Interest paid	1,701
Income taxes paid, net	21
Supplemental non-cash financing activities
Conversion of warrant liability to equity	$ 5,372

Organization and Business Overview

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Overview

1. Organization and Business Overview

Liquidity and Going Concern

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis for Preparation of the Financial Statements

All amounts shown in these financial statements and tables are in thousands and amounts in the notes are in millions, except percentages and per share and share amounts.

Reverse Stock Split

Research and Development Costs

Use of Estimates

Recently Issued Accounting Pronouncements

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

(in thousands)	Level		June 30, 2024		December 31, 2023
Assets:
Investment, related party		1	$	10	$	78
Liabilities:
Warrant liability – 2022 Purchase Warrants		3	$	72	$	328
Warrant liability - 2022 Inducement Warrants		3	$	90	$	412
Warrant liability – 2023 Purchase Warrants		3	$	759	$	3,470
Warrant liability		3	$	759	$	3,470
Total Liabilities			$	921	$	4,210

Investment, related party

Warrant Liabilities

The following table presents the changes in the Level 3 warrant liabilities measured at fair value (in thousands):

	2024			2023
	Six Months Ended June 30,
	2024			2023
Fair value at beginning of period	$	4,210		$	2,843
Issuance of new warrants		4,092			-
Exercise of warrants		(5,372	)		-
Change in fair value of warrant liabilities		(2,009	)		(1,403	)
Fair value at end of period	$	921		$	1,440

Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

4. Revenue

An analysis of the changes in product revenue allowances and reserves is summarized as follows:

(in thousands):	Returns			Co-pay assistance program			Prompt pay discounts			Government and payor rebates			Total
Balance at December 31, 2022	$	48		$	9		$	5		$	20		$	82
Provision related to current period sales		3			62			3			134			202
Credit or payments made during the period		-			(71	)		(2	)		(59	)		(132	)
Balance at June 30, 2023	$	51		$	-		$	6		$	95		$	152

Balance at December 31, 2023	$	52		$	-		$	6		$	54		$	112
Balance	$	52		$	-		$	6		$	54		$	112
Provision related to current period sales		32			-			-			112			144
Credit or payments made during the period		(7	)		-			(6	)		(90	)		(103	)
Balance at June 30, 2024	$	77		$	-		$	-		$	76		$	153
Balance	$	77		$	-		$	-		$	76		$	153

Investment, Related Party

6 Months Ended

Jun. 30, 2024

Investments, All Other Investments [Abstract]

Investment, Related Party

5. Investment, Related Party

Gain/(loss) on investment, related party, was comprised of the following:

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Net loss recognized during the period on equity securities	$	(14	)	$	(1,482	)	$	(11	)	$	(4,424	)
Less: net realized loss on equity securities sold		-			75			98			75
Unrealized gain (loss) recognized during the reporting period on equity securities still held at the reporting date	$	(14	)	$	(1,407		$	87		$	(4,349	)

Accounts Receivable, net

6 Months Ended

Jun. 30, 2024

Credit Loss [Abstract]

Accounts Receivable, net

6. Accounts Receivable, net

The allowance for credit losses was $0.3 million and $0.2 million as of June 30, 2024 and December 31, 2023, respectively.

Inventories

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Inventories

7. Inventories

Inventories are comprised of Ameluz^®, RhodoLED^® Lamps, and immaterial amounts of Xepi^®finished products.

Intangible Asset, Net

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Asset, Net

8. Intangible Asset, Net

Intangible asset, net consists of the following:

Schedule of Intangible Asset Net

(in thousands)	June 30, 2024			December 31, 2023
Capitalized software	$	50		$	15
Xepi^® license	$	4,600		$	4,600
Less: Accumulated amortization		(2,202	)		(1,986	)
Intangible asset, net	$	2,448		$	2,629

Cash Balances and Statement of Cash Flows Reconciliation

6 Months Ended

Jun. 30, 2024

Cash and Cash Equivalents [Abstract]

Cash Balances and Statement of Cash Flows Reconciliation

9. Cash Balances and Statement of Cash Flows Reconciliation

The following table provides a reconciliation of cash, cash equivalents, and restricted cash that sum to the total shown in the statements of cash flows:

(in thousands)	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	4,379	$	1,343
Long-term restricted cash		200		200
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$	4,579	$	1,543

Long-term restricted cash was recorded in other assets in the consolidated balance sheet.

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

(in thousands)	June 30, 2024		December 31, 2023
Employee compensation and benefits		1,989		2,185
Professional fees		391		1,064
Research and development		376		-
Product revenue allowances and reserves		188		149
Distribution and Storage		50		118
Legal settlement		-		403
Other		599		568
Total	$	3,593	$	4,487

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

11. Debt

Line of Credit

Loan Facilities

Related Party Transactions

6 Months Ended

Jun. 30, 2024

Related Party Transactions

12. Related Party Transactions

License and Supply Agreement

	●	Twenty-five percent of the anticipated net selling price per unit through 2025;
	●	Thirty percent of the anticipated net selling price per unit for 2026 to 2028;
	●	Thirty-two percent of the anticipated net selling price per unit for 2029 to 2031;
	●	Thirty-five percent of the anticipated net selling price per unit for 2032 and beyond, subject to a minimum dollar amount per unit; and
	●	The Transfer Price for sales related to acne, another indication currently in development, will remain at twenty-five percent of the anticipated net selling price per unit indefinitely.

Service Agreements

Clinical Lamp Lease Agreement

Others

Stockholders’ Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders’ Equity

13. Stockholders’ Equity

Pursuant to the Preferred Purchase Agreement, the Company is entitled to appoint two independent directors designated by Rosalind Advisors, Inc to the Company’s Board.

Amendment to Articles of Incorporation – Series B Preferred Stock

Series B Preferred Stock Rights:

Liquidation.

Common Stock:

Issuance of Common Stock Pursuant to the Exercise of 2023 Pre-Funded Warrants and Conversion of Series B-1 Preferred Stock

Redeemable Preferred Stock

6 Months Ended

Jun. 30, 2024

Redeemable Preferred Stock

Redeemable Preferred Stock

14. Redeemable Preferred Stock

Equity Incentive Plans and Share-Based Payments

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans and Share-Based Payments

15. Equity Incentive Plans and Share-Based Payments

2021 Omnibus Incentive Plan

Non-qualified stock options

The fair value of each option was estimated on the date of the grant using the BSM option pricing model. There were no equity grants during the three and six months ended June 30, 2024.

respectively, was recorded in selling, general and administrative expenses.

Options outstanding and exercisable under the employee share option plan as of June 30, 2024, and a summary of option activity during the six months then ended is presented below.

Schedule of Stock Option Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2023		99,486		$	39.26
Granted		-		$	-
Exercised		-		$	-
Canceled or forfeited		(11,954	)	$	11.58
Outstanding at June 30, 2024		87,532		$	42.64		8.26	$	-
Exercisable at June 30, 2024		39,809		$	58.47		7.86	$	-

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that were in the money at June 30, 2024.

Share-Based Compensation (RSUs)

Schedule of Restricted Stock Units

	Shares			Weighted Average Remaining Contractual Term		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023		4,771			-	$	52.20
Awarded		-			-	$	-
Vested		(4,771	)		-	$	52.20
Canceled or forfeited		-			-	$	-
Outstanding at June 30, 2024		-			-	$	-

As of June 30, 2024, there was no unrecognized compensation cost related to RSUs.

Interest Expense, net

6 Months Ended

Jun. 30, 2024

Interest Expense, net

16. Interest Expense, net

Interest expense, net consists of the following:

Schedule of Interest Expense

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Interest expense	$	(620	)	$	(32	)	$	(2,041	)	$	(33	)
Contract asset interest expense		-			(89	)		-			(179	)
Interest income		24			42			38			98
Interest expense, net	$	(596	)	$	(79	)	$	(2,003	)	$	(114	)

Interest expense is comprised primarily of interest on our short-term loans and line of credit, including amortization of deferred costs.

Interest income relates primarily to interest earned on funds deposited in our bank accounts.

Net Earnings (Loss) per Share

6 Months Ended

Jun. 30, 2024

Loss per common share:

Net Earnings (Loss) per Share

17. Net Earnings (Loss) per Share

In periods where a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be anti-dilutive.

The following table sets forth the computation of the Company’s basic and diluted net earnings (loss) per share attributable to common stockholders (in thousands, except share and per share data):

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)
Weighted average common shares outstanding, basic and diluted		5,091,353			1,360,739			4,357,474			1,359,894
Net loss per share, basic and diluted	$	(0.05	)	$	(7.23	)	$	(2.45	)	$	(12.73	)

The following table sets forth the securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future:

June 30,	2024		2023
Common stock warrants		2,269,356		1,877,630
Common stock options and RSUs		87,532		106,034
Unit Purchase Options		20,182		20,182
Shares related to Series B-2 convertible preferred stock		6,793,893		-
Shares related to Series B-3 convertible preferred stock		11,306,191		-
Total		20,477,154		2,003,846
Anti-dilutive securities		20,477,154		2,003,846

Common Stock warrants include Purchase Warrants, Inducement Warrants and warrants issued in the Company’s initial public offering.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

18. Commitments and Contingencies

Leases

Future lease payments under non-cancelable leases as of June 30, 2024 were as follows (in thousands):

Years ending December 31,	Future lease commitments
Remainder of 2024	$	382
2025		582
2026		238
2027		31
Thereafter		-
Total future minimum lease payments	$	1,233
Less imputed interest		(89	)
Total lease liability	$	1,144

Schedule of Operating Lease Liability

Reported as:
Operating lease liability, current	$	701
Operating lease liability, non-current		443
Total	$	1,144

Ameluz LSA Sales Commitment

Ameluz^® Minimum Research and Development Costs (“Minimum R&D Costs”)

Licensing Agreement with Optical Tools

The Company did not make any milestone or royalty payments or accruals for such payments during the three and six months ended June 30, 2024 or 2023.

Milestone payments with Ferrer Internacional S.A.

Research and Development Arrangements

Legal proceedings

Legal Claims

Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

19. Subsequent Events

As of July 23, 2024, we have received the full amount of replacement inventory for the recalled Ameluz® (See Note 12 Related Party Transactions).

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis for Preparation of the Financial Statements	Basis for Preparation of the Financial Statements The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the Company’s opinion, the unaudited condensed consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2024, the Company’s operating results for the three and six months ended June 30, 2024 and 2023, and the Company’s cash flows for the six months ended June 30, 2024 and 2023. The accompanying financial information as of December 31, 2023 is derived from audited financial statements. Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024. All amounts shown in these financial statements and tables are in thousands and amounts in the notes are in millions, except percentages and per share and share amounts. Reverse Stock Split On July 3, 2023, the Company effected a 1-for-20 reverse stock split (the “Reverse Stock Split”) of the issued and outstanding shares of the Company’s common stock, $0.001 par value (the “Common Stock”). The Common Stock began trading on the Nasdaq Capital Market on a post-split basis on July 5, 2023. All information included in these consolidated financial statements has been adjusted, on a retrospective basis, to reflect the Reverse Stock Split as if it had been effective from the beginning of the earliest period presented, unless otherwise stated. All outstanding securities entitling their holders to purchase shares of Common Stock or acquire shares of Common Stock, including stock options, restricted stock units, and warrants, were adjusted as a result of the Reverse Stock Split, as required by the terms of those securities. With the exception of the accounting policies below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the year ended December 31, 2023.
Research and Development Costs	*Research and Development Costs* Research and development expenses include costs directly attributable to the clinical development of Ameluz^®, including personnel-related expenses, the cost of services provided by outside contractors, including services related to the Company’s clinical trials, facilities, depreciation, and other direct and allocated expenses. All costs associated with research and development are expensed as incurred. Clinical trial costs are a significant component of our research and development expenses and include costs associated with third-party contractors. The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as Clinical Research Organizations (“CROs”), independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. We record accruals for estimated costs under these contracts. When evaluating the adequacy of the accrued liabilities, we analyze the progress of the studies or clinical trials, including the phase or completion of events, invoices received, contracted costs and purchase orders. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period based on the facts and circumstances known at that time. Although we do not expect the estimates to be materially different from the amounts actually incurred, if the estimates of the status and timing of services performed differs from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period. Actual results could differ from our estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates and record any necessary adjustments in the period such variances become known. We estimate clinical trial and research agreement related expenses based on the services performed, pursuant to contracts with the CROs, independent clinical investigators, and other vendors that conduct clinical trials and research on our behalf. In accruing clinical and research related fees, we estimate the period over which services will be performed and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we will adjust the accrual accordingly. Payments made under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.
Use of Estimates	Use of Estimates The preparation of the financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions by management that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities, as reported on the balance sheet date, and the reported amounts of revenues and expenses arising during the reporting period. The main areas in which assumptions, estimates and the exercising of judgment are appropriate relate to, valuation allowances for receivables and inventory, valuation of contingent consideration and warrant liabilities, realization of intangible and other long-lived assets, product sales allowances and reserves, share-based payments, accrual of research and development expenses and income taxes including deferred tax assets and liabilities. Estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. They are continuously reviewed but may vary from the actual values.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The guidance is effective for the Company in the first quarter of fiscal year 2024. The adoption of ASU 2020-06 did not have a material impact on our results of operations or financial position. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This standard update requires additional interim and annual disclosures about a reportable segment’s expenses, even for companies with only one reportable segment. The Company is required to adopt the guidance for its 2024 annual report filed on Form 10-K, though early adoption is permitted. The Company is currently evaluating the impact of these amendments on its disclosures, but this standard update will not impact the Company’s results of operations or financial position. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. We are currently evaluating the effect of adopting the ASU on our disclosures.

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Hierarchy Valuation Inputs

(in thousands)	Level		June 30, 2024		December 31, 2023
Assets:
Investment, related party		1	$	10	$	78
Liabilities:
Warrant liability – 2022 Purchase Warrants		3	$	72	$	328
Warrant liability - 2022 Inducement Warrants		3	$	90	$	412
Warrant liability – 2023 Purchase Warrants		3	$	759	$	3,470
Warrant liability		3	$	759	$	3,470
Total Liabilities			$	921	$	4,210

Schedule of Changes in Fair Value Warrant Liabilities

The following table presents the changes in the Level 3 warrant liabilities measured at fair value (in thousands):

	2024			2023
	Six Months Ended June 30,
	2024			2023
Fair value at beginning of period	$	4,210		$	2,843
Issuance of new warrants		4,092			-
Exercise of warrants		(5,372	)		-
Change in fair value of warrant liabilities		(2,009	)		(1,403	)
Fair value at end of period	$	921		$	1,440

Revenue (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue Allowance and Accrual Activities

An analysis of the changes in product revenue allowances and reserves is summarized as follows:

(in thousands):	Returns			Co-pay assistance program			Prompt pay discounts			Government and payor rebates			Total
Balance at December 31, 2022	$	48		$	9		$	5		$	20		$	82
Provision related to current period sales		3			62			3			134			202
Credit or payments made during the period		-			(71	)		(2	)		(59	)		(132	)
Balance at June 30, 2023	$	51		$	-		$	6		$	95		$	152

Balance at December 31, 2023	$	52		$	-		$	6		$	54		$	112
Balance	$	52		$	-		$	6		$	54		$	112
Provision related to current period sales		32			-			-			112			144
Credit or payments made during the period		(7	)		-			(6	)		(90	)		(103	)
Balance at June 30, 2024	$	77		$	-		$	-		$	76		$	153
Balance	$	77		$	-		$	-		$	76		$	153

Investment, Related Party (Tables)

6 Months Ended

Jun. 30, 2024

Investments, All Other Investments [Abstract]

Schedule of Unrealized Gains and Losses on Investments in Equity Securities

Gain/(loss) on investment, related party, was comprised of the following:

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Net loss recognized during the period on equity securities	$	(14	)	$	(1,482	)	$	(11	)	$	(4,424	)
Less: net realized loss on equity securities sold		-			75			98			75
Unrealized gain (loss) recognized during the reporting period on equity securities still held at the reporting date	$	(14	)	$	(1,407		$	87		$	(4,349	)

Intangible Asset, Net (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Asset Net

Intangible asset, net consists of the following:

Schedule of Intangible Asset Net

(in thousands)	June 30, 2024			December 31, 2023
Capitalized software	$	50		$	15
Xepi^® license	$	4,600		$	4,600
Less: Accumulated amortization		(2,202	)		(1,986	)
Intangible asset, net	$	2,448		$	2,629

Cash Balances and Statement of Cash Flows Reconciliation (Tables)

6 Months Ended

Jun. 30, 2024

Cash and Cash Equivalents [Abstract]

Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash that sum to the total shown in the statements of cash flows:

(in thousands)	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	4,379	$	1,343
Long-term restricted cash		200		200
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$	4,579	$	1,543

Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

(in thousands)	June 30, 2024		December 31, 2023
Employee compensation and benefits		1,989		2,185
Professional fees		391		1,064
Research and development		376		-
Product revenue allowances and reserves		188		149
Distribution and Storage		50		118
Legal settlement		-		403
Other		599		568
Total	$	3,593	$	4,487

Equity Incentive Plans and Share-Based Payments (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

Options outstanding and exercisable under the employee share option plan as of June 30, 2024, and a summary of option activity during the six months then ended is presented below.

Schedule of Stock Option Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2023		99,486		$	39.26
Granted		-		$	-
Exercised		-		$	-
Canceled or forfeited		(11,954	)	$	11.58
Outstanding at June 30, 2024		87,532		$	42.64		8.26	$	-
Exercisable at June 30, 2024		39,809		$	58.47		7.86	$	-

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that were in the money at June 30, 2024.

Schedule of Restricted Stock Units

	Shares			Weighted Average Remaining Contractual Term		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023		4,771			-	$	52.20
Awarded		-			-	$	-
Vested		(4,771	)		-	$	52.20
Canceled or forfeited		-			-	$	-
Outstanding at June 30, 2024		-			-	$	-

Interest Expense, net (Tables)

6 Months Ended

Jun. 30, 2024

Schedule of Interest Expense

Interest expense, net consists of the following:

Schedule of Interest Expense

(in thousands)	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2024			2023			2024			2023

Interest expense	$	(620	)	$	(32	)	$	(2,041	)	$	(33	)
Contract asset interest expense		-			(89	)		-			(179	)
Interest income		24			42			38			98
Interest expense, net	$	(596	)	$	(79	)	$	(2,003	)	$	(114	)

Net Earnings (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2024

Loss per common share:

Schedule of Basic and Diluted Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of the Company’s basic and diluted net earnings (loss) per share attributable to common stockholders (in thousands, except share and per share data):

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net loss	$	(257	)	$	(9,837	)	$	(10,694	)	$	(17,315	)
Weighted average common shares outstanding, basic and diluted		5,091,353			1,360,739			4,357,474			1,359,894
Net loss per share, basic and diluted	$	(0.05	)	$	(7.23	)	$	(2.45	)	$	(12.73	)

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share

The following table sets forth the securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future:

June 30,	2024		2023
Common stock warrants		2,269,356		1,877,630
Common stock options and RSUs		87,532		106,034
Unit Purchase Options		20,182		20,182
Shares related to Series B-2 convertible preferred stock		6,793,893		-
Shares related to Series B-3 convertible preferred stock		11,306,191		-
Total		20,477,154		2,003,846
Anti-dilutive securities		20,477,154		2,003,846

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Commitments and Sublease Income

Future lease payments under non-cancelable leases as of June 30, 2024 were as follows (in thousands):

Years ending December 31,	Future lease commitments
Remainder of 2024	$	382
2025		582
2026		238
2027		31
Thereafter		-
Total future minimum lease payments	$	1,233
Less imputed interest		(89	)
Total lease liability	$	1,144

Schedule of Operating Lease Liability

Reported as:
Operating lease liability, current	$	701
Operating lease liability, non-current		443
Total	$	1,144

Organization and Business Overview (Details Narrative) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Feb. 19, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net Cash Provided by (Used in) Operating Activities				$ 8,045	$ 14,025
Retained Earnings (Accumulated Deficit)		$ 110,344		110,344		$ 99,650
Cash and Cash Equivalents, at Carrying Value		4,379		4,379		$ 1,343
Discretionary expenses				5,500
Research and development cost		621	$ 11	637	$ 11
Decrease on cash flow spending		$ 5,800		$ 5,800
Second Amended And Restated License And Supply Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development cost	$ 2,700

Summary of Significant Accounting Policies (Details Narrative) - $ / shares	May 14, 2024	Jul. 03, 2023	Jun. 30, 2024	Apr. 25, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Reverse stock split	1 for 21 reverse stock split	1-for-20
Common stock, par value		$ 0.001	$ 0.001	$ 0.001	$ 0.001

Schedule of Fair Value Hierarchy Valuation Inputs (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	$ 921	$ 4,210
Fair Value, Inputs, Level 1 [Member] \| Related Party [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment, related party	10	78
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	921	4,210	$ 1,440	$ 2,843
Fair Value, Inputs, Level 3 [Member] \| 2022 Purchase Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	72	328
Fair Value, Inputs, Level 3 [Member] \| 2022 Inducement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability - 2022 Inducement Warrants	90	412
Fair Value, Inputs, Level 3 [Member] \| 2023 Purchase Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	$ 759	$ 3,470

Schedule of Changes in Fair Value Warrant Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value at beginning of period			$ 4,210
Change in fair value of warrant liabilities	$ (5,438)	$ (375)	(2,009)	$ (1,403)
Fair value at end of period	921		921
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value at beginning of period			4,210	2,843
Issuance of new warrants			4,092
Exercise of warrants			(5,372)
Change in fair value of warrant liabilities			(2,009)	(1,403)
Fair value at end of period	$ 921	$ 1,440	$ 921	$ 1,440

Fair Value Measurements (Details Narrative)	6 Months Ended	12 Months Ended
Fair Value Measurements (Details Narrative)	Jun. 30, 2024 $ / shares shares	Dec. 31, 2023 shares	Feb. 19, 2024 $ / shares shares	Nov. 02, 2023 $ / shares shares	Nov. 02, 2022 $ / shares	Jul. 26, 2022 shares	May 16, 2022 shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment in equity securities, shares \| shares	3,019	177,465
Series B-3 Preferred Stock [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Class of warrant or right, number of securities called by warrants or rights \| shares			8,000
Preferred Stock, Par or Stated Value Per Share			$ 0.001
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Share Price [Member] \| 2023 Purchase Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Share Price	$ 0.90
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Share Price [Member] \| 2023 Purchase Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Share Price	$ 1.54
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Option Volatility [Member] \| 2023 Purchase Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	95
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Option Volatility [Member] \| 2023 Purchase Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	100
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Option Volatility [Member] \| 2024 Preferred Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	79.3
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Option Volatility [Member] \| 2024 Preferred Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	105
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Risk Free Interest Rate [Member] \| 2023 Purchase Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	4.20
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Risk Free Interest Rate [Member] \| 2023 Purchase Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	4.35
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Risk Free Interest Rate [Member] \| 2024 Preferred Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	5.39
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Risk Free Interest Rate [Member] \| 2024 Preferred Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	5.54
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Term [Member] \| 2023 Purchase Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expiration term (in years)	4 years 4 months 2 days
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Term [Member] \| 2023 Purchase Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expiration term (in years)	4 years 7 months 2 days
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Term [Member] \| 2024 Preferred Warrants [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expiration term (in years)	1 day
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Term [Member] \| 2024 Preferred Warrants [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expiration term (in years)	2 months 15 days
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Dividend Payment [Member] \| 2023 Purchase Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	0
Fair Value, Inputs, Level 3 [Member] \| Measurement Input, Expected Dividend Payment [Member] \| 2024 Preferred Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant outstanding, measurement input	0.0
Fair Value, Inputs, Level 3 [Member] \| 2022 Purchase Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Class of warrant or right, exercise price of warrants or rights					$ 3.55
Fair Value, Inputs, Level 3 [Member] \| 2022 Inducement Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Class of warrant or right, number of securities called by warrants or rights \| shares						214,286
Class of warrant or right, exercise price of warrants or rights				$ 3.55
Fair Value, Inputs, Level 3 [Member] \| 2023 Common Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Class of warrant or right, number of securities called by warrants or rights \| shares				1,807,500
Class of warrant or right, exercise price of warrants or rights				$ 3.55
Expiration term (in years)				5 years
Fair Value, Inputs, Level 3 [Member] \| Private Placement [Member] \| 2022 Purchase Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Class of warrant or right, number of securities called by warrants or rights \| shares							170,950

Schedule of Revenue Allowance and Accrual Activities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Balance	$ 112	$ 82
Provision related to current period sales	144	202
Credit or payments made during the period	(103)	(132)
Balance	153	152
Returns [Member]
Disaggregation of Revenue [Line Items]
Balance	52	48
Provision related to current period sales	32	3
Credit or payments made during the period	(7)
Balance	77	51
Co-pay Assistance Program [Member]
Disaggregation of Revenue [Line Items]
Balance		9
Provision related to current period sales		62
Credit or payments made during the period		(71)
Balance
Prompt Pay Discounts [Member]
Disaggregation of Revenue [Line Items]
Balance	6	5
Provision related to current period sales		3
Credit or payments made during the period	(6)	(2)
Balance		6
Government and Payor Rebates [Member]
Disaggregation of Revenue [Line Items]
Balance	54	20
Provision related to current period sales	112	134
Credit or payments made during the period	(90)	(59)
Balance	$ 76	$ 95

Schedule of Unrealized Gains and Losses on Investments in Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Investments, All Other Investments [Abstract]
Net loss recognized during the period on equity securities	$ (14)	$ (1,482)	$ (11)	$ (4,424)
Less: net realized loss on equity securities sold		75	98	75
Unrealized gain (loss) recognized during the reporting period on equity securities still held at the reporting date	$ (14)	$ (1,407)	$ 87	$ (4,349)

Investment, Related Party (Details Narrative) - USD ($) $ in Thousands			6 Months Ended
	May 14, 2024	Jul. 03, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]
Reverse stock split	1 for 21 reverse stock split	1-for-20
Proceeds from sale of equity securities			$ 57	$ 178
Biofrontera AG [Member]
Defined Benefit Plan Disclosure [Line Items]
Investment in equity securities, shares			3,019		177,465

Accounts Receivable, net (Details Narrative) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Credit Loss [Abstract]
Allowance for doubtful accounts	$ 0.3	$ 0.2

Inventories (Details Narrative) - USD ($) $ in Millions	3 Months Ended		6 Months Ended	12 Months Ended
Inventories (Details Narrative) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2023
Ameluz [Member]
Inventory [Line Items]
Inventory write down	$ 0.0	$ 0.0	$ 0.0	$ 5.2

Schedule of Intangible Asset Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized software	$ 50	$ 15
Xepi® license	4,600	4,600
Less: Accumulated amortization	(2,202)	(1,986)
Intangible asset, net	$ 2,448	$ 2,629

Intangible Asset, Net (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Xepi license fair value	$ 4,600		$ 4,600		$ 4,600
Xepi license useful life	11 years		11 years
Amortization expense	$ 100	$ 100	$ 216	$ 209

Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 4,379	$ 1,343
Long-term restricted cash	200	200
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$ 4,579	$ 1,543

Cash Balances and Statement of Cash Flows Reconciliation (Details Narrative) $ in Millions	Jun. 30, 2024 USD ($)
Cash and Cash Equivalents [Abstract]
FDIC, excess amount	$ 4.0

Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Employee compensation and benefits	$ 1,989	$ 2,185
Professional fees	391	1,064
Research and development	376
Product revenue allowances and reserves	188	149
Distribution and Storage	50	118
Legal settlement		403
Other	599	568
Total	$ 3,593	$ 4,487

Debt (Details Narrative) - USD ($)			3 Months Ended		6 Months Ended
Debt (Details Narrative) - USD ($)	Jan. 04, 2024	Dec. 21, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Line of Credit Facility [Line Items]
Repayment of line of credit, principal					$ 357,000
Interest expense			$ 620,000	$ 32,000	2,041,000	$ 33,000
Loan Agreement [Member] \| MidCap Business Credit LLC [Member]
Line of Credit Facility [Line Items]
Repayment of line of credit, principal	$ 400,000
Line of credit, interest	200,000
Payment for termination fee	$ 200,000
Loss related to prepayment fees and deferred financing costs					300,000
Business Loan and Security Agreement [Member] \| Secured Promissory Note [Member]
Line of Credit Facility [Line Items]
Interest Expense, Borrowings					880,000
Business Loan and Security Agreement [Member] \| Agile Lending LLC [Member] \| Secured Promissory Note [Member]
Line of Credit Facility [Line Items]
Principal amount		$ 2,000,000
Loan periodic payment		$ 102,857
Loan maturity date		Jul. 05, 2024
Stock issuance costs		$ 300,000
Interest expense			200,000		1,700,000
Discount amortization			100,000		300,000
Principal outstanding amount			300,000		300,000
Business Loan and Security Agreement [Member] \| Cedar Advance LLC [Member] \| Secured Promissory Note [Member]
Line of Credit Facility [Line Items]
Principal amount		2,000,000
Loan periodic payment		$ 102,857
Loan maturity date		Jul. 05, 2024
Stock issuance costs		$ 300,000
Interest expense			200,000		1,700,000
Discount amortization			100,000		300,000
Principal outstanding amount			$ 300,000		$ 300,000

Related Party Transactions (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 19, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Feb. 29, 2024
Related Party Transaction [Line Items]
Amount due from Bioscience		$ 3,504,000		$ 3,504,000		$ 5,162,000
Legal settlements receivable percentage						50.00%
Investment in equity securities, shares				3,019		177,465
Biofrontera AG [Member]
Related Party Transaction [Line Items]
Legel settlement						$ 2,800,000	$ 2,800,000
Investment in equity securities, shares		3,019		3,019		177,465
Biofrontera Pharma GmbH [Member]
Related Party Transaction [Line Items]
Interest income		$ 0	$ 0	$ 0	$ 0
Biofrontera AG and Biofrontera Bioscience [Member]
Related Party Transaction [Line Items]
Reimbursements expense		200,000	200,000	300,000	400,000
License and Supply Agreement [Member]
Related Party Transaction [Line Items]
Related party costs		800,000	10,400,000	1,100,000	13,700,000
Accounts payable related parties		2,200,000		2,200,000		$ 8,500,000
Service Agreements [Member] \| Biofrontera AG [Member]
Related Party Transaction [Line Items]
Accounts payable related parties		100,000		100,000		100,000
Expenses related to service			$ 100,000		$ 100,000
Clinical Lamp Lease Agreement [Member] \| Biofrontera Pharma GmbH [Member]
Related Party Transaction [Line Items]
Amount due from Bioscience		$ 200,000		$ 200,000		200,000
Share Purchase and Transfer Agreement [Member]
Related Party Transaction [Line Items]
Number of shares in equity securities investment value						$ 100,000
Investment in equity securities, shares						177,465
Ameluz LSA [Member]
Related Party Transaction [Line Items]
Transfer price percentage for sales related to acne	25.00%
Inventory write-off						$ 5,200,000
Through 2025 [Member] \| Ameluz LSA [Member]
Related Party Transaction [Line Items]
Transfer price percentage	25.00%
2026 to 2028 [Member] \| Ameluz LSA [Member]
Related Party Transaction [Line Items]
Transfer price percentage	30.00%
2029 to 2031 [Member] \| Ameluz LSA [Member]
Related Party Transaction [Line Items]
Transfer price percentage	32.00%
2032 and After [Member] \| Ameluz LSA [Member]
Related Party Transaction [Line Items]
Transfer price percentage	35.00%

Stockholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Millions							6 Months Ended
	May 14, 2024	May 13, 2024	Feb. 22, 2024	Feb. 19, 2024	Feb. 02, 2024	Jan. 08, 2024	Jun. 30, 2024	Apr. 25, 2024	Feb. 20, 2024	Dec. 31, 2023	Jul. 03, 2023
Class of Stock [Line Items]
Common stock shares, authorized							35,000,000	35,000,000		35,000,000
Preferred stock shares, authorized								20,000,000
Common stock, par value							$ 0.001	$ 0.001		$ 0.001	$ 0.001
Stock option exercised
Common Stock [Member]
Class of Stock [Line Items]
Number of shares issued for conversion			2,516,785
Common Stock [Member] \| Investor [Member]
Class of Stock [Line Items]
Stock issued during period, shares, new issues					1,055,000	1,055,000
Shares issued price per share					$ 0.0001	$ 0.0001
2023 Pre-funded Warrant [Member] \| Investor [Member]
Class of Stock [Line Items]
Common stock, par value					$ 0.001	$ 0.001
Stock option exercised					888,000	167,000
Series B-1 Preferred Stock [Member]
Class of Stock [Line Items]
Convertible preferred stock, shares issued upon conversion				6,586
Preferred stock par or stated value per share				$ 0.001
Sale of stock, price per share				1,000
Number of shares converted			1,780
Preferred stock, shares outstanding							0			0
Authorized and unissued preferred stock									6,586
Series B-3 Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock par or stated value per share				$ 0.001
Number of warrants purchase				8,000
Proceeds from issuance of private placement				$ 8.0
Preferred stock convertible conversion price				$ 0.125
Preferred stock convertible shares issuable				11,309,019
Preferred stock, shares outstanding							7,998			0
Authorized and unissued preferred stock									8,000
Convertible preferred stock par value									$ 0.001
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Proceeds from issuance of private placement				$ 7.3
Preferred stock convertible conversion price				$ 0.7074
Preferred stock convertible shares issuable				1,413.6
Series B-1 Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding			4,806
Series B2 Convertiable Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding			6,793,893
2024 Preferred Warrants [Member]
Class of Stock [Line Items]
Number of warrants purchase	8,000	8,000
Series B-3 Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Number of warrants purchase	7,998	7,998
Preferred stock, shares outstanding							7,998
Warrant preferred warrants, par value	$ 0.001	$ 0.001
Proceeds from warrant exercises	$ 7.4	$ 7.4
Stock issued during period, shares, new issues							11,306,192
Series B2 Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding							4,806			0
Authorized and unissued preferred stock									6,586

Schedule of Stock Option Activity (Details)

6 Months Ended

Jun. 30, 2024

USD ($)

$ / shares

Share-Based Payment Arrangement [Abstract]

Number of Shares Outstanding, Beginning Balance | shares

99,486

Weighted Average Exercise Price, Beginning Balance | $ / shares

$ 39.26

Number of Shares Outstanding, Granted | shares

Weighted Average Exercise Price, Granted | $ / shares

Number of Shares Outstanding, Exercised | shares

Weighted Average Exercise Price, Exercised | $ / shares

Number of Shares Outstanding, Canceled or forfeited | shares

(11,954)

Weighted Average Exercise Price, Canceled or forfeited | $ / shares

$ 11.58

Number of Shares Outstanding, Ending Balance | shares

87,532

Weighted Average Exercise Price, Ending Balance | $ / shares

$ 42.64

Weighted Average Remaining Contractual Life (in Years), Outstanding

8 years 3 months 3 days

Aggregate Intrinsic Value, Outstanding, Balance | $

^[1]

Number of Shares Execisable, Ending Balance | shares

39,809

Weighted Average Exercise Price Options Exercisable, Ending Balance | $ / shares

$ 58.47

Weighted Average Remaining Contractual Life (in Years), Exercisable

7 years 10 months 9 days

Aggregate Intrinsic Value, Exercisable, Balance | $

^[1]

[1]	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that were in the money at June 30, 2024.

Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, beginning balance	4,771
Weighted average remaining contractual life (in years) outstanding, balance
Number of shares weighted average grant date fair value, beginning balance	$ 52.20
Number of shares outstanding, Awarded
Number of shares weighted average grant date fair value, Awarded
Number of shares outstanding, Vested	(4,771)
Number of shares weighted average grant date fair value,Vested	$ 52.20
Number of shares outstanding, canceled or forfeited
Number of shares weighted average grant date fair value, canceled or forfeited
Number of shares outstanding, ending balance		4,771
Number of shares weighted average grant date fair value, outstanding ending balance		$ 52.20

Equity Incentive Plans and Share-Based Payments (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2021	Jun. 12, 2024	Jun. 11, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation cost	$ 600,000		$ 600,000
Compensation cost recognized, weighted average period			1 year 6 months 3 days
Unrecognized compensation cost	0		$ 0
Selling, General and Administrative Expenses [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation expenses	200,000	$ 200,000	300,000	$ 400,000
Selling, General and Administrative Expenses [Member] \| Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation expenses	$ 100,000	$ 100,000	$ 100,000	$ 200,000
2021 Omnibus Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Maximum contractual term					10 years
Number of shares reserved and authorized for awards					3,483,010	3,750,000	266,990
Shares available for future grant	3,636,788		3,636,788

Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Interest expense	$ (620)	$ (32)	$ (2,041)	$ (33)
Contract asset interest expense		(89)		(179)
Interest income	24	42	38	98
Interest expense, net	$ (596)	$ (79)	$ (2,003)	$ (114)

Interest Expense, net (Details Narrative) - Maruho Co, Ltd. [Member] - Share Purchase Agreement [Member] $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)
Contract asset	$ 1.7
Startup cost financing	$ 7.3
Debt instrument stated percentage	6.00%
Debt maturity date	Dec. 31, 2023

Schedule of Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Loss per common share:
Net loss	$ (257)	$ (9,837)	$ (10,694)	$ (17,315)
Weighted average common shares outstanding, basic	5,091,353	1,360,739	4,357,474	1,359,894
Weighted average common shares outstanding, diluted	5,091,353	1,360,739	4,357,474	1,359,894
Net loss per share, basic	$ (0.05)	$ (7.23)	$ (2.45)	$ (12.73)
Net loss per share, diluted	$ (0.05)	$ (7.23)	$ (2.45)	$ (12.73)

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	20,477,154	2,003,846
Common Stock Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	2,269,356	1,877,630
Common Stock Options and Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	87,532	106,034
Unit Purchase Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	20,182	20,182
Series B2 Convertiable Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	6,793,893
Series B-3 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	11,306,191

Schedule of Future Commitments and Sublease Income (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2024	$ 382
2025	582
2026	238
2027	31
Thereafter
Total future minimum lease payments	1,233
Less imputed interest	(89)
Total lease liability	$ 1,144

Schedule of Operating Lease Liability (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease liability, current	$ 701	$ 691
Operating lease liability, non-current	443	$ 804
Total lease liability	$ 1,144

Commitments and Contingencies (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2022
Product Liability Contingency [Line Items]
Lease option to extend	option to extend the term of the lease for one five (5)-year period
Licensing Agreement [Member]
Product Liability Contingency [Line Items]
Licensing fee			$ 200,000
Licensing Agreement [Member] \| Maximum [Member]
Product Liability Contingency [Line Items]
Sales milestone payments	$ 1,000,000.0
Royalties percentage related to royalties	3.00%
Ameluz LSA [Member]
Product Liability Contingency [Line Items]
Revenue from sales	$ 150,000,000
Xepi LSA [Member]
Product Liability Contingency [Line Items]
Contractual obligation	2,000,000	$ 4,000,000
Xepi LSA [Member] \| Maximum [Member]
Product Liability Contingency [Line Items]
Revenue from sales	25,000,000	$ 50,000,000
Facility Leases [Member]
Product Liability Contingency [Line Items]
Security deposit	$ 100,000