16. Related Party Transactions

We consider the Biofrontera Group to be a related party, as prior to the Strategic Transaction, we relied on the Biofrontera Group as the sole supplier of Ameluz and the RhodoLED Lamps and following the Strategic Transaction, it is a beneficial owner of more than five percent of our Series D Convertible Preferred Stock.

License and Supply Agreement

Under the Second A&R Ameluz LSA (applicable for any tubes purchased through May 31, 2025), the Company had an exclusive, non-transferable license to market and sell its licensed products, Ameluz and RhodoLED Lamps, in the United States and was required to purchase the licensed products exclusively from Biofrontera Pharma GmbH (the “Former Ameluz Licensor”), pursuant to which the price paid per unit was based on certain percentages of the anticipated net selling price (the “Transfer Price”) that covered the cost of goods, royalties on sales, and services, including all regulatory efforts, agency fees, pharmacovigilance, and patent administration, as follows:

The Second A&R Ameluz LSA provided for the transfer of responsibilities for clinical trials relating to Ameluz in the US on June 1, 2024, including the Company assuming related contracts and transferring key personnel from the Former Ameluz Licensor to the Company.

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

On February 9, 2024, Biofrontera was notified that the Former 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 Former Ameluz Licensor confirmed that the recalled product is not likely to cause adverse health consequences. The Company did not bear any financial responsibility for the costs associated with this recall and it did not have 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 Former 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.

Strategic Transaction with Biofrontera Group

On October 20, 2025, the Company finalized the Agreements with the Biofrontera Group to acquire the U.S. Rights to Ameluz and RhodoLED. See Note 3. Asset Acquisition. Pursuant to the terms of the Agreements, retroactive to June 1, 2025, the Company will pay an earnout of 12% in years where Ameluz revenues in the United States are less than $65.0 million and an earnout of 15% in years when Ameluz revenues in the United States exceed $65.0 million, continuing until the expiration of patent protection on Ameluz (if not terminated sooner by agreement of the parties). The earnout replaces a transfer pricing model under the now terminated Second Amended and Restated License and Supply Agreement (“Second A&R Ameluz LSA”).

In exchange for the U.S. Rights, in addition to the aforementioned earnout and an agreement to transfer all costs associated with the U.S. business, the Biofrontera Group received 3,019 shares of Series D Preferred Stock on July 2, 2025, par value $0.001 per share, which represents a 10% post-money equity stake in the Company. See Note 17. Stockholders Equity.

The Company also agreed to assume the defense of co-defendant Biofrontera Group and all costs associated therewith in connection with certain legal actions pending in the United States which will be paid directly to the legal advisors by the Company. Details of the legal claims are disclosed in Note 20. Commitments and Contingencies – Legal Claims.

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

Amounts Due and Payable

Amounts due and payable to Biofrontera Group as of December 31, 2025 and 2024 were $4.8 million and $5.3 million, respectively, and were recorded in accounts payable, related parties and when applicable, net of accounts receivable, in the consolidated balance sheets. Amounts due from the Biofrontera Group as of December 31, 2025 were $0.7 million recorded as other assets, related party. There were no amounts due from related parties as of December 31, 2024.

Inventory Purchases

Purchases of the previously licensed products (inclusive of estimated and actual purchase price adjustments) were $7.1 million and $8.3 million during the years ended December 31, 2025 and 2024, respectively. These purchases were recorded in inventories in the consolidated balance sheets, and, when sold, in cost of revenues, related party in the consolidated statements of operations.

Earnout

For the year ended December 31, 2025, the Company expensed $2.2 million in earnouts in connection with the Strategic Transaction related to the sales between the acquisition date and year end. The earnout was recorded in cost of revenues, related party in the consolidated statements of operations .

Other

Total amounts paid to the Biofrontera Group for expenses related to sales of products and services in the US, including but not limited to product production, quality control, pharmacovigilance, regulatory activities as well as rent for the years ended December 31, 2025 and 2024 were $0.8 million and $0.5 million, respectively.

As of December 31, 2025 and 2024, our investment, related party consisted solely of 3,019 common shares of Biofrontera AG. The total investment had minimal value as of December 31, 2025 and 2024. As reflected in the consolidated statements of cash flows, we received proceeds from sales of equity securities of $0.1 million during the year ended December 31, 2024.

In November 2024, the Company issued $4.2 million in an aggregate principal amount of Notes to certain stockholders. See Note 14. Debt-Convertible Notes Payable. As of December 31, 2025 and 2024, the outstanding balance of the Notes was $4.6 million and $4.1 million, respectively.