13. Related Party Transactions

We consider 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 holds all 3,019 shares of our Series D Preferred Stock.

License and Supply Agreement

Under the Second Amended and Restated License and Supply Agreement (“Second A&R Ameluz LSA”), which was applicable for any tubes purchased through May 31, 2025, the Company had an exclusive, non-transferable license to market and sell its previously licensed products, Ameluz^® and RhodoLED^® Lamps, in the United States and was required to purchase the previously licensed products exclusively from Biofrontera Pharma GmbH (the “Former Ameluz Licensor”). Pursuant to the Second A&R Ameluz LSA, the price paid was set at twenty-five percent of the anticipated net selling price per unit through 2025 (the “Transfer Price”), which covered the cost of goods, royalties on sales, and services, including all regulatory efforts, agency fees, pharmacovigilance, and patent administration.

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.

Strategic Transaction with Biofrontera Group

The Company entered into the Strategic Transaction on October 20, 2025. See Note 1. Organization and Business Overview for more information.

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^®. The earnout replaces a transfer pricing model under the now terminated Second A&R Ameluz LSA. At the acquisition date, the Company evaluated the terms of the earnout arrangement and concluded that the amount of contingent consideration was not reasonably estimable due to the significant uncertainty associated with the timing and magnitude of future net sales. Accordingly, no amount related to the earnout was included in the initial measurement of the cost of the acquired assets. The Company has elected to account for contingent consideration in an asset acquisition as the contingency is resolved (earned and payable). No contingent consideration liability is recognized for amounts not yet earned.

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 17. Commitments and Contingencies – Legal Proceedings.

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.

If the Company does not achieve the Minimum Order Amount as defined in Note 17. Commitments and Contingencies for two consecutive calendar years starting on January 1, 2026, then the Biofrontera Group will have the right to terminate the Agreements and recover all assets transferred to the Company.

Amounts Due and Payable

Amounts due and payable to the Biofrontera Group as of June 30, 2026 and December 31, 2025 were $1.0 million and $4.8 million, respectively, and were recorded in accounts payable, related parties and when applicable, net of accounts receivable, in the condensed consolidated balance sheets. Amounts due from the Biofrontera Group as of June 30, 2026 and December 31, 2025 were $0.2 million and $0.7 million, respectively, and recorded as other assets, related party.

Inventory Purchases

Purchases from the Biofrontera Group of the previously licensed products (inclusive of estimated and actual purchase price adjustments) were $0.4 million and $0.8 million during the three and six months ended June 30, 2026, respectively. There were no inventory purchases from the Biofrontera Group for the three months ended June 30, 2025 and purchases of $3.0 million were made during the six months ended June 30, 2025. These purchases were recorded in inventories in the condensed consolidated balance sheets, and, when sold, in cost of revenues, related party in the condensed consolidated statements of operations.

Earnout

For the three and six months ended June 30, 2026, the Company expensed $1.4 million and $2.6 million, respectively, in earnouts in connection with the Strategic Transaction. The earnout was recorded in cost of revenues, related party in the condensed consolidated statements of operations. There were no earnout payments for the three and six months ended June 30, 2025.

Other

In November 2024, the Company issued $4.2 million in aggregate principal amount of Notes to certain stockholders. For each of the periods ended June 30, 2026 and December 31, 2025, the outstanding balance of the Notes was $4.6 million, including PIK interest. See Note 12. Debt-Convertible Notes Payable.