Biofrontera : Subscription offer (CONVENIENCE TRANSLATION)

- CONVENIENCE TRANSLATION -

ONLY THE GERMAN VERSION PUBLISHED IN THE FEDERAL GAZETTE (BUNDESANZEIGER) ON MAY 08, 2024, IS BINDING.

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

This rights offering is directed exclusively at existing shareholders of Biofrontera AG.

Biofrontera AG

Leverkusen

ISIN: DE0006046113 / WKN: 604611

Subscription offer

The shareholders of Biofrontera AG, Leverkusen (hereinafter "Biofrontera AG" or "Company"), are hereby notified by the Company of the following rights offering:

Capital increase from authorized capital after capital reduction

The Extraordinary General Meeting of the Company on April 4, 2024, resolved to reduce the share capital of the Company ("Capital Reduction") from EUR 63,807,058.00, divided into 63,807,058 registered shares with a proportionate amount of the share capital of EUR 1.00 per share ("old no-parvalue shares") to EUR 3,038,431.00, divided into 3,038,431 registered shares with a proportionate amount of the share capital of EUR

1.00 per share ("converted shares"). The capital reduction was carried out in the first step by withdrawing seven shares that were provided to the company free of charge by a shareholder and in the second step by subsequently consolidating shares at a ratio of 21:1. Both capital reduction steps and the corresponding amendments to the Articles of Association became effective upon entry in the company's commercial register at Cologne Local Court under HRB 49717 on April 12 and April 16, 2024 respectively. The implementation of the capital reduction in terms of securities will take place in parallel with the implementation of the capital increase in terms of securities, which is the basis of this subscription offer:

In accordance with the resolution of the company's Annual General Meeting on 9 January 2023 and Section 7 (3) of the Articles of Association, the Management Board is authorized, with the approval of the Supervisory Board, to increase the company's share capital once or several times by up to EUR 12,700,000.00 until 31 December 2027 in return for cash contributions ("Authorized Capital 2022"). On this basis, the company's Management Board resolved on April 4, 2024, and by amendment resolutions dated April 18, 2024 and May 6, 2024, with the approval of the Supervisory Board on April 12, 2024, April 24, 2024 and May 7, 2024, to utilize the Authorized Capital 2022 analogously as follows:

1. The share capital of the company, which was reduced to EUR 3,038,431.00 by the resolutions of the Annual General Meeting of the company on April 4, 2024 and for which no contributions are outstanding, will be increased by up to EUR 3,038,431.00 against cash contributions by issuing up to 3,038,431 new no-par value registered shares with a notional interest in the share capital of EUR 1.00 per share ("New Shares") ("Capital Increase"). The specific number of New Shares to be issued as part of the Capital Increase will be determined by a separate resolution.
2. The New Shares are entitled to dividends as of January 1, 2024.
   Note in this regard: The claim for delivery of New Shares from the indirect subscription and oversubscription will be fulfilled in the form of the delivery of converted shares with ISIN DE000A4BGGM7, which are already admitted to trading and entitled to dividends from January 1, 2023, based on a securities loan.
3. The shareholder Deutsche Balaton Aktiengesellschaft ("Balaton AG") as well as the shareholders DELPHI Unternehmensberatung Aktiengesellschaft, VV Beteiligungen Aktiengesellschaft, Heidelberger Beteiligungsholding AG, SPARTA AG and Deutsche Balaton Biotech AG will be granted the statutory subscription right by direct exercise vis-à-vis the company. The other shareholders will be granted statutory subscription rights in the form of indirect subscription rights. The statements in this subscription offer refer to the indirect subscription right.
4. The subscription ratio is 1:1 (i.e. one converted share grants the right to subscribe to one New Share).
   Please note: Since, for technical reasons, the subscription rights will be set up based on the securities account holdings prior to the technical implementation of the capital reduction, one subscription right will be booked for each old no-par value share. This corresponds to 21 subscription rights per converted share. Each of the 21 subscription rights entitles the holder to subscribe to one New Share.
   Trading in subscription rights is to be organized.5.
5. the issue price is EUR 1.00, the subscription price is EUR 1.10 per New Share.

Technical securities implementation

• The last trading day of the company's shares in the existing ISIN: DE0006046113 (with subscription rights to the New Shares) is May 13, 2024.
• From May 14, 2024, the stock exchange listing of the company's shares will be switched to the converted shares under ISIN: DE000A4BGGM7. Also from May 14, 2024, the subscription rights will be separated from the shareholdings as part of the capital increase and the converted shares will be listed "ex subscription rights".
• The custodian banks will rebook the custody account holdings as of May 15, 2024, in the evening (record date) on May 16, 2024, to the converted no-par value shares. Each twenty-one old no-par value shares with a pro rata amount of the original share capital of EUR 1.00 (ISIN: DE0006046113) will be replaced by one converted no-par value share with a pro rata amount of the reduced share capital of EUR 1.00 (ISIN: DE000A4BGGM7).
• For technical reasons, the subscription rights (ISIN: DE000A35JSU2, the "Subscription Rights") will be booked into the shareholders' securities accounts on May 16, 2024, in the evening of May 15, 2024 for the number of old no-par value shares in ISIN DE0006046113, i.e. one subscription right will be booked per old no- par value share. This corresponds to 21 subscription rights per converted share. Each of the 21 subscription rights entitles the holder to subscribe to one New Share at a subscription price of EUR 1.10 per share.
• The subscription period for the New Shares and subscription rights trading for the indirect subscription rights on the open market of the Hanseatic Stock Exchange in Hamburg will begin on May 16, 2024.

Direct subscription rights

mwb fairtrade Wertpapierhandelsbank AG, Gräfelfing, (hereinafter also referred to as "mwb" or the "Subscription Agent") has undertaken in a mandate agreement (the "Mandate Agreement"), subject to certain conditions, in particular those set out below in the "Important Information" section, to offer shares for subscription to shareholders of the Company who do not have direct subscription rights by way of indirect subscription rights and to offer any New Shares not subscribed for by way of indirect or direct subscription rights to existing shareholders of the Company (or purchasers of subscription rights) by way of indirect subscription rights. The Company will offer the New Shares to existing shareholders of the Company (or purchasers of subscription rights) by way of over-subscription and to subscribe to the placed New Shares at the fixed issue price of EUR 1.00 per New Share and to underwrite them with the obligation to deliver them to the shareholders of the Company (or purchasers of subscription rights) who have exercised their subscription rights, as well as to shareholders and other subscribers who have been allotted non-subscribed shares in the context of the over-subscription or the

private placement, against payment of the subscription price. Before registering the implementation of the capital increase, mwb will pay one quarter of the lowest issue amount of EUR 1.00 per new share taken over to the company and pay the remaining amount after registration of the implementation of the capital increase.

The holders of direct subscription rights are requested to exercise their subscription rights to the New Shares to avoid exclusion during the period

from May 16, 2024 (inclusive) until May 31, 2024, 24:00 hours (CEST)

(the "Subscription Period")

via their respective custodian bank at Bankhaus Gebr. Martin AG, Göppingen ("Settlement Agent"), which acts as settlement agent for mwb, during normal business hours. Subscription rights that are not exercised on time expire and are derecognized without value after expiration of the subscription period. No compensation will be paid for subscription rights not exercised.

To exercise the indirect subscription right, we ask our shareholders to issue corresponding instructions to their custodian bank using the subscription declaration provided via the custodian banks. The custodian banks are requested to submit the shareholders' subscriptions collectively to Bankhaus Gebr. Martin AG by the end of the subscription period at the latest and to pay the subscription price per New Share to the following account by the end of the subscription period at the latest:

Account holder: Bankhaus Gebr. Martin AG

Intended purpose: Biofrontera AG capital increase 2024

IBAN: DE39 6103 0000 0100 5447 50

BIC: MARBDE6G

Proof of subscription rights for the New Shares is the subscription rights. For every one (1) old share (ISIN: DE0006046113), one subscription right will be booked. Twenty-one (21) subscription rights entitle the holder to subscribe to one (1) New Share at the subscription price. No New Shares can be subscribed for fractions of New Shares resulting arithmetically from the individual shareholding due to the subscription ratio, but only the subscription of one New Share or a multiple thereof is possible.

The subscription rights must be transferred to account 6041 of the Settlement Agent held with Clearstream Banking AG by the end of the subscription period at the latest.

Subscription price

The subscription price is EUR 1.10 per New Share ("Subscription Price").

Trading of subscription rights

The subscription rights (ISIN: DE000A35JSU2) are expected to be tradable on the open market of the Hanseatic Stock Exchange Hamburg from May 16, 2024 to May 29, 2024 at noon.

Shareholders or holders of subscription rights are advised to contact their custodian banks in good time and, in particular, to observe the provisions and deadlines applicable between them and the custodian banks regarding subscription rights, their exercise and their sale by the custodian banks.

Utilization of non-related New Shares; oversubscription; private placement

In the event that not all New Shares are subscribed for within the scope of the statutory subscription right, the non-targeted New Shares will be offered to all shareholders (or purchasers of subscription rights) via the subscription agent in accordance with the principle of equal treatment (Section 53a AktG) in addition to their subscription right for oversubscription at the fixed subscription price.

Shareholders or holders of subscription rights who wish to subscribe to additional New Shares at the subscription price in excess of their subscription right quota must submit their binding subscription order to the subscription agent via their custodian bank within the subscription period.

New Shares not subscribed for on the basis of the subscription right or the oversubscription right may be freely utilized by the Company and shall be offered to institutional investors in Germany and certain other jurisdictions outside the Federal Republic of Germany, in particular in the context of a private placement ("Private Placement"). Oversubscription requests have priority over subscription requests from third parties.

Backstop agreement

On April 24, 2024, the company entered into an agreement ("Backstop Agreement") with Balaton AG, in which Balaton AG undertook to subscribe for and acquire up to 1,600,000 New Shares ("Backstop Shares") at a subscription price of EUR 1.10 per New Share as part of the capital increase, provided that these cannot be placed elsewhere.

Allocation

If, due to oversubscription, it is not possible to deliver all of the New Shares requested in the oversubscription and private placement, the New Shares will be allocated until the entire volume of the subscription offer has been exhausted. Oversubscription requests have priority over subscription requests in the private placement. If an allocation takes place within the oversubscription, this will be done in compliance with the principle of equal treatment within the meaning of Section 53a AktG.

Subscription requests from Balaton AG or companies affiliated with it within the meaning of Section 15 AktG (whether within the scope of the backstop or beyond) do not have priority over subscription requests from other shareholders, neither within the scope of the oversubscription nor within the scope of the private placement, but are subject to the principle of equal treatment.

Commissions

Shareholders or holders of subscription rights will be charged the usual bank charges by the custodian banks for the subscription and oversubscription.

Securitization, listing of the New Shares and delivery of existing shares instead of New Shares

The New Shares will be securitized in a global certificate, which will be deposited with Clearstream Banking AG, Frankfurt am Main. The shareholders' right to securitize their shares is excluded in accordance with the Articles of Association.

The claim to delivery of New Shares from the indirect subscription and oversubscription of the indirectly entitled shareholders will be fulfilled in the form of the delivery of converted shares with ISIN DE000A4BGGM7, which can be delivered promptly after the entry of the implementation of the capital increase in the company's commercial register on the basis of a securities loan agreement ("securities loan") between Balaton AG and mwb. In contrast to the New Shares, these shares are already admitted to trading on the regulated market of the Düsseldorf Stock Exchange and the Frankfurt Stock Exchange (Prime Standard) and are entitled to dividends from January 1, 2023. The New Shares, which will be delivered to Deutsche Balaton Aktiengesellschaft to repay the securities loan, will initially have the separate ISIN DE000A409625 and will only be admitted to trading on the regulated market after approval of a securities prospectus by the German Federal Financial Supervisory Authority (BaFin) and the holding of the Annual General Meeting for the 2023 financial year. The Management Board of the company intends to implement the admission of the New Shares in any case within the one-year period stipulated in Section 69 BörsZulV.

No securities prospectus, risk information

The subscription of shares in the company is associated with risks and should therefore only be made with the conscious acceptance of these risks.

The subscription offer is made in the form of a prospectus pursuant to Section 3 No. 1 WpPG i.V.m. Art. 3 para. 2 of Regulation (EU) 2017/1129 ("Prospectus Regulation") in the Federal Republic of Germany without a prospectus. The company will therefore not prepare and publish a securities prospectus in relation to the capital increase and the related subscription offer. Such a securities prospectus is therefore not available as an information basis for the subscription or acquisition of the New Shares. Nor is a securities information sheet pursuant to Section 4 WpPG to be prepared and published. The company expressly draws the shareholders' attention to this fact.

Before submitting a subscription declaration, an oversubscription request and/or an acquisition of New Shares or subscription rights, those entitled to subscribe are advised to carefully read the company's current reporting, in particular financial reports, and financial announcements. This information is available on the company's website (www.biofrontera.com) in the Investors & Media section. Those entitled to subscribe are also recommended to seek independent advice, if necessary, in order to obtain an expert assessment of the subscription offer.

In view of the current high volatility of the share prices and the market environment as well as the conversion of the quotation to the converted shares, the beneficiaries should inform themselves about the current share price of the company before exercising or purchasing subscription rights to the New Shares at the subscription price.

Important information

If the registration of the implementation of the capital increase has not taken place by August 31, 2024, the subscription certificate of mwb will become invalid. In this case, mwb's obligation to subscribe to the New Shares will expire. In this case, the capital increase will not be carried out unless mwb and the company agree on an extension of the deadline or the submission of a new subscription form.

mwb is entitled to terminate the mandate agreement extraordinarily for good cause. Good cause includes, in particular, circumstances that make it impossible or unreasonable for mwb to carry out the capital increase. In the event of (i) extraordinary termination of the mandate agreement prior to entry of the implementation of the capital increase in the commercial register or (ii) final non-entry of the implementation of the capital increase in the commercial register, and thus in each case prior to the creation of the New Shares, the subscription offer will lapse. In these cases, the subscription orders of shareholders (including oversubscription) will be reversed, and the amounts already paid to pay the subscription price will be refunded, insofar as these have not yet been transferred to the

company to the extent required by stock corporation law for the purpose of implementing the capital increase. With regard to any such amounts already paid in and transferred to the company, mwb hereby assigns any future claim it may have against the company for repayment of the contribution made to the New Shares pro rata to the shareholders accepting the subscription offer and with regard to oversubscription requests in lieu of performance. The shareholders accept this assignment upon acceptance of the subscription offer. These repayment claims are unsecured. There is a risk for shareholders that they will not be able to realize their claims for repayment against the company. In addition, investors who have acquired subscription rights against payment may suffer an additional loss in the amount of the consideration for the subscription right if the implementation of the capital increase is not entered in the commercial register. There will be no reversal of subscription rights trading transactions by the entities that brokered these transactions.

In the event of termination of the mandate agreement by mwb or termination of the subscription offer by the company prior to entry of the implementation of the capital increase in the commercial register, the subscription offer will become invalid without compensation. However, if mwb terminates the mandate agreement only after the implementation of the capital increase has been entered in the commercial register or at a time when it is no longer possible to withdraw the application for entry in the commercial register, shareholders and purchasers of subscription rights who have exercised their subscription rights may acquire the New Shares (including oversubscription) at the subscription price; in this case, it is no longer possible for shareholders or purchasers of subscription rights to withdraw or otherwise cancel the subscription or oversubscription.

If short sales have already been made before the New Shares are booked into the securities accounts of the respective purchasers, the seller alone bears the risk of not being able to fulfill the obligations entered into through a short sale by delivering shares on time.

Stabilization measures

No stabilization measures are carried out.

Selling restrictions

The rights offering will be conducted exclusively in accordance with German law. It will be published in the Federal Gazette in accordance with the relevant provisions of stock corporation law in conjunction with the company's Articles of Association. No further announcements, registrations, admissions, or approvals by or with bodies outside the Federal Republic of Germany are planned for the New Shares, the subscription rights or

the rights offering. The announcement of the Subscription Offer serves exclusively to comply with the mandatory provisions of the Federal Republic of Germany and is not intended to issue or publish the Subscription Offer in accordance with the provisions of jurisdictions other than those of the Federal Republic of Germany or to publicly advertise the Subscription Offer in accordance with the provisions of jurisdictions other than those of the Federal Republic of Germany.

The publication, dispatch, distribution, or reproduction of the subscription offer, or a summary or other description of the terms and conditions contained in the subscription offer may be subject to restrictions abroad. With the exception of the announcement in the Federal Gazette and the forwarding of the subscription offer with the approval of the company, the subscription offer may not be published, sent, distributed or passed on by third parties either directly or indirectly in or to foreign countries, insofar as this is prohibited by the applicable foreign regulations or is dependent on compliance with official procedures or the granting of approval. This also applies to a summary or other description of the terms and conditions contained in this subscription offer. The Company does not guarantee that the publication, dispatch, distribution, or dissemination of the subscription offer outside the Federal Republic of Germany is compatible with the applicable legal provisions.

The acceptance of this offer outside the Federal Republic of Germany may be subject to restrictions. Persons who wish to accept the Offer outside the Federal Republic of Germany are requested to inform themselves about restrictions existing outside the Federal Republic of Germany.

There will be no offer in the United States of America, Japan, Canada and Australia. The New Shares have not been and will not be registered under the United States Securities Act of 1933 (the "Securities Act") or with any securities regulatory authority of any state of the United States of America. The New Shares may not be offered, sold, or delivered, directly or indirectly, in or into the United States of America except pursuant to an exemption from the registration requirements of the Securities Act and the securities laws of any state of the United States of America. The same applies to an offer, sale, or delivery to U.S. persons within the meaning of the Securities Act.

Leverkusen, May 2024

Biofrontera AG

The Executive Board