Biofrontera Inc. appointed Hermann Luebbert as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers


Appointment of Hermann Luebbert as Chief Executive Officer


On May 25, 2023, the Board appointed Hermann Luebbert, the Company's current Executive Chairman, to succeed Erica Monaco as the Company's Chief Executive Officer as part of the transition of management responsibilities following the resignation of Ms. Monaco previously reported by the Company. Prof. Dr. Luebbert will also continue to serve on the Board as its Chairman.


There are no arrangements or understandings between Prof. Dr. Luebbert and any other persons pursuant to which Prof. Dr. Luebbert was selected as the Chief Executive Officer of the Company. Prof. Dr. Luebbert's biography, the material terms of his employment and any related party transactions are set forth in Items 10, 11 and 13, respectively, of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 which was filed with the Securities and Exchange Commission (the "Commission") on March 13, 2023 and are incorporated by reference herein. Prof. Dr. Luebbert's compensation arrangements will not change with his appointment as Chief Executive Officer.


Severance Agreement with Erica Monaco


As previously reported on a Current Report on Form 8-K filed with the Commission on May 12, 2023, Erica Monaco, notified the Board of her decision to resign as Chief Executive Officer of the Company. On May 25, 2023, the Company and Ms. Monaco entered into a separation agreement (the "Separation Agreement") pursuant to which it was agreed that Ms. Monaco would step down as Chief Executive Officer effective on May 26, 2023 (the "Separation Date").


Following the Separation Date, and subject to her execution and non-revocation of the Separation Agreement in accordance with its terms, Ms. Monaco is entitled to a severance payment of $450,000 less any amounts paid to her as part of her regular salary between May 8, 2023 and the Separation Date. The severance is in addition to money that will be paid to Ms. Monaco for earned leave and reimbursable business expenses. The severance amount will be paid in bi-weekly installments until January 2024, at which point any remaining severance will be paid in one lump sum payment. After the Separation Date, there will be no further vesting of any stock options held by Ms. Monaco and any vested options that are not exercised within 90 days of the Separation Date will expire and be canceled.


Pursuant to the Separation Agreement, Ms. Monaco has agreed to not solicit any of the Company's employees, vendors, suppliers or other third parties and to not compete with the Company, in each case, for a period of one year from the effective date of the Separation Agreement. The Separation Agreement also includes customary confidentiality provisions and general release of claims.


Resignation of Loretta Wedge


On May 22, 2023, the Company received a letter (the "Resignation Letter") from Loretta Wedge tendering her resignation as a member of the Board. Ms. Wedge's resignation was accepted by the Board upon receipt of her Resignation Letter. Prior to her resignation, Ms. Wedge was the chairperson of the Audit Committee and a member of the Compensation Committee.


In the Resignation Letter, Ms. Wedge stated that she is resigning from her position as a director of the Company because, among other things, she has disagreed with the Board with respect to (i) the Board's plans for the management transition following the resignation of Erica Monaco as Chief Executive Officer of the Company and (ii) certain aspects of the Company's strategic and operational direction.


The Company and the continuing members of the Board take exception to the comments made by Ms. Wedge about the Board in the Resignation Letter. In particular, they disagree with her characterization of the financial trends of the Company, the activity of the Board and committees of the Board and the conduct of the Board during meetings. Furthermore, the Company notes it is continually reviewing strategic opportunities and has no further information to announce at this time.


A copy of the Resignation Letter is included as Exhibit 17.1 to this Current Report on Form 8-K. The Company has provided a copy of the disclosures it is making in this Item 5.02 regarding her resignation to Ms. Wedge no later than the day of filing this Current Report on Form 8-K with the Commission and the Company will file any responses timely received from him pursuant to Item 5.02(a)(3) of Form 8-K.


Cautionary Note


IN THE INTERESTS OF FULL AND COMPLETE DISCLOSURE, THE RESIGNATION LETTER IS BEING FILED IN EXACTLY THE FORM IN WHICH IT WAS PROVIDED TO THE COMPANY, WITHOUT REDACTION OR MODIFICATION OF ANY KIND. THE COMPANY WISHES TO EMPHASIZE THAT THE RESIGNATION LETTER REFLECTS ONLY THE THOUGHTS AND BELIEFS OF MS. WEDGE, WHICH MAY OR MAY NOT CORRESPOND WITH THE THOUGHTS AND BELIEFS OF ANY REPRESENTATIVE OF THE COMPANY, AND MANY OF WHICH ARE EXPRESSLY CONTRARY TO THE THOUGHTS AND BELIEFS OF THE COMPANY'S MANAGEMENT AND TO THE FACTS RELEVANT TO THE VARIOUS ISSUES. AS A RESULT, THE COMPANY TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THE RESIGNATION LETTER, INCLUDING ANY RESPONSIBILITY THAT MAY ARISE IN CONNECTION WITH ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THE RESIGNATION LETTER. STOCKHOLDERS AND INVESTORS ARE STRONGLY ENCOURAGED TO RELY ONLY ON THE INFORMATION ABOUT THE COMPANY CONTAINED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K, QUARTERLY REPORTS ON FORM 10-Q AND CURRENT REPORTS ON FORM 8-K.