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Maruho Deutschland GmbH: Statement of Maruho Deutschland GmbH on the proposed capital measures in the context of the Extraordinary General Meeting on 7 April 2022

DGAP-News: Maruho Deutschland GmbH / Key word(s): Statement/Corporate Action
31.03.2022 / 12:00
The issuer is solely responsible for the content of this announcement.

Open letter to our fellow shareholders of Biofrontera AG, Leverkusen, Germany

Statement of Maruho Deutschland GmbH on the proposed  capital measures in the context of the Extraordinary General Meeting on 7 April 2022


Leverkusen, March 31, 2022

Dear fellow shareholders of Biofrontera AG,

As Managing Director of Maruho Deutschland GmbH ("Maruho"), I would like to address you with a statement on the proposed capital measures and rumors of alleged voting agreements between shareholders.

Maruho is one of the two major shareholders of Biofrontera AG ("Biofrontera") and has held an interest stake of just under 24 % in the company for years. Another major shareholder is a corporate network controlled by Mr. Wilhelm K. T. Zours around Deutsche Balaton AG ("Balaton"), which together hold an interest of just under 30 % in Biofrontera. Mr. Zours is Chairman of the Supervisory Board of Deutsche Balaton AG. Maruho has been pursuing a long-term strategic interest in a research and development collaboration with Biofrontera for years. Maruho does not have the intention to exercise control over, or even launch a public takeover offer for, Biofrontera.

To the contrast, Balaton is an activist financial investor with no strategic interest in Biofrontera. Balaton exclusively pursues financial interests. For years, Balaton has been piling numerous lawsuits on Biofrontera. Biofrontera's management had to spend considerable capacities and costs defending against these lawsuits and could therefore not use these resources for the company's daily business. In addition to personal accusations against members of the Management Board and Supervisory Board, Balaton's legal challenges have also blocked the capital measures proposed by Biofrontera's management. So far, not a single one of these lawsuits has held up in court.

On 19 November last year, after months of settlement negotiations, Biofrontera and Balaton agreed to settle the legal disputes in a mediation agreement. To ensure that Biofrontera's Supervisory Board is as balanced and as neutral as possible, Maruho also participated in the mediation agreement and on a one-time basis agreed to vote for the Supervisory Board members selected by the mediation participants and proposed to the 2021 Annual General Meeting. Prof. Dr. Ruhwedel has already resigned from her position after a short period of time, which Maruho regrets very much.

However, the intended reconciliation has failed: The conclusion of the mediation agreement was supposed to allow the management to concentrate on the daily business again. In the meantime, however, we have heard that Balaton has filed another lawsuit against Biofrontera immediately after the Annual General Meeting 2021. The subject of this lawsuit is the IPO of Biofrontera Inc. in the U.S. Balaton has thus disregarded the objective of the mediation just a few days after the conclusion of the mediation agreement.

The Chairman of the Supervisory Board is apparently subject to a serious, permanent conflict of interest: The Supervisory Board, which was newly elected on 14 December 2021, has elected Mr. Zours as Chairman. Mr. Zours, who controls Balaton as the largest shareholder, is apparently pursuing the financial interests of Balaton to a considerable extent in his function as Chairman of the Supervisory Board. Mr. Zours is obviously trying to save the investment made by Balaton by all means and at the expense of the company and the other shareholders. He controls Balaton and thus a company that has filed another lawsuit against Biofrontera immediately after the conclusion of the mediation agreement. In our view, there appears to be a serious, ongoing conflict of interest that urgently needs to be investigated.

Now, presumably on the initiative of the Supervisory Board chaired by Mr. Zours, Biofrontera proposes to resolve an authorization to issue warrant/convertible bonds and an ordinary capital increase at an Extraordinary General Meeting on 7 April 2022.

The proposed capital measures are not necessary and are neither in the interest of Biofrontera nor in the interest of all shareholders, but in the interest of Balaton:

- No voting agreement between Maruho and Balaton

First of all, we would like to clarify: There is no agreement whatsoever between Maruho and Balaton on the agenda items of the extraordinary general meeting convened for 7 April 2022. It is by no means certain that the Annual General Meeting will vote in favor of the capital measures with the required majority. Maruho will vote against the capital measures. Whether the capital measures are resolved is therefore in your hands.

- No need for capital measures and expensive extraordinary shareholders' meeting

Maruho sees no need for the proposed capital measures as long as Biofrontera has sufficient funds that are not needed for business operations. Biofrontera is in possession of such funds, as the company holds approximately 8 million liquid shares in Biofrontera Inc. Biofrontera can sell all or part of these shares in order to obtain the required liquidity at any point in time. In November 2021, the previous Supervisory Board had already approved the sale of at least some of these shares. The new Supervisory Board under Mr. Zours has revoked this approval. This is surprising, as a sale of the shares could be implemented significantly faster and cheaper than resolving and implementing the proposed capital measures at the convened Extraordinary General Meeting.

- Timing of capital increase is extremely inconvenient

The timing for a capital increase is extremely inconvenient. The share price is currently EUR 1.28 and has dropped significantly in the last months.

Even if the capital increase can be implemented, Biofrontera would probably end up with only little new capital. All in all, the planned capital measures would be a pretty bad deal for all parties involved - except for Balaton.

- Proposed capital measures serve the interests of Balaton

It is obvious that Balaton in particular will benefit from the intended capital measures. Balaton is apparently trying to reduce the average entry price of its investment through cheap capital measures at the expense of the rest of us shareholders. GSC Research, an independent analyst firm focusing on small and mid caps from the German-speaking region, has published an AGM report on the internet for the AGM of Deutsche Balaton AG of August 2021 (

According to this report, Mr. Zours considers the investment in Biofrontera as "probably the worst investment of Deutsche Balaton AG". Mr. Zours is now obviously trying to save his "worst investment" at the expense of Biofrontera and its shareholders by a way too cheap capital increase.

The ordinary capital increase (agenda item 2) can be resolved with a simple majority. This means that Balaton might achieve the required majority even without Maruho's votes. Therefore, it depends on you. We urge you to critically review the intended capital measures and vote against them at the extraordinary general meeting in the best interest of the company and the other shareholders.

Kind regards,

Takaharu Kato
Managing Director
Maruho Deutschland GmbH

31.03.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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Last Updated: 31-Mar-2022