Biofrontera cleared of wrongdoing in Nasdaq IPO

An independent review has cleared Biofrontera of wrongdoing related to its U.S. IPO. Shareholders had accused Biofrontera of acting contrary to its duties when it priced and sold stock in the U.S.

Biofrontera, which was raising money to run dermatological clinical trials, rejected the accusations but worked with an organization that represents private investors to get an independent assessment of the case. That led Biofrontera to commission Gerd Krieger, an expert in German capital market law, to look into the matter.

Krieger has now shared his findings. Biofrontera’s summary of the report exonerates the company, stating that it acted correctly in its handling of the stock offering.

Notably, Krieger found that Biofrontera was within its rights to offer stock to U.S. investors at €4.00 ($4.55) a piece, despite Deutsche Balaton being willing to pay €4.40. That finding rests on the idea that Biofrontera needed to find the "best possible price" for its stock, not the highest price. In this case, Krieger ruled that the benefits of having a U.S. stock listing outweighed the extra money offered by Deutsche Balaton.

Krieger looked into an order Deutsche Balaton placed in the U.S. to buy the stock via the IPO. The order was reportedly not "taken into account" but Krieger ruled that this was due to the independent actions of the U.S. banks handling the offering. Regardless, Krieger stated the fulfillment of Deutsche Balaton’s order would have been counter to the purpose of the offering as, rather than attracting U.S. investors, it would have simply added to the holdings of German backers.

With Krieger also finding that Biofrontera was legally allowed to set the stock price it did, at the time that it did, the rest of the report comes down in favor of the German dermatology specialist. 

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