NovaBay Pharmaceuticals Inc

2024 Reverse Stock Split

At the 2024 Annual Meeting, our stockholders approved a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, as amended (“Certificate of Incorporation”), to effect a reverse stock split, subject to the reverse split ratio being established by our Board of Directors. On May 29, 2024, we announced that our Board of Directors established the reverse stock split ratio of 1-for-35 and filed the Certificate of Amendment with the Secretary of the State of the State of Delaware to effect the 2024 Reverse Stock Split, which became effective on May 30, 2024. On May 31, 2024, the Common Stock began trading on a split-adjusted basis.

NYSE American Notices

On April 18, 2024, we received a notification from the NYSE American LLC Exchange (the “NYSE American”), stating that the Company is not in compliance with Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide (requiring stockholders’ equity of $4.0 million or more if the Company has reported losses from continuing operations and/or net losses in three of the four most recent fiscal years and $6.0 million or more if the Company has reported losses from continuing operations and/or net losses in its five most recent fiscal years, respectively). Thereafter, on May 28, 2024, we received a further notification from the NYSE American, stating that the Company is not in compliance with Section 1003(a)(i) of the NYSE American Company Guide (requiring stockholders’ equity of $2.0 million or more if the Company has reported losses from continuing operations and/or net losses in two of the three most recent fiscal years). Therefore, the Company has become subject to the procedures and requirements of Section 1009 of the NYSE American Company Guide and submitted a plan of compliance to the NYSE American addressing how it intends to regain compliance with the stockholders’ equity requirements in the NYSE American Company Guide. On June 4, 2024, the Company received notice from the NYSE American that it had accepted the Company’s plan of compliance and granted a plan period through October 18, 2025. During the plan period, the Company will be subject to quarterly monitoring for compliance with the plan. If the Company does not regain compliance with the NYSE American’s listing standards by October 18, 2025, or if the Company does not make progress consistent with its plan, then the NYSE American may initiate delisting procedures.

DERMAdoctor Divestiture

On March 12, 2024, we entered into a Membership Unit Purchase Agreement that provided for the sale of 100% of the membership units of DERMAdoctor to New Age Investments, LLC. At the closing of the DERMAdoctor Divestiture on March 25, 2024 as contemplated by the Membership Unit Purchase Agreement, the Company sold the DERMAdoctor membership units to New Age Investments, LLC for a purchase price of $1,070,000. The DERMAdoctor Divestiture immediately streamlined our business by reducing our cash burn and allowing us to focus on pursuing newer and stronger growth opportunities that are better aligned with our core eyecare business.

Amendment to the Security Agreement and Termination of the Subsidiary Guarantee

The closing of the DERMAdoctor Divestiture was subject to the satisfaction of certain conditions, which included the Company obtaining the consent of the holders of our Secured Convertible Notes to remove the DERMAdoctor membership units and assets of DERMAdoctor as collateral for the Secured Convertible Notes, for DERMAdoctor to be removed as a party to the Security Agreement and to terminate the Subsidiary Guarantee. On March 24, 2024, we entered into the First Amendment and the Subsidiary Guarantee Consent with the holders of our Secured Convertible Notes to satisfy this closing condition and complete the DERMAdoctor Divestiture on March 25, 2024. We also issued to such holders of the Secured Convertible Notes a Series D Warrant and the Unsecured Convertible Notes, as further described above under “Prospectus Summary——2024 Subsidiary Guarantee Termination Transaction”.

Series B Preferred Stock & Series C Preferred Stock

The Company authorized two series of preferred stock–the Series B Non-Voting Convertible Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), and the Series C Non-Voting Convertible Preferred Stock, par value $0.01 per share (“Series C Preferred Stock”). As of June 18, 2024, 131 shares of Series B Preferred Stock were outstanding, and, as a result of the conversion of the Series C Preferred Stock, there are no longer any shares of Series C Preferred Stock that remain outstanding.

The Certificate of Designation of Preferences, Rights and Limitations of the Series B Non-Voting Convertible Preferred Stock (the “Series B Certificate of Designation”) previously provided for anti-dilution protections in the event that the Company granted any right to reprice any Company security or issue a new Company security that would entitle the holder to acquire Common Stock at an effective price per share that is lower than the conversion price of the Series B Preferred Stock, which is referred to as “full-ratchet” anti-dilution protection. On January 29, 2024, the full-ratchet anti-dilution protection of our Series B Preferred Stock expired because greater than 75% of the originally issued 15,000 Series B Preferred Stock had been converted, and, as a result, the Series B Preferred Stock* will no longer adjust due to this anti-dilution protection.*