NovaBay Pharmaceuticals Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
SDEV$0.98+9.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001437749-24-026386
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033919
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsLegal ProceedingsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 123 current paragraphs.
59 unchanged; 31 reworded; 31 added; 5 removed; 6 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Potential Asset Sale Transaction and Dissolution
Current report
On September 19, 2024, the Company entered into an Asset Purchase Agreement (the “Original Purchase Agreement”) with PRN Physician Recommended Nutriceuticals, LLC, a Delaware limited liability company (“PRN”), pursuant to which PRN will acquire the Company’s eyecare products sold under the Avenova brand and the related assets (the “Avenova Assets”) (collectively, the “Asset Sale Transaction”). On November 5, 2024, the Company entered into an amendment to the Original Purchase Agreement (the “APA Amendment,” and together with the Original Purchase Agreement, the “Purchase Agreement”) that provides for, among other terms, an increase in the base purchase price to $11.5 million from $9.5 million and for PRN to provide the Company with a $1.0 million secured promissory note (the “Bridge Loan”). Pursuant to the Purchase Agreement, the Asset Sale Transaction is subject to certain closing conditions, including stockholder approval. Assuming stockholder approval is received and other closing conditions are met, the Company expects to close the Asset Sale Transaction in the fourth quarter of 2024.
Current report
The Asset Sale Transaction would constitute substantially all of the Company’s revenue generating and operating assets; however, PRN would not purchase any of the Company’s other products and assets, including those that relate to the Company’s wound care, urology or dermatology businesses. The Board unanimously approved the Asset Sale Transaction and further determined that, if the Asset Sale Transaction is completed, the best opportunity available to optimize value to our stockholders is to wind-up the Company’s affairs and pursue a liquidation and dissolution pursuant to the Plan of Dissolution under Delaware law that may result in distributions to our stockholders of our remaining asset value (the “Dissolution”). If the Asset Sale Transaction and/or the Dissolution are not completed, we will continue our corporate existence and the Board will continue to explore its options to secure immediate funding for ongoing operations due to significantly reduced available capital and liquidity, the strategic alternatives available to the Company including to return capital to stockholders or, to the extent funding or any other viable alternatives are not available, then the Company may need to file for bankruptcy protection or commence a similar state law proceeding.
Current report
The Company has called a special meeting of stockholders (the “Special Meeting”) on November 22, 2024 to approve (1) the Asset Sale Transaction and (2) the Dissolution subject to the Board’s discretion to proceed with the Dissolution.
Current report
On October 29, 2024, the Company announced that the Board determined that an unsolicited and non-binding acquisition proposal from Refresh Acquisitions BidCo LLC (“Refresh”) to purchase the Avenova Assets (the “Refresh Unsolicited Offer”) was a “Superior Proposal” (as defined in the Purchase Agreement). As a result, the Company notified PRN of the Board’s determination and the Company’s intention to terminate the Purchase Agreement pursuant to its terms, unless the Company received a revised proposal from PRN such that the Board determined the Refresh Unsolicited Offer was no longer a Superior Proposal, all in accordance with the process provided in the Purchase Agreement.
Current report
Subsequent to this Board determination, in accordance with the process in the Purchase Agreement, the Company negotiated in good faith with PRN, and, as a result of these negotiations, PRN proposed amending the terms of the Original Purchase Agreement by entering into the APA Amendment, which provides for the following primary revisions to the Original Purchase Agreement: (i) an increase in the base purchase price to $11.5 million from $9.5 million; (ii) the removal of debt financing contingencies and related PRN representations, while adding a new PRN representation that it has sufficient funding for the $11.5 million purchase price; (iii) PRN providing the Company with the Bridge Loan; and (iv) PRN providing the Company with an equity funding commitment letter (the “Equity Commitment Letter”) from Roundtable Healthcare Partners V, L.P. that provides for up to $13.0 million in financing to be used by PRN’s parent company, Acumen Intermediate Holdings, LLC, and contributed to PRN for payment of the purchase price at the closing of the Asset Sale Transaction (with such updated terms, the “Revised PRN Transaction Terms”). On November 4, 2024, after considering the Revised PRN Transaction Terms, the Board determined that the Refresh Unsolicited Offer was no longer a “Superior Proposal” and that it was advisable and in the best interests of stockholders to enter into the APA Amendment and the Bridge Loan.
Current report
On November 5, 2024, the Company entered into the APA Amendment and the Bridge Loan. The Bridge Loan provides for the Company to receive a secured loan of up to $1.0 million from PRN as lender that will be funded in two tranches of $0.5 million each upon the Company providing written notice to PRN on or after November 22, 2024 and on or after December 6, 2024. The amounts borrowed under the Bridge Loan are required to be used for working capital purposes, will bear interest at a rate of 10% per annum and be secured by all of the Company’s assets as collateral. The Bridge Loan is to be repaid upon the earlier of the closing of the Asset Sale Transaction (to be repaid from the purchase price), immediately upon termination of the Purchase Agreement or February 28, 2025. If the Asset Sale Transaction is not consummated, the Purchase Agreement is terminated and the Company is required to repay the full amount borrowed pursuant to the Bridge Loan, the Company may not have the necessary capital resources available at the time to repay the Bridge Loan absent the Company raising additional capital.
Current report
For more information regarding the Asset Sale Transaction (including the Revised PRN Transaction Terms, the APA Amendment and the Bridge Loan) and the Dissolution, please see the Company’s Current Reports on Form 8-K filed with the SEC on September 20, 2024, October 29, 2024 and November 6, 2024 and the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on October 16, 2024 (as may be supplemented, the “Special Meeting Proxy Statement”).
Current report
2024 Public Offering
Current report
On July 26, 2024, the Company entered into the Underwriting Agreement with Ladenburg, as the sole underwriter, relating to the issuance and sale in a public offering (the “2024 Public Offering”) of: (i) 1,158,566 shares of common stock and 2,041,814 July 2024 Pre-Funded Warrants, in lieu of shares of common stock, (ii) 3,200,380 Series F-1 Warrants, (iii) 3,200,380 Series F-2 Warrants, and (iv) 3,200,380 Series F-3 Warrants. The 2024 Public Offering closed on July 29, 2024, and the Company received gross proceeds of $3.9 million, without taking into account any underwriting discounts and commissions. A portion of the proceeds were used towards repaying the Secured Convertible Notes, which were repaid in full during the third quarter of 2024.
Current report
Additionally, the Asset Sale Transaction (to the extent completed) may cause the NYSE American to delist our shares of common stock and the Company may not meet NYSE American’s continued listing requirements. To the extent the NYSE American does not delist our shares after completion of the Asset Sale Transaction and the Board determines to effect the Dissolution, the Company plans to request that our common stock stop trading on the NYSE American on the effective date of the Dissolution or as soon thereafter as is reasonably practicable.
Current report
General and administrative expenses increased $0.6 million, or 56%, to $1.7 million for the three months ended September 30, 2024, from $1.1 million for the three months ended September 30, 2023, due primarily to an increase in legal costs related to non-recurring strategic initiatives, including the 2024 Public Offering, the Asset Sale Transaction and the Dissolution, ongoing during the three months ended September 30, 2024.
Current report
Accretion of interest and amortization of discounts on convertible notes was $0.1 million for the three months ended September 30, 2024 and $0.7 million for the three months ended September 30, 2023.
Current report
Extinguishment of Secured Convertible Notes
Current report
Extinguishment of Secured Convertible Notes was $13 thousand for the three months ended September 30, 2024, with no comparable activity for the three months ended September 30, 2023.
Current report
Accretion of interest and amortization of discounts on convertible notes was $0.9 million for the nine months ended September 30, 2024 and $1.2 million for the nine months ended September 30, 2023.
Current report
Extinguishment of Secured Convertible Notes
Current report
Extinguishment of Secured Convertible Notes was $13 thousand for the nine months ended September 30, 2024, with no comparable activity for the nine months ended September 30, 2023.
Current report
On September 16, 2024, the Board unanimously approved the Asset Sale Transaction and Dissolution, both of which are subject to the approval of the Company’s stockholders. On November 5, 2024, the Company entered into the APA Amendment that provides for, among other terms, an increase in the base purchase price to $11.5 million from $9.5 million and for PRN to provide the Company with the Bridge Loan. The Bridge Loan provides for the Company to receive funding in two tranches of $0.5 million each upon the Company providing written notice to PRN on or after November 22, 2024 and on or after December 6, 2024. The amounts borrowed under the Bridge Loan are required to be used by the Company for working capital purposes, will bear interest at a rate of 10% per annum and be secured by all of the Company’s assets as collateral. The Bridge Loan is a short term secured loan which is to be repaid upon the earlier of the closing of the Asset Sale Transaction (to be repaid from the purchase price), immediately upon termination of the Purchase Agreement or February 28, 2025. The Company is holding the Special Meeting on November 22, 2024 to obtain stockholder approval of the Asset Sale Transaction and the Dissolution, pursuant to the Special Meeting Proxy Statement.
Current report
Cash Provided by Financing Activities
Current report
Our market risk consists principally of interest rate risk on our cash and cash equivalents. Our exposure to market risk is limited primarily to interest income sensitivity, which is affected by changes in interest rates, particularly because our current liquid assets at September 30, 2024 were held in cash and cash equivalents.
Current report
Our investment policy restricts our investments to high-quality investments and limits the amounts invested with any one issuer, industry, or geographic area. The goals of our investment policy are as follows: preservation of capital, assurance of liquidity needs, best available return on invested capital, and minimization of capital taxation. Some of the securities in which we invest may be subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. For example, if we hold a security that was issued with an interest rate fixed at the then-prevailing rate and the prevailing interest rate later rises, the principal amount of our investment will probably decline. To minimize this risk, in accordance with our investment policy, we maintain our cash and cash equivalents in short-term marketable securities, including money market mutual funds, Treasury bills, Treasury notes, certificates of deposit, commercial paper, and corporate and municipal bonds. The risk associated with fluctuating interest rates is limited to our investment portfolio. Due to the short-term nature of our investment portfolio, we believe we have minimal interest rate risk arising from our investments. As of September 30, 2024 and December 31, 2023, a 10% change in interest rates would have had an immaterial effect on the value of our investment portfolio. We do not use derivative financial instruments in our investment portfolio. We do not hold any instruments for trading purposes.
Current report
With most of our focus on the domestic U.S. market, we have not had any material exposure to foreign currency rate fluctuations.
Current report
Evaluation of Disclosure Controls and Procedures
Current report
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Current report
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Assessing the costs and benefits of such controls and procedures necessarily involves the exercise of judgment by management. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Current report
Based upon that evaluation at September 30, 2024, our Chief Executive Officer and our Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure, at the reasonable assurance level, that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act was accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Current report
Changes in Internal Control Over Financial Reporting
Current report
There were no changes in our internal control over financial reporting during the current quarter which has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Current report
PART II. OTHER INFORMATION
Current report
From time to time, the Company may be involved in various legal proceedings arising in the ordinary course of business. As of September 30, 2024, there were no matters that, in the opinion of management, would ultimately result in liability that would have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Removed paragraphs (5)
Previous report
Accretion of interest and amortization of discounts on convertible notes was $0.3 million for the three months ended June 30, 2024 and $0.5 million for the three months ended June 30, 2023.
Previous report
Other expense, net decreased $363 thousand, or 84%, to $69 thousand for the three months ended June 30, 2024, from $432 thousand for the three months ended June 30, 2023. The decrease was primarily due to financing costs related to the Secured Convertible Notes in the three months ended June 30, 2023, slightly offset with financing costs related to the 2024 June Warrant Reprice transaction in the three months ended June 30, 2024.
Previous report
Accretion of interest and amortization of discounts on convertible notes was $0.7 million for the six months ended June 30, 2024 and $0.5 million for the six months ended June 30, 2023.
Previous report
Other expense, net
Previous report
Cash (Used in) Provided by Financing Activities
Reworded paragraphs (31)
Previous wording
This discussion contains forward-looking statements that involve risks and uncertainties. The following discussion of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this report, and with our consolidated financial statements and related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the“SEC”) on March 26, 2024, as amended on March 29, 2024 (the“2023 Annual Report”). Words such as“expects,”* “anticipated,” “will,” “may,” “goals,” “plans,” “believes,” “estimates,” “concludes,” determines,” variations of these* words, and similar expressions are intended to identify these forward-looking statements. As a result of many factors, including those set forth under the section entitled“Risk Factors”* of this report and in our 2023 Annual Report, as well as in other sections in our SEC filings, our actual results may* differ materially from those anticipated in these forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions based upon assumptions made that we believed to be reasonable at the time and are subject to risks and uncertainties. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements after the date of this report, even if new information becomes available in the future.
Current wording
This discussion contains forward-looking statements that involve risks and uncertainties. The following discussion of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this report, and with our consolidated financial statements and related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the“SEC”) on March 26, 2024, as amended on March 29, 2024 (the“2023 Annual Report”). Words such as“expects,”* “anticipated,” “will,” “may,” “goals,” “plans,” “believes,” “estimates,” “concludes,” determines,” variations of these* words, and similar expressions are intended to identify these forward-looking statements. As a result of many factors, including those set forth under the section entitled“Risk Factors”* of this report, our 2023 Annual Report and our Special Meeting Proxy Statement (as defined below), as well as in other sections in our SEC filings, our actual results may* differ materially from those anticipated in these forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions based upon assumptions made that we believed to be reasonable at the time and are subject to risks and uncertainties. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements after the date of this report, even if new information becomes available in the future.
Previous wording
Through our former subsidiary DERMAdoctor, LLC (“DERMAdoctor”), the Company offered over 30 dermatologist-developed products targeting common skin concerns, ranging from aging and blemishes to dry skin, perspiration and keratosis pilaris. On March 25, 2024, we announced the closing of the sale of DERMAdoctor (the “DERMAdoctor Divestiture”). We acquired DERMAdoctor in November 2021 in order to achieve overall revenue growth, cost reductions and profitability. We were unable to achieve those objectives with DERMAdoctor. We continue to evaluate strategies for our entire Company, to maximize revenue growth and profitability and minimize operating losses while addressing our capital and liquidity needs. To that end, we determined to divest DERMAdoctor and consummate the DERMAdoctor Divestiture, which was not profitable, having incurred historical losses including the loss of $124 thousand for the six months ended June 30, 2024. The DERMAdoctor Divestiture streamlined our business by reducing our cash burn and allows us to focus on pursuing better growth opportunities.
Current wording
Through our former subsidiary DERMAdoctor, LLC (“DERMAdoctor”), the Company offered over 30 dermatologist-developed products targeting common skin concerns, ranging from aging and blemishes to dry skin, perspiration and keratosis pilaris. On March 25, 2024, we announced the closing of the sale of DERMAdoctor (the “DERMAdoctor Divestiture”). We acquired DERMAdoctor in November 2021 in order to achieve overall revenue growth, cost reductions and profitability. We were unable to achieve those objectives with DERMAdoctor. Therefore, we determined to divest DERMAdoctor and consummate the DERMAdoctor Divestiture, having incurred historical losses including the loss of $124 thousand for the nine months ended September 30, 2024. The DERMAdoctor Divestiture streamlined our business by reducing our cash burn and allowing us to focus on our core business.
Previous wording
On March 24, 2024, the Company and the Secured Parties entered into a First Amendment to the Security Agreement to effect the Security Agreement Amendment, and a Consent and Release to effect the 2024 Subsidiary Guarantee Termination. As consideration for the Secured Parties executing and delivering the First Amendment and the Subsidiary Guarantee Consent, which reduced the collateral available to secure the obligations under the Secured Convertible Notes, the Company provided each Secured Party the option, at the Secured Party’s election, to receive upon the closing of the DERMAdoctor Divestiture either: (i) a new Series D common stock purchase warrant (the “March 2024 Warrant”), or (ii) a new unsecured convertible note convertible into shares of common stock (the “Unsecured Convertible Notes”). Based on the Secured Parties’ elections and as a result of the closing of the DERMAdoctor Divestiture, the Company issued: (A) a March 2024 Warrant to a Secured Party that is exercisable for an aggregate of 28,572 shares of common stock and (B) Unsecured Convertible Notes to four (4) Secured Parties that have an aggregate principal amount of $525,000 or will be convertible into an aggregate of 107,146 shares of common stock.
Current wording
On March 24, 2024, the Company and the Secured Parties entered into a First Amendment to the Security Agreement to effect the Security Agreement Amendment, and a Consent and Release to effect the 2024 Subsidiary Guarantee Termination. As consideration for the Secured Parties executing and delivering the First Amendment and the Subsidiary Guarantee Consent, which reduced the collateral available to secure the obligations under the Secured Convertible Notes, the Company provided each Secured Party the option, at the Secured Party’s election, to receive upon the closing of the DERMAdoctor Divestiture either: (i) a new Series D common stock purchase warrant (the “March 2024 Warrant”), or (ii) a new unsecured convertible note convertible into shares of common stock (the “Unsecured Convertible Notes”). Based on the Secured Parties’ elections and as a result of the closing of the DERMAdoctor Divestiture, the Company issued: (A) a March 2024 Warrant to a Secured Party that is exercisable for an aggregate of 1,000,000 shares of common stock (28,572 shares post-Reverse Stock Split) and (B) Unsecured Convertible Notes to four (4) Secured Parties that have an aggregate principal amount of $525,000 or will be convertible into an aggregate of 3,750,000 shares of common stock (107,146 shares post-Reverse Stock Split).
Previous wording
The Company incurred total issuance costs of $130 thousand in conjunction with the 2024 Subsidiary Guarantee Termination. The Company allocated $19 thousand of the issuance costs to the Unsecured Convertible Notes which was recorded as a discount in the Company’s unaudited condensed consolidated balance sheet as of June 30, 2024. The remaining $111 thousand was allocated to the embedded derivative liability and warrant liability and expensed as “Other expense, net” in the Company’s unaudited condensed consolidated statements of operations, during the six months ended June 30, 2024. For additional information regarding the March 2024 Warrant and the Unsecured Convertible Notes that we issued, see also Notes 9, “Financing Activities”; 10, “Convertible Notes”; 11, “Common Stock Warrants”; and 12, “Stockholders’ (Deficit) Equity” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Current wording
The Company incurred total issuance costs of $130 thousand in conjunction with the 2024 Subsidiary Guarantee Termination. The Company allocated $19 thousand of the issuance costs to the Unsecured Convertible Notes which was recorded as a discount in the Company’s unaudited condensed consolidated balance sheet as of September 30, 2024. The remaining $111 thousand was allocated to the embedded derivative liability and warrant liability and expensed as “Other expense, net” in the Company’s unaudited condensed consolidated statements of operations, during the nine months ended September 30, 2024. For additional information regarding the March 2024 Warrant and the Unsecured Convertible Notes that we issued, see also Notes 9, “Financing Activities”; 10, “Convertible Notes”; 11, “Common Stock Warrants”; and 12, “Stockholders’ Equity” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Previous wording
We have incurred net losses and generated negative cash flows from operations since inception and expect to incur losses in the future as we continue to commercialize our products. Our net losses were $1.6 million and $4.0 million for the three months ended June 30, 2024 and 2023, respectively. In addition, our net losses were $5.2 million and $5.8 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $180.0 million, total current assets of $2.3 million and total assets of $3.9 million.
Current wording
We have incurred net losses and generated negative cash flows from operations since inception and expect to incur losses in the future as we continue to commercialize our products. Our net losses were $2.2 million and $1.8 million for the three months ended September 30, 2024 and 2023, respectively. In addition, our net losses were $7.4 million and $7.5 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $182.2 million, total current assets of $2.3 million and total assets of $3.9 million.
Previous wording
We expect to grow commercial sales of Avenova branded products primarily through an expansion of domestic market penetration of our online channels as well expanded product offerings through partnerships with other eyecare product providers.
Current wording
To date, our plan to grow commercial sales of Avenova branded products primarily through an expansion of domestic market penetration of our online channels as well expanded product offerings through partnerships with other eyecare product providers has been unsuccessful. However, in an effort to maximize stockholder value, our Board unanimously determined to pursue the Asset Sale Transaction and the Dissolution, both of which are subject to stockholder approval at the Special Meeting. See “Potential Asset Sale Transaction and Dissolution” above for additional information regarding the Asset Sale Transaction and the Dissolution.
Previous wording
The financial results of DERMAdoctor beginning from January 1, 2024 through the closing of the DERMAdoctor Divestiture on March 25, 2024 in the table above and as set forth in this report have been aggregated in the captions entitled “Loss on divestiture of subsidiary” and “Net loss from discontinued operations” for the six months ended June 30, 2024 (see Note 18, “Divestiture and Discontinued Operations” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). The discussions below and throughout this section apply only to results from continuing operations except as otherwise noted.
Current wording
The financial results of DERMAdoctor beginning from January 1, 2024 through the closing of the DERMAdoctor Divestiture on March 25, 2024 in the table above and as set forth in this report have been aggregated in the captions entitled “Loss on divestiture of subsidiary” and “Net loss from discontinued operations” for the nine months ended September 30, 2024 (see Note 18, “Divestiture and Discontinued Operations” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). The discussions below and throughout this section apply only to results from continuing operations except as otherwise noted.
Previous wording
Product revenue, net, decreased $1.1 million, or 32%, to $2.4 million for the three months ended June 30, 2024, from $3.5 million for the three months ended June 30, 2023.
Current wording
Product revenue, net, decreased $0.1 million, or 2%, to $2.4 million for the three months ended September 30, 2024, from $2.5 million for the three months ended September 30, 2023.
Previous wording
Revenue from the Company’s wound care products decreased to a nominal amount for the three months ended June 30, 2024, from $1.3 million for the three months ended June 30, 2023. The decrease was due primarily to an unusually large order of the NeutroPhase branded wound care product in the three months ended June 30, 2023, with no comparable order in the three months ended June 30, 2024.
Current wording
Revenue from the Company’s wound care products decreased to a nominal amount for the three months ended September 30, 2024, from $0.1 million for the three months ended September 30, 2023.
Previous wording
General and administrative expenses remained consistent for the three months ended June 30, 2024 and June 30, 2023.
Current wording
Cost of goods sold remained consistent for the three months ended September 30, 2024 and September 30, 2023 at $0.8 million.
Previous wording
Sales and marketing expenses decreased $0.2 million, or 13%, to $1.0 million for the three months ended June 30, 2024, from $1.2 million for the three months ended June 30, 2023. The decrease was due primarily to continued efficiencies in digital advertising costs and a decrease in professional services fees incurred in the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current wording
Sales and marketing expenses decreased $0.4 million, or 25%, to $0.9 million for the three months ended September 30, 2024, from $1.3 million for the three months ended September 30, 2023. The decrease was due primarily to continued digital marketing efficiencies and a decrease in related consulting costs incurred in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous wording
Comparison of the Six Months Ended June 30, 2024 and 2023 (dollars in thousands)
Current wording
Comparison of the Nine Months Ended September 30, 2024 and 2023 (dollars in thousands)
Previous wording
The financial results of DERMAdoctor beginning from January 1, 2024 through the closing of the DERMAdoctor Divestiture on March 25, 2024 in the table above and as set forth in this report have been aggregated in the captions entitled “Loss on divestiture of subsidiary” and “Net loss from discontinued operations” for the three and six months ended June 30, 2024 (see Note 18, “Divestiture and Discontinued Operations” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). The discussions below and throughout this section apply only to results from continuing operations except as otherwise noted.
Current wording
The financial results of DERMAdoctor beginning from January 1, 2024 through the closing of the DERMAdoctor Divestiture on March 25, 2024 in the table above and as set forth in this report have been aggregated in the captions entitled “Loss on divestiture of subsidiary” and “Net loss from discontinued operations” for the nine months ended September 30, 2024 (see Note 18, “Divestiture and Discontinued Operations” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). The discussions below and throughout this section apply only to results from continuing operations except as otherwise noted.
Previous wording
Product revenue, net, decreased $0.8 million, or 14%, to $5.0 million for the six months ended June 30, 2024, from $5.9 million for the six months ended June 30, 2023.
Current wording
Product revenue, net, decreased $0.9 million, or 11%, to $7.4 million for the nine months ended September 30, 2024, from $8.3 million for the nine months ended September 30, 2023.
Previous wording
Revenue from eyecare products, including Avenova Spray, increased $0.2 million to $2.4 million for the three months ended June 30, 2024, from $2.2 million for the three months ended June 30, 2023. The increase was due to an overall increase in Avenova branded products sold through online channels.
Current wording
Revenue from eyecare products, including Avenova Spray, increased $0.5 million to $7.2 million for the nine months ended September 30, 2024, from $6.7 million for the nine months ended September 30, 2023. The increase was due to an overall increase in Avenova branded products sold through online channels.
Previous wording
Revenue from the Company’s wound care products decreased $1.3 million to $0.2 million for the six months ended June 30, 2024, from $1.5 million for the six months ended June 30, 2023. The decrease was due primarily to an unusually large order of the NeutroPhase branded wound care product in the six months ended June 30, 2023 with no comparable order in the six months ended June 30, 2024.
Current wording
Revenue from the Company’s wound care products decreased $1.3 million to $0.3 million for the nine months ended September 30, 2024, from $1.6 million for the nine months ended September 30, 2023. The decrease was due primarily to a large one-time order of the NeutroPhase branded wound care product in the nine months ended September 30, 2023, with no comparable order in the nine months ended September 30, 2024.
Previous wording
Cost of goods sold decreased $0.9 million, or 35%, to $1.6 million for the six months ended June 30, 2024, from $2.5 million for the six months ended June 30, 2023. Such decrease was due primarily to the decrease in wound care products which has lower margins slightly offset by an increase in eyecare products which has higher margins sold during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current wording
Cost of goods sold decreased $0.9 million, or 26%, to $2.5 million for the nine months ended September 30, 2024, from $3.4 million for the nine months ended September 30, 2023. Such decrease was due primarily to the decrease in wound care products (which has lower margins) slightly offset by an increase in eyecare products (which has higher margins) sold during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous wording
Sales and marketing expenses decreased $0.3 million, or 14%, to $2.1 million for the six months ended June 30, 2024, from $2.4 million for the six months ended June 30, 2023. The decrease was due primarily to continued digital advertising efficiencies and a decrease in related consulting costs incurred in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
Sales and marketing expenses decreased $0.7 million, or 18%, to $3.0 million for the nine months ended September 30, 2024, from $3.7 million for the nine months ended September 30, 2023. The decrease was due primarily to continued digital advertising efficiencies and a decrease in related consulting costs incurred in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous wording
General and administrative expenses increased $0.6 million, or 19%, to $3.9 million for the six months ended June 30, 2024, from $3.3 million for the six months ended June 30, 2023, was due primarily to an increase in legal costs primarily related to non-recurring strategic initiatives, including the DERMAdoctor Divestiture, ongoing during the six months ended June 30, 2024.
Current wording
General and administrative expenses increased $1.2 million, or 28%, to $5.6 million for the nine months ended September 30, 2024, from $4.4 million for the nine months ended September 30, 2023, was due primarily to an increase in legal costs primarily related to non-recurring strategic initiatives, including the DERMAdoctor Divestiture, the 2024 Public Offering, the Asset Sale Transaction and the Dissolution, ongoing during the nine months ended September 30, 2024.
Previous wording
As a result of the closing of the DERMAdoctor Divestiture on March 25, 2024, we incurred a loss of $0.9 million for the six months ended June 30, 2024 with no comparable activity for the six months ended June 30, 2023. For additional information regarding the loss on divestiture of this subsidiary, please see Note 18, “Divestiture and Discontinued Operations”, in the Notes to Unaudited Condensed Consolidated Financial Statements, in Part I, Item 1 of this report.
Current wording
As a result of the closing of the DERMAdoctor Divestiture on March 25, 2024, we incurred a loss of $0.9 million for the nine months ended September 30, 2024 with no comparable activity for the nine months ended September 30, 2023. For additional information regarding the loss on divestiture of this subsidiary, please see Note 18, “Divestiture and Discontinued Operations”, in the Notes to Unaudited Condensed Consolidated Financial Statements, in Part I, Item 1 of this report.
Previous wording
Adjustments to the fair value of warrant liabilities resulted in a gain of $114 thousand for the six months ended June 30, 2024 and $216 thousand for the six months ended June 30, 2023. The warrant liabilities for the December 2023 Warrants and the March 2024 Warrant were reclassified to equity during the six months ended June 30, 2024, and will no longer require fair value adjustments which will impact our results of operations. For additional information regarding warrant liabilities and their valuation, please see Note 11, “Common Stock Warrants”, in the Notes to Unaudited Condensed Consolidated Financial Statements, in Part I, Item 1 of this report.
Current wording
Adjustments to the fair value of warrant liabilities resulted in a gain of $114 thousand for the nine months ended September 30, 2024 and $216 thousand for the nine months ended September 30, 2023. The warrant liabilities for the December 2023 Warrants and the March 2024 Warrant were reclassified to equity during the nine months ended September 30, 2024, and will no longer require fair value adjustments which will impact our results of operations. For additional information regarding warrant liabilities and their valuation, please see Note 11, “Common Stock Warrants”, in the Notes to Unaudited Condensed Consolidated Financial Statements, in Part I, Item 1 of this report.
Previous wording
Adjustments to the fair value of embedded derivative liability resulted in a loss of $18 thousand for the six months ended June 30, 2024 and gain of $40 thousand for the six months ended June 30, 2023. For additional information regarding the embedded derivative liability and its valuation, please see Note 3, “Fair Value Measurements”.
Current wording
Adjustments to the fair value of embedded derivative liability resulted in a loss of $18 thousand for the nine months ended September 30, 2024 and gain of $40 thousand for the nine months ended September 30, 2023. For additional information regarding the embedded derivative liability and its valuation, please see Note 3, “Fair Value Measurements”.
Previous wording
Other expense, net was $0.5 million for the six months ended June 30, 2024 and $0.4 million for the six months ended June 30, 2023. Expenses were related primarily to separate and unrelated financing events recorded during the respective periods.
Current wording
Other expense, net was $0.5 million for the nine months ended September 30, 2024 and $0.4 million for the nine months ended September 30, 2023. Expenses were related primarily to separate and unrelated financing events recorded during the respective periods.
Previous wording
As of June 30, 2024, our cash and cash equivalents were $0.8 million, compared to $2.9 million as of December 31, 2023. Our cash and cash equivalents as of June 30, 2024 includes $0.2 million of net proceeds from the 2024 Warrant Reprice Transaction and $1.1 million of net proceeds from the DERMAdoctor Divestiture. Our cash and cash equivalents as of December 31, 2023 includes $0.6 million of net proceeds from the 2023 Warrant Reprice Transaction and $2.8 million of net proceeds from the 2023 Private Placement (both as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). Under the terms of the Secured Convertible Notes issued in the 2023 Private Placement, we are required to make a monthly redemption of the principal amount of the Secured Convertible Notes (“Monthly Redemption”) over an 18-month period, which began on June 1, 2023 in an amount equal to $193 thousand per month, unless such Monthly Redemption is eligible under the terms of the Secured Convertible Notes to instead be settled through the issuance of our common stock. We have paid the Monthly Redemption in cash to date, and as of June 30, 2024, the remaining outstanding principal amount of the Secured Convertible Note was $0.8 million. On March 25, 2024, the Company issued Unsecured Convertible Notes to four (4) Secured Parties that have an aggregate principal amount of $525,000 or will be convertible into an aggregate of 107,146 shares of common stock. The principal amount of the Unsecured Convertible Notes does not accrue interest and is payable to the Secured Parties upon maturity in March 2026, unless earlier converted into common stock. For additional information regarding the 2023 Private Placement, the Secured Convertible Notes and the Unsecured Convertible Notes, see Note 9 “Financing Activities, Note 10 “Convertible Notes,” and Note 12 “Stockholders’ (Deficit) Equity” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Current wording
As of September 30, 2024, our cash and cash equivalents were $0.8 million, compared to $2.9 million as of December 31, 2023. Our cash and cash equivalents as of September 30, 2024 includes $2.9 million of net proceeds from the 2024 Public Offering, $0.2 million of net proceeds from the 2024 Warrant Reprice Transaction and $1.1 million of net proceeds from the DERMAdoctor Divestiture. Our cash and cash equivalents as of December 31, 2023 includes $0.6 million of net proceeds from the 2023 Warrant Reprice Transaction and $2.8 million of net proceeds from the 2023 Private Placement (both as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report). Under the terms of the Secured Convertible Notes issued in the 2023 Private Placement, we were required to make a monthly redemption of the principal amount of the Secured Convertible Notes (“Monthly Redemption”) over an 18-month period, which began on June 1, 2023 in an amount equal to $193 thousand per month, unless such Monthly Redemption is eligible under the terms of the Secured Convertible Notes to instead be settled through the issuance of our common stock. We paid the Monthly Redemption in cash every month until the Secured Convertible Notes were repaid in full during the third quarter of 2024.
Previous wording
Based primarily on the funds available on June 30, 2024, the Company believes that the Company’s existing cash and cash equivalents and cash flows generated from product sales will be sufficient to fund its existing operations, meet its planned operating expenses and to meet the Monthly Redemption of the Secured Convertible Notes into at least the third quarter of 2024. The Company has sustained operating losses for the majority of its corporate history and expects that its 2024 expenses will exceed its 2024 revenues, as the Company continues to invest in its commercialization efforts. Additionally, the Company expects to continue incurring operating losses and negative cash flows until revenues reach a level sufficient to support ongoing growth and operations. Accordingly, the Company has determined that its planned operations raise substantial doubt about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. Additionally, changing circumstances may cause the Company to expend cash significantly faster than currently anticipated, and the Company may need to spend more cash than currently expected because of circumstances beyond its control that impact the broader economy such as periods of inflation, supply chain issues, global pandemics and international conflicts (e.g., the conflicts between Israel and Hamas, Russia and Ukraine, and China and Taiwan).
Current wording
Based primarily on the funds available on September 30, 2024, the Company believes that the Company’s existing cash and cash equivalents and cash flows generated from product sales will be sufficient to fund its existing operations and meet its planned operating expenses into at least the first quarter of 2025. The Company has sustained operating losses for the majority of its corporate history and expects that its 2024 expenses will exceed its 2024 revenues. Additionally, the Company expects to continue incurring operating losses and negative cash flows. Accordingly, the Company has determined that its planned operations raise substantial doubt about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. Additionally, changing circumstances may cause the Company to expend cash significantly faster than currently anticipated, and the Company may need to spend more cash than currently expected because of circumstances beyond its control that impact the broader economy such as periods of inflation, supply chain issues, global pandemics and international conflicts (e.g., the conflicts between Israel and Hamas, Russia and Ukraine, and China and Taiwan).
Previous wording
The Company’s long-term liquidity needs will be largely determined by the success of our commercialization efforts. To address the Company’s current liquidity and capital needs, the Company has and continues to evaluate different plans and strategic transactions to fund operations, including: (1) raising additional capital through debt and equity financings or from other sources; (2) reducing spending on operations, including reducing spending on one or more of its sales and marketing programs or restructuring operations to change its overhead structure; (3) out-licensing rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestones or an upfront fee; and/or (4) entering into license agreements to sell new products. The Company may issue securities, including common stock, preferred stock, convertible debt securities and warrants through additional private placement transactions or registered public offerings, which may require the filing of a Form S-1 or Form S-3 registration statement with the SEC. There is no assurance that the Company will be successful in executing additional capital-raising strategies at levels necessary to address the Company’s ongoing and future cash flow and liquidity needs. Accordingly, the Company continues to evaluate different plans and strategies to address the Company’s capital and liquidity needs, as well as evaluating several potential other strategic alternatives and transactions, including potential additional divestiture transactions or strategic acquisition transactions. The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to its ability to continue as a going concern.
Current wording
To address the Company’s current liquidity and near term capital needs, the Company has and continues to evaluate different plans and strategic transactions to fund operations, including: (1) raising additional capital through debt and equity financings or from other sources; (2) reducing spending on operations, including reducing spending on one or more of its sales and marketing programs or restructuring operations to change its overhead structure; and/or (3) the divestiture of certain business or product lines and related assets such as the Asset Sale Transaction and the DERMAdoctor Divestiture. If the Asset Sale Transaction and/or the Dissolution are not completed, we will continue our corporate existence and the Board will continue to explore its options to secure immediate funding for ongoing operations due to significantly reduced available capital, the strategic and alternatives available to the Company, including returning capital to stockholders or, to the extent any funding or other viable alternatives are not available or there is not sufficient capital remaining at the time to fund operations, then, the Company may need to file for bankruptcy protection or commence a similar state law proceeding. In connection with such strategic options, the Company may issue securities, including common stock, preferred stock, convertible debt securities and warrants through additional private placement transactions or registered public offerings, which may require the filing of a Form S-1 or Form S-3 registration statement with the SEC. While the Company believes that the proceeds from the 2024 Public Offering and the DERMAdoctor Divestiture improved the Company’s liquidity in the first nine months of 2024, there is no assurance that the Company will be successful in completing the Asset Sale Transaction and/or the Dissolution or otherwise executing on alternative capital-raising strategies at levels necessary to address the Company’s ongoing and future cash flow and liquidity needs. The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to its ability to continue as a going concern. If the Company’s stockholders approve the Dissolution, the Company would consider liquidation to be imminent and apply liquidation basis of accounting pursuant to U.S. GAAP.
Previous wording
Net cash used in operating activities from continuing operations was $2.2 million for the six months ended June 30, 2024, which consisted primarily of a net loss from continuing operations of $4.7 million, adjusted by depreciation and amortization expenses of $23 thousand, stock-based compensation expenses related to employee and director stock awards of $115 thousand, non-cash loss on divestiture of $0.9 million, non-cash expense for consent of Secured Note holders of $0.4 million, non-cash loss on modifications of warrants of $69 thousand, non-cash gain on changes in fair value of warrant liabilities of $114 thousand, non-cash loss on changes in fair value of embedded derivative liability of $18 thousand, non-cash right-of-use amortization of $168 thousand, accretion of interest and amortization of debt discounts on convertibles notes of $0.7 million, and a net increase of $0.3 million in our net operating assets and liabilities of continuing operations.
Current wording
Net cash used in operating activities from continuing operations was $4.2 million for the nine months ended September 30, 2024, which consisted primarily of a net loss from continuing operations of $6.0 million, adjusted by depreciation and amortization expenses of $32 thousand, stock-based compensation expenses related to employee and director stock awards of $0.1 million, non-cash loss on divestiture of $0.9 million, non-cash expense for consent of Secured Convertible Note holders of $0.4 million, non-cash loss on modifications of warrants of $69 thousand, non-cash gain on changes in fair value of warrant liabilities of $0.1 million, non-cash loss on changes in fair value of embedded derivative liability of $18 thousand, non-cash right-of-use amortization of $0.3 million, accretion of interest and amortization of debt discounts on convertibles notes of $0.9 million, and a net decrease of $0.8 million in our net operating assets and liabilities of continuing operations.
Previous wording
Net cash used in operating activities from continuing operations was $2.9 million for the six months ended June 30, 2023, which consisted primarily of a net loss from continuing operations of $3.8 million, adjusted by depreciation and amortization expenses of $26 thousand, stock-based compensation expenses of $139 thousand, non-cash loss on modifications of warrants of $285 thousand, non-cash gain on changes in fair value of warrant liabilities of $216 thousand, non-cash gain on changes in fair value of embedded derivative liability of $40 thousand, non-cash right-of-use amortization of $140 thousand, accretion of interest and amortization of debt discounts on convertibles notes of $0.5 million, and a net decrease of $0.6 million in our net operating assets and liabilities of continuing operations.
Current wording
Net cash used in operating activities from continuing operations was $3.5 million for the nine months ended September 30, 2023, which consisted primarily of a net loss from continuing operations of $5.5 million, adjusted by depreciation and amortization expenses of $39 thousand, stock-based compensation expenses of $0.2 million, non-cash loss on modifications of warrants of $0.3 million, non-cash gain on changes in fair value of warrant liabilities of $0.2 million, non-cash gain on changes in fair value of embedded derivative liability of $40 thousand, non-cash right-of-use amortization of $0.2 million, accretion of interest and amortization of debt discounts on convertibles notes of $1.1 million, and a net decrease of $0.7 million in our net operating assets and liabilities of continuing operations.
Previous wording
Net cash provided by investing activities from continuing operations was $1.1 million for the six months ended June 30, 2024, which included the DERMAdoctor Divestiture proceeds of $1.1 million and purchase of property and equipment in a nominal amount. Net cash used in investing activities for the purchase of property and equipment was $15 thousand for the six months ended June 30, 2023.
Current wording
Net cash provided by investing activities from continuing operations was $1.1 million for the nine months ended September 30, 2024, which included the DERMAdoctor Divestiture proceeds of $1.1 million and purchase of property and equipment in a nominal amount. Net cash used in investing activities for the purchase of property and equipment from continuing operations was $16 thousand for the nine months ended September 30, 2023.
Previous wording
Net cash used in financing activities from continuing operations was $1.1 million for the six months ended June 30, 2024, which included repayment of $1.2 million for the Monthly Redemption through June 30, 2024 on the Secured Convertible Notes and the net proceeds of $0.2 million from the 2024 Warrant Repice transaction.
Current wording
Net cash provided by financing activities from continuing operations was $1.0 million for the nine months ended September 30, 2024, which included repayment of $2.0 million for the Secured Convertible Notes through September 30, 2024, net proceeds of $2.9 million from the 2024 Public Offering*** ***transaction, and the net proceeds of $0.2 million from the 2024 Warrant Repice transaction.
Previous wording
Net cash provided by financing activities was $2.5 million for the six months ended June 30, 2023, which included the net proceeds of $2.8 million received in the 2023 Private Placement of the Convertible Notes and the May 2023 Warrants and repayment of $0.2 million for the Monthly Redemption through June 30, 2023 on the Secured Convertible Notes.
Current wording
Net cash provided by financing activities from continuing operations was $1.9 million for the nine months ended September 30, 2023, which included the net proceeds of $2.8 million received in the 2023 Private Placement of the Secured Convertible Notes and the May 2023 Warrants and repayment of $0.8 million for the Monthly Redemption through September 30, 2023 on the Secured Convertible Notes.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Revenue from eyecare products, including Avenova Spray, was $2.4 million for both the three months ended September 30, 2024 and September 30, 2023.
Current report — wording carried from elsewhere
On March 25, 2024, the Company issued Unsecured Convertible Notes to four (4) Secured Parties that have an aggregate principal amount of $525,000 or will be convertible into an aggregate of 3,750,000 shares of common stock (107,146 shares post-Reverse Stock Split). The principal amount of the Unsecured Convertible Notes does not accrue interest and is payable to the Secured Parties upon maturity in March 2026, unless earlier converted into common stock. For additional information regarding the 2023 Private Placement, the Secured Convertible Notes and the Unsecured Convertible Notes, see Note 9 “Financing Activities, Note 10 “Convertible Notes,” and Note 12 “Stockholders’ Equity” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Cost of goods sold decreased $1.0 million, or 55%, to $0.8 million for the three months ended June 30, 2024, from $1.8 million for the three months ended June 30, 2023. Such decrease was due primarily to the decrease in wound care products which has lower margins slightly offset by an increase in eyecare products which has higher margins sold during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Previous report — wording carried elsewhere
Non-cash (loss) gain on change in fair value of warrant liabilities
Previous report — wording carried elsewhere
Adjustments to the fair value of warrant liabilities resulted in a loss of $80 thousand for the three months ended June 30, 2024 and a gain of $216 thousand for the three months ended June 30, 2023. The warrant liabilities for the December 2023 Warrants and the March 2024 Warrant were reclassified to equity during the three months ended June 30, 2024 and 2023, respectively, and will no longer require fair value adjustments which will impact our results of operations. For additional information regarding warrant liabilities and their valuation, please see Note 11, “Common Stock Warrants”, in the Notes to Unaudited Condensed Consolidated Financial Statements, in Part I, Item 1 of this quarterly report.
Previous report — wording carried elsewhere
Adjustments to the fair value of embedded derivative liability resulted in a loss of $83 thousand for the three months ended June 30, 2024 and a gain of $40 thousand for the three months ended June 30, 2023. For additional information regarding the embedded derivative liability and its valuation, please see Note 3, “Fair Value Measurements”.
Previous report — wording carried elsewhere
Revenue from eyecare products, including Avenova Spray, increased $0.4 million to $4.8 million for the six months ended June 30, 2024, from $4.4 million for the six months ended June 30, 2023. The increase was due to an overall increase in Avenova branded products sold through online channels.
Previous report — wording carried elsewhere
Non-cash (loss) gain on changes in fair value of embedded derivative liability