EMERYVILLE, Calif. - NovaBay Pharmaceuticals, Inc. (NYSE American: NBY), a pharmaceutical company specializing in eye care products, is urging its stockholders to vote in favor of two major proposals during its upcoming Special Meeting of Stockholders. The meeting, scheduled for November 22, 2024, will address the sale of NovaBay's Avenova business to PRN Physician Recommended Nutriceuticals, LLC for $11.5 million in cash and the voluntary liquidation and dissolution of the company.
The Board of Directors at NovaBay has unanimously recommended stockholders to approve the Asset Sale Proposal and the Dissolution Proposal, as detailed in the proxy statements filed in October and November 2024. Institutional Shareholder Services (ISS), a leading advisory firm, has also advised stockholders to vote for these proposals, indicating that the asset sale could maximize shareholder value, providing liquidity and certainty of value.
The proposed sale involves NovaBay's flagship product Avenova Lid & Lash Cleansing Spray, which is widely recommended for conditions like blepharitis and dry eye disease. If the Dissolution Proposal is approved, NovaBay will proceed with a complete liquidation, settling its obligations and distributing any remaining assets to its stockholders.
ISS's support for the proposals is significant given its role as an independent provider of shareholder meeting research. The firm's endorsement may influence the decision-making of the institutional investors who rely on its guidance for investment stewardship decisions.
Stockholders of record as of October 15, 2024, are eligible to vote and can participate in the virtual Special Meeting by registering in advance. NovaBay has made arrangements with proxy solicitation firm Sodali & Co. to assist stockholders with voting procedures.
The company has been facing uncertainties, as indicated in forward-looking statements in recent press releases, which include risks that could materially affect the outcome of the proposed transactions. These risks are detailed in NovaBay's SEC filings, including its latest 10-K and 10-Q forms, and the Special Meeting Proxy Statement.
This news is based on a press release statement from NovaBay Pharmaceuticals, Inc.
In other recent news, NovaBay Pharmaceuticals has agreed to a revised offer of $11.5 million from PRN Physician Recommended Nutriceuticals, LLC for the sale of its eyecare business. This updated agreement includes a secured promissory note from PRN to NovaBay of up to $1 million, expected to be repaid at the transaction's closing. NovaBay's Board of Directors has determined these revised terms to be more favorable following a reassessment of an unsolicited proposal from Refresh Acquisitions BidCo LLC.
In further developments, NovaBay has sold its Avenova brand to PRN in a cash transaction valued at $9.5 million, pending approval from NovaBay's stockholders. The company has also reported a positive growth in its eyecare business, with sales reaching $4.8 million in the first half of 2024 and a projected target of $10 million by the end of the year.
NovaBay's total net sales have seen an 8% rise to $2.4 million, and a significant increase in gross margin on net product revenue to 66%. The company has also successfully raised $3.9 million in capital, emphasizing its focus on the U.S. dry eye market, projected to surpass $4.8 billion by 2030. These are among the recent developments as NovaBay continues to navigate its business strategies and financial health.
InvestingPro Insights
NovaBay Pharmaceuticals' proposed asset sale and dissolution come against a backdrop of financial challenges, as revealed by recent InvestingPro data. The company's revenue for the last twelve months as of Q3 2024 stood at $13.06 million, with a modest growth of 2.18%. However, the quarterly revenue growth for Q3 2024 showed a significant decline of 25.24%, underscoring the company's struggle to maintain consistent sales performance.
InvestingPro Tips highlight that analysts anticipate a sales decline in the current year and do not expect the company to be profitable. This aligns with the company's decision to sell its Avenova business and pursue liquidation, potentially as a strategic move to maximize shareholder value in the face of ongoing financial difficulties.
The company's stock price performance has been particularly concerning. InvestingPro data shows that NovaBay's stock has fallen significantly over the last year, with a one-year price total return of -93.89% as of the latest data. This steep decline likely factored into the Board's decision to recommend the asset sale and dissolution.
Despite these challenges, it's worth noting that NovaBay operates with a moderate level of debt, which could potentially simplify the liquidation process if shareholders approve the dissolution proposal.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for NovaBay Pharmaceuticals, providing deeper insights into the company's financial health and market position.
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