NovaBay Pharmaceuticals, Inc. (NYSE American: NBY) has priced its public offering of common stock and warrants, which is expected to generate gross proceeds of approximately $3.5 million.
The offering includes 3,200,380 shares of common stock, or pre-funded warrants in lieu thereof, and an equal number of Series F-1, F-2, and F-3 warrants to purchase shares of common stock. Each share or warrant is priced at $1.10.
The underwriter, Ladenburg Thalmann & Co. Inc., has been granted a 45-day option to purchase additional shares and warrants to cover over-allotments, potentially increasing the total proceeds to $4.0 million before underwriting discounts, commissions, and other expenses.
The Series F-1 warrants are exercisable immediately at $1.10 per share and will expire five years after issuance. Series F-2 warrants, also with an immediate exercise price of $1.10, will expire six months post-issuance. The Series F-3 warrants, exercisable at $1.10, will expire one year from issuance. A one-time reset of the exercise price for these warrants is included, based on certain market conditions.
NovaBay intends to use the net proceeds to redeem outstanding senior secured convertible debentures due on November 1, 2024, and for working capital and general corporate purposes. The offering's closing is anticipated to occur on or about July 29, 2024, subject to customary closing conditions.
The offering is made pursuant to a registration statement on Form S-1, declared effective by the Securities and Exchange Commission (SEC) on July 25, 2024. The prospectus detailing the offering terms has been filed with the SEC and is available on their website.
Novother aBay reported a 9% increase in its eyecare segment's net revenue for the second quarter and the first half of 2024, primarily driven by heightened sales of Avenova-branded products through online channels. The preliminary net revenue for the second quarter was announced at $2.4 million, and $5.0 million for the half-year, with expectations for the full year's revenue to reach approximately $10 million. Despite a net loss of $3.6 million for the quarter, the company maintained a steady gross margin of 68% and reduced its sales and marketing expenses by half.
Further, NovaBay reported record sales for its Avenova line of products, noting a significant increase of over 20% compared to the previous year. The company's first-quarter sales rose by 13%, primarily driven by online channels, thanks to the expanded Avenova product range.
In addition, NovaBay has entered a co-marketing agreement with Eyenovia (NASDAQ:EYEN) and is focusing on converting physician-dispensed channel customers to over-the-counter sales, especially through Amazon (NASDAQ:AMZN).
InvestingPro Insights
As NovaBay Pharmaceuticals, Inc. (NYSE American: NBY) embarks on its latest public offering, the company's financial health and market performance provide crucial context for investors. According to real-time data from InvestingPro, NovaBay's revenue growth has shown a positive trend with an 11.49% increase in the last twelve months as of Q1 2024, and an even more robust quarterly revenue growth of 12.48% in Q1 2024. This suggests a growing business, despite the challenges outlined by the InvestingPro Tips.
However, the company's operational efficiency appears to be under pressure, with an operating income margin of -34.82% for the same period, reflecting the costs outweighing revenue. Gross profit margin remains strong at 53.86%, yet this has not translated into profitability over the last twelve months, with a substantial basic and diluted EPS of -66.72 USD.
The market has reacted to these mixed signals, as evidenced by the stock's performance. The company has experienced a significant downturn, with a 1-month price total return of -10.19% and a stark 6-month price total return of -66.2%, aligning with the InvestingPro Tips that highlight a poor price performance over the last decade and a significant fall over the last year.
For investors considering NovaBay's offering, these metrics and tips may serve as a guide to the company's current financial landscape. For additional insights, there are 9 more InvestingPro Tips available, which can be accessed with a subscription. To enhance your investment analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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