NovaBay Pharmaceuticals Announces Approval of All Proposals at its 2024 Annual Meeting of Stockholders and Provides Other Corporate Updates
NovaBay Pharmaceuticals announced the approval of all proposals at its 2024 Annual Meeting, including a 1-for-35 reverse stock split. This decision aims to align with the NYSE American's listing standards and enhance stock marketability and liquidity. The reverse stock split will be effective on May 30, 2024, and shares will trade on a split-adjusted basis from May 31, 2024.
Additionally, NovaBay received a notice from NYSE American regarding non-compliance with stockholders’ equity requirements. They have until October 18, 2025, to meet these standards or face potential delisting. The company's recent financial statements included a going concern notice, highlighting ongoing financial challenges.
- Approval of all proposals at the 2024 Annual Meeting.
- 1-for-35 reverse stock split aims to increase stock price and liquidity.
- Reaffirms commitment to meeting NYSE American's listing standards.
- Potential increase in marketability and investor interest from reverse stock split.
- Notice of non-compliance with NYSE American stockholders’ equity requirements.
- Deadline of October 18, 2025, to meet compliance or risk delisting.
- Recent financial statements include a going concern notice.
- Ongoing financial instability and losses reported in multiple recent fiscal years.
Insights
NovaBay's announcement of a 1-for-35 reverse stock split is a significant move aimed at complying with the NYSE American's listing standards. A reverse stock split reduces the number of outstanding shares and increases the per-share price. While this maneuver can potentially help the company meet the stock exchange's minimum share price requirements, it doesn't inherently add value to the company.
The reverse stock split also highlights NovaBay's challenges, especially considering the going concern notice in its 10-K filing, which questions the company's ability to sustain operations. Investors should be wary that while this split might temporarily boost stock price, it doesn't address underlying operational and financial problems.
In the short term, the reverse stock split could make the stock more appealing to some investors who avoid penny stocks. However, the longer-term implications largely depend on whether NovaBay can improve its financial health and achieve compliance with NYSE requirements.
From a market perspective, the announcement of the reverse stock split and the NYSE American notice reflects the company's ongoing efforts to stay afloat. It's important to understand that a reverse stock split often signals financial distress. NovaBay's plan might temporarily increase the share price, but it does not change the company's market valuation. The move can also be viewed skeptically by some investors, potentially leading to reduced investor confidence.
The company's ongoing struggle to comply with equity requirements can have adverse effects on its market positioning. If NovaBay fails to regain compliance by the specified deadlines, it risks delisting, which would drastically reduce its stock's liquidity and accessibility to retail investors. This situation creates a high-risk environment that may deter new investments.
Retail investors should stay informed about NovaBay's progress towards compliance and be cautious of the inherent risks associated with the company's current financial instability.
The receipt of notice from the NYSE American regarding stockholders' equity non-compliance is a serious matter that highlights potential legal and regulatory risks for NovaBay. If the company does not meet the compliance deadlines, it faces the possibility of delisting, which would significantly impact shareholders and the company's ability to raise capital in public markets.
The approval of the reverse stock split is a strategic decision to address one aspect of compliance, but it does not resolve the broader issues related to financial health and regulatory adherence. Investors should monitor the company's adherence to its compliance plan and any further communications from the NYSE American, as these will be critical in assessing the company's future viability in the stock market.
Legal complexities surrounding the company's financial status and compliance efforts could also lead to further scrutiny from regulators and possibly affect investor sentiment negatively.
Announces a 1-for-35 Reverse Stock Split and Receipt of NYSE American Notice Regarding Stockholders’ Equity
“We thank stockholders for their support in approving all proposals during our annual meeting,” said Justin Hall, NovaBay’s CEO. “The approval of these proposals allows us to move forward with several strategic initiatives meant to help us regain compliance with NYSE American’s continued listing standards and grow our business. We believe the anticipated increased market price resulting from the reverse split will improve the marketability and liquidity of our stock and could encourage additional interest and trading.”
Reverse Stock Split
The Company’s Board of Directors has authorized a 1-for-35 reverse stock split of all outstanding shares of common stock of the Company. The Company anticipates that the 1-for-35 reverse stock split will be effective as of 4:15 p.m.
The effect of the reverse stock split will be to combine every 35 shares of outstanding Company common stock into 1 share of common stock. The reverse stock split will not reduce the number of authorized shares of common stock or authorized shares of preferred stock or change the par values of the Company’s common stock or preferred stock.
The Company will issue an additional whole share to all holders who would otherwise receive a fractional share of common stock. Except for adjustments resulting from the treatment of fractional shares, each stockholder will hold the same percentage of our outstanding common stock immediately following the reverse stock split as such stockholder held immediately prior to the reverse stock split.
All outstanding options, restricted stock awards, warrants, preferred stock, convertible debentures and other Company securities entitling their holders to purchase, exercise, convert or otherwise receive shares of common stock will be adjusted as a result of the reverse stock split, as required by the terms of each security.
The Company expects that the reverse stock split will increase the per-share price of its common stock, which the Company believes will enable it to comply with the NYSE American's continued-listing requirement relating to the price of its common stock. The Company's trading symbol of “NBY” will not change as a result of the reverse stock split; however, a new CUSIP number has been assigned: 66987P 409.
The reverse stock split will reduce the number of shares of common stock issued and outstanding from approximately 40,309,991 shares to approximately 1,151,715 shares (prior to rounding). Because the reverse stock split will not reduce the number of authorized shares of common stock, the effect of the reverse stock split will be to increase the number of common shares available for issuance relative to the number of common shares issued and outstanding. The reverse stock split will not modify any voting rights or other terms of the common stock.
Computershare Inc. is acting as the exchange agent and transfer agent for the reverse stock split. Computershare will provide instructions to stockholders with physical certificates regarding the process for exchanging their pre-split stock certificates for post-split shares. Computershare can be reached at (800) 962-4284. For additional information regarding the reverse stock split, please refer to NovaBay’s Current Report on Form 8-K filed with the SEC today, May 29, 2024.
NYSE American Notice Regarding Stockholders’ Equity
The Company also announces that on May 28, 2024 it received notice from the NYSE American that it is not in compliance with Section 1003(a)(i) of the NYSE American Company Guide requiring stockholders’ equity of
In a press release dated April 19, 2024, the Company announced notification by the NYSE American on April 18, 2024 that it was not in compliance with the minimum stockholders’ equity requirement of Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide requiring stockholders’ equity of
On May 8, 2024, the Company submitted its plan to regain compliance to NYSE American. The Company is subject to the requirements in the April and May notice and if the Company is not in compliance with all of the stockholders’ equity standards by October 18, 2025 or does not make substantial progress consistent with its compliance plan, then the NYSE American staff will initiate delisting proceedings, as appropriate.
Form 10-K - Going Concern
The Company also announces that, as previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 26, 2024 and amended on March 29, 2024, the audited financial statements contained an unqualified audit opinion from its independent registered public accounting firm that included an explanatory paragraph related to the Company’s ability to continue as a going concern. This announcement is made pursuant to NYSE American Company Guide Section 610(b), which requires public announcement of the receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to the Company’s financial statements or to its Annual Report on Form 10-K for the year ended December 31, 2023.
About NovaBay Pharmaceuticals, Inc.:
NovaBay’s leading product Avenova® Antimicrobial Lid & Lash Solution is often prescribed by eyecare professionals for blepharitis and dry-eye disease and is available directly to consumers through online distribution channels such as Amazon.com. It is clinically proven to kill a broad spectrum of bacteria to help relieve the symptoms of bacterial dry eye, yet is non-irritating and completely safe for regular use. NovaBay offers a full portfolio of scientifically developed products for each step of the standard dry eye treatment regimen, including the Avenova Eye Health Support antioxidant-rich oral supplement, Avenova Lubricating Eye Drops for instant relief, Avenova Warm Eye Compress to soothe the eyes and the i-Chek by Avenova to monitor physical eyelid health. The Avenova Allograft, an amniotic tissue prescription-only product, is available through eyecare professionals in
NovaBay Pharmaceuticals Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements that are based upon management's current expectations, assumptions, estimates, projections and beliefs. The use of words such as, but not limited to, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar words or expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding our business strategies and prospects, expected future financial results (including our ability to continue as a going concern), the impact of the reverse stock split, and the Company's ability to regain compliance with the continued listing requirements of the NYSE American. These statements involve risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by the forward-looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Other risks relating to NovaBay’s business, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are detailed in NovaBay’s latest Form 10-Q/K filings with the SEC, especially under the heading “Risk Factors,” and in the definitive proxy statement filed by NovaBay with the SEC, especially under the heading “Proposal Five: The Reverse Stock Split Proposal - Risks Relating to the Reverse Stock Split.” The forward-looking statements in this press release speak only as of this date, and NovaBay disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.
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Avenova Purchasing Information
For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240529054513/en/
NovaBay
Justin Hall
Chief Executive Officer and General Counsel
510-899-8800
jhall@novabay.com
Investors
LHA Investor Relations
Jody Cain
310-691-7100
jcain@lhai.com
Source: NovaBay Pharmaceuticals, Inc.
FAQ
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