Private Placement to fund acquisition of
DERMAdoctor
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) (“NovaBay”
or the “Company”) announces it has entered into a Securities
Purchase Agreement with certain institutional investors in
connection with a private placement of 15,000 shares of a newly
created Series B Non-Voting Convertible Preferred Stock (the
“Series B Preferred Stock”) at a price of $1,000 per share and
warrants exercisable to purchase up to an aggregate of 37,500,000
shares of common stock at an exercise price of $0.53 per share (the
“Warrants”). The Company expects to receive gross proceeds from the
private placement of approximately $15.0 million. The private
placement is expected to close on or about November 2, 2021,
subject to satisfaction of customary closing conditions.
“This financing allows us to close on the DERMAdoctor
acquisition and fully fund our path to profitability. With this
acquisition, we are doubling the size of our Company and expanding
into the lucrative skincare market,” said Justin Hall, NovaBay CEO.
“In addition to acquiring DERMAdoctor’s existing line of products,
we will be aggressively launching new products and brands in the
coming year.”
On September 28, 2021, NovaBay announced that it had entered
into a definitive agreement to acquire DERMAdoctor, LLC
(“DERMAdoctor”), and that the consummation of this acquisition
transaction was subject to NovaBay completing a financing to raise
capital sufficient to fund the purchase price for this acquisition,
as well as the satisfaction of other closing conditions of the
parties. NovaBay intends to use the net proceeds received from the
offering to partially fund the purchase price to acquire
DERMAdoctor, and for working capital purposes.
Ladenburg Thalmann & Co. Inc. is acting as the exclusive
placement agent for the offering.
The Series B Preferred Stock is convertible into an aggregate of
approximately 37,500,000 shares of common stock at a conversion
price of $0.40 per share. In addition, the conversion of the Series
B Preferred Stock will be subject to certain ownership limitations,
as provided in the Securities Purchase Agreement and in the
Certificate of Designation of Preferences, Rights and Limitations
of the Series B Preferred Stock, which will be filed and become
effective in connection with the closing of the offering. The
Series B Preferred Stock is only entitled to dividends in the event
dividends are paid on the Company's common stock and will not have
any preferences over the Company's common stock, including
liquidation rights. As a result of the number of shares of Company
common stock that may be issued upon the future conversion of the
Series B Preferred Stock and exercise of the Warrants, the Company
will be required to obtain stockholder approval in accordance with
the NYSE American LLC Company Guide Rule 713(a) and Rule 713(b). In
addition, the number of authorized shares of Common Stock will need
to be increased by the Company, as required by its governing
documents and applicable law, in order to have a sufficient number
of shares of Common Stock to issue upon the full conversion of the
Preferred Stock and the full exercise of the Warrants (“Authorized
Share Increase”). The Warrants will become exercisable only upon
the effectiveness of the Authorized Share Increase and will expire
six years following the date that the Warrants first become
exercisable.
The offer and sale of the Preferred Stock and the Warrants are
being made in a transaction not involving a public offering, and
these securities have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), or applicable state
securities laws. Accordingly, the securities may not be reoffered
or resold in the United States except pursuant to an effective
registration statement or an applicable exemption from the
registration requirements of the Securities Act and such applicable
state securities laws.
Under a Registration Rights Agreement to be entered into with
the Purchasers, the Company will be required to file an initial
registration statement with the Securities and Exchange Commission
(the “SEC”) covering the resale of the shares of the Company’s
common stock underlying the Series B Preferred Stock no later than
30 days after the closing of the offering and to use best efforts
to have the registration statement declared effective as promptly
as practical thereafter, and in any event no later than 90 days
after the closing of the offering. Additionally, the Company is
required to file a second registration statement with the SEC
covering the resale of the shares of the Company’s common stock
underlying the Warrants no later than 30 days after the Amendment
Date and to use best efforts to have the registration statement
declared effective as promptly as practical thereafter, and in any
event no later than 90 days after the Amendment Date.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor will there be any sales of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
About NovaBay Pharmaceuticals, Inc.
NovaBay Pharmaceuticals, Inc. is a pharmaceutical company
focusing on high-quality, differentiated, anti-infective consumer
products: Avenova®, the premier antimicrobial lid and lash spray,
CelleRx® Clinical Reset, a breakthrough product in the beauty
category, and NeutroPhase® Skin and Wound Cleanser for wound
healing. NovaBay’s products are formulated with its patented, pure,
stable, pharmaceutical grade hypochlorous acid that replicates the
antimicrobial chemicals used by white blood cells to fight
infection. NovaBay’s hypochlorous acid products do not cause
stinging or irritation, are non‑toxic and non-sensitizing, making
them completely safe for regular use. Avenova is the only
commercial hypochlorous acid lid and lash spray product clinically
proven to reduce bacterial load on ocular skin surfaces, thus
effectively addressing the underlying cause of bacterial dry
eye.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including statements
about the commercial progress and future financial performance of
NovaBay, the private placement of Series B Preferred Stock and the
Warrants (“Private Placement”), as well as the transaction to
acquire DERMAdoctor (the “Transaction”). This release contains
forward-looking statements that are based upon management’s current
expectations, assumptions, estimates, projections and beliefs.
These statements include, but are not limited to, statements
regarding our current product offerings and marketing efforts, the
financial and business impact and effect of the proposed
Transaction, the expected completion of and impact of the Private
Placement, our partnerships, and any future revenue that may result
from selling our products, as well as generally NovaBay’s expected
future financial results. These statements involve known and
unknown 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 these forward-looking
statements. 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, Form 10-K and/or 8-K
filings with the Securities and Exchange Commission, especially
under the heading “Risk Factors.” The forward-looking statements in
this 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.
Avenova.com
CelleRx Clinical Reset Purchasing
Information For NovaBay CelleRx Clinical Reset
purchasing information Please call 877-CELLERX www.CelleRx.com
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version on businesswire.com: https://www.businesswire.com/news/home/20211101005287/en/
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com NovaBay Investor
Contact LHA Investor Relations Jody Cain 310-691-7100
jcain@lhai.com
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