NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) announces
that Chief Executive Officer Justin Hall has issued the following
Letter to Stockholders:
To My Fellow Stockholders:
Over the past year, we have successfully transformed NovaBay
from a single product company into a larger organization with three
brands in three distinct market segments. We are a stronger company
with established brands in the large and growing eyecare, skincare
and wound care markets. Our Avenova®, DERMAdoctor® and PhaseOne®
products all have loyal customer bases, resulting in recurring
revenue and a solid foundation for growth as we execute an
aggressive commercial strategy. We differentiate our products from
our competitors by being scientifically developed and clinically
proven. Our high-quality products are all manufactured in the
United States.
As our stockholders know, on September 9, 2022, NovaBay entered
into two financing transactions. I would like to acknowledge the
concerns that many stockholders have shared with me about our
current need to raise additional capital and effect a reverse stock
split. Although we started the year with no intention of doing
either of those, our situation has changed. We need additional
capital to fully implement our growth strategies, such as launching
new products on the QVC® network and expanding into the European
and Chinese markets. In connection with the financing transactions,
we are required to seek stockholder approval of a reverse stock
split. We expect that the reverse stock split will increase the
market price of our common stock so that NovaBay will be able to
satisfy the continued listing requirements of the NYSE American for
the foreseeable future. We also believe that a reverse stock split
may improve the marketability and liquidity of our common stock and
appeal to a broader range of investors and generate greater
investor interest. Further, due to the number of shares of common
stock underlying the securities issued, or to be issued, in
connection with the financing transactions, the NYSE American rules
require that we seek stockholder approval prior to the issuance of
those underlying shares.
We currently anticipate holding a special meeting of
stockholders on November 10, 2022 to seek stockholder approvals on
the proposals outlined above.
Despite the current need for financing, there are many reasons
to be optimistic about our future. More people are using Avenova
today than ever before, with more than 600 units selling on Amazon
each day, representing an 18% year-over-year increase in unit
sales. To support further growth, we are expanding the customer
demographic for Avenova by entering into the eyelash extension
market. A growing number of women are turning to eyelash extensions
to enhance their appearance, driving a market that’s projected to
reach $2.4 billion by 2031. Yet lash extensions can attract oil,
dust, dirt and debris that may shorten their lifespan, cause
irritation and increase the likelihood of eye infections. Our
antimicrobial formulation is clinically proven to kill
infection-causing bacteria and remove the irritants on lids and
lashes, and, as an added benefit, Avenova does not damage the
adhesive that holds extensions in place extending lash life.
We are capitalizing on the trend for beauty products to be
increasingly purchased online by broadening availability of select
DERMAdoctor products through two popular U.S. online retailers,
Target.com and Urbanoutfitters.com. Brand influencers play an
important role in the beauty industry and we continue to build on
the enviable position of our Chief Product Officer and
board-certified dermatologist Dr. Audrey Kunin as a skincare
thought-leader through interviews with popular online consumer
publications and guest appearances on the QVC network.
Expanding marketing activities to certain overseas geographies
is also a key priority to driving sales growth. To that end, we
recently engaged a new partner in China to manage DERMAdoctor’s
flagship store on Tmall.com, which is the leading
business-to-consumer online retailer in China. Brand influencers
and social media platforms like TikTok are particularly effective
ways to attract new customers in China, and our marketing partner
brings an extensive network of bloggers and influencers, as well as
strong social media brand-building capabilities. We anticipate
DERMAdoctor’s TikTok store in China to go live in November of this
year. We are also in the process of onboarding a distribution
partner in the European Union, a previously untapped market for
us.
Lastly, we launched seven new products since the beginning of
2022. This includes both new Avenova and DERMAdoctor products,
keeping us highly relevant in industries that are characterized by
rapid change. All our new offerings reinforce our corporate
positioning of formulating and selling proprietary OTC products
that are effective, scientifically developed, clinically proven and
gentle, while addressing common yet underserved conditions.
Importantly, all of our new product creations and launch activities
are efficiently managed under a low-cost model.
Looking forward, we still anticipate a strong end to the year. A
large seasonal order from Costco for DERMAdoctor’s top-selling
product, Kakadu C, will increase revenue in the third and fourth
quarters. We also generally expect a spike in DERMAdoctor sales
during the fall, which is the seasonally strongest period for
skincare products. These developments underscore our confidence for
continued growth.
As we gain traction from our initiatives and favorable industry
trends, we expect continued growth through 2022 and into 2023. On
behalf of my NovaBay colleagues and our Board of Directors, I
appreciate your continued support of our path to profitability.
Sincerely, Justin Hall, Esq. Chief Executive Officer and General
Counsel
September 22, 2022
About NovaBay Pharmaceuticals, Inc.:
NovaBay Pharmaceuticals, Inc. is a pharmaceutical company that
develops and sells scientifically created and clinically proven
eyecare and skincare products. Avenova® is the most prescribed
antimicrobial lid and lash spray and DERMAdoctor® is a premium
skincare brand offering more than 30 dermatologist-developed
skincare products sold through traditional domestic retailers,
digital beauty channels and international distributors.
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, ability to complete certain
financing transactions, current and future product offerings,
marketing efforts, and any future revenue that may result from
selling such products, as well as generally the Company’s expected
future financial results (and ability to continue as a going
concern) and the impact of a reverse stock split. 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 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 Securities and Exchange Commission (the “Commission”),
especially under the heading “Risk Factors,” and in the Preliminary
Proxy Statement filed by NovaBay with the Commission, especially
under the heading “Proposal Two: 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.
Additional Information
As referenced above, certain stockholder matters will need to be
voted upon (the “Stockholder Matters”) and the Company filed a
preliminary proxy statement with the Commission on September 20,
2022, and intends to subsequently mail or otherwise make available
a definitive proxy statement relating to the Stockholder Matters.
This press release does not contain all the information that should
be considered concerning the Stockholder Matters, and is not
intended to form the basis of any voting decision, investment
decision or any other decision in respect of the Stockholder
Matters. The Company’s stockholders and other interested persons
are advised to read the preliminary proxy statement and the
amendments thereto and the definitive proxy statement and other
documents filed in connection with the Stockholder Matters, as
these materials will contain important information about these
matters, as well as the Company and the related financing
transactions. When available, the definitive proxy statement and
other relevant materials will be sent or given to stockholders of
the Company as of a record date to be established for voting on the
Stockholder Matters. Stockholders will also be able to obtain
copies of the preliminary proxy statement, the definitive proxy
statement and other documents filed with the Commission, without
charge, once available, at the Commission’s website at www.sec.gov,
or by directing a request to: NovaBay Pharmaceuticals, Inc., 2000
Powell Street, Suite 1150, Emeryville, CA 94608, attention:
Corporate Secretary.
Participants in the Solicitation
The Company and its directors and executive officers may be
deemed participants in the solicitation of proxies from the
Company’s stockholders with respect to the Stockholder Matters. A
list of the names of those directors and executive officers and a
description of their interests in the Company is contained in the
Company’s filings with the Commission, including in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2021,
which was filed with the Commission and is available free of charge
at the Commission’s website at www.sec.gov, or by directing a
request to: NovaBay Pharmaceuticals, Inc., 2000 Powell Street,
Suite 1150, Emeryville, CA 94608, attention: Corporate Secretary.
Additional information regarding the interests of such participants
is contained in the preliminary proxy statement and will be
contained in the definitive proxy statement for the Stockholder
Matters when available. In addition, we have engaged Alliance
Advisors, LLC, to assist in the solicitation of proxies and provide
related advice and informational support.
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Avenova Purchasing
Information For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com Avenova.com
DERMAdoctor Purchasing
Information For DERMAdoctor purchasing information:
Please call 877-337-6237 or email service@dermadoctor.com
DERMAdoctor.com
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com
Investor Contact LHA
Investor Relations Jody Cain 310-691-7100 jcain@lhai.com
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