EMERYVILLE, Calif. - NovaBay Pharmaceuticals, Inc. (NYSE American: NBY), a pharmaceutical company, announced today that it has agreed to a revised offer from PRN Physician Recommended Nutriceuticals, LLC to sell its eyecare business for an increased purchase price of $11.5 million. The agreement amends the original asset purchase terms set on September 19, 2024, and removes certain contingencies, adding assurances of PRN's funding capabilities.
The updated terms include the removal of debt financing conditions and the addition of a secured promissory note, or Bridge Loan, from PRN to NovaBay of up to $1 million, expected to be repaid at the transaction's closing. The amendment comes after NovaBay's Board of Directors reassessed an unsolicited proposal from Refresh Acquisitions BidCo LLC, which was previously considered superior. However, the Board has now determined that the revised terms with PRN are more favorable.
NovaBay's CEO, Justin Hall, expressed confidence that the new agreement with PRN is in the best interests of the company's stockholders. The transaction is still subject to certain closing conditions, including approval from NovaBay's stockholders.
A special meeting to seek stockholder approval for the sale to PRN and a potential voluntary liquidation and dissolution of NovaBay is scheduled for November 22, 2024. The Board recommends stockholders to vote in favor of the transaction.
NovaBay advises its stockholders to read the full text of the amendment and the Bridge Loan details, which will be filed with the Securities and Exchange Commission (SEC) and included in the company's Current Report on Form 8-K. Additional disclosures will also be provided to supplement the definitive proxy statement filed with the SEC on October 16, 2024.
This news is based on a press release statement from NovaBay Pharmaceuticals, Inc.
In other recent news, NovaBay Pharmaceuticals has reported noteworthy developments. The company has sold its Avenova brand to PRN Physician Recommended Nutriceuticals, LLC in a cash transaction valued at $9.5 million. The sale, which is expected to be finalized in the fourth quarter of 2024, is subject to approval from NovaBay's stockholders.
In financial news, NovaBay has 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. The company also reported an 8% rise in total net sales to $2.4 million, and a significant increase in gross margin on net product revenue to 66%.
The company has successfully raised $3.9 million in capital, emphasizing its focus on the U.S. dry eye market, which is projected to surpass $4.8 billion by 2030. NovaBay has clarified that it does not intend to expand internationally independently, but through strategic partnerships.
These are among the recent developments in NovaBay Pharmaceuticals, as the company continues to navigate its business strategies and financial health. Further updates on the company's strategic transactions and developments will be provided in the next quarterly call.
InvestingPro Insights
The revised offer from PRN Physician Recommended Nutriceuticals for NovaBay Pharmaceuticals' eyecare business comes at a critical time for the company. According to InvestingPro data, NovaBay's revenue for the last twelve months as of Q2 2024 stood at $13.88 million, with a modest revenue growth of 4.06%. However, the company's operating income for the same period was negative at -$5.23 million, indicating ongoing profitability challenges.
These financial metrics align with several InvestingPro Tips. For instance, one tip notes that "Analysts do not anticipate the company will be profitable this year," which underscores the importance of the $11.5 million sale for NovaBay's financial health. Another relevant tip points out that "Short term obligations exceed liquid assets," suggesting that the infusion of cash from the sale could significantly improve the company's balance sheet.
The proposed sale also takes on added significance in light of NovaBay's recent stock performance. An InvestingPro Tip highlights that the "Price has fallen significantly over the last year," with data showing a one-year price total return of -93.66% as of the latest available date. This context makes the Board's decision to pursue the revised PRN offer all the more crucial for stockholders.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for NovaBay Pharmaceuticals, providing a deeper understanding of the company's financial position and market performance.
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