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Note 1 - Organization

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1. ORGANIZATION

NovaBay Pharmaceuticals, Inc. (the “Company” or “our,” “we,” or “us”) was historically focused on the development and sale of scientifically-created and clinically-proven eyecare, wound care, and skin care products. We have undergone significant changes to our business and operations as a result of completing the following transactions:

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The Avenova Asset Divestiture which closed on January 17, 2025 and in which we sold our primary eyecare business (see Note 14, “Avenova Asset Divestiture and Bridge Loan”);

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The Wound Care Divestiture which closed on January 8, 2025 and in which we sold a significant portion of our wound care business (see Note 15, “Wound Care Divestiture”); and

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The DERMAdoctor Divestiture which closed on March 12, 2024 and in which we sold our primary skin care business (See Note 16, “DERMAdoctor Divestiture”).

Following the closing of these transactions, we significantly reduced the Company’s assets and operations and significantly reduced our current and expected revenue.

The Company was incorporated under the laws of the State of California on January 19, 2000, as NovaCal Pharmaceuticals, Inc. It had no operations until July 1, 2002, on which date it acquired all of the operating assets of NovaCal Pharmaceuticals, LLC, a California limited liability company. In February 2007, the Company changed its name from NovaCal Pharmaceuticals, Inc. to NovaBay Pharmaceuticals, Inc. In June 2010, the Company changed the state in which it was incorporated pursuant to the Reincorporation and is now incorporated under the laws of the State of Delaware. All references to “the Company” herein refer to the California corporation prior to the date of the Reincorporation and to the Delaware corporation on and after the date of the Reincorporation. The Company is managed as one reportable segment, eyecare and wound care.

On May 30, 2024, the Company effected the Reverse Stock Split. Except as otherwise specifically noted, all share numbers, share prices, exercise/conversion prices and per share amounts have been adjusted, on a retroactive basis, to reflect the Reverse Stock Split.

Discontinued Operations

Historical financial results related to each of the businesses and assets divested above is now presented as discontinued operations in our unaudited condensed consolidated financial statements.

Strategic Options and Plan of Dissolution

The Company’s board of directors (the “Board”) unanimously approved each of the transactions above and is now evaluating the strategic options available to the Company. After our consideration of various factors, and the absence of other more favorable strategic options available to us at the time, the Board unanimously determined that the best opportunity available to maximize the remaining value for our Company and to our stockholders was to pursue a voluntary liquidation and dissolution under Delaware law (the “Dissolution”) pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”) and obtain stockholder approval for the Dissolution at a special meeting of stockholders that was held on April 16, 2025 (the “2025 Special Meeting”). During the period that the Company was seeking stockholder approval of the Dissolution proposal at the 2025 Special Meeting, the Company was also exploring and evaluating other alternative strategic transactions available to the Company, including mergers, reverse mergers, strategic partnerships, investments, licensing and sub-licensing transactions. The Company considered pursuing potential alternative strategic transactions, which included engaging its former financial advisor, Lucid Capital Markets, LLC (“Lucid”), (i) to address the uncertainty surrounding the Company’s ability to ultimately obtain the requisite stockholder approval for the Dissolution, particularly considering the Company did not receive approval for the Dissolution at its previously held special meeting of stockholders, and (ii) to further confirm the strategic direction of the Company as it considered the Dissolution. Stockholders approved the Dissolution at the 2025 Special Meeting. Although stockholder approval of the Dissolution was received, the Board (as part of this approval) was also authorized to subsequently determine, in its discretion, whether or not to proceed with the Dissolution. Accordingly, the Board now retains complete discretion to evaluate and determine if and when the Dissolution should be effected or if another strategic option would instead be available to us that would be a better opportunity to maximize our remaining value for our Company and stockholders and be in the best interests of our Company and stockholders.

If the Board determines to proceed with the Dissolution, then the Company would consider liquidation to be imminent and apply the liquidation basis of accounting pursuant to the accounting principles generally accepted in the United States (“U.S. GAAP”).

Liquidity

Based on our funds available on March 31, 2025, management believes that the Company’s existing cash and cash equivalents will be sufficient to enable the Company to meet its planned operating expenses at least through May 15, 2026; however, there is uncertainty with respect to our strategic direction in the near term. Although the Dissolution was approved by stockholders at the 2025 Special Meeting, it has not been authorized by the Board as the Company is continuing to explore other potential strategic alternatives that may be available to us that could represent a better opportunity for us to maximize our remaining value for our Company and stockholders. As a result, when we do make a determination and pursue our strategic direction in the near term, there may be unknown or potential future claims and liabilities that may arise or changing circumstances that may cause the Company to expend cash significantly faster than currently anticipated because of factors beyond its control.