NovaBay accepts additional offers for eye care units through Investing.com
EMERYVILLE, Calif. – NovaBay Pharmaceuticals, Inc. (NYSE American: NBY), a pharmaceutical company, announced today that it has accepted a revised offer from PRN Physician Recommended Nutriceuticals, LLC to sell its eye care business for an incremental purchase price of $11.5 million. millions. The agreement amends the original procurement terms set for September 19, 2024, and removes certain contingencies, adding assurances of PRN’s financial strength.
The revised terms include the removal of debt financing conditions and the addition of a secured promissory note, or Bridge Loan, from PRN to NovaBay for up to $1 million, which is expected to be paid at closing. The amendment comes after NovaBay’s Board of Directors reviewed an unsolicited proposal from Refresh Acquisitions BidCo LLC, which was previously considered superior. However, the Board has now decided that the revised terms and PRN are more favorable.
NovaBay’s CEO, Justin Hall, expressed confidence that the new deal with PRN is in the best interests of the company’s shareholders. The transaction is subject to certain closing conditions, including approval by NovaBay shareholders.
A special meeting to seek shareholder approval for the sale to PRN and the potential voluntary liquidation and liquidation of NovaBay is scheduled for November 22, 2024. The Board recommends that shareholders vote in favor of the transaction.
NovaBay advises its shareholders to read the full text of the amendment and details of the Bridge Loan, 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 be provided to supplement the definitive proxy statement filed with the SEC on October 16, 2024.
This news is based on a press release from NovaBay Pharmaceuticals, Inc.
In other recent news, NovaBay Pharmaceuticals reported a significant development. The company sold its Avenova brand to PRN Physician Recommended Nutriceuticals, LLC for approximately $9.5 million. The sale, which is expected to be completed in the fourth quarter of 2024, is subject to the approval of NovaBay shareholders.
In financial matters, NovaBay reported good growth in its eye care business, with sales reaching $4.8 million in the first quarter of 2024 and a target of $10 million by the end of the year. The company also reported an 8% increase in total sales to $2.4 million, and a significant increase in gross margin to product revenue of 66%.
The company successfully raised $3.9 million in revenue, emphasizing its focus on the US dry eye market, which is expected to exceed $4.8 billion by 2030. NovaBay has made it clear that it does not intend to expand internationally independently, but through strategic collaboration.
This is among the latest developments at NovaBay Pharmaceuticals, as the company continues to navigate its business strategy and financial health. A further update on strategic transactions and developments will be provided on the next quarterly call.
InvestingPro Insights
The revised offer from PRN Physician Recommended Nutriceuticals for NovaBay Pharmaceuticals’ eye care business comes at a critical time for the company. According to InvestingPro data, NovaBay’s revenue for the last twelve months from Q2 2024 stood at $13.88 million, with revenue growth of 4.06%. However, the company’s operating income during the same period was negative at $5.23 million, indicating continued profitability challenges.
These financial metrics accompany several InvestingPro tips. For example, one tip notes that “Analysts don’t expect the company to turn a profit this year,” emphasizing the importance of the $11.5 million sale to NovaBay’s financial health. Another relevant tip shows that “Short-term liabilities exceed liquid assets,” suggesting that the infusion of cash from the auction could significantly improve the company’s balance sheet.
The proposed sale also takes on added importance due to NovaBay’s recent stock performance. InvestingPro Tip highlights that “The price has fallen significantly over the past year,” with data showing a one-year price return of -93.66% as of the latest available date. This context makes the Board’s decision to pursue a revised PRN offer more important to shareholders.
For investors looking for a 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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