NovaBay Pharmaceuticals Reports Third Quarter 2024 Financial Results
- Online Avenova® sales increase 14% for the quarter and 19% for the nine months
- Sales and marketing expenses declined 25% for the quarter and 18% for the nine months reflecting digital marketing optimization
NovaBay® Pharmaceuticals, Inc. (NYSE:NBY) reports financial results for the three and nine months ended September 30, 2024.
"Avenova sales through the online channel for the quarter increased 14% over the prior year, while we reduced our marketing spend by 25% in the same period as we further optimized our highly efficient digital marketing programs," said Justin Hall, CEO of NovaBay. "We saw continued momentum in Avenova online sales into the current quarter. Sales through Amazon in October continued to be strong with a successful Prime Day event."
Financial results for the three and nine months ended September 30, 2024 and 2023 do not include results from DERMAdoctor, which was divested on March 25, 2024 and is accounted for in discontinued operations. Financial information about discontinued operations is available under "Divestiture and Discontinued Operations" in the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2024, which will be filed with the Securities and Exchange Commission (the "SEC") later today.
Third Quarter Financial Results
Total sales, net for the third quarter of 2024 were $2.4 million. Essentially all net sales for the quarter were derived from sales of eyecare products. Total sales, net for the third quarter of 2023 were $2.5 million, which included $2.4 million from sales of eyecare products and $0.1 million from sales of wound care products.
Gross margin on net sales for the third quarter of 2024 was 65%, compared with 67% for the third quarter of 2023, with the change primarily due to changes in the product mix.
Sales and marketing expenses for the third quarter of 2024 were $0.9 million, a 25% decrease from $1.3 million for the prior-year period, reflecting continued efficiencies in digital advertising and lower consulting costs. General and administrative (G&A) expenses for the third quarter of 2024 were $1.7 million, compared with $1.1 million for the third quarter of 2023, with the increase due to higher legal costs.
Accretion of interest and amortization of discounts on convertible notes for the third quarter of 2024 was $0.1 million, compared with $0.7 million for the third quarter of 2023.
Net loss attributable to common stockholders for the third quarter of 2024 was $2.2 million, or $0.60 per share. This compares with a net loss attributable to common stockholders for the third quarter of 2023 of $1.8 million, or $13.11 per share.
Nine Month Financial Results
Total sales, net for the nine months ended September 30, 2024 were $7.5 million, compared with $8.4 million for the nine months ended September 30, 2023.
Gross margin on net sales for the first nine months of 2024 was 67%, compared with 60% for the first nine months of 2023.
For the nine months ended September 30, 2024, sales and marketing expenses decreased 18% and G&A expenses increased 28%, both compared with the nine months ended September 30, 2023.
Net loss attributable to common stockholders for the first nine months of 2024 was $7.4 million, or $3.97 per share, compared with a net loss attributable to common stockholders for the first nine months of 2023 of $7.5 million, or $79.58 per share.
NovaBay had cash and cash equivalents of $0.8 million as of September 30, 2024, compared with $2.9 million as of December 31, 2023. In July 2024, the Company completed an underwritten public offering raising gross proceeds of $3.9 million.
About NovaBay Pharmaceuticals, Inc.
NovaBay's leading product Avenova® Lid & Lash Cleansing Spray is often recommended by eyecare professionals for blepharitis and dry eye disease. Manufactured in the U.S., Avenova spray is formulated with NovaBay's patented, proprietary, stable and pure form of hypochlorous acid. All Avenova products are available directly to consumers through online distribution channels such as Amazon.com and Avenova.com.
Forward-Looking Statements
This release contains information about management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts. Such forward-looking statements are based upon management's current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding our business strategies, including pursuing an asset sale of our Avenova business and a potential dissolution and liquidation of the Company, the expected timing of, our ability to complete, and the financial and business impact and effect of, such asset sale and/or such dissolution and liquidation, including with respect to distributions in connection with the dissolution and liquidation, and the impact and outlook for the Company's Avenova products and business, as well as generally the Company'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. Factors that might cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to the Company's ability to, and the time it may take to, obtain stockholder approval of the asset sale and plan of dissolution, the Company's ability to continue as a going concern while the asset sale and dissolution/liquidation are in process and other factors not within our control that may make the completion of the asset sale impossible or more difficult. 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 the Company's latest Form 10-K/Q filings and registration statements, as may be amended from time to time, and are further described in the definitive proxy statement that the Company filed with the SEC on October 16, 2024 (as may be supplemented), especially under the heading "Risk Factors." The forward-looking statements in this release speak only as of this date, and the Company 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 [email protected]
Avenova.com
Financial tables follow
NOVABAY PHARMACEUTICALS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except par value amounts) |
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September 30, 2024 |
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December 31, 2023 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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|
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Cash and cash equivalents |
|
$ |
776 |
|
|
$ |
2,924 |
|
Accounts receivable, net of allowance for credit losses ($3 at September 30, 2024 and December 31, 2023) |
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704 |
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|
680 |
|
Inventory, net of allowance for excess and obsolete inventory and lower of cost or estimated net realizable value adjustments ($126 and $264 at September 30, 2024 and December 31, 2023, respectively) |
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473 |
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564 |
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Prepaid expenses and other current assets |
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|
326 |
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|
256 |
|
Current assets, discontinued operations |
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— |
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2,730 |
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Total current assets |
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2,279 |
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7,154 |
|
Operating lease right-of-use assets |
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|
1,042 |
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|
1,296 |
|
Property and equipment, net |
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61 |
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|
87 |
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Other assets |
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|
495 |
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|
478 |
|
Other assets, discontinued operations |
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— |
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|
19 |
|
TOTAL ASSETS |
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$ |
3,877 |
|
|
$ |
9,034 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Liabilities: |
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Current liabilities: |
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Accounts payable |
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$ |
396 |
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$ |
906 |
|
Accrued liabilities |
|
|
1,147 |
|
|
|
1,169 |
|
Secured Convertible Notes, net of discounts |
|
|
— |
|
|
|
1,137 |
|
Unsecured Convertible Notes, net of discounts |
|
|
51 |
|
|
|
— |
|
Operating lease liabilities |
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|
390 |
|
|
|
368 |
|
Current liabilities, discontinued operations |
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|
— |
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|
698 |
|
Total current liabilities |
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1,984 |
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|
4,278 |
|
Warrant liabilities |
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— |
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|
|
334 |
|
Operating lease liabilities-non-current |
|
|
821 |
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|
|
1,108 |
|
Total liabilities |
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|
2,805 |
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|
5,720 |
|
Commitments and contingencies |
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|
Stockholders' equity: |
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Preferred stock, $0.01 par value; 5,000 shares authorized; |
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Series B Preferred Stock; 1 and 6 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively |
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6 |
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275 |
|
Series C Preferred Stock; 0 and 1 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively |
|
|
— |
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1,675 |
|
Common stock, $0.01 par value; 150,000 shares authorized, 4,885 and 321 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively* |
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49 |
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|
|
3 |
|
Additional paid-in capital* |
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|
183,262 |
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|
176,210 |
|
Accumulated deficit |
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|
(182,245 |
) |
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|
(174,849 |
) |
Total stockholders' equity |
|
|
1,072 |
|
|
|
3,314 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
3,877 |
|
|
$ |
9,034 |
|
* |
After giving retroactive effect to a 1-for-35 Reverse Stock Split that became effective May 30, 2024. |
NOVABAY PHARMACEUTICALS, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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(in thousands, except per share data) |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Sales: |
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Product revenue, net |
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$ |
2,424 |
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$ |
2,471 |
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$ |
7,435 |
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|
$ |
8,326 |
|
Other revenue, net |
|
|
17 |
|
|
|
10 |
|
|
|
37 |
|
|
|
28 |
|
Total sales, net |
|
|
2,441 |
|
|
|
2,481 |
|
|
|
7,472 |
|
|
|
8,354 |
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|
|
|
|
|
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|
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Cost of goods sold |
|
|
848 |
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|
|
819 |
|
|
|
2,493 |
|
|
|
3,353 |
|
Gross profit |
|
|
1,593 |
|
|
|
1,662 |
|
|
|
4,979 |
|
|
|
5,001 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Research and development |
|
|
4 |
|
|
|
4 |
|
|
|
32 |
|
|
|
36 |
|
Sales and marketing |
|
|
947 |
|
|
|
1,263 |
|
|
|
3,021 |
|
|
|
3,674 |
|
General and administrative |
|
|
1,703 |
|
|
|
1,093 |
|
|
|
5,611 |
|
|
|
4,385 |
|
Loss on divestiture of subsidiary |
|
|
— |
|
|
|
— |
|
|
|
865 |
|
|
|
— |
|
Total operating expenses |
|
|
2,654 |
|
|
|
2,360 |
|
|
|
9,529 |
|
|
|
8,095 |
|
Operating loss |
|
|
(1,061 |
) |
|
|
(698 |
) |
|
|
(4,550 |
) |
|
|
(3,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Non-cash gain on changes in fair value of warrant liabilities |
|
|
— |
|
|
|
— |
|
|
|
114 |
|
|
|
216 |
|
Non-cash (loss) gain on change in fair value of embedded derivative liability |
|
|
— |
|
|
|
— |
|
|
|
(18 |
) |
|
|
40 |
|
Accretion of interest and amortization of discounts on convertible notes |
|
|
(138 |
) |
|
|
(655 |
) |
|
|
(871 |
) |
|
|
(1,156 |
) |
Extinguishment of Secured Convertible Notes |
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|
(13 |
) |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
Other expense, net |
|
|
— |
|
|
|
— |
|
|
|
(549 |
) |
|
|
(432 |
) |
Net loss from continuing operations |
|
|
(1,212 |
) |
|
|
(1,353 |
) |
|
|
(5,887 |
) |
|
|
(4,426 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from discontinued operations |
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|
— |
|
|
|
(404 |
) |
|
|
(124 |
) |
|
|
(1,106 |
) |
Net loss |
|
|
(1,212 |
) |
|
|
(1,757 |
) |
|
|
(6,011 |
) |
|
|
(5,532 |
) |
Less: Increase to accumulated deficit due to adjustment to common stock warrant exercise price |
|
|
(1,005 |
) |
|
|
— |
|
|
|
(1,005 |
) |
|
|
— |
|
Less: Increase to accumulated deficit due to adjustment to Preferred Stock conversion price |
|
|
— |
|
|
|
— |
|
|
|
(380 |
) |
|
|
(1,996 |
) |
Net loss attributable to common stockholders |
|
$ |
(2,217 |
) |
|
$ |
(1,757 |
) |
|
$ |
(7,396 |
) |
|
$ |
(7,528 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
|
|
|
|
|
|
|
|
|
|
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|
|
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Net loss per share from continuing operations* |
|
$ |
(0.60 |
) |
|
$ |
(10.10 |
) |
|
$ |
(3.90 |
) |
|
$ |
(67.89 |
) |
Net loss per share from discontinued operations* |
|
|
— |
|
|
|
(3.01 |
) |
|
|
(0.07 |
) |
|
|
(11.69 |
) |
Net loss per share attributable to common stockholders (basic and diluted)* |
|
$ |
(0.60 |
) |
|
$ |
(13.11 |
) |
|
$ |
(3.97 |
) |
|
$ |
(79.58 |
) |
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock (basic and diluted)* |
|
|
3,710 |
|
|
|
134 |
|
|
|
1,863 |
|
|
|
95 |
|
* |
After giving retroactive effect to a 1-for-35 Reverse Stock Split that became effective May 30, 2024. |
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