NovaBay Pharmaceuticals Reports Increased Net Loss and Significant Cash Reserves Following Strategic Divestitures

NovaBay Pharmaceuticals, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending June 30, 2025. The company recorded a net loss of $1.9 million, compared to a net loss of $1.6 million in the same period last year. The increase in loss was attributed to higher general and administrative expenses, which rose by 17% to $1.9 million, primarily due to costs associated with strategic initiatives following the divestiture of its eyecare and skincare businesses. The company’s total operating expenses for the quarter were $1.9 million, up from $1.6 million in the prior year.

In terms of liquidity, NovaBay's cash and cash equivalents increased significantly to $5.3 million as of June 30, 2025, compared to $430,000 at the end of 2024. This increase was largely due to proceeds from the divestiture of its Avenova and PhaseOne assets, which generated approximately $10.5 million and $0.5 million, respectively. The company also reported a total asset value of $6.9 million, up from $3.4 million at the end of the previous fiscal year, reflecting the cash influx from these transactions.

Strategically, NovaBay has undergone substantial restructuring, having divested its primary business segments, including the Avenova eyecare brand and the PhaseOne wound care trademarks. The Avenova Asset Divestiture was completed on January 17, 2025, for a base purchase price of $11.5 million, while the PhaseOne Divestiture occurred shortly thereafter on January 8, 2025, for $500,000. These divestitures have led to a significant reduction in the company's operational scope, with future revenue expected to primarily come from the manufacture of wound care products.

The company is currently evaluating its strategic options, including a potential voluntary dissolution, which was approved by stockholders in April 2025. However, the board retains discretion on whether to proceed with this plan or explore alternative strategic transactions. NovaBay's management believes that its existing cash reserves will be sufficient to cover operational expenses through at least August 2026, although uncertainties regarding future claims and liabilities remain.

Overall, NovaBay's financial performance reflects the impact of its recent strategic decisions, with a focus on managing costs and exploring new opportunities following the divestitures. The company continues to assess its future direction while maintaining a cautious outlook on its operational viability.