NovaBay Pharmaceuticals Reports $7.67 Million Net Income, Evaluates Potential Dissolution

NovaBay Pharmaceuticals, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending March 31, 2025. The company recorded a net income of $7.67 million, a substantial improvement compared to a net loss of $3.21 million in the same period last year. This positive shift was primarily driven by a gain of $10.7 million from the divestiture of its Avenova eyecare business, which closed on January 17, 2025. The company’s total revenue from continuing operations was $433,000, down from $2.37 million in the prior year, reflecting the impact of its strategic divestitures.

In terms of operational metrics, NovaBay's total assets increased to $9.87 million as of March 31, 2025, compared to $3.42 million at the end of 2024. This growth was largely attributed to the cash proceeds from the Avenova divestiture, which provided $11.5 million, offset by the repayment of a $0.5 million bridge loan. The company’s cash and cash equivalents rose significantly to $8.47 million from $430,000 at the end of the previous fiscal year, indicating improved liquidity.

Strategically, NovaBay has undergone a series of divestitures, including the sale of its wound care trademarks for $500,000 and the DERMAdoctor skincare business for $1.1 million. These transactions have led to a significant reduction in the company’s operational scope, with the board now evaluating options for a potential voluntary dissolution. Shareholders approved this dissolution plan at a special meeting on April 16, 2025, although the board retains discretion on whether to proceed.

The company’s operational focus has shifted, with expectations to generate revenue primarily from manufacturing wound care products under existing contracts until at least June 30, 2025. NovaBay's management believes that its current cash reserves will be sufficient to cover operational expenses through May 15, 2026. However, uncertainties regarding future strategic directions and potential liabilities remain, which could affect cash flow and operational stability.

Overall, NovaBay's recent financial performance reflects a transformative period marked by significant asset sales and a strategic pivot towards potential dissolution. The company is now positioned to navigate its remaining obligations while exploring alternative strategic options that may arise in the near future.