NovaBay Pharmaceuticals, Inc. has reported significant changes in its financial performance and strategic direction in its latest 10-K filing for the fiscal year ending December 31, 2025. The company recorded a net loss of $33.2 million from continuing operations, a substantial increase from a loss of $8.8 million in the previous year. This loss was primarily driven by a non-cash loss of $24.5 million related to changes in the fair value of warrant liabilities. Total operating expenses rose to $8.4 million, up from $7.4 million in 2024, reflecting increased legal costs associated with strategic initiatives.
In a strategic pivot, NovaBay has transitioned from its legacy pharmaceutical operations, which included eyecare and wound care products, to focus on acquiring and holding digital assets. This shift was marked by the completion of the Avenova Asset Divestiture and the PhaseOne Divestiture in early 2025, which significantly reduced the company's revenue-generating operations. The Avenova divestiture alone generated approximately $10.6 million in net proceeds, while the PhaseOne divestiture added $0.5 million. The company has since adopted a capital allocation strategy aimed at participating in decentralized financial networks, with a particular focus on acquiring SKY tokens, the protocol token of the Sky Protocol.
As of March 16, 2026, NovaBay held approximately 2.1 billion SKY tokens, valued at around $161.4 million. The company has engaged in significant digital asset transactions, including a January 2026 private placement that raised approximately $137.4 million through the issuance of pre-funded warrants and the acquisition of additional SKY tokens. This capital is intended to support the company's digital asset strategy, which is expected to generate revenue through staking and other protocol-level activities.
The company’s operational metrics have also changed dramatically, with a reduced employee count of just four as of December 31, 2025, down from previous levels due to the divestitures. The focus on digital assets has led to a significant reduction in traditional operational activities, with the company no longer conducting research and development in its former pharmaceutical areas. The management believes that the existing cash and cash equivalents, along with proceeds from recent financing activities, will be sufficient to fund operations through at least March 19, 2027.
Looking ahead, NovaBay's management has expressed optimism about the potential for its digital asset strategy to enhance shareholder value, although they acknowledge the inherent risks associated with market volatility and regulatory uncertainties in the digital asset space. The company is actively monitoring these developments and may adjust its strategy as necessary to navigate the evolving landscape of blockchain-based assets.
About NovaBay Pharmaceuticals, Inc.
NovaBay Pharmaceuticals is a biopharmaceutical company focused on developing and commercializing proprietary antimicrobial products, primarily hypochlorous acid-based solutions for eye care, wound care, and dermatology. Its core offerings included Avenova eye spray and wound care products. The company operates in healthcare markets targeting consumers and medical professionals, emphasizing non-toxic, scientifically proven solutions. Currently, it is winding down operations, pursuing liquidation, or exploring strategic alternatives.
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