NovaBay Pharmaceuticals’ private placement agreements may raise US$5.3 million
12 Sep 2022 --- NovaBay Pharmaceuticals is entering into a Securities Purchase Agreement with select commercial investors in regards to a private placement of 3,250 shares of a newly created Series C non-voting convertible preferred stock at a price of US$1,000 per share.
The company expects to receive a gross profit of about US$3.25 million from the private placement, which is expected to close in the fourth quarter of 2022.
The biopharmaceutical company creates products for the eye care industry, and its current priority is commercializing prescription products for managing eyelid and lash hygiene in the US.
NovaBay plans to use the proceeds from this offering for working capital and general corporate purposes. Ladenburg Thalmann investment banking company is acting as the exclusive placement agent for the private placement and as a warrant solicitation agent for the warrant reprice transactions.
The governing documents and legal requirements will be reviewed in a meeting of stockholders to take proper corporate action to close the private placement. This will have a reverse effect of splitting its common stock.
After the closing of the private placement, all of the Series C Preferred Stock and Series A-1 Warrants will be immediately convertible and all of the Series A-2 Warrants will be immediately exercisable. They will expire six years, eighteen months and six months after the closing date, respectively.
The company expects to receive a gross profit of about US$3.25 million from the private placement.Repricing warrants
Novabay entered into warrant reprice transactions with a certain number of its existing warrant holders to amend previously issued company common stock purchase warrants to reduce their exercise price, provide an opportunity to make an initial cash exercise and for such exercising holders to receive new company common stock purchase warrants.
The participants in the warrant reprice transaction include the holders of Company warrants that were exercised in July 2020 reprice transaction and holders of Company warrants that were issued in November 2021 private placement.
By letter agreement, dated September 9, 2022, the company provided the 2020 and 2021 investors holding 2020 and 2021 original warrants with the opportunity to amend their respective warrants.
The amended warrants will not be effective until six months have passed and with the approval of the shareholder. The terms of the written agreements also provided participants with the option to exercise their respective warrants in cash at the reduced exercise price and to receive a new common stock purchase warrant.
Furthermore, the new warrants will initially be exercisable by shareholders on the six-month anniversary following the date of issue and the date of shareholder approval. In addition, the new warrants have an exercise period of six years and an exercise price of US$0.18. Therefore, the company will receive aggregate first-year proceeds of approximately US$2 million.
Scientifically-backed skincare
Earlier this year, the biopharmaceutical company improved its Kakadu C and Calm Cool + Corrected product lines with anti-aging and skin brightening ingredients to reduce fine lines, discoloration and pore size.
Dr. Audrey Kunin, M.D., chief product officer and a board-certified dermatologist at NovaBay elaborated that the Kakadu C 1% Retinol with 12% Vitamin C Ferulic Acid and E Complex is a clinically concentrated, powerful combination of ingredients.
“Our use of the Kakadu plum, believed to be the world’s most concentrated natural source of vitamin C, takes this unique formulation to another level,” she touted.
Edited by Mieke Meintjes
