NovaBay(US:NBY)2024-08-13 20:11Financial Performance - Net losses for the three months ended June 30, 2024, were $1.6 million, compared to $4.0 million for the same period in 2023; for the six months ended June 30, 2024, net losses were $5.2 million, down from $5.8 million in 2023[201]. - The company incurred a loss of $0.9 million from the divestiture of DERMAdoctor for the six months ended June 30, 2024, with no comparable activity in the prior year[225]. - Net loss from continuing operations was $1.6 million for the three months ended June 30, 2024, compared to a net loss of $1.7 million for the same period in 2023, representing an improvement of $0.1 million or 8%[210]. - The company expects its 2024 expenses to exceed revenues, continuing to incur operating losses and negative cash flows until revenues support ongoing growth[230]. Revenue and Sales - Product revenue decreased by $1.1 million, or 32%, to $2.4 million for the three months ended June 30, 2024, compared to $3.5 million for the same period in 2023[213]. - Total sales decreased by $1.1 million, or 32%, to $2.4 million for the three months ended June 30, 2024, from $3.5 million in the prior year[213]. - Product revenue for the six months ended June 30, 2024, decreased by $0.8 million, or 14%, to $5.0 million from $5.9 million in the same period in 2023[221]. Costs and Expenses - Cost of goods sold decreased by $1.0 million, or 55%, to $0.8 million for the three months ended June 30, 2024, from $1.8 million for the same period in 2023[214]. - Cost of goods sold for the six months ended June 30, 2024, decreased by $0.9 million, or 35%, to $1.6 million from $2.5 million in the prior year[222]. - Sales and marketing expenses decreased by $0.2 million, or 13%, to $1.0 million for the three months ended June 30, 2024, from $1.2 million in the prior year[215]. - General and administrative expenses remained consistent at $1.6 million for the three months ended June 30, 2024, compared to $1.6 million for the same period in 2023[216]. - General and administrative expenses increased by $0.6 million, or 19%, to $3.9 million for the six months ended June 30, 2024, primarily due to increased legal costs[224]. Assets and Liabilities - As of June 30, 2024, the company had an accumulated deficit of $180.0 million, total current assets of $2.3 million, and total assets of $3.9 million[201]. - Cash and cash equivalents decreased to $0.8 million as of June 30, 2024, down from $2.9 million as of December 31, 2023[229]. - The company had net operating loss carryforwards of $139.3 million for federal income tax purposes as of December 31, 2023[237]. Compliance and Regulatory - The company received notifications from NYSE American regarding non-compliance with stockholders' equity requirements, reporting only $160 thousand as of March 31, 2024[198]. - The company has until October 18, 2025, to regain compliance with NYSE American's listing standards, following acceptance of its compliance plan[199]. Strategic Initiatives - The company expects to grow commercial sales of Avenova branded products through expanded domestic market penetration and partnerships with other eyecare product providers[201]. - The company is evaluating plans to address liquidity needs, including raising additional capital and potential strategic transactions[231]. Product Information - Avenova® Antimicrobial Lid and Lash Solution is cleared by the FDA and is available through online channels and eyecare professionals for treating blepharitis and dry eye disease[190]. - The company manufactures and sells hypochlorous acid products for wound care under the NeutroPhase and PhaseOne brands, targeting surgical procedures and various injuries[191]. Cash Flow - Net cash used in operating activities from continuing operations was $2.2 million for the six months ended June 30, 2024, compared to $2.9 million for the same period in 2023[232][233]. - Net cash provided by investing activities was $1.1 million for the six months ended June 30, 2024, primarily from the DERMAdoctor Divestiture[234]. - Net cash used in financing activities was $1.1 million for the six months ended June 30, 2024, including repayment of $1.2 million for the Monthly Redemption on Secured Convertible Notes[236]. Issuance Costs - The company incurred total issuance costs of $130 thousand related to the 2024 Subsidiary Guarantee Termination, with $19 thousand allocated to Unsecured Convertible Notes[196]. Fair Value Changes - Non-cash gain on changes in fair value of warrant liabilities was $114 thousand for the six months ended June 30, 2024, compared to a gain of $216 thousand for the same period in 2023[226]. - Non-cash loss on changes in fair value of embedded derivative liability was $18 thousand for the six months ended June 30, 2024, compared to a gain of $40 thousand for the same period in 2023[227]. - Accretion of interest and amortization of discounts on convertible notes increased to $0.7 million for the six months ended June 30, 2024, from $0.5 million for the same period in 2023[228].