NovaBay(NBY) - 2025 Q4 - Annual Report

Financial Performance - The company reported a net loss from continuing operations of $33.2 million for the year ended December 31, 2025, compared to a net loss of $8.8 million in 2024, representing a 280% increase in losses [262]. - Total operating expenses increased by 14% to $8.4 million in 2025, up from $7.4 million in 2024 [262]. - The company recorded a net loss from continuing operations of $33.2 million for the year ended December 31, 2025, compared to a net loss of $8.8 million for 2024 [269]. - Net cash used in operating activities from continuing operations was $8.4 million for the year ended December 31, 2025, compared to $7.5 million for 2024 [272][273]. - The company incurred a non-cash loss of $24.5 million related to changes in the fair value of warrant liabilities for the year ended December 31, 2025 [266]. - The company reported a non-cash loss of $24.5 million on changes in the fair value of warrant liability, a significant increase compared to a gain of $0.1 million in 2024 [262]. Cash and Liquidity - Cash and cash equivalents increased to $8.0 million as of December 31, 2025, up from $0.4 million at the end of 2024 [269]. - The company anticipates that existing cash and cash equivalents will be sufficient to fund planned operating expenses at least through March 19, 2027 [250]. - The company expects existing cash and cash equivalents, along with anticipated gross cash proceeds of approximately $25.0 million from a private placement, to fund operating expenses at least through March 19, 2027 [270]. - Net cash provided by financing activities from continuing operations was $4.6 million for the year ended December 31, 2025, compared to $1.5 million for 2024 [275][276]. Asset Management - The company completed a January 2026 Private Placement, issuing pre-funded warrants for approximately $25.0 million in cash, 35,000,000 USDT, and 16,000,000 USDS stablecoins, totaling an aggregate value of approximately $51.0 million [239]. - The company deployed approximately $70.7 million in cash to acquire approximately 1.1 billion SKY tokens following the January 2026 Private Placement [251]. - The company deployed approximately $70.7 million in cash to acquire about 1.1 billion SKY tokens following the January 2026 Private Placement [271]. - The company recorded an impairment of $854 thousand related to right-of-use assets and fixed assets due to strategic realignment [265]. - As of March 16, 2026, the company held approximately 2.1 billion SKY tokens, a network-native digital asset [241]. Strategic Initiatives - The company has not established a specific target allocation for SKY or other digital assets, with decisions driven by market conditions and risk controls [240]. - The company completed several divestitures, including the Avenova Asset and PhaseOne Divestitures, which are reflected as discontinued operations in the financial statements [249]. - The company is exposed to market price volatility associated with digital assets as it implements its digital asset strategy [287]. Expenses - General and administrative expenses rose by 3% to $7.6 million in 2025, primarily due to higher legal costs associated with strategic initiatives [264]. - The company had federal and state net operating loss carryforwards of approximately $2.9 million and $348 thousand, respectively, as of December 31, 2025 [278].