NovaBay(US:NBY)2021-03-25 20:10Product Performance - Avenova, the company's leading product, achieved record unit sales in 2020 despite the COVID-19 pandemic, contributing significantly to revenue growth[130]. - Over-the-counter Avenova was launched in Q2 2019, expanding the addressable market and allowing consumers to purchase without a prescription[131]. - Avenova is available through four primary distribution channels, including direct-to-consumer, retail pharmacies, partner pharmacies, and physician dispensed channels[130]. - Product revenue for the year ended December 31, 2020, was $9,916,000, representing a 51.5% increase from $6,556,000 in 2019[210]. - Avenova revenue from major distribution partners via Amazon increased to 50% in 2020 from 15% in 2019[233]. - The company generated revenue primarily from sales of Avenova, with significant sales through online platforms such as Amazon.com and Walmart.com[229]. Financial Performance - Total sales, net, rose by $3.3 million, or 51%, to $9.9 million for the year ended December 31, 2020, compared to $6.6 million in 2019[160]. - Gross profit increased by $1.1 million, or 23%, to $6.0 million for the year ended December 31, 2020, primarily due to KN95 Mask sales[164]. - The company reported a net loss of $11.0 million for the year ended December 31, 2020, compared to a net loss of $9.7 million in 2019, reflecting a 14% increase in loss[160]. - The company's net loss for the year ended December 31, 2020, was $11,039,000, compared to a net loss of $9,658,000 in 2019[216]. - Basic EPS for 2020 was $(0.31), an improvement from $(0.48) in 2019, while diluted EPS also stood at $(0.31) for 2020 compared to $(0.48) in 2019[264]. - The company reported a net loss attributable to common stockholders of $11,039,000 for the year ended December 31, 2020, compared to a net loss of $10,487,000 in 2019, representing an increase of 5.2%[264]. Expenses and Costs - Cost of goods sold increased by $2.2 million, or 128%, to $4.0 million for the year ended December 31, 2020, driven by the cost of KN95 Masks sold[163]. - Research and development expenses rose by $0.1 million, or 55%, to $0.3 million for the year ended December 31, 2020[165]. - Sales and marketing expenses decreased by $2.6 million, or 30%, to $6.2 million for the year ended December 31, 2020, due to reduced sales representative headcount and lower travel expenses[167]. - General and administrative expenses increased by $0.6 million, or 12%, to $5.9 million for the year ended December 31, 2020, primarily due to increased legal expenses[168]. - Operating expenses totaled $12,390,000 for 2020, down from $14,261,000 in 2019, indicating a reduction of 13.1%[210]. Cash Flow and Liquidity - Net cash used in operating activities was $4.7 million for the year ended December 31, 2020, compared to $7.9 million in 2019[175]. - Cash provided by financing activities was $9.8 million for the year ended December 31, 2020, primarily from the ATM program and warrant exercises[178]. - Cash and cash equivalents rose to $11,952,000 as of December 31, 2020, up from $6,937,000 in 2019, a 72.5% increase[209]. - The company expects its existing cash and cash equivalents to be sufficient to meet planned operating expenses at least through March 25, 2022[222]. Inventory and Returns - The company recorded a $0.4 million increase in its accrual for future returns based on updated return rate assumptions from historical data[146]. - The company recognized a $0.4 million increase in its accrual for future returns based on updated historical data for product returns[248]. - Total inventory, net, increased to $608,000 in 2020 from $492,000 in 2019, reflecting a rise in finished goods inventory[277]. - The company recorded an allowance for excess and obsolete inventory of $236 thousand as of December 31, 2020, down from $247 thousand in 2019[238]. Marketing and Advertising - The company has made significant investments in digital marketing and public relations to promote Avenova directly to consumers[133]. - Advertising expenses rose to $1.7 million in 2020, compared to $0.5 million in 2019 and $0 in 2018[253]. Debt and Financing - The company repaid a $1.0 million promissory note to Pioneer Pharma in May 2020, utilizing proceeds from an at-the-market offering[298]. - The company issued a Secured Convertible Promissory Note with a principal amount of $2.2 million, which was fully repaid in Q3 2020[301]. - Interest expense related to the Convertible Note was $200,000 for the year ended December 31, 2020, down from $800,000 in 2019[303]. Research and Development - The company’s research and development expenses were $285,000 for 2020, up from $184,000 in 2019, indicating a 55.4% increase[210]. - Research and development costs are charged to expense as incurred, including costs associated with FDA submissions[251]. Lease and Property - Operating lease costs decreased to $826,000 in 2020 from $1,130,000 in 2019, a reduction of approximately 27%[292]. - The net lease cost for 2020 was $405,000, down from $498,000 in 2019, indicating a decrease of about 19%[292]. - Future minimum lease payments total $542,000 as of December 31, 2020, with $454,000 due in 2021[293]. Stock and Shareholder Information - The weighted-average shares of common stock outstanding used in computing net loss per share (basic) increased to 35,076,000 in 2020 from 21,641,000 in 2019, a growth of 62.0%[210]. - The Company increased the number of authorized shares of common stock from 50,000,000 to 75,000,000 in Q2 2020[325].