NovaBay completed a significant private placement in January 2026, raising approximately $137.4 million through pre-funded warrants, including cash and digital assets. The company has deployed substantial cash to acquire additional SKY tokens, reinforcing its capital allocation strategy focused on digital assets.

• On January 16, 2026, NovaBay completed a private placement issuing pre-funded warrants for approximately 167.5 million shares, raising $25 million in cash and approximately $112.4 million in SKY tokens and stablecoins to support its digital asset acquisition strategy [S1].
• Following the private placement, the company held approximately 943.6 million SKY tokens and has since acquired an additional 1.1 billion SKY tokens using approximately $70.7 million in cash through March 16, 2026 [S1].
• NovaBay entered into an ATM Sales Agreement on January 20, 2026, allowing it to offer and sell shares of common stock to raise up to $100 million, providing additional liquidity options [S1].
• The company continues to monitor and manage risks related to its digital asset holdings, including regulatory, operational, and counterparty risks, as part of its ongoing capital allocation strategy [S1].

NovaBay's strategic shift to a blockchain-based asset treasury company positions it to participate in emerging decentralized financial networks through its holdings of SKY tokens. The company's significant digital asset portfolio and capital raise provide resources to pursue revenue-generating opportunities within the Sky Protocol ecosystem. Its diversified custodial arrangements and risk management practices aim to mitigate operational and counterparty risks. If the Sky Protocol and associated digital assets gain broader adoption and generate protocol-level revenues, NovaBay could benefit from economic participation and potential capital appreciation inherent in its holdings.

The company's pivot to a digital asset treasury strategy exposes it to significant risks including market volatility, liquidity constraints, regulatory uncertainty, and counterparty risks related to custodians and blockchain protocols. The legacy pharmaceutical business has been largely divested, resulting in minimal ongoing revenue and a net loss position. The digital asset market's evolving regulatory landscape and operational challenges may adversely impact NovaBay's financial results and asset valuations. Additionally, the company's limited employee base and reliance on third-party service providers may constrain its ability to manage and grow its new business effectively.

NovaBay's moat is limited given its recent strategic pivot away from pharmaceutical product development and sales toward a digital asset treasury model. The company leverages its early and significant position in SKY tokens and its established custodial relationships with reputable service providers to manage digital asset custody risks. However, the digital asset market is characterized by volatility, evolving regulatory frameworks, and operational risks, which may challenge the sustainability and competitive advantage of this new business model. The company's prior pharmaceutical intellectual property and product portfolio have been largely divested, reducing barriers to entry in its former markets.

• Market Volatility and Liquidity Risk: The value of NovaBay's digital asset holdings, primarily SKY tokens, is subject to significant price volatility and limited liquidity, which may impact the company's financial condition and ability to monetize assets.
• Counterparty and Custodial Risk: The company relies on third-party custodians Fireblocks and Kraken to securely store its digital assets. Failures or insolvency of these custodians could result in loss or restricted access to assets.
• Regulatory and Legal Uncertainty: Evolving and overlapping regulatory frameworks for digital assets and blockchain networks may affect trading venues, custodians, and NovaBay's ability to operate its digital asset strategy.
• Operational and Cybersecurity Risks: Risks related to cybersecurity breaches, operational failures, and technology vulnerabilities inherent in blockchain protocols and digital asset custody could adversely affect the company.
• Legacy Business Liabilities: Although legacy pharmaceutical operations have been divested, NovaBay remains liable for pre-closing liabilities and contingent claims that could materially affect its financial condition.

• NovaBay Pharmaceuticals, Inc. has significantly reduced its legacy pharmaceutical business operations and shifted to a capital allocation strategy focused on acquiring digital assets that provide exposure to economic participation within open digital financial networks.
• Historically, NovaBay developed and sold eyecare, wound care, and skin care products but has divested these businesses through asset sales completed by early 2025.
• The company completed a private placement on January 16, 2026, raising approximately $137.4 million through pre-funded warrants, receiving $25 million in cash and approximately $112.4 million in SKY tokens and stablecoins.
• NovaBay's digital asset strategy currently focuses on acquiring and holding SKY tokens, the protocol token of the decentralized Sky network, as its sole approved digital asset.
• The company held approximately 943.6 million SKY tokens at the closing of the private placement and has since acquired additional SKY tokens, deploying approximately $70.7 million in cash to acquire about 1.1 billion SKY tokens through March 16, 2026.
• NovaBay holds its SKY tokens primarily in custody accounts with U.S.-based service providers Fireblocks and Kraken, employing multiple custodial arrangements to diversify counterparty risk.
• The company has established internal controls, risk management policies, and ongoing monitoring of custodial service providers, including reviewing third-party certifications and audit reports.
• NovaBay's liquidity as of December 31, 2025, included $7.958 million in cash and cash equivalents, current assets of $8.675 million, and current liabilities of $1.142 million, resulting in a current ratio of 7.6 and a cash ratio of 6.97.
• The company reported a net loss of $22.141 million and basic earnings per share of -$3.80 for the fiscal year ended December 31, 2025.
• NovaBay's legacy pharmaceutical operations have been substantially wound down, including the exit from the China NeutroPhase product line in October 2025, with minimal remaining revenue from wound care products.
• The company has four employees as of December 31, 2025, with two full-time and two part-time employees, and considers its employee relations good.
• NovaBay is subject to evolving regulatory, legal, and accounting considerations related to its blockchain-based asset holdings and digital asset strategy.
• The company faces risks related to market volatility, liquidity constraints, counterparty risk with custodians, regulatory changes, and operational risks inherent in digital asset custody and blockchain protocols.
• NovaBay has completed multiple financing transactions in 2025 and early 2026 to support its new strategic direction and capital allocation strategy.
• The company has contractual agreements with investors that grant consent rights over material amendments to its digital asset strategy for a defined period.
• NovaBay's financial figures and liquidity ratios are summarized from the latest available SEC filings and are provided for informational purposes only — not financial advice.