Maxim is placement agent; deal also includes sale to insiders
By Susanna Moon
Chicago, March 4 – NovaBay Pharmaceuticals, Inc. said it priced about $4.9 million private placement of units of stock and warrants at $0.50 each. The deal includes a sale to insiders at $0.60 each.
Investors have agreed to purchase 9,273,333 units of one common share and two warrants to purchase an additional one and three-quarters share of common stock, according to a company press release.
As required by NYSE regulations, NovaBay’s largest shareholder, China Pioneer Pharma, will purchase the units at market cost of $0.60, the release said. Also, NovaBay’s chief executive officer Ron Najafi and board member Mark Sieczkarek will also purchase units at $0.60.
The first warrant, totaling rights to 9,273,333 shares, is exercisable beginning six months after issue for 15 months, allows the holder to purchase one share of common stock at a price of $0.60 per share, and includes a provision for forced conversion if the common stock trades at or above $1.10 for 10 out of 20 consecutive trading days.
The second warrant, totaling rights to 6,955,000 shares, allows the holder to purchase three-quarters of one share of common stock at a price of $0.65 per share and is exercisable beginning six months after issue for 5.5 years.
The strike price for the first warrant is a 1.7% premium to the company’s closing price on March 3, and the strike price for the second warrant is a 10.17% premium.
Maxim Group LLC is the placement agent.
Proceeds will be used for working capital and general corporate purposes, including research and development, clinical trials and selling, and general and administrative expenses, including sales and marketing expenses related to launching its Avenova product across the United States.
NovaBay Pharmaceuticals is a clinical-stage biopharmaceutical company based in Emeryville, Calif.
| Issuer: | NovaBay Pharmaceuticals
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| Issue: | Units of one common share and two warrants to purchase an additional one and three-quarters share of common stock
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| Amount: | $4.9 million (approximate)
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| Units: | 9,273,333
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| Price: | $0.50
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| Warrants: | For 9,273,333 shares and for 6,955,000 shares
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| Warrant expiration: | For 15 months and for 5.5 years
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| Warrant strike price: | $0.60, $0.65
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| Placement agent: | Maxim Group LLC
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| Investors: | China Pioneer Pharma, Ron Najafi and Mark Sieczkarek for $1,754,000
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| Pricing date: | March 4
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| Settlement date: | March 6
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| Stock symbol: | NYSE MKT: NBY
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| Stock price: | $0.59 at close March 4
|
| Market capitalization: | $30.28 million
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