SCHEDULE: Framework Ventures Boosts NovaBay Stake to 45%

Framework Ventures IV L.P. and its affiliates have increased their beneficial ownership in NovaBay Pharmaceuticals, Inc. to 45.0% and secured rights to appoint a director.

Summary

• Framework Ventures IV L.P. and its affiliates now beneficially own 56,806,080 shares of NovaBay Pharmaceuticals, Inc. Common Stock.
• This represents approximately 45.0% of the 126,173,650 shares of Common Stock outstanding as of January 16, 2026.
• The reporting persons have formed a "group" with R01 Fund LP, R01 Capital LLC, R01 Capital Manager LLC, and Michael Kazley for reporting purposes.
• Framework and R01 Fund LP purchased January 2026 Pre-Funded Warrants exercisable for shares of Common Stock at a purchase price of $0.17 per underlying share.
• These warrants are not exercisable until six months after issuance and vest on a tiered basis (20% at 6 months, 30% at 9 months, 50% at 12 months), subject to stockholder approval.
• Framework also entered into an Investors' Rights Agreement, granting them customary demand and piggyback registration rights, and the right to nominate one director to NovaBay's Board.

Sentiment

Score: 7

Explanation: The significant increase in beneficial ownership by a major investor group, coupled with board nomination rights and a capital infusion through warrant purchases, suggests a positive long-term outlook and increased investor confidence, despite the deferred exercisability of warrants.

Positives

• Significant investment by Framework Ventures and R01 Fund LP, indicating confidence in NovaBay Pharmaceuticals.
• The Investors' Rights Agreement provides Framework with demand and piggyback registration rights, which can facilitate future liquidity for their holdings.
• Framework's right to nominate one director to the Board suggests increased investor oversight and potential strategic input.

Negatives

• The pre-funded warrants are not immediately exercisable and require stockholder approval for full vesting, introducing a potential delay or hurdle.
• The purchase price of $0.17 per underlying share for the warrants could be seen as a low valuation depending on the current market price.

Risks

• The full exercisability and vesting of the January 2026 Pre-Funded Warrants are subject to stockholder approval, which is not guaranteed.
• The shares underlying the warrants are not currently deemed beneficially owned, meaning the full impact of this investment on the outstanding share count and voting power is deferred.

Future Outlook

The pre-funded warrants will become exercisable on a tiered basis over 6, 9, and 12 months, subject to stockholder approval. Framework Ventures will also have the right to nominate one director to the Board.

Industry Context

This filing indicates a significant increase in a major investor's stake, which can be a sign of confidence in the company's future prospects or a move towards greater influence/control. Such large stakes often precede strategic shifts or increased activism, especially when coupled with board nomination rights.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased share price stability or strategic direction due to a major investor's involvement and board representation. Dilution from future warrant exercise is a possibility.
• Company Management: Increased oversight and potential strategic input from a major investor on the board.

Next Steps

• Stockholder approval for the full vesting of the January 2026 Pre-Funded Warrants.
• Framework Ventures to exercise its right to nominate one director to the Board.
• Warrants becoming exercisable on a tiered basis: 20% after 6 months, 30% after 9 months, and 50% after 12 months from January 16, 2026.

Key Dates

Recommendation

While the significant investment and board representation by Framework Ventures indicate confidence and potential for strategic improvements, the deferred exercisability of warrants and the need for stockholder approval introduce some uncertainty. Investors should hold to observe the integration of the new director and the company's performance post-investment before making further decisions.

Keywords

NovaBay Pharmaceuticals, Framework Ventures, Schedule 13D, Beneficial Ownership, Pre-Funded Warrants, Investors' Rights Agreement, Corporate Governance, Equity Investment, NBY