8-K: NovaBay Announces 1-for-5 Reverse Stock Split

NovaBay Pharmaceuticals will implement a 1-for-5 reverse stock split to meet NYSE American listing requirements, effective February 20, 2026.

Summary

• NovaBay Pharmaceuticals, Inc. (NBY) announced a 1-for-5 reverse stock split of its common stock.
• The Board of Directors approved the split on February 11, 2026, following stockholder approval at the annual meeting on October 16, 2025.
• The reverse stock split is anticipated to be effective at 4:15 p.m. New York City time on Friday, February 20, 2026.
• Trading on a split-adjusted basis is expected to begin on Monday, February 23, 2026.
• The split will combine every 5 shares of outstanding common stock into 1 share.
• The number of outstanding shares will decrease from approximately 130,623,400 to approximately 26,124,680 (prior to rounding).
• The company will issue an additional whole share to holders who would otherwise receive a fractional share.
• The reverse stock split will not reduce authorized shares, change par values, or modify voting rights.
• All outstanding options, restricted stock awards, warrants, preferred stock, and convertible debentures will be adjusted.
• A new CUSIP number, 66987P 508, has been assigned, but the trading symbol NBY will remain unchanged.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a necessary but generally negative corporate action, addressing a technical listing requirement rather than signaling fundamental business strength. The strategic pivot to digital assets introduces new uncertainties.

Positives

• The reverse stock split is expected to increase the per-share price of common stock, enabling compliance with NYSE American's continued-listing requirement.
• The issuance of an additional whole share for fractional shares avoids cash-out issues for small shareholders.

Negatives

• A reverse stock split often signals a company's struggle to maintain its stock price and meet exchange listing requirements, which can be perceived negatively by investors.
• The increase in shares available for issuance relative to outstanding shares could facilitate future dilution if new shares are issued.

Risks

• The impact of the reverse stock split may cause actual results or achievements to be materially different and adverse from those expressed in or implied by forward-looking statements.
• New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties.
• Other risks relating to the Company's business are detailed in its latest Form 10-Q/K filings, Exhibit 99.1 to the Form 8-K filed on January 16, 2026, and the definitive proxy statement filed on September 23, 2025, specifically under "Risk Factors General Risks Related to the Reverse Stock Split Proposal."

Future Outlook

The company expects the reverse stock split to increase its per-share price, enabling compliance with NYSE American's continued-listing requirement. The company also recently completed a business realignment to focus on acquiring digital assets for exposure to open digital financial networks.

Management Comments

• "The Company anticipates that the 1-for-5 reverse stock split will be effective as of 4:15 p.m. New York City time on Friday, February 20, 2026, and that the Company's common stock will begin trading on a split-adjusted basis on Monday, February 23, 2026."
• "The Company expects that the reverse stock split will increase the per-share price of its common stock, which the Company believes will enable it to comply with the NYSE American's continued-listing requirement relating to the price of its common stock."

Industry Context

StockSavvy.ai notes that reverse stock splits are a common strategy for companies facing delisting threats due to low share prices. While it addresses a technical listing requirement, it does not fundamentally change the company's market capitalization or underlying business value. The shift in NovaBay's business focus from traditional healthcare products to digital assets in early 2026 indicates a significant strategic pivot, placing it in a rapidly evolving and competitive sector, where maintaining exchange listing is crucial for investor access and liquidity.

Comparison to Industry Standards

• Reverse stock splits are a standard corporate action used by companies across various industries, such as biotech (e.g., Aeterna Zentaris Inc. (AEZS) or Sorrento Therapeutics (SRNE)) or small-cap tech firms, when their stock price falls below exchange minimums (e.g., $1.00 for NYSE American).
• The 1-for-5 ratio is a moderate split, less aggressive than some 1-for-10 or 1-for-20 splits seen in companies facing more severe price erosion, suggesting the company aims for a modest price increase to regain compliance.
• The strategy of issuing whole shares for fractional shares is a common practice to simplify administration and avoid small cash payments, aligning with industry norms.

Corporate Governance

Stakeholder Impact

• Shareholders: Will hold fewer shares but at a proportionally higher price per share, maintaining the same overall percentage ownership (except for fractional share rounding up). The action aims to prevent delisting, preserving market access.
• Employees: No direct impact mentioned, but a struggling stock price and strategic pivot could create uncertainty.
• Customers/Suppliers: No direct impact mentioned from the stock split itself. The business realignment to digital assets would be more relevant to these stakeholders.
• Creditors: No direct impact mentioned.

Next Steps

• Common stock to begin trading on a split-adjusted basis on Monday, February 23, 2026.
• Equiniti Trust Company, LLC will provide instructions to stockholders with physical certificates regarding the process for exchanging pre-split stock certificates for post-split shares.

Key Dates

Recommendation

While the reverse stock split addresses a critical listing compliance issue, preventing potential delisting, it does not fundamentally improve the company's underlying business performance. The recent strategic pivot to digital assets introduces significant uncertainty and requires time to assess its potential success. Investors should hold to observe the impact of the new strategy and the company's ability to generate sustainable value in its new focus area, rather than reacting solely to a technical stock adjustment.

Keywords

NovaBay Pharmaceuticals, NBY, Reverse Stock Split, NYSE American, Listing Compliance, Stock Price, Corporate Action, Digital Assets, Eyecare, Wound Care, Skin Care