UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

NOVABAY PHARMACEUTICALS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

NOVABAY PHARMACEUTICALS, INC.

2000 Powell Street, Suite 1150

Emeryville, California 94608

Notice of 2025 Annual Meeting of Stockholders

To the Stockholders of NovaBay Pharmaceuticals, Inc.:

You are cordially invited to attend the 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of NovaBay Pharmaceuticals, Inc., a Delaware corporation (“NovaBay,” the “Company”, “we,” “our” and “us”). Stockholders will be able to participate in the Annual Meeting and to vote and submit questions during the virtual meeting by visiting www.virtualshareholdermeeting.com/NBY2025. The Annual Meeting will be held for the purpose of stockholders voting upon the following proposals, each of which are described in the accompanying proxy statement (“Proxy Statement”):

Proposal One (Election of Directors), Proposal Two (Say-on-Pay), Proposal Three (Say-on-Frequency), Proposal Four (Ratification of the Selection of the Independent Registered Public Accounting Firm), Proposal Five (NYSE American Proposal), Proposal Six (2017 Omnibus Plan Proposal), Proposal Seven (Director Equity Consideration Proposal), Proposal Eight (Reverse Stock Split Proposal), Proposal Nine (Common Stock Authorization Proposal), Proposal Ten (Preferred Stock Authorization Proposal) and Proposal Eleven (Adjournment) are collectively referred to as the “Proposals”.

On August 19, 2025, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with David E. Lazar (“Mr. Lazar”) that provides for an investment by Mr. Lazar in two separate closings of up to $6.0 million in the aggregate in exchange for newly issued shares of Company preferred stock (the “Investment Transaction”). On the date the Purchase Agreement was entered into, Mr. Lazar completed the purchase of 481,250 shares of the Company’s Series D non-voting convertible preferred stock, par value $0.01 per share (the “Series D Preferred Stock”), resulting in aggregate gross proceeds to us of $3.85 million (the “First Closing”). The Purchase Agreement contemplates that Mr. Lazar will separately purchase 268,750 shares of the Company’s Series E non-voting convertible preferred stock, par value $0.01 per share (the “Series E Preferred Stock”), resulting in additional aggregate gross proceeds of $2.15 million, which are contemplated to be issued in a second closing that is subject to receiving approval of Proposal Five (NYSE American Proposal) and the satisfaction of certain other closing conditions (the “Final Closing”). In addition to the Proposals customarily included by the Company for its Annual Meetings of Stockholders, there are several other Proposals (Proposals Five through Eleven) that are also being presented at this Annual Meeting for stockholders to vote upon that relate to the Investment Transaction, which we agreed to present pursuant to the Purchase Agreement, as further described in the accompanying Proxy Statement. Approval of these Proposals will be important in order for the Company to complete the Final Closing and to pursue the growth of its business, including pursuing a Post-Investment Transaction, as further described in the accompanying Proxy Statement. We have included certain material information regarding the Investment Transaction and the related transactions in the accompanying Proxy Statement.

We encourage you to read the Proxy Statement in its entirety and the other documents to which we have referred you to in the Proxy Statement before voting. After careful consideration, the NovaBay Board of Directors has determined that all eleven of the Proposals are advisable and in the best interests of NovaBay and its stockholders and recommends that the holders of Common Stock and the Series F Voting Retractable Preferred Stock entitled to vote with respect to each of the Proposals, vote or give instruction to vote “FOR” each of the director nominees in Proposal One, “FOR” Proposal Two, “THREE YEARS” for Proposal Three and “FOR” Proposal Four through Proposal Eleven.

You may attend the Annual Meeting online, vote your shares electronically, and submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/NBY2025 and entering the 16-digit control number included in your proxy card or the voting information form provided by your bank or broker. Prior to the Annual Meeting, you can vote at www.proxyvote.com using your 16-digit control number or by the other methods described in the Proxy Statement.

The record date for the Annual Meeting is September 22, 2025. Only stockholders of record at the close of business on that date are entitled to notice of, and may vote at, the virtual Annual Meeting or any adjournment or postponement thereof. This Notice of Annual Meeting and the Proxy Statement are being distributed and made available on or about September 23, 2025.

A list of stockholders entitled to vote at the Annual Meeting will be available at NovaBay Pharmaceuticals, Inc., 2000 Powell Street, Suite 1150, Emeryville, California 94608, for a period of ten (10) days prior to the Annual Meeting. If you would like to inspect the stockholder list, please contact our Corporate Secretary at (510) 899-8800. The stockholder list will also be available during the virtual Annual Meeting through the following secure link www.virtualshareholdermeeting.com/NBY2025.

2000 Powell Street, Suite 1150

Emeryville, California 94608

This proxy statement (the “Proxy Statement”), our Notice of 2025 Annual Meeting of Stockholders (the “Notice”) and our proxy card are being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of NovaBay Pharmaceuticals, Inc., a Delaware corporation (“NovaBay,” the “Company,” “we,” “our,” or “us”), to be voted at the 2025 Annual Meeting of Stockholders to be held on Thursday, October 16, 2025 (the “Annual Meeting”), and at any adjournment or postponement of the Annual Meeting. The Annual Meeting will be held at 11:00 a.m. Pacific Time and will be a virtual meeting of stockholders. You will be able to participate in the Annual Meeting, vote, and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/NBY2025. You must have your 16-digit control number on your proxy card to enter and participate in the virtual meeting. This Proxy Statement, the proxy card and our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024 (the “Annual Report”) are being delivered by mail on or about September 23, 2025 to stockholders of record as of September 22, 2025.

If you have any questions in voting your shares, please contact:

Sodali & Co.

333 Ludlow Street – 5th Floor

South Tower

Stamford, CT 06902

nby.info@investor.morrowsodali.com

800-662-5200

This Proxy Statement and the documents referenced herein contain “forward-looking statements” within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities and Exchange Act of 1933, as amended (the “Exchange Act”). Forward-looking statements are predictions based on expectations and projections about future events, are not statements of historical fact, are subject to risks, uncertainties and assumptions that are difficult to predict and involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The use of words such as, but not limited to, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar words or expressions are intended to identify forward-looking statements. These statements and related risks, uncertainties, factors and assumptions, include, but are not limited to: statements regarding the Investment Transaction, the expected completion of the Final Closing, the impact of not obtaining stockholder approval for Proposal Five (NYSE American Proposal) and certain of the other Proposals at this Annual Meeting, our ability to successfully pursue our business strategy, including identifying and completing a Post-Investment Transaction, and the Company’s financial condition and results of operations, including the financial impact of the Investment Transaction, the Special Dividend, and related transactions and matters. These statements involve risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in, or implied by, these forward-looking statements. No representations or warranties (expressed or implied) are made about the accuracy of any such 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 our business, ownership of our securities, the continued listing of our Common Stock on the NYSE American, and other matters, including risks that could cause results to differ materially from those projected in the forward-looking statements in this Proxy Statement, are detailed in this Proxy Statement as well as in our Annual Report, and subsequent Quarterly Reports on Form 10-Q and/or Current Reports on Form 8-K filings with the SEC, especially under the heading “Risk Factors.” The forward-looking statements in this Proxy Statement and the documents referenced herein represent our current beliefs, estimates and assumptions as of the date of this Proxy Statement, and we disclaim any intent or obligation to revise or update publicly any forward-looking statement contained in this Proxy Statement, except as required by law.

Before you make a decision regarding how you will vote on the Proposals as set forth in this Proxy Statement, you should carefully consider each of the risk factors described below in addition to the other information contained in this Proxy Statement and the annexes attached to this Proxy Statement. The risk factors described below relate to the Investment Transaction, including our planned issuance of the Series E Preferred Stock at the Final Closing and the Post-Investment Transaction, as well as the risks relating to NovaBay and its business. The risks discussed below also include forward-looking statements and actual results may differ substantially from those discussed in these forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” The risks and uncertainties described below and in this Proxy Statement are not the only risks and uncertainties that we face. We encourage you to also carefully read the risk factors generally associated with our Company and our business contained in our Annual Report, and our subsequent SEC filings. Additional risks and uncertainties not currently known to us may also materially and adversely affect our business operations and financial condition or the price of our Common Stock.

As described in this Proxy Statement, we recently completed the Investment Transaction, which is material to us and resulted in significant changes to NovaBay’s business, operations and strategic direction, as well as to our overall capital structure. Accordingly, as a result of these changes, there will be new and additional risks and uncertainties that we may encounter and have to face in the future, as well as those risks that we already had prior to completing these transactions. These risks and uncertainties have been presented and summarized below to provide stockholders with important information in connection with their own evaluation of each of the Proposals being considered at the Annual Meeting. We urge all stockholders to fully and carefully read each of these risk factors listed below in their entirety and in this Proxy Statement in connection with their voting decision on the Proposals at the Annual Meeting.

As a result of the Series D Preferred Stock that we issued and the Series E Preferred Stock to be issued in the Final Closing, whether or not the Conversion Approval is received, our stockholders will experience significant dilution as a result of the issuance of shares of our Common Stock upon future conversion of the Series D Preferred Stock and/or the Series E Preferred Stock.

Regardless of whether we receive the Conversion Approval, Mr. Lazar is entitled to convert a portion of his Series D Preferred Stock into Common Stock at any time, provided that upon conversion, the aggregate number of shares of Series D Preferred Stock converted by him does not exceed the Share Issuance Limitation (e.g. 19.99% of our issued and outstanding shares of Common Stock as of the date of the Purchase Agreement or a lower percentage as may be required by the NYSE American). If the Conversion Approval, however, is received at the Annual Meeting, (i) all of the shares of Series D Preferred Stock will be convertible either by Mr. Lazar or will automatically convert within the third business day after the Conversion Approval is received into 77.0 million shares of Common Stock and (ii) all of the Series E Preferred Stock to be issued in the Final Closing will also be immediately convertible following issuance (either by Mr. Lazar or converted automatically) into 43.0 million shares of Common Stock. As a result of the full conversion of the Series D Preferred Stock and the Series E Preferred Stock, 120.0 million shares of Common Stock will be issued, which collectively will represent approximately [95]% of the total number of shares of Common Stock expected to be outstanding immediately after the Final Closing. Upon the conversions of the Series D Preferred Stock and/or the Series E Preferred Stock after the Conversion Approval, the existing stockholders of the Company will experience significant dilution in their ownership percentage and their voting power, with Mr. Lazar receiving effective voting control over matters presented to stockholders in the future relating to our Company. Further, as part of the Investment Transaction, Mr. Lazar agreed to ensure that the Company will have sufficient capital to identify and complete a Post-Investment Transaction and fund operations for at least twelve (12) months after completing a Post-Investment Transaction, which may result in additional equity being issued to Mr. Lazar that may result in further dilution to stockholders.

If stockholders do not provide the Conversion Approval, then we will not be able to complete the Final Closing and receive the proceeds from this additional investment.

If we do not receive stockholder approval of the Conversion Approval at this Annual Meeting or at a Second Meeting (as defined in the Proxy Statement), then Mr. Lazar will not be obligated to make the additional $2.15 million investment in the Series E Preferred Stock, even if we satisfy all of the other closing conditions. The availability of the proceeds from the

sale of the Series E Preferred Stock at the Final Closing will be important to us to continue funding our operations and expenses, the pursuit of a Post-Investment Transaction, and to satisfy our other obligations, including the retirement of the outstanding shares of Series F Preferred Stock that is contemplated to occur following the Conversion Approval or after December 31, 2025. Additionally, until the Conversion Approval is obtained, the conditions to the Release Agreements will not be satisfied, Mr. Lazar will not be able to exercise certain of his one-time Board rights, including the right to nominate Additional Purchaser Nominee(s) to the Board and to be appointed as Chair of the Board and we may not be able to further pursue and/or consummate a Post-Investment Transaction. Accordingly, the failure to receive the Conversion Approval will have a material and adverse effect upon our ability to complete the transactions contemplated by the Investment Transaction and to pursue our business strategy of growing our business and creating value for our stockholders.

We may fail to realize the anticipated benefits of the Investment Transaction if we are not able to identify and/or pursue a Post-Investment Transaction.

The success of the Investment Transaction and the pursuit of our business strategy to grow our Company will depend on, among other things, our ability to identify, pursue and consummate a Post-Investment Transaction with a Target Company. We may not be able to identify a suitable operating and revenue generating Target Company to acquire or ultimately enter into and consummate a Post-Investment Transaction within the necessary timing before our capital resources are depleted. If we do enter into and consummate a Post-Investment Transaction with a Target Company, there is no assurance that the transaction will be successful or that we will be able to achieve the anticipated revenues, efficiencies, cost savings and/or realize other expected benefits of the Post-Investment Transaction. As a result, the Board may determine it is in the best interests of the stockholders to alternatively proceed with the Dissolution of our Company under Delaware law, as previously approved by stockholders at our 2025 Special Meeting held on April 16, 2025, or otherwise seek bankruptcy protection or protection under other insolvency laws.

In pursuing a Post-Investment Transaction, it is possible that we may need additional capital to fund the acquisition of a Target Company and/or we may issue Common Stock or other equity securities as consideration to acquire the Target Company. The number of shares and/or the value of the additional shares of Common Stock or other equity securities, if any, that we may issue in connection with a Post-Investment Transaction is not currently known and any such issuance would be subject to required corporate and/or stockholder approvals that may be applicable under law or the NYSE American Company Guide. To the extent we raise additional capital by issuing equity securities or issue equity securities as consideration in a Post-Investment Transaction, our stockholders may experience substantial dilution (in addition to the dilution in connection with the Investment Transaction) and the new equity securities may have greater rights, preferences or privileges than our existing Common Stock and/or our preferred stock issued, as the case maybe. In addition, the new equity securities may be offered in the future at a price that is below the then in effect conversion price of the Series D Preferred Stock, which, unless an exception was available, would result in the lowering of the conversion price of the Preferred Stock and a greater number of shares of Common Stock being issuable upon conversion of the Series D Preferred Stock for no additional consideration, causing even greater dilution to our stockholders.

Our Board and management team will significantly change in connection with the Investment Transaction and if we consummate a Post-Investment Transaction.

In connection with the Investment Transaction, there are material changes to the management of our Company that have occurred with Mr. Lazar being appointed as Chief Executive Officer and as a director at the First Closing, and that are expected to occur in connection with the resignation of Mr. Hall and the five (5) Resigning Non-Employee Directors and the appointment of up to three (3) Additional Purchaser Nominee(s) to the Board, provided that we receive approval for the issuance of the Equity Consideration and the Conversion Approval, as well as complete the Final Closing. Additionally, there may be further changes to our executive management team and Board that possibly occur in the future in connection with our Company pursuing and potentially consummating a Post-Investment Transaction. The identity of the Additional Purchaser Nominee(s) and/or other changes that may occur in the future to our executive management team and/or Board are not currently known to us; however, such persons will be subject to our review, qualification and approval. Accordingly, we expect that our Company will have significant changes and turnover to our executive management team and the Board, who would lead our Company.

If the Conversion Approval and the other Proposals are not approved by stockholders at this time, pursuant to the terms of the Purchase Agreement, we will be required to use our reasonable best efforts to call another stockholder meeting, which will be costly and delay our ability to complete the Final Closing and pursue the Post-Investment Transaction.

If the Conversion Approval and approval of the other Proposals contemplated by the Purchase Agreement are not received at this Annual Meeting, then we will be required to use our reasonable best efforts to call a Second Meeting within seventy (70) days of the date of the Annual Meeting. The failure to obtain stockholder approval at this Annual Meeting and/or the Second Meeting will result in additional cost and expense to us to hold an additional stockholder meeting, delay our ability to pursue and consummate a Post-Investment Transaction and complete the Final Closing and certain other transactions contemplated by the Investment Transaction (as discussed in the risk factor above).

If stockholders approve the amendments to our Certificate of Incorporation to increase the number of authorized Common Stock and preferred stock, then the availability of these additional authorized shares may result in greater dilution to our stockholders and/or affect the market price of our Common Stock.

In addition, if stockholders approve Proposal Nine that provides for an increase to our authorized Common Stock from 150,000,000 shares to 1,500,000,000 shares and/or Proposal Ten, which provides for an increase to our authorized preferred stock from 5,000,000 shares to 10,000,000 shares, then we will significantly increase the number of authorized shares of Common Stock and preferred stock that NovaBay may issue in the future, which our Board will have discretion to issue in the future, including, without limitation, in connection with future capital raise transactions and financings. Stockholders will not have a right to approve any such issuances or transactions, unless required by our governing documents, NYSE American rules or applicable law, and any such issuance of our Common Stock or preferred stock in the future may have a dilutive effect, including on earnings per share, on stockholders’ equity and/or voting rights. Furthermore, future sales of substantial amounts of our Common Stock, or the perception that these sales might occur, could adversely affect the prevailing market price of our Common Stock or limit our ability to raise additional capital.

We may be limited in our financing and business development activities if we are not able to increase the authorized shares of Common Stock.

If Proposal Nine that provides for an increase to the authorized Common Stock is not approved by our stockholders at this Annual Meeting, we may not have sufficient shares of Common Stock to be able to access the capital markets, complete a Post-Investment Transaction, other strategic investment and/or acquisition, pursue corporate collaborations or partnerships, and/or pursue other business opportunities that are integral to executing our business strategy and our growth and success. After the Final Closing, to the extent completed, we would only have [23,750,495] shares of Common Stock that remain available for issuance. Even if our stockholders approve Proposal Nine to increase the authorized shares of Common Stock, there is no assurance that we will be successful in completing a Post-Investment Transaction or other strategic investment and/or acquisition, raising additional funds or pursuing other business opportunities to the extent needed in the future.

The market price of our Common Stock may decline in the future as a result of the Investment Transaction and we may not regain compliance under the Company Guide.

The market price of our Common Stock may decline in the future as a result of completing the Investment Transaction and the related transactions, for a number of reasons, including the substantial dilutive impact of the issuance of 120.0 million shares of Common Stock upon conversion of all of the shares of Series D Preferred Stock and, after issuance at the Final Closing, the Series E Preferred Stock. The issuance of Common Stock will likely have a depressive effect on the market price of our Common Stock at the time of conversion by increasing the number of shares of Common Stock then outstanding. Such downward pressure could encourage short sales by certain investors, which could place further downward pressure on the price of the Common Stock. Further, if we fail to achieve the perceived benefits of the Investment Transaction, including consummating a Post-Investment Transaction or pursuing another strategic opportunity, as rapidly as, or to the extent anticipated by, financial or industry analysts, the market price of our Common Stock may further decline. Some of these factors are beyond our control. Further, we cannot assure you that we will be able to once again regain compliance with the NYSE American continued listing requirements relating to our stockholders’ equity under the Company Guide or otherwise maintain the listing of our Common Stock. Our failure to regain compliance with those stockholders’ equity requirements or to comply with other requirements of the Company Guide, including upon completion of a Post-Closing Transaction, could result in our Common Stock being delisted from the NYSE American.

Our stockholders will have significantly reduced ownership and voting power as a result of the conversion of the shares of Series D Preferred Stock and, upon issuance at the Final Closing, Series E Preferred Stock.

If the Conversion Approval is received at the Annual Meeting, then stockholders who owned shares of Common Stock prior to the conversion of the Series D Preferred Stock and, after the Final Closing, the Series E Preferred Stock into Common Stock will have a significantly lower percentage of ownership and correspondingly reduced voting power than they held immediately prior to the conversion. The shares of Series D Preferred Stock issued at the First Closing, upon conversion, will represent approximately [61]% of the Company’s issued and outstanding Common Stock on a fully diluted basis, and the Series E Preferred Stock to be issued, upon conversion, will represent approximately [34]% of the Company’s issued and outstanding Common Stock on a fully diluted basis as of the Final Closing, or collectively approximately [95]% in the aggregate (based on the number of shares of Common Stock anticipated to be outstanding as of the Final Closing). Therefore, assuming the completion of the Final Closing and without taking into account future issuances of our securities (including pursuant to a Post-Investment Transaction), our stockholders prior to the conversion of the Series D Preferred Stock and the Series E Preferred Stock will have significantly less ownership of our Company and voting power, and, therefore, they will have a substantially reduced ability to influence significant corporation decisions that require approval of holders of the outstanding Common Stock with Mr. Lazar, and/or transferee who subsequently owns such securities upon exercise of Mr. Lazar’s Securities Purchase Rights, owning approximately [95]% of the issued and outstanding shares as of the Final Closing.

Mr. Lazar will have significant control and influence over our Company and corporate matters.

In addition to the ownership that will result in connection with the conversion the Series D Preferred Stock and the Series E Preferred Stock to be issued in the Final Closing (as described in the risk above), Mr. Lazar was appointed as a director to our Board and began serving as our Chief Executive Officer in connection with the First Closing. Additionally, pursuant to the Purchase Agreement, Mr. Lazar received certain one-time contractual rights involving the Board, which include: (i) a contractual right to recommend one (1) individual to be nominated for election at this Annual Meeting, which right was exercised with Mr. Lazar’s nomination for election to the Board at this Annual Meeting; (ii) provided that the Conversion Approval is received and the Final Closing occurs, a contractual right to nominate and have appointed up to three (3) Additional Purchaser Nominee(s) depending on Mr. Lazar’s percentage ownership of our Common Stock at the time of appointment; and (iii) subject to the Conversion Approval and the Final Closing occurring, a one-time contractual right to be appointed as the Chair of the Board. As a result of Mr. Lazar’s one-time contractual Board rights and his positions as Chief Executive Officer and a director, Mr. Lazar will have input on all matters before our Board (excluding the matters delegated to the Board committees, including the Special Transaction Committee). Separately, due to his potential significant ownership of Common Stock, Mr. Lazar would also have the ability to exercise significant influence and control over the outcome of all matters requiring Board and stockholder approval, including the election of directors. As a result of Mr. Lazar’s voting power (and assuming he does not exercise his Securities Purchase Rights or otherwise sell the Conversion Shares), we may determine that we are a “controlled company” as defined in the Company Guide and, therefore, are not subject to the NYSE American’s requirements that would otherwise require us to have (a) a majority of independent directors; (b) director nominees selected, or recommended for the Board selection, either by a majority of the independent directors or a nominating committee composed solely of independent directors; (c) a nominating committee composed solely of independent directors; (d) compensation of our chief executive officer and all other officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors; and/or (e) a compensation committee charter which provides the compensation committee with the authority and funding to retain compensation consultants and other advisors.

The shares of Series D Preferred Stock, Series E Preferred Stock and/or the Conversion Shares acquired or to be acquired by Mr. Lazar may be sold to another unknown person if Mr. Lazar decides to exercise his Securities Purchase Rights.

The Purchase Agreement expressly provides for Mr. Lazar to have the Securities Purchase Rights that permits the assignment, transfer and/or sale of the Series D Preferred Stock, the Series E Preferred Stock, the Conversion Shares and/or his right to acquire such securities, which may occur at any time after the First Closing, including having such rights exercised at the time or in connection with a Post-Investment Transaction. If Mr. Lazar were to properly exercise the Securities Purchase Rights with respect to all of his shares of Series D Preferred Stock and the right to acquire the shares of Series E Preferred Stock at the Final Closing, then the ownership of such preferred stock and related rights will transfer to a third party who is unknown to us and such third party will then have the right to exercise significant influence and control over the outcome of all other matters requiring Board and stockholder approval.

The proposed Reverse Stock Split, if effected, may not increase our stock price, and could lead to a decrease in our overall market capitalization.

On September 22, 2025, the closing sale price of our Common Stock on the NYSE American was $[__] per share of Common Stock. We expect that the Reverse Stock Split, if effected, will increase the per share trading price of our Common Stock. However, the market price per share of our Common Stock after the Reverse Stock Split may not rise (or remain constant) in proportion to the reduction in the number of shares of Common Stock outstanding before the Reverse Stock Split. We cannot predict the effect of the Reverse Stock Split on the per share trading price of our Common Stock, and the history of reverse stock splits for our Company and other companies is varied, particularly since some investors may view a reverse stock split negatively. In many cases, the market price of a company’s shares declines after a reverse stock split, or the market price of a company’s shares immediately after a reverse stock split does not reflect a proportionate or mathematical adjustment to the market price based on the ratio of the reverse stock split (which happened to the Company after its 1-for-35 reverse stock split effective November 15, 2022 and its 1-for-35 reverse stock split effective May 30, 2024). Accordingly, our total market capitalization after a Reverse Stock Split may be lower than our total market capitalization before the Reverse Stock Split, and it is possible that a Reverse Stock Split may not result in a per share trading price that would attract investors who do not trade in lower priced stocks.

Even if we implement the Reverse Stock Split, the per share trading price of our Common Stock may decrease due to factors unrelated to the Reverse Stock Split. Other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the per share trading price of our Common Stock. As a result, we cannot assure you that the Reverse Stock Split, if completed, will result in the benefits that we anticipate, that the per share trading price of our Common Stock will increase following the Reverse Stock Split or that the per share trading price of our Common Stock will not decrease in the future.

The proposed Reverse Stock Split, if effected, may decrease the liquidity of our Common Stock.

The liquidity of our Common Stock may be harmed by the proposed Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the per share trading price does not increase proportionately as a result of the Reverse Stock Split. While the Board believes that a higher stock price may help generate the interest of new investors, the Reverse Stock Split may not result in a per share price that will attract certain types of investors, such as institutional investors or investment funds, and such share price may not satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our Common Stock may not improve as a result of a Reverse Stock Split and could be adversely affected by a higher per share price. Accordingly, the Reverse Stock Split may not increase marketability of our Common Stock. In addition, investors might consider the increased proportion of unissued authorized shares to issued shares to have an anti-takeover effect under certain circumstances, because the proportion allows for dilutive issuances that could prevent certain stockholders from changing the composition of the Board or render tender offers for a combination with another entity more difficult.

The proposed Reverse Stock Split, if effected, may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell.

If the proposed Reverse Stock Split is implemented, it will increase the number of stockholders who own “odd lots” of less than 100 shares of Common Stock. A purchase or sale of less than 100 shares of Common Stock may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own less than 100 shares of our Common Stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their shares of Common Stock.

The proposed Reverse Stock Split, if effected, will result in a significant increase in our authorized Common Stock and may result in future dilution to our stockholders.

The Reverse Stock Split will reduce the number of outstanding shares of our Common Stock without a proportionate reduction in the number of shares of authorized but unissued Common Stock in our Certificate of Incorporation (either currently 150,000,000 shares of Common Stock or 1,500,000,000 shares of Common Stock if stockholders approve Proposal Nine providing for an increase in the authorized shares of Common Stock), which will give the Company a significantly larger number of authorized shares, as a percentage of total outstanding shares, available for future issuance without further stockholder action, except as may be required by applicable laws or the rules of any stock exchange on which our Common Stock is listed. Accordingly, as a result of our Company having available a significantly greater number of shares of Common Stock for future issuance due to the authorized but unissued shares in our Certificate of Incorporation not proportionately adjusting as a result of the Reverse Stock Split, the ability to issue an even greater number of newly issued shares of Common Stock in the future may have a further dilutive effect on the ownership of existing stockholders.

The specific Proposals to be considered and acted upon at the Annual Meeting are summarized in the Notice and “Summary of the Proxy Statement” above and are described in more detail in this Proxy Statement.

As permitted by Delaware law and our Bylaws, as amended and restated effective June 13, 2023 (the “Bylaws”), the Annual Meeting will be held as a virtual meeting live via the Internet. As an owner of Common Stock and/or Series F Preferred Stock, you will be able to attend the Annual Meeting via live webcast by visiting NovaBay’s virtual meeting website (www.virtualshareholdermeeting.com/NBY2025) at the meeting time. Upon visiting the meeting website, you will be prompted to enter your 16-digit control number provided on your proxy card. Your unique control number allows us to identify you as a stockholder and will enable you to securely log on, vote and submit questions during the Annual Meeting on the meeting website.

Shares of Common Stock which you are the beneficial owner, but not the stockholder of record, also may be voted electronically during the Annual Meeting if you have a 16-digit control number. If there is no 16-digit control number included on your instructions, please refer to the information provided by your broker, bank or other holder of record for voting information and/or instruction on how to attend the Annual Meeting.

Even if you plan to attend the Annual Meeting virtually, NovaBay recommends that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the Annual Meeting.

The record date for determining those stockholders who are entitled to notice of, and to vote at, the Annual Meeting has been fixed as September 22, 2025 (“Record Date”). Only holders of Common Stock and holders of Series F Preferred Stock of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. Each stockholder of Common Stock is entitled to one (1) vote for each share of our Common Stock held by such stockholder as of the Record Date. Each holder of Series F Preferred Stock is entitled to the voting equivalent of approximately 0.424 shares of Common Stock for each outstanding share of Series F Preferred Stock held. Holders of Common Stock and Series F Preferred Stock will vote together as a single class.

As of the Record Date, [5,862,005] shares of our Common Stock and 1,986,565 shares of Series F Preferred Stock (having the voting equivalent of an aggregate of 842,829 shares of Common Stock) were outstanding. There were also 131 shares of our Series B Preferred Stock and 481,250 shares of our Series D Preferred Stock outstanding as of the Record Date. Neither the Series B Preferred Stock nor the Series D Preferred Stock have voting rights for any of the Proposals, and, therefore, cannot be voted at the Annual Meeting.

The presence at the Annual Meeting, either in person or by duly authorized proxy, of holders of one-third (1/3) of the voting power of all the outstanding shares of our stock entitled to vote will constitute a quorum for the transaction of business at the Annual Meeting, in line with the Bylaws. Stockholders who log on and vote at our virtual meeting of stockholders with their 16-digit control number (which is provided on your proxy card) are considered present in person at the Annual Meeting. Abstentions are counted as present for purposes of determining the presence of a quorum. If a quorum is not present, we expect that the Annual Meeting will be adjourned or postponed in order to permit further solicitation of proxies until a quorum is obtained. If a quorum is not present, the Annual Meeting will be adjourned or postponed in order to permit further solicitation of proxies until a quorum is obtained.

Pursuant to the Series F Agreements that we entered into in connection with the Investment Transaction, the Remaining Warrant Holders agreed to vote all of their Series F Preferred Stock, which represents approximately [12.6]% of the voting power as of the Record Date, in favor of each of the Proposals presented to stockholders at this Annual Meeting. Also in connection with the Investment Transaction, we and Mr. Lazar separately entered into the Voting Agreement with Jad Fakhry and the Poplar Entities pursuant to which the Poplar Entities agreed to vote all of their shares of Common Stock,

approximately 17.5% of outstanding Common Stock as of June 4, 2025, at the Annual Meeting in favor of each of the Proposals presented to stockholders at this Annual Meeting. As a result of these voting commitments by the Remaining Warrant Holders and the Poplar Entities, we expect that approximately [30.1]% of the voting power at this Annual Meeting will be present at the Annual Meeting for purposes of establishing a quorum and will vote to approve each of the director nominees, for three years in relation to the Say-on-Frequency proposal and to approve the remaining Proposals.

Votes Generally. Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, for each proposal, votes “FOR” and “Against,” abstentions, and, if applicable, broker non-votes (as well as “ONE YEAR”, “TWO YEARS” AND “THREE YEARS” votes with respect to Proposal Three (Say-on-Frequency)

Abstentions and Broker Non-Votes. Abstentions and broker non-votes will be counted towards the quorum requirement. A broker non-vote occurs when a broker, bank or other agent has not received voting instructions from the beneficial owner of the shares and the broker, bank or other agent cannot vote the shares because the matter is considered “non-routine” under NYSE rules. Proposals 1, 2, 3, 5, 6, 7 and 10 are considered to be “non-routine” under NYSE rules such that your broker, bank or other agent may not vote your shares on those Proposals in the absence of your voting instructions. As also provided in the chart below, Proposals 4, 8, 9 and 11 are considered to be “routine” under NYSE rules and thus if you do not return voting instructions to your broker, your shares may be voted by your broker in its discretion for these Proposals.

Required Vote. The following table summarizes the proposals and the minimum vote needed to approve each proposal and the effect of abstentions and broker non-votes.

It is important to understand that we are not seeking stockholder approval of, and you are not being asked to vote on, the Investment Transaction (with the First Closing having already been completed), the issuance of the Series D Preferred Stock (which have already been issued) or the issuance of the Series E Preferred Stock at the Final Closing (which has yet to occur and is subject to the satisfaction of closing conditions as described in this Proxy Statement). Instead, pursuant to Proposal Five (NYSE American Proposal), we are seeking your approval of the issuance of shares of Common Stock to be issued upon conversion of the shares of Series D Preferred Stock and, if issued at the Final Closing, the shares of Series E Preferred Stock, as well as the other Proposals Six through Ten that are matters being submitted in connection with the Investment Transaction.

Stockholder of Record; Shares Registered in Your Name

If you are a stockholder of record and do not vote by telephone or over the Internet or by completing and returning your proxy card, your shares will not be voted.

Beneficial Owner; Shares Registered in the Name of a Broker, Bank or Other Nominee

If you are a beneficial owner and do not instruct your broker, bank or other nominee on how to vote your shares, the question of whether your broker, bank or other nominee will still be able to vote your shares depends on whether the NYSE American deems the particular proposal to be a “routine” matter. Brokers, banks or other nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of NYSE American, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management supported. Accordingly, your broker, bank or other nominee may not vote your shares on Proposals 1, 2, 3, 5, 6, 7 and 10.

If you were a registered stockholder on the Record Date, you may vote your shares at the virtual Annual Meeting, www.virtualshareholdermeeting.com/NBY2025, which contains voting instructions. You may also vote your shares by telephone by calling (toll free within the U.S. and Canada) 1-800-690-6903 and following the voting instructions read to you by the automated operator. Upon visiting the meeting website or calling the call-in telephone line, you will be prompted to enter your 16-digit control number provided to you on your proxy card. Your unique control number allows us to identify you as a stockholder and will enable you to securely cast votes.

Internet and telephone voting facilities for stockholders of record will be available 24 hours a day beginning at 12:01 a.m. Pacific Time on September 23, 2025. Internet and telephone voting will close promptly at 11:59 p.m. Eastern Time on Wednesday, October 15, 2025. After internet and telephone voting closes, you will only be able to vote by attending the Annual Meeting via live webcast and voting at the Annual Meeting. The Annual Meeting starts at 11:00 a.m. (Pacific Time) on October 16, 2025. After voting is closed during the Annual Meeting, you will no longer have the ability to vote your shares for the specific Proposals considered at the Annual Meeting.

If you are a registered stockholder as of the Record Date and hold your shares in more than one fund or other affiliated investment vehicle, you will receive separate voting credentials for each such entity that is a record holder of shares of our Common Stock. Please be sure to log on separately for each fund in order to cast all votes that you are entitled to cast at the Annual Meeting.

If you receive proxy materials by mail or if you request paper copies of the proxy materials, you can vote by mail by marking, dating, signing and returning your proxy card in the postage-paid envelope. Further instructions on how to vote by mail are included on the proxy card. Only proxy cards that have been signed, dated, and timely returned will be counted towards the quorum and entitled to vote.

If you submit your proxy card and it does not specify how the shares represented thereby are to be voted, then the proxy will be voted “FOR” the election of the directors proposed by the Board under Proposal One, “FOR” the approval of Proposal Two, “THREE YEARS” for Proposal Three, and “FOR” Proposal Four through Proposal Eleven described in this Proxy Statement. The proxy card also grants the proxy holder discretionary authority to vote on any other business that may properly come before the Annual Meeting. We have not been notified by any stockholder of his or her intent to present a stockholder proposal at the Annual Meeting.

If your shares are held in your name, you may revoke or change your vote at any time before the Annual Meeting by (i) submitting another proxy on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted); (ii) attending the Annual Meeting live via webcast and voting during the meeting (simply attending the virtual meeting will not, by itself, revoke your proxy);

or (iii) by filing a notice of revocation or submitting another signed proxy card with a later date with our Corporate Secretary, Mr. Justin M. Hall, Esq., at our principal executive offices at 2000 Powell Street, Suite 1150, Emeryville, California 94608. Unless so revoked, the shares represented by such proxies or voting instructions will be voted at the Annual Meeting and all adjournments or postponements of the Annual Meeting. Proxies solicited on behalf of the Board will be voted in accordance with the directions given.

NovaBay will bear the entire cost of proxy solicitation, including the costs of preparing, assembling, printing and mailing this Proxy Statement, the Notice, the proxy card and any additional solicitation materials furnished to the stockholders. Copies of these materials will be furnished to brokers, banks or other nominees holding shares in their names that are beneficially owned by others so they may forward these materials to such beneficial owners. In addition, we may reimburse such persons for their reasonable expenses in forwarding the solicitation materials to the beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by personal contact, telephone, facsimile, email or any other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services. In addition, we have engaged Sodali & Co., to assist in the solicitation of proxies and provide related advice and informational support. For additional information about this engagement, please see “Method of Proxy Solicitation” below.

Other than the Proposals described in the Proxy Statement, the Board is not aware of any other business that will be presented for consideration at the Annual Meeting. If any other matters should be properly presented at the Annual Meeting or any adjournments or postponements of the Annual Meeting for action by stockholders, the person named in the form of proxy will vote the proxy, pursuant to the authority provided to him or her, in accordance with his or her best judgment on that matter.

Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four (4) business days after the Annual Meeting.

Our Certificate of Incorporation provides for a classified Board consisting of three (3) classes of directors, Class I, Class II and Class III, each with staggered three (3)-year terms. As a result, a portion of our Board will be elected at each annual meeting. In connection with the Investment Transaction and the appointment of Mr. Lazar as a director in connection with the First Closing, the size of our Board was increased from seven (7) directors to eight (8) directors. At this year’s Annual Meeting, the current term of the Class III directors will expire and our stockholders will vote on the three Class III director nominees identified below. Pursuant to the Purchase Agreement, Mr. Lazar received certain investor rights relating to the Board, which included a one-time contractual right to recommend one (1) individual to be nominated for election at this Annual Meeting, which right was exercised by Mr. Lazar recommending himself for nomination to the Board at this Annual Meeting.

Upon the recommendation of the N&CG Committee of the Board, our Board selected and approved Dr. Paul E. Freiman (“Dr. Freiman”), Mr. Lazar and Ms. Swan Sit (“Ms. Sit”) as nominees for election as Class III directors at this Annual Meeting to serve for a term of three (3) years, expiring at the 2028 Annual Meeting of Stockholders, until their respective successors are duly elected and qualified or until their earlier resignation or removal. Each nominee has agreed to serve if elected. Management has no reason to believe any of the nominees herein will be unable to serve. In the event any of the nominees named is unable to serve or declines to serve at the time of the Annual Meeting, the proxy holders will exercise discretionary authority to vote for substitutes. Unless otherwise instructed, the proxy holders will vote the proxies received by them “FOR” the nominees named above.

Mr. Mijia (Bob) Wu (“Mr. Wu”) and Dr. Yenyou (Jeff) Zheng (“Dr. Jeff Zheng”) have been designated as Class I directors whose terms expire at the 2026 Annual Meeting of Stockholders. Further, Ms. Julie Garlikov (“Ms. Garlikov”), Mr. Justin M. Hall, Esq. (“Mr. Hall”), and Mr. Yongxiang (Sean) Zheng (“Mr. Sean Zheng”) have been designated as Class II directors whose terms expire at the 2027 Annual Meeting of Stockholders.

In connection with the First Closing and pursuant to the terms of the Release Agreements, Mr. Hall and the Resigning Non-Employee Directors (Dr. Freiman, Ms. Garlikov, Ms. Sit, Mr. Wu and Mr. Sean Zheng) agreed to resign after the Annual Meeting and upon the Resignation Event, including the Final Closing occurring which the Company expects to occur by the end of the fourth quarter of 2025. Dr. Jeff Zheng is not a Resigning Non-Employee Director and did not enter into a Release Agreement. Dr. Jeff Zheng is expected to continue to serve on the Board after the Resignation Event until his earlier resignation or removal.

The names of our director nominees and other current directors, as well as their ages (as of September 22, 2025) and biographical information about them are as follows.

Class III Directors – Terms Expiring at the 2025 Annual Meeting

Dr. Freiman has been an independent pharmaceutical professional and consultant since January 2009. He was also a board member of Chronix Biomedical Inc., a private molecular diagnosis company, from 2009 until its acquisition by Oncocyte Corporation in April 2021. Dr. Freiman’s prior experience includes serving as the president and chief executive officer of Neurobiological Technologies, Inc. (OTC: NTII) and a member of its board of directors from April 1997 until 2009. Dr. Freiman’s prior experience also includes serving as the former chairman and chief executive officer of Syntex from 1989 to 1994. He is credited with much of the marketing success of Syntex’s lead product, Naprosyn, and was responsible for moving the product to over-the-counter status, marketed as Aleve. Dr. Freiman served as chairman of the board of Neurotrope, Inc. (OTCBB: BLFL) from 2013 until August 2016. Dr. Freiman served as chairman of Penwest Pharmaceutical Co. until 2010 and served on the board of directors of Otsuka American Pharmaceuticals, Inc. and Otsuka America, Inc. until 2011, NeoPharm, Inc. until 2010 and Calypte Biomedical Corporation until September 2009. Dr. Freiman also served on the board (including as chairman) of the Pharmaceutical Research and Manufacturers Association of America. He has also served on a number of industry task forces both domestically and internationally. Dr. Freiman received a B.S. in pharmacy from Fordham University and an honorary doctorate from the Arnold & Marie Schwartz College of Pharmacy.

Mr. Lazar currently serves as NovaBay’s Chief Executive Officer, and has served as Chief Executive Officer since August 2025 upon the First Closing occurring. Mr. Lazar previously served as director on the board of directors of FiEE, Inc. (formerly Minim, Inc.) (NASDAQ: FIEE) where he also previously served as the Chief Executive Officer and Chief Financial Officer from December 2023 to February 2025. Mr. Lazar served as interim Chief Executive Officer and principal financial officer of Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC), from January 2, 2025 through February 26, 2025. Mr. Lazar served as the Chief Executive Officer of Titan Pharmaceuticals Inc. listed on Nasdaq (NASDAQ: TTNP) from August 2022 to April 2024, where he also served as a director and board chairman from August 2022 until October 2023. Mr. Lazar also served as the chief executive officer and chairman of the board of directors of OpGen, Inc. (OTC: OPGN) from March 2024 to August 2024. Mr. Lazar also served as the president and a member of the board of directors of LQR House Inc. (NASDAQ: YHC) from October 2024 to April 2025.

Ms. Sit currently acts as an independent business consultant to various public and private companies. Ms. Sit also serves as a director of Edgewell Personal Care Company (NYSE: EPC) since September 2020. She previously served as the Vice President of NA Digital Commerce Capabilities, Business Operations and Service and the Vice President of Global Digital Marketing of Nike, Inc. from 2018 to 2019. Prior to such position, Ms. Sit served as the Vice President of Global Digital of Revlon and Elizabeth Arden, Inc. from 2015 to 2017 and the Executive Director of Strategy and Planning, Online of The Estée Lauder Companies, Inc. Ms. Sit brings business experience including digital transformation experience supplemented by management consulting, brand management and advertising. Ms. Sit has built front-end consumer experiences across ecommerce, omnichannel, mobile, media, social, apps and innovation as well as integrated back-end operations. Ms. Sit received an MBA from Columbia Business School and a B.A. in Economics from Harvard University.

A plurality of the votes entitled to be cast at the Annual Meeting is required for approval of each of the director nominees. Unless otherwise instructed in the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” this proposal. Abstentions and broker non-votes, if any, with respect to this Proposal One, will have no effect.

Class I Directors – Terms Expiring at the 2026 Annual Meeting

Since June 2008, Mr. Wu has been the Managing Director of China Kington Investment Co. Ltd. (an affiliated entity of China Kington Asset Management, which has a long-standing relationship with NovaBay). Certain related-party historic transactions between the Company and China Kington are described in the Company’s prior filings with the SEC. Concurrently, he has served as the Managing Director of Shanghai Ceton Investment Management Co. Ltd. From October 2013 to January 2022, he also served as the Non-Executive Director of Pioneer. Previously, he served as a Director of UBS AG, Hong Kong Branch in 2007 and Vice President of BNP Paribas Hong Kong from 2005 to 2006. He was also the Assistant Vice President at ABN AMRO Bank (China) Co., Ltd. from 2002 to 2005. He holds an M.B.A. from Manchester Business School, University of Manchester, and an Executive M.B.A. from Cheung Kong Graduate School of Business.

Dr. Jeff Zheng has served as the Director of Business Development of, and as a broker with, Craft Capital Management LLC since September 2019. Dr. Jeff Zheng is also currently an independent director with Mars Acquisition Corp. Prior to that, Dr. Jeff Zheng served as the Director of Business Development of Spartan Securities Group, Ltd. from 2014 to August 2019. Dr. Jeff Zheng’s experience includes providing innovative financial solutions and consulting services for initial public offering underwriting and investment banking as well as corporate financing solutions with a particular focus on Chinese companies listed overseas. Dr. Jeff Zheng previously served as a financial advisor for various Canadian public companies including: P & P Ventures Inc. (TSX-V: PPV.H) where he served as president and a director; Damon Capital Corp (TSX-V: DAM.H) where he served as Chief Financial Officer and a director; and Cantronic Systems Inc. (TSX-V: CTS) where he served as a director and chair of the audit committee. Dr. Jeff Zheng received a Ph.D. in physics from Flinders University of South Australia.

Class II Directors – Terms Expiring at the 2027 Annual Meeting

Ms. Garlikov currently serves as the Vice President of Global Marketing of CareDx, a leading precision medicine solutions company focused on clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. She previously served as the Chief Commercial Officer of Sherlock Biosciences, a biotechnology CRISPR diagnostic company from 2022 to 2024 and was the Vice President of Marketing of Grail, LLC, a biotechnology and pharmaceutical company focused on early cancer detection from 2020 to 2022. Ms. Garlikov has over 25 years of experience in marketing, which includes serving as the Chief Marketing Officer or Leader at GRAIL, New Age and Shaklee, as well as senior marketing positions at Rodan & Fields, Obagi Medical, Nuvesse Skin Therapies and Allergan. She is a classically trained consumer packaged goods sales and marketing leader who gained her consumer experience at Procter & Gamble, Johnson & Johnson and PepsiCo and has deep expertise in both health, beauty and eyecare products, as well as in direct to consumer advertising and digital demand generation. Ms. Garlikov has a Bachelor’s degree from the University of California, Berkley and a Master’s degree in Business Administration from Columbia University.

Mr. Hall currently serves as NovaBay’s Vice President of Business Development, General Counsel and Corporate Secretary of NovaBay. Mr. Hall has served as NovaBay’s Vice President of Business Development since August 2025 and as General Counsel and Corporate Secretary since June 2019. He previously served as NovaBay’s Chief Executive Officer from June 2019 until his resignation effective at the First Closing. Mr. Hall served as the Company’s Interim President and Chief Executive Officer from March 2019 to June 2019 and as the Company’s Senior Vice President and General Counsel beginning in December 2015. Prior to this, he served as the Company’s lead in-house counsel beginning in February 2013. Prior to joining the Company, Mr. Hall worked as Corporate Counsel at Accuray Incorporated, a radiation oncology company, which he joined in October 2006, where he provided substantive legal advice on a broad range of complex legal matters with a focus on employment, corporate compliance, and corporate governance. Mr. Hall’s prior experience also includes serving as an investment advisor at Sagemark Consulting from 2000 to 2006, and a stockbroker at First Security Van Kasper from 1998 to 2001. Mr. Hall received a B.A. in Business Administration and Management from the University of California, San Diego, and a J.D. from the University of San Diego, School of Law.

Mr. Sean Zheng has served as the General Manager of the Investment Department of China Pioneer Pharma Holding Ltd. since January 1, 2024. Prior to joining China Pioneer Pharma Holding Ltd., he served as the Managing Director of Q3 Medical Devices (Shanghai) Co. Ltd. from November 2021 to December 2023. Prior to joining Q3 Medical, Mr. Sean Zheng held several leadership positions, including Managing Director of Boill Fund Management (HK) Co., Ltd. and Managing Director and Chief Executive Officer of Sprott- Zijin Mining fund, a joint venture fund between Zijin Mining Group and Sprott Asset Management LP. From 2007 to 2011, Mr. Sean Zheng served as a director of Dingtian Asset Management. Mr. Sean Zheng has also been a CFA chartered holder since 2006. Mr. Sean Zheng graduated from Renmin University of China in 1992 and holds a B.S. degree in Commodity Science. He received his MBA from the University of New South Wales in 2002 and earned a master’s degree of EMBA from China Europe International Business School (CEIBS) in 2010.

There are no family relationships among any of our directors, director nominees or executive officers.

Our Board has adopted a Code of Ethics and Business Conduct (the “Code of Ethics”) which applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and employees. The full text of our Code of Ethics is available on the Corporate Governance section of our website at www.novabay.com. We intend to disclose future amendments to certain provisions of the Code of Ethics, and any waivers of provisions of the Code of Ethics required to be disclosed under the rules of the SEC, at the same location on our website.

Our Board has determined that each of Dr. Freiman, Ms. Garlikov, Ms. Sit and Dr. Jeff Zheng satisfies the requirements for “independence” as defined in the NYSE American Company Guide. The remaining directors, who are not independent, do not and will not serve on any committees of the Board as long as they are not independent.

Our Board has three (3) standing committees, including an Audit Committee, a Compensation Committee and an N&CG Committee. As part of the Board’s approval of the Investment Transaction, the Board established a Special Transaction Committee of the Board. Each of the Board’s three (3) standing committees has a written charter that is reviewed annually and revised as appropriate. A copy of each standing committee’s charter is available on the Corporate Governance section of our website at www.novabay.com.

The table below shows the number of Board and Committee meetings held in 2024. The Special Transaction Committee was formed in June 2025.

Directors are expected to attend Board meetings, our annual stockholders’ meeting and the meetings of the committees on which they serve. In 2024, no director attended fewer than 75% of the aggregate number of Board and Committee meetings of the Board and committees on which he or she served. Following all of the regularly scheduled 2024 Board meetings, the independent directors met in an executive session. During 2024, Dr. Freiman served as Chair of the Board.

Board’s Leadership Structure. Dr. Freiman has served as the Board’s independent Chair since March 2019. Pursuant to the Purchase Agreement, Mr. Lazar has a one-time contractual right to serve as the Chair of the Board subject to the Conversion Approval and the Final Closing occurring. The Board believes that until the Final Closing that the Board is best served by separating the roles of Chair and Chief Executive Officer to enhance both the independence of the Board and its effectiveness in discharging its responsibilities. As a result of the Investment Transaction and Mr. Lazar’s one-time contractual right to serve as Chair of the Board after the Final Closing, the Board believes that NovaBay will be served by combining the roles of Chair and Chief Executive Officer to lead the Company in pursuing a Post-Investment Transaction. At such time as the roles of Chair and Chief Executive Officer are combined, the Board may evaluate and nominate a Lead Independent Director in its discretion.

Board Changes in Connection with the Investment Transaction. Pursuant to the Purchase Agreement, Mr. Lazar obtained certain one-time contractual rights involving the Board, including the right to nominate one director at this Annual Meeting (Mr. Lazar nominated himself), and a right for Mr. Lazar to later be appointed as Chair of the Board and to nominate up to three (3) Additional Purchaser Nominee(s) to the Board. The rights to serve as Chair and nominate the Additional Purchaser Nominee(s) to the Board are subject to the Conversion Approval and the Final Closing occurring.

In connection with the First Closing, the Company entered into the Release Agreements on August 19, 2025 with Mr. Hall and the five (5) Resigning Non-Employee Directors. Under the terms of the Release Agreements with Mr. Hall and the Resigning Non-Employee Directors, these directors agreed to, among other terms, resign from the Board effective on the Resignation Event, which requires the following to have occurred: (i) the Conversion Approving having been received; (ii) the Final Closing having occurred; and (iii) up to three (3) Additional Purchaser Nominee(s) nominated by Mr. Lazar being qualified and appointed to serve on the Board; provided, however, the resignations of the Resigning Non-Employee Directors are also conditioned upon (A) the Special Dividend having been declared and paid and (B) Proposal Seven (Director Equity Consideration Proposal) being approved. Dr. Jeff Zheng is not a Resigning Non-Employee Director and did not enter into a Release Agreement. Dr. Jeff Zheng will continue to serve on the Board as a continuing director.

As a result of the anticipated changes to the composition and management of our Board described above and changes to our business, including as a result of a Post-Investment Transaction being completed, as described in this Proxy Statement, our Board management, priorities and other aspects of our governance may change as a result.

Board’s Role in Risk Oversight. One of the Board’s key functions is informed oversight of NovaBay’s risk management process. The Board does not have a formal risk management committee, but rather administers this oversight function through various standing committees of the Board that address risks inherent in their respective areas of oversight. Our Audit Committee is responsible for considering and discussing financial and enterprise risk exposures, including internal controls, and discusses with management, and the independent registered public accountants, our policies with respect to risk assessment and risk management, including risks related to fraud, liquidity, credit operations and regulatory compliance. In addition, under our whistleblower policy, employees wishing to report concerns or complaints they have related to accounting, auditing and internal controls submit such concerns in confidence, or anonymously if desired, to an outside administrator who forwards such complaints to our Audit Committee Chair. Our Audit Committee monitors the effectiveness of the whistleblower policy. Our N&CG Committee monitors the effectiveness of our compliance and ethics policies, including whether they are successful in preventing illegal or improper liability-creating conduct, and our compliance with legal and regulatory requirements. Our Compensation Committee monitors NovaBay’s compensation policies to ensure that the compensation packages offered to our executive officers do not present such individuals with the potential to engage in excessive or inappropriate risk-taking activities.

Management is responsible for the day-to-day management of the risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board is responsible for satisfying itself that our risk management processes are adequate and functioning as designed. Our Board’s involvement in risk oversight includes receiving regular reports from members of management and evaluating areas of material risk, including operational, financial, legal, regulatory, strategic and reputational risks. As a smaller reporting company with a reasonably-sized Board, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

Annual Meeting Attendance. We do not have a formal policy regarding attendance by members of our Board at the annual meetings of stockholders; however, directors are encouraged to attend all such meetings. In 2024, all seven (7) of our directors then serving attended our 2024 Annual Meeting of Stockholders.

Director Selection. The N&CG Committee reviews the appropriate qualities and skills required of directors in the context of the current Board composition. This includes an assessment of each candidate’s independence, personal and professional integrity, financial literacy or other professional or business experience, ability to think and act independently and with sound judgment, and ability to serve our stockholders’ interests. These factors, and others deemed appropriate by the N&CG Committee in contributing to our Board’s heterogeneity, are reviewed in the context of an assessment of the perceived needs of the Board at a particular point in time. As a result, the priorities and emphasis of the N&CG Committee and of the Board may change from time to time to take into account changes in business and other trends, rules and laws related to board criteria, and the portfolio of skills and experience of current and prospective directors. The N&CG Committee has historically led the search for and selected, or recommended that the Board select, candidates for election to the Board. Consideration of new director candidates typically involves a series of committee discussions, review of information concerning candidates and interviews with selected candidates. Other than the director candidates nominated or to be nominated by Mr. Lazar in connection with this Investment Transaction, candidates for nomination to our Board typically have been suggested by other members of the Board or by our executive officers or by our large stockholders or investment partners.

From time to time, the N&CG Committee may engage the services of a third-party search firm to identify director candidates. The Board strives to achieve a membership of qualified individuals with a combination of qualities that best serves the Company’s needs. The N&CG Committee consults with the Board to determine the most appropriate mix of characteristics, skills and experiences for the Board as a whole to possess at any given time.

To identify the best candidates for the Board’s needs, the N&CG Committee considers the following as the minimum qualifications a nominee must have:

The N&CG Committee also considers industry experience or qualifications, such as generic, brand or biotech experience, general management or financial experience, and diverse experience in business, education, government, law, technology, regulatory compliance, medicine and science. When considering candidates for election (or re-election) to the Board, the N&CG Committee considers the entirety of a candidate’s credentials and background in addition to the specific minimum qualifications outlined above. Moreover, the members of the N&CG Committee believe that each member of the Board should have the highest character and integrity, a reputation for working constructively with others, and minimal conflicts of interest that might interfere with his or her performance as a director.

The N&CG Committee will consider candidates for director recommended by our stockholders who meet the eligibility requirements for submitting stockholder proposals for inclusion in our next proxy statement, as described in the Bylaws and provided that such recommendations are received within the timeframe required under

the caption “Deadline for Receipt of Stockholder Proposals or Nominations” below. Such stockholder’s notice shall set forth: (A) as to each nominee such stockholder proposes to nominate at the meeting: (i) the name, age, business address and residence address of such nominee, (ii) the principal occupation or employment of such nominee, (iii) the class and number of shares of each class of capital stock of the Company which are owned of record and beneficially by such nominee, (iv) the date(s) on which such shares were acquired and the investment intent of such acquisition, (v) a statement of whether such nominee, if elected, intends to tender, promptly following such person’s failure to receive the required vote for election or re-election at the next meeting at which such person would face election or re-election, his or her resignation, and (vi) such other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to § 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named as a nominee and to serving as a director if elected); and (B) as of the date of the notice and as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “Proponent” and collectively, the “Proponents”): (i) the name and address of each Proponent, as they appear on the Company’s books; (ii) the class, series and number of shares of the Company that are owned beneficially and of record by each Proponent; (iii) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal between or among any Proponent and any of its affiliates or associates, and any others (including their names) acting in concert, or otherwise under the agreement, arrangement or understanding, with any of the foregoing; (iv) a representation that the Proponent(s) are holders of record or beneficial owners, as the case may be, of shares of the Company entitled to vote at the meeting and intend to appear in person or by proxy duly authorized at the meeting to nominate the person(s) specified in the notice; (v) a representation as to whether the Proponent(s) intend to deliver a proxy statement and form of proxy to holders of a sufficient number of holders of the Company’s voting shares to elect such nominee or nominees; (vi) to the extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice; and (vii) a description of any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial (each, a “Derivative Transaction”) by each Proponent during the previous 12-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions.

The N&CG Committee evaluates each candidate, including Board incumbents, based on the same criteria. After a candidate has been contacted and agrees to be considered as a nominee, the N&CG Committee will review the candidate’s resume and other credentials and evaluate the expertise and experience that the candidate would provide to the Board and the Company.

Any potential candidates for director nominee, including candidates recommended by stockholders, are reviewed in the context of the current composition of the Board, our operating requirements, and the interests of stockholders. In conducting this assessment, the N&CG Committee considers such factors as it deems appropriate given our current needs and those of our Board to maintain a balance of knowledge, experience and capability. The N&CG Committee reviews directors’ overall service during their term, including the number of meetings attended, level of participation and quality of performance. The N&CG Committee also determines whether the nominee would be independent, which determination is based upon the Company Guide and applicable SEC rules and regulations. The N&CG Committee then compiles a list of potential candidates from suggestions it may receive. The N&CG Committee conducts any appropriate and necessary inquiries into the background and qualifications of possible candidates as it deems appropriate, then meets to discuss and consider such candidates’ qualifications, and then selects a nominee for recommendation to the Board by majority vote.

Other than the nomination of Mr. Lazar in connection with the Investment Transaction, no other candidates for director nominations were submitted to the N&CG Committee by any stockholder in connection with the election of directors at the Annual Meeting. All three of the director nominees standing for election at this Annual Meeting are current directors of NovaBay.

With respect to Mr. Lazar’s one-time contractual right to nominate up to three (3) Additional Purchaser Nominee(s) subject to the Final Closing occurring and the Conversion Approval being received, pursuant to the Purchase Agreement, each Additional Purchaser Nominee nominated shall be qualified and approved by the N&CG Committee, which shall include an assessment of their respective qualifications and experience, personal and professional integrity, financial literacy and other factors and criteria customarily reviewed and assessed as discussed above. Additionally, a sufficient number of Additional Purchaser Nominee(s) shall be nominated in order for us to continue to satisfy the “independence” requirements as set forth in the Company Guide and under the federal securities laws.

Our Board has implemented a process by which stockholders or other interested parties may send written communications directly to the attention of the Board, any committee of the Board or any individual Board member, care of our Corporate Secretary, Mr. Justin M. Hall, Esq., at 2000 Powell Street, Suite 1150, Emeryville, California 94608. The name of any specific intended Board recipient should be noted in the communication. Our Corporate Secretary will be responsible for collecting, organizing and monitoring communications from stockholders and, where appropriate depending on the facts and circumstances outlined in the communication, providing copies of such communications to the intended recipients. Communications will be forwarded to directors if they relate to appropriate and important substantive corporate or Board matters. Communications that are primarily commercial in nature or related to an improper or irrelevant topic will not be forwarded to the Board.

Unless otherwise indicated, all per share numbers have been retroactively adjusted to account for the 1-for-35 reverse stock split, effective May 30, 2024.

The table below sets forth certain information regarding our executive officers. Our executive officers are elected by, and serve at the discretion of, our Board. The following provides the biographical information regarding our Chief Financial Officer. Information concerning the business experience of Mr. Lazar and Mr. Hall is provided in “Class III Directors” and “Class II Directors” above, respectively.

Tommy Law (“Mr. Law”), prior to his appointment as Chief Financial Officer and Treasurer of the Company in August 2025, served as the Company’s Interim Chief Financial Officer and Treasurer since February 2023. Prior to that, he served the Company since December 2019 in a variety of positions, including as the Corporate Controller from September 2022 to January 2023. As the Corporate Controller, Mr. Law was responsible for quarterly filings with the SEC, as well as managing the periodic financial close process. Prior to serving as the Corporate Controller, Mr. Law served the Company as an Assistant Controller (April 2022 to September 2022), Accounting Manager (June 2020 to April 2022) and Senior Accountant (December 2019 to June 2020). Prior to joining the Company, Mr. Law was a Senior Accountant at KP LLC, a marketing solutions company, from January 2017 to December 2019. Previously, he served as Accounting Manager at Hitachi Solutions America, Ltd., an information technology company, from 2012 to 2015. Mr. Law received a B.S. in Business Administration, Accounting from San Jose State University.

There is no arrangement or understanding between any director or executive officer and any other person pursuant to which he or she was or is to be selected as a director, nominee or officer, other than the Purchase Agreement, the New Hall Employment Agreement, the Law Employment Agreement and the Release Agreements (each as described elsewhere in this Proxy Statement). There are no family relationships among any of our officers or directors.

The following table shows information regarding the compensation earned during the fiscal years ended December 31, 2024 and December 31, 2023 for Mr. Hall and Mr. Law (collectively, the “NEOs”). The current and former titles of each of the NEOs is as indicated in the following Summary Compensation Table.

Mr. Lazar did not begin his service as our Chief Executive Officer until August 2025, and therefore, was not a NEO during the fiscal years ended December 31, 2024 and 2023. Mr. Lazar is currently not party to an employment agreement with the Company and is not currently receiving any compensation for assuming and serving in the role of Chief Executive Officer. Mr. Lazar is also not receiving any compensation for his service as a director on the Board.

In 2023, the amounts included: (a) individual life insurance premiums paid for by the Company for Mr. Hall and Mr. Law of $1,854 and $896, respectively; and (b) 401(k) plan matching contributions paid for by the Company for Mr. Hall and Mr. Law of $12,292 and $6,800, respectively.

Base Salaries and Target Bonus Amounts

The Compensation Committee did not recommend any increases to executive salaries or target bonus amounts for 2024 or 2023; they remained the same as 2022. For Mr. Hall, this was a 2024 base salary of $350,000 and a target bonus percentage of base salary of 50%. For Mr. Law, this was a 2024 base salary of $170,000 and a target bonus percentage of base salary of 25%.

As further described below, in connection with the Investment Transaction and the New Hall Employment Agreement or Law Employment Agreement, as applicable, Mr. Hall’s base salary was reduced to $175,000 and Mr. Law’s base salary was maintained at $170,000, which changes were both effective at the First Closing on August 19, 2025. Neither the New Hall Employment Agreement nor the Law Employment Agreement provides for a target bonus percentage.

Cash Bonuses

The Board, upon the recommendation of the Compensation Committee, determined not to award any bonuses to Mr. Hall for fiscal year 2024 performance or fiscal year 2023 performance. Mr. Law did not receive a bonus for fiscal year 2023 performance and received a cash bonus of $42,500 for fiscal year 2024 performance.

Pursuant to his Release Agreement in connection with the Investment Transaction and as further described below, Mr. Hall is entitled to a cash settlement payment of $481,250 plus any unpaid wages and $8,778 in payments pursuant to COBRA, which he received in connection with the First Closing, as well as a second cash settlement payment of $481,250 plus any unpaid wages and $8,778 in COBRA payments by October 31, 2025.

Separately, as further described below, in connection with the Investment Transaction and the Law Employment Agreement, Mr. Law is entitled to receive a retention bonus of $170,000 to the extent he remains employed by the Retention Date and has not resigned or been terminated for cause. Mr. Law will also be eligible for any bonus plan that is deemed appropriate by the Board. Additionally, as a result of Mr. Law’s appointment as the Chief Financial Officer and Treasurer of the Company, Mr. Law also received a one-time signing bonus of $89,250 that was paid in cash, which payment was separate from the terms of the Law Employment Agreement.

Equity Awards

Federal Income Tax Law

Federal income tax law prohibits publicly-held companies, such as the Company, from deducting compensation paid to a NEO that exceeds $1 million during the tax year. Prior to the adoption of the Tax Cuts and Jobs Act of 2017 (“Tax Act”), to the extent that compensation was based upon the attainment of performance goals set by the Compensation Committee pursuant to plans approved by the stockholders, the compensation was exempted from the $1 million deduction limit. The Tax Act repealed this exemption, and now compensation paid to NEOs in excess of $1 million is no longer deductible, even if performance-based. The Compensation Committee intends to continue to use performance metrics in compensation when it is in the best interests of the Company and its stockholders even if such compensation is not deductible for tax purposes.

The following table presents the outstanding equity awards held by each of our NEOs as of December 31, 2024. Stock options were granted pursuant to our 2007 Omnibus Incentive Plan (“2007 Omnibus Plan”) thereafter until its expiration in March 2017, and all awards since then have been granted pursuant to our 2017 Omnibus Plan. The options granted under our 2007 Omnibus Plan and 2017 Omnibus Plan are not exercisable until they have vested.

As noted above, effective August 19, 2025, (i) Mr. Lazar was appointed to serve as the Company’s Chief Executive Officer, (ii) Mr. Hall resigned as the Company’s Chief Executive Officer and was appointed to serve as the Company’s Vice President of Business Development, General Counsel and Corporate Secretary, and (iii) Mr. Law, who formerly served as the Company’s Interim Chief Financial Officer and Treasurer, was appointed to serve as the Company’s Chief Financial Officer and Treasurer.

The principal terms of Mr. Hall’s and Mr. Law’s respective employment agreements and the Hall Release Agreement are each summarized below. Mr. Lazar is not currently party to an employment agreement with the Company and is not currently receiving any compensation for assuming and serving in the role of Chief Executive Officer. Mr. Lazar is also not receiving any compensation for his service as a director on the Board.

Justin Hall

On January 31, 2020, the Company entered into an employment agreement with Mr. Hall in connection with his appointment to serve as an executive officer. Mr. Hall’s employment agreement was subsequently amended by a first amendment on January 26, 2022, a second amendment effective on December 31, 2023, and a third amendment effective on December 31, 2024 (as amended, the Prior Hall Employment Agreement). Mr. Hall’s employment agreement, as amended by the third amendment, provided for at-will employment and a term commencing on January 31, 2020 and ending on December 31, 2025, unless earlier terminated in accordance with the terms of the employment agreement. For the fiscal year ended December 31, 2024, pursuant to the Prior Hall Employment Agreement, Mr. Hall’s annual base salary was three hundred fifty thousand dollars ($350,000), subject to annual review and increases determined by the Compensation Committee and/or Board.

On August 19, 2025, the Company entered into the New Hall Employment Agreement with Mr. Hall for his service as the Company’s Vice President of Business Development, General Counsel and Corporate Secretary, which entirely amended and restated the Prior Hall Employment Agreement.

The New Hall Employment Agreement provides for employment with a term commencing on the date of the First Closing on August 19, 2025 and ending on October 31, 2025 (the “Hall Employment Term”). The New Hall Employment Agreement provides for an amended annual base salary of one hundred seventy-five thousand dollars ($175,000) (the “Hall Base Salary”).

The New Hall Employment Agreement is guaranteed through the Hall Employment Term. If the Company terminates Mr. Hall prior to the end of the Hall Employment Term, the Company is required to pay the Hall Base Salary from the date of termination through the end of the Hall Employment Term (the “Hall Severance Amount”). The Hall Severance Amount is required to be paid in a lump sum within sixty (60) days following the executive’s separation from service.

Also on August 19, 2025, the Company entered into a Release Agreement with Mr. Hall (the “Hall Release Agreement”). The Hall Release Agreement provides for (i) Mr. Hall to generally release the Company from any claims, actions, or losses that such person may have against the Company and (ii) the Company to similarly release Mr. Hall from any claims, actions or losses that the Company may have against such person, provided that the Company shall remain obligated pursuant to the indemnification agreements with each person and to maintain D&O insurance coverage, or a D&O tail policy. Pursuant to the Hall Release Agreement, he agreed to resign from the Board effective on the Resignation Event, which includes the Conversion Approval being received, the Final Closing having occurred, and up to three (3) Additional Purchaser Nominee(s) being appointed to the Board. Mr. Hall further agreed to resign, and did resign, as the Company’s Chief Executive Officer as of the First Closing.

Mr. Hall received a cash settlement payment of $481,250 plus any unpaid wages and $8,778 in payments pursuant to COBRA in accordance with the Hall Release Agreement in connection with the First Closing. Further, Mr. Hall will receive a second cash settlement payment of $481,250 plus any unpaid wages and $8,778 in COBRA payments by October 31, 2025. Mr. Hall’s payment amounts comprise his earned severance under the Prior Hall Employment Agreement.

Tommy Law

On August 19, 2025, the Company entered into the Law Employment Agreement with Mr. Law for his service as the Company’s Chief Financial Officer and Treasurer. Mr. Law did not previously have an employment agreement in place. As a result of Mr. Law’s appointment as the Chief Financial Officer and Treasurer of the Company, Mr. Law also received a one-time signing bonus of $89,250, to be paid in cash, separate from the terms of the Law Employment Agreement.

The Law Employment Agreement provides for at-will employment with a term commencing on the date of the First Closing and continuing until the first anniversary of the date of commencement. The Law Employment Agreement provides for an annual base salary of one hundred seventy thousand dollars ($170,000) (the “Law Base Salary”). In addition, Mr. Law shall be eligible for any bonus plan that is deemed appropriate by the Board. The bonus amount shall be determined by the Board, in its sole discretion, based upon, among others, the following factors: (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to the executive as set by the Company’s Chief Executive Officer and/or the Board, before the end of the first calendar quarter; (ii) the evaluation of the executive by the Company’s Chief Executive Officer and/or the Board; (iii) the Company’s financial, product and expected progress; and (iv) other pertinent matters relating to the Company’s business and valuation. Any bonus will be payable within two and a half (2 ½) months following the end of the year for which the bonus was earned. The Compensation Committee of the Board shall have the sole discretion to pay any or all of the annual bonus in the form of equity compensation. Any such equity compensation shall be issued from the Company’s 2017 Omnibus Plan and shall be fully vested upon payment.

Further, Mr. Law is entitled to a retention bonus of $170,000 to the extent he remains employed through the Company’s filing of its quarterly report on Form 10-Q with the SEC for the quarter ended September 30, 2025 (the “Retention Date”) and he has not otherwise resigned or been terminated for cause (as defined in the Law Employment Agreement) prior to the Retention Date.

In the event the Company terminates Mr. Law without cause (including death, disability or for constructive termination), or his employment term otherwise expires at the end of the term, he shall be entitled to an amount equal to the Law Base Salary in effect on the date of separation from service (the “Law Severance Amount”). The Law Severance Amount will be paid in a lump sum within sixty (60) days following the executive’s separation from service. The Law Severance Amount shall be in addition to Mr. Law’s earned wages and other compensation (including reimbursements of his outstanding expenses and unused vacation) through the date his employment is terminated from the Company as provided in the preceding sentence. In the event the Company terminates Mr. Law for cause, he shall be entitled to any earned but unpaid wages or other compensation (including reimbursements of his outstanding expenses and unused vacation) earned through the termination date.

Moreover, all outstanding equity awards held by Mr. Law will be subject to full accelerated vesting on the date of termination without cause or at the expiration of the employment term, and the exercise period shall be extended to three (3) years from the date of termination. In order to terminate Mr. Law for cause (or for Mr. Law to resign for constructive termination), the acting party shall give notice to the other party specifying the reason for termination and providing a period of thirty (30) days to cure the reason specified. If there is no cure within thirty (30) days or the notified party earlier refuses to effect the cure, the termination shall then be deemed effective.

The compensation and benefits for service as non-employee members of our Board is determined by the Board. Directors employed by the Company, such as Mr. Lazar and Mr. Hall, are not compensated for service on the Board or any committee of the Board; however, the Company reimburses all directors for any out-of-pocket expenses incurred in connection with attending meetings of the Board and committees of the Board.

The Board, upon the recommendation of the Compensation Committee, approved the Non-Employee Director Compensation Program, effective January 1, 2024 (the “2024 Non-Employee Director Compensation Plan”). Under the 2024 Non-Employee Director Compensation Plan, each director received his or her annual retainer compensation in cash and an annual grant of 858 restricted stock units. All cash compensation is payable quarterly on the first (1st) business day of the quarter.

Approved non-employee director compensation for 2024 was as follows:

Non-employee directors also may be granted additional awards under our equity incentive plans at the discretion of our Board.

The compensation received during 2024 by each non-employee director is set forth below.

Release Agreements with the Resigning Non-Employee Directors

On August 19, 2025 at the First Closing of the Investment Transaction, the Company entered into Release Agreement with Mr. Hall and each of the Resigning Non-Employee Directors (Dr. Freiman, Ms. Garlikov, Ms. Sit, Mr. Wu and Mr. Sean Zheng). The remaining non-employee director, Dr. Jeff Zheng, will continue to serve on the Board as a continuing director and, therefore, he did not enter into a Release Agreement. Please see “Executive Compensation and Other Information—Employment-Related Agreements and Potential Payments upon Termination or Change in Control—Justin Hall” for a description of the Hall Release Agreement.

The Release Agreements provide for (i) the Resigning Non-Employee Directors to generally release the Company from any claims, actions, or losses that such person may have against the Company and (ii) the Company to similarly release each of the Resigning Non-Employee Directors from any claims, action or losses that the Company may have against such person, provided that the Company shall remain obligated pursuant to the indemnification agreements with each person and to maintain D&O insurance coverage, or a D&O tail policy.

Under the terms of the Release Agreements with the Resigning Non-Employee Directors, these directors agreed to resign from the Board effective on the Resignation Event, which includes the Conversion Approval being received, the Final Closing having occurred, and up to three (3) Additional Purchaser Nominee(s) being appointed to the Board as well as the Special Dividend having been declared and paid and Proposal Seven being approved. Pursuant to, and as consideration for, the Release Agreements with the Resigning Non-Employee Directors, each Resigning Non-Employee Director shall receive the Equity Consideration of a settlement payment of newly-issued shares of restricted Common Stock, with an aggregate value of $40,000 (determined based on the closing price of Common Stock on the trading day that immediately precedes the date of the Resignation Event) to be issued on the date of the Resignation Event, as well as any accrued and unpaid director’s fees. To the extent that Proposal Seven (Director Equity Consideration Approval) is not obtained and the Equity Consideration is not issued to the Resigning Non-Employee Director, then the Release Agreements with the Resigning Non-Employee Directors will terminate and be of no further force and effect.

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, the Company is providing the following disclosure about the relationship between executive pay actually paid (as defined by SEC rules) and the Company’s financial performance.

In accordance with Section 14(a) of the Exchange Act, stockholders are being given the opportunity to vote on an advisory (non-binding) resolution to approve the compensation of the Company’s executive officers or NEOs, as described above under “Executive Compensation and Other Information,” which includes compensation tables and narrative discussions of the NEOs’ compensation in this Proxy Statement.

We are asking our stockholders to indicate their support for our NEO compensation as set forth in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophies, policies and practices described in this Proxy Statement. We are asking our stockholders to vote “FOR” the following non-binding resolution at the Annual Meeting:

“RESOLVED, that the compensation of NovaBay Pharmaceuticals, Inc.’s named executive officers, as disclosed in NovaBay’s Proxy Statement for the 2025 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the “Executive Compensation and Other Information,” the compensation tables and related narrative disclosures, is hereby approved.”

The Say-on-Pay vote is advisory, and therefore not binding on NovaBay, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of NovaBay’s stockholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, the Board and the Compensation Committee will consider stockholders’ concerns and evaluate whether any actions are necessary to address those concerns.

The affirmative vote of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required for the approval of this Proposal Two. Unless otherwise instructed in the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” this proposal. Abstentions, if any, with respect to this proposal will have the effect of a vote “AGAINST” this Proposal Two. Broker non-votes, if any, with respect to this Proposal Two, will have no effect.

Under Section 14(a) of the Exchange Act, the Company’s stockholders are required to vote, on an advisory, non-binding bases, on the frequency with which they would prefer to cast an advisory, non-binding Say-on-Pay vote on executive compensation, commonly referred to as the “Say-on-Frequency vote,” at least every six (6) years. By voting on this proposal, stockholders may indicate whether they prefer that we seek an advisory vote every one, two or three years. At our 2019 Annual Meeting, our stockholders expressed a preference that the non-binding advisory Say-on-Pay vote on executive compensation be held every three years, which the Company has done for the last six (6) years.

After careful consideration of the frequency alternatives, the Board believes that continuing to conduct a triennial advisory (non-binding) Say-on-Pay vote on executive compensation is appropriate for the Company and its stockholders at this time. In making its determination to recommend that our stockholders vote for a frequency of every three years, the Board determined that such advisory vote on executive compensation will provide our stockholders with sufficient time to evaluate the effectiveness of our executive compensation philosophy, policies, and practices in the context of long-term business results and strategy, while avoiding over-emphasis on short-term variations in compensation and business results; and that an advisory vote every three years will also permit our stockholders to observe and evaluate the impact of any changes in our executive compensation policies and practices which have occurred since the last advisory vote on executive compensation, including changes made in response to the outcome of a prior advisory vote on executive compensation.

Accordingly, the Board is asking stockholders to indicate their preferred voting frequency by voting for one, two or three years (which vote will also be a vote to approve the resolution) or abstaining from voting on the resolution below:

“RESOLVED, that the alternative of soliciting advisory stockholder approval of the compensation of NovaBay’s named executive officers once every one, two or three calendar years that receives the greatest number of votes of shares present in person or represented by proxy and voting on this proposal at the Annual Meeting shall be considered the frequency preferred by the stockholders.”

Although the vote of the stockholders is non-binding on the Board and NovaBay, the Board and the Compensation Committee value the opinions of NovaBay’s stockholders in this matter and the Board intends to adopt whichever frequency receives the greatest number of votes of shares present in person or represented by proxy and entitled to vote on this proposal at the Annual Meeting.

The frequency that receives the greatest number of votes by holders of the voting power of shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be considered the non-binding selection of stockholders for this Proposal Three. Unless otherwise instructed in the proxy or unless authority to vote is withheld, shares represented by executed proxies will vote “THREE YEARS” for this proposal. Abstentions and broker non-votes, if any, with respect to this Proposal Three, will have no effect.

The Audit Committee of our Board has selected WithumSmith+Brown, PC (“Withum”) as our independent registered public accounting firm for the fiscal year ending December 31, 2025. Withum is registered with the Public Company Accounting Oversight Board (“PCAOB”) and the Center for Audit Quality and has over twenty (20) years of experience representing public companies with over 200 SEC registrants for which it performs public company audits.

We are asking our stockholders to ratify the selection by the Audit Committee of Withum as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2025, and to perform other appropriate services. Stockholder ratification of the selection of Withum as our independent registered public accounting firm is not required by the Bylaws or otherwise. In the event that stockholders fail to ratify the appointment, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee feels that such a change would be in the Company’s best interests and our stockholders’ best interests.

A representative of Withum is expected to be present at the Annual Meeting, will have the opportunity to make a brief presentation to the stockholders if he or she so desires and is expected to be available to respond to appropriate questions from stockholders.

The following table sets forth the fees billed to us for the fiscal years ended December 31, 2024 and 2023 by Withum for such years:

Audit Fees. Audit fees consisted of fees billed by Withum for professional services rendered in connection with the audit and quarterly reviews of our consolidated financial statements and other engagements, such as review of documents filed with the SEC, including fees associated with the review of registration statements, comfort letters and consents.

Audit-Related Fees. Audit-related fees comprise fees for professional services rendered by Withum that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported in “Audit Fees.” In 2024 and 2023, such audit-related fees were related to out-of-pocket expenses incurred in conjunction with the performance of audits and reviews.

Tax Fees. These are fees for professional services with respect to tax compliance, tax advice and tax planning. There were no such services rendered by Withum in 2024 or 2023 that meet this category description.

All Other Fees. All other fees are the fees for products and services other than those in the above three categories. There were no such services rendered by Withum in 2024 or 2023 that meet this category description.

All engagements for services by Withum or other independent registered public accounting firms are subject to prior approval by the Audit Committee; however, de minimis non-audit services may be approved in accordance with applicable SEC rules. The Audit Committee approved all services provided by Withum for the fiscal years ended December 31, 2024 and December 31, 2023.

The affirmative vote of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required for ratification of this Proposal Four. Unless otherwise instructed in the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” this proposal. Abstentions, if any, with respect to this proposal will have the effect of a vote “AGAINST” this Proposal Four. We do not expect to receive any broker non-votes on this Proposal Four.

The following is the report of the Audit Committee with respect to the audited consolidated financial statements of NovaBay Pharmaceuticals, Inc. for the fiscal year ended December 31, 2024, included in the Annual Report on Form 10-K for that year.

The Audit Committee has reviewed and discussed the audited financial statements of NovaBay for the fiscal year ended December 31, 2024 with NovaBay’s management. The Audit Committee has discussed with NovaBay’s independent registered public accounting firm, Withum, the matters required to be discussed by Auditing Standard No. 61, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”).

The Audit Committee has received the written disclosures and the letter from Withum required by applicable requirements of the PCAOB regarding Withum’s communications with the Audit Committee concerning independence and has discussed with Withum the independence of Withum.

Based on the review and discussions referred to above in this report, the Audit Committee recommended to NovaBay’s Board that the audited financial statements be included in NovaBay’s Annual Report for filing with the SEC.

The following is a summary of the material provisions of the Purchase Agreement, the Series D Preferred Stock, the Series E Preferred Stock and other related transaction documents summarized below, but does not purport to describe all of the terms and conditions and may not contain all of the information about these documents identified below that are important to you. The following summary is qualified in its entirety by reference to the complete text of the Purchase Agreement, the Series D Certificate of Designation (as defined below), the Series E Certificate of Designation (as defined below) and other related transaction documents, which are publicly available and attached as exhibits to our Current Report on Form 8-K as filed with the SEC on August 19, 2025 (the “Investment Transaction Form 8-K”). You should refer to the full text of the Purchase Agreement, the Series D Certificate of Designation, the Series E Certificate of Designation and other related transaction documents referred to below and elsewhere in this Proxy Statement for details about the Investment Transaction, and carefully read this entire Proxy Statement and the other documents to which we have referred you under the section “Where You Can Find More Information” in this Proxy Statement.

Private Placement of Series D Preferred Stock and Expected Private Placement of Series E Preferred Stock

On August 19, 2025, we entered into the Purchase Agreement that provided for the Company to sell to Mr. Lazar in a private placement an aggregate of 481,250 shares of Series D Preferred Stock convertible into an aggregate of 77.0 million shares of Common Stock and an aggregate of 268,750 shares of Series E Preferred Stock convertible into an aggregate of 43.0 million shares of Common Stock. At the First Closing simultaneously with entering into the Purchase Agreement, Mr. Lazar purchased the shares of Series D Preferred Stock at a price of $8.00 per share for aggregate gross proceeds to us of $3.85 million. Pursuant to the Purchase Agreement, at the Final Closing, Mr. Lazar will separately purchase the shares of Series E Preferred Stock at a price of $8.00 per share for aggregate gross proceeds to us of $2.15 million. The consummation of the Final Closing by us and Mr. Lazar is subject to the satisfaction or waiver of, among other customary closing conditions, (i) receiving the Conversion Approval, as is being solicited by Proposal Five (NYSE American Proposal), (ii) the accuracy of the representations and warranties of each of the parties in the Purchase Agreement, (iii) compliance by the parties with the covenants in the Purchase Agreement, and (iv) no permanent suspension or other trading suspension for more than three consecutive trading days of our Common Stock by the SEC, the NYSE American or as reported by Bloomberg L.P. having occurred.

The shares of Series D Preferred Stock issued at the First Closing, upon conversion, will represent approximately [61]% of the Company’s issued and outstanding Common Stock on a fully diluted basis, and the Series E Preferred Stock to be issued at the Final Closing, upon conversion, will represent approximately [34]% of the Company’s issued and outstanding Common Stock on a fully diluted basis as of the Final Closing, or collectively approximately [95]% in the aggregate (based on the number of shares of Common Stock anticipated to be outstanding as of the Final Closing). As a result of our Common Stock being listed on the NYSE American, we are required to comply with the continued listing rules set forth in Section 713(a) and Section 713(b) of the Company Guide and obtain the Conversion Approval of our stockholders in order for Mr. Lazar to be able to fully convert the Series D Preferred Stock and convert the Series E Preferred Stock, which approval, pursuant to Proposal Five (NYSE American Proposal) is being sought at this Annual Meeting.

Use of Proceeds

Pursuant to the Purchase Agreement, the net proceeds received from the Investment Transaction have been and will be used for the Company’s operations, including for general corporate and working capital purposes, for payment of the Special Dividend, for expenses related to the Investment Transaction and the Post-Investment Transaction (as discussed below) and to satisfy other agreed upon Company obligations that include the payments to the Remaining Warrant Holders pursuant to the Series F Agreements and severance and other payments pursuant to the Release Agreements (as discussed below).

One-Time Special Cash Dividend to Stockholders

As a result of receiving the proceeds from the Investment Transaction and pursuant to the Purchase Agreement, the Company committed to declaring and paying a one-time Special Dividend to stockholders funded by the Aggregate Cash Distribution Amount that was segregated at the First Closing for payment of the Special Dividend. Further, pursuant to the Voting Agreement with the Poplar Entities, the Company agreed to use commercially reasonable efforts to issue a special cash dividend that equals or exceeds $0.80 per share. To satisfy this important commitment, on August 26, 2025, the Company announced that it declared this one-time Special Dividend payable on September 29, 2025 to stockholders of record as of the close of business on September 15, 2025 in the amount of $0.80 per share of Common Stock. Pursuant to the Purchase Agreement, in addition to other conversion limitations, Mr. Lazar is restricted from converting any shares of Series D Preferred Stock until after the Special Dividend is declared and paid to our stockholders. The payment of the Special Dividend is under the direction and control of the Special Transaction Committee, comprised of directors that our Board has determined do not have a material personal interest and are not otherwise affiliated with Mr. Lazar or the Investment Transaction.

Post-Investment Transaction

Additionally, after the Final Closing and subject to approval by the Board, the Company intends to use the net proceeds from the Investment Transaction to pursue and consummate the Post-Investment Transaction, which is contemplated to be a strategic transaction involving an investment and/or acquisition of an operating going concern and solvent company (“Target Company”). If and when a Post-Investment Transaction is entered into and consummated after receiving required approvals, we expect that, by combining with a new operating and revenue generating Target Company, such combination will result in a future growth opportunity for our Company and our stockholders. In connection with a Post-Investment Transaction being consummated, our stockholders may experience dilution to the extent that we issue additional shares of our Common Stock or other securities as consideration to acquire the Target Company.

The Purchase Agreement entered into by us and Mr. Lazar provides for the transactions and agreements described below and contains customary representations, warranties, and covenants by us and Mr. Lazar, as well as indemnification rights, and other obligations of the parties.

First Closing Conditions and Transactions

The consummation of the First Closing on August 19, 2025 was subject to the satisfaction of customary closing conditions, including the accuracy of the representations and warranties in the Purchase Agreement and the execution and delivery of certain transaction documents, which included the Series F Agreements with the Remaining Warrant Holders and the Voting Agreement with the Poplar Entities, as well as the Release Agreements with Mr. Hall and each of the Resigning Non-Employee Directors, the New Hall Employment Agreement and the Law Employment Agreement, each as further described below.

Series F Agreements. On August 19, 2025, simultaneous with the First Closing, the Company entered into the Series F Agreements with each of the Remaining Warrant Holders, comprised of Anson Investments Master Fund LP, Hudson Bay Capital Management LP and Armistice Capital, LLC, as the three largest remaining holders of the Company’s Series F Warrants. Pursuant to the Series F Agreements, each Remaining Warrant Holder surrendered all of their respective Series F Warrants and any additional Common Stock purchase warrants that each Remaining Warrant Holder owned, if any, in exchange for (i) the Company issuing an aggregate of 1,986,565 shares of Series F Preferred Stock to the Remaining Warrant Holders and (ii) a cash payment of $175,000 to each of the Remaining Warrant Holders. The Series F Preferred Stock issued has the powers, preferences, rights, qualifications, limitations and restrictions as set forth in the Certificate of Designation of Preferences, Rights and Limitations for the Series F Voting Retractable Preferred Stock (the “Series F Certificate of Designation”). Among these rights, each share of Series F Preferred Stock that we issued has the right to vote the equivalent of approximately 0.424 shares of Common Stock, or in the aggregate the right to vote 842,829 shares of Common Stock, which will represent an aggregate of approximately [12.6]% of the voting power as of the Record Date. The Series F Agreements provide for each of the Remaining Warrant Holders to exercise their voting rights by voting all of their Series F Preferred Stock in favor of the Proposals that have been presented to stockholders at this Annual Meeting, including the Conversion Approval.

The terms of the Series F Preferred Stock provide the Remaining Warrant Holders with the right to require that we retire their shares of Series F Preferred Stock and convertible securities beginning after the earlier of the Conversion Approval and December 31, 2025 in exchange for $175,000 to each Remaining Warrant Holder, or an aggregate of $525,000. We also have the right to retire the Series F Preferred Stock for the same amount after December 31, 2025 if such shares have not been retired. The Series F Agreements include a standstill provision pursuant to which the Remaining Warrant Holders agree not to initiate any claims against the Company, including claims that relate to the transactions contemplated by the Purchase Agreement and the Special Dividend, as well as a “most favored nations” provision that provides for transaction terms of the Remaining Warrant Holders to be materially consistent. For additional information about the Series F Agreements and the Series F Preferred Stock, see the Investment Transaction Form 8-K.

Voting Agreement. In connection with the First Closing of the Investment Transaction, the Company and Mr. Lazar entered into the Voting Agreement with Jad Fakhry and the Poplar Entities, which reported owning approximately 17.5% of outstanding Common Stock in their Schedule 13D filed with the SEC on June 4, 2025. In connection with the Poplar Entities entering into the Voting Agreement, we agreed to use commercially reasonable efforts for the contemplated Special Dividend to equal or exceed $0.80 per share (prior to any stock split, share consolidation, recapitalization or similar transaction). Pursuant to the Voting Agreement, the Poplar Entities agreed to, among other terms, vote all of their shares of Common Stock at the Annual Meeting in favor of the Proposals recommended by the Board and appoint the Company as an irrevocable proxy for the Poplar Entities for the duration of the Voting Agreement, which has a term of two years. The Poplar Entities also agreed to a standstill provision that ensures they will, among other terms, (i) not effect, offer or propose to purchase any additional securities or assets of the Company (including derivative rights), engage in any tender, merger, recapitalization, liquidation, or other business combination transaction, solicit proxies or otherwise act to control or influence the management of the Board or take any action that may force us to make a public announcement of such matters and (ii) not dispose of any shares of our Company until the Poplar Entities have voted their shares of Common Stock at the Annual Meeting in favor of all Proposals recommended by the Board at the Annual Meeting and such proposals have passed. Notwithstanding the standstill provision, the Poplar Entities can make proposals to the Board or Special Transaction Committee, the Chairman, and/or the Chief Executive Officer on a confidential, non-public basis for pursuit of a proposed transaction between the Company, Mr. Lazar and the Poplar Entities, so long as the Company would not reasonably be expected to publicly disclose such a proposal and a waiver of the standstill provision.

Release Agreements. As a condition to the First Closing, we entered into Release Agreements with Mr. Hall and the Resigning Non-Employee Directors, comprised of five (5) of the six (6) non-employee directors serving on the Board (Dr. Freiman, Ms. Garlikov, Ms. Sit, Mr. Wu and Mr. Sean Zheng). The remaining non-employee director, Dr. Jeff Zheng (who satisfies the “independence” requirements set forth in the Company Guide and under federal securities laws) will continue to serve on the Board, and, therefore, he did not enter into a Release Agreement. The Release Agreements provide for (i) Mr. Hall and the Resigning Non-Employee Directors to generally release the Company from any claims, actions, or losses that such person may have against the Company and (ii) the Company to similarly release Mr. Hall and each of the Resigning Non-Employee Directors from any claims, actions or losses that the Company may have against such person, provided that the Company shall remain obligated pursuant to the indemnification agreements with each person and to maintain D&O insurance coverage, or a D&O tail policy.

Pursuant to the Hall Release Agreement, he agreed to resign from the Board effective on the date and at the time that each of the following have occurred: (i) receipt of the Conversion Approval; (ii) the completion of the Final Closing; and (iii) the Additional Purchaser Nominee(s) (as further discussed below) being qualified and appointed to serve on the Board. Mr. Hall further agreed to resign, and did resign, as the Company’s Chief Executive Officer as of the First Closing. Under the terms of the Release Agreements with the Resigning Non-Employee Directors, each of these directors agreed to resign from the Board effective upon the Resignation Event or on the date and at the time that each of the following have occurred: (a) receipt of the Conversion Approval; (b) the Final Closing; (c) the Additional Purchaser Nominee(s) being qualified and appointed to serve on the Board; (d) the Special Dividend having been declared and paid; and (e) Proposal Seven (Director Equity Consideration Proposal) having been approved.

Pursuant to, and as consideration for, the Release Agreements with the Resigning Non-Employee Directors, each Resigning Non-Employee Director shall receive (i) a settlement payment of newly-issued shares of restricted Common Stock, with an aggregate value of $40,000 (determined based on the closing price of Common Stock on the trading day that immediately precedes the date of the Resignation Event) to be issued on the date of the Resignation Event (the “Equity Consideration”), subject to stockholders approving Proposal Seven (Director Equity Consideration Proposal), plus (ii) any accrued and unpaid directors’ fees.

To the extent that Proposal Seven (Director Equity Consideration Proposal) is not obtained and the Equity Consideration is not issued to the Resigning Non-Employee Directors, then the Release Agreements with the Resigning Non-Employee Directors will terminate and be of no further force and effect. The Hall Release Agreement provides for Mr. Hall to receive a cash settlement payment of $481,250 plus any unpaid wages and $8,778 in payments pursuant to COBRA in connection with the First Closing, which Mr. Hall received at such time. Further, Mr. Hall will receive a second cash settlement payment of $481,250 plus any unpaid wages and $8,778 in COBRA payments by October 31, 2025. Mr. Hall’s payment amounts comprise his earned severance under the Prior Hall Employment Agreement.

New Hall Employment Agreement. At the First Closing, the Company entered into the New Hall Employment Agreement that provides for his continued service as the Company’s Vice President of Business Development, General Counsel and Corporate Secretary, which entirely amended and restated the Prior Hall Employment Agreement. The New Hall Employment Agreement provides for an employment term commencing on the date of the First Closing and ending on October 31, 2025 (the “Hall Employment Term”) and an annual base salary of $175,000. The Hall Employment Agreement is guaranteed through the Hall Employment Term. See “Executive Compensation and Other Information—Employment-Related Agreements and Potential Payments upon Termination or Change in Control—Justin Hall” for a further description of the New Hall Employment Agreement and the Prior Hall Employment Agreement.

Law Employment Agreement. The Company at the First Closing also entered into the Law Employment Agreement with Mr. Law to serve as the Company’s Chief Financial Officer and Treasurer. Mr. Law previously served as the Interim Chief Financial Officer and Treasurer and did not have an employment agreement in place. The Law Employment Agreement provides for at-will employment with a term commencing on the date of the First Closing that continues until August 19, 2026 with an annual base salary of $170,000. Mr. Law will also be (i) entitled to a retention bonus of $170,000 to the extent he remains employed through the Company’s filing of its quarterly report on Form 10-Q with the SEC for the quarter ended September 30, 2025 and has not resigned or been terminated for cause (as defined in the Law Employment Agreement) prior to such date and (ii) eligible for any bonus plan that is deemed appropriate by the Board as provided in the Law Employment Agreement. The Law Employment Agreement also provides for the termination of Mr. Law’s employment and compensation that he may be entitled to receive, including a severance payment, depending on the circumstances of his termination. See “Executive Compensation and Other Information—Employment-Related Agreements and Potential Payments upon Termination or Change in Control—Tommy Law” for a further description of the Law Employment Agreement.

Post-First Closing Covenants of Mr. Lazar and Our Company

Pursuant to the Purchase Agreement, we and Mr. Lazar each agreed to be bound by certain covenants after the First Closing, which include the following:

Stockholder Proposals and Meeting

Pursuant to the Purchase Agreement, we agreed to hold this Annual Meeting to obtain the Conversion Approval contemplated by Proposal Five, as well as obtain stockholder approval of (i) an increase in the Company’s authorized shares of Common Stock to 300.0 million shares from 150.0 million shares, as contemplated by Proposal Nine, although such increase is proposed to be 1.5 billion shares, (ii) an increase in the Company’s authorized shares of preferred stock to 10.0 million shares from 5.0 million shares, as contemplated by Proposal Ten, (iii) the election of Company directors to the Board, including Mr. Lazar, as contemplated by Proposal One, (iv) an increase in shares available under the NovaBay Pharmaceuticals, Inc. 2017 Omnibus Plan to up to one (1) million shares, as contemplated by Proposal Six, (v) the issuance and payment of the Equity Consideration, comprised of newly-issued shares of restricted Common Stock with an aggregate value of $40,000, to each of the Resigning Non-Employee Directors as contemplated by the Release Agreements, as contemplated by Proposal Seven, and (vi) a reverse stock split of the Common Stock in the range of not less than 1-for-2 and not more than 1-for-10, with the specific ratio to be determined and implemented in the sole and absolute discretion of the Board, as contemplated by Proposal Eight.

To the extent that the above proposals are not obtained, then we are required to use our reasonable best efforts to call a second stockholder meeting within seventy (70) days of the date of the Annual Meeting (the “Second Meeting”). If the Conversion Approval is not received at the Second Meeting, then we agreed to issue and sell to Mr. Lazar in the Additional Private Placement (as defined below) up to 19.99% of the Common Stock outstanding as of the date of the Purchase Agreement at a price per share equal to the closing stock price of the Common Stock on the date of the Second Meeting plus $0.02. The number of shares of Common Stock that Mr. Lazar will be entitled to purchase in the Additional Private Placement is limited and subject to automatic reduction to a number of shares of Common Stock where Mr. Lazar, together with his affiliates, will not own shares of Common Stock in excess of 19.99% of Common Stock outstanding as of the date of the Purchase Agreement. As a result of the Share Issuance Limitation in the Series D Preferred Stock, if the Additional Private Placement is completed by Mr. Lazar, he will no longer be able to convert any Series D Preferred Stock until after the Conversion Approval is received.

Description of Series D Preferred Stock and Series E Preferred Stock

The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series D Preferred Stock and the Series E Preferred Stock to be issued in the Investment are set forth in the Company’s Certificate of Designation of Preferences, Rights and Limitations of the Series D Non-Voting Convertible Preferred Stock (the “Series D Certificate of Designation”) and the form of Certificate of Designation of Preferences, Rights and Limitations of the Series E Non-Voting Convertible Preferred Stock (the “Series E Certificate of Designation”). The Series D Certificate of Designation was filed with the Delaware Secretary of State on August 19, 2025 and is attached as Exhibit 3.1 to the Investment Transaction Form 8-K. The Series E Certificate of Designation will be filed

with the Delaware Secretary of State prior to the Final Closing occurring, with the form of such Series E Certificate of Designation attached as Exhibit 3.2 to the Investment Transaction Form 8-K. As summarized below, the powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series D Preferred Stock and the Series E Preferred Stock are substantially similar.

Voting Rights. The holders of the shares of the Series D Preferred Stock and Series E Preferred Stock generally will have no voting rights, except as required by law, with the exception that the consent of the majority of holders of the outstanding Series D Preferred Stock or Series E Preferred Stock, as applicable, would be required to: (i) alter or change adversely the powers, preferences or rights given to the Series D Preferred Stock or Series E Preferred Stock or alter or amend the Series D Certificate of Designation or Series E Certificate of Designation, as applicable; (ii) amend the Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock or Series E Preferred Stock, as applicable; (iii) increase the number of authorized shares of Series D Preferred Stock or Series E Preferred Stock, as applicable; and (iv) enter into any agreement with respect to any of the foregoing.

Dividends. The holders of the Series D Preferred Stock and the Series E Preferred Stock will be entitled to receive, and the Company will be required to pay, dividends on shares of the Series D Preferred Stock and the Series E Preferred Stock equal (on an as if converted to Common Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock; provided, however, that no dividends will be paid to the holders of the Series D Preferred Stock or the Series E Preferred Stock prior to the declaration and payment of the Special Dividend and the Company receiving the Conversion Approval.

Conversion and Limitations. Pursuant to the Series D Certificate of Designation and the Series E Certificate of Designation, the Series D Preferred Stock and the Series E Preferred Stock are each generally subject to the Share Issuance Limitation. After issuance by the Company, (i) each share of Series D Preferred Stock will be convertible into 160 shares of Common Stock per share of Series D Preferred Stock, or an aggregate of 77.0 million shares of Common Stock, and (ii) each share of Series E Preferred Stock will be convertible into 160 shares of Common Stock, or an aggregate of 43.0 million shares of Common Stock (as may be adjusted from time to time as a result of certain corporate actions such as a reverse stock split), in each case, subject to the Share Issuance Limitation and receipt of the Conversion Approval. Thereafter, on the third business day after the Company receives the Conversion Approval, each outstanding share of the Series D Preferred Stock will automatically convert into 160 shares of Common Stock (or an aggregate of up to 77.0 million shares of Common Stock), which conversion, as a result of having received the Conversion Approval, shall not be subject to the Share Issuance Limitation. Effective on the 30^th business day after the Conversion Approval is received and the issuance of the Series E Preferred Stock, each outstanding share of the Series E Preferred Stock will automatically convert into 160 shares of Common Stock (or an aggregate of up to 43.0 million shares of Common Stock), which conversion, as a result of having received the Conversion Approval, shall also not be subject to the Share Issuance Limitation.

Dilution Protection. In the event the Company, at any time that any shares of Series D Preferred Stock or Series E Preferred Stock are outstanding: (i) pays a dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, a dividend or other distribution shall not include any shares of Common Stock issued by the Company upon conversion of the Series D Preferred Stock and Series E Preferred Stock); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the number of shares of Common Stock underlying each share of Series D Preferred Stock and Series E Preferred Stock shall be adjusted as provided in the respective Series D Certificate of Designation or Series E Certificate of Designation. Any adjustment made pursuant to the respective Series D Certificate of Designation or Series E Certificate of Designation shall become effective immediately after the effective date of the applicable event described in subsections (i) through (iv) above.

In addition, if the Company issues shares of Common Stock (or other shares of capital stock or other securities convertible into Common Stock) at any time while the Series D Preferred Stock and Series E Preferred Stock are outstanding and the consideration per share payable to the Company reflects a pre-money imputed equity value of the Company less than $10.0 million, then the value of the Series D Preferred Stock or the Series E Preferred Stock will

be reduced to such lower price, which is referred to as a “full-ratchet” anti-dilution protection. This full-ratchet anti-dilution protection is subject to the reduced value only being reduced to the extent such reduction will not require further stockholder approval. Additionally, these dilution protections are not applicable to the Investment Transaction, the Additional Private Placement, the Equity Consideration and other transactions pursuant to the Purchase Agreement or any Post-Investment Transaction.

Rank. Based upon the rights and preferences as provided in the Series D Certificate of Designation and the Series E Certificate of Designation, each of the Series D Preferred Stock and the Series E Preferred Stock, respectively, will rank as to dividends or distributions of assets upon the Company’s liquidation, dissolution or winding up, whether voluntarily or involuntarily, as follows:

Liquidation Preference. In the event of the Company’s liquidation, dissolution or winding up, the holders of Series D Preferred Stock and Series E Preferred Stock will be entitled to receive an amount equal to $8.00 per share, the stated value of the Series D Preferred Stock and the Series E Preferred Stock (as may be increased from time to time pursuant to the terms of the Series D Certificate of Designation or Series E Certificate of Designation, as applicable) plus any declared but unpaid dividends that such holders are entitled to at such time. Next, the remaining assets of the Company will be distributed to the holders of Common Stock and any other junior securities until such holders receive a return of their capital originally contributed. Following this distribution, any remaining assets will be distributed to all holders of Common Stock, junior securities, Series D Preferred Stock, Series E Preferred Stock and any other parity securities pro rata based on the number of shares held on an as-converted basis. Pursuant to the terms of the Series D Certificate of Designation and the Series E Certificate of Designation, a liquidation event includes an acquisition or merger of the Company (not including transactions where stockholders maintain 50% or more voting power) or a sale of substantially all of the assets of the Company. The Series D Certificate of Designation and Series E Certificate of Designation each expressly provide that a liquidation event will not be triggered by a Post-Investment Transaction, or any other transaction contemplated by the Purchase Agreement.

Lazar Investor Rights

Board Rights. In connection with the First Closing of the Investment Transaction, Mr. Lazar was appointed as a director to our Board and began serving as our Chief Executive Officer, with our former Chief Executive Officer, Mr. Hall, continuing with the Company as its Vice President of Business Development, General Counsel and Corporate Secretary. Additionally, pursuant to the Purchase Agreement, Mr. Lazar received one-time contractual rights involving the Board, which include: (i) a contractual right to recommend one (1) individual to be nominated for election at this Annual Meeting, which right was exercised with Mr. Lazar’s nomination for election to the Board at this Annual Meeting; (ii) subject to the Conversion Approval and the Final Closing occurring, a contractual right to nominate up to three (3) Additional Purchaser Nominee(s) to be qualified (including satisfying director “independence” requirements under the Company Guide) and appointed to serve as directors on the Board after the resignation of the Resigning Non-Employee Directors pursuant to their respective Release Agreements; and (iii) subject to the Conversion Approval and the Final Closing occurring, a contractual right to be appointed as the Chair of the Board. Pursuant to the Purchase Agreement, when exercising his one-time right to appoint Additional Purchaser Nominee(s), Mr. Lazar will be entitled to nominate up to three (3) Additional Purchaser Nominee(s) to the Board based on his beneficial ownership of Common Stock (including through his ownership of Preferred Stock convertible into Common Stock) at the time of such nomination as follows: (a) one (1) Additional Purchaser Nominee when Mr. Lazar beneficially owns 20% but less than 40% of the outstanding Common Stock; (b) two (2) Additional Purchaser Nominee(s) when Mr. Lazar beneficially owns at least 40% of the outstanding Common Stock but less than 60% of the outstanding Common Stock; and (c) three (3) Additional Purchaser Nominee(s) when Mr. Lazar beneficially owns 60% or more of the outstanding Common Stock.

Participation in Future Offerings. In connection with the Investment Transaction, the Company granted Mr. Lazar a right to participate in subsequent financing transactions where we issue Common Stock or Common Stock equivalents for cash consideration, indebtedness or a combination thereof until the earlier of closing a Post-Investment Transaction or February 19, 2026 (i.e. the six (6) month anniversary of the First Closing), in an amount up to 25% of the subsequent financing transaction or a lesser amount to the extent that Mr. Lazar no longer holds at the time at least 25% of the issued and outstanding shares of Common Stock, including on an as converted basis.

Share Transfer Rights. Pursuant to the Purchase Agreement, Mr. Lazar has the right to assign and transfer the Series D Preferred Stock, the Series E Preferred Stock and the Conversion Shares and/or his right to acquire such securities (collectively, the “Securities Purchase Rights”), or the option to sell the Securities Purchase Rights, subject to Mr. Lazar and the transferee satisfying certain requirements pursuant to the Purchase Agreement. In connection with any such assignment or transfer of the Securities Purchase Rights, (i) such assignee or transferee must agree to be bound with respect to the transferred Securities Purchase Rights and/or transferred securities, by the representations and warranties and other applicable provisions of the Purchase Agreement and other transaction documents applicable to Mr. Lazar acquiring such securities, (ii) the exemption relied upon by us in connection with the issuance of the securities in the Investment Transaction shall continue to be in full force and effect and the transfer will be in compliance with all applicable laws, and (iii) upon request, Mr. Lazar shall certify to us regarding compliance with these obligations. Mr. Lazar’s indemnification obligations and covenants set forth in Article 4 of the Purchase Agreement shall be performed by Mr. Lazar and not be assignable in connection with the Securities Purchase Rights.

At the Annual Meeting, we are asking stockholders to approve this Proposal Five, and thereby provide the Conversion Approval, in accordance with Sections 713(a) and 713(b) of the Company Guide for both:

The Series D Preferred Stock that were issued at the First Closing, upon conversion will represent approximately [61]% of the Company’s issued and outstanding Common Stock on a fully diluted basis, and the Series E Preferred Stock to be issued, upon conversion, will represent approximately [34]% of the Company’s issued and outstanding Common Stock on a fully diluted basis as of the Final Closing, or collectively approximately [95]% in the aggregate (based on the number of shares of Common Stock anticipated to be outstanding as of the Final Closing). Accordingly, as a result of the significant number of shares of Common Stock and controlling ownership of NovaBay that Mr. Lazar will have upon conversion of the Series D Preferred Stock into the Series D Conversion Shares and the Series E Preferred Stock into the Series E Conversion Shares, our stockholders at this Annual Meeting are being asked to authorize and approve the full conversion of all of the shares of Series D Preferred Stock and all of the shares of Series E Preferred Stock to be issued in the Final Closing into the Conversion Shares.

Since our Common Stock is currently listed on the NYSE American, we are required to comply with the continued listing rules of the Company Guide. Section 713(a) of the Company Guide requires stockholder approval in connection with any transaction, other than a public offering, involving the sale, issuance, or potential issuance, of Common Stock or securities convertible into Common Stock, equal to 20.0% or more of presently outstanding stock for less than the greater of book or market value. Section 713(b) of the Company Guide requires stockholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of Common Stock (or securities convertible into or exercisable for Common Stock) when the issuance or potential issuance of additional shares may result in a change of control of the issuer.

Pursuant to the Company Guide, derivative securities representing in excess of 20% of shares of Common Stock currently outstanding on an as-converted basis or that will result in a change of control upon conversion, such as the Series D Preferred Stock issued in the Investment Transaction, may be issued prior to obtaining stockholder approval; however, such derivative securities, such as the Series D Conversion Shares, may not be converted into or exercised for shares of Common Stock above the Share Issuance Limitation until such time, if ever, that stockholder approval for such conversion or exercise, is obtained. Accordingly, until this Proposal Five is approved by stockholders, Mr. Lazar, as the current holder of the Series D Preferred Stock, may convert his shares only up to an aggregate of 19.99% of the outstanding shares of Common Stock as of the signing of the Purchase Agreement or such lower percentage of outstanding shares of Common Stock as may be required by the NYSE American or due to the issuance of Common Stock in the Additional Private Placement (the “Share Issuance Limitation”). Therefore, if stockholder approval is not obtained for the issuance of the Conversion Shares, the Series D Preferred Stock may not be converted into the Series D Conversion Shares in excess of the Share Issuance Limitation and even if we were to issue the Series E Preferred Stock in the Final Closing, the Series E Preferred Stock would not be convertible for the Series E Conversion Shares.

Strategic Direction of NovaBay

NovaBay has continued to explore and evaluate strategic options available to the Company during 2024 and 2025 to maximize its value following the Avenova Asset Divestiture that closed on January 17, 2025, the PhaseOne Divestiture that closed on January 8, 2025, and the DERMAdoctor Divestiture that closed on March 12, 2024. Among these strategic options, we pursued potential strategic transactions, such as this Investment Transaction, as well as the Dissolution that stockholders approved at the 2025 Special Meeting held on April 16, 2025. Specifically, the stockholder approval of the Dissolution gave the Board authorization from stockholders to subsequently determine, in its discretion, whether or not to proceed with the Dissolution. Following the Company’s review of its strategic options, the Company determined that pursuing the Investment Transaction that provides for a Special Dividend and a Post-Investment Transaction, instead of pursuing the Dissolution at this time, is a better opportunity to maximize the value of the Company for stockholders following the divestiture transactions and is in the best interest of the Company and its stockholders.

Investment Transaction

On August 19, 2025, we entered into the Purchase Agreement with Mr. Lazar that provides for the Company to issue and sell to Mr. Lazar in a private placement (i) an aggregate of 481,250 shares of Series D Preferred Stock convertible into the Series D Conversion Shares for $3.85 million and (ii) an aggregate of 268,750 shares of Series E Preferred Stock convertible into the Series E Conversion Shares for an additional $2.15 million.

Simultaneously with entering into the Purchase Agreement on August 19, 2025, we completed the First Closing where Mr. Lazar purchased the Series D Preferred Stock from the Company at a price of $8.00 per share for aggregate gross proceeds to the Company of $3.85 million. The Purchase Agreement also contemplates that Mr. Lazar will separately purchase and acquire the Series E Preferred Stock as soon as practicable at the Final Closing after the Company receives the Conversion Approval at a price of $8.00 per share for aggregate gross proceeds to us of $2.15 million, subject to the satisfaction of certain closing conditions that include: (i) the receipt of the Conversion Approval, and (ii) the continued listing of our Common Stock on the NYSE American. Pursuant to the Purchase Agreement, the net proceeds from the Investment Transaction have been and will be used for the Company’s operations, including for general corporate and working capital purposes, for payment of the Special Dividend, for expenses related to the Investment Transaction and the Post-Investment Transaction and to satisfy other agreed upon Company obligations.

As part of the Investment Transaction, Mr. Lazar was appointed as the Chief Executive Officer of NovaBay and was appointed to serve as a director of the Company. Mr. Lazar also received certain one-time contractual rights involving the Board, including: (i) nominating one (1) director at this Annual Meeting (which right was exercised with Mr. Lazar’s nomination at this Annual Meeting) and (ii) subject to receipt of the Conversion Approval and the Final Closing occurring, Mr. Lazar being appointed as Chair of the Board and his right to nominate up to three (3) Additional Purchaser Nominee(s) to the Board.

See “Description of the Investment Transaction and Preferred Stock” for a more fulsome description of the Investment Transaction and the rights Mr. Lazar received with respect to the Board and management of the Company.

Special Dividend to Stockholders (excluding Mr. Lazar)

As a result of receiving the proceeds from the Investment Transaction, the Purchase Agreement contemplated the Company declaring a one-time special dividend to NovaBay stockholders under the direction and control of our Special Transaction Committee. On August 26, 2025, the Company announced that it declared this one-time Special Dividend to stockholders of record on September 15, 2025 in the amount of $0.80 per share of Common Stock and payable on September 29, 2025. Neither the Series D Preferred Stock nor the Series E Preferred Stock will participate in the Special Dividend.

Post-Investment Transaction

After the Final Closing and subject to approval by the Board, the Company intends to use the net proceeds from the Investment Transaction to pursue and consummate a Post-Investment Transaction (i.e., a potential strategic transaction that would involve an investment and/or acquisition of a Target Company). If and when a Post-Investment Transaction is entered into and consummated after receiving required approvals, we expect that by combining with a new operating and revenue generating Target Company that such combination will result in a future growth opportunity for our Company and our stockholders. In connection with a Post-Investment Transaction being consummated, our stockholders may experience dilution to the extent that we issue shares of our Common Stock or other securities as consideration to acquire the Target Company, which would be in addition to the dilution that will result if stockholders approve this Proposal Five.

Significant Ownership and Control Upon Conversion of the Series D Preferred Stock and Series E Preferred Stock

As summarized in this Proposal Five and further detailed in the section of this Proxy Statement titled “Description of the Investment Transaction and Preferred Stock”, as a result of to the conversion of all of the shares of Series D Preferred Stock into shares of Common Stock representing approximately [61]% of the Company’s issued and outstanding Common Stock on a fully diluted basis as of the Record Date, and the full conversion of all shares of Series E Preferred Stock to be issued at the Final Closing into shares of Common Stock representing approximately an additional [34]% of the Company’s issued and outstanding Common Stock on a fully diluted basis as of the Final Closing, or collectively approximately [95]% in the aggregate, we are seeking approval of stockholders under both Section 713(a) and Section 713(b) of the Company Guide. Stockholder approval of this Proposal Five will constitute stockholder approval for purposes of both Section 713(a) and 713(b) of the Company Guide.

Approval of this Proposal Five will remove the conversion limitations upon the Series D Preferred Stock and there will not be any conversion limitations upon the Series E Preferred Stock to be issued, which upon conversion will result in Mr. Lazar having significant ownership of our Common Stock. Further, pursuant to the Purchase Agreement, Mr. Lazar has the right to assign and transfer his Securities Purchase Rights (i.e., the Series D Preferred Stock, the Series E Preferred Stock and the Conversion Shares and/or his right to acquire such securities), or the option to sell the Securities Purchase Rights, subject to certain requirements. Accordingly, if Mr. Lazar exercises this right partially or in full, it is possible that Mr. Lazar would not continue to be the controlling stockholder of our Company.

The Board approved the Investment Transaction and the Purchase Agreement and believes that satisfying our contractual obligations in the Investment Transaction by submitting this Proposal Five to stockholders for their approval at this Annual Meeting is in the best interests of our Company and our stockholders.

Satisfaction of a Condition to the Final Closing

Pursuant to the Purchase Agreement, the issuance of the Series E Preferred Stock to Mr. Lazar and our receipt of gross proceeds of $2.15 million is conditioned upon us receiving the Conversion Approval, as is being proposed by this Proposal Five, that will allow for the Series E Preferred Stock to be converted into Common Stock, as well as the satisfaction of certain other closing conditions that include no permanent suspension or other trading suspension for more than three consecutive trading days of our Common Stock by the SEC, the NYSE American or as reported by Bloomberg L.P. These additional proceeds will be important to us to fund our continuing operations and expenses, our pursuit of a potential Post-Investment Transaction, and our other obligations, including the retirement of the outstanding shares of Series F Preferred Stock that is contemplated to occur following the Conversion Approval or any time after December 31, 2025. If we do not receive stockholder approval of this Proposal Five, then Mr. Lazar will not be obligated to make the additional investment in the Series E Preferred Stock, even if we satisfy all of the other closing conditions, until the Conversion Approval is received.

Dilutive Effect and Control After Issuance of Conversion Shares. If this Proposal Five is approved by stockholders, all of the shares of Series D Preferred Stock will be convertible by Mr. Lazar or converted automatically within the third business day after this Proposal Five is approved into 77.0 million shares of Common Stock and the Series E Preferred Stock to be issued in the Final Closing will be immediately convertible following issuance by Mr. Lazar or converted automatically within 30 business days after this Proposal Five is approved into 43.0 million shares of Common Stock. As a result of the full conversion of the Series D Preferred Stock and the Series E Preferred Stock, it will result in the aggregate issuance of up to 120.0 million shares of Common Stock, which collectively will represent [95]% of shares of Common Stock anticipated to be outstanding as of the Final Closing. Upon the conversions of the Series D Preferred Stock and the Series E Preferred Stock, the existing stockholders of the Company will suffer significant dilution in their ownership interests and their voting rights, with Mr. Lazar receiving effective voting control over matters presented to stockholders in the future relating to our Company.

Rights as a Holder of Common Stock. If stockholder approval of this Proposal Five is received at this Annual Meeting, then the shares of Common Stock issuable upon the conversion of the Series D Preferred Stock and the Series E Preferred Stock, when issued, shall have the same privileges and rights as all other shares of our Common Stock that are currently issued and outstanding, including the right to vote on all matters presented to the holders of our Common Stock. However, as discussed above, Mr. Lazar’s ownership of our Common Stock will result in him having the ability to control the outcome of votes presented to stockholders.

Obligations Upon Failure of Stockholder Approval. Pursuant to the Purchase Agreement, to the extent that this Proposal Five and approval of Proposals One, Six, Seven, Eight, Nine and Ten are not obtained at this Annual Meeting, then we will be required to use our reasonable best efforts to call a Second Meeting within seventy (70) days of the date of the Annual Meeting. If the Conversion Approval is not received at the Second Meeting, the Company agreed to enter into the Additional Private Placement with Mr. Lazar and issue him shares of Common Stock equal to up to 19.99% of the Common Stock outstanding as of the date of the Purchase Agreement (as may be adjusted down) at a price per share equal to the closing stock price of the Common Stock on the date of the Second Meeting plus $0.02. The Company calling a Second Meeting and/or completing the Additional Private Placement would create additional expenses for the Company and divert management’s attention from its strategy, including completing a Post-Investment Transaction.

Please refer to “Risk Factors” in this Proxy Statement above for certain material risks related to the Investment Transaction and the approval of this Proposal Five.

This Proposal Five and the Section of this Proxy Statement titled “Description of the Investment Transaction and Preferred Stock” provides a description of the Investment Transaction and the material terms of the Purchase Agreement, the Series D Preferred Stock as set forth in the Series D Certificate of Designation, the Series E Preferred Stock as set forth in the Series E Certificate of Designation, as well as the related transaction documents. Additionally, disclosure of the Investment Transaction, as well as forms of the Purchase Agreement, the Series D Certificate of Designation, the Series E Certificate of Designation and the other transaction documents referred to in this Proposal Five and in other Proposals in this Proxy Statement can be found as exhibits to the Investment Transaction Form 8-K. See “Where You Can Find More Information” in this Proxy Statement below.

If approved by the stockholders, Mr. Lazar or any transferee (if Mr. Lazar were to transfer his shares as described in this Proxy Statement) will be entitled to convert all of the shares of Series D Preferred Stock and Series E Preferred Stock after being issued in the Final Closing into Common Stock. By approving this Proposal Five you are not being asked to vote on the Investment Transaction (with the First Closing already been completed), the issuance of the Series D Preferred Stock (which has already been issued) or the issuance of the Series E Preferred Stock at the Final Closing (which has yet to occur and is subject to satisfaction of closing conditions). Instead, pursuant to this Proposal Five, we are seeking your approval of the issuance of shares of Common Stock to be issued upon conversion of the shares of Series D Preferred Stock and, if issued at the Final Closing, the shares of Series E Preferred Stock.

The affirmative vote of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required for the approval of this Proposal Five. Unless otherwise instructed in the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” this proposal. Abstentions, if any, with respect to this proposal will have the effect of a vote “AGAINST” this Proposal Five. Broker non-votes, if any, with respect to this Proposal Five, will have no effect.

At this Annual Meeting, we are asking our stockholders to approve an amendment (the “Omnibus Plan Amendment”) to our 2017 Omnibus Plan to (i) increase the shares authorized under the 2017 Omnibus Plan by 1,000,000 shares of Common Stock resulting in a maximum number of shares currently available for issuance of 1,021,332 shares of Common Stock, subject to an annual increase in the Board’s discretion pursuant to the Evergreen Provision (as defined and described below) and (ii) make corresponding changes to the share grant limitations in the 2017 Omnibus Plan for Incentive Stock Options, Restricted Stock and Restricted Stock Units (as each term is defined under the 2017 Omnibus Plan). On September 5, 2025, upon recommendation of the Compensation Committee, the Board approved the adoption of the Omnibus Plan Amendment, subject to approval by NovaBay’s stockholders at the Annual Meeting. The Omnibus Plan Amendment will not make any other changes to the 2017 Omnibus Plan.

Our stockholders originally approved the 2017 Omnibus Plan at the 2017 Annual Meeting of Stockholders, and, at that time, the 2017 Omnibus Plan initially authorized the issuance of an aggregate of 1,892 shares of Common Stock under the 2017 Omnibus Plan, and the Board further authorized an additional 19,440 aggregate shares of Common Stock under the 2017 Omnibus Plan pursuant to its Evergreen Provision (as defined and discussed below). We currently have approximately [14,332] shares of Common Stock available for issuance under the 2017 Omnibus Plan, which number reflects the adjustments made as a result of the 1-for-35 reverse stock split of our Common Stock on November 15, 2022 and the 1-for-35 reverse stock split of the our Common Stock on May 30, 2024, as well as the additional shares added over the years with the automatic adjustments in accordance with the Evergreen Provision (as defined and described below) of the 2017 Omnibus Plan. With the proposed 1,000,000 share increase under the Omnibus Plan Amendment, 1,021,332 will be available for issuance under the 2017 Omnibus Plan, which will represent approximately [17.1]% of our [5,862,005] shares outstanding as of the Record Date of September 22, 2025.

In connection with the increase in authorized shares under the 2017 Omnibus Plan that will occur if stockholders approve this Proposal Six, the Omnibus Plan Amendment will also adjust the amounts of the share grant limitations for Incentive Stock Options, Restricted Stock and Restricted Stock Units (as each are defined in the 2017 Omnibus Plan) to provide for these limitations to not exceed the number of authorized shares under the 2017 Omnibus Incentive Plan. Accordingly, if stockholders approve this Proposal Six that will increase the authorized shares under the 2017 Omnibus Plan to 1,021,332 shares, then stockholders will also be approving an amendment to the share grant limitation amounts under the 2017 Omnibus Plan (as provided below) whereby the number of shares that will be available for grant for (i) Incentive Stock Options shall not exceed 1,021,332 shares, plus the automatic annual increase contemplated by Evergreen Provision (as defined below), subject to adjustment as provided in the 2017 Omnibus Plan and (ii) Restricted Stock and Restricted Stock Units shall not exceed 1,021,332 shares, plus the automatic annual increase contemplated by Evergreen Provision and subject to adjustment as provided in the 2017 Omnibus Plan.

Pursuant to the Purchase Agreement, we agreed to seek stockholder approval as provided in this Proposal Six at the Annual Meeting to increase the authorized shares of Common Stock available for issuance under the 2017 Omnibus Plan to up to 1,000,000 shares. If the Omnibus Plan Amendment is approved, we intend to utilize the increased amount of shares authorized under the Omnibus Plan Amendment to attract officers, directors, employees and others who perform services for us and incentivize key individuals through annual equity grants in the future, including as we execute upon our business strategy, including pursuing a Post-Investment Transaction as discussed in this Proxy Statement.

The amendment to the 2017 Omnibus Plan that is being presented to stockholders for approval at this Annual Meeting that provides for the increase in authorized shares and amends the share grant limitations for Incentive Stock Options, Restricted Stock and Restricted Stock Units reads as follows:

Section 4(a) of the 2017 Omnibus Plan states as follows:

(a) Shares Available. Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under the Plan shall be 1,021,332, plus an automatic annual increase on the first day of each of the Company’s fiscal years beginning January 1, 2018 through January 1, 2027 equal to (i) four percent (4%) of the number of shares of Common Stock outstanding on the last day of the immediately preceding fiscal year or (ii) such lesser number of shares of Common Stock than provided for in Section 4(a)(i) as determined by the Board. Shares to be issued under the Plan may be either authorized but unissued Shares or Shares re-acquired and held in treasury. Any Shares that are used by a Participant as full or partial payment to the Company of the purchase price relating to an Award, or in connection with the satisfaction of tax obligations relating to an Award, shall again be available for granting Awards (other than Incentive Stock Options) under the Plan. In addition, if any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan. Notwithstanding the foregoing, (i) the number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 1,021,332, plus the automatic annual increase described above, subject to adjustment as provided in Section 4(c) of the Plan and subject to the provisions of Section 422 or 424 of the Code or any successor provision and (ii) the number of Shares available for granting Restricted Stock and Restricted Stock Units shall not exceed 1,021,332, plus the automatic annual increase described above, subject to adjustment as provided in Section 4(c) of the Plan.

The material features and provisions of the 2017 Omnibus Plan are summarized below. The full text of the 2017 Omnibus Plan is attached as Annex A and the proposed Omnibus Plan Amendment is attached as Annex B to this Proxy Statement. The summary of the 2017 Omnibus Plan set forth below also assumes the approval of the Omnibus Plan Amendment. The following description is not complete and is qualified in its entirety by reference to Annex A and Annex B.

Administration. The Compensation Committee is the committee of the Board that will administer the 2017 Omnibus Plan, and has full power and authority to determine when and to whom awards will be granted, and the type, amount, form of payment and other terms and conditions of each award, consistent with the provisions of the 2017 Omnibus Plan (provided, however, that awards to Committee members are required to be authorized by a disinterested majority of the Board). Subject to the provisions of the 2017 Omnibus Plan, the Compensation Committee may amend or waive the terms and conditions, or accelerate the exercisability, of an outstanding award. The Compensation Committee has authority to interpret the 2017 Omnibus Plan, and establish rules and regulations for the administration of the 2017 Omnibus Plan. In addition, the Board may exercise the powers of the Compensation Committee at any time, but only to the extent it would not cause a loss of any benefits under § 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

Eligible Participants. Any employee, officer, consultant, independent contractor or director providing services to us or any of our affiliates (including our current and future subsidiaries), who is selected by the Compensation Committee, is eligible to receive an award under the 2017 Omnibus Plan. Accordingly, each of our executive officers, directors and nominees for election as a director is eligible to receive awards under the 2017 Omnibus Plan. However, any such grants will be made by the Compensation Committee at its discretion.

Shares Available For Awards. Prior to the contemplated Omnibus Plan Amendment, an aggregate of [14,332] shares of our Common Stock are currently reserved for issuance over the term of the 2017 Omnibus Plan. Every year (beginning on each January 1^st from January 1, 2018 through January 1, 2027), the number of shares reserved for issuance under the 2017 Omnibus Plan is able to increase by an amount equal to the lesser of: (a) four percent (4%) of the total number of shares of our Common Stock outstanding on the last day of the preceding year, or (b) such lesser number as determined by our Board (the “Evergreen Provision”). To date, since the 2017 Omnibus Plan was established, the total number of shares available for issuance has increased from 1,892 to 21,332 with the 19,440 increase in shares occurring pursuant to the Evergreen Provision. Awards of incentive stock options (“ISOs”) under the 2017 Omnibus Plan may be made for shares of our Common Stock with an aggregate fair market value of up to $100,000 on the grant date and exercisable for the first time by any Participant during any calendar year.

The shares of Common Stock issuable under the 2017 Omnibus Plan may be drawn from shares of authorized but unissued Common Stock or from shares of Common Stock that we re-acquire and hold in treasury. The Compensation Committee may adjust the number of shares and share limits described above in the case of a stock dividend or other distribution, including a stock split, merger or other similar corporate transaction or event, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be provided under the 2017 Omnibus Plan.

If any shares of our Common Stock subject to any award or to which an award relates are forfeited or are reacquired by us, or if any award terminates without the delivery of any shares, the shares previously set aside for such awards will be available for future awards under the 2017 Omnibus Plan. In addition, shares used by award recipients as payment of the exercise price of an award or in satisfaction of the tax obligations relating to an award other than an ISO will be available again for award grants.

Types of Awards and Terms and Conditions. The 2017 Omnibus Plan permits the granting of:

Awards may be granted alone, in addition to, in combination with or in substitution for, any other award granted under the 2017 Omnibus Plan or any other compensation plan. Awards can be granted for no cash consideration or for cash or other consideration as determined by the Compensation Committee or as required by applicable law. Awards may provide that upon the grant or exercise thereof, the holder will receive cash, shares of our Common Stock, promissory notes, other securities, other awards or property, or any combination of these, in a single payment, installments or on a deferred basis. The exercise price per share under any stock option and the grant price of any SAR will be determined by the Compensation Committee and may not be less than the fair market value on the date of grant of such option or SAR, or less than 110% of fair market value for incentive stock options granted to holders of more than ten percent (10%) of our Common Stock. Determinations of fair market value under the 2017 Omnibus Plan will be made in accordance with methods and procedures established by the Compensation Committee. The term of awards will not be longer than ten (10) years, or in the case of incentive stock options, longer than five (5) years with respect to holders of more than ten percent (10%) of our Common Stock.

Stock Options and SARs.

Limitations. No holder may be granted, during any one (1) calendar year period, options and SARs with respect to more than 1,000,000 shares in the aggregate, subject to the number of shares being adjusted as provided for in the 2017 Omnibus Plan).

Stock Options. The holder of an option will be entitled to purchase a number of shares of our Common Stock at a specified exercise price during a specified time period, all as determined by the Compensation Committee. The option exercise price may be payable either in cash or, at the discretion of the Compensation Committee, in other securities or other property having a fair market value on the exercise date equal to the exercise price. The shares subject to each option will generally vest in one (1) or more installments over a specified period of service measured from the grant date. We receive no payment for the grant of an option. Upon cessation of service, we have the right to repurchase any or all unvested shares at a price per share determined by the Compensation Committee.

SARs. The holder of a SAR is entitled to receive the excess of the fair market value (calculated as of the exercise date or, at the Compensation Committee’s discretion, as of any time during a specified period before or after the exercise date) of a specified number of shares of our Common Stock over the grant price of the SAR, as determined by the Compensation Committee, paid solely in shares of Common Stock. SARs vest and become exercisable in accordance with a vesting schedule established by the Compensation Committee. This type of SAR is sometimes described as a “stock-settled stock appreciation right.”

Restricted Stock. The holder of restricted stock will own shares of our Common Stock subject to restrictions imposed by the Compensation Committee (including, for example, restrictions on transferability or on the right to vote the restricted shares or to receive any dividends with respect to the shares) for a specified time period determined by the Compensation Committee. The restrictions, if any, may lapse or be waived separately or collectively, in installments or otherwise, as the Compensation Committee may determine. If the participant’s employment or service as a director terminates during the vesting period for any other reason, the restricted stock shall be forfeited, unless the Compensation Committee determines that it would be in our best interest to waive the remaining restrictions.

RSUs. The holder of RSUs will have the right, subject to any restrictions imposed by the Compensation Committee, to receive shares of our Common Stock at some future date determined by the Compensation Committee. If the participant’s employment or service as a director terminates during the vesting period for any other reason, the RSUs will be forfeited, unless the Compensation Committee determines that it would be in our best interest to waive the remaining restrictions.

Performance Awards. Prior to the effective date of the Tax Cuts and Jobs Act of 2017, performance awards granted under the 2017 Omnibus Plan are intended to qualify as “performance-based compensation” within the meaning of § 162(m) of the Code. Performance awards give participants the right to receive payments in stock or property based solely upon the achievement of certain performance goals during a specified performance period. The Compensation Committee must designate all participants for each performance period, and establish performance goals and target awards for each participant No later than 90 days after the beginning of each performance period. Performance goals must be based solely on one or more of the following business criteria: (i) revenue; (ii) cash flow; (iii) gross profit; (iv) earnings before interest and taxes; (v) earnings before interest, taxes, depreciation and amortization; (vi) net earnings; (vii) earnings per Share; (viii) margins (including one (1) or more of gross, operating and net income margins); (ix) returns (including one or more of return on assets, equity, investment, capital and revenue and total stockholder return); (x) Share price; (xi) economic value added; (xii) working capital; (xiii) market share; (xiv) cost reductions; (xv) workforce satisfaction and diversity goals; (xvi) employee retention; (xvii) customer satisfaction; (xviii) completion of key projects; and (xix) strategic plan development and implementation.

Dividend Equivalents. The holder of a dividend equivalent will be entitled to receive payments in cash, shares of our Common Stock, other securities or other property equivalent to the amount of cash dividends paid by us to our stockholders, with respect to the number of shares determined by the Compensation Committee. Dividend equivalents will be subject to other terms and conditions determined by the Compensation Committee.

Other Stock Awards. The Compensation Committee may grant unrestricted shares of our Common Stock, subject to terms and conditions determined by the Compensation Committee and the 2017 Omnibus Plan limitations.

Other Stock-Based Awards. The Compensation Committee may grant awards denominated or payable in shares of our Common Stock, including securities convertible into such shares, consistent with the purpose of the 2017 Omnibus Plan.

Duration, Termination and Amendment. Unless earlier discontinued or terminated by the Board, the 2017 Omnibus Plan will expire on June 2, 2027. No awards may be made after that date. However, unless otherwise expressly provided in an applicable award agreement, any award granted under the 2017 Omnibus Plan prior to expiration may extend beyond the end of such period through the award’s normal expiration date.

The Board and, pursuant to the delegation of its authority, the Compensation Committee, may amend, alter or discontinue the 2017 Omnibus Plan at any time, although stockholder approval must be obtained for any action that would, absent such approval, (i) violate the rules and regulations of the NYSE American or any other securities exchange applicable to us, (ii) cause Rule 16b-3 of the Exchange Act to become unavailable with respect to the 2017 Omnibus Plan, or (iii) cause us to be unable under the Code to grant incentive stock options under the 2017 Omnibus Plan.

Transferability of Awards. With the exception of NQSOs, unless otherwise provided by the Compensation Committee, awards under the 2017 Omnibus Plan may only be transferred by will or by the laws of descent and distribution.

Acceleration. The Compensation Committee may accelerate the exercisability of any option award. The ability to accelerate vesting in the event of a change in the ownership or control may be seen as an anti-takeover provision and may have the effect of discouraging a merger proposal, a takeover attempt or other efforts to gain control of the Company.

Delivery of Shares for Tax Obligation. Under the 2017 Omnibus Plan, the Compensation Committee may permit participants receiving or exercising awards, subject to the discretion of the Compensation Committee and upon such terms and conditions as it may impose, to deliver shares of our Common Stock (either shares received upon the receipt or exercise of the award or shares previously owned by the holder of the option) to us to satisfy federal and state income tax obligations.

Governing Law. The validity, construction and effect of the 2017 Omnibus Plan or any award, and any rules and regulations relating to the 2017 Omnibus Plan or any award, will be determined in accordance with the laws of the State of Delaware.

The following is a summary of the principal U.S. federal income tax consequences generally applicable to awards under the 2017 Omnibus Plan and does not purport to be complete. This summary is based upon current U.S. federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any recipient may depend on his or her particular situation, each recipient should consult his or her tax adviser regarding the federal, state, local, and other tax consequences of the grant or exercise of an award or the disposition of shares acquired pursuant to an award. Our ability to realize the benefit of any income tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness, the provisions of § 162(m) of the Code and the satisfaction of our tax reporting obligations.

Grant of Options and SARs. The grant of a stock option or SAR is not expected to result in any taxable income for the recipient, and we will not be entitled to an income tax deduction upon such grants.

Exercise of Options and SARs. Upon exercising an NQSO, the optionee will recognize ordinary income equal to the excess, if any, of the fair market value of the shares of our Common Stock acquired on the date of exercise over the exercise price, and we will generally be entitled at that time to an income tax deduction for the same amount. Upon exercising an incentive stock option, the optionee generally will not recognize taxable income (except that an alternative minimum tax liability may arise), and we will not be entitled to an income tax deduction. Upon exercising a SAR, the recipient of the SAR will recognize ordinary income in an amount equal to the fair market value on the exercise date of any shares of our Common Stock received, and we will generally be entitled at that time to an income tax deduction for the same amount.

Disposition of Shares Acquired Upon Exercise of Options and SARs. The tax consequence upon a disposition of shares acquired through the exercise of an option or SAR will depend on how long the shares have been held and whether the shares were acquired by exercising an NQSO or SAR or by exercising an incentive stock option.

Generally, there will be no tax consequence to us in connection with the disposition of shares acquired under an NQSO or SAR. The optionee’s or recipient’s tax basis in those shares will be equal to the fair market value of the shares on the date of exercise, and the optionee’s or recipient’s capital gain holding period for those shares will begin on that date.

If an optionee holds a share acquired upon exercise of an incentive stock option for more than two (2) years following the date the option was granted and more than one (1) year following the date the option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the holder’s tax basis in that share will be long-term capital gain or loss. If, however, an optionee disposes of a share acquired upon exercise of an incentive stock option before the end of the

required holding period, which is referred to as a disqualifying disposition, the optionee generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date the option was exercised over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date the option was exercised, the amount of ordinary income recognized by the optionee will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date the option was exercised, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year. The Company will not be entitled to an income tax deduction on the disposition of a share acquired upon exercise of an incentive stock option after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled to an income tax deduction in an amount equal to the ordinary income includible in income by the optionee.

Awards Other than Options and SARs. As to other awards granted under the 2017 Omnibus Plan that are payable in either cash or shares of our Common Stock that are either transferable or not subject to substantial risk of forfeiture, the holder of the award must recognize ordinary income equal to (a) the amount of cash received or, as applicable, (b) the excess of (i) the fair market value of the shares received (determined as of the date of receipt) over (ii) the amount (if any) paid for the shares by the holder of the award. We will generally be entitled at that time to an income tax deduction for the same amount. The holder’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from such an award will be the amount (if any) paid for such shares plus any ordinary income recognized when the shares are received.

As to an award that is payable in shares of our Common Stock that are restricted from transfer and subject to substantial risk of forfeiture, unless a special election is made by the holder of the award under the Code, the holder must recognize ordinary income equal to the excess of (i) the fair market value of the shares received (determined as of the first time the shares become transferable or not subject to substantial risk of forfeiture, whichever occurs earlier) over (ii) the amount (if any) paid for the shares by the holder of the award. We will generally be entitled at that time to an income tax deduction for the same amount. The holder’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from such an award will be the amount (if any) paid for such shares plus any ordinary income recognized when the shares become transferable or not subject to substantial risk of forfeiture.

To conform to the requirements of § 409A of the Code, the shares subject to an RSU award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the award otherwise complies with or qualifies for an exception to the requirements of § 409A of the Code, in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed.

Deductibility of Executive Compensation Under Code § 162(m). Section 162(m) of the Code generally limits to $1,000,000 the amount that a publicly-held corporation is allowed each year to deduct for the compensation paid to (i) each of the company’s principal executive officer and principal financial officer, (ii) each of the company’s three (3) most highly compensated officers (excluding the principal executive officer and principal financial officer) whose compensation for the taxable year is required to be reported to stockholders under the SEC’s executive compensation disclosure rules, and (iii) each employee or former employee who was a “covered employee” for purposes of Section 162(m) of the Code for any taxable year of the company beginning after December 31, 2016.