NovaBay Pharmaceuticals Announces the Closing of its $2.45 Million Registered Direct Offering of Common Stock and Warrants

By August 26, 2009

NovaBay® Pharmaceuticals, Inc. (NYSE-Amex: NBY) announced today that it has closed its previously announced registered direct offering of 1,225,000 units, with each unit consisting of (i) one share of the NovaBay® common stock, par value $0.01 per share, and (ii) one warrant to purchase one share of NovaBay® common stock. The purchase price for each unit was $2.00. Each warrant has an exercise price of $2.75, which will be exercisable 180 days after issuance and will expire five years from the date of issuance. The units will not be issued or certificated and neither the units nor warrants will trade on any exchange or be listed for quotation on any market. Maxim Group LLC served as placement agent for the offering.

The units were offered by NovaBay® pursuant to a registration statement previously filed and declared effective by the Securities and Exchange Commission.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The securities may be offered only by means of a prospectus. Copies of the final prospectus supplement and accompanying base prospectus relating to this offering may be obtained at the SEC’s website at or from the offices of Maxim Group LLC, 405 Lexington Avenue, New York, New York 10174, Attn: Prospectus Department, (212) 895-3685.

About NovaBay

NovaBay® Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing its proprietary and patented Aganocide® compounds, which are novel, synthetic anti-infective product candidates that are bioequivalent to the active antimicrobial molecules generated within white blood cells to treat and prevent a wide range of infections without causing bacterial resistance. NovaBay® has internal development programs aimed at addressing hospital and respiratory infections. The company has a licensing and research collaboration agreement with Alcon, Inc. for use of its Aganocide® compounds to treat eye, ear and sinus infections as well as in contact lens care solutions. NovaBay® also has entered into an agreement with Galderma S.A. to develop and commercialize Aganocides in acne, impetigo and other dermatological indications. NovaBay® and Aganocide® are trademarks of NovaBay® Pharmaceuticals, Inc.

NovaBay Pharmaceuticals Contacts
Thomas J. Paulson  
Chief Financial Officer
Contact Thomas Paulson