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Investing.com --NovaBay Pharmaceuticals (NYSE:NBY)stock tumbled 30% on Tuesday after the company announced it had entered into an at-the-market (ATM) equity offering agreement potentially worth up to $100 million.
According to an SEC filing, NovaBay signed the ATM Sales Agreement with Virtu Americas LLC on January 20, 2026, allowing the company to sell shares of its common stock through Virtu as either a sales agent or principal. The arrangement permits NovaBay to raise capital by selling shares directly on the New York Stock Exchange or other existing trading markets.
Under the terms of the agreement, NovaBay will pay Virtu a commission of up to 2.0% on gross proceeds from any stock sales executed through the arrangement. The company has also provided Virtu with customary indemnification rights.
Investors typically react negatively to ATM offerings as they can lead to dilution of existing shareholders’ stakes. The significant size of the potential offering relative to NovaBay’s market capitalization likely contributed to the sharp decline in share price.
The filing emphasized that NovaBay is not obligated to make any sales under the agreement, which can be terminated by either party under specified circumstances, including material adverse changes affecting the company or financial markets.
The common stock is being offered pursuant to NovaBay’s previously filed shelf registration statement on Form S-3 dated October 3, 2025, as amended on November 25, 2025, with a prospectus supplement dated January 20, 2026.
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