Stablecoin Development (SDEV) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01As a result of the completion of the Avenova Asset Sale and the Wound Care Divestiture, we no longer have a significant revenue generating business
2. 02The cash proceeds from the Avenova Asset Sale and the Wound Care Divestiture will continue to be used to fund our expenses and ongoing liabilities until we are able to commence the Dissolution or pursue another strategic alternative, which will deplete our remaining cash assets
3. 03We remain liable for claims and expenses that may arise related to our business operations prior to the completion of the Avenova Asset Sale and the Wound Care Divestiture
4. 04We are subject to contingent liabilities related to the Avenova Asset Sale and the Wound Care Divestiture that could have a material adverse effect on our financial condition
5. 05We may be subject to litigation, which is expensive and could divert our attention
6. 06Significant disruptions of information technology systems or breaches of information security could adversely affect our businesses

Risks Relating to the Potential Dissolution of our Company and Potential Strategic Transaction

1. 07There can be no guarantees that the Dissolution will be completed and, if not completed, it may be very difficult for us to identify strategic alternatives to maximize the remaining value for NovaBay and its stockholders
2. 08We cannot assure you as to the amount of distributions, if any, to be made to our stockholders
3. 09We cannot predict the timing of the distributions to stockholders
4. 10The Board may determine not to proceed with the Dissolution
5. 11Our stockholders may be liable to our creditors for part or all of the amount received from us in our liquidating distributions if reserves are inadequate
6. 12If our stockholders vote against the Dissolution pursuant to the Plan of Dissolution, we may pursue other strategic alternatives; which may not result in greater (or even equivalent) stockholder value than the proposed Dissolution and may entail additional risks and costs (e.g., bankruptcy)
7. 13any impairment of intangible assets, such as goodwill, or depreciation and amortization expenses associated with the Potential Strategic Transaction
8. 14If we proceed with the Dissolution, our stockholders will not be able to buy or sell shares of our common stock after we close our stock transfer books at the Effective Time of the Dissolution
9. 15Further stockholder approval will not be required in connection with the implementation of the Plan of Dissolution, including the sale or disposition of all or substantially all of our assets following the Effective Time of the Dissolution pursuant to the Plan of Dissolution
10. 16If we proceed with the Dissolution, our stockholders may not be able to recognize a loss for U.S. federal income tax purposes until they receive a final distribution from us
11. 17The loss of members of our senior executive management team could adversely affect our ability to operate our remaining business and administer the Dissolution process
12. 18Resources may be wasted in searching for Potential Strategic Transactions that are not completed, which could materially adversely affect stockholder value, including distributions as part of the Dissolution (if any)

Risks Relating to Owning Our Common Stock

1. 19The price of our common stock may fluctuate substantially, which may result in losses to our stockholders
2. 20adverse developments with respect to the Dissolution or any other Potential Strategic Transaction
3. 21Our stockholders may experience significant dilution as a result of the conversion of the Series B Preferred Stock and the potential exercise of outstanding common stock purchase warrants
4. 22We have not paid dividends or repurchased stock in the past and do not expect to pay dividends or repurchase stock in the future, and any return on investment may be limited to the value of our stock
5. 23We may issue additional shares of our common stock, other series or classes of preferred stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares
6. 24Offers or availability for sale of a substantial number of shares of our common stock, including as a result of the conversion of the Series B Preferred Stock, conversion of the Unsecured Convertible Notes and/or the exercise of outstanding warrants may cause the price of our publicly traded securities to decline
7. 25If we become a “shell company,” the holders of our restricted securities and control securities will not be able to sell their securities in reliance on Rule 144
8. 26Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited