NOVABAY PHARMACEUTICALS $NBY
BMF Reports • Published September 4, 2025 • The Lazar-Sized Black Hole Disguised as a Biotech
CORE INVESTMENT THESIS
NovaBay is a walking corpse stuffed with paper, propped up by hype and run by a serial dilution artist.
After selling its only revenue-generating asset (Avenova®) and issuing a smokescreen dividend, the company now sits as an empty shell controlled by David Lazar, whose track record is defined by backdoor takeovers, aggressive dilution, and financial manipulation. BMF concludes this is a forensic takedown waiting to happen.
COMPANY OVERVIEW
📋 What They Actually Do
NovaBay WAS a pharmaceutical company developing eye care products, primarily the Avenova® brand. However, they sold their only revenue-generating asset in June 2024 for $15.6 million to Legacy Ventures Pharma.
Current Reality: The company has no commercial operations, no revenue, no pipeline, and no business plan. It exists solely as a publicly-listed shell awaiting David Lazar's next reverse merger scheme.
David Lazar gained 95% voting control through 1.3 million Series B preferred shares for just $20,000 - a 97% discount to market price.
Special dividend totaling $8.2 million - over 50% of Avenova sale proceeds - primarily benefited insiders and Poplar Capital before Lazar takeover.
The 10-Q openly admits: "We do not expect to generate significant revenue... our future operations are dependent on identifying a strategic transaction or merger."
Goldman Sachs debt lawsuit, disbarred attorney (David Kagel) who stole $25K in Lazar deal, CPA Ontario professional misconduct ruling.
The Lazar Takeover Timeline
Avenova Sold
Dividend Issued
Lazar Control
Empty Shell
Voting Control Structure
KEY PLAYERS
David E. Lazar
Serial Microcap Manipulator
Role: Acquired 95% voting control for $20,000 via Custodian Ventures
Significance: Track record of shell recycling, reverse mergers, and equity destruction
Red Flag: Sued by Goldman Sachs for debt default, CPA Ontario professional misconduct, tied to disbarred lawyer
David L. Kagel
Disbarred Attorney
Role: Lazar's transactional attorney in Custodian Ventures deals
Significance: Intermediary in $120,000 Custodian Ventures stock transaction
Red Flag: Disbarred in 2023 for misappropriating $25,000 in client funds from Lazar deal
Poplar Capital
Microcap Hedge Fund
Role: Largest institutional holder during Avenova sale and dividend
Significance: Accumulated 732,000+ shares at $0.55-$0.69, benefited from $0.80 dividend
Coordination: Fully exited before Lazar's dilution scheme - suspicious timing suggests coordination
Custodian Ventures LLC
Lazar's Investment Vehicle
Role: Lazar's main vehicle for acquiring control of distressed shells
Significance: Used in dozens of microcap takeovers, custodianship actions
Pattern: Takes control via Nevada courts, issues preferred shares, then executes reverse mergers
Lazar's Shell Game Track Record
🚨 The Lazar Playbook: 5 Steps to Equity Destruction
📊 Lazar's Greatest Hits - Shell Destruction Record
LEGAL BAGGAGE ANALYSIS
⚖️ Goldman Sachs Lawsuit
Case: 21CHCV00579 - LA Superior Court
Cause: Debt collection - non-payment of commercial loans
🎓 CPA Ontario Misconduct
Finding: Guilty of violating Rule 104.2 of CPA Code
Penalty: $5,000 fine + $1,500 costs + reprimand
👨💼 Disbarred Attorney Network
Attorney: David L. Kagel (disbarred 2023)
Crime: Misappropriated $25,000 in Lazar deal
📋 SEC Pattern Issues
Allegations: Undisclosed group activity, hidden ownership
Example: My Size Inc. (MYSZ) activist dispute
Price Target & Upcoming Catalysts
🎯 Price Target
📅 Upcoming Catalysts
🚨 Red Flag Summary
BMF Reports' Verdict
According to BMF Reports, NovaBay Pharmaceuticals ($NBY) is a walking corpse stuffed with paper, propped up by hype and run by serial dilution artist David Lazar. After selling its only revenue-generating asset and issuing a smokescreen dividend, the company now exists as an empty shell with no commercial operations, no business plan, and no viable value proposition. BMF concludes this is a forensic takedown of Lazar's latest microcap heist, where retail traders are about to get torched.