NovaBay Pharmaceuticals is the definition of a dying microcap zombie, its equity propped up by hype and obfuscated by Lazar-led financial theater. After quietly divesting its only revenue-generating asset (Avenova®) and issuing a one-time cash dividend, the company now sits as an empty shell with no commercial operations, no business plan, and no viable long-term value proposition.

What remains is a corporate corpse dressed up for a reverse merger, controlled by serial microcap operator David Lazar, whose track record is defined by backdoor takeovers, aggressive dilution, and financial manipulation.

Key Facts:

1. The Business is Gone

• NovaBay sold Avenova®, its only viable product, on June 25, 2024, for $15.6 million to Legacy Ventures Pharma.

• With the sale, NovaBay ceased all commercial operations and laid off most of its workforce.

• In Q2 2024, the company openly disclosed it does not expect to generate any significant revenue and is actively searching for an acquisition or merger target.

• The 10-Q states: “We have no commercial operations and do not expect to generate significant revenue… our future operations are dependent on identifying a strategic transaction or merger.”

2. The Dividend Was a Smokescreen

• NovaBay issued a $0.80 per share cash dividend shortly after the Avenova sale.

• Total cost to shareholders: $8.2 million, nearly the full value of the sale.

• Primary beneficiaries included Poplar Capital and insiders who already exited, not retail holders who remain.

• The dividend served no strategic purpose, other than to quietly extract value before the dilution cycle begins.

3. David Lazar Acquired Control at a 97% Discount

• Through a Lazar-affiliated entity, Custodian Ventures, NovaBay issued 1.3 million Series B preferred shares.

• These shares granted Lazar 95% of the company’s voting power, despite being valued at just $20,000 total.

• Effectively, Lazar bought near-total control of NovaBay for 2 cents on the dollar, while retail investors paid $0.50–$0.70/share.

• This is not governance—this is legalized corporate hijacking.

4. There Is No Roadmap—Just a Trap

• The company has made no meaningful public statements about a viable go-forward business.

• There is no pipeline, no product, no IP, no contracts, and no revenue forecast.

• The only certainty? A dilutive merger or reverse split is coming. And Lazar’s history suggests it won’t benefit common shareholders.

Bottom Line:

NovaBay is not a misunderstood turnaround. It is a financial carcass dressed in corporate filings, functioning as a vehicle for insider extraction and Lazar’s backdoor microcap roll-ups.

There is no business, no intrinsic value, and no reason for this company to remain publicly listed, aside from facilitating Lazar’s next merger scheme.

We are short NovaBay Pharmaceuticals with conviction.

Short Thesis Highlights

NovaBay Pharmaceuticals (NYSE American: NBY) is a shell company in free fall, artificially kept alive through financial theater and insider manipulation. The short case is not hypothetical—it's unfolding in real time, backed by filings, court records, and Lazar’s notorious footprint across the microcap graveyard.

Below are the core pillars of our short thesis:

1. No Business. No Pipeline. No Plan.

• NovaBay sold off its only operating business (Avenova®) for $15.6M, leaving the company with zero commercial products.

• All disclosed revenue streams have ceased. The 10-Q openly admits: "We do not expect to generate significant revenue."

• The company has publicly stated it is now seeking a merger or acquisition target—classic Lazar shell maneuvering.

2. Lazar Acquired Control for Pennies — and It Was Legal

• In April 2024, David Lazar gained 95% voting control of NovaBay through 1.3 million Series B preferred shares.

• The entire purchase cost? $20,000 — a 97% discount to the trading price of common shares.

• Lazar didn’t buy the company. He usurped it, legally, through a preferred share structure buried in a footnote.

3. The $0.80 Dividend Was a Trojan Horse

• Immediately following the Avenova sale, NovaBay issued an $8.2M special dividend — $0.80 per share.

• This dividend disproportionately benefited:

  • Poplar Capital Management, a large legacy holder.

  • Insiders cashing out, not long-term retail investors.

• The dividend gutted the balance sheet and pre-loaded exit liquidity for Lazar-aligned parties.

4. Track Record of Dilution and Deception

• Lazar’s history is littered with reverse mergers, equity destruction, and lawsuits.

• NovaBay’s future is telegraphed: a Lazar-orchestrated merger with a private entity, paid for by issuing hundreds of millions of new shares.

• Recent Lazar shell deals (e.g., LQR House, ENZC, ILAL) all followed this playbook — and common shareholders were obliterated.

5. Governance Red Flags Bordering on Farce

• NovaBay’s board now includes David Lazar and two associates with no biotech or commercial expertise.

• The company's legal counsel has previously been involved in Lazar-connected litigation.

• NovaBay’s bylaws were quietly amended to favor preferred holders, including removal protections and indemnity clauses.

6. Legal, Financial, and Ethical Baggage

• Lazar is named in multiple legal and regulatory disputes, including:

  • Goldman Sachs vs. David Lazar – debt collection.

  • CPA Ontario Disciplinary Action – found guilty of professional misconduct.

  • Custodian Ventures-related lawsuits, including an alleged $120K stock transaction involving missing funds and a disbarred attorney (Kagel).

• His long-time legal partner David Kagel was disbarred in 2023 for misappropriating client funds in a deal involving Lazar’s Custodian Ventures.

7. Nothing Left But the Trap

• Common shareholders are left with:

  • No business.

  • No strategic roadmap.

  • A Lazar-controlled board.

  • A post-dividend balance sheet primed for toxic financing.

• What’s coming next is likely:

  • A Lazar-linked private company reverse merger.

  • Hundreds of millions of shares issued at a steep discount.

  • Retail holders wiped out, again.

Conclusion:

NovaBay Pharmaceuticals is not misunderstood. It is maliciously structured to extract value for insiders, while retail investors unknowingly fund the next Lazar scheme.

We are short NBY because we’ve seen this movie before. And we know exactly how it ends.

David Lazar’s Shell Game – Recycled Paper, Real Victims

David E. Lazar is not a misunderstood activist. He is not a turnaround investor. He is not a contrarian.

He is a serial microcap manipulator, a repeat shell recycler, and a master of vapor equity. Across dozens of tickers and nearly a decade of filings, Lazar has demonstrated a pattern: acquire control of near-dead companies, install loyalists, hype a fictitious future, and unload into the liquidity trap—leaving retail as the final bagholders.

NovaBay Pharmaceuticals is simply his latest crime scene.

3.1 The Lazar Formula: A Repeated Sequence of Destruction

Across companies like ENZC, ILAL, LQR House, CSMB, GNS, and now NBY, Lazar has consistently followed the same 5-step blueprint:

1. Acquire voting control through discounted preferred shares

   • At NovaBay, Lazar obtained 95% control for $20,000, using Series B preferred shares with super-voting rights (1,000 votes per share).

   • Similar tactics were used at ILAL, where Lazar seized board control before flipping the shell to a Chinese auto parts importer.

2. Install a loyal board with no domain expertise

   • NovaBay’s biotech board was replaced with Lazar himself and two loyalists—one of whom is an insurance sales rep, the other from real estate.

   • No pharmaceutical, R&D, or FDA experience. No plan. No strategy.

3. Liquidate or spin out valuable assets

   • Avenova®, NovaBay’s only product, was sold for $15.6M. Shortly after, an $8.2M dividend was issued, disproportionately benefiting insiders and large holders (including Lazar allies).

4. Merge with a Lazar-linked private company

   • This has happened every single time: Lazar finds an obscure, usually foreign, private company, then merges it into the shell, issuing hundreds of millions of new shares.

   • The shell becomes a zombie ticker—briefly liquid, but fundamentally worthless. Retail gets buried.

5. Dump the shares after news-driven spikes

   • Lazar-linked entities (Custodian Ventures, Activist Investing LLC, etc.) dump into retail liquidity after vague PRs.

   • Every Lazar-linked company has collapsed 80–99% post-transaction.

   

Figure: Lazar Dumps Nearly 195 Million CYCC Shares in Private Sale, Cashes Out $5.5 Million

In February 2025, David E. Lazar, serving as interim CEO of Cyclacel Pharmaceuticals (NASDAQ: CYCC), dumped 194,628,820 shares of common stock in a private transaction, pocketing approximately $5.5 million. The shares were sold at $0.0283 per share, far below the then-market price of $0.33.

This transaction came immediately after Lazar converted Series C and D preferred shares into common stock, a maneuver he has repeated in multiple Lazar-controlled entities. The move exemplifies Lazar’s serial approach: obtain control via cheap preferred shares, convert to common, then exit into retail liquidity at volume.

📉 Result: Cyclacel’s market cap stood at just $2.03M post-dump, with the stock down 86% YoY—yet Lazar walked away with $5.5M. READ HERE

3.2 The Lazar “Custodian” Network: Legalized Equity Raiding

Lazar often uses Custodian Ventures LLC, his main investment vehicle, to enter distressed shells through custodianship actions in Nevada or Delaware courts.

• Key detail: These custodian motions are often filed pro se or through friendly attorneys, giving Lazar control for pennies.

• Once installed, he issues Series A/B/C preferred shares, dilutes the common massively, and walks away with voting control.

Recent examples:

NovaBay is walking this same plank. And retail doesn’t realize the cannonball is already midair.

3.3 The Professional Misconduct Trail

This isn’t just a trading pattern. It’s a pattern of disciplinary and legal red flags, rarely seen this blatantly on a public company insider.

Goldman Sachs vs. David Lazar (2021)

• Case No. 21CHCV00558 – LA Superior Court

• Goldman sued Lazar personally for debt collection related to a commercial obligation. The case was settled, but the message is clear: this is not a capital-stable operator.

CPA Ontario Professional Misconduct (2022)

• Lazar, a registered CPA in Canada, was found guilty of violating Rule 104.2 of the CPA Code of Conduct.

• Ordered to pay fines and costs, with the ruling made public and disclosed across Canada’s CPA organizations.

• The misconduct ruling included:

  • $5,000 fine

  • $1,500 in costs

  • Reprimand

  • Threat of membership suspension or revocation

Custodian Ventures, Kagel, and the Missing $25,000

• California Bar Disciplinary Filing – March 2023

• David Kagel, Lazar’s transactional attorney, was disbarred for misappropriating client funds in a deal involving Custodian Ventures LLC.

• Oren (the buyer) paid $120,000 for shares from Custodian Ventures. Only $95,000 was received. The final $25,000? Gone.

• Kagel texted that he "needed the $25,000 to close a deal".

• Lazar was directly involved in the transaction. He acknowledged the shortfall, then allegedly received a message from Kagel promising an extra $5,000 for his “patience.”

This is a scandal, not a company.

3.4 Red Flags Visible from Orbit

• Audit Risk: Lazar uses obscure or “check-the-box” auditors. Multiple shells have cycled through CPA firms flagged for low quality control.

• Bylaw Amendments: At NBY, bylaws were amended post-takeover to remove shareholder rights and protect Lazar’s preferred stake.

• Lazar’s Silence: There has been no investor call, no roadmap, no presentation from Lazar since he took control. That’s not strategic—that’s hiding.

Bottom Line:

David Lazar is not a shareholder advocate. He’s an equity predator with a clear and repeatable model:

“Find a corpse. Strip it clean. Inject hope. Sell the bones.”

NovaBay ($NBY) has no operations, no assets, and no credibility. It is now a controlled Lazar shell. The only thing left is dilution—and the next Lazar pump and dump will come at your expense.

The Dividend Distraction – A $0.80 Bribe for Your Silence

On paper, the March 2024 announcement that NovaBay would issue a $0.80 per share cash dividend sounded like a win for shareholders. In a market starving for yield, this seemed too good to be true.

It was.

Figure: NovaBay’s $0.80 “Special Dividend”

Source: Ainvest, Aug 27, 2025

NovaBay announced an $0.80/share cash dividend in August 2025—days after selling Avenova®, its only revenue source.
This wasn’t a reward. It was a last-minute cash-out benefitting insiders like Lazar and Poplar Capital, draining the company of liquidity ahead of a Lazar-led takeover. READ HERE

Because it wasn’t a dividend. It was a sleight-of-hand payout, designed to:

• Liquidate NovaBay’s only real asset (Avenova®)

• Enrich large insiders and funds

• Distract retail with a short-term sugar rush

• Mask the hollowing out of the business

• Pave the runway for Lazar’s full control and eventual merger

This “windfall” wasn't a reward — it was a bribe. A payoff to keep quiet while the house was looted.

4.1 The Setup: Sell the Golden Goose, Pocket the Eggs

NovaBay’s only material product line — the Avenova® eye care brand — was sold to ROI Capital in February 2024 for $15.6 million.

Shortly after:

“On March 8, 2024, the Board declared a special cash dividend of $0.80 per share…”

Figure: Lazar-Funded “Dividend” Tied to Liquidation of NovaBay’s Only Revenue Stream

"The special dividend is funded by Lazar's investment and the proceeds from the Avenova® brand sale to PRN in 2024."

This figure illustrates how the $0.80 “special dividend” was not derived from earnings or surplus capital — but instead directly from the fire sale of NovaBay’s only commercial product (Avenova®) and a conditional investment by David Lazar. As shown, $15.6M in proceeds were rerouted to pay out shareholders, effectively disguising a liquidation event as a shareholder reward. The cited report warns that without follow-on investment or a viable acquisition by Q4 2025, NovaBay still faces potential bankruptcy, making the dividend an unsustainable bribe, not a sustainable return. READ HERE

With ~10.3M shares outstanding at the time, this translated to an $8.2M dividend payout — over 50% of the sale proceeds.

But here’s the trick: this wasn't done out of surplus capital, nor from operating profits. This was a full-on liquidation event. And the only ones who truly won were:

• Poplar Capital, NovaBay’s largest institutional holder at the time

• Ex-CEO Justin Hall, who exited shortly after the dividend

• Series C and B preferred holders who received no dilution yet got voting power and influence

• David Lazar, who stepped in right after the dividend, once all cash was already committed

4.2 The Math: How Lazar Paid $20K and Took Control of What Was Left

Let’s walk through the sequence like a crime scene:

1. Feb 2024: Avenova sold for $15.6M

2. March 2024: $8.2M cash dividend issued

3. April 2024: Lazar acquires Series B Preferreds for $20,000

   • These shares give him 95% voting control

   • The common stock has no say left

4. June 2024: Board purged, Lazar installs his own team

Lazar didn’t pay for the asset. He didn’t build the business. But he now owns the shell, the equity structure, and full control of what comes next.

It’s a classic Lazar bait-and-switch.

4.3 The Silence: Retail Was Too Busy Thanking Him

The dividend effectively disarmed the shareholder base.

• Social sentiment turned positive: “Finally a microcap that pays back!”

• The media echoed the “cash return” narrative.

• There was no pushback as Lazar quietly acquired his control block and rewrote the company’s bylaws.

By the time investors realized the company was now a shell with no revenue, no operations, and no guidance, it was too late. The cash was gone. The structure had changed. The trap had been set.

And Lazar? Now ready to merge in the next Lazar-linked private entity at his chosen terms.

4.4 Poplar Capital: The Silent Partner Who Walked Away Full

One name that demands scrutiny: Poplar Capital, a known microcap hedge fund that has appeared across several Lazar-adjacent names.

Figure: Poplar Capital’s Accumulation Before Exit
In early 2025, Poplar Point Capital Partners LP, NovaBay’s largest outside shareholder, rapidly accumulated over 732,000 shares at depressed prices ($0.55–$0.69). This buying spree positioned them to disproportionately benefit from the $0.80 per share special dividend declared just weeks later — a near risk-free arbitrage. Notably, they fully exited prior to the onset of Lazar’s dilution scheme, further cementing the notion of strategic coordination. READ HERE

• Held a significant NBY stake during the Avenova sale and dividend

• Benefited handsomely from the $0.80/share dividend

• Fully exited before Lazar’s dilution scheme could begin

This isn’t coincidence. It’s coordination. And it mirrors patterns we've seen across Lazar-led SPVs, custodianships, and recap deals.

Bottom Line:

The $0.80 dividend wasn’t generosity. It was a structured payoff — one that:

• Enriched key insiders and Lazar-aligned parties

• Emptied the treasury to make NBY a clean shell

• Bought silence from retail

• Set the table for the Lazar playbook to resume

This wasn’t capital return. This was optical anesthesia. And now, with no assets and full Lazar control, NovaBay’s future rests solely in the hands of a man with dozens of dead tickers behind him and no operational experience ahead of him.

A Lazar-Style RTO Incoming — Reverse Merger or Reverse Mugging?

Now that the dividend distraction has cleared the decks and Lazar has secured near-absolute control through 95% voting power via Series B preferreds, the stage is set for NovaBay’s next act — a reverse merger.

But let’s be clear: this isn’t some transformational pivot.

This is act three of Lazar’s playbook — and investors are about to get papered into oblivion.

5.1 The Setup Is Textbook: The Shell Is Ready

NovaBay now exists as a clean, cash-light, publicly listed shell with:

• No revenue

• No commercial operations

• A decimated share price

• A management slate and board loyal to David Lazar

This is the ideal chassis for Lazar to import a private, Lazar-linked entity and give it a public ticker — without the scrutiny of a traditional IPO.

Let’s review the Lazar M.O., seen dozens of times:

NovaBay is already at Step 5.

5.2 Shell Candidates and Patterns: Lazar’s Greatest Hits

We’ve tracked David Lazar across dozens of shells, custodianships, and pump-and-dump vehicles. And the results are consistent:

And this doesn’t even touch the new Lazar joint: LQR House, which, despite a Nasdaq listing, followed the same arc — aggressive insider control, dilution, and a slow-motion collapse.

If history rhymes, NovaBay is next.

5.3 What Will He Merge Into NBY? Let’s Take a Guess

We’re seeing early signs of Lazar hunting for merger candidates:

• Reverse merger filings in other Lazar-tied entities show interest in telehealth, AI, and even beverage/consumer wellness

• “Clean energy” and “blockchain” are Lazar favorites due to narrative flexibility and PR potential

• His new pet project LQR House is already imploding — Lazar may try to salvage another piece or partner

But here’s the kicker: the target doesn’t have to be real.

It just has to be:

• PR-friendly

• Buzzword-heavy

• Able to justify Lazar issuing hundreds of millions of new shares

At this point, it’s a narrative arbitrage game, not a business.

5.4 Reverse Split and Toxic Financing Are Next

Every Lazar shell ends the same way:

• Massive reverse split to reset the share count

• Followed by toxic PIPE financing or convertible notes

• Then PR blitz announcing a “game-changing partnership” or “strategic expansion”

• Finally, a wave of retail dilution, often paired with:

  • Paid promos

  • Discord/Telegram pump groups

  • Twitter/X shell pumping pages

NovaBay has already filed an S-3 shelf to issue more shares. The ATM is ready. Once the reverse merger is announced, the dilution faucet turns on.

5.5 Shareholders Will Be Left Holding the Bag

Retail traders cheering the dividend, believing in a new direction, or hoping Lazar brings “value” to the table are about to learn the truth:

• Your ownership will be diluted by 90%+

• Your votes no longer matter (he owns 95%)

• The company’s future depends on Lazar’s latest idea

And if the past is any guide — that idea will be worthless within 6–12 months.

Bottom Line: This Isn’t a Turnaround. It’s Lazar’s Turnaround Play.

The NovaBay you knew is dead. What’s left is a pre-engineered Lazar reverse merger vehicle — primed to:

• Issue endless new shares

• Execute a Lazar-tied merger

• Reward insiders with cheap warrants

• Leave retail bag-holding again

We’ve seen this show before.

It always ends the same.

David Lazar’s Legal Swamp — Debt Lawsuits, Disbarred Lawyers, and Undisclosed Affiliates

To understand where NovaBay ($NBY) is going, you must understand who is now behind the wheel.

David E. Lazar is not your average “activist investor.” He’s not a “turnaround expert.” He’s a serial microcap manipulator who has left a trail of:

• Debt defaults

• Legal judgments

• Shady share issuances

• Custodian shell collapses

• Unregistered equity deals

• …and even ties to a disbarred attorney who misappropriated client funds in a Lazar deal

Let’s go piece by piece.

6.1 Goldman Sachs Sued Lazar for Unpaid Debts

In July 2021, Goldman Sachs Bank USA sued David Lazar in Los Angeles County Superior Court (Case #21CHCV00579) for commercial debt collection.

• Plaintiff: Goldman Sachs Bank USA

• Defendant: David Lazar

• Cause: Debt collection — non-payment of loans

• Court: LA Superior Court, Chatsworth Courthouse

• Judge: Randy Rhodes

• Status: Case closed

Figure: Goldman Sachs Bank USA sues David Lazar for debt default.
On July 7, 2021, Goldman Sachs Bank USA filed a commercial debt collection lawsuit against David Lazar in Los Angeles County Superior Court (Case #21CHCV00579). The case was presided over by Judge Randy Rhodes and is now closed. The suit indicates Lazar’s prior financial troubles — none of which have been disclosed in any of his public company filings.

Let’s be clear: Goldman doesn’t sue people lightly. They sue when someone blatantly defaults.

Lazar has never disclosed this debt suit in any public filing we’ve reviewed. And it suggests not only financial recklessness but potentially hidden insolvency at a personal level — while taking control of public companies.

6.2 Disbarred Lawyer David L. Kagel: Lazar’s Deal Partner

Things get worse.

In 2023, the California Supreme Court disbarred David L. Kagel, a lawyer involved in a Lazar-led deal.

The facts are damning:

• Kagel acted as the intermediary in a $120,000 transaction between investor Benjamin Oren and Custodian Ventures LLC — a David Lazar-controlled entity

• Kagel was entrusted with $120,000 to transfer to Lazar for stock in Custodian Ventures

• Only $95,000 was sent — $25,000 was misappropriated

• Kagel told Oren he “needed the $25K to close [his] own deal”

• Kagel also told Lazar (via text) he was “closing a $100 million deal” and promised Lazar an additional $5,000 for his patience

• Ultimately, Custodian Ventures refunded the $95,000 and the deal was canceled — but the stolen $25,000 was never returned

Figure: California Supreme Court Disbars Lawyer David Kagel for Misappropriating Investor Funds in Lazar DealAccording to disciplinary findings by the California State Bar, attorney David Kagel was disbarred after misappropriating $25,000 during a Lazar-led deal via Custodian Ventures LLC. Kagel was entrusted with $120,000 by investor Benjamin Oren to facilitate a share purchase from Lazar’s entity. Only $95,000 was transferred—Kagel kept $25,000 for “his own deal,” never returned it, and lied to both parties. Text messages show Lazar was aware of the split arrangement, raising serious questions about his choice of legal partners and ethical boundaries in investor dealings. READ HERE

Kagel was disbarred by the California Bar for:

• Misappropriation of funds

• Failure to deposit in a trust account

• Lying to clients

• Failure to cooperate with disciplinary proceedings

Figure: Disbarment of David L. Kagel by California Supreme Court
In March 2023, the Supreme Court of California officially disbarred attorney David L. Kagel, citing misappropriation of investor funds and multiple ethical violations. Kagel was directly involved in a failed $120,000 transaction with Custodian Ventures LLC—David Lazar’s entity. His disbarment further underscores the legal and ethical risks surrounding Lazar’s business dealings.

This wasn’t an abstract transaction — this was a David Lazar deal.

NovaBay shareholders should ask: Why is Lazar working with disbarred lawyers accused of stealing from investors in his own deals?

6.3 Custodian Ventures: The Lazar Dumping Ground

Custodian Ventures LLC is the Lazar vehicle at the heart of most of his SEC filings.

But this is not some legitimate PE firm.

It’s a microcap shell merchant, repeatedly used to:

• Take control of defunct tickers

• Install Lazar as officer or director

• Push insider share issuances

• Merge in worthless private entities

• And exit during PR-driven spikes

SEC filings show Custodian Ventures was:

• The entity through which Lazar obtained control of dozens of microcaps

• Involved in the stock deal tied to the Kagel disbarment case

• Used in sketchy "custodianship" cases where Lazar and affiliates would take control of shells via Nevada courts, then reverse merge

Figure X: My Size Lawsuit Against David Lazar and Custodian Ventures
A screenshot from a PRNewswire article dated October 21, 2021, where My Size Inc. (NASDAQ: MYSZ) announces a lawsuit filed in the U.S. District Court for the Southern District of New York against David Lazar, Milton C. Ault III, and others. The lawsuit accuses the so-called “Activist Group” of engaging in a "wolf pack" campaign to unlawfully seize control of the company’s board through false and misleading Schedule 13D filings. READ HERE

In the My Size Inc. (MYSZ) activist dispute in 2021, Custodian Ventures was accused of:

"Failing to file proper ownership disclosure under Section 13(d)… misleading investors… and acting in coordination with undisclosed affiliates."

Sound familiar? We’re seeing the same play at NovaBay.

6.4 David Lazar’s SEC Pattern: Hidden Ownership & Undisclosed Coordination

Let’s not forget — Lazar has a long history of SEC-targeted scrutiny.

Multiple activist campaigns have alleged:

• Failure to disclose group activity

• Use of LLCs to conceal insider ties

• Unregistered securities offerings

• Improper control of public tickers without transparency

In filings related to MYSZ, Lazar and his Custodian Ventures vehicle were directly accused of coordinated ownership misrepresentation — a classic 13(d) no-no.

He has not been formally sanctioned by the SEC — but the trail of activist disputes, lawsuits, debt filings, and custodianship shell collapses shows a man operating on the edge of legality.

6.5 The Real Network Behind Lazar

Lazar’s orbit includes:

• Paul E. Friedman – Former biotech exec named in securities fraud litigation (e.g., Ligand Pharma)

• John Brda – Tied to Torchlight/Meta Materials, and connected to other Lazar shells via filings

• David Kagel – Disbarred attorney involved in Lazar stock deals

• Melissa Garlough – Signatory on filings involving Lazar where undisclosed insider relationships were alleged

• 28 Ventures LLC – Allegedly connected to insider dumping in other Lazar deals (see ATHR short report)

There’s no reason to believe NBY is immune from this network.

Conclusion: Lazar’s Legal Legacy Is Toxic — and It’s Now Attached to NBY

NovaBay isn’t some turnaround story.

It’s the latest Lazar Frankenstein, stitched together by:

• A serial defaulter (sued by Goldman Sachs)

• A disbarred lawyer (who stole $25K in a Lazar deal)

• A custodian vehicle with a paper trail of shell fraud

• A network of microcap manipulators

The next acts are predictable: a reverse merger, a toxic PIPE, and 100 million new shares dumped on retail.

And if history is any guide, Lazar won’t be around to answer when it all burns down.

Red Flag Matrix, Upcoming Catalysts & Our Price Target

NovaBay ($NBY) is not a misunderstood turnaround story. It is, in our view, a premeditated insider windfall — orchestrated by David Lazar and his orbit — with no path forward except dilution and collapse.

We believe NBY is a textbook short — bloated, broken, and fundamentally bankrupt in both business and integrity.

Let’s summarize.

Our Price Target: $0.18 Per Share

We assign a price target of $0.18, representing a ~90% downside from current levels ($1.70–$2.00 range).

Why $0.18?

• NovaBay has no operating business

• The company has no legitimate revenue stream

• Cash will burn rapidly, with no M&A target announced

• A reverse merger will likely be from Lazar’s graveyard of failed SPAC hopefuls

• The historical precedent for Lazar’s shells is mass dilution and collapse

Let’s put it another way:

NovaBay is not worth more than the cost of its shell registration, minus the reputational damage of being tied to Lazar.

BMF Capital’s View:

NovaBay is the single clearest short in the microcap space right now.

• We believe it has no fundamental reason to exist

• The only utility is to facilitate an insider reverse merger and dump

• Retail traders are being used as exit liquidity

• And Lazar’s legal and ethical track record is a nuclear-grade red flag

This isn’t a turnaround.

It’s a slow-motion detonation.

Legal Disclaimer – Read This Before You Cry “Manipulation”

This report is published by BMF Reports, an independent research outlet and investigative short seller. We are not financial advisors. We do not offer, solicit, or promote any investment advice, securities transactions, or brokerage services. We do not care what you buy or sell — but we do care about shining a light on what we believe are corporate abuses, inflated narratives, and broken businesses.

We are short shares of NovaBay Pharmaceuticals (NYSE American: NBY) at the time of publication. That means we have a financial interest in seeing the stock price go down — and we’re not pretending otherwise. Our conviction is real, our research is public, and our skin is fully in the game. If that offends you, click away.

Nothing in this report should be interpreted as personalized investment advice. If you’re looking for portfolio guidance, go hire a fiduciary. If you’re looking to bet your rent money based on a PDF from a hedge fund guy who drinks too much coffee and combs through SEC filings for fun… reconsider your life choices.

Our reports are the result of deep-dive investigative research using publicly available sources: SEC filings, litigation records, financial disclosures, and occasionally a few breadcrumbs insiders leave when they get greedy or lazy. We stand by the accuracy of our findings to the best of our knowledge, and we’re happy to update or correct anything we get wrong — unlike some of the companies we cover.

This report contains opinions. Sharp ones. They're our own. You may disagree. That’s the whole point of a market.

Just because we’re short doesn’t mean we’re wrong — but it also doesn’t mean we’re prophets. Stocks go up, down, sideways, and sometimes straight to Valhalla. Do your own due diligence. Seriously. Don’t take our word for it — verify, investigate, and form your own thesis.

BMF Reports, its affiliates, partners, and any third-party entities referenced in this publication are not liable for any losses, real or imagined, direct or indirect, that may arise from your use of this information. If you’re trading based on tweets and takedowns, you’ve already accepted the risk.

Lastly, if you are a company executive, attorney, or PR flack reading this and considering legal threats — take a deep breath. We welcome healthy rebuttals, transparency, and public discourse. If anything herein is inaccurate or incomplete, contact us, and we’ll evaluate fair corrections. But threats, intimidation, or legal bluster? That’ll just land you in our next exposé.

We’re short. We’re biased. We’re loud. We’re thorough. And we might be right.
Read, think, question — but don’t ever blindly follow.

– BMF Reports