Beyond Antibiotics

Corporate Update

Ron Najafi

Chairman & CEO

Annual Shareholder Meeting

June 11, 2013

NYSE-MKT: NBY

1

This presentation contains forward-looking statements, within the meaning of applicable U.S. securities laws, which statements can, in some cases, be identified with terms such as “project” "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect“, “targets”, “potential”, and other similar expressions. These forward-looking statements reflect NovaBay’s current expectation and assumptions, such as expected efficacy of compounds, timing of clinical trials, future results of clinical trials, other expected or targeted events and potential market sizes and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed in the Company's filings with the SEC which filings can be found at www.sec.gov. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable U.S. securities laws.

Forward-Looking Statements

2

Antibiotic Resistance Crisis

Pre-Antibiotic Era - Pre-1930’s - Minor injury = Death - Life Expectancy (LE) 45

Alexander Fleming Bread Mold Observation

Antibiotic Era

- 1930 – 2010 - Penicillin - 150 Antibiotics - Wonder Drugs - Save Millions of Lives - LE 85

3

Disease Pre-Antibiotic Death Rate

Death With Antibiotics

Change in Death

Community Pneumonia1 35% 10% -25%

Hospital Pneumonia2 60% 30% -30%

Heart Infection3 100% 25% -75%

Brain Infection4 >80% <20% -60%

Skin Infection5 11% <0.5% -10%

By comparison…treatment of myocardial infarction with aspirin or fibrinolytic drugs6

-3%

1IDSA Position Paper ’08 Clin Infect Dis 47(S3):S249-65; 2IDSA/ACCP/ATS/SCCM Position Paper ’10 Clin Infect Dis In Press; 3Kerr AJ. Subacute Bacterial Endocarditis. Springfield IL: Charles C. Thomas, 1955 & Lancet 1935 226:383-4; 4Lancet ’38 231:733-4 & Waring et al. ’48 Am J Med 5:402-18; 5Spellberg et al. ’09 Clin Infect Dis 49:383-91 & Madsen ’73 Infection 1:76-81; 6’88 Lancet 2:349-60

Power of Antibiotics

4

Antibiotic Resistance Crisis

Pre-Antibiotic Era - Pre-1930’s - Minor injury = Death - Life Expectancy (LE) 45

Alexander Fleming Bread Mold Observation

Antibiotic Era

- 1930 – 2010 - Penicillin - 150 Antibiotics - Wonder Drugs - Save Millions of Lives - LE 85

Megatrend

Bacteria containing NDM-1 enzyme

Post-Antibiotic Era - Confirmed by WHO - Widespread Resistance - “Super Bugs”/ MRSA - Flesh Eating - Will this effect LE?

5

• Good safety profile

• Fast

• Broad spectrum of activity

• Effective against multi-drug resistant bacteria

• Effective against biofilm

Our Solution Compounds that Mimic Nature

(N,N-dichloro-2,2-dimethyltaurine) Effective and Stable, Broad Patent Protection

Auriclosene

6

6 Million U.S. Patients

Two Distinct Anti-Infective Product Groups

WW: $600M

US: $100M

WW: $700M

Aganocides® Lead: Auriclosene

(NVC-422)

Wound Care Chronic

Non-healing Wounds

Dermatology Impetigo

Ophthalmology Pink Eye

Urology UCBE

7

$2B (WW) $400-600 Mil (WW)

$100-200 Mil (US)

Four Distinct Business Units Pursuing Independent Opportunities

8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Begin Ph. I

Begin Ph. II

Begin Ph. III

File for

Approval

Anti-infective

• $21 B Market • Development cost & time is less • Few new products – Escalating need • Higher probability of success

Anti-Infective Advantages

Source: CMR International

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Begin Ph. I

Begin Ph. II

Begin Ph. III

File for

Approval

CNS

Anti-cancer

Cardiac

Anti-infective

9

Company History / Major Milestones Corporate Partners Have Contributed ~$60 million

Founded

Novato, CA

NVC-101

Discovery and development of NeutroPhase for

wound care

Partnership

Licenses right to develop Aganocide compounds for ophthalmology uses

Initial Public Offering October

Listing on NYSE-Amex NBY

$20,000,000

Partnership i

NovaBay licenses the right to Aganocide for Impetigo

and Acne

Partnership

Strategic marketing agreement with Pioneer

Pharma for China

Largest Trial For Viral Conjunctivitis Ever

Launched

Launch Global Phase 2b Clinical Trial

Impetigo Represents “Gateway” Indication

Launch Global Phase 2b Clinical Trial

Granted in Multiple Ex-US Countries

Aganocides Issued Additional Composition of

Matter Patents

2000

2012

2007 2009 1998-2003 2006 2012

2012 2012 2012 2012

Strategic Marketing Agreement Added for

Southeast Asia

Partnership Expansion Equity Investment

Up to $5.5 million

Partnership

Licenses right to Aganocide for Animal Health

2013

10

Pipeline Continues to Advance Results From Three Advanced Clinical Trials in 2013

* FDA has agreed that conjunctivitis Phase 2b trial could be considered pivotal

Therapeutic Area

Delivery Scope

(Patients)

2013

Q1 Q2 Q3 Q4

Aganocides®

(auriclosene)

Urology Irrigation Solution

US (30)

Dermatology

Topical Gel

Global (300+)

Ophthalmology Eye drops Global (500+)

NeutroPhase®

(NVC-101) Advanced

Wound Care

Pure HOCl

Solution

Commercial Launch

Underway

Enrolling Phase 2, Part 2

Partnered in China, SE Asia and S. Korea ; Seeking WW Partners

Enrolling Global Phase 2b

Enrolling Global Phase 2b*

Clinical Trials Update

Pink Eye

(Infectious Conjunctivitis) David Stroman, Ph.D.

Senior Vice President Ophthalmology

12

Bacterial (US) $457

Bacterial (Ex-US)

$768

Viral (US)

$300 (1)

Viral (Ex-US) $400 (1)

WW = $2 billion

(1) Extrapolated from Japanese incidence data of 1 million cases of adenoviral conjunctivitis per year. Other published estimates of incidence support greater frequencies in US and other countries.

Worldwide Conjunctivitis Market Bacterial and Viral

13

• Number 1 unmet medical need in ocular infections

• Epidemic Keratoconjunctivitis (EKC)

– Can be sight threatening

– Highly contagious

– Causes large epidemic outbreaks

Adenoviral Conjunctivitis

14

15% Separation from Vehicle

Sustained clinical cure is attained if the sum of bulbar conjunctival injection and foreign body sensation is zero and remains zero for all subsequent visits

6

13 13

19

38

69

0 0 0

8

31

54

0

10

20

30

40

50

60

70

80

Day 3 Day 5 Day 7 Day 9 Day 11 Day 18

NVC-422 Vehicle

% of Patients 15%

Clinical Success: 69% on Day 18 in EKC Adenoviral Patients

15

31

46

62 69

85 92

-

13 13

25

38

50

-

10

20

30

40

50

60

70

80

90

100

Day 3 Day 5 Day 7 Day 9 Day 11 Day 18

NVC-422 Vehicle

42% Separation from Vehicle

Sustained clearing of blurred vision is obtained if symptom is zero and remains zero for all subsequent visits

42%

Blurred Vision Clearing 92% on Day 18 in EKC Adenoviral Patients

% of Patients

16

• Sustained Microbiological success

• Sustained Clinical cure

• Sustained clearing of blurred vision

• Resolution of SEIs

• Safe and well tolerated

Summary of Proof-of-Concept Study Patients with EKC Serotypes

17

• Phase I: US Escalating Exposure Study – Completed

• Phase 2a: US Adenoviral Proof-of-Concept Study – Completed

• Phase 2b: BAYnovation – Global Safety/Efficacy Study

– Enrollment began May 4, 2012

– Completion expected in late-2013

• Phase 2a: BACTOvation – US Bacterial Proof-of-Concept Study

– FPI – June, 2013

– Completion expected 1st Qtr 2014

Infectious Conjunctivitis -- Time-line

18

• Ages – 1 year and older

• Signs and Symptoms of viral infection of 3 days or less

• Pre-screened with Adeno Detector Plus test

• Treatment is for 10 days – 8 times per day

• Visit schedule – Day 1, 3, 6, 11, 18 , and 42

BAYnovation Study Design

19

BAYnovation Adenoviral Conjunctivitis US Investigators

20

BAYnovation Adenoviral Conjunctivitis India Investigators

21

BAYnovation Adenoviral Conjunctivitis Brazil Investigators

22

• Ages – 1 year and older

• Signs and Symptoms of bacterial infection of 3 days or less

• Treatment is for 4 days – 4 times per day

• Visit schedule – Day 1, 3, and 5

BACTOvation Study Design

23

BACTOvation Adenoviral Conjunctivitis US Investigators

24

• Successful completion of Phase 2b/3 adenoviral conjunctivitis will be one of the two registration studies needed for “approval” of adenoviral conjunctivitis in the US and elsewhere

• Successful completion of POC bacterial conjunctivitis study will provide clinical basis to pursue the indication for the second most important cause of infectious conjunctivitis

Summary of Infectious Conjunctivitis

Will be the first product indicated for adenoviral conjunctivitis

Will be first product indicated for both viral and bacterial conjunctivitis

Business Unit Updates – MediBay

Russell Hoon Vice President,

Advanced Wound Care

26 26

27

• A natural agent produced by white blood cells as part of the innate immune system

• Broad spectrum antimicrobial that doesn’t give rise to resistance

• Effective against bacteria (gram positive and negative), fungi, and biofilm destruction

• Rapid time-kill (less than 60 seconds-in vitro) with effectiveness greater than 99.9%

• NeutroPhase concentration: 0.01%

NeutroPhase® Pure Hypochlorous Acid in Saline

28 28

HOCl produced by neutrophils is unstable

with very limited shelf-life

(rendering it not commercially viable)

This slide is the first frame of a video demonstrating

how a Neutrophil captures, engulfs, and then

produces HOCl to kill invading microbes

Microbe

Neutrophil

HOCl

NovaBay’s NeutroPhase® Mimics Neutrophils

29

• NeutroPhase® addresses the greater than six million patient U.S. chronic wound care market

• Three 510(k) notifications

• NBY business model is to form partnerships with Medical device/pharma companies

– Collaboration for late stage development and commercialization

– Early stage collaboration with companies with complementary expertise/technology

NeutroPhase® Marketing

30

Global Partnering

Brazil

(25)

Advanced Negotiations

Distributor in Place

Partnering Discussions

31

Pioneer Pharma Coverage in China

• Covers every region

• 510 regional distributors

• 7000 hospitals covered

P P

P

32

Necrotizing Fasciitis CBS News San Francisco

33 33

Corporate Update

Annual Shareholder Meeting

Tom Paulson

Chief Financial Officer

NYSE-MKT: NBY

35

Financial Overview Key Statistics

Million

Market Cap (June 6)

$49

March 31 Cash and Equivalents (Plus an additional ~$1M of Acc/Rec from Partners)

$13.2

Debt $0

Shares Outstanding (only common outstanding)

37

36

Anticipated Upcoming Milestones*

*Expected as of June 2013

Year Date Event

2013

H1 NeutroPhase Partnerships USA / ROW

H2 Data - Part 2 of Phase 2a Urology (UCBE)

H2 Data - Phase 2b Impetigo Global study

H2 Data - Phase 2b BAYnovation Global Study

2014

H1 Sign Conjunctivitis Partner

H1 Initiate Impetigo Phase 3 Global Studies

H2 Commercialize Conjunctivitis Product in Brazil

H2 Begin 2nd Conjunctivitis Phase 3 (BAYnovation II)

37

NBY Management Team

Roy Wu Senior Vice President

Business Development

Ron Najafi, Ph.D. Chief Executive Officer

Tom Paulson Chief Financial Officer

Kenneth Krantz, MD, Ph.D. Vice President Medical Affairs

David Stroman, Ph.D. Senior Vice President

Ophthalmology

Russell Hoon Vice President

Advance Wound Care

Keith Bley, Ph.D. Senior Vice President Product Development

38

Experienced Leadership Board of Directors

38

Paul Freiman Former CEO, NTII; Former Chairman & CEO, Syntex

Alex McPherson, MD, Ph.D. Lead Independent Director, Chair-N&GC

Former President & CEO, Biomira Inc. Past President CMA, Deputy Minister Health

Gail Maderis President and CEO, BayBio Former CEO of Five Prime Therapeutics Former president of Genzyme Oncology

Charles Cashion Chair- Audit Committee

SVP, CFO at Conatus Pharma Former CFO at IDUN Pharmaceuticals, Inc.

Robert Tufts Partner, Tufts, Stephenson & Kasper

Tony Wicks Chair-Compensation Committee

Former CEO of several mining companies

Tony Dailley, D.D.S. Co-founder 1-800-Dentist

Ron Najafi, Ph.D. Chairman and CEO, NovaBay

39

• Confirmed New Anti-Infective Paradigm

– Auriclosene effective against bacteria, viruses and fungi

– Does not give rise to resistance

• Multiple Phase 2 Global Trial Results in 2013

– Impetigo

– Infectious Conjunctivitis

– Urinary Catheter Blockage and Encrustation

• Commercial Launch of NeutroPhase® Underway

– Partners finalized in China, South East Asia, and South Korea

– Future partnerships will target US, EU, MENA, LATAM

• Validating Partnerships for auriclosene

– Galderma for Impetigo

– Virbac for animal health

• Risk-Mitigating Strategy

Value Proposition

Annual Shareholder Meeting

Q&A Session

Beyond Antibiotics

Corporate Update

Annual Shareholder Meeting

June 11, 2013

NYSE-MKT: NBY