NOVN Novan Inc

Novan, Inc. (“the Company” or “Novan”) (Nasdaq: NOVN), today announced that it has entered into definitive agreements for the issuance and sale in a registered direct offering of an aggregate of (i) 5,042,017 shares of its common stock (or pre-funded warrants to purchase common stock in lieu thereof) and (ii) warrants (the “Common Warrants”) to purchase up to 5,042,017 shares of common stock, at an effective combined purchase price of $1.19 per share (or pre-funded warrant) and associated Common Warrant. The Common Warrants will become exercisable six months from the date of issuance at an exercise price of $1.20 per share and will expire five years following the initial exercise date.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The gross proceeds to Novan from this offering are expected to be approximately $6.0 million, before deducting the placement agent’s fees and other offering expenses payable by Novan. Novan intends to use the net proceeds from the offering to fund its berdazimer gel, 10.3% (SB206) development program activities, support sales and marketing efforts for the Company’s marketed products and for general working capital purposes and other operating expenses. The offering is expected to close on or about March 16, 2023, subject to satisfaction of customary closing conditions.

The securities described above are being offered by Novan pursuant to a shelf registration statement (Registration No. 333-262865) originally filed by Novan with the Securities and Exchange Commission (“SEC”) on February 18, 2022 and that became effective on February 25, 2022. The offering is being made only by means of a prospectus supplement and accompanying prospectus that forms a part of the registration statement. A prospectus supplement and accompanying prospectus relating to the registered direct offering will be filed with the SEC and, when available, may be obtained for free on the SEC’s website located at http://www.sec.gov. When available, electronic copies of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained by contacting H.C. Wainwright & Co., LLC, 430 Park Avenue, 3rd Floor, New York, NY 10022, or by telephone at (212) 856-5711, or by email to placements@hcwco.com.

The Company also has agreed that certain existing warrants to purchase up to an aggregate of 5,261,311 shares of common stock at an exercise price of $2.851 per share and an expiration date of June 13, 2027, will be amended effective upon the closing of the offering, such that the amended warrants will have a reduced exercise price of $1.20 per share following the closing of the offering, will become exercisable six months after the closing of the offering and will be exercisable until December 13, 2027.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Novan

Novan, Inc. is a medical dermatology company primarily focused on researching, developing, and commercializing innovative therapeutic products for skin diseases. Our goal is to deliver safe and efficacious therapies to patients, including developing product candidates where there are unmet medical needs. Novan has a robust commercial infrastructure across sales, marketing, and communications, as well as fully dedicated market access and pharmacy relation teams, promoting products for plaque psoriasis, rosacea and acne. The U.S. Food and Drug Administration (“FDA”) accepted for filing Novan’s New Drug Application (“NDA”) seeking approval for berdazimer gel, 10.3% (SB206) for the treatment of molluscum contagiosum. The Company also has a pipeline of potential product candidates using its proprietary nitric oxide-based technology platform, NITRICIL™, to generate new treatments for multiple indications.

Forward-Looking Statements

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “believe,” “expect,” “target,” “anticipate,” “may,” “plan,” “potential,” “will,” “look forward to” and similar expressions, and are based on the Company’s current beliefs and expectations. These forward-looking statements include, but are not limited to, statements relating to closing of the offering and satisfaction of closing conditions, the expected gross proceeds from the offering; and statements regarding the anticipated use of proceeds from the offering. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the Company’s expectations, including, but not limited to, risks and uncertainties associated with market and other conditions and the satisfaction of customary closing conditions related to the offering, and other risks and uncertainties described in the Company’s annual report filed with the Securities and Exchange Commission on Form 10-K for the twelve months ended December 31, 2021, and in the Company’s subsequent filings with the Securities and Exchange Commission. Such forward-looking statements speak only as of the date of this press release, and the Company disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by law.

INVESTOR AND MEDIA CONTACT:Jenene ThomasJTC Team, LLC833-475-8247NOVN@jtcir.com