Item 8.01. Other Events.
On March 7, 2023, Novan, Inc. (the "Company") announced that the U.S. Food and
Drug Administration ("FDA") had completed its filing review of the Company's new
drug application ("NDA") filing submitted in early January seeking marketing
approval for berdazimer gel, 10.3% (SB206) for the topical treatment of
molluscum contagiosum. The FDA determined the Company's NDA was sufficiently
complete, no filing review issues were identified, the substantive review
process had commenced, and the Company was assigned a Prescription Drug User Fee
Act goal date of January 5, 2024. The Company has previously disclosed that it
is pursuing a broad range of financing options that could be used to extend its
cash runway, and that the Company also considers various strategic transactions
from time to time. In an investor deck filed with the Securities and Exchange
Commission on March 7, 2023, the Company stated its belief that its existing
cash and cash equivalents, plus expected receipts associated with product sales
from its commercial product portfolio, will provide it with adequate liquidity
to fund its planned operating needs into the end of the first quarter of 2023.
Silicon Valley Bank ("SVB") is one of the Company's two primary banking
relationships. On March 10, 2023, the Federal Deposit Insurance Corporation
("FDIC") issued a press release stating that SVB was closed by the California
Department of Financial Protection and Innovation, which appointed the FDIC as
receiver. On March 12, 2023, the FDIC, the Department of Treasury and the
Federal Reserve issued a joint statement indicating that actions would be taken
to complete the FDIC's resolution of SVB in a manner that protects depositors.
The Company is monitoring the situation as more details become available, and in
the interim, the Company has taken measures to conserve cash.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements regarding
the Company's current expectations. These forward-looking statements include,
without limitation, statements regarding future actions relating to the
Company's deposits with SVB, including the Company's ability to recover its cash
on deposit at SVB and the timing of any such recovery, the Company's cash runway
and implementing measures to conserve cash. Factors that could cause actual
results to differ include, but are not limited to, risks and uncertainties
related to actions of government agencies, including the FDIC, over which the
Company has no control, the risk that the Company may not be able to recover its
cash on deposit with SVB or on a timely basis, risks and uncertainties relating
to the Company's need for additional cash and risks and uncertainties related to
the ability to raise additional capital. Additional risks and uncertainties
regarding the Company's business, including with respect to the sufficiency of
its cash resources and need to raise additional capital, can be found in the
section titled "Risk Factors" in the Company's Annual Report on Form 10-K for
the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the three
and nine months ended September 30, 2022 filed with the United States Securities
and Exchange Commission (SEC), and future filings and reports that the Company's
makes from time to time with the SEC. The information contained in this Current
Report on Form 8-K is as of March 13, 2023, and the Company undertakes no duty
to update forward-looking statements contained in this Current Report on Form
8-K except as required by applicable laws.
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