Novan (NOVN) Satisfies $16.5M Outstanding Promissory Note
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Novan, Inc. (Nasdaq: NOVN), today announced that it had reached agreement with Evening Post Group, LLC (“EPG”) regarding payment, satisfaction and termination of its secured promissory note and security agreement associated with the March 11, 2022 acquisition of EPI Health. Novan and EPG agreed that, upon EPG’s receipt of $10.0 million, which Novan subsequently paid, all outstanding indebtedness and obligations of Novan under the promissory note are fully satisfied, and accordingly, the promissory note and related security agreements are terminated.
“We are pleased to announce that the satisfaction of Novan’s only outstanding debt, at a substantive 39% discount, and by avoiding $4.6 million in future interest payments represents a tremendous opportunity for us,” commented Paula Brown Stafford, President and Chief Executive Officer of Novan. “The termination and release not only provide $11.1 million of savings to our shareholders, but importantly unencumbers our EPI Health commercial asset portfolio which allows us to explore a broader range of potential financing and partnering options for Novan.”
Using cash generated through the sales of its commercial products, as well as existing cash on hand (other than from the proceeds from Novan’s June 2022 registered direct offering), Novan has paid EPG in full satisfaction of all outstanding indebtedness and obligations under the promissory note. The liens on the membership interests and assets of EPI Health, which had previously secured the promissory note, were terminated, and no obligations related to the securities agreement remain outstanding.
EPG President and CEO Terry Hurley added, “EPI Health has progressed well thus far under new leadership, and we hope that our support demonstrates our excitement for Novan going forward. While we have strategically moved away from the pharmaceutical industry and turned our focus and resources to other opportunities, we wish EPI Health and Novan the best.”
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