Market Value of Listed Securities Requirement

On July 9, 2020, Novan, Inc. (the “Company”), received written notice from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that over the previous 10 consecutive business days, from June 23, 2020 to July 8, 2020, the Company’s market value of listed securities had been $50,000,000 or greater. Accordingly, the Company has regained compliance with the market value of listed securities listing requirement set forth under Nasdaq Listing Rule 5450(b)(2)(A).

Minimum Bid Price Requirement

As previously disclosed, on February 19, 2020, the Company received a letter from the staff of the Listing Qualifications Department of Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1) because the closing bid price for the Company’s common stock had closed below $1.00 per share for the previous 30 consecutive business days (the “Minimum Bid Price Requirement”).

As also previously disclosed, on April 17, 2020, the Company received a letter from the staff of the Listing Qualifications Department of Nasdaq indicating that, due to extraordinary market conditions, Nasdaq had tolled the compliance period for the Minimum Bid Price Requirement through June 30, 2020 (the “tolling period”), and that on April 16, 2020, Nasdaq filed an immediately effective rule change with the Securities and Exchange Commission to implement the tolling period. The letter indicated that upon expiration of the tolling period and beginning on July 1, 2020, the Company would receive the balance of days remaining under its currently pending compliance period in effect at the rule change date. Accordingly, upon expiration of the tolling period and beginning on July 1, 2020, the Company has 123 calendar days from July 1, 2020, or until November 2, 2020, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to November 2, 2020.

The Company intends to actively monitor the Minimum Bid Price Requirement and other continued listing requirements and, as appropriate, will consider available options to resolve any deficiencies as to those requirements and regain compliance with those requirements, as applicable.

About Novan, Inc. (NASDAQ:NOVN)

Novan, Inc. is a late-stage pharmaceutical company. The Company is engaged in the development and commercialization of therapies using its nitric oxide platform. The Company develops product candidates using its Nitricil technology, which enables the Company to engineer tunable new chemical entities (NCEs). The Company’s formulation science enables it to further tune the release of nitric oxide when applied to the skin by using the combinations of inactive ingredients. It is developing SB204 for the treatment of acne vulgaris in Phase III. The Company is developing its product candidate, SB206, for the treatment of external genital and perianal warts in Phase II. It is developing SB208, an investigational topical anti-fungal for the treatment of fungal infections of the skin and nails. It is developing SB204 for the treatment of inflammatory skin diseases. Its pipeline also includes SB414, a topical cream product candidate.