Novan, Inc. (NASDAQ:NOVN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02.

On March 20, 2017, Novan, Inc. (the Company) and Richard
Peterson, Chief Financial Officer and the principal financial and
accounting officer of the Company, reached agreement regarding
his departure from the Company effective March 23, 2017 for Good
Reason (as defined in the employment agreement, dated April 13,
2016 between Mr. Peterson and the Company (the Employment
Agreement)).

On March 21, 2017, the Company appointed William L. Hodges, 62,
as Interim Chief Financial Officer, to serve as the principal
financial and accounting officer of the Company, effective March
24, 2017. Mr. Hodges served most recently at POZEN, Inc., a
pharmaceutical company, as Senior Vice President and Chief
Financial Officer, from August 2004 until December 2015. Mr.
Hodges continued to serve with POZEN, Inc. as the Senior Vice
President of Finance and Administration until the completion of
POZENs merger with Tribute Pharmaceuticals in March 2016 and has
subsequently provided part-time service to POZEN.

On March 21, 2017, the Company entered into an offer letter (the
Offer Letter) with Mr. Hodges. The Offer Letter provides that Mr.
Hodges will serve for a three month engagement, after which he
and the Company can mutually agree to terminate the employment
arrangement or extend the employment arrangement for an
additional three months. During his employment, Mr. Hodges will
receive a base salary of $30,000 per month and is eligible to
receive a discretionary bonus with a target bonus equal to 40% of
his actual base salary over the three month employment, or
$36,000, contingent upon continued employment for the three month
period (unless employment terminates before such time due to the
hiring of a Chief Financial Officer) and payable at the three
month anniversary of the commencement date of his employment. On
March 24, 2017, in accordance with the Offer Letter, Mr. Hodges
will receive a stock option award to purchase 33,000 shares of
the Companys common stock, vesting monthly during the three month
term of his employment.

There is no arrangement or understanding with any person to which
Mr. Hodges was selected as Interim Chief Financial Officer, and
there are no there are no family relationships between Mr. Hodges
and any director or executive officer of the Company.

The foregoing description of the Offer Letter does not purport to
be complete and is qualified in its entirety by reference to the
full text of the Offer Letter, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.

On March 22, 2017, the Company issued a press release announcing
certain organizational changes. The full text of this press
release is furnished herewith as Exhibit 99.1 to this Current
Report and incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1, shall
not be deemed filed for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject
to the liability of that section. Furthermore, the information in
this report shall not be deemed incorporated by reference into
the filings of the Company under the Securities Act of 1933, as
amended.

See the Exhibit Index which follows the page of this Current
Report on Form 8-K, which is incorporated herein by reference.

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.

Novan, Inc. (NASDAQ:NOVN) Recent Trading Information

Novan, Inc. (NASDAQ:NOVN) closed its last trading session down -0.25 at 6.10 with 142,670 shares trading hands.