In our last article we recommended that Novan (NOVN) was an attractive investment for our readers and subscribers. At the time of our alert it was trading for around $0.70, went up to $1.23 and back down to the $0.80 area.
If you missed out now may be your chance to hop in.
Why Novan (NOVN)’s Direct Sale Agreement is good
On July 21, 2020, Novan, Inc., entered into a common stock purchase agreement with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $30.0 million of shares of the Company’s common stock at the Company’s request from time to time during the 30-month term of the Purchase Agreement.
Upon execution of the Purchase Agreement, the Company agreed to sell to Aspire Capital 5,555,555 shares of common stock at $0.90 per share for proceeds of $5.0 million.
Under the Purchase Agreement, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 300,000 shares of the Company’s common stock per business day, up to an aggregate of $30.0 million (including the initial purchase shares) of the Company’s common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of:
- The lowest sale price of the Company’s common stock on the purchase date; or
- The arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the purchase date.
The aggregate purchase price payable by Aspire Capital on any one purchase date may not exceed $500,000, unless otherwise mutually agreed. The parties may mutually agree to increase the number of shares of our common stock that may be purchased per trading day pursuant to the terms of the Purchase Agreement to 2,000,000 shares.
In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 300,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine.
The purchase price per share pursuant to such VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date.
The Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales under the Purchase Agreement on any purchase date where the closing sale price of the company’s common stock is less than $0.15.
There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future financing transactions, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement.
In consideration for entering into the Purchase Agreement, upon satisfaction of certain conditions under the Purchase Agreement, the Company issued to Aspire Capital 1,000,000 shares of the Company’s common stock (the “Commitment Shares”). The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any penalty or additional cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the Purchase Agreement.
Any proceeds the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes.
Novan (NOVN)’s upcoming shareholders meeting
Considering the coronavirus (COVID-19) pandemic, for the safety and health of Novan’s stockholders, employees and the broader community, the Company has determined that its 2020 Annual Meeting will be held solely via the Internet. To be admitted to the 2020 ASM webcast, stockholders need to visit www.virtualshareholdermeeting.com/NOVN2020 and enter the control number included on the proxy form or voting instruction form, as applicable. During the virtual annual meeting, stockholders of record as of June 11, 2020 will be able to vote their shares electronically and will be able to ask questions via the web portal, as time permits.
Guests may listen to the 2020 ASM by visiting www.virtualshareholdermeeting.com/NOVN2020 and completing the guest login section of the web portal. If you are not a stockholder of record, you may still access and listen to the meeting, however, guests will be unable to submit questions during the webcast.
Online check-in will begin 15 minutes prior, at 9:15 a.m. ET. The ASM will begin promptly at 9:30 a.m. ET on July 28, 2020.
What does this mean for Novan (NOVN) and is $1 to $3 possible?
This agreement is a good thing because whenever Novan needs money they can get funding from Aspire Capital to further expand business operations. This agreement does not dilute current shareholder shares, so that’s a big plus. Now, the stock needs to stay above $1 for 10 days to complete the minimum bid requirement for the exchange they’re listed on.
$3 is very possible, as we said in our previous post there is a gap waiting to be filled at the $3 level and possible acquisition news could help contribute to this. In the event that there is no acquisition, Novan is still a great investment because nitric oxide plays a key role in COVID-19, according to researchers
Nitric oxide plays key roles in maintaining normal vascular function and regulating inflammatory cascades that contribute to acute lung injury (ALI) and acute respiratory distress syndrome (ARDS). Interventions that are protective against ALI and ARDS can play a critical role for patients and health systems during the pandemic.
SB206 is a great candidate
The company plans in September 2020 to add the first patient to B-SIMPLE4 and the high-level efficacy results will be aimed at late in the second quarter of 2021, if the trial were started on this calendar and not further influenced by the COVID-19 pandemic.
Progress is important because there is no US at the moment. Approved treatment therapies for molluscum Food and Drugs Administration. Treatment options for patients under 10, including in-company and other painful, medical scratching, freezing, burning and blistering procedures, most of whom are under 10.
In-office scraping, freezing, burning and blistering, often painful by physicians. The only potential solutions seem to be off-label drugs and off-the-counter items without any clinical results that are suitable for an indication of molluscum.
In the opinion of the organization, SB206 would meet an essential necessity for patient care for molluscum, a topical treatment at home, with a fast treatment advantage if approved.
Is Novan (NOVN) a reliable investment?
Shares of Novan (NOVN) appear to be a very good investment option, the Money Midnight Indicator is expecting its price to increase considerably in the next several months. The majority of the metrics point to this investment being highly attractive.
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