false000146715400014671542023-11-212023-11-21


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
  
 CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 21, 2023
 _____________________
NVN Liquidation, Inc.
(Exact name of registrant as specified in its charter) 
 _____________________
Delaware001-3788020-4427682
(State or other jurisdiction of
incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
P.O. Box 64, Pittsboro, North Carolina 27312
(Address of principal executive offices) (Zip Code)
(919) 485-8080
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
 _____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
        
Securities registered pursuant to Section 12(b) of the Act: 
Title of Each ClassTrading Symbol(s)
Name of Each Exchange on Which Registered 
Common Stock, $0.0001 par valueNOVNQNONE
(1) The registrant’s common stock was previously traded on the Nasdaq Capital Market under the symbol “NOVN.” On July 26, 2023, the registrant’s common stock began trading exclusively on the over-the-counter (“OTC”) market under the symbol “NOVNQ.” On September 8, 2023, Nasdaq filed a Form 25 with the United States Securities and Exchange Commission to complete the delisting of the registrant’s common stock from Nasdaq, and the delisting became effective ten days after the Form 25 was filed.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 7.01. Regulation FD Disclosure.
As previously disclosed, on July 17, 2023, NVN Liquidation, Inc., f/k/a Novan, Inc. (the “Company”) and its wholly owned subsidiary, EPI Health, LLC (“EPI Health” and together with the Company, the “Debtors”) filed voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The case is being administered under the caption In re: NVN Liquidation, Inc., et al, f/k/a Novan, Inc., Case No. 23-10937 (the “Chapter 11 Case”).
On November 21, 2023, each of the Debtors filed with the Bankruptcy Court its monthly operating report for the month ended October 31, 2023 (the “Monthly Operating Reports”). The Monthly Operating Reports are attached hereto as Exhibit 99.1 and Exhibit 99.2 and are incorporated herein by reference. This Current Report on Form 8-K (including the exhibits hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD. The Monthly Operating Reports and other filings with the Bankruptcy Court related to the Chapter 11 Case may be available electronically at www.kccllc.net/novan. The documents and other information available via website or elsewhere are not part of this Form 8-K and shall not be deemed incorporated herein.
The information contained in this Item 7.01 and in Exhibit 99.1 and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding the Monthly Operating Reports
The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Reports, which were not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The Monthly Operating Reports are limited in scope, cover a limited time period and have been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court. The Monthly Operating Reports were not audited or reviewed by independent accountants, were not prepared in accordance with generally accepted accounting principles in the United States, are in a format prescribed by applicable bankruptcy laws or rules and are subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the Monthly Operating Reports are complete. The Monthly Operating Reports also contain information for periods which are shorter or otherwise different from those required in the Company’s reports pursuant to the Exchange Act, and such information might not be indicative of the Company’s financial condition or operating results for the period that would be reflected in the Company’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Reports should not be viewed as indicative of future results.
Cautionary Information Regarding Trading in the Company’s Securities
The Company cautions that trading in the Company’s securities (including, without limitation, the Company’s common stock) during the pendency of the Chapter 11 Case is highly speculative and poses substantial risks. The Company expects that the currently outstanding shares of its common stock will be eventually cancelled and extinguished by the Bankruptcy Court. The holders of the Company’s common stock are not expected to receive any proceeds from the sale of substantially all of the Company’s assets due to the Company’s obligations to creditors and others. As a result, the Company expects that its currently outstanding stock may have little or no value. Trading prices for the Company’s common stock may bear little or no relation to actual recovery, if any, by holders thereof in the Chapter 11 Case. Accordingly, the Company urges extreme caution with respect to existing and future investments in its common stock.
Cautionary Statement Regarding Forward-Looking Statements
This Form 8-K includes statements that are, or may be deemed, “forward-looking statements.” In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or, in each case, their negative or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. These forward-looking statements reflect the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to significant risks, uncertainties and assumptions that are difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the forward-looking statements. Forward-looking statements are also subject to the risk factors and cautionary language described from time to time in the reports the Company files with the SEC, including in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2022 and any updates thereto in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements. Any forward-looking statements that we make in this Form 8-K speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Form 8-K or to reflect the occurrence of unanticipated events.








Item 9.01. Financial Statements and Exhibits.

(d)Exhibits
 
EXHIBIT INDEX



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
NVN Liquidation, Inc.
Date: November 22, 2023
By:/s/ Paula Brown Stafford
Paula Brown Stafford
Chairman, President and Chief Executive Officer
 


UST Form 11-MOR (12/01/2021) 1 UNITED STATES BANKRUPTCY COURT DISTRICT OF Delaware In Re. NVN Liquidation, Inc., f/k/a Novan, Inc. Debtor(s) § § § § Case No. 23-10937 Lead Case No. 23-10937 Jointly Administered Monthly Operating Report Chapter 11 Reporting Period Ended: 10/31/2023 Petition Date: 07/17/2023 Months Pending: 4 Industry Classification: 3 2 5 4 Reporting Method: Accrual Basis Cash Basis Debtor's Full-Time Employees (current): 0 Debtor's Full-Time Employees (as of date of order for relief): 37 Supporting Documentation (check all that are attached): (For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor) Statement of cash receipts and disbursements Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit Statement of operations (profit or loss statement) Accounts receivable aging Postpetition liabilities aging Statement of capital assets Schedule of payments to professionals Schedule of payments to insiders All bank statements and bank reconciliations for the reporting period Description of the assets sold or transferred and the terms of the sale or transfer Signature of Responsible Party Printed Name of Responsible Party Date Address /s/ Daniel B. Butz 11/21/2023 Daniel B. Butz Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street, PO Box 1347 Wilmington, DE 19899-1347 STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies. Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 1 of 17 Exhibit 99.1

 
UST Form 11-MOR (12/01/2021) 2 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 Part 1: Cash Receipts and Disbursements Current Month Cumulative a. Cash balance beginning of month $6,398,515 b. Total receipts (net of transfers between accounts) $41,515 $20,045,354 c. Total disbursements (net of transfers between accounts) $2,597,562 $19,363,096 d. Cash balance end of month (a+b-c) $3,842,468 e. Disbursements made by third party for the benefit of the estate $0 $1,207,567 f. Total disbursements for quarterly fee calculation (c+e) $2,597,562 $20,570,663 Part 2: Asset and Liability Status Current Month (Not generally applicable to Individual Debtors. See Instructions.) a. Accounts receivable (total net of allowance) $0 b. Accounts receivable over 90 days outstanding (net of allowance) $0 c. Inventory ( (attach explanation))Book Market Other $0 d Total current assets $6,833,019 e. Total assets $6,843,319 f. Postpetition payables (excluding taxes) $-1,385,637 g. Postpetition payables past due (excluding taxes) $0 h. Postpetition taxes payable $0 i. Postpetition taxes past due $0 j. Total postpetition debt (f+h) $-1,385,637 k. Prepetition secured debt $0 l. Prepetition priority debt $0 m. Prepetition unsecured debt $6,709,338 n. Total liabilities (debt) (j+k+l+m) $5,323,701 o. Ending equity/net worth (e-n) $1,519,618 Part 3: Assets Sold or Transferred Current Month Cumulative a. Total cash sales price for assets sold/transferred outside the ordinary course of business $0 $21,357,567 b. Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business $0 $1,207,567 c. Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b) $0 $20,150,000 Part 4: Income Statement (Statement of Operations) Current Month Cumulative (Not generally applicable to Individual Debtors. See Instructions.) a. Gross income/sales (net of returns and allowances) $0 b. Cost of goods sold (inclusive of depreciation, if applicable) $0 c. Gross profit (a-b) $0 d. Selling expenses $0 e. General and administrative expenses $1,105,659 f. Other expenses $-18,870 g. Depreciation and/or amortization (not included in 4b) $0 h. Interest $0 i. Taxes (local, state, and federal) $0 j. Reorganization items $0 k. Profit (loss) $-1,086,789 $22,934,166 Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 2 of 17

 
UST Form 11-MOR (12/01/2021) 3 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 Part 5: Professional Fees and Expenses Approved Current Month Approved Cumulative Paid Current Month Paid Cumulative a. Debtor's professional fees & expenses (bankruptcy) Aggregate Total $195,793 $416,222 $1,032,029 $1,252,458 Itemized Breakdown by Firm Firm Name Role i Morris Nichols Lead Counsel $0 $0 $552,120 $552,120 ii SierraConstellation Partners Financial Professional $0 $0 $265,953 $265,953 iii KCC (156) Other $195,793 $316,222 $195,793 $316,222 iv KCC (327) Other $0 $0 $18,163 $18,163 v Raymond James Financial Professional $0 $100,000 $0 $100,000 vi vii viii ix x xi xii xiii xiv xv xvi xvii xviii xix xx xxi xxii xxiii xxiv xxv xxvi xxvii xxviii xxix xxx xxxi xxxii xxxiii xxxiv xxxv xxxvi Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 3 of 17

 
UST Form 11-MOR (12/01/2021) 4 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 xxxvii xxxvii xxxix xl xli xlii xliii xliv xlv xlvi xlvii xlviii xlix l li lii liii liv lv lvi lvii lviii lix lx lxi lxii lxiii lxiv lxv lxvi lxvii lxviii lxix lxx lxxi lxxii lxxiii lxxiv lxxv lxxvi lxxvii lxxvii Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 4 of 17

 
UST Form 11-MOR (12/01/2021) 5 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 lxxix lxxx lxxxi lxxxii lxxxii lxxxiv lxxxv lxxxvi lxxxvi lxxxvi lxxxix xc xci xcii xciii xciv xcv xcvi xcvii xcviii xcix c ci Approved Current Month Approved Cumulative Paid Current Month Paid Cumulative b. Debtor's professional fees & expenses (nonbankruptcy) Aggregate Total $11,250 $91,763 $11,250 $91,763 Itemized Breakdown by Firm Firm Name Role i Law office of Kathleen Lynch Special Counsel $8,750 $26,250 $8,750 $26,250 ii Myers Bigel Sibley & Sajovec, Special Counsel $2,500 $43,200 $2,500 $43,200 iii Deloitte Tax LLP Financial Professional $0 $22,313 $0 $22,313 iv v vi vii viii ix x xi xii xiii xiv Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 5 of 17

 
UST Form 11-MOR (12/01/2021) 6 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 xv xvi xvii xviii xix xx xxi xxii xxiii xxiv xxv xxvi xxvii xxviii xxix xxx xxxi xxxii xxxiii xxxiv xxxv xxxvi xxxvii xxxvii xxxix xl xli xlii xliii xliv xlv xlvi xlvii xlviii xlix l li lii liii liv lv lvi Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 6 of 17

 
UST Form 11-MOR (12/01/2021) 7 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 lvii lviii lix lx lxi lxii lxiii lxiv lxv lxvi lxvii lxviii lxix lxx lxxi lxxii lxxiii lxxiv lxxv lxxvi lxxvii lxxvii lxxix lxxx lxxxi lxxxii lxxxii lxxxiv lxxxv lxxxvi lxxxvi lxxxvi lxxxix xc xci xcii xciii xciv xcv xcvi xcvii xcviii Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 7 of 17

 
UST Form 11-MOR (12/01/2021) 8 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 xcix c c. All professional fees and expenses (debtor & committees) $0 $0 $675,300 $675,300 Part 6: Postpetition Taxes Current Month Cumulative a. Postpetition income taxes accrued (local, state, and federal) $0 $0 b. Postpetition income taxes paid (local, state, and federal) $0 $0 c. Postpetition employer payroll taxes accrued $0 $16,593 d. Postpetition employer payroll taxes paid $0 $84,855 e. Postpetition property taxes paid $0 $0 f. Postpetition other taxes accrued (local, state, and federal) $0 $0 g. Postpetition other taxes paid (local, state, and federal) $0 $0 Part 7: Questionnaire - During this reporting period: a. Were any payments made on prepetition debt? (if yes, see Instructions) Yes No b. Yes NoWere any payments made outside the ordinary course of business without court approval? (if yes, see Instructions) c. Yes NoWere any payments made to or on behalf of insiders? d. Yes NoAre you current on postpetition tax return filings? e. Yes NoAre you current on postpetition estimated tax payments? f. Were all trust fund taxes remitted on a current basis? Yes No g. Yes NoWas there any postpetition borrowing, other than trade credit? (if yes, see Instructions) h. Were all payments made to or on behalf of professionals approved by the court? Yes No N/A i. Do you have: Worker's compensation insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) Casualty/property insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) General liability insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) j. Has a plan of reorganization been filed with the court? Yes No k. Has a disclosure statement been filed with the court? Yes No l. Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930? Yes No Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 8 of 17

 
UST Form 11-MOR (12/01/2021) 9 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 Part 8: Individual Chapter 11 Debtors (Only) a. Gross income (receipts) from salary and wages $0 b. Gross income (receipts) from self-employment $0 c. Gross income from all other sources $0 d. Total income in the reporting period (a+b+c) $0 e. Payroll deductions $0 f. Self-employment related expenses $0 g. Living expenses $0 h. All other expenses $0 i. Total expenses in the reporting period (e+f+g+h) $0 j. Difference between total income and total expenses (d-i) $0 k. List the total amount of all postpetition debts that are past due $0 l. Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)? Yes No m. Yes No N/AIf yes, have you made all Domestic Support Obligation payments? Privacy Act Statement 28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C. §§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor's progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee's or examiner's duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee's systems of records notice, UST-001, "Bankruptcy Case Files and Associated Records." See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F). I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate. /s/ Paula Brown Stafford Signature of Responsible Party CEO Printed Name of Responsible Party 11/21/2023 DateTitle Paula Brown Stafford Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 9 of 17

 
UST Form 11-MOR (12/01/2021) 10 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 PageOnePartOne PageOnePartTwo PageTwoPartOne PageTwoPartTwo Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 10 of 17

 
UST Form 11-MOR (12/01/2021) 11 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 Bankruptcy51to100 NonBankruptcy1to50 NonBankruptcy51to100 Bankruptcy1to50 Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 11 of 17

 
UST Form 11-MOR (12/01/2021) 12 Debtor's Name NVN Liquidation, Inc., f/k/a Novan, Inc. Case No. 23-10937 PageFour PageThree Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 12 of 17

 
NVN Liquidation, Inc. Balance Sheet As of October 31, 2023 Cash and cash equivalents 3,842,468$ Prepaid expenses and other current assets 2,990,551 TOTAL CURRENT ASSETS 6,833,019 Other assets 10,300 TOTAL ASSETS 6,843,319$ Accounts payable 1,476,787$ Accrued expenses 3,846,914 TOTAL CURRENT LIABILITIES 5,323,701 Contingent Consideration due to EPG for purchase, net of current portion 2,352,961 Due to/from EPI Health, LLC 13,006,470 [1] TOTAL LIABILITIES 20,683,132 Common Stock 3,683 Additional paid-in capital 291,393,658 Treasury stock (155,268) Accumulated deficit (305,081,886) TOTAL EQUITY (DEFICIT) (13,839,813) TOTAL LIABILITIES & EQUITY (DEFICIT) 6,843,319$ Footnote: [1] This line item includes an intercompany balance generated post-petition related to the NVN Liquidation, Inc. (f/k/a Novan, Inc.) joint administration of case 23-10937 and 23-10938 totaling $4.4 million. As part of the joint administration of the bankruptcy proceedings, certain transactions and amounts have been recorded on the books and records of NVN Liquidation, Inc. rather than EPI Health, LLC, due to the nature of the underlying general ledger and accounting system. Post-petition adjustments specifically impacting either Debtor have been reflected within the intercompany account balances accordingly. Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 13 of 17

 
NVN Liquidation, Inc. Statement of Operations Reporting Period: October 1 to October 31, 2023 License and collaboration revenue -$ Government research contracts and grants revenue - TOTAL REVENUE - Research and development (18,870) General and administrative 1,105,659 TOTAL OPERATING EXPENSES 1,086,789 Interest income - Interest expense - Impairment of goodwill - Gain on sale of assets - NET INCOME (LOSS) (1,086,789)$ Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 14 of 17

 
NVN Liquidation, Inc. Statement of Cash Receipts and Disbursements Summary (Cash Basis) Reporting Period: October 1 to October 31, 2023 BEGINNING CASH BALANCE 6,398,515$ Receipts: Advance deposit for TSA services 41,515 TOTAL RECEIPTS 41,515 Operating Disbursements: Intellectual property activities 13,124 Manufacturing and QA services 245,297 Facility, administrative and information technology services 57,978 Activities and services related to lead R&D asset (SB206) 20,189 Professional fees related to bankruptcy 2,043,208 [1] Consulting services related to bankruptcy 66,450 [1] Transfers to EPI Health, LLC 147,449 Bank fees and other misc. 3,867 TOTAL DISBURSEMENTS 2,597,562 NET CASH FLOW (2,556,047) ENDING CASH BALANCE 3,842,468$ Footnote: [1] As part of the joint administration of the bankruptcy proceedings, certain transactions and amounts have been recorded on the books and records of NVN Liquidation, Inc. rather than EPI Health, LLC, due to the nature of the underlying general ledger and accounting system. Post-petition adjustments specifically impacting either Debtor have been reflected within the intercompany account balances accordingly. Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 15 of 17

 
NVN Liquidation, Inc. Summary of Cash Book Balances As of October 31, 2023 Cash and cash equivalents Account Description Bank Account Number Last 4 Digits Book Balance as of 10/31/2023 Operational Silicon Valley Bank 7949 13,517 Utility Motion Account East West Bank 0000 18,125 Operational PNC Bank 0299 3,798,527 Operational PNC Bank 3407 (185) Collateral/Unrestricted (Letter of Credit) PNC Bank 3374 12,484 3,842,468$ Restricted Cash, current Account Description Bank Account Number Last 4 Digits Book Balance as of 10/31/2023 Collateral/Restricted (Letter of Credit) PNC Bank 3374 -$ Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 16 of 17

 
NVN Liquidation, Inc. Summary of Intercompany Balances Reporting Period: October 1 to October 31, 2023 Pre-petition Post-petition Total BEGINNING BALANCE (October 1, 2023) 9,614,641$ 3,514,050$ 13,128,691$ [1] Reductions: Operating transactions - 122,221 122,221 TOTAL REDUCTIONS - 122,221 122,221 NET ACTIVITY - (122,221) (122,221) ENDING BALANCE (October 31, 2023) 9,614,641$ 3,391,829$ 13,006,470$ Footnote: [1] Certain intercompany balance generated post-petition relate to the NVN Liquidation, Inc. (f/k/a Novan, Inc.) joint administration of Case 23-10937 and Case 23-10938. As part of the joint administration of the bankruptcy proceedings, certain transactions and amounts have been recorded on the books and records of NVN Liquidation, Inc. rather than EPI Health, LLC, due to the nature of the underlying general ledger and accounting system. Post-petition adjustments specifically impacting either Debtor have been reflected within the intercompany account balances accordingly. Prior to the petition date, the Debtors recorded intercompany assets and liabilities through one intercompany account. The intercompany account recorded transactions, including, but not limited to, transfers of cash, disbursements and other financial reporting adjustments related to the operations of the Debtor and its subsidiaries on a consolidated basis. The pre- petition intercompany balance was generated by transactions which were based on the consolidated operations of the Debtors, not on an arm's length basis. For example, there were no intercompany allocation of certain operating and non- operating expenses to EPI Health, LLC from NVN Liquidation, Inc. Such allocations, if recorded, would have impacted the pre-petition intercompany balances. Case 23-10937-LSS Doc 434 Filed 11/21/23 Page 17 of 17

 
UST Form 11-MOR (12/01/2021) 1 UNITED STATES BANKRUPTCY COURT DISTRICT OF Delaware In Re. EPI Health, LLC Debtor(s) § § § § Case No. 23-10938 Lead Case No. 23-10937 Jointly Administered Monthly Operating Report Chapter 11 Reporting Period Ended: 10/31/2023 Petition Date: 07/17/2023 Months Pending: 4 Industry Classification: 4 2 4 2 Reporting Method: Accrual Basis Cash Basis Debtor's Full-Time Employees (current): 0 Debtor's Full-Time Employees (as of date of order for relief): 1 Supporting Documentation (check all that are attached): (For jointly administered debtors, any required schedules must be provided on a non-consolidated basis for each debtor) Statement of cash receipts and disbursements Balance sheet containing the summary and detail of the assets, liabilities and equity (net worth) or deficit Statement of operations (profit or loss statement) Accounts receivable aging Postpetition liabilities aging Statement of capital assets Schedule of payments to professionals Schedule of payments to insiders All bank statements and bank reconciliations for the reporting period Description of the assets sold or transferred and the terms of the sale or transfer Signature of Responsible Party Printed Name of Responsible Party Date Address /s/ Daniel B. Butz 11/21/2023 Daniel B. Butz Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street, PO Box 1347 Wilmington, DE 19899-1347 STATEMENT: This Periodic Report is associated with an open bankruptcy case; therefore, Paperwork Reduction Act exemption 5 C.F.R. § 1320.4(a)(2) applies. Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 1 of 17 Exhibit 99.2

 
UST Form 11-MOR (12/01/2021) 2 Debtor's Name EPI Health, LLC Case No. 23-10938 Part 1: Cash Receipts and Disbursements Current Month Cumulative a. Cash balance beginning of month $4,813,594 b. Total receipts (net of transfers between accounts) $595,025 $5,934,317 c. Total disbursements (net of transfers between accounts) $147,449 $697,534 d. Cash balance end of month (a+b-c) $5,261,170 e. Disbursements made by third party for the benefit of the estate $0 $0 f. Total disbursements for quarterly fee calculation (c+e) $147,449 $697,534 Part 2: Asset and Liability Status Current Month (Not generally applicable to Individual Debtors. See Instructions.) a. Accounts receivable (total net of allowance) $4,401,805 b. Accounts receivable over 90 days outstanding (net of allowance) $3,066,094 c. Inventory ( (attach explanation))Book Market Other $1,363,011 d Total current assets $12,382,793 e. Total assets $22,752,748 f. Postpetition payables (excluding taxes) $-1,660,981 g. Postpetition payables past due (excluding taxes) $0 h. Postpetition taxes payable $0 i. Postpetition taxes past due $0 j. Total postpetition debt (f+h) $-1,660,981 k. Prepetition secured debt $0 l. Prepetition priority debt $0 m. Prepetition unsecured debt $27,517,898 n. Total liabilities (debt) (j+k+l+m) $25,856,917 o. Ending equity/net worth (e-n) $-3,104,169 Part 3: Assets Sold or Transferred Current Month Cumulative a. Total cash sales price for assets sold/transferred outside the ordinary course of business $0 $0 b. Total payments to third parties incident to assets being sold/transferred outside the ordinary course of business $0 $0 c. Net cash proceeds from assets sold/transferred outside the ordinary course of business (a-b) $0 $0 Part 4: Income Statement (Statement of Operations) Current Month Cumulative (Not generally applicable to Individual Debtors. See Instructions.) a. Gross income/sales (net of returns and allowances) $0 b. Cost of goods sold (inclusive of depreciation, if applicable) $-417 c. Gross profit (a-b) $417 d. Selling expenses $0 e. General and administrative expenses $87,573 f. Other expenses $0 g. Depreciation and/or amortization (not included in 4b) $0 h. Interest $0 i. Taxes (local, state, and federal) $0 j. Reorganization items $-9,964 k. Profit (loss) $-77,142 $-14,151,761 Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 2 of 17

 
UST Form 11-MOR (12/01/2021) 3 Debtor's Name EPI Health, LLC Case No. 23-10938 Part 5: Professional Fees and Expenses Approved Current Month Approved Cumulative Paid Current Month Paid Cumulative a. Debtor's professional fees & expenses (bankruptcy) Aggregate Total Itemized Breakdown by Firm Firm Name Role i ii iii iv v vi vii viii ix x xi xii xiii xiv xv xvi xvii xviii xix xx xxi xxii xxiii xxiv xxv xxvi xxvii xxviii xxix xxx xxxi xxxii xxxiii xxxiv xxxv xxxvi Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 3 of 17

 
UST Form 11-MOR (12/01/2021) 4 Debtor's Name EPI Health, LLC Case No. 23-10938 xxxvii xxxvii xxxix xl xli xlii xliii xliv xlv xlvi xlvii xlviii xlix l li lii liii liv lv lvi lvii lviii lix lx lxi lxii lxiii lxiv lxv lxvi lxvii lxviii lxix lxx lxxi lxxii lxxiii lxxiv lxxv lxxvi lxxvii lxxvii Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 4 of 17

 
UST Form 11-MOR (12/01/2021) 5 Debtor's Name EPI Health, LLC Case No. 23-10938 lxxix lxxx lxxxi lxxxii lxxxii lxxxiv lxxxv lxxxvi lxxxvi lxxxvi lxxxix xc xci xcii xciii xciv xcv xcvi xcvii xcviii xcix c ci Approved Current Month Approved Cumulative Paid Current Month Paid Cumulative b. Debtor's professional fees & expenses (nonbankruptcy) Aggregate Total Itemized Breakdown by Firm Firm Name Role i ii iii iv v vi vii viii ix x xi xii xiii xiv Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 5 of 17

 
UST Form 11-MOR (12/01/2021) 6 Debtor's Name EPI Health, LLC Case No. 23-10938 xv xvi xvii xviii xix xx xxi xxii xxiii xxiv xxv xxvi xxvii xxviii xxix xxx xxxi xxxii xxxiii xxxiv xxxv xxxvi xxxvii xxxvii xxxix xl xli xlii xliii xliv xlv xlvi xlvii xlviii xlix l li lii liii liv lv lvi Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 6 of 17

 
UST Form 11-MOR (12/01/2021) 7 Debtor's Name EPI Health, LLC Case No. 23-10938 lvii lviii lix lx lxi lxii lxiii lxiv lxv lxvi lxvii lxviii lxix lxx lxxi lxxii lxxiii lxxiv lxxv lxxvi lxxvii lxxvii lxxix lxxx lxxxi lxxxii lxxxii lxxxiv lxxxv lxxxvi lxxxvi lxxxvi lxxxix xc xci xcii xciii xciv xcv xcvi xcvii xcviii Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 7 of 17

 
UST Form 11-MOR (12/01/2021) 8 Debtor's Name EPI Health, LLC Case No. 23-10938 xcix c c. All professional fees and expenses (debtor & committees) Part 6: Postpetition Taxes Current Month Cumulative a. Postpetition income taxes accrued (local, state, and federal) $0 $0 b. Postpetition income taxes paid (local, state, and federal) $0 $0 c. Postpetition employer payroll taxes accrued $0 $3,307 d. Postpetition employer payroll taxes paid $0 $11,455 e. Postpetition property taxes paid $0 $0 f. Postpetition other taxes accrued (local, state, and federal) $0 $0 g. Postpetition other taxes paid (local, state, and federal) $0 $0 Part 7: Questionnaire - During this reporting period: a. Were any payments made on prepetition debt? (if yes, see Instructions) Yes No b. Yes NoWere any payments made outside the ordinary course of business without court approval? (if yes, see Instructions) c. Yes NoWere any payments made to or on behalf of insiders? d. Yes NoAre you current on postpetition tax return filings? e. Yes NoAre you current on postpetition estimated tax payments? f. Were all trust fund taxes remitted on a current basis? Yes No g. Yes NoWas there any postpetition borrowing, other than trade credit? (if yes, see Instructions) h. Were all payments made to or on behalf of professionals approved by the court? Yes No N/A i. Do you have: Worker's compensation insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) Casualty/property insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) General liability insurance? Yes No If yes, are your premiums current? Yes No N/A (if no, see Instructions) j. Has a plan of reorganization been filed with the court? Yes No k. Has a disclosure statement been filed with the court? Yes No l. Are you current with quarterly U.S. Trustee fees as set forth under 28 U.S.C. § 1930? Yes No Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 8 of 17

 
UST Form 11-MOR (12/01/2021) 9 Debtor's Name EPI Health, LLC Case No. 23-10938 Part 8: Individual Chapter 11 Debtors (Only) a. Gross income (receipts) from salary and wages $0 b. Gross income (receipts) from self-employment $0 c. Gross income from all other sources $0 d. Total income in the reporting period (a+b+c) $0 e. Payroll deductions $0 f. Self-employment related expenses $0 g. Living expenses $0 h. All other expenses $0 i. Total expenses in the reporting period (e+f+g+h) $0 j. Difference between total income and total expenses (d-i) $0 k. List the total amount of all postpetition debts that are past due $0 l. Are you required to pay any Domestic Support Obligations as defined by 11 U.S.C § 101(14A)? Yes No m. Yes No N/AIf yes, have you made all Domestic Support Obligation payments? Privacy Act Statement 28 U.S.C. § 589b authorizes the collection of this information, and provision of this information is mandatory under 11 U.S.C. §§ 704, 1106, and 1107. The United States Trustee will use this information to calculate statutory fee assessments under 28 U.S.C. § 1930(a)(6). The United States Trustee will also use this information to evaluate a chapter 11 debtor's progress through the bankruptcy system, including the likelihood of a plan of reorganization being confirmed and whether the case is being prosecuted in good faith. This information may be disclosed to a bankruptcy trustee or examiner when the information is needed to perform the trustee's or examiner's duties or to the appropriate federal, state, local, regulatory, tribal, or foreign law enforcement agency when the information indicates a violation or potential violation of law. Other disclosures may be made for routine purposes. For a discussion of the types of routine disclosures that may be made, you may consult the Executive Office for United States Trustee's systems of records notice, UST-001, "Bankruptcy Case Files and Associated Records." See 71 Fed. Reg. 59,818 et seq. (Oct. 11, 2006). A copy of the notice may be obtained at the following link: http:// www.justice.gov/ust/eo/rules_regulations/index.htm. Failure to provide this information could result in the dismissal or conversion of your bankruptcy case or other action by the United States Trustee. 11 U.S.C. § 1112(b)(4)(F). I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate. /s/ Paula Brown Stafford Signature of Responsible Party CEO Printed Name of Responsible Party 11/21/2023 DateTitle Paula Brown Stafford Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 9 of 17

 
UST Form 11-MOR (12/01/2021) 10 Debtor's Name EPI Health, LLC Case No. 23-10938 PageOnePartOne PageOnePartTwo PageTwoPartOne PageTwoPartTwo Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 10 of 17

 
UST Form 11-MOR (12/01/2021) 11 Debtor's Name EPI Health, LLC Case No. 23-10938 Bankruptcy51to100 NonBankruptcy1to50 NonBankruptcy51to100 Bankruptcy1to50 Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 11 of 17

 
UST Form 11-MOR (12/01/2021) 12 Debtor's Name EPI Health, LLC Case No. 23-10938 PageFour PageThree Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 12 of 17

 
EPI Health, LLC Balance Sheet [1] As of October 31, 2023 Cash and cash equivalents 5,261,170$ Trade accounts receivable, net 4,401,805 Inventory, net 1,363,011 Prepaid expenses and other current assets 1,356,807 TOTAL CURRENT ASSETS 12,382,793 Intangible Assets, Net 10,369,955 TOTAL ASSETS 22,752,748$ Accounts payable 20,352,561$ Accrued expenses 5,504,356 TOTAL CURRENT LIABILITIES 25,856,917 Other long-term liabilities 494,070 Due to/from Novan, Inc. (13,006,470) [2] TOTAL LIABILITIES 13,344,517 Additional paid-in capital 32,045,966 Accumulated deficit (22,637,735) TOTAL EQUITY 9,408,231 TOTAL LIABILITIES & EQUITY 22,752,748$ Footnote: [2] This line item includes an intercompany balance generated post-petition related to the NVN Liquidation, Inc. (f/k/a Novan, Inc.) joint administration of case 23-10937 and 23-10938 totaling $4.4 million. As part of the joint administration of the bankruptcy proceedings, certain transactions and amounts have been recorded on the books and records of NVN Liquidation, Inc. rather than EPI Health, LLC, due to the nature of the underlying general ledger and accounting system. Post-petition adjustments specifically impacting either Debtor have been reflected within the intercompany account balances accordingly. [1] Assets and liabilities associated with the Minolira, Cloderm and Wynzora products are included in this balance sheet at historical carrying values. Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 13 of 17

 
EPI Health, LLC Statement of Operations Reporting Period: October 1 to October 31, 2023 Net product sales -$ License and collaboration revenue - TOTAL REVENUE - Cost of goods sold (467) [1] GROSS PROFIT 467 Sell, General & Administrative 87,573 Amortization expense - TOTAL OPERATING EXPENSES 87,573 Interest Expense - Gain on Sale of Assets (9,964) NET INCOME (LOSS) (77,142)$ Footnote: [1] This amount represents adjusting entries made to cost of goods sold related to the prior periods. Adjustments flow through the statement of operations as they occur. Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 14 of 17

 
EPI Health, LLC Statement of Cash Receipts and Disbursements Summary (Cash Basis) Reporting Period: October 1 to October 31, 2023 BEGINNING CASH BALANCE 4,813,594$ Receipts: Transfers from Novan, Inc. 147,449 Proceeds from asset sales 10,000 Accounts receivable 437,576 TOTAL RECEIPTS 595,025 Operating Disbursements: Intellectual property activities 1,147 Third-party logistics provider 14,144 Regulatory activities and services 68,108 Market related activities and services 64,050 TOTAL DISBURSEMENTS 147,449 NET CASH FLOW 447,576 ENDING CASH BALANCE 5,261,170$ Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 15 of 17

 
EPI Health, LLC Summary of Cash Book Balances As of October 31, 2023 Cash and cash equivalents Account Description Bank Account Number Last 4 Digits Book Balance as of 10/31/2023 Operational Silicon Valley Bank 9806 3,825$ [1] Lockbox Bank of America 1379 538,628 DIP Deposit East West Bank 0007 4,718,717 5,261,170$ Footnotes: [1] This account, while owned by parent Debtor, Novan, Inc., is used to track operational activities related to EPI Health, LLC. Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 16 of 17

 
EPI Health, LLC Summary of Intercompany Balances Reporting Period: October 1 to October 31, 2023 Pre-petition Post-petition Total BEGINNING BALANCE (October 1, 2023) 9,614,641$ 3,514,050$ 13,128,691$ [1] Reductions: Operating transactions - 122,221 122,221 TOTAL REDUCTIONS - 122,221 122,221 NET ACTIVITY - (122,221) (122,221) ENDING BALANCE (October 31, 2023) 9,614,641$ 3,391,829$ 13,006,470$ Footnote: [1] Certain intercompany balance generated post-petition relate to the NVN Liquidation, Inc. (f/k/a Novan, Inc.) joint administration of Case 23-10937 and Case 23-10938. As part of the joint administration of the bankruptcy proceedings, certain transactions and amounts have been recorded on the books and records of NVN Liquidation, Inc. rather than EPI Health, LLC, due to the nature of the underlying general ledger and accounting system. Post-petition adjustments specifically impacting either Debtor have been reflected within the intercompany account balances accordingly. Prior to the petition date, the Debtors recorded intercompany assets and liabilities through one intercompany account. The intercompany account recorded transactions, including, but not limited to, transfers of cash, disbursements and other financial reporting adjustments related to the operations of the Debtor and its subsidiaries on a consolidated basis. The pre- petition intercompany balance was generated by transactions which were based on the consolidated operations of the Debtors, not on an arm's length basis. For example, there were no intercompany allocation of certain operating and non- operating expenses to EPI Health, LLC from NVN Liquidation, Inc. Such allocations, if recorded, would have impacted the pre-petition intercompany balances. Case 23-10937-LSS Doc 435 Filed 11/21/23 Page 17 of 17

 
v3.23.3
Cover
Nov. 21, 2023
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Nov. 21, 2023
Entity Registrant Name NVN Liquidation, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-37880
Entity Tax Identification Number 20-4427682
Entity Address, Address Line One P.O. Box 64
Entity Address, City or Town Pittsboro
Entity Address, State or Province NC
Entity Address, Postal Zip Code 27312
City Area Code 919
Local Phone Number 485-8080
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.0001 par value
Trading Symbol NOVNQ
Security Exchange Name NONE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001467154
NVN Liquidation (CE) (USOTC:NOVNQ)
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