UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 29, 2003
Date of Report (Date of earliest event reported)
NovaDel Pharma Inc.
(Exact name of Registrant as specified in its charter)
Delaware 000-23399 22-2407152
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
25 Minneakoning Road
Flemington, New Jersey 08822
(Address of principal executive offices)
(908) 782-3431
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 5. Other Events
On December 29, 2003 (the "Closing Date"), Registrant received and
accepted definitive purchase agreements from subscribers for a private placement
(the "Offering"), in which Registrant is raising approximately $14 million in
gross proceeds. Pursuant to the Offering, Registrant is issuing up to 140 units
(the "Units"), consisting of an aggregate of approximately 13.3 million shares
of common stock, par value $.001 per share ("Common Stock"), and warrants (the
"Warrants") to purchase 3,999,940 shares of Common Stock, subject to adjustment,
with an initial exercise price of $1.40 per share of Common Stock.
Registrant anticipates using the net proceeds after expenses of
approximately $12.9 million from the Offering for working capital and other
general corporate purposes, primarily the continuing research and development of
Registrant's products.
In connection with the Offering, the Registrant is paying a cash
commission equal to 7% of the gross proceeds from the Offering to Paramount
Capital, Inc., who acted as its placement agent, and will issue options to
purchase a number of Units equal to 14 Units sold in the Offering to such agent.
Accordingly, approximately 1.3 million shares of Common Stock will be directly
issuable upon the exercise of the placement agent's options, and an additional
399,994 shares of Common Stock will be issuable upon the exercise of Warrants
contained in the Units issuable upon the exercise of the placement agent's
options. Each placement agent option is exercisable at an initial exercise price
of $110,000.
The shares of Common Stock issued in connection with the Offering,
including those issuable upon the exercise of the Warrants, as well as any
shares of Common Stock issuable pursuant to Units directly or indirectly
issuable upon the exercise of the placement agent's options (collectively, the
"Registrable Shares"), are entitled to certain registration rights. Registrant
is required to file with the Securities and Exchange Commission (the "SEC") a
registration statement for the resale of the Registrable Shares within 45 days
of the closing of the Offering (the "Filing Date"), and to use its best efforts
to cause the registration statement to be declared effective by the SEC within
60 days of the Filing Date.
The Registrant is entitled to redeem the Warrants, upon 30 days'
prior written notice, for $.001 per Warrant, subject to certain limitations,
once the average per share closing bid price, regular way, of the Common Stock
on the OTC Bulletin Board(R) (the "OTCBB") for any 20 consecutive trading days
is at least $3.00 (subject to appropriate adjustment in the event of any stock
splits, combinations, recapitalizations or similar events). The Warrants are
immediately exercisable and terminate on the fifth anniversary of issuance at
the exercise price (subject to adjustment). In addition, the Warrants are
entitled to customary anti-dilution protection.
The Offering triggers the reset rights of certain prior investors.
As a result the Registrant shall be obligated to issue approximately 1.37
million shares of Common Stock, in the aggregate, to such investors for no
additional consideration. The placement agent will not receive any compensation
in connection with the issuance of shares of Common Stock pursuant to this
reset.
The Registrant's Certificate of Incorporation authorizes it to issue
up to 50,000,000 shares of Common Stock. The Registrant has agreed to hold a
meeting of its stockholders to, among other things, seek the requisite approval
of an amendment to its Certificate of Incorporation to authorize the issuance of
a sufficient number of additional shares of Common Stock to allow the Registrant
to issue shares of Common Stock issuable upon the exercise of all derivative
securities issued by the Registrant, including all instruments issued in
connection with the Offering.
The Offering was not registered under Securities Act of 1933 (the
"Securities Act"), in reliance on the exceptions set forth in Section 4(2) of
the Securities Act and Rule 506 of Regulation D promulgated thereunder. Each of
the purchasers in the Offering represented that it is an accredited investor, as
defined by Rule 501 of Regulation D promulgated under the Securities Act, and
certificates representing the shares of Common Stock and the Warrants issued in
connection with the Offering will contain appropriate legends to reflect the
restrictions on transfer imposed by the Securities Act.
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.
NovaDel Pharma Inc.
By: /s/ Gary A. Shangold
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Name: Gary A. Shangold, M.D.
Title: President and Chief Executive
Officer
Date: December 30, 2003