UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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) May 26, 2005
NOVADEL
PHARMA INC.
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware |
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001-32177 |
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22-2407152 |
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(State
or other jurisdiction
of
incorporation)
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(Commission
File No.) |
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(I.R.S.
Employer
Identification
No.)
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25
Minneakoning Road
Flemington,
New Jersey 08822
(Address
of principal executive offices) (Zip Code)
(908)
782-3431
(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 (see
General
Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item
1.01. Entry
into a Material Agreement
On May
27, 2005, NovaDel Pharma Inc. (the “Company”) issued a press release to announce
that it had closed a private placement (the “Offering”) of 6,733,024 shares of
its common stock, par value $.001 per share (“Common Stock”), and Class D
warrants (the “Warrants”) to purchase a total of 2,356,559 shares of Common
Stock, with an initial exercise price equal to $1.30 per share of Common Stock,
subject to adjustment. The Company received gross proceeds of approximately
$7,069,675 and net proceeds of approximately $6,300,000, from the Offering. The
financing was led by ProQuest Investments and included the Caisse de
dépôt et
placement du Québec and
others.
The
Offering is embodied in (i) a Securities Purchase Agreement dated as of May 26,
2005 (the “Closing Date”), among the Company, certain funds associated with
ProQuest Investments, the Caisse de dépôt et
placement du Québec and other accredited investors (collectively, the
“Investors”), (ii) a Registration Rights Agreement dated as of the Closing Date,
among the Company and the Investors and (iii) the Warrants executed and
delivered on the Closing Date (collectively with the Securities Purchase
Agreement and the Registration Rights Agreement, the “Transaction Documents”),
which Transaction Documents are filed herewith. The descriptions in this Current
Report on Form 8-K of the Transaction Documents do not purport to be complete
and are qualified in their entirety by reference to the agreements and
instruments attached hereto as exhibits. A copy of the press release announcing
the consummation of the Offering is also attached hereto as Exhibit
99.1.
In
connection with the Offering, the Company paid a cash commission equal to 7% of
the gross proceeds from the Offering to Paramount BioCapital, Inc. (“Paramount
BioCapital”), who acted as its placement agent, and issued to Paramount
BioCapital a warrant to purchase 336,651 shares of Common Stock (the “Placement
Warrant”). The Placement Warrant is exercisable at an initial exercise price
equal to $1.30 per share (subject to adjustment). Paramount BioCapital is also
entitled to an expense allowance of up to $50,000 to reimburse it for its out of
pocket expenses incurred in connection with the Offering. The Company agreed to
indemnify Paramount BioCapital against certain liabilities, including
liabilities under the Securities Act of 1933 (the “Securities Act”), incurred in
connection with the Offering. Paramount BioCapital and its affiliates are
beneficial owners of a significant amount of shares of Common Stock and
securities exercisable for shares of Common Stock and accordingly, Paramount
BioCapital may be deemed to be an affiliate of the Company. Dickstein Shapiro
Morin & Oshinsky LLP, New York, represented the Company in connection with
the Offering. From time to time it has represented, and will continue to
represent, Paramount BioCapital and its affiliates.
Securities
Purchase Agreement
Pursuant
to the Securities Purchase Agreement, the Company issued to the Investors, in
consideration of its receipt of gross cash proceeds equal to $7,069,675, a total
of 6,733,024 shares of Common Stock and Warrants to purchase 2,356,559 shares of
Common Stock, which is equal to 35% of the number of shares of Common Stock sold
in the Offering. In addition, the Company agreed that, except for the
Registration Statement (as defined below), commencing on the Closing Date, the
Company will not file a registration statement with the Securities and Exchange
Commission (the “SEC”) until the later of (i) 30 days after the date on which
the Registration Statement is declared effective by the SEC and (ii) 90 days
from the Closing Date.
Description
of Warrants
Pursuant
to the Securities Purchase Agreement, the Company issued to the Investors
Warrants to purchase an aggregate of 2,356,559 shares of Common Stock. The
Warrants are exercisable for a five-year period commencing upon the six month
anniversary of the Closing Date, at a per share exercise price equal to $1.30
(subject to adjustment), which exercise price is payable in either cash or
pursuant to a “cashless” net exercise transaction. The per share exercise price
of the Warrant is adjustable in the event of stock dividends or splits, or
similar transactions, and pro rata distributions by the Company to all holders
of Common Stock. The Company shall be subject to certain cash penalties in the
event that the Company fails to deliver the shares of Common Stock issuable upon
exercise of the Warrants in a timely manner. The warrants may not be transferred
until the six month anniversary of the Closing Date.
In
connection with the Closing, the Company issued warrants to purchase 336,651
shares of Common Stock to Paramount BioCapital with terms, conditions and
limitations identical to those set forth in the Warrants.
Registration
Rights Agreement
The
Registration Rights Agreement provides for the registration for resale of (i)
shares of Common Stock sold in connection with the Offering, (ii) the shares of
Common Stock issuable upon exercise of the Warrants and the Placement Warrants
and (iii) any shares of Common Stock issued or issuable with respect to any of
the foregoing following a stock split, stock dividend, recapitalization,
exchange or similar event (the “Registrable Shares”).
The
Company is required to file with the SEC a registration statement (the
“Registration Statement”) for the resale of the Registrable Shares within 45
days of the Closing Date (the “Filing Date”), and to use its commercially
reasonable efforts to cause the registration statement to be declared effective
by the SEC within 90 days of the Closing Date (120 days in the event that the
SEC reviews and provides written comments to the registration statement) (the
“Effectiveness Date”). Subject to certain conditions and limitations, if (i) the
Company fails to file the Registration Statement prior to the Filing Date, (ii)
the Company fails to cause the Registration Statement to be declared effective
on or before the Effectiveness Date or (iii) the Company fails to perform other
specified acts relating to the Registration Statement being declared effective
in a timely manner and the maintenance of such effectiveness thereafter, the
Company will be required to pay to each holder of Registrable Shares relating to
such Registration Statement an amount in cash equal to 1% of the aggregate
purchase price of such holder’s Registrable Shares for each 30-day period until
such failure is cured.
All
reasonable expenses, other than underwriting discounts and commissions and as
set forth below, incurred in connection with registrations, filings or
qualifications pursuant to the Registration Rights Agreement shall be paid by
the Company.
Pursuant
to the Registration Rights Agreement, the Company shall indemnify each Investor
from and against any liabilities arising out of material misstatements or
omissions set forth in the Registration Statement or any prospectus included
therein, subject to standard exceptions.
Item
3.02. Unregistered
Sales of Equity Securities.
As
reported more fully in Item 1.01 above and incorporated herein by reference, in
connection with the consummation of the Offering, the Company issued to the
Investors 6,733,024 shares of Common Stock, at a purchase price equal to $1.05
per share, and Warrants to purchase a number of shares of Common Stock equal to
35% of the number of shares of Common Stock issued in connection with the
Offering. The Company also issued to Paramount BioCapital a warrant to purchase
336,651 shares of Common Stock. The terms of the Warrants are summarized herein
and are set forth in their entirety in the form of Warrant attached hereto. The
Company received gross proceeds of $7,069,675 from the Offering.
The
Company anticipates using the net proceeds from the sale of the Common Stock and
Warrants in connection with the Offering for working capital and general
corporate purposes, including research and development costs and expenses. The
Company shall not use any proceeds from the sale of Common Stock and Warrants
hereunder to repay any indebtedness of the Company, including, but not limited
to, any indebtedness to current executive officers or principal stockholders of
the Company, but excluding trade payable and accrued expenses incurred in the
ordinary course of business and consistent with prior practices.
The
Offering was not registered under 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, the Warrants and the Placement Warrants issued in
connection with the Offering will contain appropriate legends to reflect the
restrictions on transfer imposed by the Securities Act.
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits.
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4.1 |
Form of Class D Warrant. |
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10.1 |
Form
of Securities Purchase Agreement dated as of May 26, 2005, among NovaDel
Pharma Inc., and each purchaser identified on the signature pages
thereto. |
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10.2 |
Form
of Registration Rights Agreement made and entered into as of May 26, 2005,
among NovaDel Pharma Inc., and the purchasers signatory thereto.
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99.1 |
Press
Release dated May 27, 2005, titled “NovaDel
Announces $7 Million Private Placement.” |
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.
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NovaDel Pharma
Inc. |
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By: |
/s/ Jean W. Frydman
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Name: Jean W. Frydman |
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Title:
Vice President and General Counsel |
| Date: May 27, 2005 |
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EXHIBIT
INDEX
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Exhibit |
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Description |
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4.1 |
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Form
of Class D Warrant. |
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10.1 |
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Form
of Securities Purchase Agreement dated as of May 26, 2005, among NovaDel
Pharma Inc., and each purchaser identified on the signature pages
thereto. |
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10.2 |
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Form
of Registration Rights Agreement made and entered into as of May 26, 2005,
among NovaDel Pharma Inc., and the purchasers signatory
thereto. |
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99.1 |
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Press
Release dated May 27, 2005, titled “NovaDel
Announces $7 Million Private Placement.” |