AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 2004
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
NOVADEL PHARMA INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-2407152
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
25 MINNEAKONING ROAD, FLEMINGTON, NEW JERSEY 08822
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NOVADEL PHARMA INC. 1998 STOCK OPTION PLAN
AND NON-PLAN EXECUTIVE, DIRECTOR AND CONSULTANT OPTIONS
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(FULL TITLE OF THE PLAN)
GARY A. SHANGOLD, M.D., 25 MINNEAKONING ROAD, FLEMINGTON, NEW JERSEY 08822
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(NAME AND ADDRESS OF AGENT FOR SERVICE)
(908) 782-3431
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(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
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Title of Amount to be Proposed Proposed Amount of
securities to registered (1) maximum maximum Registration Fee
be registered offering aggregate
price per offering price
share(2)
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Common Stock 6,950,000 $1.96 $13,622,000 $1,725.91
$.001 par value
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(1) The aggregate amount of securities registered hereunder is 6,950,000 shares
of common stock issued in connection with, or issuable upon exercise of,
non-plan stock options held by executives and other employees, consultants and
directors, and options which were, or may be, granted pursuant to our 1998 Stock
Option Plan. Pursuant to Rule 416 promulgated under the Securities Act of 1933,
as amended, this registration statement covers such indeterminate additional
shares of common stock to be offered or issued to prevent dilution as a result
of future stock splits, stock dividends or other similar transactions.
(2) The fee with respect to these shares has been calculated pursuant to
paragraphs (h) and (c) of Rule 457 upon the basis of $1.96, the average of the
high and low prices for our common stock on June 15, 2004, a date within five
(5) business days prior to the date of filing of this registration statement, as
reported by the American Stock Exchange LLC.
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part contains a
"Reoffer Prospectus," which has been prepared in accordance with the
requirements of Part I of Form S-3 (as required by Section C.1. of the General
Instructions to Form S-8). The Reoffer Prospectus will be used for reoffers and
resales by affiliates of NovaDel Pharma Inc. (the "Registrant") of shares of
common stock of the Registrant to be issued upon exercise of options granted
pursuant to the Registrant's 1998 stock option plan and non-plan executive,
director and consultant options, and by non-affiliates of the Registrant of
shares of common stock previously issued to them upon exercise of options . The
second part contains information required in the registration statement pursuant
to Part II of Form S-8. Pursuant to the introductory note to Part I of Form S-8,
the plan information, which constitutes part of the "Plan Prospectus," is not
being filed with the Securities and Exchange Commission.
PROSPECTUS
NOVADEL PHARMA INC.
6,950,000 Shares of
Common Stock
_____________
NovaDel Pharma Inc. 1998 Stock Option Plan and Non-plan Executive, Director and
Consultant Options
This prospectus is being used in connection with the offering from time to
time by certain selling stockholders of our company or their successors in
interest of shares of the common stock which have been issued under, or may be
acquired upon the exercise of, stock options pursuant to our 1998 Stock Option
Plan and Non-plan Executive, Director and Consultant Options (collectively, the
"Plans").
The common stock may be sold from time to time by the selling stockholders
or by their pledgees, donees, transferees or other successors in interest. Such
sales may be made in the over-the-counter market or otherwise at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The common stock may be sold by one or more of the
following: (a) block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell portions of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this prospectus; (c) an exchange distribution in accordance with the rules of
such exchange; and (d) ordinary brokerage transactions and transactions in which
the broker solicits purchases. In effecting sales, brokers or dealers engaged by
the selling stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
selling stockholders in amounts to be negotiated immediately prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Act") in connection with such sales. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this prospectus. We will not receive
any of the proceeds from the sale of these shares, although we have paid the
expenses of preparing this prospectus and the related registration statement.
The closing sales price of our common stock on June 15, 2004 as reported
by the American Stock Exchange LLC ("AMEX") was $1.98.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_____________________________________________________
The date of this Prospectus is June 18, 2004.
TABLE OF CONTENTS
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PROSPECTUS SUMMARY.....................................................1
WHERE YOU CAN FIND MORE INFORMATION....................................2
DOCUMENTS INCORPORATED BY REFERENCE....................................3
THE COMPANY............................................................4
FORWARD LOOKING STATEMENTS.............................................5
RISK FACTORS...........................................................6
USE OF PROCEEDS.......................................................18
SELLING STOCKHOLDERS..................................................19
PLAN OF DISTRIBUTION..................................................22
LEGAL MATTERS.........................................................23
EXPERTS...............................................................23
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
ii
PROSPECTUS SUMMARY
The following summary contains basic information about Novadel Pharma
Inc. and this prospectus. It may not contain all of the information that is
important to you. For a more complete understanding, we encourage you to read
the entire prospectus and the documents incorporated by reference into this
prospectus. In this prospectus, the words "Novadel," "Company," "we," "our" and
"us" refer to Novadel Pharma Inc.
Common Stock outstanding 32,943,699 Shares (1)
before the offering
Common Stock outstanding 34,060 Shares
which may be offered
pursuant to this prospectus
Common Stock issuable upon 6,915,940 Shares
exercise of outstanding
options which may be
offered pursuant to this
prospectus
AMEX Symbol for Common "NVD"
Stock
Use of Proceeds We will not receive any
proceeds from the sales of
these shares. We will
receive proceeds to the
extent that currently
outstanding options are
exercised for cash. We
will use the exercise
proceeds, if any, for
working capital and general
corporate purposes.
Risk Factors There are risks associated
with an investment in the
common stock offered by
this prospectus. You
should carefully consider
the risk factors described
in this prospectus in the
"Risk Factors" section
before making a decision to
invest.
(1) As of June 9, 2004. Does not include shares of common stock issuable upon
exercise of options or warrants.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy, upon payment of a fee set by the SEC, any documents that we
file with the SEC as its public reference room at 450 Fifth Street, N.W.,
Washington, D.C. You may also call the SEC at 1-800-432-0330 for more
information on the public reference rooms. Our filings are also available to the
public on the Internet through the SEC's EDGAR database. You may access the
EDGAR database at the SEC's website at www.sec.gov.
This prospectus is part of registration statement on Form S-8 that we
have filed with the SEC to register the common stock offered hereby under the
Act. As permitted by SEC rules, this prospectus does not contain all of the
information contained in the registration statement and accompanying exhibits
and schedules that we file with the SEC. You may refer to the registration
statement, the exhibits and schedules for more information about us and our
common stock. The registration statement, exhibits and schedules are available
at the SEC's public reference rooms or through its EDGAR database on the
Internet.
You should rely only on the information contained in this prospectus or
any supplement to this prospectus. We have not authorized anyone to provide you
with different information.
Our common stock is quoted on the AMEX under the symbol "NVD."
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the SEC (File No. 000-23399) pursuant
to the Securities Exchange Act of 1934, as amended, (the "Exchange Act") are
incorporated herein by reference:
1. The description of the common stock contained in our Registration
Statement (File No. 333-112852) on Form SB-2/A filed with the SEC on
March 25, 2004.
2. Annual Report on Form 10-KSB for the fiscal year ended July 31,
2003, as amended.
3. Quarterly Report on Form 10-QSB for the period ended October 31,
2003.
4. Quarterly Report on Form 10-QSB for the period ended January 31,
2004.
5. Quarterly Report on Form 10-QSB for the period ended April 30, 2004.
6. Definitive Proxy Statement on Schedule 14A dated March 5, 2004 in
connection with our annual meeting of stockholders held on April 19,
2004.
7. Current Reports on Form 8-K filed on December 3 and December 30,
2003 and on January 6, January 12 and May 11, 2004.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering
shall be deemed to be incorporated by reference in this prospectus and to be a
part of this prospectus from the date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of that person, a copy of all documents
incorporated by reference into the registration statement of which this
prospectus is a part, other than exhibits to those documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such documents should be directed to Jean W. Frydman, Esq., General
Counsel, NovaDel Pharma Inc., 25 Minneakoning Road, Flemington, New Jersey,
08822, telephone: (908) 782-3431.
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THE COMPANY
We are engaged in the development of novel application drug delivery
systems for presently marketed prescription and over-the-counter ("OTC") drugs.
Our patented and patent-pending delivery systems are lingual sprays enabling
drug absorption through the oral mucosa and more rapid absorption into the
bloodstream than presently available oral delivery systems. Our proprietary,
novel delivery system is designed to provide patients with the therapeutic
effects of a given drug within minutes of such drug's administration to the
patient thereby enhancing and greatly accelerating the onset of the intended
therapeutic benefits of the drug. Our development efforts for our novel drug
delivery system are concentrated on making it available for drugs that are
already available and proven in the marketplace. In addition to increasing the
bioavailability of a drug by avoiding metabolism by the liver before entry into
the bloodstream, we believe that our proprietary drug delivery system offers the
following significant advantages: (i) more rapid delivery of drugs to the
bloodstream allowing for quicker onset of therapeutic effects compared to
conventional oral dosage forms; (ii) improved drug safety profile by reducing
the required dosage, including possible reduction of side-effects; (iii)
improved dosage reliability; (iv) allowing medication to be taken without water;
and (v) improved patient convenience and compliance.
In light of the material expense and delays associated with independently
developing and obtaining approval of pharmaceutical products, we intend to
develop drug products through collaborative arrangements with major
pharmaceutical companies, such pharmaceutical companies providing the funding
for the development of specified drug products. To date, other than our license
agreement with Manhattan Pharmaceuticals, Inc., in connection with propofol, we
have not entered into any material development arrangements with any
pharmaceutical companies. The lack of any such arrangements and our limited
revenues and low level of working capital has restricted our ability to
aggressively pursue our product development strategy. We will require
significant additional financing and/or a strategic alliance with a well-funded
development partner to undertake and maintain our business plan.
At our inception in 1982, we engaged in the business of consulting to the
pharmaceutical industry, focusing on product development activities of various
European pharmaceutical companies. Since 1992, we have used our consulting
revenues and the funds generated from financings to fund our own product
development activities. Our focus on developing our own products evolved
naturally out of our consulting experience on behalf of other pharmaceutical
companies. Substantially all of our revenues previously were derived from our
consulting activities. Effective October 1, 2002, we changed our corporate name
from Flemington Pharmaceutical Corporation to NovaDel Pharma Inc. Our principal
business address is 25 Minneakoning Road, Flemington, New Jersey, 08822, and our
telephone number is (908) 782-3431.
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FORWARD LOOKING STATEMENTS
The statements set forth in this prospectus, including under "Risk
Factors," and those incorporated by reference herein, which are not historical
constitute "Forward Looking Statements" within the meaning of Section 27A of the
Act and Section 21E of the Exchange Act, including statements regarding the
expectations, beliefs, intentions or strategies for the future. These statements
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," "plans," "future," "intends," "continue,"
"estimate" or "anticipates" or the negatives or variations of these terms, and
other comparable terminology. We intend that all forward-looking statements be
subject to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are only predictions and
reflect our views as of the date they are made with respect to future events and
financial performance. Forward-looking statements are subject to many risks and
uncertainties which could cause our actual results to differ materially from any
future results expressed or implied by the forward-looking statements.
Examples of the risks and uncertainties include, but are not limited to:
the inherent risks and uncertainties in developing products of the type we are
developing; possible changes in our financial condition; the progress of our
research and development; clinical trials require adequate supplies of drug
substance and drug product, which may be difficult or uneconomical to procure or
manufacture; timely obtaining sufficient patient enrollment in our clinical
trials; the impact of development of competing therapies and/or technologies by
other companies; our ability to obtain additional required financing to fund our
research programs; our ability to enter into agreements with collaborators and
the failure of collaborators to perform under their agreements with us; the
progress of the FDA approvals in connection with the conduct of our clinical
trials and the marketing of our products; the additional costs and delays which
may result from requirements imposed by the FDA in connection with obtaining the
required approvals.
Except to the extent required by applicable laws or rules, we do not
undertake any obligation or duty to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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RISK FACTORS
One should carefully consider the following risk factors and all other
information contained in this prospectus before investing in our common stock.
Investing in our common stock involves a high degree of risk. Any of the
following risks could adversely affect our business, financial condition,
results of operations, performance, achievements and industry and could result
in a complete loss of one's investment. The risks and uncertainties described
below are not the only ones we may face. See also "Forward Looking Statements."
WE ARE A DEVELOPMENT STAGE COMPANY AND HAVE A LIMITED OPERATING HISTORY AND HAVE
NOT GENERATED ANY REVENUES FROM THE SALE OF PRODUCTS TO DATE.
We are a developmental stage biopharmaceutical company. Therefore, you must
evaluate us in light of the uncertainties and complexities present in such
companies. We have not generated any revenue from the commercial sale of our
proposed products and do not expect to receive such revenue in the near future.
We have no material licensing or royalty revenue or products ready for use or
licensing in the marketplace. This limited history may not be adequate to enable
one to fully assess our ability to develop our technologies and proposed
products, obtain FDA approval and achieve market acceptance of our proposed
products and respond to competition. We cannot be certain as to when to
anticipate commercializing and marketing any of our proposed products in
development, if at all, and do not expect to generate sufficient revenues from
proposed product sales to cover our expenses or achieve profitability in the
near future.
We had an accumulated deficit as of April 30, 2004, of approximately
$20,499,000. We incurred operating losses in each of our last eight fiscal
years, including a net loss of approximately $5,815,000 for the fiscal year
ended July 31, 2003 and $4,871,000 for the nine months ended April 30, 2004.
Because we increased our product development activities, we anticipate that we
will incur substantial operating expenses in connection with continued research
and development, clinical trials, testing and approval of our proposed products,
and expect these expenses will result in continuing and, perhaps, significant
operating losses until such time, if ever, that we are able to achieve adequate
product sales levels. Our ability to generate revenue and achieve profitability
depends upon our ability, alone or with others, to complete the development of
our proposed products, obtain the required regulatory approvals and manufacture,
market and sell our proposed products.
WE WILL REQUIRE SIGNIFICANT CAPITAL REQUIREMENTS FOR PRODUCT DEVELOPMENT AND
COMMERCIALIZATION.
The research, development, testing and approval of our proposed products involve
significant expenditures and accordingly we require significant capital to fund
such expenditures. We anticipate, based on our current proposed plans and
assumptions relating to our operations (including the timetable of, and costs
associated with, new product development), that the proceeds of the private
placements we completed during the year 2003 will be sufficient to satisfy our
contemplated cash requirements through the third quarter of our fiscal year
2005. Due to our small revenue base, low level of working capital and inability
to increase the number of development agreements with pharmaceutical companies,
we have been unable to aggressively pursue our product development strategy. We
will require significant additional financing and/or a strategic alliance with a
well-funded development partner to aggressively pursue our business plan. We
have no current arrangements with respect to, or sources of, additional
financing, and additional financing may not be available to us on acceptable
terms, if at all. Unless we raise additional financing, we may not have
sufficient funds and we may not be able to complete development and
commercialization of our proposed products or continue operating.
OUR ADDITIONAL FINANCING REQUIREMENTS COULD RESULT IN DILUTION TO EXISTING
STOCKHOLDERS.
The additional financings we require may be obtained through one or more
transactions which effectively dilute the ownership interests of our
stockholders. Further, we may not be able to secure such additional financing on
terms acceptable to us, if at all. We have the authority to issue additional
shares of common stock, as well as additional classes or series of ownership
interests or debt obligations which may be convertible into any one or more
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classes or series of ownership interests. We are authorized to issue 100,000,000
shares of common stock and 1,000,000 shares of preferred stock. Such securities
may be issued without the approval or other consent of our stockholders.
OUR TECHNOLOGY PLATFORM IS BASED SOLELY ON OUR PROPRIETARY DRUG DELIVERY
TECHNOLOGY. OUR ONGOING CLINICAL TRIALS FOR CERTAIN OF OUR PRODUCT CANDIDATES
MAY BE DELAYED, OR FAIL, WHICH WILL HARM OUR BUSINESS.
Our strategy is to concentrate our product development activities primarily on
pharmaceutical products for which there already are significant prescription
sales, where the use of our proprietary, novel drug delivery technology will
greatly enhance speed of onset of therapeutic effect, reduce side effects
through a reduction of the amount of active drug substance required to produce a
given therapeutic effect and improve patient convenience or compliance. We have
completed pilot pharmacokinetic studies for two antihistamine lingual sprays
(loratadine and clemastine), an estradiol lingual spray, a progesterone lingual
spray and a nitroglycerin lingual spray. In addition, a phase 2 clinical trial
was completed for the nitroglycerin lingual spray. Additional development work
on loratadine, clemastine, estradiol and progesterone has been put on hold due
to changes in the marketplace which have significantly reduced the market
potential for these compounds. We plan to file an NDA for the nitroglycerin
lingual spray in 2004. We plan to initiate pilot pharmacokinetic studies on our
Tier I priority products during calendar year 2004. These products are lingual
spray formulations of sumatriptan, alprazolam, propofol, ondansetron and
zolpidem. The goal of these pilot pharmacokinetic studies is to determine
whether or not a specific lingual spray can achieve blood levels of an active
ingredient via administration through the oral mucosa. If blood levels are not
achieved, it could result in the need to reformulate the lingual spray and/or to
terminate work on a specific compound which would have a material adverse effect
on our operations.
Companies in the pharmaceutical and biotechnology industries have suffered
significant setbacks in advanced clinical trials, even after obtaining promising
results in earlier trials. Data obtained from tests are susceptible to varying
interpretations which may delay, limit or prevent regulatory approval. In
addition, companies may be unable to enroll patients quickly enough to meet
expectations for completing clinical trials. The timing and completion of
current and planned clinical trials of our product candidates depend on, among
other factors, the rate at which patients are enrolled, which is a function of
many factors, including:
o the number of clinical sites;
o the size of the patient population;
o the proximity of patients to the clinical sites;
o the eligibility criteria for the study;
o the existence of competing clinical trials; and
o the existence of alternative available products.
Delays in patient enrollment in clinical trials may occur, which would
likely result in increased costs, program delays or both.
THERE ARE CERTAIN INTERLOCKING RELATIONSHIPS AND POTENTIAL CONFLICTS OF
INTEREST.
Lindsay A. Rosenwald, M.D., a significant stockholder of NovaDel, is the
Chairman of Paramount Capital, the placement agent for the private placements we
completed during calendar year 2003. In the regular course of its business and
the business of its affiliates, and outside of its arrangement with us,
Paramount and/or its affiliates identify, evaluate and pursue investment
opportunities in biomedical and pharmaceutical products, technologies and
companies. In addition, Dr. Rosenwald may be deemed to beneficially own
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approximately 10,838,901 of our outstanding common stock (assuming exercise of
certain warrants beneficially owned by Dr. Rosenwald) and 5,075,664 of our
voting stock (assuming no exercise of such warrants). As such, Dr. Rosenwald and
Paramount may be deemed to be our affiliates. Generally, Delaware corporate law
requires that any transactions between us and any of our affiliates be on terms
that, when taken as a whole, are substantially as favorable to us as those then
reasonably obtainable in an arms-length transaction from a person who is not an
affiliate. Nevertheless, neither such affiliates nor Paramount are obligated
pursuant to any agreement or understanding with us to make any additional
products or technologies available to us, nor can there be any assurance, and we
do not expect and our stockholders should not expect, that any biomedical or
pharmaceutical product or technology identified by such affiliates or Paramount
in the future will be made available to us. In addition, certain of our current
officers and directors or any officers or directors hereafter appointed by us
may from time to time serve as officers or directors of other biopharmaceutical
or biotechnology companies. Such other companies may have interests in conflict
with our interests.
OUR BUSINESS AND REVENUE IS DEPENDENT ON THE SUCCESSFUL DEVELOPMENT OF OUR
PRODUCTS.
Revenue received from our product development efforts consists of payments by
pharmaceutical companies for research and bioavailability studies, pilot
clinical trials and similar milestone-related payments. Our future growth and
profitability will be dependent upon our ability successfully to raise
additional funds to complete the development of, obtain regulatory approvals for
and license out or market our proposed products. Accordingly, our prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered in connection with the establishment of a new business in a highly
competitive industry, characterized by frequent new product introductions. We
anticipate that we will incur substantial operating expenses in connection with
the development, testing and approval of our proposed products and expect these
expenses to result in continuing and significant operating losses until such
time, if ever, that we are able to achieve adequate levels of sales or license
revenues. We may not be able to raise additional financing, increase revenues
significantly, or achieve profitable operations. See "Risk Factors - We will
require significant capital requirements for product development and
commercialization."
WE DO NOT HAVE COMMERCIALLY AVAILABLE PRODUCTS.
Our principal efforts are the development of, and obtaining regulatory approvals
for, our proposed products. We anticipate that marketing activities for our
proprietary products, whether by us or one or more of our licensees, if any,
will not begin until 2005 at the earliest. Accordingly, it is not anticipated
that we will generate any revenues from royalties or sales of proprietary
products until regulatory approvals are obtained and marketing activities begin.
Any one or more of our proposed proprietary products may not prove to be
commercially viable, or if viable, may not reach the marketplace on a basis
consistent with our desired timetables. The failure or the delay of any one or
more of our proposed products to achieve commercial viability would have a
material adverse effect on us.
WE HAVE NOT COMPLETED PRODUCT DEVELOPMENT.
We have not completed the development of our proposed products and we will be
required to devote considerable effort and expenditures to complete such
development. In addition to obtaining adequate financing, satisfactory
completion of development, testing, government approval and sufficient
production levels of such products must be obtained before the proposed products
will become available for commercial sale. We do not anticipate generating
material revenue from product sales until perhaps 2005 or thereafter. Other
potential products remain in the conceptual or very early development stage and
remain subject to all the risks inherent in the development of pharmaceutical
products, including unanticipated development problems and possible lack of
funds to undertake or continue development. These factors could result in
abandonment or substantial change in the development of a specific formulated
product. We may not be able to successfully develop any one or more of our
proposed products or develop such proposed products on a timely basis. Further,
such proposed products may not be commercially accepted if developed. The
inability to successfully complete development, or a determination by us, for
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financial or other reasons, not to undertake to complete development of any
proposed product, particularly in instances in which we have made significant
capital expenditures, could have a material adverse effect on us.
WE DO NOT HAVE DIRECT CONSUMER MARKETING EXPERIENCE.
We have no experience in marketing or distribution at the consumer level of our
proposed products. Moreover, we do not have the financial or other resources to
undertake extensive marketing and advertising activities. Accordingly, we intend
generally to rely on marketing arrangements, including possible joint ventures
or license or distribution arrangements with third parties. We have not entered
into any significant agreements or arrangements with respect to the marketing of
our proposed products, and there can be no assurance that we will do so in the
future or that any such products can be successfully marketed. If we fail to
enter into these agreements or if we or the third parties do not perform under
such agreements, it could impair our ability to commercialize our products. If
we do not develop a marketing force of our own, then we will depend on
arrangements with corporate partners or other entities for the marketing and
sale of our remaining products. Our strategy to rely on third party marketing
arrangements could adversely affect our profit margins.
WE MUST COMPLY WITH GOOD MANUFACTURING PRACTICES.
The manufacture of our pharmaceutical products will be subject to current Good
Manufacturing Practices (cGMP) prescribed by the FDA, pre-approval inspections
by the FDA or comparable foreign authorities, or both, before commercial
manufacture of any such products and periodic cGMP compliance inspections
thereafter by the FDA. We, or any of our third party manufacturers, may not be
able to comply with cGMP or satisfy pre- or post-approval inspections by the FDA
or comparable Foreign authorities in connection with the manufacture of our
proposed products. Failure or delay by us or any such manufacturer to comply
with cGMP or satisfy pre- or post-approval inspections would have a material
adverse effect on us.
WE ARE DEPENDENT ON OUR SUPPLIERS.
We believe that the active ingredients used in the manufacture of our proposed
pharmaceutical products are presently available from numerous suppliers located
in the United States, Europe, India and Japan.
We believe that certain raw materials, including inactive ingredients, are
available from a limited number of suppliers and that certain packaging
materials intended for use in connection with our spray products currently are
available only from sole source suppliers. Although we do not believe we will
encounter difficulties in obtaining the inactive ingredients or packaging
materials necessary for the manufacture of our proposed products, we may not be
able to enter into satisfactory agreements or arrangements for the purchase of
commercial quantities of such materials. We have a written supply agreement with
Dynamit Nobel for certain raw materials for our nitroglycerin lingual spray
product. With respect to other suppliers, we operate primarily on a purchase
order basis beyond which there is no contract memorializing our purchasing
arrangements. The inability to enter into agreements or otherwise arrange for
adequate or timely supplies of principal raw materials and the possible
inability to secure alternative sources of raw material supplies, or the failure
of Dynamit Nobel to comply with its supply obligations to us, could have a
material adverse effect on our ability to arrange for the manufacture of
formulated products. In addition, development and regulatory approval of our
products are dependent upon our ability to procure active ingredients and
certain packaging materials from FDA-approved sources. Since the FDA approval
process requires manufacturers to specify their proposed suppliers of active
ingredients and certain packaging materials in their applications, FDA approval
of a supplemental application to use a new supplier would be required if active
ingredients or such packaging materials were no longer available from the
originally specified supplier, which may result in manufacturing delays. If we
do not maintain important manufacturing relationships, we may fail to find a
replacement manufacturer or to develop our own manufacturing capabilities. If we
cannot do so, it could delay or impair our ability to obtain regulatory approval
for our products and substantially increase our costs or deplete any profit
margins. If we do find replacement manufacturers, we may not be able to enter
into agreements with them on terms and conditions favorable to us and, there
could be a substantial delay before a new facility could be qualified and
registered with the FDA and foreign regulatory authorities.
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WE FACE INTENSE COMPETITION.
The markets which we intend to enter are characterized by intense competition.
We or our licensees may be competing against established pharmaceutical
companies which currently market products which are equivalent or functionally
similar to those we intend to market. Prices of drug products are significantly
affected by competitive factors and tend to decline as competition increases. In
addition, numerous companies are developing or may, in the future, engage in the
development of products competitive with our proposed products. We expect that
technological developments will occur at a rapid rate and that competition is
likely to intensify as enhanced dosage from technologies gain greater
acceptance. Additionally, the markets for formulated products which we have
targeted for development are intensely competitive, involving numerous
competitors and products. Most of our prospective competitors possess
substantially greater financial, technical and other resources than we do.
Moreover, many of these companies possess greater marketing capabilities than we
do, including the resources necessary to enable them to implement extensive
advertising campaigns. We may not be able to compete successfully with such
competitors.
Accordingly, our competitors may succeed in obtaining patent protection,
receiving FDA or comparable foreign approval or commercializing products before
us. If we commence commercial product sales, we will compete against companies
with greater marketing and manufacturing capabilities who may successfully
develop and commercialize products that are more effective or less expensive
than ours. These are areas in which, as yet, we have limited or no experience.
In addition, developments by our competitors may render our product candidates
obsolete or noncompetitive.
We are aware of several companies that are selling or developing lingual spray
products. First Horizon Pharmaceutical Corporation, headquartered in Alpharetta,
Georgia, currently markets Nitrolingual(R) Pumpspray, a nitroglycerin lingual
spray which is in an "air" propelled dispensing system (our nitroglycerin
lingual spray is in a "propellant" based dispensing system).
Generex Biotechnology Corporation, based in Toronto, Canada, is developing an
insulin formulation that is delivered directly into the mouth via their
RapidMist(TM) device. They also state that they have begun research on four
specific target molecules for their RapidMist delivery system: morphine,
fentanyl, heparin and flu vaccine. Sirus Pharmaceuticals Ltd., based in the
United Kingdom, also claims to be developing drugs to be delivered sublingually
via an aerosol spray. Sirus is working in the areas of pain and emesis. There
are several other companies that we are aware of that market lingual spray
products containing vitamins and homeopathic ingredients.
We also face, and will continue to face, competition from colleges,
universities, governmental agencies and other public and private research
organizations. These competitors are becoming more active in seeking patent
protection and licensing arrangements to collect royalties for use of technology
that they have developed. Some of these technologies may compete directly with
the technologies that we are developing. These institutions will also compete
with us in recruiting highly qualified scientific personnel. We expect that
developments in the areas in which we are active may occur at a rapid rate and
that competition will intensify as advances in this field are made. As a result,
we need to continue to devote substantial resources and efforts to research and
development activities.
THE ABSENCE OF PRODUCT LIABILITY INSURANCE COVERAGE MAY AFFECT OUR BUSINESS.
We may be exposed to potential product liability claims by consumers. We
presently do not maintain product liability insurance coverage. Although we will
seek to obtain product liability insurance before the commercialization of any
of our proposed products, there can be no assurance that we will be able to
obtain such insurance or, if obtained, that any such insurance will be
sufficient to cover all possible liabilities to which we may be exposed. Any
product liability claim, even one that was not in excess of our insurance
coverage or one that is meritless and/or unsuccessful, could adversely affect
our cash available for other purposes, such as research and development. In
addition, the existence of a product liability claim could affect the market
price of our common stock. In addition, certain food and drug retailers require
minimum product liability insurance coverage as a condition precedent to
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purchasing or accepting products for retail distribution. Product liability
insurance coverage includes various deductibles, limitations and exclusions from
coverage, and in any event might not fully cover any potential claims. Failure
to satisfy such insurance requirements could impede the ability of us or our
distributors to achieve broad retail distribution of our proposed products,
which could have a material adverse effect on us.
EXTENSIVE GOVERNMENT REGULATION MAY AFFECT OUR BUSINESS.
The development, manufacture and commercialization of pharmaceutical products is
generally subject to extensive regulation by various federal and state
governmental entities. The FDA, which is the principal United States regulatory
authority over pharmaceutical products, has the power to seize adulterated or
misbranded products and unapproved new drugs, to request their recall from the
market, to enjoin further manufacture or sale, to publicize certain facts
concerning a product and to initiate criminal proceedings. As a result of
federal statutes and FDA regulations pursuant to which new pharmaceuticals are
required to undergo extensive and rigorous testing, obtaining pre-market
regulatory approval requires extensive time and expenditures. Under the United
States Federal Food, Drug, and Cosmetic (FDC) Act, as amended (21 U.S.C. 301 et.
seq.), a new drug may not be commercialized or otherwise distributed in the
United States without the prior approval of the FDA. The FDA approval processes
relating to new drugs differ, depending on the nature of the particular drug for
which approval is sought. With respect to any drug product with active
ingredients not previously approved by the FDA, a prospective drug manufacturer
is required to submit a new drug application an NDA, which includes complete
reports of pre-clinical, clinical and laboratory studies to prove such product's
safety and efficacy. The NDA process generally requires, before the submission
of the NDA, submission of an investigative new drug application, an IND,
pursuant to which permission is sought to begin preliminary clinical testing of
the new drug. An NDA, based on published safety and efficacy studies conducted
by others, may also be required to be submitted for a drug product with a
previously approved active ingredient if the method of delivery, strength or
dosage form is changed. Alternatively, a drug having the same active ingredients
as a drug previously approved by the FDA may be eligible to be submitted under
an ANDA, which is significantly less stringent than the NDA approval process.
While the ANDA process requires a manufacturer to establish bioequivalence to
the previously approved drug, it permits the manufacturer to rely on the safety
and efficacy studies contained in the NDA for the previously approved drug. We
believe that the products we develop in spray dosage form will require
submission of an NDA. We estimate that the development of new formulations of
pharmaceutical products, including formulation, testing and obtaining FDA
approval, generally takes four to seven years for the NDA process. Our
determinations may prove to be inaccurate or pre-marketing approval relating to
our proposed products may not be obtained on a timely basis, if at all. The
failure by us to obtain necessary regulatory approvals, whether on a timely
basis, or at all, would have a material adverse effect on our business.
THE CLINICAL TRIAL AND REGULATORY APPROVAL PROCESS FOR OUR PRODUCTS IS EXPENSIVE
AND TIME CONSUMING, AND THE OUTCOME IS UNCERTAIN.
In order to sell our proposed products, we must receive regulatory approvals for
each product. The FDA and comparable agencies in foreign countries extensively
and rigorously regulate the testing, manufacture, distribution, advertising,
pricing and marketing of drug products like our products. This approval process
includes preclinical studies and clinical trials of each pharmaceutical compound
to establish its safety and effectiveness and confirmation by the FDA and
comparable agencies in foreign countries that the manufacturer maintains good
laboratory and manufacturing practices during testing and manufacturing.
Clinical trials generally take two to five years or more to complete. Even if
favorable testing data is generated by clinical trials of drug products, the FDA
may not approve an NDA filed by a pharmaceutical or biotechnology company for
such drug product.
The approval process is lengthy, expensive and uncertain. It is also possible
that the FDA or comparable foreign regulatory authorities could interrupt, delay
or halt any one or more of our clinical trials. If we, or any regulatory
authorities, believe that trial participants face unacceptable health risks, any
one or more of our trials could be suspended or terminated. We also may not
reach agreement with the FDA and/or comparable foreign agencies on the design of
any one or more of the clinical studies necessary for approval. Conditions
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imposed by the FDA and comparable agencies in foreign countries on our clinical
trials could significantly increase the time required for completion of such
clinical trials and the costs of conducting the clinical trials. Data obtained
from clinical trials are susceptible to varying interpretations which may delay,
limit or prevent regulatory approval.
Delays and terminations of the clinical trials we conduct could result from
insufficient patient enrollment. Patient enrollment is a function of several
factors, including the size of the patient population, stringent enrollment
criteria, the proximity of the patients to the trial sites, having to compete
with other clinical trials for eligible patients, geographical and geopolitical
considerations and others. Delays in patient enrollment can result in greater
costs and longer trial timeframes. Patients may also suffer adverse medical
events or side effects.
The FDA and comparable foreign agencies could withdraw any approvals we obtain.
Further, if there is a later discovery of unknown problems or if we fail to
comply with other applicable regulatory requirements at any stage in the
regulatory process, the FDA may restrict or delay our marketing of a product or
force us to make product recalls. In addition, the FDA could impose other
sanctions such as fines, injunctions, civil penalties or criminal prosecutions.
To market our products outside the United States, we also need to comply with
foreign regulatory requirements governing human clinical trials and marketing
approval for pharmaceutical products. The FDA and foreign regulators have not
yet approved any of our products under development for marketing in the United
States or elsewhere. If the FDA and other regulators do not approve our
products, we will not be able to market our products.
WE EXPECT TO FACE UNCERTAINTY OVER REIMBURSEMENT AND HEALTHCARE REFORM.
In both the United States and other countries, sales of our proposed products
will depend in part upon the availability of reimbursement from third party
payors, which include government health administration authorities, managed care
providers and private health insurers. Third party payors are increasingly
challenging the price and examining the cost effectiveness of medical products
and services.
OUR STRATEGY, IN MANY CASES, IS TO ENTER INTO COLLABORATION AGREEMENTS WITH
THIRD PARTIES AND WE MAY REQUIRE ADDITIONAL COLLABORATION AGREEMENTS. IF WE FAIL
TO ENTER INTO THESE AGREEMENTS OR IF WE OR THE THIRD PARTIES DO NOT PERFORM
UNDER SUCH AGREEMENTS, IT COULD IMPAIR OUR ABILITY TO COMMERCIALIZE OUR PROPOSED
PRODUCTS.
Our strategy for the completion of the required development and clinical testing
of our proposed products and for the manufacturing, marketing and
commercialization of such products, in many cases, depends upon entering into
collaboration arrangements with pharmaceutical companies to market,
commercialize and distribute the products. Our success depends upon obtaining
collaboration partners. In addition, we may depend on our partners' expertise
and dedication of sufficient resources to develop and commercialize our proposed
products. We may, in the future, grant to collaboration partners rights to
license and commercialize pharmaceutical products developed under collaboration
agreements. Under these arrangements, our collaboration partners may control key
decisions relating to the development of the products. The rights of our
collaboration partners would limit our flexibility in considering alternatives
for the commercialization of the products. If we fail to successfully develop
these relationships or if our collaboration partners fail to successfully
develop or commercialize any of our products, it may delay or prevent us from
developing or commercializing our proposed products in a competitive and timely
manner and would have a material adverse effect on our business.
IF WE CANNOT PROTECT OUR INTELLECTUAL PROPERTY, OTHER COMPANIES COULD USE OUR
TECHNOLOGY IN COMPETITIVE PRODUCTS. IF WE INFRINGE THE INTELLECTUAL PROPERTY
RIGHTS OF OTHERS, OTHER COMPANIES COULD PREVENT US FROM DEVELOPING OR MARKETING
OUR PRODUCTS.
We seek patent protection for our technology so as to prevent others from
commercializing equivalent products in substantially less time and at
substantially lower expense. The pharmaceutical industry places considerable
importance on obtaining patent and trade secret protection for new technologies,
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products and processes. Our success will depend in part on our ability and that
of parties from whom we license technology to:
o defend our patents and otherwise prevent others from infringing on
our proprietary rights;
o protect trade secrets; and
o operate without infringing upon the proprietary rights of others,
both in the United States and in other countries.
The patent position of firms relying upon biotechnology is highly uncertain and
involves complex legal and factual questions for which important legal
principles are unresolved. To date, the United States Patent and Trademark
Office has not adopted a consistent policy regarding the breadth of claims that
the United States Patent and Trademark Office allows in biotechnology patents or
the degree of protection that these types of patents afford. As a result, there
are risks that we may not develop or obtain rights to products or processes that
are or may seem to be patentable.
EVEN IF WE OBTAIN PATENTS TO PROTECT OUR PRODUCTS, THOSE PATENTS MAY NOT BE
SUFFICIENTLY BROAD AND OTHERS COULD COMPETE WITH US.
We, and the parties licensing technologies to us, have filed various United
States and foreign patent applications with respect to the products and
technologies under our development, and the United States Patent and Trademark
Office and foreign patent offices have issued patents with respect to our
products and technologies. These patent applications include international
applications filed under the Patent Cooperation Treaty. Our pending patent
applications, those we may file in the future or those we may license from third
parties may not result in the United States Patent and Trademark Office or
foreign patent office issuing patents. Also, if patent rights covering our
products are not sufficiently broad, they may not provide us with sufficient
proprietary protection or competitive advantages against competitors with
similar products and technologies. Furthermore, if the United States Patent and
Trademark Office or foreign patent offices issue patents to us or our licensors,
others may challenge the patents or circumvent the patents, or the patent office
or the courts may invalidate the patents. Thus, any patents we own or license
from or to third parties may not provide any protection against competitors.
Furthermore, the life of our patents is limited. Such patents, which include
relevant foreign patents, expire on various dates. We have filed, and when
possible and appropriate, will file, other patent applications with respect to
our products and processes in the United States and in foreign countries. We may
not be able to develop additional products or processes that will be patentable
or additional patents may not be issued to us. See also "Risk Factors - If we
cannot meet requirements under our license agreements, we could lose the rights
to our products."
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES COULD LIMIT OUR ABILITY TO MARKET
OUR PRODUCTS.
Our commercial success also significantly depends on our ability to operate
without infringing the patents or violating the proprietary rights of others.
The United States Patent and Trademark Office keeps United States patent
applications confidential while the applications are pending. As a result, we
cannot determine which inventions third parties claim in pending patent
applications that they have filed. We may need to engage in litigation to defend
or enforce our patent and license rights or to determine the scope and validity
of the proprietary rights of others. It will be expensive and time consuming to
defend and enforce patent claims. Thus, even in those instances in which the
outcome is favorable to us, the proceedings can result in the diversion of
substantial resources from our other activities. An adverse determination may
subject us to significant liabilities or require us to seek licenses that third
parties may not grant to us or may only grant at rates that diminish or deplete
the profitability of the products to us. An adverse determination could also
require us to alter our products or processes or cease altogether any related
research and development activities or product sales.
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IF WE CANNOT MEET REQUIREMENTS UNDER OUR LICENSE AGREEMENTS, WE COULD LOSE THE
RIGHTS TO OUR PRODUCTS.
We depend on licensing arrangements with third parties to maintain the
intellectual property rights to our products under development. These agreements
require us to make payments and satisfy performance obligations in order to
maintain our rights under these licensing arrangements. All of these agreements
last either throughout the life of the patents, or with respect to other
licensed technology, for a number of years after the first commercial sale of
the relevant product.
In addition, we are responsible for the cost of filing and prosecuting certain
patent applications and maintaining certain issued patents licensed to us. If we
do not meet our obligations under our license agreements in a timely manner, we
could lose the rights to our proprietary technology.
In addition, we may be required to obtain licenses to patents or other
proprietary rights of third parties in connection with the development and use
of our products and technologies. Licenses required under any such patents or
proprietary rights might not be made available on terms acceptable to us, if at
all.
WE RELY ON CONFIDENTIALITY AGREEMENTS THAT COULD BE BREACHED AND MAY BE
DIFFICULT TO ENFORCE.
Although we believe that we take reasonable steps to protect our intellectual
property, including the use of agreements relating to the non-disclosure of
confidential information to third parties, as well as agreements that purport to
require the disclosure and assignment to us of the rights to the ideas,
developments, discoveries and inventions of our employees and consultants while
we employ them, the agreements can be difficult and costly to enforce. Although
we seek to obtain these types of agreements from our consultants, advisors and
research collaborators, to the extent that they apply or independently develop
intellectual property in connection with any of our projects, disputes may arise
as to the proprietary rights to this type of information. If a dispute arises, a
court may determine that the right belongs to a third party, and enforcement of
our rights can be costly and unpredictable. In addition, we will rely on trade
secrets and proprietary know-how that we will seek to protect in part by
confidentiality agreements with our employees, consultants, advisors or others.
Despite the protective measures we employ, we still face the risk that:
o they will breach these agreements;
o any agreements we obtain will not provide adequate remedies for this
type of breach or that our trade secrets or proprietary know-how
will otherwise become known or competitors will independently
develop similar technology; and
o our competitors will independently discover our proprietary
information and trade secrets.
WE ARE DEPENDENT ON EXISTING MANAGEMENT.
Our success is substantially dependent on the efforts and abilities of our
President and Chief Executive Officer, Gary A. Shangold, M.D., and our Vice
President of New Business and Product Development, Barry Cohen. Decisions
concerning our business and our management are and will continue to be made or
significantly influenced by these individuals. The loss or interruption of their
continued services would have a materially adverse effect on our business
operations and prospects. Although our employment agreements with such members
of management generally provide for severance payments that are contingent upon
the applicable officer's refraining from competition with us, the loss of any of
these persons' services would adversely affect our ability to develop and market
our products and obtain necessary regulatory approvals, and the applicable
noncompetition provisions can be difficult and costly to monitor and enforce.
Further, we do not maintain key-man life insurance.
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Our future success also will depend in part on the continued service of our key
scientific and management personnel and our ability to identify, hire and retain
additional personnel, including marketing and sales staff. We experience intense
competition for qualified personnel, and the existence of non-competition
agreements between prospective employees and their former employers may prevent
us from hiring those individuals or subject us to suit from their former
employers.
While we attempt to provide competitive compensation packages to attract and
retain key personnel, some of our competitors are likely to have greater
resources and more experience than we have, making it difficult for us to
compete successfully for key personnel.
WE ARE CONTROLLED BY CURRENT STOCKHOLDERS, OFFICERS AND DIRECTORS.
Our directors, executive officers and principal stockholders and certain of our
affiliates have the ability to influence the election of our directors and most
other stockholder actions. Management and our affiliates currently beneficially
own (including shares they have the right to acquire) approximately 37% of our
common stock. Specifically, Dr. Rosenwald has the ability to exert significant
influence over the election of the Board and other matters submitted to our
stockholders for approval. Such positions may discourage or prevent any proposed
takeover of NovaDel, including transactions in which our stockholders might
otherwise receive a premium for their shares over the then current market
prices. Our directors, executive officers and principal stockholders may
influence corporate actions, including influencing elections of directors and
significant corporate events.
THE LIMITED PRIOR PUBLIC MARKET AND TRADING MARKET MAY CAUSE POSSIBLE VOLATILITY
IN OUR STOCK PRICE.
There has only been a limited public market for our securities and there can be
no assurance that an active trading market in our securities will be maintained.
In addition, the overall market for securities in recent years has experienced
extreme price and volume fluctuations that have particularly affected the market
prices of many smaller companies. The trading price of our common stock is
expected to be subject to significant fluctuations in response to variations in
quarterly operating results, changes in analysts' earnings estimates,
announcements of innovations by us or our competitors, general conditions in the
industry in which we operate and other factors. These fluctuations, as well as
general economic and market conditions, may have a material or adverse effect on
the market price of our common stock.
WE MAY BE DE-LISTED FROM THE AMEX IF WE DO NOT MEET CONTINUED LISTING
REQUIREMENTS.
Our common stock commenced trading on the AMEX on May 11, 2004. The AMEX (Part
10, Section 1003) requires stockholders' equity (for continued listing) of at
least $6,000,000 if a listed company has sustained net losses in its five most
recent fiscal years. We have sustained net losses in each of our last eight
fiscal years. As of April 30, 2004, our stockholders' equity was approximately
$11,984,000.
If our common stock is de-listed by the AMEX, trading of our common stock would
thereafter likely be conducted on the OTC Bulletin Board. In such case, the
market liquidity of our common stock would likely be negatively affected, which
may make it more difficult for holders of our common stock to sell their
securities in the open market and we could face difficulty raising capital
necessary for our continued operations.
ADDITIONAL AUTHORIZED SHARES OF OUR COMMON STOCK AND PREFERRED STOCK AVAILABLE
FOR ISSUANCE MAY ADVERSELY AFFECT THE MARKET.
We are authorized to issue 100,000,000 shares of our common stock. As of June 9,
2004, there were 32,943,699 shares of common stock issued and outstanding.
However, the total number of shares of our common stock issued and outstanding
does not include shares reserved in anticipation of the exercise of options or
warrants. As of June 9, 2004, we had outstanding stock options and warrants to
purchase approximately 20,289,221 shares of our common stock, the exercise price
of which range between $0.63 per share to $3.18 per share, and we have reserved
shares of our common stock for issuance in connection with the potential
exercise thereof. Of the reserved shares, a total of 2,053,000 shares are
currently reserved for issuance in connection with our 1992, 1997 and 1998 Stock
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Option Plans, respectively, of which options to purchase an aggregate of 300,000
(500,000 authorized under such plan and 200,000 exercised to date), 250,000
(500,000 authorized under such plan and 250,000 exercised to date) and 1,503,000
(3,400,000 authorized under such plan and 265,000 exercised to date) shares have
been issued under the respective stock option plans. Another 2,900,000 shares
are reserved for issuance and available for the options granted pursuant to the
terms of the employment agreements of various of our current and former
officers. A significant number of such options and warrants contain provisions
for cashless exercise. To the extent such options or warrants are exercised, the
holders of our common stock will experience further dilution. In addition, in
the event that any future financing should be in the form of, be convertible
into or exchangeable for, equity securities, and upon the exercise of options
and warrants, investors may experience additional dilution. See "Risk Factors -
Our additional financing requirements could result in dilution to existing
stockholders."
The exercise of the outstanding derivative securities, will reduce the
percentage of common stock held by our stockholders. Further, the terms on which
we could obtain additional capital during the life of the derivative securities
may be adversely affected, and it should be expected that the holders of the
derivative securities would exercise them at a time when we would be able to
obtain equity capital on terms more favorable than those provided for by such
derivative securities. As a result, any issuance of additional shares of common
stock may cause our current stockholders to suffer significant dilution which
may adversely affect the market.
In addition to the above-referenced shares of common stock which may be issued
without stockholder approval, we have 1,000,000 shares of authorized preferred
stock, the terms of which may be fixed by our Board. We presently have no issued
and outstanding shares of preferred stock and while we have no present plans to
issue any shares of preferred stock, our Board has the authority, without
stockholder approval, to create and issue one or more series of such preferred
stock and to determine the voting, dividend and other rights of holders of such
preferred stock. The issuance of any of such series of preferred stock may have
an adverse effect on the holders of common stock.
POSSIBLE FUTURE SALES OF SHARES BY THE SELLING STOCKHOLDERS MAY BE ADVERSELY
AFFECT THE MARKET.
Subject to the restrictions described under "Risk Factors - Shares eligible for
future sale may adversely affect the market" and applicable law, the selling
stockholders could cause the sale of any or all the shares of common stock they
own upon the effectiveness of the registration statement of which this
prospectus forms a part. The selling stockholders may determine to sell shares
of common stock from time to time for any reason. Although we can make no
prediction as to the effect, if any, that sales of shares of common stock owned
by selling stockholders would have on the market price prevailing from time to
time, sales of substantial amounts of common stock, or the availability of such
shares for sale in the public market, could adversely affect prevailing market
prices of common stock.
SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET.
From time to time, certain of our stockholders may be eligible to sell all or
some of their shares of common stock by means of ordinary brokerage transactions
in the open market pursuant to Rule 144, promulgated under the Act, subject to
certain limitations. In general, pursuant to Rule 144, a stockholder (or
stockholders whose shares are aggregated) who has satisfied a one-year holding
period may, under certain circumstances, sell within any three-month period a
number of securities which does not exceed the greater of 1% of the then
outstanding shares of common stock or the average weekly trading volume of the
class during the four calendar weeks prior to such sale. Rule 144 also permits,
under certain circumstances, the sale of securities, without any limitation, by
our stockholders that are non-affiliates that have satisfied a two-year holding
period. Any substantial sale of our common stock pursuant to Rule 144 or
pursuant to any resale prospectus may have material adverse effect on the market
price of our securities.
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LIMITATION ON DIRECTOR/OFFICER LIABILITY.
As permitted by Delaware law, our certificate of incorporation limits the
liability of our directors for monetary damages for breach of a director's
fiduciary duty except for liability in certain instances. As a result of our
charter provision and Delaware law, stockholders may have limited rights to
recover against directors for breach of fiduciary duty. In addition, our
certificate of incorporation provides that we shall indemnify our directors and
officers to the fullest extent permitted by law.
WE HAVE NO HISTORY OF PAYING DIVIDENDS ON OUR COMMON STOCK.
We have never paid any cash dividends on our common stock and do not anticipate
paying any cash dividends on our common stock in the foreseeable future. We plan
to retain any future earnings to finance growth. If we decide to pay dividends
to the holders of our common stock, such dividends may not be paid on a timely
basis.
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND DELAWARE LAW COULD DEFER A
CHANGE OF OUR MANAGEMENT WHICH COULD DISCOURAGE OR DELAY OFFERS TO ACQUIRE US.
Provisions of our Certificate of Incorporation and Delaware law may make it more
difficult for someone to acquire control of us or for our stockholders to remove
existing management, and might discourage a third party from offering to acquire
us, even if a change in control or in management would be beneficial to our
stockholders. For example, our Certificate of Incorporation allows us to issue
shares of preferred stock without any vote or further action by our
stockholders. Our Board has the authority to fix and determine the relative
rights and preferences of preferred stock. Our Board also has the authority to
issue preferred stock without further stockholder approval, including large
blocks of preferred stock. As a result, our Board could authorize the issuance
of a series of preferred stock that would grant to holders the preferred right
to our assets upon liquidation, the right to receive dividend payments before
dividends are distributed to the holders of common stock and the right to the
redemption of the shares, together with a premium, prior to the redemption of
our common stock.
-17-
USE OF PROCEEDS
The shares which may be sold under this prospectus will be sold for the
respective accounts of each of the selling stockholders. Accordingly, NovaDel
will not realize any proceeds from the sale of the shares, except that it will
derive proceeds if all of the options currently outstanding are exercised for
cash. However, a substantial number of such options contain certain provisions
for cashless exercise. If exercised for cash, such funds will be available to
NovaDel for working capital and general corporate purposes. No assurance can be
given, however, as to when or if any or all of the options will be exercised.
All expenses of the registration of the shares will be paid for by NovaDel. See
"Selling Stockholders" and "Plan of Distribution."
-18-
SELLING STOCKHOLDERS
The following table sets forth the name and relationship to NovaDel and
its affiliates (within the past three years) of each selling stockholder, the
number of shares of common stock which each selling stockholder (1) owned of
record before the offering; (2) may acquire pursuant to the exercise of a
previously granted option or options which hereafter may be granted under the
Plans, all of which shares may be sold pursuant to this prospectus; and (3) the
amount of common stock to be owned by each selling stockholder and (if one
percent or more) the percentage of the class to be owned by such stockholder
assuming the grant of the maximum number of shares issuable under the Plans, the
exercise of all options granted under the Plans, and the sale of all shares
acquired upon exercise of such options.
The information contained in this table reflects "beneficial" ownership of
common stock within the meaning of Rule 13d-3 under the Exchange Act. As of June
9, 2004, the Company had 32,943,699 shares of common stock outstanding.
Beneficial ownership information reflected in the table includes shares issuable
upon the exercise of outstanding options/warrants issued by the Company at their
initial exercise prices.
Name and Relationship to the Amount of Common Stock Amount Amount of Common Stock and
Company Within the Past Three Beneficially Owned As of Offered Percentage of Class to be
Years June 9, 2004 Hereby Owned After the Offering
Harry A. Dugger 2,154,003(1) 420,000(2) 1,734,003 (5.18%)
Founder, Officer
Former Chairman
Gary A. Shangold 1,125,000(3) 1,125,000 0
CEO/President,
Director
Robert F. Schaul 324,286(4) 240,000(5) 84,286 (*)
Officer, Director
Mohammed Abd El-Shafy 250,000(6) 250,000 0
Officer
Jean W. Frydman 100,000(7) 100,000 0
Officer
William F. Hamilton 150,000(8) 150,000 0
Director
Lawrence J. Kessel 176,265(9) 150,000(10) 26,265 (*)
Director
Barry Cohen 150,000(11) 150,000 0
Officer
Mark H. Rachesky 150,000(12) 150,000 0
Director
Charles Nemeroff 150,000(13) 150,000 0
Director
Robert G. Savage 150,000(14) 150,000 0
Director
-19-
Name and Relationship to the Amount of Common Stock Amount Amount of Common Stock and
Company Within the Past Three Beneficially Owned As of Offered Percentage of Class to be
Years June 9, 2004 Hereby Owned After the Offering
D. Cox 4,371(15) 4,371 0
Former Employee
Robert Galler Consultant, 1,050,000(16) 1,050,000 0
Former Officer
Bernadine Wrubel Former 29,689(17) 29,689 0
Employee
(*) Less than 1%.
(1) Represents 852,003 shares of common stock; options to purchase 200,000
shares of common stock (exercisable at $.70 per share) issued under the 1992
stock plan which expire in November 2006; options to purchase 50,000 shares of
common stock (exercisable at $.70 per share) under the 1997 stock plan which
expire in November 2006; options to purchase 300,000 shares of common stock
issued outside of the 1998 Plan (exercisable at $1.84 per share) which expire
November 2007; 166,000 shares owned by his daughter Christina Dugger; 166,000
shares owned by his son Andrew Dugger; and the options described in footnote 2
below.
(2) Represents options to purchase 95,000 shares of common stock (exercisable at
$.70 per share) issued under the 1998 Plan which expire in November 2006;
options to purchase 200,000 shares of common stock issued outside of the 1998
Plan (exercisable at $1.30 per share) which expire October 2007; options to
purchase 75,000 shares of common stock (exercisable at $1.30 per share) issued
under the 1998 Stock Option Plan, which expire in October 2007 and options to
purchase 50,000 shares of common stock issued under the 1998 Plan (exercisable
at $1.82 per share) which expire in February 2009.
(3) Represents 1,000,000 options issued outside of the 1998 Plan, in December
2002 (exercisable at $1.93 per share) which expire in December 2007; and options
to purchase 125,000 shares of common stock issued under the 1998 Plan
(exercisable at $1.82 per share) which expire in February 2009.
(4) Represents 39,286 shares of common stock; 20,000 options, issued under the
1992 stock plan, to purchase common stock at an exercise price of $.63 per
share, expiring in July, 2006; 25,000 options issued under the 1997 stock plan,
to purchase common stock at an exercise price of $.63 per share, expiring in
March 2008; and the options described in footnote 5 below.
(5) Represents 10,000 options issued under the 1998 Plan, to purchase common
stock at an exercise price of $.63 per share, expiring in September 2009; 95,000
options issued under the 1998 Plan, to purchase common stock at an exercise
price of $.63 per share, expiring in January 2010; 75,000 options issued under
the 1998 Plan, to purchase common stock at an exercise price of $2.69 per share,
expiring in February 2012; 10,000 options issued under the 1998 Plan to purchase
common stock at an exercise price of $1.51 per share, expiring in March 2008 and
50,000 options issued outside of the 1998 Plan to purchase common stock at an
exercise price of $1.95 per share expiring in April 2009.
(6) Represents options issued outside of the 1998 Plan to purchase 150,000
shares of common stock at an exercise price of $3.02 per share expiring in May
2012; 50,000 options issued under the 1998 Plan to purchase common stock at an
exercise price of $1.51 per share, expiring in March 2008; and 50,000 options
issued under the 1998 Plan to purchase common stock at an exercise price of
$1.65 per share, expiring in February 2009.
(7) Represents 100,000 options issued outside the 1998 Plan to purchase shares
of common stock at an exercise price of $1.98 per share, which expire in May
2014.
(8) Represents 100,000 options issued outside of the 1998 Plan, exercisable at
$1.51 per share which expire in March 2008 and 50,000 options issued outside of
the 1998 Plan, exercisable at $1.95 per share which expire in April 2009.
(9) Represents 20,204 shares of common stock; warrants to purchase 6,061 shares
of common stock at an exercise price of $1.40 per share which expire in January
2009; and the options described in footnote 10 below.
(10) Represents 100,000 options issued outside of the 1998 Plan exercisable at
$1.51 per share which expire in March 2008 and 50,000 options issued outside of
the 1998 Plan exercisable at $1.95 per share which expire in April 2009.
-20-
(11) Represents 75,000 options issued under the 1998 Plan, to purchase common
stock at an exercise price of $1.65 per share which expire in February 2009 and
75,000 options issued under the 1998 Plan to purchase common stock at an
exercise price of $2.04 per share, which expire in May 2013.
(12) Represents 100,000 options issued outside of the 1998 Plan to purchase
shares of common stock at an exercise price of $2.15 per share, which expire in
June 2008 and 50,000 options issued outside of the 1998 Plan exercisable at
$1.95 per share which expire in April 2009.
(13) Represents 100,000 options issued outside of the 1998 Plan to purchase
shares of common stock at an exercise price of $1.85 per share, which expire in
February 2009 and 50,000 options issued outside of the 1998 Plan exercisable at
$1.95 per share which expire in April 2009.
(14) Represents 100,000 options issued outside of the 1998 Plan to purchase
shares of common stock at an exercise price of $1.65 per share, which expire in
September 2008 and 50,000 options issued outside of the 1998 Plan exercisable at
$1.95 per share which expire in April 2009.
(15) Represents shares of common stock acquired upon exercise of stock options
issued under the 1998 Plan.
(16) Represents 1,050,000 options issued outside of the 1998 Plan to purchase
shares of common stock at an exercise price of $0.75 per share expiring in
December 2011.
(17) Represents shares of common stock acquired upon exercise of stock options
issued under the 1998 Plan.
-21-
PLAN OF DISTRIBUTION
In this section of the prospectus, the term "selling security holder" means and
includes: (1) the persons identified in the tables above as the Selling
Stockholders; and (2) any of their donees, pledgees, distributees, transferees
or other successors in interest who may (a) receive any of the shares of our
common stock offered hereby after the date of this prospectus and (b) offer or
sell those shares hereunder.
The shares of our common stock offered by this prospectus may be sold from time
to time directly by the selling security holders. Alternatively, the selling
security holders may from time to time offer such shares through underwriters,
brokers, dealers, agents or other intermediaries. The selling security holders
as of the date of this prospectus have advised us that there were no
underwriting or distribution arrangements entered into with respect to the
common stock offered hereby. The distribution of the common stock by the selling
security holders may be effected: in one or more transactions that may take
place on the AMEX (including one or more block transaction) through customary
brokerage channels, either through brokers acting as agents for the selling
security holders, or through market makers, dealers or underwriters acting as
principals who may resell these shares on the AMEX; in privately-negotiated
sales; by a combination of such methods; or by other means. These transactions
may be effected at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at other negotiated prices. Usual
and customary or specifically negotiated brokerage fees or commissions may be
paid by the selling security holders in connection with sales of our common
stock.
The selling security holders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares of our
common stock in the course of hedging the positions they assume with the selling
security holders. The selling security holders also may sell shares short and
redeliver the shares to close out such short positions. The selling security
holders may enter into option or other transactions with broker-dealers which
require the delivery to the broker-dealer of shares of our common stock. The
broker-dealer may then resell or otherwise transfer such shares of common stock
pursuant to this prospectus.
The selling security holders also may lend or pledge shares of our common stock
to a broker-dealer. The broker-dealer may sell the shares of common stock so
lent, or upon a default the broker-dealer may sell the pledged shares of common
stock pursuant to this prospectus. Any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this prospectus. The selling security holders have advised us
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of shares of common stock the selling security holders.
Although the shares of common stock covered by this prospectus are not currently
being underwritten, the selling security holders or their underwriters, brokers,
dealers or other agents or other intermediaries, if any, that may participate
with the selling security holders in any offering or distribution of common
stock may be deemed "underwriters" within the meaning of the Act and any profits
realized or commissions received by them may be deemed underwriting compensation
thereunder.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of shares of the common stock offered hereby may not
simultaneously engage in market making activities with respect to the common
stock for a period of up to five days preceding such distribution. The selling
security holders will be subject to the applicable provisions of the Exchange
Act and the rules and regulations promulgated thereunder, including without
limitation Regulation M, which provisions may limit the timing of purchases and
sales by the selling security holders.
In order to comply with certain state securities or blue sky laws and
regulations, if applicable, the common stock offered hereby will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In certain
states, the common stock may not be sold unless they are registered or qualified
for sale in such state, or unless an exemption from registration or
qualification is available and is obtained.
-22-
We will bear all costs, expenses and fees in connection with the registration of
the common stock offered hereby. However, the selling security holders will bear
any brokerage or underwriting commissions and similar selling expenses, if any,
attributable to the sale of the shares of common stock offered pursuant to this
prospectus.
We have agreed to indemnify certain of the selling security holders against
certain liabilities, including liabilities under the Act, or to contribute to
payments to which any of those security holders may be required to make in
respect thereof.
There can be no assurance that the selling securityholders will sell any or all
of the securities offered by them hereby.
LEGAL MATTERS
The legality of the common stock to be offered hereby has been passed
upon for NovaDel by Ellenoff Grossman & Schole LLP.
EXPERTS
The balance sheet of NovaDel as of July 31, 2003 and the statements of
operations, changes in capital deficiency and cash flows for each of the years
in the two-year period ended July 31, 2003 incorporated by reference in this
registration statement have been audited by Wiss & Company, LLP. These financial
statements have been incorporated herein by reference in reliance upon the
report of Wiss & Company, LLP, and upon their authority as experts in accounting
and auditing.
-23-
--------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFERING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH 6,950,000 SHARES
INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED NOVADEL PHARMA INC.
BY THE COMPANY OR ANY OTHER PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS COMMON STOCK
NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OFFERED HEREBY BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS P R O S P E C T U S
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Prospectus Summary .....................1
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Where You Can Find More Information ....2
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Documents Incorporated By Reference ....3
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The Company ............................4
-----------------------------------------
Forward Looking Statements .............5
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Risk Factors ...........................6 JUNE 18, 2004
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Use of Proceeds .......................18
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Selling Stockholders ..................19
-----------------------------------------
Plan of Distribution ..................22
-----------------------------------------
Legal Matters .........................23
-----------------------------------------
Experts ...............................23
-----------------------------------------
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-24-
PART II
-------
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3 INCORPORATION OF DOCUMENTS BY REFERENCE
Included in Part I of this registration statement.
ITEM 4 DESCRIPTION OF SECURITIES
The description of the common stock contained in our Registration
Statement (File No. 333-112852) on Form SB-2/A filed with the Commission on
March 25, 2004 and declared effective by the Commission on March 29, 2004 is
hereby incorporated by reference.
ITEM 5 INTERESTS OF NAMED EXPERTS AND COUNSEL
N/A
ITEM 6 INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "GCL") empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of the performance of their duties as
directors and officers. The GCL provides further that the indemnification
permitted thereunder shall not be deemed exclusive of any other rights to which
the directors and officers may be entitled under the corporation's by-laws, any
agreement, vote of stockholders or otherwise.
Article Ninth of our Certificate of Incorporation eliminates the personal
liability of directors to the fullest extent permitted by Section 102 of the
GCL. Article Tenth provides for indemnification of all persons whom we shall
have the power to indemnify pursuant to Section 145 of the GCL.
The effect of the foregoing is to require NovaDel to the extent permitted
by law to indemnify the officers and directors of NovaDel for any claim arising
against such persons in their official capacities if such person acted in good
faith and in a manner that he reasonably believed to be in or not opposed to the
best interests of NovaDel, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Insofar
as indemnification for liabilities arising under the Act may be permitted to
directors, officers or persons controlling NovaDel pursuant to the foregoing
provisions, we have been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. We currently have liability insurance coverage for our
officers and directors.
In addition to such other rights of indemnification as they may have as
directors or as members of the committee (the "Committee") administering our
1998 Stock Option Plan (the "Plan"), under the terms of the Plan the members of
the Committee shall be indemnified by NovaDel against the reasonable expenses,
including attorney's fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plans or any option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
NovaDel) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Board member is liable for negligence
or misconduct in the performance of his duties.
II-1
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling NovaDel pursuant to the
foregoing provisions, NovaDel has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
ITEM 7 EXEMPTION FROM REGISTRATION CLAIMED
All shares of common stock registered hereunder for reoffer or resale,
have been or will be issued upon exercise of options granted pursuant to the
Registrant's 1998 Stock Option Plan, and its Non-Plan Executive, Consultant and
Director Options. The options are non-transferable and the underlying shares
were and will be issued in transactions not involving a public offering. Upon
exercise of an option, the optionee is required to execute an undertaking not to
resell such shares except pursuant to an effective registration statement or
other exemption under the Act, a restrictive legend is placed on the
certificates for the shares of common stock purchased and transfer stops are
placed against such certificates. Such shares may only be reoffered and sold
pursuant to registration under the Act or pursuant to an applicable exemption
under the Act. As a result, such offers and sales are exempt from the
registration requirements of the Act pursuant to the provisions of Section 4(2)
of the Act.
ITEM 8 EXHIBITS
NUMBER DESCRIPTION
4.1 Registrant's 1998 Stock Option Plan, as
amended to date
4.2 Form of Stock Option Agreement for 1998
Stock Option Plan
4.3 Form of Non-Plan Stock Option Agreement
5.1 Opinion of Ellenoff Grossman & Schole LLP
23.1 Consent of Wiss & Company, LLP
23.2 Consent of Ellenoff Grossman & Schole
LLP (included in Exhibit 5.1)
ITEM 9: UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Flemington, New Jersey, on June 18, 2004.
NOVADEL PHARMA INC.
By: /s/ Gary A. Shangold
---------------------------------------------
Name: Gary A. Shangold, M.D.
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the dates indicated.
NAME TITLE DATE
/s/ Gary A. Shangold President, Chief Executive June 18, 2004
----------------------------- Officer (Principal Executive
Gary A. Shangold, M.D. Officer) and Director
/s/ Donald J. Deitman Chief Financial Officer June 18, 2004
----------------------------- (Principal Financial Officer)
Donald J. Deitman
/s/ Robert F. Schaul Secretary and Director June 18, 2004
-----------------------------
Robert F. Schaul
/s/ William F. Hamilton Director June 18, 2004
-----------------------------
William F. Hamilton
/s/ Lawrence J. Kessel Director June 18, 2004
-----------------------------
Lawrence J. Kessel
/s/ Charles Nemeroff Director June 18, 2004
-----------------------------
Charles Nemeroff, M.D., Ph.D.
/s/ Robert G. Savage Director June 18, 2004
-----------------------------
Robert G. Savage
II-3
EXHIBIT INDEX
NUMBER DESCRIPTION
4.1 Registrant's 1998 Stock Option Plan, as amended
to date
4.2 Form of Stock Option Agreement for 1998 Stock
Option Plan
4.3 Form of Non-Plan Stock Option Agreement
5.1 Opinion of Ellenoff Grossman & Schole LLP
23.1 Consent of Wiss & Company, LLP
23.2 Consent of Ellenoff Grossman & Schole LLP
(included in Exhibit 5.1)