By Devika Patel
Knoxville, Tenn., May 6 - NovaDel Pharma Inc. said it will raise $4 million in a private placement of secured convertible promissory notes.
The company intends to settle approximately $1.5 million immediately, with the balance subject to stockholder approval.
The notes have a 10% coupon.
In the initial tranche, the notes will be convertible at $0.295 per share. The investors will also receive five-year warrants for 3 million common shares, exercisable at $0.369.
In the subsequent tranche, the notes are convertible at a price equal to the lesser of the closing market price of the company's stock on the date of the closing plus $0.075 per share or $1.05 per share. The investors will also receive five-year warrants with 60% coverage on the principal amount of the notes, with an exercise price equal to 125% of the conversion price.
Proceeds will be used for product development activities, as well as near-term general working capital requirements.
NovaDel, based in Flemington, N.J., develops drug delivery systems for prescription and over-the-counter drugs.
| Issuer: | NovaDel Pharma Inc.
|
| Issue: | Secured convertible promissory notes
|
| Amount: | $4 million
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Conversion price: | $0.295 (for $1.5 million), the remainder subject to market conditions
|
| Warrants: | 60% coverage
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.369 (for 3 million shares), the remainder subject to market conditions
|
| Pricing date: | May 6
|
| Stock symbol: | Amex: NVD
|
| Stock price: | $0.239 at close May 6
|
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