NovaDel investor swaps $3.66 million of convertible debt for shares

By Devika Patel

Knoxville, Tenn., Jan. 5 - NovaDel Pharma Inc. said it has signed an agreement with ProQuest Investments LP, the holder of $3.66 million of the company's convertible notes, to convert all of the notes into 23,237,083 common shares.

The convertibles were sold in two tranches on May 30, 2008 and Oct. 17, 2008. The May 30 convertible had a conversion price of $0.295 per share and the Oct. 17 convertible had a conversion price of $0.235 per share.

As consideration for converting the notes, the company agreed to set a conversion price of $0.1574 per share for the notes. It also agreed to reduce the exercise price of the related warrants to $0.1888 per share from 120% of the respective note conversion price.

Of the warrants, 220,726 will be retired and 1,986,536 will have a reduced strike price of $0.1888 per share.

"We are pleased that ProQuest has converted their notes and increased their equity participation in our company," chairman and interim chief executive officer Steven B. Ratoff said in a press release. "We view this agreement as an indication of ProQuest's confidence in our opportunity to deliver increased shareholder value to all investors."

NovaDel, based in Flemington, N.J., develops drug delivery systems for prescription and over-the-counter drugs.

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