UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
---
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2004
TRANSITION REPORT UNDER SECTION 13 or 15(d) OF
---
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission file number 000-23399
NOVADEL PHARMA INC.
(Exact name of small business issuer as specified in its charter)
Delaware 22-2407152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
25 Minneakoning Road
Flemington, New Jersey 08822
(Address of Principal Executive Offices) (Zip Code)
(908)782-3431
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 32,943,699 shares of common
stock outstanding as of June 9, 2004.
1
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOVADEL PHARMA INC.
CONDENSED BALANCE SHEETS
April 30, July 31,
2004 2003
------------ ------------
(Unaudited) (Note 1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11,451,000 $ 3,086,000
Accounts receivable - trade 79,000 2,000
Prepaid expenses and other current assets 255,000 168,000
------------ ------------
Total Current Assets 11,785,000 3,256,000
FURNITURE, FIXTURES, AND EQUIPMENT, LESS
ACCUMULATED DEPRECIATION 1,019,000 714,000
OTHER ASSETS 354,000 357,000
------------ ------------
$ 13,158,000 $ 4,327,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable-trade $ 151,000 $ 139,000
Accrued expenses and other current liabilities 587,000 318,000
Current portion of deferred revenue 19,000 --
Current portion of capitalized lease obligation 27,000 --
------------ ------------
Total Current Liabilities 784,000 457,000
Non current portion of deferred revenue 348,000 --
Non current portion of capitalized lease obligation 42,000 --
------------ ------------
Total Liabilities 1,174,000 457,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value:
Authorized 1,000,000 shares, none issued -- --
Common stock, $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding 32,877,642 shares at April 30, 2004
and 17,972,760 shares at July 31, 2003 33,000 18,000
Additional paid-in capital 32,450,000 19,480,000
Accumulated deficit (20,499,000) (15,628,000)
------------ ------------
Total Stockholders' Equity 11,984,000 3,870,000
------------ ------------
$ 13,158,000 $ 4,327,000
============ ============
See accompanying notes to condensed financial statements.
2
NOVADEL PHARMA INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30,
------------------------------------------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
LICENSE FEE $ 5,000 $ -- $ 8,000 $ --
CONSULTING REVENUES 11,000 -- 29,000 --
------------ ------------ ------------ ------------
TOTAL REVENUES 16,000 -- 37,000 --
------------ ------------ ------------ ------------
RESEARCH AND DEVELOPMENT
EXPENSES 587,000 264,000 1,265,000 829,000
CONSULTING, SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,218,000 614,000 3,927,000 3,649,000
------------ ------------ ------------ ------------
TOTAL EXPENSES 1,805,000 878,000 5,192,000 4,478,000
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (1,789,000) (878,000) (5,155,000) (4,478,000)
INTEREST INCOME 59,000 7,000 70,000 40,000
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (1,730,000) (871,000) (5,085,000) (4,438,000)
DEFERRED INCOME TAX BENEFIT -- -- 214,000 84,000
------------ ------------ ------------ ------------
NET LOSS $ (1,730,000) $ (871,000) $ (4,871,000) $ (4,354,000)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER SHARE $ (.05) $ (.06) $ (.20) $ (.30)
============ ============ ============ ============
SHARES USED IN COMPUTATION OF
BASIC AND DILUTED LOSS PER
SHARE 32,866,531 15,155,662 24,635,900 14,731,391
============ ============ ============ ============
See accompanying notes to condensed financial statements.
3
NOVADEL PHARMA INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED April 30, 2004
(Unaudited)
Common Stock
----------------------------- Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------------ ------------ ------------ ------------ ------------
BALANCE, August 1, 2003 17,972,760 $ 18,000 $ 19,480,000 $(15,628,000) $ 3,870,000
Stock issued in connection with private
placement, net of costs 13,333,333 14,000 12,771,000 -- 12,785,000
Stock issued to 2003 private investors
in connection with reset provision 1,371,549 1,000 (1,000) -- --
Stock issued for options exercised 200,000 -- 200,000 -- 200,000
Net Loss -- -- -- (4,871,000) (4,871,000)
------------ ------------ ------------ ------------ ------------
BALANCE, April 30, 2004 32,877,642 $ 33,000 $ 32,450,000 $(20,499,000) $ 11,984,000
============ ============ ============ ============ ============
See accompanying notes to condensed financial statements.
4
NOVADEL PHARMA INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
April 30,
------------------------------
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,871,000) $ (4,354,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Warrants issued for services -- 7,000
Options issued for services -- 1,198,000
Depreciation and amortization 162,000 111,000
Changes in operating assets and liabilities:
Accounts receivable (77,000) 1,000
Prepaid expenses and other current assets (87,000) (35,000)
Other assets 3,000 (334,000)
Accounts payable - trade 12,000 122,000
Accrued expenses and other current liabilities 269,000 309,000
Deferred revenue 367,000 --
------------ ------------
Net cash used in operating activities (4,222,000) (2,975,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -
purchase of property and equipment (380,000) (264,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Proceeds received from issuance of common
stock through
private placement 12,785,000 2,511,000
Shares issued for warrants exercised -- 10,000
Shares issued for options exercised 200,000 --
Payments of capitalized lease obligation (18,000) --
------------ ------------
Net cash provided by financing activities 12,967,000 2,521,000
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,365,000 (718,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,086,000 3,314,000
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 11,451,000 $ 2,596,000
============ ============
SUPPLEMENTAL DISCLOSURE OF INVESTING AND
FINANCING ACTIVITIES:
Equipment acquired under capitalized lease obligation $ 87,000 $ --
============ ============
See accompanying notes to condensed financial statements.
5
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The balance sheet at July 31, 2003, the end of the preceding
fiscal year, has been derived from the audited balance sheet
contained in the previously filed Form 10-KSB of NovaDel
Pharma Inc. (the Company) for the year ended July 31, 2003 and
is presented for comparative purposes. All other financial
statements are unaudited. In the opinion of management, all
adjustments, which include only normal recurring adjustments
necessary to present fairly the financial position, results of
operations and cash flows for all periods presented, have been
made in the interim financial statements. Results of
operations for interim periods are not necessarily indicative
of the operating results to be expected for a full year.
Management of the Company believes that during the third
calendar quarter of fiscal 2005, it will be necessary for the
Company to obtain additional financing and/or consummate a
well funded strategic alliance with a business partner. There
are a number of risks and uncertainties related to the
Company's attempt to complete a financing or strategic
partnering arrangement that are outside the control of the
Company. The Company may not be able to successfully obtain
additional financing on terms acceptable to the Company, or at
all.
Certain footnote disclosures normally included in financial
statements prepared in accordance with accounting principles
generally accepted in the United States have been omitted in
accordance with the published rules and regulations of the
Securities and Exchange Commission. The condensed financial
statements in this report should be read in conjunction with
the financial statements and notes thereto included in the
Form 10-KSB for the year ended July 31, 2003.
NOTE 2 - LOSS PER COMMON SHARE
Loss per common share is computed pursuant to SFAS No. 128,
"Earnings Per Share." Basic loss per share is computed as net
loss divided by the weighted average number of common shares
outstanding for the period. Diluted net loss per common share
is the same as basic net loss per common share, since
potentially dilutive securities from options and warrants
would have an antidilutive effect because the Company incurred
a net loss during each period presented. As of April 30, 2004,
20,185,589 shares issuable upon exercise of options and
warrants were excluded from the diluted loss per share
computation, as their effect would be anti-dilutive.
NOTE 3 - CAPITALIZED LEASE OBLIGATION:
In October 2003, the Company entered into a capital lease for
laboratory equipment. This lease requires 36 monthly payments
of $2,827 each.
NOTE 4 - CONTRACTS:
In August 2003, Mr. Robert C. Galler agreed to change from an
employee of the Company as Vice President - Corporate
Development to a consultant and entered into a consulting
agreement with the Company at a base compensation of $180,000
per year. The consulting agreement terminates in February
2005.
In April, 2004, the Company amended its employment agreement
with Mohammed Abd El-Shafy, its Vice President - Formulation
Development. The amended agreement has a term of three years,
a base salary of $200,000 per year and an incentive bonus for
each lingual spray compound developed by him.
6
NOTE 5 - STOCK OPTIONS AND WARRANTS:
The Company uses the intrinsic value method of accounting for
stock options pursuant to the provisions of APB Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and
related interpretations in accounting for its employee stock
options. Since all of the options granted by the Company have
been at exercise prices that were at least equal to the market
value at the date of grant, there were no charges to
operations upon issuance. Had compensation costs been
determined using the Black-Scholes option pricing model in
accordance with the fair value method prescribed by,
"Accounting for Stock-Based Compensation" (SFAS 123), for all
options issued to SFAS No. 123, employees and amortized over
the vesting period, the Company's net loss applicable to
common shares and net loss per common share (basic and
diluted) would have been increased to the pro forma amounts
indicated below.
THREE MONTHS ENDED
APRIL 30,
----------------------------------
2004 2003
---------------- ----------------
Net loss, as reported $(1,730,000) $ (871,000)
Stock-based employee compensation expense
under fair value method, net of related
tax effects (52,000) (238,000)
---------------- ----------------
Pro forma net loss $(1,782,000) $(1,109,000)
================ ================
Loss per share:
Basic and diluted, as reported $(.05) $(.06)
================ ================
Basic and diluted, pro forma $(.05) $(.07)
================ ================
NINE MONTHS ENDED
APRIL 30,
----------------------------------
2004 2003
---------------- ----------------
Net loss, as reported $(4,871,000) $(4,354,000)
Stock-based employee compensation expense
under fair value method, net of related
tax effects (108,000) (437,000)
---------------- ----------------
Pro forma net loss $(4,979,000) $(4,791,000)
================ ================
Loss per share:
Basic and diluted, as reported $(.20) $(.30)
================ ================
Basic and diluted, pro forma $(.20) $(.33)
================ ================
The fair value of options granted during the three and nine
months periods ending April 30, 2004 and 2003 were estimated
at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions,
respectively: risk-free interest rates of 4.0%; dividend yield
of 0.0%; volatility factors of 54% for the three months ended
April 30, 2004; 74% for the three months ended April 30, 2003;
57% for the nine months ended April 30, 2004; and 74% for the
nine months ended April 30, 2003; and a weighted-average
expected life of the options of five years for the three
months ended April 30, 2004; six years for the nine months
ended April 30, 2004; five years for both the three; and nine
months ended April 30, 2003.
7
During the first fiscal quarter, ending October 31, 2003, the
Company granted 141,000 options to employees and 100,000
options to a new director. Of these options, 141,000 were
granted under the 1998 Stock Option Plan and 100,000 were
Non-plan Options. All granted options vest equally over 3
years, 141,000 expire in 10 years and 100,000 expire in 5
years. The range of exercise prices, of all options granted
during this fiscal quarter, was $1.85 - $2.23.
During the second fiscal quarter, ending January 31, 2004, the
Company granted 161,000 options, under the 1998 Stock Option
Plan, to employees. All granted options vest equally over 3
years and expire in 10 years. The range of exercise prices, of
all options granted during this fiscal quarter, was $1.45 -
$1.60.
In February 2004, 200,000 options were exercised for $200,000
and the Company issued 200,000 shares of common stock.
During the third fiscal quarter, ending April 30, 2004, the
Company granted 100,000 options to a new director,300,000
options to directors,300,000 options to officers and 96,000
options to employees. Of these options, 396,000 were granted
under the 1998 Stock Option Plan and 400,000 were Non-plan
Options. All granted options vest equally over 3 years and
expire in 5 years. The range of exercise prices, of all
options granted during this fiscal quarter, was $1.65 - $1.95.
20,000 options granted during the second fiscal quarter
expired during the third fiscal quarter due to a termination
of employment.
On November 18, 2003, the Company's publicly traded warrants,
for the purchase of 680,000 shares, expired.
NOTE 6 - RELATED PARTY TRANSACTIONS:
In April 2003, the Company entered into a license and
development agreement with Manhattan Pharmaceuticals, Inc. for
the worldwide, exclusive rights to the Company's proprietary
lingual spray technology. One of the Company's significant
stockholders is also a significant stockholder of Manhattan
Pharmaceuticals, Inc.
During the nine months ended April 30, 2004, the Company
invoiced Manhattan Pharmaceuticals, Inc. approximately
$340,000 for the Company's reimbursable expenses of which
payment of approximately $280,000 was received prior to April
30, 2004. In November 2003, the Company received $375,000 from
Manhattan Pharmaceuticals, Inc., for license fees. The Company
is recognizing these license fees over the 20-year term of the
license.
NOTE 7 - PRIVATE PLACEMENT:
During January 2004, the Company completed a private placement
and received net proceeds of approximately $12,785,000 from
the sale of a total of 140 units of the Company's securities.
Each unit consisted of 95,238 common shares, par value $.001
and 28,571 warrants. Each warrant entitles the holder to
purchase an additional share of the Company's common stock at
an exercise price of $1.40 within five years. The sale price
of each unit was $100,000 ($1.05 per share). A total of
13,333,333 shares and approximately 4,000,000 warrants were
issued.
The securities were sold through Paramount Capital, Inc., a
NASD broker-dealer ("Paramount"). For its services as
placement agent, the Company paid Paramount a commission of 7%
of the aggregate amount raised and also issued to Paramount
(and its designees) unit purchase options to purchase
1,330,303 shares of common stock at an exercise price of $1.40
per share and warrants to purchase an additional 399,091
shares of common stock at an exercise price of $1.40 per
share. The Company also paid Paramount a non-accountable
expense allowance of $25,000 to reimburse Paramount for its
out-of- pocket expenses. A significant stockholder of the
Company is a controlling principal of Paramount.
8
In connection with the Company's April/May 2003 private
placement, the Company had agreed, for a period of one year,
that if the Company issued shares of common stock at a per
share price less than $1.50 (the price per share in such
offering) that such investors would receive "reset price"
shares without any additional consideration being paid to the
Company (so that those investors would receive additional
shares as if they purchased their shares at such lower per
share purchase price). The per share sale price of the January
2004 offering triggered the reset rights of such investors and
1,371,549 shares were issued to these investors for no
additional consideration. The reset provisions expire in May
2004.
NOTE 8 - SUBSEQUENT EVENTS:
In May 2004, The Company entered into a three-year employment
agreement with Jean W. Frydman, Esq. pursuant to which she
agreed to serve as the Company's Vice President and General
Counsel. The Company agreed to pay Ms. Frydman an annual base
salary of $200,000. Pursuant to the agreement, Ms. Frydman was
also granted Non-Plan options to purchase 100,000 shares of
the Company's common stock at an exercise price of $1.98 per
share (110% of the fair market value on the grant date) which
vest, subject to conditions, over a three year period. Such
options have a term of 10 years.
On May 11, 2004, the Company's common stock commenced trading
on the American Stock Exchange LLC under the symbol NVD.
9
NOVADEL PHARMA INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Novadel Pharma Inc., a Delaware corporation (the "Company"), is engaged in
development of novel application drug delivery systems for presently marketed
prescription and over-the-counter ("OTC") drugs and has been a consultant to the
pharmaceutical industry. Since 1992, the Company has used its consulting
revenues to fund its own product development activities.
Since its inception, substantially all of the Company's revenues have been
derived from its consulting activities. The Company has had a history of
recurring losses from operations, giving rise to an accumulated deficit at April
30, 2004 of $20,499,000.
The Company anticipates that it will incur substantial operating expenses in
connection with the testing and approval of its proposed delivery systems, and
expects these expenses will result in continuing and significant operating
losses until such time, if ever, that the Company is able to achieve adequate
sales levels.
RESULTS OF OPERATIONS
THE NINE MONTHS ENDED APRIL 2004 [THE "2004 PERIOD"] AND APRIL 2003 [THE "2003
PERIOD"]
Operating revenues for the 2004 Period increased approximately $37,000 from $0
for the 2003 Period.
Total expenses for the 2004 Period increased approximately $714,000 or 16% to
$5,192,000 from $4,478,000 for the 2003 Period. This increase includes
approximately: $720,000 in payroll expense primarily due to the hiring of
additional employees; $230,000 in rent expense due to the leasing and occupying
of additional space during the first fiscal quarter; $200,000 in employee
recruiting; $185,000 in legal and professional fees; $98,000 in insurance
expenses due to additional employees, additional coverage and generally
increased premiums; $60,000 in inside laboratory expenses; $54,000 in outside
services due to increased activity; $33,000 in public company expense due to an
increased number of directors; $32,000 in office expenses due to additional
employees; $27,000 in travel expenses; $26,000 in depreciation and amortization
expense; $24,000 in telephone expense; $14,000 in utilities; $14,000 in outside
laboratory expense and $11,000 in temporary employees. Expense decreases for the
2004 Period, as compared to the 2003 Period, include approximately: $926,000 in
consultants fees primarily due to a non-cash charge for options issued to a
consultant during the 2003 Period; $104,000 in cost of clinical studies
primarily due to fewer studies during the 2004 Period and $15,000 in trade show
and conference expenses.
Interest income increased approximately $30,000 or 75% to $70,000 for the 2004
Period from $40,000 for the 2003 Period due to an increased average cash
balance.
Deferred income tax benefit for the 2004 period was approximately $214,000
compared to approximately $84,000 for the 2003 period. These benefits resulted
from the sale of the Company's New Jersey net operating losses.
The resulting net loss for the 2004 period was $4,871,000 (or $.20 per share)
compared to a net loss of $4,354,000 (or $.30 per share) for the 2003 Period.
10
THE THREE MONTHS ENDED APRIL 2004 [THE "2004 PERIOD"] AND APRIL 2003 [THE "2003
PERIOD"]
Operating revenues for the 2004 Period increased approximately $16,000 from $0
from the 2003 Period.
Total expenses for the 2004 Period increased approximately $927,000 or 106% to
$1,805,000 from $878,000 for the 2003 Period. This increase includes
approximately: $245,000 in payroll expense primarily due to the hiring of
additional employees; $182,000 in legal and professional fees; $157,000 in
employee recruiting; $85,000 in rent expense due to the leasing and occupying of
additional space during the first fiscal quarter; $52,000 in insurance expenses
due to additional employees, additional coverage and generally increased
premiums; $52,000 in consultants fees; $28,000 in inside laboratory expenses;
$21,000 in cost of clinical studies; $16,000 in office expenses due to
additional employees; $11,000 in depreciation and amortization expense and
$11,000 in temporary employees.
Interest income increased approximately $52,000 or 743% to $59,000 for the 2004
Period from $7,000 for the 2003 Period due to an increased average cash balance.
The resulting net loss for the 2004 Period was $1,730,000 (or $.05 per share)
compared to a net loss of $871,000 (or $.06 per share) for the 2003 period.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities approximated $4,022,000 for the 2004
Period compared to net cash used in operating activities of approximately
$2,965,000 for the 2003 Period. Net cash used in operating activities for both
the 2004 and 2003 periods was primarily attributable to the net loss of
$4,871,000 and $4,354,000, respectively. For the 2004 period, $380,000 was used
for investing activities compared to $264,000 for the 2003 period. For the 2004
period, $12,767,000 was received from financing activities primarily as a result
of the completion of a private offering of Units (consisting of common stock and
warrants).
During January 2004, the Company completed a private offering of units and
received net proceeds of approximately $12,785,000 (See Part I, Note 5).
The Company believes that it currently has sufficient cash to satisfy its cash
requirements into the third calendar quarter of 2005. However, beyond this point
there is substantial doubt about the Company's ability to continue operations
without obtaining additional financing and/or consummating a well-funded
strategic alliance with a business partner. There are a number of risks and
uncertainties related to the Company's attempt to complete a financing or
strategic partnering arrangement that are outside the control of the Company. We
may not be able to successfully obtain additional financing on terms acceptable
to the Company, or at all (See Part 1, Note 1).
OFF BALANCE SHEET ARRANGEMENTS
The Company has no off balance sheet arrangements within the meaning of SEC
rules.
INFLATION
The Company does not believe that inflation has had a material effect on its
results of operations during the past three fiscal years. There can be no
assurance that the Company's business will not be affected by inflation in the
future.
11
ITEM 3. CONTROLS AND PROCEDURES
As of April 30, 2004, our Chief Executive Officer and Chief Financial Officer
performed an evaluation of the effectiveness of the Company's disclosure
controls and procedures (as defined in SEC Rule 13a-15(e)), which have been
designed to ensure that material information related to the Company is made
known to them and timely disclosed. The Company's management, including the CEO
and CFO, does not expect that the Company's disclosure controls or internal
controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. Notwithstanding the foregoing,
however, based upon their evaluations, our CEO and CFO concluded that the
Company's disclosure controls are effective to provide a reasonable level of
assurance that material information relating to the Company is accumulated and
communicated to management, including the CEO and CFO, as appropriate, to allow
timely decisions regarding required disclosure.
During the three months ended April 30, 2004, there have been no significant
changes in our internal controls over financial reporting or in other factors,
which have significantly affected, or are reasonable likely to significantly
affect, our internal controls over financial reporting subsequent to such
evaluation.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
N/A
ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF SECURITIES
During February 2004, 200,000 options were exercised for $200,000
and the Company issued 200,000 shares of common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
N/A
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 19, 2004, the Company held an annual meeting of
stockholders to vote on the election of directors, the ratification
of the Company's independent auditors, an amendment to the
Company's Certificate of Incorporation and an amendment to the
Company's 1998 Stock Option Plan. Of the 32,877,642 shares of the
Company's Common Stock entitled to vote at the meeting, holders of
19,263,502 shares were present in person or were represented by
proxy at the meeting.
The directors elected at the meeting and the results of the voting
were as follows:
For Withheld
----- --------
Gary A. Shangold, M.D. 19,058,393 205,109
Robert F. Schaul, Esq. 19,050,628 212,874
William F. Hamilton, Ph.D 19,223,093 40,409
Lawrence J. Kessel, M.D., FACP 19,223,093 40,409
Mark H. Rachesky, M.D. 19,223,093 40,409
Charles Nemeroff, M.D., Ph.D. 19,223,093 40,409
Robert G. Savage 19,215,328 48,174
The above represented all of the directors of the Company on April
19, 2004.
12
The shares voted regarding the Board of Directors' proposal to
select the accounting firm of J.H. Cohn LLP, to serve as
independent auditors of the Company, were as follows:
For: 19,178,102
Against: 85,400
Abstain: 0
The shares voted regarding the Board of Directors' proposal to
amend the Company's Certificate of Incorporation, to increase the
authorized common stock from 50,000,000 shares to 100,000,000
shares, were as follows:
For: 18,154,154
Against: 546,570
Abstain: 562,778
The shares voted regarding the Board of Directors' proposal to
amend the Company's 1998 Stock Option Plan, to increase the number
of shares of common stock authorized under the Plan from 1,800,000
shares to 3,400,000 shares, were as follows:
For: 13,764,644
Against: 935,149
Abstain: 561,778
There was a motion at the Annual Stockholders' Meeting to amend the
Corporation's By-Laws to increase the maximum authorized size of
the Corporation's Board of Directors from seven to eleven.
19,263,502 shares voted in favor of the amendment, 0 shares voted
against it and 0 shares abstained.
ITEM 5. OTHER INFORMATION
N/A
13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) List of Exhibits
Exhibit 3.1 Restated Certificate of Incorporation of
Novadel Pharma Inc. as fully restated to
integrate all amendments through April
2004.
Exhibit 10.32 Amendment of Employment Agreement with
Mohammed Abd El-Shafy, Ph.D
Exhibit 31.1 Rule 13a-14(a) Certification of Chief
Executive Officer
Exhibit 31.2 Rule 13a-14(a) Certification of Chief
Financial Officer
Exhibit 32.1 Certification under 18 U.S.C. 1350
Exhibit 32.2 Certification under 18 U.S.C. 1350
b) Reports on Form 8-K
None
14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
NOVADEL PHARMA INC
Dated: June 14, 2004 By: /s/ Gary A. Shangold, M.D.
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Gary A. Shangold, M.D.
President & Chief Executive Officer
Dated: June 14, 2004 By: /s/ Donald J. Deitman
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Donald J. Deitman
Chief Financial Officer
15