Novadel Pharma will likely return to PIPE market to fund operations

By Sheri Kasprzak

New York, Oct. 31 - Novadel Pharma, Inc. may conduct a private placement to help finance its operations if it cannot generate significant revenues.

"The company's long-term liquidity is contingent upon achieving product sales and/or obtaining additional financing," said a form 10-QSB filed with the Securities and Exchange Commission on Monday.

"The most likely sources of financing include private placements of its equity or debt securities, or bridge loans to the company from third-party lenders ... If we are unable to raise additional capital in fiscal 2006, we will likely be forced to curtail our desired development activities, which will delay the development of our product candidates.

"There can be no assurance that such capital will be available to use on favorable terms or at all."

Novadel has used private placements and public offerings since its inception as principal sources of capital, according to the report.

In May, Novadel sold 6.7 million shares at $1.05 each to a group of investors, including ProQuest Investments and Caisse de depot et placement du Quebec.

Paramount BioCapital, Inc. was the placement agent for that offering.

The company had an accumulated deficit of $34,391,000 as of July 31. On July 31, the company had working capital of $6,781,000, compared to working capital of $7,676,000 on July 31, 2004.

For the year ended July 31, Novadel reported a net loss of $9.45 million compared to a net loss of $6,341,000 for the year ended July 31, 2004.

Based in Flemington, N.J., NovaDel is a pharmaceutical company that produces oral sprays and gelatin capsules.

The company's stock lost $0.05 to close at $1.34 Monday.

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