x |
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the quarterly period ended March 31,
2008.
|
NEXMED,
INC.
|
(Exact
Name of Issuer as Specified in Its
Charter)
|
Nevada
|
87-0449967
|
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
|
Incorporation
or Organization)
|
Identification
No.)
|
89
Twin Rivers Drive, East Windsor, NJ 08520
|
(Address
of Principal Executive Offices)
|
(609)
371-8123
|
(Issuer’s
Telephone Number, Including Area
Code)
|
Page
|
|||
Part
I. FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
1
|
|
Consolidated
Balance Sheets at March 31, 2008 (unaudited) and December 31,
2007
|
1
|
||
Unaudited
Consolidated Statements of Operations for the Three Months Ended
March 31,
2008 and March 31, 2007
|
2
|
||
Unaudited
Consolidated Statements of Cash Flows for the Three Months Ended
March 31,
2008 and March 31, 2007
|
3
|
||
Notes
to Unaudited Consolidated Financial Statements
|
4
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
22
|
|
Item
4.
|
Controls
and Procedures
|
22
|
|
Part
II. OTHER INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
22
|
|
Item
1A.
|
Risk
Factors
|
23
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
|
Item
6.
|
Exhibits
|
24
|
|
Signatures
|
25
|
||
Exhibit
Index
|
26
|
March
31,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(Unaudited)
|
|||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
2,382,559
|
$
|
2,735,940
|
|||
Short
term investments
|
-
|
750,000
|
|||||
Debt
issuance cost, net of accumulated amortization
|
|||||||
of
$22,694 and $7,565 - current portion
|
68,081
|
68,081
|
|||||
Prepaid
expenses and other assets
|
115,849
|
127,659
|
|||||
Total
current assets
|
2,566,489
|
3,681,680
|
|||||
Fixed
assets, net
|
6,841,818
|
6,956,986
|
|||||
Debt
issuance cost, net of accumulated amortization of $5,673 and
$3,782
|
17,020
|
34,040
|
|||||
Total
assets
|
$
|
9,425,327
|
$
|
10,672,706
|
|||
Liabilities
and stockholders' equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued expenses
|
$
|
604,249
|
$
|
621,668
|
|||
Payroll
related liabilities
|
151,430
|
693,774
|
|||||
Deferred
revenue
|
1,504,542
|
953,528
|
|||||
Deferred
compensation - current portion
|
61,656
|
60,929
|
|||||
Total
current liabilities
|
2,321,877
|
2,329,899
|
|||||
Long
Term liabilities:
|
|||||||
Note
payable, net of debt discount of $384,413 and $461,295
|
2,615,587
|
2,538,705
|
|||||
Deferred
compensation
|
983,673
|
999,345
|
|||||
Total
Liabilities
|
5,921,137
|
5,867,949
|
|||||
Commitments
and contingencies (Note 7)
|
|||||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $.001 par value, 10,000,000 shares authorized, none issued
and
outstanding
|
-
|
-
|
|||||
Common
stock, $.001 par value, 120,000,000 shares authorized, 83,148,407
and
83,063,002 issued and outstanding, respectively
|
83,150
|
83,065
|
|||||
Additional
paid-in capital
|
139,581,329
|
139,239,794
|
|||||
Accumulated
deficit
|
(136,160,289
|
)
|
(134,518,102
|
)
|
|||
Total
stockholders' equity
|
3,504,190
|
4,804,757
|
|||||
Total
liabilities and stockholders' equity
|
$
|
9,425,327
|
$
|
10,672,706
|
See
notes to consolidated financial
statements.
|
FOR THE THREE MONTHS ENDED
|
|
||||||
|
|
MARCH 31,
|
|
||||
|
|
2008
|
|
2007
|
|
||
Revenues,
principally license fee revenue
|
$
|
951,787
|
$
|
286,959
|
|||
Operating
expenses
|
|||||||
Research
and development
|
1,169,091
|
1,077,883
|
|||||
General
and administrative
|
1,303,398
|
1,232,895
|
|||||
Total
operating expenses
|
2,472,489
|
2,310,778
|
|||||
Loss
from operations
|
(1,520,702
|
)
|
(2,023,819
|
)
|
|||
Other
expense
|
|||||||
Interest
expense, net
|
(121,485
|
)
|
(15,490
|
)
|
|||
Total
other expense
|
(121,485
|
)
|
(15,490
|
)
|
|||
Net
loss
|
(1,642,187
|
)
|
(2,039,309
|
)
|
|||
Basic
and diluted loss per share
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
|
Weighted
average common shares outstanding used for basic and diluted loss
per
share
|
83,094,347
|
80,803,109
|
|||||
See
notes to consolidated financial
statements.
|
FOR THE THREE MONTHS ENDED
MARCH 31,
|
|||||||
2008
|
2007
|
||||||
Cash
flows from operating activities
|
|||||||
Net
loss
|
$
|
(1,642,187
|
)
|
$
|
(2,039,309
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities
|
|||||||
Depreciation
and amortization
|
126,595
|
171,798
|
|||||
Non-cash
interest, amortization of debt discount and deferred financing
costs
|
93,903
|
68,229
|
|||||
Non-cash
compensation expense
|
301,870
|
358,313
|
|||||
Loss
on disposal of fixed assets
|
2,605
|
-
|
|||||
Decrease
in other receivable
|
-
|
183,700
|
|||||
Increase/(decrease)
in prepaid expenses and other assets
|
11,810
|
(31,027
|
)
|
||||
Increase/(decrease)
in deferred revenue
|
551,014
|
(282,319
|
)
|
||||
Decrease
in payroll related liabilities
|
(542,344
|
)
|
(33,842
|
)
|
|||
Decrease
in deferred compensation
|
(14,945
|
)
|
(40,698
|
)
|
|||
Increase/(decrease)
in accounts payable and accrued expenses
|
(17,419
|
)
|
105,863
|
||||
Net
cash used in operating activities
|
(1,129,098
|
)
|
(1,539,292
|
)
|
|||
Cash
flow from investing activities
|
|||||||
Capital
expenditures
|
(14,033
|
)
|
-
|
||||
Purchase
of short term investments
|
-
|
(3,000,000
|
)
|
||||
Proceeds
from sale of short term investments
|
750,000
|
1,500,000
|
|||||
Net
cash provided by (used in) investing activities
|
735,967
|
(1,500,000
|
)
|
||||
Cash
flow from financing activities
|
|||||||
Issuance
of common stock, net of offering costs
|
-
|
(2,110
|
)
|
||||
Proceeds
from exercise of stock options and warrants
|
39,750
|
135,689
|
|||||
Net
cash provided by financing activities
|
39,750
|
133,579
|
|||||
Net
decrease in cash and cash equivalents
|
(353,381
|
)
|
(2,905,713
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
2,735,940
|
11,069,133
|
|||||
Cash
and cash equivalents, end of period
|
$
|
2,382,559
|
$
|
8,163,420
|
|||
See
notes to consolidated financial
statements.
|
1. |
BASIS
OF PRESENTATION
|
2. |
ACCOUNTING
FOR STOCK BASED COMPENSATION
|
Three Months
|
Three Months
|
||||||
Ended
|
Ended
|
||||||
March 31, 2008
|
March 31, 2007
|
||||||
Research
and development
|
$
|
9,183
|
$
|
24,966
|
|||
General
and administrative
|
292,687
|
273,347
|
|||||
|
|||||||
Stock-based
compensation expense
|
$
|
301,870
|
$
|
298,313
|
|||
Dividend
yield
|
0.00%
|
Risk-free
yields
|
1.35% - 5.02%
|
Expected volatility
|
80% - 103.51%
|
Expected option life
|
1 - 6 years
|
Forfeiture rate
|
6.41%
|
|
|
|
|||||||||||
Weighted Average |
Weighted Average
Remaining |
Total Aggregate |
|||||||||||
Number
of
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Shares
|
Price
|
Life
|
Value
|
||||||||||
Outstanding
at December 31, 2007
|
3,469,841
|
||||||||||||
Granted
|
-
|
$
|
-
|
||||||||||
Exercised
|
(55,000
|
)
|
$
|
0.73
|
|||||||||
Cancelled
|
(5,850
|
)
|
$
|
11.78
|
|||||||||
Outstanding
at March 31, 2008
|
3,408,991
|
$
|
1.40
|
6.94
years
|
$
|
1,410,738
|
|||||||
Vested
or expected to vest at March 31, 2008
|
3,190,475
|
$
|
1.40
|
6.94
years
|
$
|
1,320,310
|
|||||||
Exercisable
at March 31, 2008
|
3,062,590
|
$
|
1.43
|
6.73
years
|
$
|
1,347,537
|
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||
Weighted Average
|
Aggregate
|
Aggregate
|
||||||||||||||||||||
Range of
|
Number
|
Remaining
|
Weighted Average
|
Intrinsic
|
Number
|
Weighted Average
|
Intrinsic
|
|||||||||||||||
Exercise Prices
|
Outstanding
|
Contractual Life
|
Exercise Price
|
Value
|
Exercisable
|
Exercise
Price
|
Value
|
|||||||||||||||
$
.55 - 1.85
|
2,878,090
|
7.52
years
|
$
|
0.87
|
$
|
1,410,738
|
$
|
2,531,689
|
$
|
0.82
|
$
|
1,347,537
|
||||||||||
2.00
- 3.99
|
139,250
|
2.84
years
|
2.83
|
-
|
139,250
|
2.83
|
-
|
|||||||||||||||
4.00
- 5.50
|
373,651
|
4.26
years
|
4.65
|
-
|
373,651
|
4.65
|
-
|
|||||||||||||||
7.00
- 12.00
|
18,000
|
2.18
years
|
8.67
|
-
|
18,000
|
8.67
|
-
|
|||||||||||||||
3,408,991
|
$
|
1.40
|
$
|
1,410,738
|
$
|
3,062,590
|
$
|
1.43
|
$
|
1,347,537
|
FOR THE THREE MONTHS
ENDED MARCH 31,
|
|||||||
2008
|
2007
|
||||||
Net
loss
|
$ |
(1,642,187
|
)
|
$ |
(2,039,309
|
)
|
|
|
|||||||
Weighted
average common shares outstanding used for basic and diluted loss
per share
|
83,094,347
|
80,803,109
|
|||||
Basic
and diluted loss per common share
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
5.
|
DEFERRED
COMPENSATION
|
ITEM 2. |
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Patent
Name
|
Expiration Date
|
|||
Biodegradable
Absorption Enhancers
|
2008
|
|||
Biodegradable
Absorption Enhancers
|
2009
|
|||
Compositions
and Methods for Amelioration of Human Female Sexual
Dysfunction
|
2017
|
|||
Topical
Compositions for PGE1 Delivery
|
2017
|
|||
Topical
Compositions for Non-Steroidal Anti-Inflammatory Drug
Delivery
|
2017
|
|||
Prostaglandin
Compositions & Methods of Treatment for Male Erectile
Dysfunction
|
2017
|
|||
Medicament
Dispenser
|
2019
|
|
||
Crystalline
Salts of dodecyl 2-(N, N-Dimethylamino) *
|
2019
|
|||
Topical
Compositions Containing Prostaglandin E1
|
2019
|
|||
CIP:
Topical Compositions Containing Prostaglandin E1
|
2019
|
|||
Prostaglandin
Composition and Methods of Treatment of Male Erectile
Dysfunction
|
2020
|
|||
CIP:
Prostaglandin Composition and Methods of Treatment of Male Erectile
Dysfunction
|
2020
|
|||
Topical
Stabilized Prostaglandin E Compound Dosage Forms
|
2023
|
ITEM 3. |
QUALITATIVE
AND QUANTITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM 4. |
CONTROLS
AND PROCEDURES
|
ITEM 1. |
LEGAL
PROCEEDINGS
|
ITEM 1A. |
RISK
FACTORS
|
ITEM 2. |
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
31.1
|
Chief
Executive Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Chief
Financial Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Chief
Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 –
furnished only.
|
|
32.2
|
Chief
Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
–
furnished only.
|
NEXMED,
INC.
|
|
Date:
May 8, 2008
|
/s/
Mark Westgate
|
Vice
President and Chief Financial
Officer
|
31.1
|
Chief
Executive Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Chief
Financial Officer’s Certificate, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Chief
Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
–
furnished only.
|
|
32.2
|
Chief
Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
–
furnished only.
|