<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
MAY 18, 1999
NEXMED, INC.
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(Exact name of Registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation)
0-22245 87-0449967
--------------------- --------------------
(Commission File No.) (I.R.S. Employer
Identification No.)
350 CORPORATE BOULEVARD, ROBBINSVILLE, NJ 08691
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(Address of Principal Executive Offices) (Zip Code)
(609) 208-9688
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 29, 1999, NexMed International Limited, a British Virgin
Islands company ("NexMed International") and a wholly-owned subsidiary of
NexMed, Inc. (the "Company"), entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") with Vergemont International Limited, a Turks and
Caico Islands company with operations in Hong Kong ("Vergemont"), pursuant to
which Vergemont purchased the total issued and outstanding capital stock of
NexMed Asia Limited ("NexMed Asia"), including its 70% holding in NexMed
Pharmaceuticals (Zhongsham) Ltd., in China (the "Joint Venture") for $4,000,000.
The purchase price consists of $2,000,000 in cash and two promissory notes each
in the amount of $1,000,000, due on November 12, 1999 and June 30, 2000,
respectively. The effectiveness of the Stock Purchase Agreement was conditioned
upon receipt from Vergemont of $2,000,000 in cash. On May 18, 1999, Vergemont
completed its $2,000,000 cash payment to the Company.
In conjunction with the sale of NexMed Asia to Vergemont, NexMed
International and Vergemont entered into a license agreement. Under the terms of
the license agreement, Vergemont, through its ownership of NexMed Asia, has an
exclusive right in China and Asian Pacific countries to manufacture and market
the Company's MED treatment cream and four (4) of the Company's other
proprietary products under development. The Company will receive a royalty on
sales and supply to NexMed Asia on a cost plus basis, the NexACT(R) enhancers
that are essential in the formulation and production of the Company's
proprietary topical treatments. The Company and Vergemont also agreed that in
the 12 months following effectiveness of the Stock Purchase Agreement, Dr.
Joseph Mo, the Company's President and C.E.O., would remain active in the
management of the Joint Venture's operations and the anticipated approval and
launch of the Company's proprietary topical treatment for MED in China and the
Company will be compensated for his time and expenses. In addition, the Company
granted Vergemont warrants to purchase 2,000,000 shares of the Company's Common
Stock exercisable at $2.50 and $3.00 per share, depending on whether the warrant
is exercised before or after June 30, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
<PAGE>
NexMed, Inc.
Pro Forma Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
March 31, 1999 Adjustments March 31, 1999
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 543,820 $ 503,242 B $ 1,047,062
Accounts receivable, net 1,220,325 (1,220,325)C --
Inventories 794,566 (785,668)C 8,898
Due from related party 125,640 (125,640)C --
Prepaid expenses and other assets 181,990 (122,360)C 59,630
------------ -------------- ------------
Total current assets 2,866,341 (1,750,751) 1,115,590
Furniture and equipment, net 2,148,153 (1,959,052)C 189,101
Notes receivable, net of deferred gain on sale -- 114,464 D 114,464
Intangibile assets 172,201 (172,201)C --
------------ -------------- ------------
Total assets $ 5,186,695 $ (3,767,540) $ 1,419,155
============ ============== ============
Liabilities and stockholders' equity
Current liabilities:
Line of credit $ 1,569,999 $ (1,569,999)C --
Notes payable 2,586,876 (29,543)C 2,557,333
Due to joint venture partner 217,441 (217,441)C --
Due to officer 854,812 (854,812)E --
Accounts payable and accrued expenses 2,377,961 (858,071)F 1,519,890
------------ -------------- ------------
Total current liabilities 7,607,089 (3,529,866) 4,077,223
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Minority interest 659,408 (636,685)C 22,723
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Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000
shares authorized, none issued and outstanding -- -- --
Common stock, $.001 par value, 40,000,000
shares authorized, 8,401,703 issued
and outstanding, respectively 8,402 -- 8,402
Additional paid-in capital 10,770,214 445,200 G 11,215,414
Accumulated deficit (13,729,260) -- (13,729,260)
Cumulative translation adjustments 26,217 (46,189)B (19,972)
------------ -------------- ------------
(2,924,427) 399,011 (2,525,416)
Less: deferred compensation (5,375) -- (5,375)
Note receivable - related party (150,000) -- (150,000)
------------ -------------- ------------
Total stockholders' equity (3,079,802) 399,011 (2,680,791)
------------ -------------- ------------
Total liabilities and stockholders' equity $ 5,186,695 $ (3,767,540) $ 1,419,155
============ ============== ============
</TABLE>
<PAGE>
NexMed, Inc.
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
Three Months Ended Pro Forma Three Months Ended
March 31, 1999 Adjustments March 31, 1999
<S> <C> <C> <C>
Revenue
Product sales $ 1,097,767 $ (1,097,767)H $ --
----------- ------------- -----------
Operating expenses
Cost of product sales 1,040,844 (1,040,844)H --
Selling, general and administrative 477,343 (280,096)H 197,247
Research and development 318,960 (16,492)H 302,468
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Total operating expenses 1,837,147 (1,337,432) 499,715
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Loss from operations (739,380) 239,665 (499,715)
Interest income (expense), net (91,034) 32,334 I (58,700)
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Loss before minority interest (830,414) 271,999 (558,415)
Minority interest 61,590 (60,515)H 1,075
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Net loss $ (768,824) $ 211,484 $ (557,340)
=========== ============= ===========
Basic and diluted loss per share $ (0.09) $ (0.07)
=========== ===========
Weighted average common shares outstanding
used for basic and diluted loss per share 8,401,703 8,401,703
=========== ===========
</TABLE>
<PAGE>
NexMed, Inc.
Condensed Consolidated Statement of Operations
<TABLE>
<CAPTION>
Historical Pro Forma
Year Ended Pro Forma Year Ended
December 31, 1998 Adjustments December 31, 1998
<S> <C> <C> <C>
Revenue
Product sales $ 5,709,083 $ (5,709,083)H $ --
License fees -- -- --
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Total revenues 5,709,083 (5,709,083) --
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Operating expenses
Cost of product sales 5,186,308 (5,186,308)H --
Selling, general and administrative 2,635,114 (1,395,675)H 1,239,439
Research and development 2,302,148 (97,340)H 2,204,808
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Total operating expenses 10,123,570 (6,679,323) 3,444,247
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Loss from operations (4,414,487) 970,240 (3,444,247)
Interest income (expense), net (600,337) 148,306 I (452,031)
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Loss before minority interest (5,014,824) 1,118,546 H (3,896,278)
Minority interest 235,822 (233,545)H 2,277
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Net loss $ (4,779,002) $ 885,001 $ (3,894,001)
============ ============= ============
Basic and diluted loss per share $ (0.64) $ (0.52)
============ ============
Weighted average common shares outstanding
used for basic and diluted loss per share 7,505,588 7,505,588
============ ============
</TABLE>
<PAGE>
NexMed, Inc.
Notes to Pro Forma Consolidated Financial Statements
A. On May 18, 1999, NexMed International Limited, a wholly-owned subsidiary of
NexMed, Inc. ("NexMed" or the "Company"), completed the sale of all of the
issued and outstanding shares of capital stock of NexMed Asia Limited
("NexMed Asia"), and warrants to acquire 2,000,000 shares of the Company's
common stock for total consideration of $4,000,000; $2,000,000 in cash and
$2,000,000 in two promissory notes, each in the amount of$1,000,000 due on
November 12, 1999 and June 30, 2000, respectively. The warrants to purchase
shares of the Company's common stock are exercisable at $2.50 and $3.00 per
share, depending on whether the warrant is exercised before or after June
30, 1999. In conjunction with this transaction, the Company has agreed to
pay a consulting firm a 6% commission on the $4,000,000 in proceeds, as
such proceeds are received, and to issue the consulting firm warrants to
acquire 200,000 shares of the Company's common stock at $3.00 per share for
a period of two years.
At March 31, 1999, the Company's basis in the assets and liabilities of
NexMed Asia was approximately $1,400,000. The Company has estimated the
fair value of the warrants issued to the purchaser and the consulting firm
to be approximately $372,000 and $73,000, respectively, resulting in a
preliminary net gain on the transaction of approximately $1,886,000, which
has been deferred due to uncertainty regarding the ultimate realization of
the two promissory notes issued.
B. The pro forma adjustments represent the proceeds of $2,000,000 in cash,
offset by (i) $120,000 payable to the consulting firm, (ii) the planned
repayment of approximately $855,000 due to an officer of the Company and
(iii) the reduction in consolidated cash balances due to cash held by
NexMed Asia.
C. The pro forma adjustments represent the divestiture of the assets and
liabilities of NexMed Asia.
D. The pro forma adjustments represent the receipt of two promissory notes,
each in the principal amount of $1,000,000, offset by the deferred gain on
transaction of approximately $1,886,000.
E. The pro forma adjustment represents the repayment of amounts due to an
officer of the Company from the cash proceeds.
F. The pro forma adjustments represent the reduction in accounts payable and
accrued expenses from the sale of NexMed Asia, offset by an accrual of
$120,000 payable to the consulting firm as the notes receivable are
collected.
G. The pro forma adjustments represent the recording of the estimated fair
value of the warrants issued to the purchaser and consultant.
H. The pro forma adjustments represent the elimination of the activity of
NexMed Asia.
I. The pro forma adjustments to interest expense represent the elimination of
interest expense incurred on debt of NexMed Asia assumed by the buyer, plus
the elimination of interest expense incurred on advances from an officer of
the Company from the proceeds of the transaction.
<PAGE>
(b) Pro Forma Financial Information
On May 18, 1999, NexMed International Limited, a wholly-owned subsidiary of
NexMed, Inc. ("NexMed" or the "Company"), completed the sale of all of the
issued and outstanding shares of capital stock of NexMed Asia Limited (the
"Disposition") to Vergemont International Limited ("Vergemont") for total
consideration of $4,000,000; $2,000,000 in cash and $2,000,000 in two promissory
notes, each in the amount of$1,000,000 due on November 12, 1999 and June 30,
2000, respectively. The warrants to purchase shares of the Company's common
stock are exercisable at $2.50 and $3.00 per share, depending on whether the
warrant is exercised before or after June 30, 1999. The warrants expire on June
30, 2000. In conjunction with this transaction, the Company has agreed to pay a
consulting firm a 6% commission on the $4,000,000 in proceeds, as such proceeds
are received, and to issue the consulting firm warrants to acquire 200,000
shares of the Company's common stock at $3.00 per share for a period of two
years.. Proceeds from the sale were used to repay advances made by an officer of
the Company and for general corporate purposes.
The following unaudited condensed consolidated statement of operations of NexMed
for the three months ended March 31, 1999 and for the year ended December 31,
1998 give effect to the disposition as if such events occurred on January 1,
1998. The unaudited condensed consolidated balance sheet of NexMed as of March
31, 1999 is based upon the historical balance sheets of NexMed and NexMed Asia
Limited and gives effect to the Disposition and related reduction in advances
from an officer as if they had occurred on March 31, 1999.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the audited historical financial statements of NexMed
contained in NexMed's Annual Report on Form 10-KSB dated April 12, 1999 and the
unaudited interim financial statements, including the notes thereto, contained
in NexMed's report on Form 10-QSB dated May 17, 1999. The unaudited pro forma
data is not necessarily indicative of the results of operations or financial
position of NexMed that would have occurred if the pro forma events had been in
effect at the beginning of the earliest period presented, nor are they
necessarily indicative of future results of operations or financial position.
The pro forma adjustments are based upon available information and certain
assumptions set forth herein, included in the notes to the unaudited pro forma
condensed consolidated financial statements.
<PAGE>
Exhibits
Exhibit Document
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20.1 Press Release of NexMed, Inc., dated April 13, 1999.
20.2 Press Release of NexMed, Inc., dated May 18, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXMED, INC.
Date: June 2, 1999 By: /s/ Dr. Joseph Mo
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Dr. Joseph Mo
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit Document
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20.1 Press Release of NexMed, Inc., dated April 13, 1999.
20.2 Press Release of NexMed, Inc., dated May 18, 1999.
<PAGE>
Exhibit 20.1
FOR IMMEDIATE RELEASE
CONTACTS:
Kevin Theiss Vivian Liu
Rubenstein Investor Relations NexMed, Inc.
212-843-8096 609-208-9688
[email protected] [email protected]
NEXMED ANNOUNCES AGREEMENTS FOR THE SALE OF ITS CHINA
MANUFACTURING OPERATIONS AND THE LICENSING OF
ITS PROPRIETARY TOPICAL TREATMENTS FOR ASIA
Robbinsville, NJ, April 13, 1999 -- NexMed, Inc. (OTC BB: NEXM) announced today
that it has entered into an agreement with a Hong Kong based investment group,
pursuant to which NexMed would sell its Asian operations, including the 70%
owned joint venture in China. Pending final completion of the transaction, the
Company would receive total proceeds of $4 million.
Under the terms of the agreement, the purchase price would be paid as $2,000,000
in cash by April 28, 1999, and two promissory notes each for $1,000,000, due on
November 12, 1999 and June 30, 2000, respectively. The Company would grant the
buyer warrants to purchase 2,000,000 shares of the Company's common stock at
$2.50 and $3.00 per share, depending on whether the warrant is exercised before
or after June 30, 1999. The Company would pay a commission of six percent on the
anticipated $4 million in proceeds and warrants to purchase 200,000 shares of
the Company's common stock at $3.00 per share to a local investment consulting
firm. The sale is conditioned on the timely payment of the $2,000,000 in cash by
the buyer, absent of an extension by the Company. Failure to do so would render
the transaction null and void.
In conjunction with the sale, the Company would enter into a license agreement
with the buyer. Under the terms of this agreement, the buyer would have the
exclusive right in China and Asian Pacific countries to manufacture and market
the Company's erectile dysfunction (impotence) treatment cream and four other of
the Company's products under development. The Company would enjoy royalty
payments for 10 years on product sales in the territory, and supply on a cost
plus basis, the essential NexACT enhancers for the formulation and production of
the Company's proprietary topical treatments. During the next 12 months, Dr.
Joseph Mo, the Company's President and C.E.O., would remain active in the
management of the China operations and the Company would be compensated for his
time and expenses. No additional terms were disclosed.
- MORE -
<PAGE>
NEXMED, INC.
PAGE 2
Dr. Mo commented, "This transaction when completed, will substantially reduce
our financial liabilities, and enable us to concentrate our resources on our
U.S. development programs. Initiating and completing Phase II clinical studies
on the Alprox-TD impotence cream in the U.S. has become our primary objective.
The markets in the U.S. and Europe represent a significant share of the
worldwide potential, and NexMed must focus on them for its development and
growth. The Company has generated valuable clinical data in China that is
crucial for the ongoing discussions with potential partners who can assist us in
developing the Alprox-TD cream to its full global potential."
The Company has recently completed in China, Phase III clinical trials on its
topical cream treatment for male erectile dysfunction, and filed in January
1999, a New Drug Application based on an overall 75% efficacy rate with the
China State Drug Administration. As and when approved for sale, the product will
be marketed and distributed in China under the trademark name, Befar.
NexMed, Inc., an emerging international pharmaceutical and medical company, is
developing 1) Alprox-TD and Femprox, topically-applied treatments for male and
female sexual dysfunction; 2) Viratrol, a non-invasive, hand-held device for
treating oral and genital herpes; 3) other topical applications based on the
NexACT transdermal drug delivery system.
ALPROX-TD, FEMPROX, NEXACT, VIRATROL, BEFAR ARE TRADEMARKS OF NEXMED, INC.
STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT: WITH THE
EXCEPTION OF THE HISTORICAL INFORMATION CONTAINED IN THIS RELEASE, THE MATTERS
DESCRIBED HEREIN CONTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE RISK AND
UNCERTAINTIES THAT MAY INDIVIDUALLY OR MUTUALLY IMPACT THE MATTERS HEREIN
DESCRIBED, INCLUDING BUT NOT LIMITED TO PRODUCT DEVELOPMENT AND ACCEPTANCE,
MANUFACTURING, COMPETITION, REGULATORY AND/OR OTHER FACTORS, WHICH ARE OUTSIDE
THE CONTROL OF THE COMPANY.
# # #
<PAGE>
Exhibit 20.2
FOR IMMEDIATE RELEASE
CONTACTS:
Kevin Theiss Vivian Liu
Rubenstein Investor Relations NexMed, Inc.
212-843-8096 609-208-9688
[email protected] [email protected]
NEXMED, INC. REPORTS 1999 FIRST QUARTER FINANCIAL RESULTS
Robbinsville, NJ, May 18, 1999 -- NexMed, Inc. (OTC BB: NEXM) announced today
that revenues for the 1999 first quarter ended March 31, 1999, were $1,097,767.
The first quarter net loss was $(768,824), or $(0.09) per share, compared with a
net loss of $(995,743), or $(0.16) per share, for the same quarter in 1998.
Revenues during the first quarter resulted from product sales of NexMed
Pharmaceuticals (Zhongshan) Limited, a joint-venture pharmaceutical facility in
China.
The Company announced on April 13, 1999, that it entered into an agreement for
the sale of its Asian operations, including the Zhongshan joint-venture, for $4
million. The payments would be made as $2 million in cash and $ 2 million in two
promissory notes, each for $1 million, due on November 12, 1999 and June 30,
2000 respectively. As of today, the Company has received the $2 million in cash,
and agreement is deemed effective. Additional information on this transaction is
contained in the Company's Form 10K-SB report filed on April 12, 1999.
Dr. Joseph Mo, president and chief executive officer, commented, "We have
generated very valuable clinical information from our operations in China and
will maintain a licensing arrangement for the sale of our proprietary products.
But, NexMed's future is in the U.S. and European markets and we are
concentrating our resources on accelerating our U.S. clinical development
program for the Alprox-TD(R) topical cream for treating male erectile
dysfunction (impotence). With the availability of adequate financing, we intend
to initiate U. S. Phase II clinical studies during the summer."
NexMed, Inc., an emerging international pharmaceutical and medical device
company, is developing 1) Alprox-TD(R), a topically-applied treatment for male
erectile dysfunction, 2) FemproxTM, a topically-applied treatment for female
sexual dysfunction and 3) Viratrol(R), a non-invasive, hand-held device for
treating oral and genital herpes.
-- MORE --
<PAGE>
NEXMED, INC.
PAGE 2
NEXMED, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the three months ended March 31,
1999 1998
---- ----
<S> <C> <C>
Revenues from Product Sales $1,097,767 $1,204,670
Net Loss $ (768,824) $ (995,743)
Basic and Diluted Loss Per Share $ (0.09) $ (0.16)
Weighted Average Number
of Shares Outstanding 8,401,703 6,183,320
</TABLE>
Statements under the Private Securities Litigation Reform Act: with the
exception of the historical information contained in this release, the matters
described herein contain forward-looking statements that involve risk and
uncertainties that may individually or mutually impact the matters herein
described, including but not limited to product development and acceptance,
manufacturing, competition, regulatory and/or other factors, which are outside
the control of the Company.
# # #
