As of September 30, 2011, we had $429,000 in cash and cash equivalents. Based on our operating plan, we
expect that our existing cash and cash equivalents will fund our operations only through December 31, 2011.
We will require
significant capital for product development and commercialization in the near term.
The research, development, testing and approval of
our product candidates involve significant expenditures, and, accordingly, we require significant capital to fund such expenditures. Until and unless our operations generate significant revenues and cash flow, we will attempt to continue to fund
operations from cash on hand, license agreements and sale of equity securities. Our long-term liquidity is contingent upon achieving sales and positive cash flows from operating activities, and/or obtaining additional financing. The most likely
sources of financing include private placements of our equity or debt securities or bridge loans to us from third-party lenders, license payments from current and future partners, and royalty payments from sales of approved product candidates by
partners. We can give no assurances that any additional capital that we are able to obtain will be sufficient to meet our needs, or on terms favorable to us.
We have incurred losses since inception and we may continue to incur losses for the foreseeable future. Royalty revenues for products which we license out are dependent upon the
commercialization efforts of our partners, including the sales and marketing efforts of Akrimax relating to NitroMist and HiTech Pharmacal relating to Zolpimist.
We had a loss of $6,425,000 for the nine months ended September 30, 2011 and an accumulated deficit as of September 30, 2011 of approximately $91.9 million and we incurred losses in each of our last
three fiscal years, including net losses of approximately $2,666,000 for the year ended December 31, 2010, $7,577,000 for the year ended December 31, 2009 and $9,586,000 for the year ended December 31, 2008. Additionally, we have
reported negative cash flows from operations of $3,280,000 for the year ended December 31, 2010, $1,578,000 for the year ended December 31, 2009 and $5,533,000 for the year ended December 31, 2008. We anticipate that, even with
our limited research and development activities, we could incur substantial operating expenses in connection with continued research and development, clinical trials, testing and approval of our product candidates, and administrative costs
associated with operating as a SEC registrant. We expect these expenses will result in continuing and, perhaps, significant operating losses until such time, if ever, that we are able to achieve adequate product sales levels.
Our ability to receive royalty revenue from the sale of our products and achieve profitability is dependent on a number of factors, including our ability
to complete the development of our product candidates, obtain the required regulatory approvals and the successful commercialization of our product candidates by us or commercial partners. Our licensees for NitroMist and Zolpimist commercially
launched these products in January 2011. We have not generated significant royalty revenue from the commercial sale of NitroMist and Zolpimist, and do not expect to generate significant royalty revenue from the sale of these approved products in the
future. In addition, we cannot be certain as to when to anticipate commercializing and marketing any of our other product candidates in development, if at all, and cannot be certain whether we will generate any royalty revenue from the sale of
these product candidates in the future.
The uncertainty created by current economic conditions and possible terrorist attacks and
military responses thereto could have a material adverse effect on our ability to sell our products, and to secure additional financing.
Current conditions in the domestic and global economies continue to present challenges. We expect that the future direction of the overall domestic and
global economies will have a significant impact on our overall performance. Fiscal, monetary and regulatory policies worldwide will continue to influence the business climate in which we operate. If these actions are not successful in spurring
continued economic growth, we expect that our business will be negatively impacted, as customers will be less likely to buy our products, if and when we commercialize our products.
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