##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE OF 1934
 For the quarterly period ended June 30, 2009
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from  to
 Commission file number: 000-52998
 Transdel
Pharmaceuticals, Inc.
  Delaware
    
    45-0567010(State or Other Jurisdiction of Incorporation 
or Organization)
    
    (I.R.S. Employer Identification No.)4225 Executive Square, Suite 485
La Jolla, CA
    
    92037(Address of Principal Executive Offices)
    
    (Zip Code)
 
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filero
    
    Non-accelerated filero
(Do not check if a smaller reporting company)
    
    Smaller reporting companyþ
 o þ




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##### 



TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 Table of Contents
 PagePart I
    
    FINANCIAL INFORMATION
    
    
    2Item 1.
    
    Financial Statements
    
    
    2Condensed
Consolidated Balance Sheets  June 30, 2009 (Unaudited) and December 31, 2008
    
    
    2Unaudited Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2009 and 2008
    
    
    3Unaudited Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2009 and 2008
    
    
    4Notes to the Unaudited Condensed Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 4T.
    
    Controls and Procedures
    
    
    17Part II
    
    OTHER INFORMATION
    
    
    19Item 1A.
    
    Risk Factors
    
    
    19Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 6.
    
    Exhibits
    
    
    27EX-31.1EX-31.2EX-32.1
  1




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,902,221
    
    
    $
    5,111,031Prepaid consulting fees
    
    
    
    
    
    
    29,048Prepaid expenses and other current assets
    
    
    71,144
    
    
    
    193,306Total current assets
    
    
    2,973,365
    
    
    
    5,333,385Equipment, net
    
    
    1,922
    
    
    
    2,450Total assets
    
    $
    2,975,287
    
    
    $
    5,335,835LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    603,061
    
    
    $
    556,390Accrued Phase 3 expenses
    
    
    375,817
    
    
    
    141,952Accrued expenses and payroll liabilities
    
    
    49,640
    
    
    
    65,651Total liabilities
    
    
    1,028,518
    
    
    
    763,993Stockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 50,000,000 shares authorized, 15,602,061 and
15,556,283 shares issued and outstanding as of June 30, 2009 and December 31,
2008, respectively
    
    
    15,602
    
    
    
    15,556Additional paid-in capital
    
    
    15,162,364
    
    
    
    14,938,219Deficit accumulated during the development stage
    
    
    (13,231,197
    )
    
    
    (10,381,933
    )Total stockholders equity
    
    
    1,946,769
    
    
    
    4,571,842Total liabilities and stockholders equity
    
    $
    2,975,287
    
    
    $
    5,335,835
 See accompanying notes to these unaudited condensed consolidated financial statements.
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For thePeriod FromJuly 24, 1998(Inception)ThroughThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009Operating expenses:Selling, general and administrative
    
    $
    347,850
    
    
    $
    562,324
    
    
    $
    829,324
    
    
    $
    1,010,179
    
    
    $
    5,668,636Research and development
    
    
    882,443
    
    
    
    718,083
    
    
    
    2,028,994
    
    
    
    937,183
    
    
    
    6,577,403Operating loss
    
    
    1,230,293
    
    
    
    1,280,407
    
    
    
    2,858,318
    
    
    
    1,947,362
    
    
    
    12,246,039Other income (expense):Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,575,755
    )Interest income
    
    
    2,265
    
    
    
    17,094
    
    
    
    9,054
    
    
    
    36,328
    
    
    
    125,683Gain on forgiveness of liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,914Gain on settlement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,000
    
    
    
    375,000Total other income (expense), net
    
    
    2,265
    
    
    
    17,094
    
    
    
    9,054
    
    
    
    411,328
    
    
    
    (985,158
    )Net loss
    
    $
    (1,228,028
    )
    
    $
    (1,263,313
    )
    
    $
    (2,849,264
    )
    
    $
    (1,536,034
    )
    
    $
    (13,231,197
    )Basic and diluted loss per common share
    
    $
    (0.08
    )
    
    $
    (0.09
    )
    
    $
    (0.18
    )
    
    
    (0.11
    )Weighted average common shares outstanding
    
    
    15,602,061
    
    
    
    14,643,436
    
    
    
    15,583,472
    
    
    
    14,143,936
 See accompanying notes to these unaudited condensed consolidated financial statements.
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The PeriodFrom July 24,1998(Inception)ThroughSix Months Ended June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (2,849,264
    )
    
    $
    (1,536,034
    )
    
    $
    (13,231,197
    )Adjustments to reconcile net loss to net cash used in operating activities:Estimated fair value of contributed services
    
    
    
    
    
    
    
    
    
    
    2,475,000Gain on forgiveness of liabilities
    
    
    
    
    
    
    
    
    
    
    (89,914
    )Amortization of prepaid consulting fees
    
    
    29,048
    
    
    
    303,807
    
    
    
    572,008Depreciation
    
    
    528
    
    
    
    176
    
    
    
    1,232Non-cash interest on notes payable
    
    
    
    
    
    
    
    
    
    
    1,575,755Stock-based compensation
    
    
    224,190
    
    
    
    412,089
    
    
    
    971,154Changes in operating assets and liabilities:Prepaid consulting costs
    
    
    
    
    
    
    
    
    
    
    (140,000
    )Prepaid expenses and other current assets
    
    
    122,162
    
    
    
    (146,456
    )
    
    
    (71,144
    )Accounts payable
    
    
    46,672
    
    
    
    183,076
    
    
    
    692,975Accrued Phase 3 expenses
    
    
    233,865
    
    
    
    (138,007
    )
    
    
    375,817Accrued expenses and payroll liabilities
    
    
    (16,011
    )
    
    
    (12,538
    )
    
    
    49,640Net cash used in operating activities
    
    
    (2,208,810
    )
    
    
    (933,887
    )
    
    
    (6,818,674
    )Cash flows from investing activities:Purchase of fixed assets
    
    
    
    
    
    
    (3,154
    )
    
    
    (3,154
    )Net cash used in investing activities
    
    
    
    
    
    
    (3,154
    )
    
    
    (3,154
    )Cash flows from financing activities:Proceeds from notes payable to stockholders
    
    
    
    
    
    
    
    
    
    
    226,300Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    1,500,000Capital contributions
    
    
    
    
    
    
    
    
    
    
    168,707Net proceeds from purchase of common stock and exercise of warrants and
stock options
    
    
    
    
    
    
    
    
    
    
    49,950Net proceeds from Private Placements
    
    
    
    
    
    
    3,941,301
    
    
    
    7,779,092Net cash provided by financing activities
    
    
    
    
    
    
    3,941,301
    
    
    
    9,724,049Net change in cash and cash equivalents
    
    
    (2,208,810
    )
    
    
    3,004,260
    
    
    
    2,902,221Cash and cash equivalents, beginning of period
    
    
    5,111,031
    
    
    
    3,706,369
    
    
    
    Cash and cash equivalents, end of period
    
    $
    2,902,221
    
    
    $
    6,710,629
    
    
    $
    2,902,221Supplemental disclosure of cash flow information:Issuance of and adjustment to common stock and warrants to consulting firms
for prepaid consulting fees
    
    $
    
    
    
    $
    (46,190
    )
    
    $
    432,007Conversion of notes payable and accrued interest into common stock
    
    $
    
    
    
    $
    
    
    
    $
    1,530,177Forgiveness of notes payable and accrued interest to shareholders
    
    $
    
    
    
    $
    
    
    
    $
    241,701Conversion of advances to notes payable to shareholders
    
    $
    
    
    
    $
    
    
    
    $
    196,300
 See accompanying notes to these unaudited condensed consolidated financial statements.
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Business Description
 ®
 Note 2. Basis of Presentation
  Note 3. Merger with Public Company and Reorganization
    Note 4. Summary of Significant Accounting Policies
 Development Stage Enterprise. Accounting and Reporting by Development Stage
Enterprises
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Summary of Significant Accounting Policies (continued)
 ® ®
 Research and Development.
 Cash and Cash Equivalents
 Concentrations of Credit Risk.
 Computer Equipment.
 Fair Value of Financial Instruments.
 Revenue Recognition. Revenue Recognition
  Stock-Based Compensation. Share-Based Payment
 6




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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Summary of Significant Accounting Policies (continued)
 Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services Accounting Recognition for
Certain Transactions Involving Equity Instruments Granted to Other Than Employees.
 Basic and Diluted Loss per Common Share Earnings Per Share Computation of Earnings Per Share
  Use of Estimates.
 Reclassification.
 Note 5. Stockholders Equity
     7




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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 5. Stockholders Equity (continued)
     Note 6. Stock Option Plan
   8




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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 6. Stock Option Plan (continued)
  Weighted
    
    
    WeightedAve.
    
    
    Ave.Number
    
    
    Exercise
    
    
    Remaining
    
    
    Aggregateof Shares
    
    
    Price
    
    
    Contractual Life
    
    
    Intrinsic ValueOutstanding
 January 1, 2009
    
    
    1,085,000
    
    
    $
    1.63Granted
    
    
    405,000
    
    
    
    1.60Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Cancelled
    
    
    (50,000
    )
    
    
    2.00Outstanding
 June 30, 2009
    
    
    1,440,000
    
    
    $
    1.61
    
    
    
    9.1
    
    
    $
    209,000Exercisable
 June 30, 2009
    
    
    439,833
    
    
    $
    1.79
    
    
    
    8.6
    
    
    $
    46,550Vested and
expected to vest  June 30, 2009
    
    
    1,381,500
    
    
    $
    1.63
    
    
    
    9.1
    
    
    $
    190,450
  Share-Based Payment,
   9




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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 6. Stock Option Plans (continued)
       Note 7. Stock Warrants
   Number ofShares
    
    
    Weighted-Subject to
    
    
    AverageWarrants
    
    
    ExerciseOutstanding
    
    
    PriceWarrants
outstanding  January 1, 2009
    
    
    802,730
    
    
    $
    4.10Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Warrants
outstanding and exercisable  June 30, 2009
    
    
    802,730
    
    
    $
    4.10Weighted average remaining contractual life of the
outstanding warrants  June 30, 2009
    
    3.31 years
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 8. Recent Accounting Pronouncements
  FASB Accounting Standards
Codification  The
Hierarchy of Generally Accepted Accounting Principles FASB Accounting Standard
Codification 
 Subsequent Events
  Note 9. Commitments and Contingencies
 Indemnities and Guarantees
  Cato Research Ltd. Agreement
 ® ®
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TRANSDEL PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 9. Commitments and Contingencies (Continued)
 Cosmetic Products Consulting Agreement
  Cosmeceutical License Agreement
  Note 10. Related Party Transaction
 Mediation Settlement
  12




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
 ®
  Plan of Operations
 ®
 Clinical Program for Ketotransdel®
 ® ®
 ® ® ® ®
 Cosmeceutical/Cosmetic Product Development Program
 TM
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Other Product Development Programs
 ®
 Results of Operations
 Selling, General and Administrative Expenses
   Three months ended
    
    
    
    
    
    Six months endedJune 30,
    
    $
    
    June 30,
    
    $2009
    
    2008
    
    Variance
    
    2009
    
    2008
    
    VarianceSelling, general
and administrative
    
    $
    347,850
    
    
    $
    562,324
    
    
    
    ($214,474
    )
    
    $
    829,324
    
    
    $
    1,010,179
    
    
    
    ($180,855
    )
  
    
    The primary reason for the decrease in investor relations expenses was due the
amortization expense of approximately $165,000 realized in the second quarter of 2008
related to the value of stock-based compensation for stock and warrants previously issued
to investor relations firms. The decrease in legal fees of approximately $75,000 is due to
a lower amount of legal activity and related expense during the current period in
comparison to the same period last year.
    
    The increase in personnel expenses of approximately $22,000 is due an increase in wages
and additional stock-based compensation granted to employees and board members in the
fourth quarter of 2008 and during the current period. Insurance costs increased by
approximately $15,000 due primarily to the amortization of two product liability policies
that we obtained in the latter part of the second quarter 2008 and in the fourth quarter of
2008 for our Phase 3 clinical trial and our cosmeceutical products.
  
    
    The primary reason for the decrease in investor relations expense was due the lower
amount of amortization expense of approximately $225,000, related to the value of
stock-based compensation for stock and warrants previously issued to investor relations
firms as well as a decrease in the current period of approximately $35,000 related to other
investor relations costs. The decrease in legal fees of approximately $90,000 is due to a
lower amount of legal activity and related expense during the current period in comparison
to the same period last year.
    
    The increase in personnel expenses of approximately $55,000 is due to an increase in
wages and additional stock-based compensation granted to employees and board members in the
second and fourth quarters of 2008 and during the current period. Consulting expenses
increased by approximately $60,000 primarily related to stock-based compensation and
monthly fees for business development consulting services. Insurance costs increased by
approximately $40,000 due primarily to the amortization of two product liability policies
that we obtained in the latter part of the second quarter 2008 and in the fourth quarter of
2008 for our Phase 3 clinical trial and our cosmeceutical products.
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Research and Development Expenses
   Three months ended
    
    
    
    
    
    Six months endedJune 30,
    
    $
    
    June 30,
    
    $2009
    
    2008
    
    Variance
    
    2009
    
    2008
    
    VarianceResearch and development
    
    $
    882,443
    
    
    $
    718,083
    
    
    $
    164,360
    
    
    $
    2,028,994
    
    
    $
    937,183
    
    
    $
    1,091,811
  
    
    During the current period, we recognized expenses of approximately $645,000 related to
the current Phase 3 study. This expense was primarily related to fees incurred by our
contract research organization for their services provided in conducting the study as well
as investigator payments owed to the clinical sites for the patients they enrolled in the
study.
    
    The decrease in personnel expenses of approximately $245,000 was primarily related to
stock-based compensation and wages of former employees recognized in the second quarter of
2008. Also, during the same period in the prior year, we recognized approximately $230,000
of expenses related to contract manufacturing activities, non-clinical studies and
consulting for the Phase 3 clinical program which were not incurred in the current period.
  
    
    During the current period, we recognized expenses of approximately $1.8 million related
to the current Phase 3 study. This expense was primarily related to fees incurred by our
contract research organization for their services provided in conducting the study as well
as investigator payments owed to the clinical sites for the patients they enrolled in the
study.
 
    
    The decrease in personnel expenses of approximately $370,000 was primarily related to
stock-based compensation and wages of former employees recognized in the prior year. Also,
during the same period in the prior year, we recognized approximately $320,000 of expenses
related to contract manufacturing activities and non-clinical studies for the Phase 3
clinical program which were not incurred in the current period.
 Interest Income
  Gain on Settlement
  Liquidity and Capital Resources
  15




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®
   Critical Accounting Policies
    Stock-Based Compensation. Share-Based Payment
 16




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Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services Accounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees.
 Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 FASB Accounting Standards
Codification  The
Hierarchy of Generally Accepted Accounting Principles FASB Accounting Standard
Codification 
 Subsequent Events
  
 Item 4T.
    
    Controls and Procedures.
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
   17




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Changes in Internal Control Over Financial Reporting
  18




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PART II
OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
 You should consider carefully the following information about the risks described below,
together with the other information contained in this quarterly report on Form 10-Q and in our
other filings with the Securities and Exchange Commission, before you decide to buy or maintain an
investment in our common stock. We believe the risks described below are the risks that are
material to us as of the date of this quarterly report. If any of the following risks actually
occur, our business financial condition, results of operations and future growth prospects would
likely be materially and adversely affected. In these circumstances, the market price of our common
stock could decline, and you may lose all or part of the money you paid to buy our common stock.
The risk factors set forth below with an asterisk (*) next to the title are new risk factors or
risk factors containing changes, including any material changes from the risk factors set forth in
our annual report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the
Securities and Exchange Commission on March 26, 2009.
 Risks Relating to Our Business
 *We have incurred losses in the research and development of Ketotransdel® and our Transdel
technology since inception. No assurance can be given that we will ever generate revenue or become
profitable.
  ® ® ®
 *We will need additional financing to execute our business plan and fund our operations, which
additional financing may not be available on a timely basis, or at all.
 ® ® ®
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®
 Timing and results of clinical trials to demonstrate the safety and efficacy of products as
well as FDA approval of products are uncertain.
   If we fail to comply with continuing federal, state and foreign regulations, we could lose our
approvals to market drugs and our business would be seriously harmed.
  
    
    issue warning letters;
    
    impose civil or criminal penalties;
    
    suspend or withdraw our regulatory approval;
    
    suspend or terminate any of our ongoing clinical trials;
    
    refuse to approve pending applications or supplements to approved applications filed by us;
    
    impose restrictions on our operations;
    
    close the facilities of our contract manufacturers; or
    
    seize or detain products or require a product recall.
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Delays in the conduct or completion of our clinical and non-clinical trials or the analysis of
the data from our clinical or non-clinical trials may result in delays in our planned filings for
regulatory approvals, and may adversely affect our business.
  
    
    failure of the FDA to approve the scope or design of our clinical
or non-clinical trials or manufacturing plans;
    
    delays in enrolling volunteers in clinical trials;
    
    insufficient supply or deficient quality of materials necessary
for the performance of clinical or non-clinical trials;
    
    negative results of clinical or non-clinical studies; and
    
    adverse side effects experienced by study participants in clinical
trials relating to a specific product.
  None of our pharmaceutical product candidates, other than Ketotransdel®, have commenced
clinical trials.
 ®
 Once approved, there is no guarantee that the market will accept our products, and regulatory
requirements could limit the commercial usage of our products.
  We may be subject to product liability claims.
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If our patents are determined to be unenforceable, or if we are unable to obtain new patents
based on current patent applications or for future inventions, we may not be able to prevent others
from using our intellectual property.
  The use of our technologies could potentially conflict with the rights of others.
  We will be dependent on outside manufacturers in the event that we successfully develop our
product candidates into commercial products; therefore, we will have limited control of the
manufacturing process, access to raw materials, timing for delivery of finished products and costs.
One manufacturer may constitute the sole source of one or more of our products.
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We are dependent on third parties to conduct clinical trials and non-clinical studies of our
drug candidates and to provide services for certain core aspects of our business. Any interruption
or failure by these third parties to meet their obligations pursuant to various agreements with us
could have a material adverse effect on our business, results of operations and financial
condition.
  *Our cosmetic/cosmeceutical product development program may not be successful.
 TM
 We currently have no internal sales and marketing resources and may have to rely on third
parties in the event that we successfully commercialize our product.
  If we are unable to retain our key personnel or attract additional professional staff, we may
be unable to maintain or expand our business.
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Risks Relating to Our Industry
 If we are unable to compete with other companies that develop rival products to our products,
then we may never gain market share or achieve profitability.
  We may not be able to keep up with the rapid technological change in the biotechnology and
pharmaceutical industries, which could make our products obsolete and reduce our potential
revenues.
  Our ability to generate revenues will be diminished if we fail to obtain acceptable prices or
an adequate level of reimbursement from third-party payors.
   Changes in the healthcare industry that are beyond our control may be detrimental to our
business.
  Risks Relating to the Common Stock
 *We are subject to financial reporting and other requirements for which our accounting and
other management systems and resources may not be adequately prepared.
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If we fail to maintain an effective system of internal control, we may not be able to report
our financial results accurately or to prevent fraud. Any inability to report and file our
financial results accurately and timely could harm our business and adversely impact the trading
price of our common stock.
  Public company compliance may make it more difficult to attract and retain officers and
directors.
  Our stock price may be volatile.
  
    
    changes in the pharmaceutical industry and markets;
    
    competitive pricing pressures;
    
    our ability to obtain working capital financing;
    
    new competitors in our market;
    
    additions or departures of key personnel;
    
    limited public float in the hands of a small number of persons
whose sales or lack of sales could result in positive or negative
pricing pressure on the market price for our common stock;
    
    sales of our common stock;
    
    our ability to execute our business plan;
    
    operating results that fall below expectations;
    
    loss of any strategic relationship with our contract manufacturers
and clinical and non-clinical research organizations;
    
    industry or regulatory developments;
    
    economic and other external factors; and
    
    period-to-period fluctuations in our financial results.
  We have not paid dividends in the past and do not expect to pay dividends in the future. Any
return on investment may be limited to the value of our common stock.
  25




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Our common stock may be deemed a penny stock, which would make it more difficult for our
investors to sell their shares.
   Offers or availability for sale of a substantial number of shares of our common stock may
cause the price of our common stock to decline.
  Our directors and executive officers can exert significant control over our business and
affairs and may have actual or potential interests that may depart from those of our other
stockholders.
  
    
    the election of our directors;
    
    amendment of our Certificate of Incorporation or By-laws; and
    
    mergers, sales of assets or other corporate transactions.
  Raising additional funds by issuing securities or through collaboration and licensing
arrangements may cause dilution to existing stockholders, restrict operations or require us to
relinquish proprietary rights.
  26




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Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 6.
    
    Exhibits
 ExhibitNumber
    
    Description31.1*
    
    Section 302 Certification of Principal Executive Officer31.2*
    
    Section 302 Certification of Principal Financial Officer32.1*
    
    Section 906 Certification of Principal Executive Officer and Principal Financial Officer
 
 *
    
    Filed herewith. 27




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SIGNATURES
  Transdel Pharmaceuticals, Inc.Dated: August 11, 2009
    By:
    /s/ Juliet SinghJuliet Singh, Ph.D.Chief Executive Officer
(Principal Executive Officer) 28




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EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1*
    
    Section 302 Certification of Principal Executive Officer31.2*
    
    Section 302 Certification of Principal Financial Officer32.1*
    
    Section 906 Certification of Principal Executive Officer and Principal Financial Officer
 
 *
    
    Filed herewith. 29