FILED PURSUANT TO RULES 424(b)(3) AND 424(c) REGISTRATION NO. 333-105509 PROSPECTUS SUPPLEMENT NO. 3 TO PROSPECTUS DATED JUNE 3, 2003 NEXMED, INC. 13,190,422 SHARES COMMON STOCK This prospectus supplement relates to the resale, from time to time of up to 13,190,422 shares of Common Stock of NexMed, Inc., a Nevada corporation, all of which are being offered by the selling shareholders named in the prospectus dated June 3, 2003 or in any amendments or supplements thereto. This prospectus supplement should be read in conjunction with, and may not be delivered or utilized without, the prospectus, including any amendments or supplements thereto. The information in the table appearing under the heading "Selling Shareholders" in the prospectus is amended by adding the information below with respect to a selling shareholder not previously listed in the prospectus, and by deleting the information with respect to the other selling shareholders listed below and replacing such information with the information provided herein. Other than with respect to changes to the Common Stock holdings of the previously listed selling shareholders listed herein to reflect the transfer of warrants to the new selling shareholder, the information with respect to such previously listed selling shareholders reflects holdings as of May 2003. SELLING SHAREHOLDERS PERCENTAGE OF CLASS OWNED BY NUMBER OF PERCENTAGE OF THE SHARES NUMBER OF CLASS TO BE SELLING OF COMMON SHARES OF OWNED BY THE NAME OF SHAREHOLDER STOCK COMMON STOCK SELLING SELLING NUMBER OF SHARES OF BEFORE BEING REGISTERED TO BE OWNED SHAREHOLDER SHAREHOLDER COMMON STOCK OWNED THIS BY THIS AFTER THIS AFTER THIS (1) BEFORE THIS OFFERING OFFERING (3) PROSPECTUS OFFERING OFFERING (7) --- -------------------- ------------ ---------- -------- ------------ BayStar 637,511 (2) 2.11% 828,764 (5) 0 * Capital II, L.P. North Sound 1,692,243 (2) 2.81% 1,948,561 (5) 0 * Legacy Institutional Fund LLC North Sound 1,855,655 (2) 2.74% 2,106,159 (5) 0 * Legacy International Ltd. North Sound 20,053 (17) * 10,997 (5) 0 * Legacy Fund LLC * Less than 1%. (1) Other than Robert C. Ciricilo, who was Vice President-Legal and Business Affairs of the Company from May to December of 2000, and has served since that time as a legal consultant to the Company, neither the selling shareholders nor any of their officers, directors or principal equity holders has held any position or office or has had any material relationship with us within the past three years. (2) Includes shares of Common Stock issuable on conversion of the Preferred Stock and shares of Common Stock issuable on exercise of warrants, which warrants are not exercisable until April 21, 2005. Assumes conversion of Preferred Stock held by the selling shareholders as of May 21, 2003 at a conversion price of $1.5686 per share and exercise of all warrants granted to them. The agreements we entered into with the purchasers of Preferred Stock prohibit each such purchaser from converting Preferred Stock or exercising the warrants issued in connection with the sale of Preferred Stock to the extent that, upon such conversion or exercise, such purchaser's and its affiliates' beneficial ownership of the Company's Common Stock (excluding beneficial ownership of Common Stock by virtue of ownership of certain securities or rights to acquire securities that have similar limitations on the right to convert, exercise or purchase) would exceed 4.95% of the total number of shares of Common Stock of the Company then issued and outstanding. (3) This percentage is calculated using as the numerator, the number of shares of Common Stock included in the prior column and as the denominator, 29,598,556 shares of Common Stock outstanding as of May 21, 2003 plus the number of shares of Common Stock issuable upon the exercise of options, warrants or other convertible securities held by the selling shareholder before this offering. This percentage includes shares of Common Stock issuable on conversion of the Preferred Stock, but excludes shares of Common Stock issuable on exercise of warrants not exercisable within 60 days. (5) Pursuant to the terms of the Investor Rights Agreement dated April 21, 2003 with the purchasers indicated on Schedule 1 thereto, we agreed to register for each such selling shareholder a number of shares of Common Stock equal to 130% of the number of shares issuable upon full conversion of the Preferred Stock (at $1.5686 per share) plus 100% of the number of shares of Common Stock issuable upon the exercise of warrants. (7) This percentage is calculated using as the numerator, the number of shares of Common Stock included in the prior column and as the denominator, 29,598,556 shares of Common Stock outstanding as of May 21, 2003 plus the number of shares of Common Stock issuable upon the exercise of all options, warrants or other convertible securities held by the selling shareholder after this offering, assuming the sale by the selling shareholder of all of its shares covered by this prospectus. (17) Includes shares of Common Stock issuable on exercise of warrants, which warrants are not exercisable until April 21, 2005. --------------------- THE SHARES OFFERED IN THE PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 7 OF THE PROSPECTUS, IN DETERMINING WHETHER TO PURCHASE SHARES OF OUR COMMON STOCK. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THE PROSPECTUS OR THIS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS SUPPLEMENT IS NOVEMBER 18, 2004
