Form 8-K - Current report

UNITED STATES

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 13, 2024

NEXGEL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-41173	26-4042544
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

2150 Cabot Boulevard West, Suite B

Langhorne, Pennsylvania

19067

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (215) 702-8550

(Former name or former address, if changed since last report)

Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	NXGL	The Nasdaq Capital Market LLC
Warrants to Purchase Common Stock	NXGLW	The Nasdaq Capital Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On May 13, 2024, NexGel, Inc. (the “Company”) issued a press release reporting the Company’s results for the quarter ended March 31, 2024, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

The information in Item 2.02 of this Current Report on Form 8-K, including the information set forth in Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall Exhibit 99.1 filed herewith be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description

99.1		Press release issued May 13, 2024.
104		Cover Page Interactive Data File (formatted as Inline XBRL)

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.

Date: May 13, 2024

	NEXGEL, INC.

	By:	/s/ Adam Levy
		Adam Levy
		Chief Executive Officer

Exhibit 99.1

NEXGEL Reports First Quarter 2024 Revenue of $1.27 Million, an Increase of 104% Year-Over-Year

LANGHORNE, Pa. – May 13, 2024 – NEXGEL, Inc. (“NEXGEL” or the “Company”) (NASDAQ: “NXGL”), a leading provider of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications, today announced its financial results for the first quarter ended March 31, 2024.

Adam Levy, NEXGEL’s Chief Executive Officer, commented, “Following a record year of growth in 2023, I am pleased to report our first quarter financial results that demonstrate steady growth year-over-year and preparedness for significant growth levers we expect in 2024. Revenue for the quarter grew 104% year-over-year driven by growth in both contract manufacturing and consumer branded product business segments of approximately 58% and 178%, respectively. In the first quarter and into the second quarter of this year we are investing for the growth we expect in the back half of this year. We are nearly complete with the capacity expansion of our facility in Texas along with installation of state-of-the art equipment in preparation for product launches with Abbvie and others. Additionally, we expect to launch our first batch of consumer branded products in Europe and are in the final stages of receiving the proper certifications to do so. We have a lot to be excited about regarding our future growth opportunities at NEXGEL.”

First Quarter 2024 Financial Highlights

For the quarter ended March 31, 2024, revenue totaled $1.27 million, an increase of $646,000, or 104%, as compared to $620,000 for the quarter ended March 31, 2023. The increase in revenue was driven by sales growth in contract manufacturing of approximately 58% and branded products of 178%.

Gross profit totaled $277,000 for the three months ended March 31, 2024, compared to a gross profit loss of $57,000 for the three months ended March 31, 2023. The increase of $334,000 in gross profit year-over-year was primarily due to the increase in consumer branded products.

Gross profit margin for the first quarter of 2024 was 21.9% compared to a negative gross margin for the first quarter of 2023 of 9.2% and a gross profit margin of 14.6% in the fourth quarter of 2023.

Cost of revenues increased by $312,000, or 46.1%, to $989,000 for the three months ended March 31, 2024, as compared to $677,000 for the three months ended March 31, 2023. The increase in cost of revenues is primarily aligned with the new product line growth and an increase in compensation and benefits with the increase in revenue growth.

Selling, general and administrative expenses increased by $349,000 or 43.8%, to $1.1 million for the three months ended March 31, 2024, as compared to $797,000 for the three months ended March 31, 2023. The increase in selling, general and administrative expenses is primarily attributable to an increase in advertising, marketing and Amazon fees, professional and consulting fees, and of compensation and benefits expense.

Research and development expenses decreased by $27,000 to $2,000 for the three months ended March 31, 2024, from $29,000 for the three months ended March 31, 2023.

Net loss for the three months ended March 31, 2024, was $905,000 as compared to a net loss of 807,000 in the three months ended March 31, 2023.

As of March 31, 2024, the Company had a cash balance of $2.4 million, which includes an approximate $1 million registered direct offering led by insiders. During the quarter, there was a net usage of cash for investment due to several non-recurring key strategic investments and acquisition costs.

As of March 31, 2024, NEXGEL had 6,227,624 shares of common stock outstanding.

First Quarter 2024 Financial Results Conference Call

Date: May 13, 2024

Time: 4:30 P.M. ET

Live Call: + 1-800-343-5419 (U.S. Toll Free) or + 1-203-518-9731 (International)

Webcast: Events and Presentations

For interested individuals unable to join the conference call, a replay will be available through May 27, 2024, by dialing + 1-844-512-2921 (U.S. Toll Free) or + 1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 11155952. An archived version of the webcast will also be available for 90 days.

About NEXGEL, INC.

NEXGEL is a leading provider of healthcare, beauty, and over-the-counter (OTC) products including ultra-gentle, high-water-content hydrogels. Based in Langhorne, Pa., the Company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades. NEXGEL brands include Silverseal, Hexagels, Turfguard, Kenkoderm, and Dermablock. Additionally, NEXGEL has strategic contract manufacturing relationships with leading consumer healthcare companies.

Forward-Looking Statement

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “prospects,” “outlook,” and similar words or expressions, or future or conditional verbs, such as “will,” “should,” “would,” “may,” and “could,” are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance, or achievements to be materially different from any anticipated results, performance, or achievements for many reasons. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company’s forward-looking statements, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, including but not limited to the discussion under “Risk Factors” therein, which the Company filed with the SEC and which may be viewed at http://www.sec.gov/.

Investor Contacts:

Valter Pinto, Managing Director

KCSA Strategic Communications

212.896.1254

valter@kcsa.com

NEXGEL, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2024 AND DECEMBER 31, 2023

(Unaudited)

(in thousands, except share and per share data)

	March 31, 2024			December 31, 2023
ASSETS:
Current Assets:
Cash	$	2,419		$	2,700
Accounts receivable, net		739			633
Inventory		1,369			1,319
Prepaid expenses and other current assets		336			400
Total current assets		4,863			5,052
Goodwill		1,128			1,128
Intangibles, net		302			326
Property and equipment, net		2,194			1,499
Operating lease - right of use asset		1,803			1,855
Other assets		95			95
Total assets	$	10,385		$	9,955

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,053		$	1,233
Accrued expenses and other current liabilities		111			398
Deferred revenue		250			20
Current portion of note payable		87			80
Warrant liability		255			146
Contingent consideration liability		439			439
Financing lease liability, current portion		55			-
Operating lease liabilities, current portion		233			233
Total current liabilities		2,483			2,549
Operating lease liabilities, net of current portion		1,682			1,727
Financing lease liability, net of current portion		352			-
Notes payable, net of current portion		663			513
Total liabilities		5,180			4,789

Commitments and Contingencies (Note 15)		-			-

Preferred stock, par value $0.001 per share, 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, par value $0.001 per share, 25,000,000 shares authorized; 6,227,624 and 5,741,838 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		6			6
Additional paid-in capital		20,350			19,406
Accumulated deficit		(15,568	)		(14,715	)
Total NexGel stockholders’ equity		4,788			4,697
Non-controlling interest in joint venture		417			469
Total stockholders’ equity		5,205			5,166
Total liabilities and stockholders’ equity	$	10,385		$	9,955

NEXGEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)

(in thousands, except share and per share data)

	Three months ended
	March 31,
	2024			2023
Revenues, net	$	1,266		$	620

Cost of revenues		989			677

Gross margin (loss)		277			(57	)

Operating expenses
Research and development		2			29
Selling, general and administrative		1,146			797
Total operating expenses		1,148			826

Loss from operations		(871	)		(883	)

Other income (expense)
Interest income (expense), net		(15	)		(1	)
Changes in fair value of warrant liability and warrant modification expense		(53	)		66
Gain on investment in marketable securities		34			7
Other income		—			4
Total other income (expense), net		(34	)		76
Loss before income taxes		(905	)		(807	)
Income tax expense		—			—
Net loss		(905	)		(807	)
Less: Income (loss) attributable to non-controlling interest in joint venture		(52	)		7
Net loss attributable to NexGel stockholders	$	(853	)	$	(814	)
Net loss per common share - basic	$	(0.14	)	$	(0.15	)
Net loss per common share - diluted	$	(0.14	)	$	(0.15	)
Weighted average shares used in computing net loss per common share - basic		5,982,062			5,586,326
Weighted average shares used in computing net loss per common share – diluted		5,982,062			5,586,326

NEXGEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)

(in thousands)

	Three Months Ended March 31,
	2024			2023
Operating Activities
Net loss	$	(853	)	$	(814	)
Adjustments to reconcile net loss to net cash used in operating activities:
Income (loss) attributable to non-controlling interest in joint venture		(52	)		7
Depreciation and amortization		62			31
Share-based compensation and restricted stock vesting		54			24
Gain on investment in marketable securities		(34	)		7
Changes in fair value of warrant liability		53			(66	)
Amortization of right of use asset		52			49

Changes in operating assets and liabilities:
Accounts receivable		(106	)		(158	)
Inventory		(50	)		(466	)
Prepaid expenses and other assets		64			11
Accounts payable		(180	)		722
Accrued expenses and other current liabilities		(287	)		(18	)
Deferred revenue		230			—
Operating lease liability		(45	)		(38	)
Net Cash Used in Operating Activities		(1,092	)		(709	)

Investing Activities
Proceeds from sales of marketable securities		34			485
Capital expenditures		(152	)		(88	)
Net Cash Provided by (Used in) Investing Activities		(118	)		397

Financing Activities
Proceeds from rights offering, net of expenses		946			—
Principal payment on financing lease liability		(9	)		—
Principal payments of notes payable		(8	)		(2	)
Net Cash Provided by (Used in) Financing Activities		929			(2	)
Net Decrease in Cash		(281	)		(314	)
Cash – Beginning of period		2,700			1,101
Cash – End of period	$	2,419		$	787
Supplemental Disclosure of Cash Flows Information
Cash paid during the year for:
Interest	$	10		$	—
Taxes	$	—		$	—

Supplemental Non-cash Investing and Financing activities
Property and equipment financed under notes payable	$	165		$	—
Property and equipment financed under financing leases	$	416		$	—
Property and equipment contributed as capital investment to JV	$	—		$	500
ROU asset and operating lease liabilities recognized upon consolidation of JV	$	—		$	334

Cover	May 13, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 13, 2024
Entity File Number	001-41173
Entity Registrant Name	NEXGEL, INC.
Entity Central Index Key	0001468929
Entity Tax Identification Number	26-4042544
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2150 Cabot Boulevard West
Entity Address, Address Line Two	Suite B
Entity Address, City or Town	Langhorne
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19067
City Area Code	(215)
Local Phone Number	702-8550
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common Stock, par value $0.001
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	NXGL
Security Exchange Name	NASDAQ
Warrants to Purchase Common Stock
Title of 12(b) Security	Warrants to Purchase Common Stock
Trading Symbol	NXGLW
Security Exchange Name	NASDAQ