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 second quarter ended June 30, 2022.
Adam Levy, NEXGEL Chief Executive Officer,
commented, “During the second quarter of 2022, we successfully
continued to grow revenue year-over-year. I am particularly pleased
with our ability to generate positive gross profit during the
quarter and, from an operating perspective, we increased our
investment in R&D for the long-term growth opportunities of the
business. Our growth is attributable to our branded products and
contract manufacturing segments. Within the branded product
segment, we are focused on expanding our hydrogel line and recently
introduced our 11th product in July, MEDAGEL Pro Pads. We also saw
increased demand within our contract manufacturing business, which
continues to advance as a result of sustained use in our customers'
line extensions. We are moving forward with our plan to advance
NEXDrape, our first potential medical device product, and expect
clinical data before the end of the year. As of June 30, 2022, we
had $9.7 million of cash and cash equivalents, including our
investment in treasuries of $5.4 million, which we believe provides
us with a very comfortable balance sheet to continue our planned
year-over-year growth the foreseeable future and invest in the
business.”
Second Quarter
2022 Financial
HighlightsRevenue for the three months ended June
30, 2022 was $561 thousand, an increase of 35%, when compared to
$417 thousand for the three months ended June 30, 2021, and a
sequential increase of 42% as compared to $396 thousand for the
first quarter ended March 30, 2022. The increase in our overall
revenue was due to sales growth of new products as well as our
initiatives in branded consumer products.
Gross profit was $101 thousand, yielding a 18%
gross profit margin, for the three months ended June 30, 2022, as
compared to a gross profit of $4 thousand for the three months
ended June 30, 2021.
Cost of revenues was $460 thousand for the three
months ended June 30, 2022, as compared to $413 thousand for the
three months ended June 30, 2021. The increase in cost of revenues
is primarily aligned with the increase in revenues in the current
year.
Operating expenses, including R&D and
SG&A expenses, increased by $262 thousand to $819 thousand for
the three months ended June 30, 2022, as compared to $557 thousand
for the three months June 30, 2021. During the quarter R&D
totaled $111 thousand as compared to $10 thousand during the second
quarter of 2021 and $24 thousand during the first quarter of 2022.
The increase in SG&A expenses is primarily attributable to
increases in compensation and benefits and costs for professional
fees and other administrative expenses associated with public
company governance requirements.
As of June 30, 2022, NEXGEL had $9.7 million of
cash and cash equivalents, which includes an investment in
treasuries of $5.4 million.
Second Quarter 2022
Operational HighlightsLaunched MEDAGEL Hydroliner Pro
Pads. The MEDAGEL Pro Pads are for protecting eyelashes during
cosmetic extension and lift and tint services. These under-eye pads
provide powerful, yet skin-friendly adhesion aimed at isolating the
lower lashes.
Conference Call
DetailsManagement will host a conference call and webcast
today at 4:30 p.m. Eastern Time to discuss its quarterly
operational and financial results for the second quarter 2022.
NEXGEL Second Quarter 2022 Results
Conference CallDate: August 10,
2022Time: 4:30 P.M. ETLive Call:
+1-877-407-9208 (U.S. Toll Free) or +1-201-493-6784
(International)Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1562627&tp_key=63fb56d71d
For interested individuals unable to join the
conference call, a replay will be available through August 17,
2022, at +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: 13732071. An archived version of the
webcast will also be available on NEXGEL’s Investor Relations site:
https://ir.nexgel.com/.
About NEXGEL, INC.NEXGEL is a
leading provider of ultra-gentle, high-water-content hydrogels for
healthcare and consumer applications. Based in Langhorne, Pa., the
Company has developed and manufactured electron-beam, cross-linked
hydrogels for over two decades. NEXGEL has formulated more than 200
different combinations to bring natural ingredients to gentle skin
patches that can be worn for long periods of time with little to no
irritation.
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 including the impact of the COVID-19
pandemic. 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, 2021, 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 DirectorKCSA Strategic
Communications212.896.1254valter@kcsa.com
Media
Contacts:Caitlin
Kasunich / Raquel ConaKCSA Strategic Communications212.896.1241 /
516.779.2630ckasunich@kcsa.com / rcona@kcsa.com
NEXGEL, INCCONDENSED
CONSOLIDATED BALANCE SHEETSAS OF JUNE 30, 2022 AND
DECEMBER 31, 2021(Unaudited)(in
thousands, except share and per share data)
|
|
June 30, |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,420 |
|
|
$ |
13,350 |
|
Marketable securities |
|
|
5,371 |
|
|
|
- |
|
Accounts receivable, net |
|
|
300 |
|
|
|
209 |
|
Inventory |
|
|
381 |
|
|
|
291 |
|
Prepaid expenses and other current assets |
|
|
313 |
|
|
|
77 |
|
Total current assets |
|
|
10,785 |
|
|
|
13,927 |
|
Goodwill |
|
|
311 |
|
|
|
311 |
|
Intangibles, net |
|
|
26 |
|
|
|
33 |
|
Property and equipment, net |
|
|
704 |
|
|
|
723 |
|
Operating lease - right of use asset |
|
|
1,832 |
|
|
|
1,926 |
|
Other assets |
|
|
113 |
|
|
|
63 |
|
Total assets |
|
$ |
13,771 |
|
|
$ |
16,983 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
522 |
|
|
$ |
254 |
|
Accrued expenses and other current liabilities |
|
|
85 |
|
|
|
62 |
|
Convertible notes payable |
|
|
1,240 |
|
|
|
2,037 |
|
Note payable, current portion |
|
|
18 |
|
|
|
10 |
|
Warrant liability |
|
|
419 |
|
|
|
318 |
|
Operating lease liability, current portion |
|
|
207 |
|
|
|
207 |
|
Total current liabilities |
|
|
2,491 |
|
|
|
2,888 |
|
Long-Term Liabilities: |
|
|
|
|
|
|
|
|
Operating lease liability, net of current portion |
|
|
1,669 |
|
|
|
1,744 |
|
Notes payable, net of current portion |
|
|
263 |
|
|
|
266 |
|
Total long-term liabilities |
|
|
1,932 |
|
|
|
2,010 |
|
Total liabilities |
|
|
4,423 |
|
|
|
4,898 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 750,000,000 shares
authorized; 5,572,234 shares issued and outstanding as of June 30,
2022 and December 31, 2021, respectively |
|
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
|
19,025 |
|
|
|
18,891 |
|
Accumulated deficit |
|
|
(9,683 |
) |
|
|
(6,812 |
) |
Total stockholders’ equity |
|
|
9,348 |
|
|
|
12,085 |
|
Total liabilities and stockholders’ equity |
|
$ |
13,771 |
|
|
$ |
16,983 |
|
NEXGEL, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE
AND SIX MONTHS ENDED JUNE 30, 2022 AND
2021(Unaudited)(in thousands, except
share and per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues, net |
|
$ |
561 |
|
|
$ |
417 |
|
|
$ |
956 |
|
|
$ |
683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
460 |
|
|
|
413 |
|
|
|
884 |
|
|
|
722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross (loss)/profit |
|
|
101 |
|
|
|
4 |
|
|
|
72 |
|
|
|
(39 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
111 |
|
|
|
10 |
|
|
|
135 |
|
|
|
17 |
|
Selling, general and
administrative |
|
|
708 |
|
|
|
547 |
|
|
|
1,467 |
|
|
|
1,017 |
|
Total operating expenses |
|
|
819 |
|
|
|
557 |
|
|
|
1,602 |
|
|
|
1,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(718 |
) |
|
|
(553 |
) |
|
|
(1,530 |
) |
|
|
(1,073 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(348 |
) |
|
|
(370 |
) |
|
|
(1,092 |
) |
|
|
(518 |
) |
Loss on debt
extinguishment |
|
|
— |
|
|
|
— |
|
|
|
(150 |
) |
|
|
(25 |
) |
Debt discount costs |
|
|
— |
|
|
|
(52 |
) |
|
|
— |
|
|
|
(68 |
) |
Other income |
|
|
2 |
|
|
|
147 |
|
|
|
2 |
|
|
|
147 |
|
Changes in fair value of
warrant liability |
|
|
29 |
|
|
|
2 |
|
|
|
(101 |
) |
|
|
8 |
|
Total other income
(expense) |
|
|
(317 |
) |
|
|
(273 |
) |
|
|
(1,341 |
) |
|
|
(456 |
) |
Loss before income taxes |
|
|
(1,035 |
) |
|
|
(826 |
) |
|
|
(2,871 |
) |
|
|
(1,529 |
) |
Income tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(1,035 |
) |
|
$ |
(826 |
) |
|
|
(2,871 |
) |
|
|
(1,529 |
) |
Net loss per common share -
basic |
|
$ |
(0.19 |
) |
|
$ |
(0.28 |
) |
|
|
(0.52 |
) |
|
|
(0.52 |
) |
Net loss per common share -
diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.28 |
) |
|
|
(0.52 |
) |
|
|
(0.52 |
) |
Weighted average shares used
in computing net loss per common share - basic |
|
|
5,572,234 |
|
|
|
2,939,837 |
|
|
|
5,572,234 |
|
|
|
2,918,759 |
|
Weighted average shares used
in computing net loss per common share – diluted |
|
|
5,572,234 |
|
|
|
2,939,837 |
|
|
|
5,572,234 |
|
|
|
2,918,759 |
|
NEXGEL, INC.CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYFOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND
2021(Unaudited)(in thousands, except
share data)
|
|
Common Stock |
|
|
AdditionalPaid-in |
|
|
Retained
Earnings(Accumulated |
|
|
TotalStockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit) |
|
|
Equity (Deficit) |
|
Balance, January 1, 2022 |
|
|
5,572,234 |
|
|
$ |
6 |
|
|
$ |
18,891 |
|
|
$ |
(6,812 |
) |
|
$ |
12,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
55 |
|
|
|
- |
|
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,836 |
) |
|
|
(1,836 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2022 |
|
|
5,572,234 |
|
|
$ |
6 |
|
|
$ |
18,946 |
|
|
$ |
(8,648 |
) |
|
$ |
10,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
54 |
|
|
|
- |
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock vesting |
|
|
- |
|
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,035 |
) |
|
|
(1,035 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2022 |
|
|
5,572,234 |
|
|
$ |
6 |
|
|
$ |
19,025 |
|
|
$ |
(9,683 |
) |
|
$ |
9,348 |
|
|
|
Common Stock |
|
|
AdditionalPaid-in |
|
|
Retained
Earnings(Accumulated |
|
|
TotalStockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit) |
|
|
Equity (Deficit) |
|
Balance, January 1, 2021 |
|
|
2,838,047 |
|
|
$ |
3 |
|
|
$ |
2,570 |
|
|
$ |
(2,502 |
) |
|
$ |
71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
69 |
|
|
|
- |
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock vesting |
|
|
- |
|
|
|
- |
|
|
|
21 |
|
|
|
- |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuances of common stock, net
of issuance costs |
|
|
101,800 |
|
|
|
- |
|
|
|
285 |
|
|
|
- |
|
|
|
285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants issued for debt
issuance |
|
|
- |
|
|
|
- |
|
|
|
(18 |
) |
|
|
- |
|
|
|
(18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial conversion and
warrant features of convertible debt |
|
|
- |
|
|
|
- |
|
|
|
1,276 |
|
|
|
- |
|
|
|
1,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(704 |
) |
|
|
(704 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2021 |
|
|
2,939,847 |
|
|
$ |
3 |
|
|
$ |
4,203 |
|
|
$ |
(3,206 |
) |
|
$ |
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
74 |
|
|
|
- |
|
|
|
74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock vesting |
|
|
39,324 |
|
|
|
- |
|
|
|
21 |
|
|
|
- |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(826 |
) |
|
|
(826 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021 |
|
|
2,979,171 |
|
|
$ |
3 |
|
|
$ |
4,298 |
|
|
$ |
(4,032 |
) |
|
$ |
269 |
|
NEXGEL, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX
MONTHS ENDED JUNE 30, 2022 AND
2021(Unaudited)(in thousands)
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
Operating
Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,871 |
) |
|
$ |
(1,529 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
57 |
|
|
|
56 |
|
Changes in ROU asset and operating lease liability |
|
|
19 |
|
|
|
6 |
|
Share-based compensation |
|
|
134 |
|
|
|
185 |
|
Changes in fair value of
warrant liability |
|
|
101 |
|
|
|
(8 |
) |
Amortization of deferred
financing costs |
|
|
1,086 |
|
|
|
528 |
|
Loss on extinguishment of
debt |
|
|
150 |
|
|
|
24 |
|
Forgiveness of debt |
|
|
- |
|
|
|
(148 |
) |
Beneficial conversion feature
in excess of face value |
|
|
- |
|
|
|
51 |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(91 |
) |
|
|
(146 |
) |
Inventory |
|
|
(90 |
) |
|
|
7 |
|
Prepaid expenses and other assets |
|
|
(286 |
) |
|
|
61 |
|
Accounts payable |
|
|
268 |
|
|
|
(67 |
) |
Accrued expenses and other liabilities |
|
|
28 |
|
|
|
(15 |
) |
Deferred revenue |
|
|
- |
|
|
|
(38 |
) |
|
|
|
|
|
|
|
|
|
Net Cash Used in
Operating Activities |
|
|
(1,495 |
) |
|
|
(1,033 |
) |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
|
Investment in marketable securities |
|
|
(5,371 |
) |
|
|
- |
|
Capital expenditures |
|
|
(31 |
) |
|
|
(267 |
) |
Net Cash Used in
Investing Activities |
|
|
(5,402 |
) |
|
|
(267 |
) |
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
|
Issuance of common stock, net of issuance costs |
|
|
- |
|
|
|
285 |
|
Proceeds from notes payable |
|
|
- |
|
|
|
15 |
|
Principle payment of notes payable |
|
|
(2,033 |
) |
|
|
(15 |
) |
Proceeds from notes payable (PPP) |
|
|
- |
|
|
|
128 |
|
Proceeds from convertible notes |
|
|
- |
|
|
|
1,337 |
|
Principal payment on convertible notes |
|
|
- |
|
|
|
(100 |
) |
Net Cash Provided by
(Used In) Financing Activities |
|
|
(2,033 |
) |
|
|
1,650 |
|
Net Increase
(Decrease) in Cash and Cash Equivalents |
|
|
(8,930 |
) |
|
|
350 |
|
Cash and Cash
Equivalents – Beginning of period |
|
|
13,350 |
|
|
|
32 |
|
Cash and Cash Equivalents – End of period |
|
$ |
4,420 |
|
|
$ |
382 |
|
Supplemental
Disclosure of Cash Flows Information |
|
|
|
|
|
|
|
|
Cash paid during the year
for: |
|
|
|
|
|
|
|
|
Interest |
|
|
- |
|
|
|
- |
|
Taxes |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Supplemental Non-cash
Investing and Financing activities |
|
|
|
|
|
|
|
|
Fair value of beneficial conversion and warrant features of
Convertible Notes Payable |
|
$ |
- |
|
|
$ |
1,276 |
|
Original issue discounts recognized on Convertible Notes
Payable |
|
$ |
- |
|
|
$ |
343 |
|
Warrants issued for debt and equity financing costs |
|
$ |
- |
|
|
$ |
130 |
|
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