NEXGEL Reports Second Quarter 2023 Record Revenue of $1.17 Million, an Increase of 108% Year-Over-Year
LANGHORNE, Pa., Aug. 14, 2023 (GLOBE NEWSWIRE) -- 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 financial results for the second quarter ended June 30, 2023.
Adam Levy, NEXGEL’s Chief Executive Officer, commented, “Record second quarter revenue of
Mr. Levy continued, “During the second quarter, we strategically invested in inventory and capital expenditure to improve equipment and increase capacity in anticipation of demand we expect during the second half of this year and beyond. Thus far the branded products sequential growth trend we saw in the first half of the year has continued into the current third quarter. Taking into account the investments we made during the quarter, we continue to have a sufficient runway of cash to operate and invest in accelerating our growth going forward.”
2023 Operational Highlights to Date
- Announced a new strategic relationship with Enigma Health, a new joint venture company, for retail distribution and marketing services in North America.
- Acquired a
50% interest in a newly formed joint venture (“JV”), CG Converting and Packaging, LLC, with C.G. Laboratories Inc. (“CG Labs”) for its converting and packaging business. - Executed a supply agreement with a large new customer relating to a new consumer product.
- Launched advertising and marketing initiative, which has increased branded product sales.
Second Quarter 2023 Financial Highlights
For the second quarter of 2023, revenue totaled
Gross profit for the second quarter of 2023 was
Total operating expenses, including R&D and SG&A expenses, increased to
Net loss for the quarter ended June 30, 2023, improved to
As of March 31, 2023, NEXGEL had approximately
As of June 30, 2023, NEXGEL had 5,696,064 shares of common stock outstanding.
NEXGEL Second Quarter 2023 Financial Results Conference Call
Management will host a conference call and webcast today at 4:30 p.m. Eastern Time to discuss its operational and financial results for the second quarter 2023.
Date: August 14, 2023
Time: 4:30 P.M. ET
Live Call: +1-877-300-8521 (U.S. Toll Free) or +1-412-317-6026 (International)
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1627569&tp_key=69c361dd6d
For interested individuals unable to join the conference call, a replay will be available through August 28, 2023, 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: 10181557. 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. 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
Media Contacts:
Kelly Knobeck
Director of Consumer Products
info@nexgel.com
NEXGEL, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022
(Unaudited)
(in thousands, except share and per share data)
June 30, 2023 | December 31, 2022 | |||||||
ASSETS: | ||||||||
Current Assets: | ||||||||
Cash | $ | 3,691 | $ | 1,101 | ||||
Marketable securities | 612 | 5,508 | ||||||
Accounts receivable, net | 950 | 222 | ||||||
Inventory | 1,079 | 502 | ||||||
Prepaid expenses and other current assets | 366 | 172 | ||||||
Total current assets | 6,698 | 7,505 | ||||||
Goodwill | 311 | 311 | ||||||
Intangibles, net | 13 | 20 | ||||||
Property and equipment, net | 1,413 | 721 | ||||||
Operating lease - right of use asset | 1,967 | 1,737 | ||||||
Other assets | 95 | 63 | ||||||
Total assets | $ | 10,497 | $ | 10,357 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 1,058 | $ | 265 | ||||
Accrued expenses and other current liabilities | 202 | 130 | ||||||
Current portion of note payable | 15 | 15 | ||||||
Warrant liability | 165 | 242 | ||||||
Operating lease liability, current portion | 232 | 207 | ||||||
Total current liabilities | 1,672 | 859 | ||||||
Operating lease liability, net of current portion | 1,819 | 1,593 | ||||||
Notes payable, net of current portion | 265 | 268 | ||||||
Total liabilities | 3,756 | 2,720 | ||||||
Commitments and Contingencies (Note 15) | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, par value | — | — | ||||||
Common stock, par value | 6 | 6 | ||||||
Additional paid-in capital | 19,242 | 19,189 | ||||||
Accumulated deficit | (13,067 | ) | (11,558 | ) | ||||
Total NexGel stockholders’ equity | 6,181 | 7,637 | ||||||
Non-controlling interest in joint venture | 560 | — | ||||||
Total stockholders’ equity | 6,741 | 7,637 | ||||||
Total liabilities and stockholders’ equity | $ | 10,497 | $ | 10,357 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Unaudited)
(in thousands, except share and per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues, net | $ | 1,167 | $ | 561 | $ | 1,786 | $ | 956 | ||||||||
Cost of revenues | 992 | 460 | 1,669 | 884 | ||||||||||||
Gross profit | 175 | 101 | 117 | 72 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 55 | 111 | 84 | 135 | ||||||||||||
Selling, general and administrative | 882 | 708 | 1,679 | 1,467 | ||||||||||||
Total operating expenses | 937 | 819 | 1,763 | 1,602 | ||||||||||||
Loss from operations | (762 | ) | (718 | ) | (1,646 | ) | (1,530 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (9 | ) | (348 | ) | (10 | ) | (1,092 | ) | ||||||||
Interest income | 2 | - | 2 | - | ||||||||||||
Loss on debt extinguishment | - | - | - | (150 | ) | |||||||||||
Other income | - | 2 | 4 | 2 | ||||||||||||
Gain on investments | 116 | - | 124 | - | ||||||||||||
Changes in fair value of warrant liability | 11 | 29 | 77 | (101 | ) | |||||||||||
Total other income (expense), net | 120 | (317 | ) | 197 | (1,341 | ) | ||||||||||
Loss before income taxes | (642 | ) | (1,035 | ) | (1,449 | ) | (2,871 | ) | ||||||||
Income tax expense | - | - | - | - | ||||||||||||
Net loss | $ | (642 | ) | $ | (1,035 | ) | (1,449 | ) | (2,871 | ) | ||||||
Less: Income attributable to non-controlling interest in joint venture | 53 | - | 60 | - | ||||||||||||
Net loss attributable to NexGel stockholders | (695 | ) | (1,035 | ) | (1,509 | ) | (2,871 | ) | ||||||||
Net loss per common share - basic | $ | (0.12 | ) | $ | (0.19 | ) | (0.27 | ) | (0.52 | ) | ||||||
Net loss per common share - diluted | $ | (0.12 | ) | $ | (0.19 | ) | (0.27 | ) | (0.52 | ) | ||||||
Weighted average shares used in computing net loss per common share - basic | 5,662,338 | 5,572,234 | 5,624,275 | 5,572,234 | ||||||||||||
Weighted average shares used in computing net loss per common share – diluted | 5,662,338 | 5,572,234 | 5,624,275 | 5,572,234 |
NEXGEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Unaudited)
(in thousands)
Six Months Ended June 30, | |||||||||||||
2023 | 2022 | ||||||||||||
Operating Activities | |||||||||||||
Net loss | $ | (1,509 | ) | $ | (2,871 | ) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||
Income attributable to non-controlling interest in joint venture | 60 | - | |||||||||||
Depreciation and amortization | 68 | 57 | |||||||||||
Changes in ROU asset and operating lease liability | 21 | 19 | |||||||||||
Share-based compensation and restricted stock vesting | 53 | 134 | |||||||||||
Gain on investment in marketable securities | 124 | - | |||||||||||
Changes in fair value of warrant liability and warrant modification | (77 | ) | 101 | ||||||||||
Amortization of deferred financing costs | - | 1,086 | |||||||||||
Loss on extinguishment of debt | - | 150 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Accounts receivable | (728 | ) | (91 | ) | |||||||||
Inventory | (577 | ) | (90 | ) | |||||||||
Prepaid expenses and other assets | (226 | ) | (286 | ) | |||||||||
Accounts payable | 793 | 268 | |||||||||||
Accrued expenses and other current liabilities | 72 | 28 | |||||||||||
Net Cash Used in Operating Activities | (1,926 | ) | (1,495 | ) | |||||||||
Investing Activities | |||||||||||||
Proceeds from sales of marketable securities | 4,772 | - | |||||||||||
Investment in marketable securities | - | (5,371 | ) | ||||||||||
Capital expenditures | (253 | ) | (31 | ) | |||||||||
Net Cash Provided by Investing Activities | 4,519 | (5,402 | ) | ||||||||||
Financing Activities | |||||||||||||
Principle payments of notes payable | (3 | ) | (2,033 | ) | |||||||||
Net Cash Used in Financing Activities | (3 | ) | (2,033 | ) | |||||||||
Net Decrease in Cash | 2,590 | (8,930 | ) | ||||||||||
Cash – Beginning of period | 1,101 | 13,350 | |||||||||||
Cash – End of period | $ | 3,691 | $ | 4,420 | |||||||||
Supplemental Disclosure of Cash Flows Information | |||||||||||||
Cash paid during the year for: | |||||||||||||
Interest | $ | - | $ | - | |||||||||
Taxes | $ | - | $ | - | |||||||||
Supplemental Non-cash Investing and Financing activities | |||||||||||||
Property and equipment contributed as capital investment to JV | $ | 500 | $ | - | |||||||||
ROU asset and operating lease liabilities recognized upon consolidation of JV | $ | 334 | $ | - |