Full Press Release Details
Acquires 50% Interest in Newly Formed Joint Venture with C.G. Laboratories for
and Packaging Business
investment in CG Labs' revenue generating and already profitable business increases NEXGEL's capacity, improves margins and
streamlines supply chain
Pa. - March 2, 2023 - NEXGEL, Inc. (NASDAQ: NXGL, NXGLW), ("NEXGEL" or the "Company"),
a leading provider of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications, announced today the
acquisition of 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. The agreement is effective March 1, 2023.
Labs was established in 1983 as a microbiology laboratory founded by Dr. Glenn Crum. In 1996, it relocated to Granbury, TX and expanded
its services to include medical device contract manufacturing. Since then, it has grown into a multi-service company with three distinct
divisions including: Medical Device Laboratory, Medical Device Decontamination, and Contract Packaging. CG Labs current converting and
packaging division has been one of NEXGEL's largest customers for many years, is revenue generating, and already profitable.
are excited to announce this strategic opportunity with one of our largest and long-standing customers," said Adam Levy, Chief
Executive Officer of NEXGEL. "CG Labs converting and packaging division is already a successful and profitable business that has
been one of NEXGEL's largest customers for over 15 years. This transaction immediately increases capacity, improves margins and
streamlines our supply chain. There are also significant synergies between the two operations, allowing for the onboarding of potential
finished goods customers that in the past were not large enough to be practical for CG Labs or might be too large for NEXGEL to on board
alone, as well as combined marketing and customer outreach."
the terms of the agreement, this JV, named CG Converting and Packaging, LLC, will be owned 50% by NEXGEL. CG Labs will contribute its
existing converting and packaging division to the JV, including, but not limited to, its facilities, equipment, employees, and customers.
NEXGEL will contribute $500,000 to the JV to be used for equipment and facility upgrades as well as general corporate purposes. CG labs
will continue to operate its medical device decontamination/disinfection and laboratory services business separately from the JV.
Crum, CEO of CG Labs, stated, "After many years of operating a successful and profitable small business, it made strategic sense
for our company to partner with NEXGEL, whom we have had a trusting, long standing relationship with. There are excellent synergies between
our two companies that will allow us each to accelerate the growth of our businesses."
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. Alongside its strategic partners,
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.
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," "confidence," "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, except as required by law. 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/.
Pinto, Managing Director
Strategic Communications
Cona / Michaela Fawcett
Strategic Communications