Full Press Release Details
Reports First Quarter 2024 Revenue of $1.27 Million, an Increase of 104% Year-Over-Year
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.
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."
Quarter 2024 Financial Highlights
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
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.
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.
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.
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.
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.
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
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.
of March 31, 2024, NEXGEL had 6,227,624 shares of common stock outstanding.
Quarter 2024 Financial Results Conference Call
Call: + 1-800-343-5419 (U.S. Toll Free) or + 1-203-518-9731 (International)
Events and Presentations
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.
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.
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
Pinto, Managing Director
Strategic Communications
CONSOLIDATED BALANCE SHEETS
OF MARCH 31, 2024 AND DECEMBER 31, 2023
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 |
CONSOLIDATED STATEMENTS OF OPERATIONS
THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
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 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
| 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 |