Full Press Release Details
Reports Fourth Quarter and Full Year 2021 Financial Results
Full year 2021 revenue increased 130% YoY to
As of December 31, 2021, the Company had $13.35
LANGHORNE, Pa. - March 21, 2022 - 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 fourth quarter and full year periods ended December
"2021 was a milestone year for NEXGEL - we completed a
$14.2 million initial public offering and began trading on NASDAQ under the ticker symbol NXGL. Furthermore, we brought on new leadership
with deep experience in commercializing healthcare assets with the appointment of Miranda Toledano to the Board of Directors and Adam
Drapczuk as Chief Financial Officer," said Adam Levy, NEXGEL Chief Executive Officer.
Mr. Levy continued, "We believe we have growth opportunities
in all three new operating verticals - medical devices, branded products, and white/custom label manufacturing, each of which leverage
our unique and proprietary hydrogel manufacturing capabilities. We developed concrete milestones to execute on these opportunities and
already have seen rapid growth in our branded products and white/custom label manufacturing verticals. We are pleased with the 130% and
428% year-over-year revenue growth for the 2021 full year and fourth quarter, respectively, and fully expect to continue to enjoy year-over-year
revenue growth in 2022 while we prudently manage operating expenses. As of December 31, 2021, we had $13.35 million in cash, which is
sufficient working capital to accelerate our growth going forward."
Fourth Quarter and Full Year 2021 Financial
Fourth Quarter and Full Year 2021 Operational
Conference Call Details
Management 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 fourth quarter and full year 2021.
| Event: | NEXGEL Fourth Quarter and Full Year 2021 Results Conference Call |
| Date: | Monday, March 21, 2022 |
| Time: | 4:30 p.m. Eastern Time |
| Live Call: | +1-877-407-9208 (Toll-Free) / +1-201-493-6784 (International) |
| Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1538008&tp_key=ba6651ff6a |
For interested individuals unable to join today's
conference call, a dial-in replay of the call will be available until March 28, 2022 and can be accessed by dialing +1-844-512-2921 (U.S.
Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 13728073.
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/.
Non-GAAP Financial Measures
From time to time, we may publicly disclose certain
"non-GAAP" financial measures, such as earnings before interest, taxes, depreciation, and amortization ("EBITDA"),
during our investor presentations, earnings releases, earnings conference calls or other venues. A non-GAAP financial measure is a numerical
measure of historical or future performance, financial position or cash flow that excludes amounts, or is subject to adjustments that
effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with GAAP in our
consolidated financial statements, and vice versa for measures that include amounts, or are subject to adjustments that effectively include
amounts, that are excluded from the most directly comparable measure as calculated and presented.
Non-GAAP financial measures are provided as additional
information to investors in order to provide them with an alternative method for assessing our financial condition and operating results.
These measures are not meant to be a substitute for GAAP, and may be different from or otherwise inconsistent with non-GAAP financial
measures used by other companies.
To provide investors with additional information
about our financial results, we disclose within this press release EBITDA, which is a non-GAAP financial measure, of NexGel, Inc. These
metrics are derived exclusively from the operations of NexGel, Inc. as reflected in our consolidated financial statements. We have provided
below a reconciliation table between EBITDA and net income (loss). Net income (loss) is the most directly comparable financial measure
prepared in accordance with GAAP.
EBITDA is calculated as net income (loss) before
interest expense, depreciation expense and amortization expense. Amortization expenses consist of amortization of intangibles and debt
charges, including debt issuance costs, financing costs and the like.
We have included EBITDA in this press release
because we believe it enhances investors' understanding of the operating results. EBITDA is provided because management believes
it is an important measure of financial performance commonly used to determine the value of companies, to define standards for borrowing
from institutional lenders and because it is the primary measure used by management to evaluate our performance.
Some limitations of EBITDA are:
Because of these limitations, you should consider
EBITDA alongside other financial performance measures, including net income and audited historical financial results presented elsewhere
in the report in accordance with GAAP.
Valter Pinto / Nick Staab
KCSA Strategic Communications
212.896.1254 / 212.896.1254
Caitlin Kasunich / Raquel Cona
KCSA Strategic Communications
212.896.1241 / 516.779.2630
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| ASSETS: | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 13,350 | $ | 32 | ||||
| Accounts receivable, net | 209 | 73 | ||||||
| Inventory | 291 | 233 | ||||||
| Prepaid expenses and other current assets | 77 | 25 | ||||||
| Total current assets | 13,927 | 363 | ||||||
| Goodwill | 311 | 311 | ||||||
| Intangibles | 33 | 47 | ||||||
| Property and equipment, net | 723 | 553 | ||||||
| Operating lease - right of use asset | 1,926 | 805 | ||||||
| Other assets | 63 | 178 | ||||||
| Total assets | $ | 16,983 | $ | 2,257 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 254 | $ | 658 | ||||
| Accrued expenses and other current liabilities | 62 | 90 | ||||||
| Deferred Revenue | - | 38 | ||||||
| Convertible notes payable | 2,037 | 59 | ||||||
| Note payable, current portion | 10 | 10 | ||||||
| Note payable - PPP | - | 147 | ||||||
| Warrant liability | 318 | 123 | ||||||
| Operating lease liability, current portion | 207 | 207 | ||||||
| Total current liabilities | 2,888 | 1,332 | ||||||
| Operating lease liability, net of current portion | 1,744 | 598 | ||||||
| Notes payable, net of current portion | 266 | 256 | ||||||
| Total liabilities | $ | 4,898 | $ | 2,186 | ||||
| Commitments and Contingencies (Note 17) | - | - | ||||||
| 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 and 2,838,047 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 6 | 3 | ||||||
| Additional paid-in capital | 18,891 | 2,570 | ||||||
| Accumulated deficit | (6,812 | ) | (2,502 | ) | ||||
| Total stockholders' equity | 12,085 | 71 | ||||||
| Total liabilities and stockholders' equity | $ | 16,983 | $ | 2,257 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenues, net | $ | 1,551 | $ | 674 | ||||
| Cost of revenues | 1,542 | 965 | ||||||
| Gross (loss)/profit | 9 | (291 | ) | |||||
| Operating expenses | ||||||||
| Research and development | 31 | - | ||||||
| Selling, general and administrative | 2,548 | 1,969 | ||||||
| Total operating expenses | 2,579 | 1,969 | ||||||
| Loss from operations | (2,570 | ) | (2,260 | ) | ||||
| Other income (expense) | ||||||||
| Change in fair value of warrant liability | 8 | (2 | ) | |||||
| Forgiveness of debt | 275 | - | ||||||
| Debt discount costs | (68 | ) | (2 | ) | ||||
| Loss on debt extinguishment | (25 | ) | - | |||||
| Interest expense | (1,930 | ) | (8 | ) | ||||
| Other income | - | 8 | ||||||
| Total other income (expense) | (1,740 | ) | (4 | ) | ||||
| Net loss | $ | (4,310 | ) | $ | (2,264 | ) | ||
| Net loss per common share - diluted and diluted | $ | (1.45 | ) | $ | (1.05 | ) | ||
| Weighted average shares used in computing net loss per common share - basic and diluted | 2,979,962 | 2,254,145 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
(in thousands, except share data)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2019 | 1,643,006 | $ | 2 | $ | 616 | $ | (238 | ) | 380 | |||||||||||
| Issuance of common stock, net of issuance costs | 757,786 | 1 | 1,369 | - | 1,370 | |||||||||||||||
| Issuance of common stock for acquisition | 267,858 | - | 375 | 375 | ||||||||||||||||
| Restricted stock vesting | 169,397 | - | - | - | - | |||||||||||||||
| Warrants issued for equity raising costs | - | (65 | ) | - | (65 | ) | ||||||||||||||
| Beneficial conversion and warrant features of convertible debt | - | - | 43 | - | 43 | |||||||||||||||
| Share-based compensation | - | - | 232 | - | 232 | |||||||||||||||
| Net loss | - | - | - | (2,264 | ) | (2,264 | ) | |||||||||||||
| Balance, December 31, 2020 | 2,838,047 | $ | 3 | $ | 2,570 | $ | (2,502 | ) | $ | 71 |
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2020 | 2,838,047 | $ | 3 | $ | 2,570 | $ | (2,502 | ) | $ | 71 | ||||||||||
| Issuance of common stock, net of issuance costs | 2,686,800 | 3 | 13,468 | - | 13,471 | |||||||||||||||
| Restricted stock vesting | 39,524 | - | 61 | - | 61 | |||||||||||||||
| Beneficial conversion and warrant features of convertible debt | - | - | 2,587 | - | 2,587 | |||||||||||||||
| Exercise of stock options | 7,183 | - | - | - | - | |||||||||||||||
| Share-based compensation | - | - | 223 | - | 223 | |||||||||||||||
| Derivative liability - COVA | - | - | (18 | ) | - | (18 | ) | |||||||||||||
| Share adjustment for stock split rounding | 680 | - | - | - | - | |||||||||||||||
| Net loss | - | - | - | (4,310 | ) | (4,310 | ) | |||||||||||||
| Balance, December 31, 2021 | $ | 5,572,234 | $ | 6 | $ | 18,891 | $ | (6,812 | ) | $ | 12,085 |
STATEMENTS OF CASH FLOWS
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (4,310 | ) | $ | (2,264 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 113 | 50 | ||||||
| Share-based compensation | 285 | 232 | ||||||
| Changes in ROU asset and operating lease liability | (8 | ) | 2 | |||||
| Forgiveness of debt | (275 | ) | - | |||||
| Changes in fair value of warrant liability | 25 | - | ||||||
| Loss of extinguishment of debt | 25 | - | ||||||
| Amortization of deferred financing costs | 1,933 | 2 | ||||||
| Beneficial conversion feature in excess of face value | 52 | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (137 | ) | 29 | |||||
| Inventory | (58 | ) | (99 | ) | ||||
| Prepaid expenses and other assets | 63 | 10 | ||||||
| Accounts payable | (405 | ) | 137 | |||||
| Accrued expenses and other liabilities | (18 | ) | 62 | |||||
| Deferred revenue | (38 | ) | 38 | |||||
| Net Cash Used in Operating Activities | (2,753 | ) | (1,801 | ) | ||||
| Investing Activities | ||||||||
| Purchase of equipment | (269 | ) | (312 | ) | ||||
| Net Cash Used in Investing Activities | (269 | ) | (312 | ) | ||||
| Financing Activities | ||||||||
| Issuance of common stock, net of issuance costs | 13,471 | 1,370 | ||||||
| Proceeds from notes payable | 15 | 414 | ||||||
| Proceeds from convertible notes | 2,957 | 100 | ||||||
| Payment of financing costs | (115 | ) | ||||||
| Principal payment of notes payable | (15 | ) | - | |||||
| Principal payment on convertible notes | (100 | ) | - | |||||
| Proceeds from notes payable (PPP) | 127 | - | ||||||
| Net Cash Provided by Financing Activities | 16,340 | 1,884 | ||||||
| Net Increase (Decrease) in Cash | 13,318 | (229 | ) | |||||
| Cash - Beginning of period | 32 | 261 | ||||||
| Cash - End of period | $ | 13,350 | $ | 32 | ||||
| Supplemental Disclosure of Cash Flows Information | ||||||||
| Non-Cash Transactions: | ||||||||
| Non-cash Investing and Financing Activities | ||||||||
| Fair value of beneficial conversion and warrant features of Convertible Notes Payable | $ | 2,587 | $ | - | ||||
| Original issue discounts recognized on Convertible Notes Payable | $ | 653 | $ | - | ||||
| Warrants issued for debt and equity financing costs | $ | 203 | $ | - | ||||
| Operating lease, ROU assets and liabilities | $ | 2,050 | $ | - | ||||
| Common Shares issued for acquisition | $ | - | $ | 375 | ||||
| Inventory acquired from acquisition | $ | - | $ | 21 | ||||
| Accounts payable assumed from acquisition | $ | - | $ | 13 |
RECONCILIATION OF EBITDA (NON-GAAP)
The following table presents
a reconciliation of net income to EBITDA for the years ended December 31, 2021 and 2020 (in thousands):
| 2021 | 2020 | |||||||
| Net income (loss) | $ | (4,310 | ) | $ | (2,264 | ) | ||
| Adjusted for: | ||||||||
| Interest expense, net | 1,930 | 8 | ||||||
| Depreciation and amortization | 113 | 50 | ||||||
| EBITDA | $ | (2,267 | ) | $ | (2,206 | ) |