Company Overview - NEXGEL, Inc. is a leading provider of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications, based in Langhorne, Pennsylvania [1][3] - The company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades and offers brands such as SilverSeal, Hexagels, Turfguard, Kenkoderm, and Silly George [3] Partnership Expansion - NEXGEL announced an expansion of its partnership with STADA Arzneimittel AG, a European leader in consumer health, which includes the planned launch of digestive enzyme formulas and solutions targeting scars and stretch marks [1][2] - As part of the agreement, STADA will provide $1 million in non-dilutive capital to support NEXGEL's product launches and marketing efforts [2] Financial Performance of STADA - In the financial year 2024, STADA achieved group sales of €4,059 million and adjusted constant-currency earnings before interest, taxes, depreciation, and amortization (adj. cc EBITDA) of €886 million [2] - STADA operates globally, selling products in over 100 countries and employing 11,649 people as of December 31, 2024 [2]

Company Overview - NEXGEL, Inc. is a leading provider of healthcare, beauty, and over-the-counter (OTC) products, specializing in ultra-gentle, high-water-content hydrogels [3] - The company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades [3] - NEXGEL's product brands include SilverSeal, Hexagels, Turfguard, Kenkoderm, and Silly George [3] - The company has established strategic contract manufacturing relationships with leading consumer healthcare companies [3] Event Participation - Adam Levy, the Chief Executive Officer of NEXGEL, will participate in the 6th Annual CEO Networking Event hosted by Semco Capital in Chicago on June 2, 2025 [1] - The event will feature a fireside chat with Scott Weis of Semco Capital [1] - The Annual CEO Networking Event aims to bring together leading microcap companies with unique business models and strong management teams [2]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $2,810,000, representing a 121% increase year over year compared to $1,270,000 in Q1 2024 [4][20] - Gross margins normalized to 42.4%, compared to 37% in Q4 2024 and 43.6% in Q3 2024 [4][21] - EBITDA loss narrowed to negative $540,000 from negative $840,000 in the same period last year [5][22] - Net loss for Q1 2025 was $710,000, down from a net loss of $850,000 in Q1 2024 [22] Business Line Data and Key Metrics Changes - Contract manufacturing revenue increased by 58% year over year, driven by demand from existing customers and new partnerships [4][5] - Consumer branded products revenue surged by 189% year over year, significantly boosted by the addition of Silly George [4] - The entire consumer products portfolio saw strong expansion, with new product launches planned for 2025 [11][12] Market Data and Key Metrics Changes - The company is experiencing increased interest in U.S.-made gels due to potential tariff impacts, which may enhance competitiveness against imported products [17][18] - There is a robust pipeline of new and potential customers for 2025, indicating strong market demand [8][19] Company Strategy and Development Direction - The company aims to expand its product lines, including new offerings for MetaGel and Cancoderm, and is transitioning Silly George into a broader beauty brand [12][13] - Strategic partnerships, such as with Stata, are expected to drive growth, with plans for additional product launches in 2025 and 2026 [14][30] - The company is monitoring tariff situations closely and is prepared to adjust manufacturing strategies if necessary [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the product launch with AbbVie, despite delays, and sees it as a substantial opportunity [8][51] - The company does not foresee any weakness in consumer product sales and maintains guidance of $13,000,000 in revenue for 2025 [19][58] - Management is optimistic about achieving cash flow positivity in 2025, supported by ongoing innovation and growth [19][22] Other Important Information - The company has a cash balance of approximately $1,190,000 as of March 31, 2025 [22] - The company is exploring various financing options but prefers to avoid debt until achieving EBITDA positivity [48][64] Q&A Session Summary Question: How much revenue was expected from AbbVie, and does the delay affect guidance? - Management indicated that not much revenue was baked in from AbbVie, so the delay should not impact the projection of $13,000,000 [25] Question: Can you provide details on the product launching with Stata? - The first product is Histosol, a digestive enzyme, with plans for additional digestive enzymes in the future [30] Question: Is there a seasonal decline in Silly George sales? - Management noted a slight decline but emphasized that it was the most profitable quarter despite being smaller than previous quarters [57] Question: Will transitioning manufacturing to Texas impact other business lines? - Management confirmed that there is enough capacity in the new clean room to accommodate potential shifts in manufacturing [35] Question: Will the company survive on current cash reserves until EBITDA positive? - Management believes they can manage with current cash reserves until reaching EBITDA positivity [64]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $2,810,000, representing a 121% increase year over year compared to $1,270,000 in Q1 2024 [5][21] - Gross margins normalized to 42.4%, compared to 37% in Q4 2024 and 43.6% in Q3 2024 [5][22] - EBITDA loss narrowed to negative $540,000 from negative $840,000 in the same period last year [6][23] - Net loss for Q1 2025 was $710,000, down from a net loss of $850,000 in Q1 2024 [23] Business Line Data and Key Metrics Changes - Contract manufacturing revenue increased by 58% year over year, driven by demand from existing customers and new partnerships [5] - Consumer branded products revenue surged by 189% year over year, significantly boosted by the addition of Silly George [5] - The company expects continued growth in both contract manufacturing and consumer products, with a robust pipeline for 2025 [8][11] Market Data and Key Metrics Changes - The company is seeing increased interest in U.S.-made gels due to potential tariff impacts, which may enhance competitiveness against imported products [19] - There is a growing market for hydrogel applications, particularly in laser hair removal, with significant interest from major companies [42] Company Strategy and Development Direction - The company plans to expand its product lines, including new offerings for MetaGel and Cancoderm, and is transitioning Silly George into a broader beauty brand [12][13] - The partnership with Stata is progressing well, with plans for additional product launches in 2025 and 2026 [14] - The company is strategically managing cash and R&D to ensure high ROI while pursuing growth opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about achieving $13,000,000 in revenue and cash flow positivity in 2025 despite external challenges [20] - The company is monitoring tariff situations closely and is prepared to adjust manufacturing strategies if necessary [16][19] - Management expressed confidence in the growth potential of their products and the overall market, despite uncertainties in the broader economic environment [60] Other Important Information - The company has a cash balance of approximately $1,190,000 as of March 31, 2025 [23] - The company has 7,654,537 shares of common stock outstanding as of May 13, 2025 [23] Q&A Session Summary Question: How much revenue was expected from AbbVie, and does the delay affect guidance? - Management indicated that not much revenue was baked in from AbbVie, so the delay should not significantly impact the $13,000,000 projection [25][26] Question: Can you provide details on the product launch with Stata? - The first product is Histosol, a digestive enzyme, with plans for additional digestive enzymes in the future [30] Question: Is there a seasonal improvement expected for Silly George? - Management expects seasonal growth, especially with new product launches planned for Q3 and Q4 [61][62] Question: Will transitioning manufacturing to Texas impact other business lines? - The company has built a new clean room with enough capacity to accommodate potential shifts in manufacturing [35][36] Question: Will the company survive on current cash reserves until EBITDA positive? - Management believes they can manage with current cash reserves until reaching EBITDA positivity [66]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides NexGel's unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2025 [Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents NexGel's unaudited condensed consolidated financial statements for the three months ended March 31, 2025, compared to the same period in 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, highlighting changes in assets, liabilities, and equity as of March 31, 2025 Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $4,740 | $5,114 | | **Total Assets** | $10,437 | $10,983 | | **Total Current Liabilities** | $2,519 | $2,470 | | **Total Liabilities** | $4,869 | $4,903 | | **Total Stockholders' Equity** | $5,568 | $6,080 | - Cash decreased from **$1.81 million** at the end of 2024 to **$1.19 million** as of March 31, 2025[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's operational performance, showing significant revenue growth and improved gross margin despite a net loss Statements of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenues, net** | $2,806 | $1,266 | | **Gross margin** | $1,188 | $160 | | **Loss from operations** | $(777) | $(871) | | **Net loss attributable to NexGel** | $(712) | $(853) | | **Net loss per common share - basic & diluted** | $(0.09) | $(0.14) | - Revenues more than doubled year-over-year, increasing by **121.6%**, leading to a significant improvement in gross margin from **12.6% to 42.3%**[13](index=13&type=chunk)[180](index=180&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities, and the resulting net decrease in cash Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | $(400) | $(1,092) | | **Net Cash Used in Investing Activities** | $0 | $(118) | | **Net Cash (Used in) Provided by Financing Activities** | $(215) | $929 | | **Net Decrease in Cash** | $(615) | $(281) | | **Cash – End of period** | $1,192 | $2,419 | - Cash used in operating activities significantly decreased year-over-year, from **$1.09 million to $400 thousand**, indicating improved operational cash management[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's business, accounting policies, revenue segmentation, and the going concern assessment - **Business Description:** The company manufactures hydrogels and has expanded from contract manufacturing to include branded consumer products (Medagel, Kenkoderm, Silly George) and custom/white label opportunities. Recent activities include the acquisition of the Silly George business in May 2024 and the Kenkoderm business in December 2023[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - **Going Concern:** The company's cash balance of **$1.2 million**, net loss of **$712 thousand** for the quarter, and net cash usage in operations of **$400 thousand** raise substantial doubt about its ability to continue as a going concern. Management plans to grow sales, explore strategic initiatives, and potentially raise additional capital[28](index=28&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) Disaggregated Revenue by Sales Type (in thousands) | Sales Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Contract manufacturing | $948 | $601 | | Custom and white label | $0 | $31 | | Consumer branded products | $1,782 | $617 | | Other | $76 | $17 | | **Total** | **$2,806** | **$1,266** | - **Customer Concentration:** For Q1 2025, one customer accounted for approximately **10% of total revenue**. As of March 31, 2025, two customers represented **26% and 49% of total accounts receivable**[157](index=157&type=chunk)[158](index=158&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q1 2025, highlighting a 121.6% increase in net revenues to $2.8 million, driven by growth in contract manufacturing and branded consumer products [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue growth, gross profit improvement, and increased operating expenses for the quarter - Revenues for Q1 2025 increased by **$1.54 million**, or **121.6%**, to **$2.81 million** compared to Q1 2024, primarily due to sales growth in both contract manufacturing and branded products[179](index=179&type=chunk) - Gross profit increased by **$1.03 million** to **$1.19 million** in Q1 2025, with gross margin expanding to **42.3% from 12.6%** in Q1 2024, mainly due to the increase in higher-margin consumer branded products[180](index=180&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$935 thousand**, or **90.9%**, to **$1.96 million** in Q1 2025. This was driven by a **$505 thousand** increase in advertising and marketing, a **$103 thousand** increase in compensation, and a **$110 thousand** increase in share-based compensation[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and management's plans to address liquidity and going concern risks - As of March 31, 2025, the company had **$1.19 million** in cash and cash equivalents, a decrease from **$1.81 million** at December 31, 2024[190](index=190&type=chunk) - Working capital decreased to **$2.22 million** at March 31, 2025, from **$2.64 million** at December 31, 2024, primarily due to the quarterly loss from operations[193](index=193&type=chunk) - Management acknowledges that the company's ability to continue as a going concern depends on its ability to grow its business and achieve profitability, and it may consider raising additional capital through debt or equity offerings[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, NexGel is not required to provide these disclosures - The company is not required to provide disclosures for this item[204](index=204&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025 - Management concluded that Disclosure Controls and Procedures were **not effective** as of March 31, 2025[205](index=205&type=chunk) - Material weaknesses were identified, including: (i) lack of controls for journal entry review, (ii) a single accounting individual having 'super user' system access, and (iii) an ineffective financial reporting process leading to improper adjustments and reconciliations[206](index=206&type=chunk)[207](index=207&type=chunk) - Remediation efforts are underway and are expected to be completed by June 30, 2025, or at the latest, by September 30, 2025[206](index=206&type=chunk) [PART II – OTHER INFORMATION](index=40&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity sales, and other disclosures for the reporting period [Legal Proceedings](index=40&type=section&id=ITEM%201.%20Legal%20Proceedings) NexGel has initiated legal action against Kiss Nail Products, Inc. concerning a patent dispute - On April 9, 2025, NexGel filed a Complaint for Declaratory Judgment against Kiss Nail Products, Inc. regarding a patent dispute[209](index=209&type=chunk) - The dispute relates to ready-to-use eyelash extension products sold under the Silly George brand on Amazon.com[209](index=209&type=chunk) - If NexGel does not prevail, certain products may be removed from Amazon.com, which would result in a material adverse effect on the business[209](index=209&type=chunk) [Risk Factors](index=40&type=section&id=ITEM%201A.%20Risk%20Factors) The company reports that there have been no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes during fiscal year 2025 to the risk factors included in the 2024 Annual Report on Form 10-K[211](index=211&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the company did not sell any unregistered securities nor did it repurchase any of its own securities - The Company did not sell any unregistered securities or repurchase any of its securities during the three months ended March 31, 2025[212](index=212&type=chunk)[213](index=213&type=chunk) [Other Information](index=40&type=section&id=ITEM%205.%20Other%20Information) The company states that no director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - During Q1 2025, no director or officer of the Company adopted, modified or terminated a Rule 10b5-1 trading arrangement[216](index=216&type=chunk) [Exhibits](index=41&type=section&id=ITEM%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications (Sections 302 and 906), and iXBRL data files - Lists all exhibits filed with the quarterly report, including Certifications of the CEO and CFO pursuant to the Sarbanes-Oxley Act[219](index=219&type=chunk)

Financial Performance - First quarter 2025 revenue totaled $2.81 million, an increase of 121% compared to $1.27 million in Q1 2024[2] - Gross profit for Q1 2025 was $1.19 million, with a gross profit margin of 42.4%, up from 12.6% in Q1 2024[7] - EBITDA loss narrowed to ($0.54) million in Q1 2025, compared to ($0.84) million in Q1 2024[9] - The net loss for Q1 2025 was $0.71 million, an improvement from a net loss of $0.85 million in Q1 2024[10] - Adjusted EBITDA for the three months ended March 31, 2025, was $(468,000), compared to $(731,000) in the same period of 2024, indicating a reduction in losses[24] Revenue Expectations - The company expects to achieve at least $13 million in revenue for 2025 and positive EBITDA during the year[4] - The increase in revenue was primarily driven by sales growth in both contract manufacturing and branded products[5] Expenses and Cash Flow - Selling, general and administrative expenses increased to $1.96 million in Q1 2025 from $1.03 million in Q1 2024[8] - Cash used in operating activities decreased to $400,000 in Q1 2025 from $1,092,000 in Q1 2024, reflecting improved cash flow management[23] - Cash at the end of the period was $1,192,000, down from $2,419,000 at the end of Q1 2024, showing a decrease in liquidity[23] - Depreciation and amortization expenses increased to $114,000 in Q1 2025 from $62,000 in Q1 2024, indicating higher asset utilization[23] - Interest expense, net for Q1 2025 was $21,000, up from $15,000 in Q1 2024, suggesting increased borrowing costs[24] Investment and Financing - The company reported a gain on investment in marketable securities of $0 in Q1 2025, compared to a loss of $34,000 in Q1 2024, reflecting improved investment performance[23] - The company had no capital expenditures in Q1 2025, compared to $152,000 in Q1 2024, indicating a pause in investment activities[23] - The net cash provided by financing activities was $(215,000) in Q1 2025, a decrease from $929,000 in Q1 2024, reflecting changes in financing strategy[23] Future Plans - The company has multiple opportunities in contract manufacturing with existing customers like Cintas and new potential customers[4] - NEXGEL plans to launch several new consumer branded products throughout the remainder of 2025 and into 2026[4] Accounts Payable - The company experienced a significant increase in accounts payable, which rose to $219,000 in Q1 2025 from a decrease of $75,000 in Q1 2024, indicating potential changes in supplier payment terms[23]

Core Insights - NEXGEL, Inc. reported a significant revenue increase of 121% year-over-year for Q1 2025, totaling $2.81 million compared to $1.27 million in Q1 2024 [1][4][10] - The gross profit margin improved to 42.4% in Q1 2025, up from 12.6% in Q1 2024, indicating enhanced profitability [6][10] - The company aims to achieve $13 million in revenue for 2025 and expects to reach positive EBITDA during the year [3][10] Financial Performance - Revenue for Q1 2025 was $2.81 million, a 121% increase from $1.27 million in Q1 2024, driven by growth in both contract manufacturing and branded products [4][10] - Gross profit for the quarter was $1.19 million, compared to $0.16 million in Q1 2024, with a gross profit margin of 42.4% [6][10] - Cost of revenues increased to $1.62 million in Q1 2025 from $1.11 million in Q1 2024, aligning with revenue growth [5][10] Operating Expenses - Selling, general and administrative expenses rose to $1.96 million in Q1 2025 from $1.03 million in Q1 2024, attributed to higher compensation, marketing, and consulting fees [7][10] - EBITDA loss narrowed to ($0.54) million in Q1 2025 from ($0.84) million in Q1 2024, while adjusted EBITDA improved to ($0.47) million from ($0.73) million [8][10] Net Loss and Cash Position - The net loss for Q1 2025 was $0.71 million, an improvement from a net loss of $0.85 million in Q1 2024 [8][10] - As of March 31, 2025, the company had a cash balance of approximately $1.19 million [9][10] Future Outlook - The CEO highlighted multiple growth opportunities in contract manufacturing with existing customers and new product launches in consumer branded products [3][10] - The company remains confident in achieving its revenue guidance for 2025 and expects to improve its EBITDA performance [3][10]

Company Overview - NEXGEL, Inc. is a leading provider of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications [3] - The company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades [3] - NEXGEL's product brands include Silverseal, Hexagels, Turfguard, Kenkoderm, and Silly George [3] - The company has strategic contract manufacturing relationships with leading consumer healthcare companies [3] Financial Results Announcement - NEXGEL will report its financial results for the first quarter of 2025 after the market close on May 13, 2025 [1] - A conference call will be hosted by the company at 4:30 P.M. ET on the same day to discuss the financial results [1][2] - For those unable to join the live call, a replay will be available until May 27, 2025, with specific dial-in numbers provided [2]

Company Overview - NEXGEL, Inc. is a leading provider of medical and over-the-counter (OTC) products, specializing in ultra-gentle, high-water-content hydrogels for healthcare and consumer applications [1][3] - The company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades and offers brands such as SilverSeal, Hexagels, Turfguard, Kenkoderm, and Silly George [3] Upcoming Event - Adam Levy, the Chief Executive Officer of NEXGEL, will present at the Planet MicroCap Showcase: Vegas 2025, scheduled for April 22-24, 2025, at the Paris Hotel & Casino in Las Vegas, NV [1][2] - The presentation is set for April 23, 2025, at 9:30 a.m. PT, and there will be opportunities for one-on-one investor meetings [2]

Company Overview - NEXGEL, Inc. is a leading provider of medical and over-the-counter (OTC) products, specializing in ultra-gentle, high-water-content hydrogels for healthcare and consumer applications [1][3] - The company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades and offers brands such as SilverSeal®, Hexagels®, Turfguard®, Kenkoderm®, and Silly George® [3] Upcoming Event - Adam Levy, the Chief Executive Officer of NEXGEL, will present at the Planet MicroCap Showcase: Vegas 2025, scheduled for April 22-24, 2025, at the Paris Hotel & Casino in Las Vegas, NV [1][2] - The presentation is set for April 23, 2025, at 9:30 a.m. PT, and will take place in Track 4 - Loire [2] Strategic Relationships - NEXGEL has established strategic contract manufacturing relationships with leading consumer healthcare companies, enhancing its market presence and operational capabilities [3]