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NexGel(NXGL) - 2025 Q2 - Quarterly Report

FORM 10-Q This cover page details NexGel, Inc.'s Quarterly Report on Form 10-Q for Q2 2025, classifying it as a non-accelerated, smaller reporting, and emerging growth company - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 20252 - NexGel, Inc. is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company6 - As of August 12, 2025, the registrant had 8,067,580 shares of common stock outstanding7 PART I – FINANCIAL INFORMATION This section presents NexGel, Inc.'s unaudited condensed consolidated financial statements, notes, and management's discussion and analysis ITEM 1. Condensed Consolidated Financial Statements (Unaudited) This item presents NexGel, Inc.'s unaudited condensed consolidated financial statements and notes for Q2 2025 and comparative periods Condensed Consolidated Balance Sheets Balance sheets show NexGel's financial position, with total assets decreasing to $9,711 thousand and equity declining to $5,055 thousand | Metric | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | Change ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------------------- | | Total Assets | $9,711 | $10,983 | $(1,272) | | Total Liabilities | $4,656 | $4,903 | $(247) | | Total Stockholders' Equity | $5,055 | $6,080 | $(1,025) | | Cash | $725 | $1,807 | $(1,082) | | Total Current Assets | $4,162 | $5,114 | $(952) | | Total Current Liabilities | $2,396 | $2,470 | $(74) | Condensed Consolidated Statements of Operations Operations statements show significant revenue growth for Q2 and H1 2025, improved gross profit margins, but continued net losses | Metric | 3 Months Ended June 30, 2025 ($ in thousands) | 3 Months Ended June 30, 2024 ($ in thousands) | 6 Months Ended June 30, 2025 ($ in thousands) | 6 Months Ended June 30, 2024 ($ in thousands) | | :----------------------------------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Revenues, net | $2,884 | $1,440 | $5,690 | $2,706 | | Cost of revenues | $1,626 | $1,147 | $3,244 | $2,187 | | Gross profit | $1,258 | $293 | $2,446 | $519 | | Loss from operations | $(636) | $(1,054) | $(1,413) | $(1,925) | | Net loss attributable to NexGel stockholders | $(665) | $(885) | $(1,377) | $(1,738) | | Net loss per common share - basic | $(0.09) | $(0.14) | $(0.18) | $(0.28) | - Revenue Growth (YoY): - Three months ended June 30, 2025: +100.3% ($2,884k vs $1,440k)13 - Six months ended June 30, 2025: +110.3% ($5,690k vs $2,706k)13 - Gross Profit Margin: - Three months ended June 30, 2025: 43.6%13 - Three months ended June 30, 2024: 20.3%13 - Six months ended June 30, 2025: 43.0%13 - Six months ended June 30, 2024: 19.2%13 Condensed Consolidated Statements of Stockholders' Equity Equity statements detail changes for Q2 and H1 2025, with total stockholders' equity decreasing to $5,055 thousand due to net losses | Metric | Balance, Jan 1, 2025 | Balance, June 30, 2025 | Balance, Jan 1, 2024 | Balance, June 30, 2024 | | :----------------------------------- | :------------------- | :------------------- | :------------------- | :------------------- | | Common Stock Shares | 7,638,497 | 7,654,537 | 5,741,838 | 6,324,266 | | Common Stock Amount ($ in thousands) | $8 | $8 | $6 | $6 | | Additional Paid-in Capital ($ in thousands) | $23,743 | $24,036 | $19,406 | $20,614 | | Accumulated Deficit ($ in thousands) | $(17,996) | $(19,373) | $(14,715) | $(16,453) | | Total Stockholders' Equity ($ in thousands) | $6,080 | $5,055 | $5,166 | $4,527 | - Share-based compensation and restricted stock vesting amounted to $293 thousand for the six months ended June 30, 2025, compared to $118 thousand for the same period in 202416 - Equity offering proceeds, net of expenses, in 2024 were $946 thousand16 Condensed Consolidated Statements of Cash Flows Cash flow statements show a net decrease in cash, with operating cash usage decreasing and financing activities shifting to cash usage | Metric | 6 Months Ended June 30, 2025 ($ in thousands) | 6 Months Ended June 30, 2024 ($ in thousands) | | :----------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash used in operating activities | $(807) | $(1,792) | | Net cash used in investing activities | $(20) | $(704) | | Net cash provided by (used in) financing activities | $(255) | $865 | | Net Decrease in Cash | $(1,082) | $(1,631) | | Cash – End of period | $725 | $1,069 | - Net cash used in operating activities decreased from $1,792 thousand in 2024 to $807 thousand in 2025, indicating improved operational cash management18 - Investing activities in 2024 included $361 thousand in capital expenditures and $400 thousand for asset acquisition, significantly higher than $20 thousand in 202518 Notes to Condensed Consolidated Financial Statements This section provides detailed disclosures and explanations for the financial statements, covering policies, segments, and transactions Note 1. Description of Business and Basis of Presentation NexGel manufactures hydrogels, expanded into branded consumer products and custom labels, and made key acquisitions like Silly George and Kenkoderm - NexGel manufactures high water content, electron beam cross-linked, aqueous polymer hydrogels for wound care, medical diagnostics, transdermal drug delivery, and cosmetics19 - Since 2020, the company has expanded into branded consumer products and custom/white label opportunities, moving beyond its historical role as a contract manufacturer19 - Key acquisitions include Silly George (eyeliner, fake eyelashes, lash serum, mascara business) on May 15, 2024, and Kenkoderm (skincare line for psoriasis) on December 1, 20232021 Note 2. Going Concern NexGel's financial position raises substantial doubt about its going concern ability, prompting strategies for sales growth and capital raises - As of June 30, 2025, the Company had a cash balance of $725 thousand, a net loss attributable to NexGel stockholders of $1.4 million, and net cash usage in operating activities of $807 thousand, raising substantial doubt about its ability to continue as a going concern27 - Management is exploring new product channel sales in adjacent industries (cosmetics, athletic products, proprietary medical devices) and increasing focus on sales and developing a sales pipeline28 - Plans include maintaining and growing the existing contract manufacturing business, building a catalog of consumer products, developing proprietary medical devices, and evaluating strategic initiatives (e.g., acquisitions) and additional capital raises through debt or equity29 Note 3. Significant Accounting Policies and Estimates This note details NexGel's significant accounting policies and estimates, including segment reporting, revenue recognition, and fair value measurements - The Company has two reportable segments: the NexGel segment (manufacturing hydrogel products, Kenkoderm, Silly George, and the dissolved Enigma JV) and the CGN segment (converting and packaging business)3334 - Revenue is recognized predominately from three sources: contract manufacturing, custom and white label finished goods manufacturing, and branded consumer products, generally upon the customer obtaining control of the goods or shipment to the end customer55 | Sales Type | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | Change (YoY) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | :----------- | | Contract manufacturing | $1,811 | $1,026 | +76.5% | | Custom and white label finished goods | $27 | $42 | -35.7% | | Consumer branded products | $3,666 | $1,585 | +131.3% | | Other | $186 | $53 | +250.9% | | Total | $5,690 | $2,706 | +110.3% | Note 4. Business Segments NexGel operates two segments, NexGel and CGN JV, with the CGN JV showing improved operating income for Q2 and H1 2025 | Metric | NexGel (3M 2025, $ in thousands) | CGN JV (3M 2025, $ in thousands) | Total (3M 2025, $ in thousands) | NexGel (3M 2024, $ in thousands) | CGN JV (3M 2024, $ in thousands) | Total (3M 2024, $ in thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | | Total Revenue | $2,333 | $551 | $2,884 | $1,090 | $350 | $1,440 | | Income (Loss) from Operations | $(711) | $75 | $(636) | $(937) | $(117) | $(1,054) | | Metric | NexGel (6M 2025, $ in thousands) | CGN JV (6M 2025, $ in thousands) | Total (6M 2025, $ in thousands) | NexGel (6M 2024, $ in thousands) | CGN JV (6M 2024, $ in thousands) | Total (6M 2024, $ in thousands) | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | | Total Revenue | $4,331 | $1,359 | $5,690 | $1,941 | $765 | $2,706 | | Income (Loss) from Operations | $(1,583) | $170 | $(1,413) | $(1,716) | $(209) | $(1,925) | - The CGN JV segment improved its operating performance, moving from an operating loss of $(117) thousand in Q2 2024 to an operating income of $75 thousand in Q2 2025, and from $(209) thousand in H1 2024 to $170 thousand in H1 20258587899192 Note 5. Acquisition This note details NexGel's acquisitions of Silly George and Kenkoderm, along with its interest in the consolidated CGN JV - Silly George Acquisition (May 15, 2024): Purchased for $600 thousand, consisting of $400 thousand cash and $200 thousand in 89,892 shares of common stock979899 - Kenkoderm Acquisition (December 1, 2023): Purchased for $986 thousand, comprising $547 thousand cash and $439 thousand in contingent consideration liability100101103 - CGN Joint Venture: Acquired a 50% interest on March 1, 2023, contributing $500 thousand cash, and is consolidated as a Variable Interest Entity (VIE)104105106 Note 6. Variable interest entities This note details assets and liabilities of consolidated VIEs, primarily the CGN JV, with all liabilities being non-recourse | Metric | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Total Assets | $3,092 | $3,307 | | Total Liabilities | $2,362 | $2,731 | | Cash | $171 | $26 | | Accounts receivable, net | $506 | $764 | | Inventory | $621 | $646 | - The Enigma JV was dissolved on December 23, 2024111 - All liabilities of the consolidated VIEs are non-recourse to NexGel, Inc. as of June 30, 2025, and December 31, 2024112 Note 7. Operating Leases NexGel holds operating leases for facilities in PA and TX, with total undiscounted payments of $1,853 thousand as of Q2 2025 - The Company has an operating lease for a commercial manufacturing facility and administrative offices in Langhorne, Pennsylvania, running through January 2031113 - A sublease for office and manufacturing space in Granbury, Texas, runs through February 2028114 | Metric | Amount ($ in thousands) | | :-------------------------------- | :---------------------- | | Total undiscounted operating lease payments | $1,853 | | Present value of operating lease liability | $1,680 | | Weighted average remaining lease term | 5.9 years | | Weighted average discount rate | 3.0% | Note 8. Financing Lease The CGN JV entered a financing lease for equipment in February 2024, with a present value of $337 thousand as of Q2 2025 - In February 2024, the CGN JV entered into a financing lease agreement for certain equipment, maturing in January 2030116 | Metric | Amount ($ in thousands) | | :-------------------------------- | :---------------------- | | Total undiscounted financing lease payments | $415 | | Present value of financing lease liability | $337 | | Weighted average remaining lease term | 4.6 years | | Weighted average discount rate | 9.1% | Note 9. Inventory Inventory increased slightly to $1,821 thousand as of Q2 2025, comprising raw materials, WIP, and finished goods with no reserve | Category | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Raw materials | $831 | $723 | | Work-in-progress | $52 | $25 | | Finished goods | $938 | $1,003 | | Total Inventory | $1,821 | $1,751 | - No inventory reserve for excess and slow-moving inventory was recorded as of June 30, 2025, and December 31, 2024118 Note 10. Property and Equipment, Net Net property and equipment decreased to $2,070 thousand as of Q2 2025, primarily due to increased accumulated depreciation | Category | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Machinery and equipment | $2,123 | $2,118 | | Office furniture and equipment | $191 | $187 | | Leasehold improvements | $419 | $419 | | Construction in progress | $543 | $532 | | Less: accumulated depreciation and amortization | $(1,206) | $(1,045) | | Property and equipment, net | $2,070 | $2,211 | - Depreciation expense for the six months ended June 30, 2025, was $162 thousand, compared to $76 thousand for the same period in 2024119 Note 11. Intangible Assets Net intangible assets decreased to $744 thousand, including $600 thousand in indefinite-lived trademarks from the Silly George acquisition | Category | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Product/technology related, net | $85 | $134 | | Marketing related, net | $659 | $673 | | Total identifiable intangible assets, net | $744 | $807 | - The Silly George acquisition on May 15, 2024, included $600 thousand in trademark related intangibles with indefinite lives120 | Fiscal Year | Estimated Annual Amortization Expense ($ in thousands) | | :----------------------- | :------------------------------------- | | 2025 (remainder of year) | $62 | | 2026 | $64 | | 2027 | $13 | | 2028 | $2 | | 2029 | $2 | | Thereafter | $1 | | Subtotal (definite-lived) | $144 | | Indefinite lived intangible assets | $600 | | Total | $744 | Note 12. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities increased to $534 thousand, mainly due to higher salaries, benefits, and incentive compensation | Category | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Salaries, benefits, and incentive compensation | $340 | $242 | | Other | $194 | $68 | | Total accrued expenses and other current liabilities | $534 | $310 | Note 13. Common Stock As of Q2 2025, NexGel had 7,654,537 shares outstanding, with shares reserved for compensation and warrants from a 2024 offering - As of June 30, 2025, 7,654,537 shares of common stock were issued and outstanding11 - The Company has reserved 879,111 shares for its share-based compensation plan, 4,765,205 shares for warrants to purchase common stock, and 89,990 shares for restricted stock units124 - A February 2024 offering resulted in the issuance of 485,782 shares of common stock and warrants to purchase up to 242,891 shares, generating net proceeds of $900 thousand124126 Note 14. Share-based Compensation NexGel's 2019 Incentive Plan has 1,651,429 reserved shares, with 879,111 options outstanding and $293 thousand in H1 2025 expense - The 2019 Long-Term Incentive Plan has 1,651,429 shares of common stock reserved for awards129 | Metric | Number of Options | Weighted Average Exercise Price | | :-------------------------------- | :---------------- | :------------------------------ | | Outstanding at January 1, 2025 | 588,397 | $2.67 | | Granted | 370,000 | $3.34 | | Exercised | (6,458) | $2.05 | | Forfeited | — | — | | Cancelled | (58,542) | $2.01 | | Expired | (14,286) | $5.25 | | Outstanding at June 30, 2025 | 879,111 | $2.96 | | Exercisable at June 30, 2025 | 374,111 | $2.13 | - Total unrecognized share-based compensation related to unvested stock options was approximately $687 thousand, and for unvested RSUs was $124 thousand, as of June 30, 2025137146 Note 15. Notes Payable Notes payable for NexGel and CGN JV total $539 thousand long-term, including equipment notes and an EIDL | Segment | Type | Principal Balance (June 30, 2025, $ in thousands) | Interest Rate | | :---------------- | :-------------------------------- | :---------------------------------------- | :------------ | | CGN JV | Equipment Promissory Note 1 | $178 | 8% | | CGN JV | Equipment Promissory Note 2 | $186 | 8% | | NexGel | Leasehold Improvements Promissory Note | $4 | 0% | | NexGel | Economic Injury Disaster Loan (EIDL) | $270 | 3.75% | - The total long-term portion of notes payable, net of current portion, was $539 thousand as of June 30, 2025152 Note 16. Warrant Liability Warrant liability, a Level 3 fair value item, decreased to $14 thousand for 57,777 outstanding warrants as of Q2 2025 | Metric | December 31, 2024 ($ in thousands) | June 30, 2025 ($ in thousands) | Change ($ in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------------------- | | Warrants Outstanding | 57,777 | 57,777 | 0 | | Fair Value per Share | $2.05 | $0.25 | $(1.80) | | Fair Value | $118 | $14 | $(104) | - The warrant liabilities are considered Level 3 liabilities on the fair value hierarchy, with fair value determined using a Black-Scholes option valuation model154 Note 17. Commitments and Contingencies NexGel may face legal proceedings, but management is unaware of material matters beyond those disclosed in Part II, Item 1 - The Company may be subject to legal proceedings and claims that arise in the ordinary course of business155 - Management is not currently aware of any matters that will or may have a material effect on the financial position, results of operations, or cash flows of the Company, except as described in Part II, Item 1 'Legal Proceedings'155 Note 18. Concentrations of Risk NexGel faces customer concentration risk, with one customer accounting for 10% of revenue and three for 61% of receivables - For the six months ended June 30, 2025, one customer approximated 10% of total revenue156 - As of June 30, 2025, three customers had accounts receivable balances that were 12%, 14%, and 35% of total accounts receivable157 - Cash balances are maintained principally at major U.S. financial institutions and are insured by the FDIC up to regulatory limits; as of June 30, 2025, no balance exceeded the $250 thousand limit158 Note 19. Related Party Transactions As of Q2 2025, NexGel had an outstanding balance of $447 thousand due to C.G. Laboratories, Inc. for related party services - As of June 30, 2025, the Company had an outstanding balance of $447 thousand due to C.G. Laboratories, Inc., a related party160 - These balances primarily relate to transactions for contract manufacturing, packaging, and other services provided by C.G. Laboratories, Inc160 Note 20. Subsequent Events Subsequent events include an expanded partnership with STADA, a $950,000 August financing, and a new board member appointment - On July 14, 2025, the Company announced an expanded partnership with STADA Arzneimittel AG, including a $1 million non-dilutive advance to support product launches and marketing efforts162 - On July 31, 2025, the Company entered into an August Financing, closing on August 5, 2025, for the sale of 413,043 shares of common stock and warrants to purchase 206,521 shares, generating approximately $950,000 in gross proceeds163164 - On July 31, 2025, Steven A. Ciardiello was appointed to the Board and granted an option to purchase 30,000 shares of common stock at an exercise price of $2.25 per share167168 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses NexGel's business, financial condition, operations, liquidity, and capital resources, including its four business lines Overview NexGel manufactures hydrogels, expanded into branded consumer products, and operates four business lines, including the CGN JV - NexGel manufactures high water content, electron beam cross-linked, aqueous polymer hydrogels for wound care, medical diagnostics, transdermal drug delivery, and cosmetics176 - The company has expanded its business to include its own line of branded consumer products and custom/white label opportunities since 2020176 - NexGel operates four distinct lines of business: Contract Manufacturing, Custom & White Label, Consumer Branded Products (MedaGel, Kenkoderm, Silly George), and Medical Devices/Other177178180181182 Results of Operations (Three Months) Q2 2025 saw 100.3% revenue growth to $2,884 thousand and improved gross profit, but SG&A expenses increased by 49.0% - Revenues, net, increased by $1,444 thousand (100.3%) to $2,884 thousand for the three months ended June 30, 2025, primarily due to sales growth in contract manufacturing and branded products185 - Gross profit increased by $965 thousand to $1,258 thousand (43.6% margin) for the three months ended June 30, 2025, compared to $293 thousand (20.3% margin) in the prior year, mainly driven by consumer branded products186 - Selling, general and administrative expenses increased by $623 thousand (49.0%) to $1,894 thousand, primarily due to increases in compensation and benefits (+53.6%), share-based compensation (+132.1%), and advertising, marketing, and Amazon fees (+91.1%) related to consumer branded product sales188189190191 Results of Operations (Six Months) H1 2025 revenues grew 110.3% to $5,690 thousand with improved gross profit, while SG&A expenses increased by 63.1% - Revenues, net, increased by $2,984 thousand (110.3%) to $5,690 thousand for the six months ended June 30, 2025, primarily due to sales growth in branded consumer products and the Silly George acquisition195 - Gross profit increased by $1,927 thousand to $2,446 thousand (43.0% margin) for the six months ended June 30, 2025, compared to $519 thousand (19.2% margin) in the prior year, mainly due to branded consumer products196 - Selling, general, and administrative expenses increased by $1,492 thousand (63.1%) to $3,858 thousand, primarily driven by increased advertising, marketing, and Amazon fees (+139.7%) related to promoting Kenkoderm and Silly George199202 Liquidity and Capital Resources NexGel's cash decreased to $725 thousand, with significant cash usage in operations and investing, and working capital declined | Metric | June 30, 2025 ($ in thousands) | June 30, 2024 ($ in thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(807) | $(1,792) | | Net cash used in investing activities | $(20) | $(704) | | Net cash provided by (used in) financing activities | $(255) | $865 | | Net increase (decrease) in cash and cash equivalents | $(1,082) | $(1,631) | | Cash and cash equivalent at end of quarter | $725 | $1,069 | - Working capital decreased to $1,766 thousand at June 30, 2025, from $2,644 thousand at December 31, 2024, primarily due to the loss from operations of $1,413 thousand212 - The company intends to grow its contract manufacturing business, develop consumer products, explore proprietary medical devices, and evaluate strategic initiatives and additional capital raises to achieve profitability and financial stability215216 Off Balance Sheet Arrangements As of Q2 2025, NexGel, Inc. reported no off-balance sheet arrangements or related obligations - As of June 30, 2025, NexGel, Inc. had no off-balance sheet arrangements218 Critical Accounting Policies and Estimates Critical accounting policies involve significant judgment for share-based compensation and warrant liability, valued using Black-Scholes - Share-based compensation fair values are estimated using a Black-Scholes option valuation model, with compensation expense recognized straight-line over the vesting period, using the 'simplified method' for expected term221 - Warrant liability fair values are estimated at issuance and re-measured at each reporting period using a Black-Scholes option valuation model, with adjustments recognized in other income (expense)222 - The Black-Scholes model requires assumptions regarding the fair value of common stock, expected volatility (based on comparable public companies), dividend yield (0.0%), risk-free interest rates, and the expected term223 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Quantitative and qualitative disclosures regarding market risk are not required for NexGel, Inc - Quantitative and qualitative disclosures about market risk are not required for the Company224 ITEM 4. Controls and Procedures Disclosure controls were ineffective as of Q2 2025 due to material weaknesses in internal control over financial reporting - As of June 30, 2025, the Company's disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting225 - Identified material weaknesses include a lack of designed controls for accounting journal entry approvals and one individual having 'super user' access and security administration rights to financial reporting systems226 - Additional weaknesses noted were improper fair value adjustments to contingent consideration, failure to record adequate inventory reserves, and various balance sheet accounts not being properly reconciled, indicating an ineffective financial reporting process227 PART II – OTHER INFORMATION This section covers other information not in Part I, including legal proceedings, risk factors, and equity security sales ITEM 1. Legal Proceedings NexGel filed a declaratory judgment against Kiss Nail Products over a patent dispute concerning Silly George eyelash products - On April 9, 2025, NexGel, Inc. filed a Complaint for Declaratory Judgment against Kiss Nail Products, Inc. in the United States District Court for the Eastern District of Pennsylvania229 - The dispute relates to a takedown notice from Kiss Nail Products to Amazon.com, claiming NexGel's Silly George eyelash extension products violate a U.S. patent229 - NexGel believes the patent is invalid and expects to prevail; however, an inability to prevail could result in products being removed from Amazon.com, materially affecting the business229 ITEM 1A. Risk Factors Readers are referred to the 2024 Form 10-K for risk factors, with no material changes noted in fiscal year 2025 - Readers should carefully review the risk factors described in Part I, 'Item 1A. Risk Factors' in the Company's 2024 Annual Report on Form 10-K231 - There have been no material changes during fiscal year 2025 to the risk factors included in the Form 10-K231 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds NexGel did not sell any unregistered securities or repurchase its own securities during the six months ended June 30, 2025 - The Company did not sell any unregistered securities during the six months ended June 30, 2025232 - The Company did not repurchase any of its securities during the six months ended June 30, 2025233 ITEM 3. Defaults Upon Senior Securities NexGel, Inc. reported no defaults upon senior securities - There were no defaults upon senior securities234 ITEM 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to NexGel, Inc - Mine Safety Disclosures are not applicable to the Company235 ITEM 5. Other Information Two officers and directors adopted Rule 10b5-1 trading plans for common stock sales during Q2 2025 - Scott R. Henry, a board member, adopted a Rule 10b5-1 trading plan on June 24, 2025, for the sale of up to 35,515 shares of common stock, terminating on December 31, 2026237 - Adam R. Levy, CEO and board member, adopted a Rule 10b5-1 trading plan on June 24, 2025, for the sale of up to 24,000 shares of common stock, terminating on February 27, 2026238 ITEM 6. Exhibits This item lists exhibits filed with the Form 10-Q, including corporate documents, certifications, and XBRL financials - Exhibits include Certificate of Incorporation, Bylaws, Certification of Chief Executive Officer (31.1, 32.1), Certification of Chief Financial Officer (31.2, 32.2), and iXBRL formatted financial statements (101, 104)241 Signatures The report is signed by the CEO and CFO, certifying its submission on August 12, 2025 - The report was signed by Adam Levy, Chief Executive Officer, and Joseph F. McGuire, Chief Financial Officer246 - The signing date of the report was August 12, 2025246