Sol-Gel(SLGL) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenue for the six months ended June 30, 2025, was $18,292,000, representing a 210% increase compared to $5,899,000 for the same period in 2024[8] - Net income for the six months ended June 30, 2025, was $2,802,000, compared to a net loss of $4,368,000 for the same period in 2024[8] - Operating income for the three months ended June 30, 2025, was $11,230,000, a significant improvement from an operating loss of $1,624,000 for the same period in 2024[8] - The total revenue for the six months ended June 30, 2025, was $18.292 million, a substantial increase from $5.899 million in the same period of 2024[49] Assets and Liabilities - Cash and cash equivalents decreased to $10,221,000 as of June 30, 2025, from $19,489,000 as of December 31, 2024[5] - Total current assets increased to $36,262,000 as of June 30, 2025, up from $31,295,000 as of December 31, 2024[5] - Total liabilities increased to $7,425,000 as of June 30, 2025, compared to $6,996,000 as of December 31, 2024[5] - Shareholders' equity rose to $31,882,000 as of June 30, 2025, from $28,850,000 as of January 1, 2025[5] - The Company’s marketable securities increased from $4.425 million on December 31, 2024, to $14.054 million by June 30, 2025, indicating a significant growth in investments[45] Research and Development - Research and development expenses for the six months ended June 30, 2025, were $13,489,000, compared to $7,783,000 for the same period in 2024[8] - As of June 30, 2025, the Company recognized R&D expenses of $13.489 million for the six months ended, compared to $7.783 million for the same period in 2024, reflecting an increase of approximately 73%[49] - The Company plans to fund approximately $2.9 million for a hydrogenator to support the commercial manufacturing of Patidegib API[28] Agreements and Contracts - The company has two approved drugs: Twyneo® and Epsolay®, with Twyneo® available for purchase since April 14, 2022, and Epsolay® since June 2, 2022[24] - The company entered into a Termination Agreement with Padagis, which includes a payment of $4,250,000 and future royalties[24] - The Company entered into an asset purchase agreement with PellePharm for the acquisition of assets related to patidegib, with an upfront payment of $4 million and potential future payments totaling up to $70 million based on development and commercial milestones[25] - The Company expects to receive a total of $16 million from Mayne Pharma in two installments, with $10 million received in May 2025 and $6 million expected in Q4 2025[30] - The Company entered into a Termination Agreement with Padagis for the sale of rights related to Roflumilast cream and foam, receiving $4,250 in total, paid in eight quarterly installments, plus 2% royalties on gross profits[54] - The Company entered into a product purchase agreement with Mayne Pharma for the sale and exclusive license of U.S. rights to EPSOLAY and TWYNEO, entitled to receive $16 million in total, with $10 million in Q2 2025 and $6 million in Q4 2025[57] Operational Updates - The Company’s subsidiary in the U.S. ceased operations in 2024, impacting its marketing and regulatory affairs[31] - The Company continues to monitor its operations in Israel amid ongoing geopolitical tensions, with no material impact reported as of June 30, 2025[33] Revenue Recognition - The Company recognized revenue of $24 and $42 from continuing services for the six months ended June 30, 2025, and 2024, respectively, and $750 as license revenue in 2025 compared to $0 in 2024[54] - For the six months ended June 30, 2025, the Company did not recognize any revenue from the sale of intellectual property, compared to $4.8 million for the same period in 2024[56] - The Company allocated $200 to support services to be recognized over time, with only $8 thousand recognized for continuing support as of June 30, 2025[57] - The Company has identified multiple performance obligations in agreements, recognizing revenue from the sale of IP at a point in time upon transfer of control[54] Stock Options - The Company granted 14,054 options to executive officers in February 2025 at an exercise price of $8.96 per share, vesting over four years[59] - The weighted average fair value of options granted in February 2025 was $53, with an expected volatility of 69.85% and a risk-free interest rate of 4.48%[61] Management and Segmentation - The Chief Executive Officer manages the Company's business activities as a single operating segment, using consolidated net income to assess performance[63]