NEXGEL (NasdaqCM:NXGL) Conference Summary Company Overview - NEXGEL has transitioned into a consumer products company, generating approximately $8 million annually from direct-to-consumer products [1] - The company operates a 16,500 square foot facility in Langhorne, Pennsylvania, housing an electron beam accelerator, one of only two such facilities globally [2] Industry Position - NEXGEL produces hydrogels for both consumer and medical applications, with a focus on biocompatible products for sensitive skin [6] - The company has established a joint venture with CG, addressing bottlenecks in converting and packaging processes, which previously limited production capacity [4] Product Development and Innovations - NEXGEL is developing a drug delivery pipeline, including a diclofenac patch that delivers medication faster than traditional creams [7] - The company is exploring a patch for Apremilast delivery, targeting patients with stubborn lesions who cannot tolerate systemic treatments [9] - SilverSeal, a flagship product, is a 94% water wound dressing with antimicrobial properties, showing promise in reducing scarring [13] Strategic Partnerships - A significant partnership with Cintas Corporation involves distributing SilverSeal products, with strong reorder patterns observed [20][21] - NEXGEL has a joint venture with Stada, a major European consumer healthcare company, to market products in the U.S., with plans for multiple product launches [22][23] Financial Performance - The company reported over 100% revenue growth in Q2, driven by consumer product sales and contract manufacturing [34] - NEXGEL received $1 million in non-dilutive funding from Stada to support its joint venture and product launches [23][36] Future Outlook - The company anticipates significant revenue opportunities from partnerships, particularly with AbbVie regarding the Resonic cellulite treatment [26][28] - NEXGEL is actively pursuing additional partnerships and has a robust pipeline of research and development projects [29][36] Key Challenges - The medical device side of the business has longer lead times for revenue recognition compared to consumer products, which can delay financial performance [35] - The company is managing capacity issues and production bottlenecks as it scales operations [4][6] Additional Insights - NEXGEL's hydrogel technology is being explored for aesthetic applications, including laser hair removal, which could open new market opportunities [30][32] - The company is focused on maintaining a strong cash position to support ongoing marketing and product development initiatives [36]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was approximately $2.9 million, a 100% increase year over year and a slight sequential increase [5][17] - Gross margins improved to 43.6%, more than double the 20.3% reported in Q2 2024, and increased from 42.4% sequentially [5][18] - Adjusted EBITDA loss narrowed to negative $420,000 compared to negative $790,000 for the same period last year [6][20] - Net loss attributable to stockholders was $670,000, down from $890,000 in Q2 2024 [20] Business Line Data and Key Metrics Changes - Contract manufacturing revenue increased to $863,000, a 103% year over year increase from approximately $425,000 in 2024 [6] - Consumer products revenue increased by 95% year over year, driven by growth across the brand portfolio [12] Market Data and Key Metrics Changes - The company is seeing increased demand from domestic companies due to tariffs, although the impact on margins has been mild [35][36] - The partnership with Cintas remains strong, with ongoing sales of the SilverSeal product included in their wound care kits [7][75] Company Strategy and Development Direction - The company aims to continue expanding its contract manufacturing and white label business as a major driver of growth [11] - New product launches are planned, including an expanded beauty line and additional skincare solutions, reflecting the commitment to innovative, high-quality products [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive EBITDA by the end of the year and maintaining guidance for $13 million in revenue [15][81] - The company is preparing for potential economic downturns by focusing on high-margin consumer products and evaluating cost structures [66] Other Important Information - The company received $1 million in non-dilutive funding from STATA to support upcoming product launches and marketing initiatives [15][21] - The company has sufficient cash on hand, including recent capital raises, to support growth initiatives [21] Q&A Session Summary Question: Market opportunities for upcoming launches - Management discussed the potential for new digestive enzyme products, which target larger markets compared to existing products [22][23] Question: Retail strategy and brand consolidation - Management clarified that brands will maintain their unique identities and are currently exploring private label opportunities [25][27] Question: Manufacturing capacity and onboarding new customers - Current manufacturing capacity is underutilized, allowing for onboarding of new customers without immediate expansion [29][30] Question: Impact of tariffs on the business - Management noted a mild negative impact on margins but increased interest from domestic companies [35][36] Question: Status of AbbVie partnership - Management confirmed delays in the AbbVie project but remains optimistic about future developments [40][44] Question: New product details from Silly George - Management highlighted successful new product launches and strong sales performance [48][51] Question: Cash position and recession preparedness - Management is considering strategies for potential economic downturns while maintaining a focus on high-margin products [66] Question: Ranking of partnerships - Management identified key partnerships, including Cintas and AbbVie, as significant opportunities for growth [75]

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]