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
financial results for the fourth quarter and full year ended
December 31, 2022.
Adam Levy, NEXGEL’s Chief Executive Officer,
commented, “We are pleased to surpass $2 million in full year
revenue for 2022, a 32% year-over-year increase, driven primarily
by a 34.7% increase in contract manufacturing and a 67.0% increase
in branded consumer products. At year-end, we had over $6.6 million
of cash and securities, providing us with ample working capital to
execute on our growth plans and operate our business plan through
2025.”
Mr. Levy continued, “As we continue through
2023, we anticipate our investments in R&D and joint ventures,
new product launches, and partnerships to generate further
year-over-year revenue growth. Our team has continued to navigate a
challenging macroeconomic backdrop by being disciplined with cash
deployment, while continuing to execute a thoughtful, multi-pronged
business strategy to drive our future growth.”
Fourth Quarter 2022 Operational
Highlights
|
● |
Launched Turfguard, a unique hydrogel dressing for soothing turf
burn and protecting athletic wounds. Turfguard’s sterile silver
patches, cleared by the U.S. Food and Drug Administration for use
on turf burns, kills 99% of staph, MRSA, and strep. |
|
● |
Reported positive results from proof-of-concept study comparing its
diclofenac hydrogel patches designed to treat pain indications such
as arthritis, joint pain, muscle aches and more against leading
commercially available topical treatments. |
|
● |
Developed a new, proprietary hydrogel eye patch to treat amblyopia,
a type of poor vision that typically occurs in one or both eyes
often referred to as lazy eye, that is much gentler on the skin and
is manufactured without the use of harsh chemicals or painful
adhesives. |
|
● |
SAGE Journals’ Scars, Burns and Healing publication, a
peer-reviewed journal that focuses on scar and burns research,
published new data from a study evaluating the impact of NEXGEL’s
SilverSeal® hydrogel dressing on postoperative scarring and
complications. The results demonstrated significant scar
improvement in patients treated with SilverSeal. |
Operational Highlights Subsequent to
Fourth Quarter 2022
|
● |
Partnered with former Major League Lacrosse player and founder of
The Face-off Academy, Greg “The Beast” Gurenlian, to provide
athletes with a better treatment for turf burn through the use of
NEXGEL’s Turfguard. |
|
● |
Acquired a 50% interest in a newly formed joint venture (“JV”), CG
Converting and Packaging, LLC, with C.G. Laboratories Inc. (“CG
Labs”) for its converting and packaging business. |
|
● |
Executed supply agreement with large new customer relating to a new
consumer product. |
|
● |
Appointed Scott Henry, CFA, as a new independent director to the
Company’s Board of Directors as well as a member of the Board’s
Audit Committee. |
Fourth Quarter and Full Year 2022
Financial Highlights
For the fourth quarter of 2022, revenue totaled
$524 thousand, a slight decrease as compared to $533 thousand in
the fourth quarter of 2021. During the fourth quarter of 2022,
branded consumer product sales as a percentage of revenue was
approximately 37%, a change of approximately 4% from the third
quarter of 2022 when branded consumer product sales were 41% of
revenue. The decrease is predominately due to a slowdown from the
Amazon marketplace and supply chain delays that delayed new product
launches originally scheduled for early Q4 into late Q4 and early
Q1. Contract manufacturing revenue for the fourth quarter 2022 as a
percentage of revenue was 57%. In 2023, management expects branded
consumer product and contract manufacturing to each contribute
approximately 50% to revenue.
For the year ended December 31, 2022, revenue
totaled $2.05 million, an increase of $497 thousand, or 32%, when
compared to $1.55 million for the year ended December 31, 2021. The
increase in overall revenues was primarily due to sales growth
year-over-year in both our contract manufacturing of 34.7% and
branded products of 67.0%.
Gross profit for the fourth quarter of 2022 was
$36 thousand compared to $103 thousand for the same period in 2021
reflecting a higher percentage of lower margin contract
manufacturing revenue during the quarter. Gross profit margin for
the fourth quarter of 2022 was 7%.
Gross profit was $256 thousand for the year
ended December 31, 2022, compared to a gross profit of $8 thousand
for the year ended December 31, 2021. The year-over-year increase
was primarily due to the increase in revenues from higher margin
Branded Products and R&D revenue. Gross profit margin was
approximately 12.5% for the year ended December 31, 2022, over a
3,100% improvement compared to 0.5% for the year ended December 31,
2021. The Company anticipates continued improvement in gross
margins due to both increased revenue against fixed facility
expenses and larger productions runs on commercially proven
products.
Cost of revenues was $488 thousand for the
quarter ended December 31, 2022, an increase of $58 thousand
compared to $430 thousand for the quarter ended December 31, 2021.
The increase in cost of revenues was attributable to the Company’s
revenue growth.
Cost of revenues increased by $249 thousand, or
16.1%, to $1.8 million for the year ended December 31, 2022, as
compared to $1.5 million for the year ended December 31, 2021. The
increase in cost of revenues is reflective of the Company’s
year-over-year revenue growth.
Total operating expenses, including R&D and
SG&A expenses, decreased to $816 thousand for the three months
ended December 31, 2022, as compared to $991 thousand for the prior
year period. The decrease was attributable to a reduction in
SG&A expenses in the quarter.
Total operating expenses, including R&D and
SG&A expenses, increased to $3.6 million for the year ended
December 31, 2022, as compared to $2.6 million for the prior year.
The increase was primarily attributable to an increase in franchise
tax expense, increased research and development investment related
to the initiation of two proof of concept studies for drug delivery
candidates utilizing our hydrogel technology, and the costs for
professional fees and other administrative expenses associated with
public company governance requirements. The exceptionally high
franchise tax was due to the Company’s IPO and the associated
increase in gross assets. The Company has reduced its number of
authorized shares which will significantly reduce the franchise tax
in 2023 and beyond. The Company expects its franchise tax liability
will be approximately $24 thousand in 2023.
Research and development expenses. Research and
development expenses increased by $336 thousand to $367 thousand
for the year ended December 31, 2022, from $31 thousand for the
year ended December 31, 2021. The increase is due to the initiation
of two proof of concept studies for drug delivery candidates
utilizing our hydrogel technology.
Net loss for the year ended December 31, 2022,
was $4.75 million as compared to $4.31 million for the same period
the year prior. Interest expense totaled $1.3 million for the full
year 2022, as compared to $1.9 million for the full year 2021. In
2022 we paid off all our convertible debt, which makes up the
majority of this interest expense, and as a result, our interest
expense will dramatically decrease in 2023.
As of December 31, 2022, NEXGEL had $6.6 million
of cash and cash equivalents and marketable securities, which
includes an investment in US treasuries of $5.5 million.
As of December 31, 2022, NEXGEL had 5,572,234
shares of common stock outstanding.
NEXGEL Fourth Quarter and Full Year 2022
Financial Results Conference Call
Management will host a conference call and
webcast today at 4:30 p.m. Eastern Time to discuss its operational
and financial results for the fourth quarter and full year
2022.
Date: March 27,
2023Time: 4:30 P.M. ETLive Call:
+1-877-407-9208 (U.S. Toll Free) or +1-201-493-6784
(International)Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1600317&tp_key=5dc1f7e99c
For interested individuals unable to join the
conference call, a replay will be available through April 3, 2023,
at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671
(International). Participants must use the following code to access
the replay of the call: 13736617. An archived version of the
webcast will also be available on NEXGEL’s Investor Relations site:
https://ir.nexgel.com/.
About NEXGEL, INC.
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/.
Investor Contacts:
Valter Pinto, Managing DirectorKCSA Strategic
Communications212.896.1254valter@kcsa.com
Media Contacts:
Kelly KnobeckDirector of Consumer
Productsinfo@nexgel.com
NEXGEL, INCCONSOLIDATED
BALANCE SHEETS(in thousands, except share and per share
data)
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,101 |
|
|
$ |
13,350 |
|
Marketable securities |
|
|
5,508 |
|
|
|
- |
|
Accounts receivable, net |
|
|
222 |
|
|
|
209 |
|
Inventory |
|
|
502 |
|
|
|
291 |
|
Prepaid expenses and other current assets |
|
|
172 |
|
|
|
77 |
|
Total current assets |
|
|
7,505 |
|
|
|
13,927 |
|
Goodwill |
|
|
311 |
|
|
|
311 |
|
Intangibles, net |
|
|
20 |
|
|
|
33 |
|
Property and equipment,
net |
|
|
721 |
|
|
|
723 |
|
Operating lease - right of use
asset |
|
|
1,737 |
|
|
|
1,926 |
|
Other assets |
|
|
63 |
|
|
|
63 |
|
Total assets |
|
$ |
10,357 |
|
|
$ |
16,983 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
265 |
|
|
$ |
254 |
|
Accrued expenses and other current liabilities |
|
|
130 |
|
|
|
62 |
|
Convertible notes payable, net of deferred financing costs |
|
|
- |
|
|
|
2,037 |
|
Notes payable, current portion |
|
|
15 |
|
|
|
10 |
|
Warrant liability |
|
|
242 |
|
|
|
318 |
|
Operating lease liability, current portion |
|
|
207 |
|
|
|
207 |
|
Total current liabilities |
|
|
859 |
|
|
|
2,888 |
|
Operating lease liability, net of current portion |
|
|
1,593 |
|
|
|
1,744 |
|
Notes payable, net of current portion |
|
|
268 |
|
|
|
266 |
|
Total liabilities |
|
|
2,720 |
|
|
|
4,898 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
(Note 15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 25,000,000 shares authorized; 5,577,916 and 5,572,234
shares issued and outstanding as of both December 31, 2022 and
2021 |
|
|
6 |
|
|
|
6 |
|
Additional paid-in
capital |
|
|
19,189 |
|
|
|
18,891 |
|
Accumulated deficit |
|
|
(11,558 |
) |
|
|
(6,812 |
) |
Total stockholders’
equity |
|
|
7,637 |
|
|
|
12,085 |
|
Total liabilities and
stockholders’ equity |
|
$ |
10,357 |
|
|
$ |
16,983 |
|
NEXGEL, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except share and
per share data)
|
|
Year Ended December 31, |
|
|
|
2022 |
|
|
2021 |
|
Revenues, net |
|
$ |
2,048 |
|
|
$ |
1,551 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
1,792 |
|
|
|
1,543 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
256 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
367 |
|
|
|
31 |
|
Selling, general and
administrative |
|
|
3,237 |
|
|
|
2,547 |
|
Total operating expenses |
|
|
3,604 |
|
|
|
2,578 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(3,348 |
) |
|
|
(2,570 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Change in fair value of
warrant liability and warrant modification expense |
|
|
76 |
|
|
|
8 |
|
Forgiveness of debt |
|
|
- |
|
|
|
275 |
|
Debt financing costs |
|
|
- |
|
|
|
(68 |
) |
Unrealized gain on investments
in marketable securities |
|
|
9 |
|
|
|
- |
|
Loss on debt
extinguishment |
|
|
(150 |
) |
|
|
(25 |
) |
Interest expense |
|
|
(1,336 |
) |
|
|
(1,930 |
) |
Other income |
|
|
3 |
|
|
|
- |
|
Total other income
(expense) |
|
|
(1,398 |
) |
|
|
(1,740 |
) |
Net loss |
|
$ |
(4,746 |
) |
|
$ |
(4,310 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share –
basic and diluted |
|
$ |
(0.85 |
) |
|
$ |
(1.45 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares used
in computing net loss per common share – basic and diluted |
|
|
5,574,818 |
|
|
|
2,979,962 |
|
NEXGEL, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(in thousands)
|
|
Year Ended December 31, |
|
|
|
2022 |
|
|
2021 |
|
Operating
Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,746 |
) |
|
$ |
(4,310 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
112 |
|
|
|
113 |
|
Share-based compensation |
|
|
298 |
|
|
|
285 |
|
Gain on investment in marketable securities |
|
|
(9 |
) |
|
|
- |
|
Changes in fair value of warrant liability |
|
|
(133 |
) |
|
|
(8 |
) |
Warrant modification expense |
|
|
57 |
|
|
|
52 |
|
Forgiveness of debt |
|
|
- |
|
|
|
(275 |
) |
Amortization of right of use asset |
|
|
189 |
|
|
|
25 |
|
Loss of extinguishment of debt |
|
|
150 |
|
|
|
25 |
|
Amortization of deferred financing costs |
|
|
1,324 |
|
|
|
1,933 |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(13 |
) |
|
|
(137 |
) |
Inventory |
|
|
(211 |
) |
|
|
(58 |
) |
Prepaid expenses and other current assets |
|
|
(95 |
) |
|
|
63 |
|
Accounts payable |
|
|
11 |
|
|
|
(405 |
) |
Accrued expenses and other current liabilities |
|
|
74 |
|
|
|
(18 |
) |
Deferred revenue |
|
|
- |
|
|
|
(38 |
) |
Net Cash Used in
Operating Activities |
|
|
(2,992 |
) |
|
|
(2,753 |
) |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
|
Purchases of equipment |
|
|
(96 |
) |
|
|
(269 |
) |
Proceeds from sales of marketable securities |
|
|
1,500 |
|
|
|
- |
|
Investments in or Purchases of marketable securities |
|
|
(6,999 |
) |
|
|
- |
|
Net Cash Used in
Investing Activities |
|
|
(5,595 |
) |
|
|
(269 |
) |
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
|
Principal payments on operating lease liability |
|
|
(151 |
) |
|
|
- |
|
Issuance of common stock, net of issuance costs |
|
|
- |
|
|
|
13,471 |
|
Proceeds from notes payable |
|
|
- |
|
|
|
15 |
|
Proceeds from convertible notes |
|
|
- |
|
|
|
2,957 |
|
Payment of financing costs |
|
|
- |
|
|
|
(115 |
) |
Principal payments of notes payable |
|
|
- |
|
|
|
(15 |
) |
Principal payments on convertible notes |
|
|
(3,511 |
) |
|
|
(100 |
) |
Proceeds from notes payable (PPP) |
|
|
- |
|
|
|
127 |
|
Net Cash Used in
Financing Activities |
|
|
(3,662 |
) |
|
|
16,340 |
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash |
|
|
(12,249 |
) |
|
|
13,318 |
|
Cash – Beginning of year |
|
|
13,350 |
|
|
|
32 |
|
Cash – End of year |
|
$ |
1,101 |
|
|
$ |
13,350 |
|
Supplemental 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 |
|
Grafico Azioni NexGel (NASDAQ:NXGLW)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni NexGel (NASDAQ:NXGLW)
Storico
Da Giu 2023 a Giu 2024