Nexgel (NXGL) Q1 2026 Earnings Transcript

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DATE

Friday, May 15, 2026 at 12 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Adam R. Levy
• Chief Financial Officer — Ian Blackman

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TAKEAWAYS

• Revenue -- $2.65 million, down from $2.81 million, reflecting flat business, a decrease in Silly George sales, and partial offset from growth in contract manufacturing and MEDAGEL.
• Cash and Restricted Cash -- $2.1 million at quarter-end and $1.8 million as of the call date.
• Financing Raised -- $13.8 million raised, comprising $8.8 million in cash and a $5 million convertible note to Cellularity for the BioNX acquisition and working capital.
• SG&A Expense Increase -- Attributed mainly to acquisition costs for BioNX and the KISS Nail Products legal settlement.
• BioNX Acquisition -- Closed in mid-April; the acquired portfolio includes 6 commercial-stage regenerative biomaterial products with decade-long clinical use and coverage in approximately 500 U.S. hospitals.
• Pro Forma Revenue Projection -- Management anticipates the acquisition "to approximately triple our annual revenue to roughly $35 million and to be immediately accretive to profitability upon closing."
• Operating Expense Outlook -- Operating overhead expected at an approximate monthly run rate of $500,000 encompassing all salaries, marketing, and commissions.
• Contract Manufacturing and MEDAGEL Growth -- Growth reported in both segments, with MEDAGEL including products under the STADA brand.
• Product Development Pipeline -- Three 510(k) devices in development with $4.6 million in paid-in capital, slated for commercialization during 2027, 2026, and 2020.
• KISS Nail Legal Case -- Legal matter cited as settled during the quarter; related SG&A expenses incurred.
• Board and Management Changes -- Addition of Sequence LifeScience executives Brian J. Keeser and Kevin Harris to the board following the financing and appointment of Dave Hazard as Vice President of Sales for BioNX Surgical.

SUMMARY

The quarter reflected a transitional phase driven by the recent BioNX acquisition and associated costs. No contribution from BioNX was recorded in the financials yet, but management expects to reflect partial revenue from BioNX for half of the next quarter. Sales from Silly George began normalizing and showed signs of recovery in April after a weak period. Legacy product lines like STADA posted growth while iRhythm orders remained steady but below earlier expectations. Product pipeline advancement continues, backed by committed invested capital. Board composition and senior management now incorporate partners from Sequence LifeScience and experienced leadership to help support integration and future commercial expansion.

• CEO Levy stated, "we anticipate it to approximately triple our annual revenue to roughly $35 million and to be immediately accretive to profitability upon closing."
• Contract manufacturing activity offset lower sales in selected consumer brands, supporting top-line stability.
• Analyst discussion confirmed that the primary financing round is nearly complete, with minor remaining commitments from board members and expected disclosure via an imminent 8-K filing.
• Management addressed supply chain timing for newly released and soon-to-be-commercialized products, targeting further growth in multiple consumer and healthcare segments.
• Newly published clinical data from a sponsored laser hair removal study showed a 90% plume reduction and 70% efficacy, though commercial revenue impact to NEXGEL remains to be seen as marketing efforts by Innovative Optics have only recently begun.

INDUSTRY GLOSSARY

• 510(k) clearance: U.S. FDA process under which a medical device is demonstrated to be substantially equivalent to a legally marketed predicate device for market entry.
• SG&A: Selling, general, and administrative expenses, encompassing company overhead costs not directly tied to production.
• Pro forma revenue: Revenue projection that incorporates the expected contribution from completed acquisitions as if owned for the full period.

Full Conference Call Transcript

Adam R. Levy: Thank you, Valter, and thank you, everyone, for joining us today. On today's call, I would like to provide an overview of our first quarter 20 financial results and bring everyone up to speed on the progress we have made on the integration of the acquisition we recently closed in mid April. Starting with our first quarter results, revenue for the first quarter totaled 2.65 million as compared to 2.81 million for the same period last year. The business year-over-year was relatively flat, with sales from Silly George coming in lower, which were partially offset by revenue growth in both contract manufacturing and our MEDAGEL brand.

During the quarter, the increase in our SG&A was due primarily to costs incurred relating to the acquisition of our BioNX division and the KISS Nail Products legal case which has since been settled. Cash and restricted cash as of 03/31/2026 was approximately $2.1 million. As of today, our cash on hand is $1.8 million. In total, we have raised $13.8 million comprised of $8.8 million received in cash, and $5 million of our convertible note delivered to Cellularity to fund the acquisition and to provide the business with working capital. The first quarter does not include any revenue from our acquisition.

In the second quarter, we have already seen sales from Silly George normalize and recover, and we will begin accounting for revenue from our acquisition for about half of the second quarter. The financing for BioNX was led by Sequence LifeScience, with a $5.5 million investment that not only strengthen the financing structure of the transaction, but also aligns us with a partner that enhances our capabilities across manufacturing, product development, and distribution. Importantly, this transaction replaced a financial lender who was seeking a near term exit with a long term strategic partner who is focused on supporting the long term growth and execution of our business. Brian J. Keeser and Kevin Harris, CEO and COO of Sequence LifeScience.

Have since joined our board of directors. Brian and Kevin bring deep industry experience, product innovation, and a strong distribution network that will help us grow and expand the potential of our new acquisition. I am very excited to have them in our corner and I am looking forward to working with them to grow the business. The BioNX portfolio includes 6 established regenerative biomaterial products positioning us squarely within 1 of the fastest growing segments of health care. These are not early stage assets, They are commercial stage products with more than a decade of clinical use, demonstrated real world utility, and already have existing reimbursement pathways.

These products are approved in approximately 500 hospitals across The US, and represent a large opportunity for BioNX in several surgical specialties as well as wound care. To lead this effort, we recently appointed Dave Hazard as vice president of sales for BioNX Surgical, who brings more than 13 years of sales leadership across orthopedics, spine, biologics, and joins the company in an important stage in its commercial growth phase. He has a strong track record of building scalable sales infrastructure, and establishing the kind of enterprise partnerships that drive repeatable revenue. His expertise in biologics and commercial execution will be instrumental as we continue expanding operations for our newly formed BioNX division.

In addition to our existing products, we currently have 3 510(k) devices in development within our pipeline. These programs represent approximately $4.6 million in invested paid in capital and are targeted for commercialization in 2027, 2026, and 2020. Beyond the products, we have also added an experienced commercial and scientific team. This is an important aspect of the transaction as it meaningfully expands our internal capabilities and strengthens our ability to develop the markets for NEXGEL's own medical devices. This transaction will be transformative not only from a strategic standpoint, but also financially. On a pro forma basis, we anticipate it to approximately triple our annual revenue to roughly $35 million and to be immediately accretive to profitability upon closing.

Taken together, the acquisition and our strategic partnership with Sequence represents step change in NEXGEL's trajectory. We are combining a proven hydrogel platform with a portfolio of commercial regenerative products supported by a strategic manufacturing partner. This positions us to accelerate product development broaden our commercial footprint, and pursue new opportunities within the regenerative medicine landscape. Lastly, I am excited to introduce Ian Blackman as our new CFO. Ian is a veteran financial and M&A leader who has been appointed to lead the integration of our acquisition scale the business, and accelerate growth. Our board and senior leadership team is now the strongest it has ever been in our history.

We are focused on successfully integrating these assets driving commercial growth and continuing to build a platform that can generate sustained long term growth and profitability. I am looking forward to reporting on our second quarter financial results in August, where we will be able to provide more details into the integration and execution of our BioNX division. With that, I will turn the call over to the operator, and I am happy to take any questions. Operator?

Operator: Thank you. If you would like to ask a question, press *1 on your keypad. To leave the queue at any time, press #2. Once again, that is *1 to ask a question. And our first question today will come from Naz Rahman with Maxim Group. Your line is now open.

Analyst (Nas Raman): Hi, everyone. Congrats on closing the deal and the progress, and thanks for taking my I just have a few. Now that you have closed the BioNX transaction, how long has the field force, I guess, been out there promoting the product? I realize it is only going to be a limited amount of time. But how long have they been out promoting the BioNX product? And have you seen, like, I guess, in uptick in reception or sales of the products versus their prior run rate under the previous owner?

Adam R. Levy: So, okay. 3 parts. I will try to go through them in order. So we were not able to really do a lot preclosing just because of the nature of--we had not closed and it was not our asset. There is a little bit of a lag in terms of getting the Salesforce reengage and going out there. Right? We have our own contracts that have to be approved by legal. We have to do our own training because of various rules like Sunshine Laws. So we are really now just getting the contracts back and guys are going out there. So that is why I kind of framed it as half a quarter.

Because now, as of May 15, we are just really getting out there and starting to ramp the sales. And sending out, getting back the contracts changing all the vendors, calling all the hospitals that do not change the account name from Cellularity to BioNX. All of these things are small things that happen in a matter of a few weeks. But they do need to get done before you can really ramp. So we are kind of excited for what May and what June are going to look like. But we are really just getting started.

Analyst (Nas Raman): Understood. that is fair. On the tripling of your revenue that you communicated, does that assume at this point that, like, the non-BioNX business or businesses stay flat, or are you assuming any growth there? It seems like that non-BioNX business is basically flat at this point.

Adam R. Levy: Yeah. It is. We do not expect it to stay flat. You know, Silly George had a uncharacteristically bad fourth quarter and a kind of a meh first quarter, year over year, down a little bit. So we see already a recovery, in April on that product line. So we think there will be some growth, but we were kind of, you know, modest in that. We have very little growth built in for this particular segment.

Analyst (Nas Raman): Got it. And 1 last question, if I may. I guess, what normalized with all the additional sales reps, and the R&D team, how much do you expect operating expenses to be I guess, on a quarterly basis? Or how much do you expect it to increase annually on a normalized basis?

Adam R. Levy: So we probably have added, and, our CFO, Ian, is on the call as well. So correct me if I am mistaken in this, Ian. But I think that we have added in fact, why do not I just ask you what we think the operating overhead is?

Analyst: Yeah. So it will be an approximate monthly run rate of 500 thousand. All in. Salaries, marketing, and commissions, and so on.

Analyst (Nas Raman): Got it. That was helpful. Thanks for taking my questions. Thank you.

Operator: And once again, if you would like to ask a question, please press star and 1 on your keypad now. And we will take our next question from Ves Mahallov, as a private investor.

Analyst (Ves Mahalow): Thank you for taking my questions, Adam. Good morning.

Adam R. Levy: Hi, Ves. Good talking to you again.

Analyst (Ves Mahalow): That is. I wanted to ask you about the offering. Is it still open? You just filed an 8-K for another million dollars. Are you still conducting this offering? Is it still open for additional investors? And do you intend to file an 8-Ks and a press release stating when it is completely closed.

Adam R. Levy: Yes. We do. And it is pretty much closed. there is a couple of, smaller investors, particularly board members that are kind of coming in at the end. And by the way, now you if you look at the million we filed, they are also a board he is also a board member at this point. So this was really mostly an investor and--kind of, there is a couple of small investors that have been a long term friends of the company. But we will be wrapping that up in the next day or 2, and then we will make an announcement in an 8 k early part of next week.

Analyst (Ves Mahalow): Okay. So just want to alert you that there is a, you know, 350 thousand shares sold short. So I think that, you know, this is like a wet blanket on the stock. So the sooner it closes, provided you have got all the money necessary, the better. Just my personal opinion.

Adam R. Levy: Understand.

Analyst (Ves Mahalow): The next question is, I wanna go back to the legacy business. I mean, could you comment a little bit more on how did all this growth in all these product lines just disappear combined? We had STADA, We had, what was it, iRhythm. You announced in an 8 k. Obviously, still with George. We were growing 100% year-over-year. For quite a few quarters, and now you are saying basically it is flat. Could you expand on this a little bit more? Why is this happening?

Adam R. Levy: Sure. Well, again, let me be clear. it is flat. And in my projected total of what I am talking about, I am being very conservative in building a modest, maybe 10% growth in there. We hope to do a lot better. And 1 of the reasons 1 of the things that first, let me talk about what happened. So Silly George had an exceptionally bad fourth quarter. The new product, the lip gloss, did not do what we expected and was very slow. As well as just a general downturn, given all the competition that was out there at that time, especially in the pop ones. Now we have repositioned some things.

We have added a couple of new we have a new tweezers doing extremely well. So we are seeing the growth kind of return in April. We are seeing more of a normalized revenue stream. The STADA products are growing nicely. We released the second 1 in January. Actually, it did not really get to market until mid February due to some Amazon had some stickering issues. But we are seeing growth there. The tropoelastin products are on their way to us. They have shipped from Germany. We should be receiving those and putting those up on Amazon in the next 60 days. So there is lots of areas for growth.

But as a matter of being sort of conservative we are not going to because it is consumer products. We are not gonna really go out on a limb again because sometimes they do not work out the way you think they are. So it is just a conservative estimate more than anything else.

Analyst (Ves Mahalow): And how's the iRhythm relationship going? Is that ramping up? It was supposed to be $3.4 million a year business, I think.

Adam R. Levy: You mean iRhythm? Yeah. IRhythm. Sorry. Were you talking about I did not I did not catch who you were talking about. I am sorry.

Analyst (Ves Mahalow): IRhythm. Correct.

Adam R. Levy: IRhythm. IRhythm. Yeah. So they have ordered a few times, but it has not been as big as originally we thought it might be. Now some of that could have been the initial orders were, you know, kind of, you know, eating it up. And I do not have a daily update on the expansion of their business. We are the gel pad that they use, and I expect that, you know, their sales will also kind of increase, over the course of the year. But so far, we have not seen them be a huge customer yet, but they are a steady customer.

Analyst (Ves Mahalow): Uh-huh. On previous conference calls, you had mentioned that you thought there were an additional $300 thousand to $400 thousand deals in the funnel, in the pipeline, so to speak, similar to this 1, to the iRhythm. Yeah.

Adam R. Levy: Right now, it is more like 200 thousand. Okay.

Analyst (Ves Mahalow): So are they still in the funnel? If some of them come through, you know, is the funnel growing?

Adam R. Levy: You mean other accounts away from iRhythm?

Analyst (Ves Mahalow): Correct.

Adam R. Levy: Yes. Yes. No. there is still a funnel there. But, you know, and I have talked about this before, know, the development and the release of these products has 510(k) clearance associated. So it is hard to pinpoint the exact quarter that these things are gonna start to ramp and grow, but we are expecting growth. We are expecting more products. And in fact, the as I said, partially offset the disappointing Silly George was that we did see some growth in contract manufacturing. And we did see some growth in the MEDAGEL products, which includes the STADA products. So that growth is still there. And we expect it to continue in 26. Okay.

Analyst (Ves Mahalow): And what happened with the laser hair removal product? You never announced anything publicly on that 1 as far as I know.

Adam R. Levy: Yeah. We did not because everything kind of got, like, overshadowed by what we are doing right now, but I am happy to tell you that is study was published. The results were outstanding. We have not done a press release on it yet, but it showed a 90% reduction in the plume. It showed secondary endpoints of reduced pain. And, also, I think it was 70% efficacy. But if you want, Ves, if you reach out to me on email, and I will send you the link. It is a published study, so we certainly can talk about it.

Analyst (Ves Mahalow): No. I mean, what does it mean for NexGel in terms of future sales? Are you guys doing sales? Or what needs to happen for any revenues to come from that 1?

Adam R. Levy: So Innovative Optics sponsored and paid for that study. They are the company that deals and has business relationships with all the large laser manufacturers. So they are using that study now, which actually was published only about 3 weeks ago. They are using that study to market. So I do not really know exactly where they are with it because they are gonna mark and they buy the goods from us and they take a transfer price. So they really just have just got the study in their hands and they are just getting started. So you know, what how successful they will be in marketing, they seem very excited, is yet to be determined.

Analyst (Ves Mahalow): Thanks, Adam, for all the great answers. And just 1 final comment. Now that the company has been transformed in terms of size and hopefully profitability starting in Q3 and later, You know, most investors would expect that the company would be more communicative going forward you know, hopefully with the product launches, you know, market developments, you know, revenue updates in the beginning of the quarter. So you know, April sorry. August 15th is in the dark days of summer, probably would be great to get a some sort of an update on the integration and revenues, some sort of preannouncement at Q2 or Q3 before the dark days of summer, like I said.

But thank you very much again for all the great work you have done and the whole team at NEXGEL.

Adam R. Levy: Thank you, Ves.

Operator: Thank you. As a reminder, ladies and gentlemen, it is star and 1 if you would like to ask a question. And I am showing no further questions at this time. I will now turn the meeting back to our presenters for any additional or closing remarks.

Adam R. Levy: No, I think we are fine. Thank you, operator.

Operator: Thank you. This will bring us to the end of today's Q and A session as well as NEXGEL's Shareholder Update Conference Call. We appreciate your time and participation. You may now disconnect.

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