UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 001-41173

NexGel, Inc.

(Exact name of registrant as specified in its charter)

Delaware		26-4042544
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

2150 Cabot Blvd West, Suite B

Langhorne, PA

19047

(Address of principal executive office)

(Zip Code)

Registrant’s telephone number, including area code: (215) 702-8550

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	NXGL	The Nasdaq Capital Market LLC
Warrants to Purchase Common Stock	NXGLW	The Nasdaq Capital Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒
	Smaller reporting company ☒	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2026 the registrant had 9,131,055 shares of common stock outstanding.

nEXGEL, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements	3
	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	31
ITEM 4.	Controls and Procedures	31

	PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3.	Defaults Upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	33

Signatures		34

	March 31, 2026			December 31, 2025
ASSETS:
Current Assets:
Cash	$	208		$	317
Restricted cash		1,914			741
Accounts receivable, net		662			673
Inventory, net		2,263			2,111
Prepaid expenses and other current assets		591			496
Total current assets		5,638			4,338
Goodwill		1,128			1,128
Intangibles, net		655			681
Property and equipment, net		1,891			1,955
Operating lease - right of use asset		1,942			2,015
Investment in NexGelRx		249			249
Other assets		95			95
Total assets	$	11,598		$	10,461

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,202		$	723
Accounts payable - related party		604			566
Accrued expenses and other current liabilities		428			462
Current portion of note payable		100			99
Partnership accrued advance		596			731
Current portion of finance lease liability		65			65
Current portion of operating lease liability		319			310
Total current liabilities		3,314			2,956
Operating lease liabilities, net of current portion		1,801			1,883
Financing lease liability, net of current portion		226			242
Convertible notes payable		1,312			-
Notes payable, net of current portion		463			489
Total liabilities		7,116			5,570

Commitments and Contingencies (Note 16)		-			-

STOCKHOLDERS’ EQUITY
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; 8,475,693 and 8,143,133 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		8			8
Additional paid-in capital		25,909			25,447
Accumulated deficit		(21,923	)		(20,996	)
Total NexGel stockholders’ equity		3,994			4,459
Non-controlling interest in joint venture		488			432
Total stockholders’ equity		4,482			4,891
Total liabilities and stockholders’ equity	$	11,598		$	10,461

	2026			2025
	Three Months Ended
	March 31,
	2026			2025
Revenues, net	$	2,650		$	2,806

Cost of revenues		1,589			1,618

Gross margin		1,061			1,188

Operating expenses:
Research and development		-			1
Selling, general and administrative		2,019			1,964
Total operating expenses		2,019			1,965

Loss from operations		(958	)		(777	)

Other income (expense):
Interest income (expense), net		(42	)		(21	)
Changes in fair value of warrant liability and warrant modification expense		—			91
Other expense		(6	)		(39	)
Other income		135			68
Total other income (expense), net		87			99
Loss before income taxes		(871	)		(678	)
Income tax expense		—			—
Net loss		(871	)		(678	)
Less: Income attributable to non-controlling interest in joint venture		(56	)		(34	)
Net loss attributable to NexGel stockholders	$	(927	)	$	(712	)
Net loss per common share - basic	$	(0.11	)	$	(0.09	)
Net loss per common share - diluted	$	(0.11	)	$	(0.09	)
Weighted average shares used in computing net loss per common share - basic		8,204,205			7,645,311
Weighted average shares used in computing net loss per common share – diluted		8,204,205			7,645,311

	Shares		Amount		Capital		Interest		Deficit			Equity
	Common Stock				Additional Paid-in		Non- controlling		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Interest		Deficit			Equity
Balance, January 1, 2026		8,143,133	$	8	$	25,447	$	432	$	(20,996	)	$	4,891

Restricted stock issuances		20,325		—		143		—		—			143

Issuance of securities for the conversion of convertible notes payable and accrued interest		312,235		—		319		—		—			319

Net income (loss)		—		—		—		56		(927	)		(871	)

Balance, March 31, 2026		8,475,693	$	8	$	25,909	$	488	$	(21,923	)	$	4,482

	2026			2025
	Three Months Ended March 31,
	2026			2025
Operating Activities
Net loss	$	(871	)	$	(678	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		99			114
Share-based compensation and restricted stock vesting		143			166
Changes in fair value of warrant liability and warrant modification expense		—			(91	)
Amortization of right-of-use asset		73			58
Amortization of debt discount		11			—

Changes in operating assets and liabilities:
Accounts receivable, net		11			7
Inventory		(152	)		(95	)
Prepaid expenses and other assets		(95	)		(153	)
Accounts payable		479			219
Accounts payable – related party		38			(32	)
Accrued expenses and other current liabilities		(32	)		24
Partnership advance		(135	)		—
Operating lease liability		(73	)		(46	)
Deferred revenue		—			107
Net Cash Used in Operating Activities		(504	)		(400	)

Investing Activities
Capital expenditures		(9	)		—
Net Cash Used in Investing Activities		(9	)		—

Financing Activities
Proceeds from convertible notes payable, net		1,618			—
Payment of contingent consideration		—			(178	)
Principal payment on financing lease liability		(16	)		(14	)
Principal payments of notes payable		(25	)		(23	)
Net Cash Provided by (Used in) Financing Activities		1,577			(215	)
Net Increase (Decrease) in Cash *		1,064			(615	)
Cash and restricted cash – Beginning of period		1,058			1,807
Cash and restricted cash – End of period	$	2,122		$	1,192
(*) $109 relates to decrease in cash and $1,173 relates to increase in restricted cash
Supplemental Disclosure of Cash Flows Information
Cash paid during the year for:
Interest	$	15		$	18
Taxes	$	—		$	—

Supplemental Non-cash Investing and Financing activities
Issuance of securities for the conversion of convertible notes payable and accrued interest	$	319		$	—

	NexGel			CGN JV		Total
Revenues, net	$	1,945		$	705	$	2,650

Cost of revenues		1,154			435		1,589

Advertising, marketing and amazon fees		635			-		635
General and administrative		1,239			145		1,384
Total Selling, general and administrative		1,874			145		2,019

Research and development		-			-		-

Operating expenses		1,874			145		2,019
Income (loss) from operations	$	(1,083	)	$	125	$	(958	)

	March 31, 2026		December 31, 2025
ASSETS
Current Assets:
Cash	$	63	$	94
Accounts receivable, net		552		519
Inventory		913		841
Prepaid expenses and other current assets		20		11
Total current assets		1,548		1,465
Intangibles, net		16		32
Property and equipment, net		1,279		1,314
Operating lease - right of use asset		853		873
Total assets	$	3,696	$	3,684

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	103	$	87
Accounts payable – related party		482		477
Accounts payable		482		477
Accrued expenses and other current liabilities		1		1
Current portion of note payable		94		93
Finance lease liability, short term		65		65
Operating lease liability, current portion		84		84
Total current liabilities		829		807
Operating lease liability, net of current portion		768		790
Finance lease liability, long term		226		242
Notes payable, net of current portion		203		228
Total liabilities	$	2,026	$	2,067

Maturity of Lease Liability	Operating Lease Liability
2026	$	276
2027		374
2028		381
2029		388
2030		395
Thereafter		481
Total undiscounted operating lease payments		2,295
Less: Imputed interest		(175	)
Present value of operating lease liability	$	2,120

Maturity of Lease Liability	Financing Lease Liability
2026		68
2027		90
2028		91
2029		90
Thereafter		8
Total undiscounted financing lease payments		347
Less: Imputed interest		(56	)
Present value of financing lease liability	$	291

	March 31,			December 31,
	2026			2025
Raw materials	$	1,443		$	1,374
Work-in-progress		50			47
Finished goods		1,020			961
Inventory, gross		2,513			2,382
Less: Inventory reserve for excess and slow moving inventory		(250	)		(271	)
Total	$	2,263		$	2,111

	Useful Life	March 31,			December 31,
	(Years)	2026			2025
Machinery and equipment	3 - 10	$	2,178		$	2,161
Office furniture and equipment	3 - 10		194			197
Leasehold improvements	6		419			419
Construction in progress	N/A		541			547
Property and equipment, gross			3,332			3,324
Less: accumulated depreciation and amortization			(1,441	)		(1,369	)
Property and equipment, net		$	1,891		$	1,955

	2026		2025
	Three Months Ended
	March 31,
	2026		2025
Contract manufacturing	$	916	$	948
Custom and white label finished goods manufacturing		-		-
Consumer branded products		1,621		1,782
Medical devices/other		113		76
Total	$	2,650	$	2,806


2026 (remainder of year)	$	37
2027		13
2028		2
2029		2
2030		1
Subtotal		55
Indefinite lived intangible assets (subject to impairment analysis)		600
Total	$	655

	Amount
For the year ending December 31 ($ in thousands):
2026	$	74
2027		106
2028		114
2029		24
2030		6
Thereafter		239
Total		563
Less: current portion of notes payable		100
Long-term portion of notes payable	$	463

Share-based compensation plan			848,363
Warrants to purchase common stock			4,793,626
Restricted stock units			80,781

	Awards						Awards
	Reserved for		Awards		Awards		Available for
	Issuance		Issued		Exercised		Grant
2019 Plan⁽¹⁾		1,651,429		1,114,676		194,240		536,753
Awards issued in excess of 2019 Plan⁽²⁾		-		100,821		92,113		-

⁽¹⁾	Includes incentive stock options and restricted stock units discussed below.

⁽²⁾	Includes shares of restricted common stock granted outside of the 2019 Plan to our Chief Executive Officer, Adam Levy.