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: June 30, 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 August 14, 2026 the registrant had 9,747,663 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 June 30, 2026 and December 31, 2025	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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	29
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	35
ITEM 4.	Controls and Procedures	35

	PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	36
ITEM 1A.	Risk Factors	36
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 3.	Defaults Upon Senior Securities	37
ITEM 4.	Mine Safety Disclosures	37
ITEM 5.	Other Information	37
ITEM 6.	Exhibits	38

Signatures		39

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NEXGEL, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2026 AND DECEMBER 31, 2025

(Unaudited)

(in thousands, except share and per share data)

	June 30, 2026			December 31, 2025
ASSETS:
Current Assets:
Cash	$	492		$	317
Restricted cash		1,214			741
Accounts receivable, net		1,079			673
Inventory, net		2,303			2,111
Prepaid expenses and other current assets		1,082			496
Total current assets		6,170			4,338
Goodwill		1,128			1,128
Intangibles, net		13,491			681
Property and equipment, net		1,909			1,955
Operating lease - right of use asset		3,405			2,015
Investment in NexGelRx		249			249
Other assets		95			95
Total assets	$	26,447		$	10,461

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	3,344		$	723
Accounts payable - related party		575			566
Accrued expenses and other current liabilities		456			462
Current portion of note payable		102			99
Partnership accrued advance		483			731
Current portion of finance lease liability		68			65
Current portion of operating lease liability		747			310
Derivative liability, at fair value		8,665			-
Total current liabilities		14,440			2,956
Operating lease liabilities, net of current portion		2,847			1,883
Financing lease liability, net of current portion		203			242
Convertible notes payable, net of debt discount		3,054			-
Notes payable, net of current portion		437			489
Total liabilities		20,981			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; 9,700,022 and 8,475,693 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively		10			8
Additional paid-in capital		30,497			25,447
Accumulated deficit		(25,558	)		(20,995	)
Total NexGel stockholders’ equity		4,949			4,460
Non-controlling interest in joint venture		517			431
Total stockholders’ equity		5,466			4,891
Total liabilities and stockholders’ equity	$	26,447		$	10,461

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NEXGEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(Unaudited)

(in thousands, except share and per share data)

	2026			2025			2026			2025
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Revenues, net	$	3,686		$	2,884		$	6,336		$	5,690

Cost of revenues		2,577			1,626			4,166			3,244

Gross margin		1,109			1,258			2,170			2,446

Operating expenses:
Research and development		20			-			20			1
Selling, general and administrative		3,594			1,894			5,613			3,858
Total operating expenses		3,614			1,894			5,633			3,859

Loss from operations		(2,505	)		(636	)		(3,463	)		(1,413	)

Other income (expense):
Interest income (expense), net		(2,226	)		(21	)		(2,269	)		(42	)
Changes in fair value of derivative liability and warrant modification expense		1,436			13			1,436			104
Loss on issuance of convertible debt		(422	)					(422	)
Other expense		(1	)		(37	)		(7	)		(76	)
Other income		112			41			247			109
Total other income (expense), net		(1,101	)		(4	)		(1,015	)		95
Loss before income taxes		(3,606	)		(640	)		(4,478	)		(1,318	)
Income tax expense		-			-			-
Net loss		(3,606	)		(640	)		(4,478	)		(1,318	)
Less: Income attributable to non-controlling interest in joint venture		(29	)		(25	)		(85	)		(59	)
Net loss attributable to NexGel stockholders	$	(3,635	)	$	(665	)	$	(4,563	)	$	(1,377	)
Net loss per common share - basic	$	(0.40	)	$	(0.09	)	$	(0.54	)	$	(0.18	)
Net loss per common share - diluted	$	(0.40	)	$	(0.09	)	$	(0.54	)	$	(0.18	)
Weighted average shares used in computing net loss per common share - basic		9,013,261			7,654,348			8,486,427			7,649,878
Weighted average shares used in computing net loss per common share – diluted		9,013,261			7,654,348			8,486,427			7,649,878

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NEXGEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(Unaudited)

(in thousands, except share data)

	Shares		Amount		Capital		Deficit		Interest			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

Stock-based compensation - stock options/restricted		—		—		119		—		—			119

Issuance of securities for the conversion of convertible notes payable and accrued interest		1,224,329		2		611		—		—			613

Warrants issued in conjunction with the conversion of convertible notes payable		—		—		3,858		—		—			3,858

Net income (loss)		—		—		—		29		(3,635	)		(3,606	)

Balance, June 30, 2026		9,700,022	$	10	$	30,497	$	517	$	(25,558	)	$	5,466

	Common Stock				Additional Paid-in		Non- controlling		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Interest		Deficit			Equity
Balance, January 1, 2025		7,638,497	$	8	$	23,743	$	325	$	(17,996	)	$	6,080

Share-based compensation and restricted stock issuances		15,540		—		166		—		—			166

Net income (loss)		—		—		—		34		(712	)		(678	)

Balance, March 31, 2025		7,654,037		8		23,909		359		(18,708	)		5,568
Balance		7,654,037		8		23,909		359		(18,708	)		5,568

Share-based compensation and restricted stock issuances		500		—		127		—		—			127

Net income (loss)		—		—		—		25		(665	)		(640	)

Balance, June 30, 2025		7,654,037	$	8	$	24,036	$	384	$	(19,373	)	$	5,055
Balance		7,654,037	$	8	$	24,036	$	384	$	(19,373	)	$	5,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NEXGEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(Unaudited)

(in thousands)

	2026			2025
	Six Months Ended June 30,
	2026			2025
Operating Activities
Net loss	$	(4,478	)	$	(1,318	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		926			225
Share-based compensation and restricted stock vesting		262			293
Amortization of right-of-use asset		228			116
Amortization of debt discount		1,914			-
Changes in fair value of warrant liability and warrant modification expense		(1,436	)		(104	)
Loss on issuance of convertible note		422			-

Changes in operating assets and liabilities:
Accounts receivable, net		(405	)		180
Inventory		(166	)		(70	)
Prepaid expenses and other assets		(586	)		(240	)
Accounts payable		824			65
Accounts payable – related party		9			(84	)
Accrued expenses and other current liabilities		252			224
Partnership advance		(248	)		—
Operating lease liability		(217	)		(95	)
Deferred revenue		(2	)		1
Net Cash Used in Operating Activities		(2,701	)		(807	)

Investing Activities
Capital expenditures		(85	)		(20	)
Investment in BioNx (License Agreement)		(6,502	)		—
Net Cash Used in Investing Activities		(6,587	)		(20	)

Financing Activities
Proceeds from convertible notes payable, net		10,203			—
Payment of contingent consideration		—			(178	)
Principal payment on financing lease liability		(36	)		(29	)
Financing costs		(182	)		—
Principal payments of notes payable		(49	)		(48	)
Net Cash Provided by (Used in) Financing Activities		9,936			(255	)
Net Increase (Decrease) in Cash *		648			(1,082	)
Cash and restricted cash – Beginning of period		1,058			1,807
Cash and restricted cash – End of period	$	1,706		$	725
(*) $175 relates to an increase in cash and $473 relates to increase in restricted cash
Supplemental Disclosure of Cash Flows Information
Cash paid during the year for:
Interest	$	—		$	18
Taxes	$	—		$	—

Supplemental Non-cash Investing and Financing activities
Issuance of convertible notes and other liabilities in conjunction with license agreement	$	8,800		$	—
Issuance of securities for the conversion of convertible notes payable and accrued interest	$	1,000		$	—
Issuance of warrants in conjunction with convertible notes payable	$	3,858		$	—
Debt issued at a discount	$	179		$	—
Derivative liabilities recognized as debt discounts	$	10,101		$	—
Initial recognition of ROU asset and operating lease liabilities	$	1,617		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NEXGEL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

1. Description of Business and Basis of Presentation

NexGel, Inc. (“NexGel” or the “Company”) manufactures high water content, electron beam cross-linked, aqueous polymer hydrogels, or gels, used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. The Company specializes in custom gels by capitalizing on proprietary manufacturing technologies. The Company has historically served as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products. Beginning in 2020, we created two new lines of business for the Company. First, we launched our own line of branded consumer products sold direct to consumers. Second, we expanded into custom and white label opportunities, which focuses on combining our gels with proprietary branded products and white label opportunities. All of our gel products are manufactured using proprietary and non-proprietary mixing, coating and cross-linking technologies. Together, these technologies enable us to produce gels that can satisfy rigid tolerance specifications with respect to a wide range of physical characteristics (e.g., thickness, water content, adherence, absorption, moisture vapor transmission rate [a measure of the passage of water vapor through a substance] and release rate) while maintaining product integrity. Additionally, we have the manufacturing ability to offer broad choices in the selection of liners onto which the gels are coated. Consequently, the Company and its customers are able to determine tolerances in moisture vapor transmission rate and active ingredient release rates while personalizing color and texture.

NexGel was previously known as AquaMed Technologies, Inc. (“AquaMed”) before changing its name to NexGel, Inc. on November 14, 2019.

Basis of Presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars.

The accompanying interim unaudited condensed consolidated financial statements and footnotes of NexGel have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2026. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and the fifty percent (50%) owned CGN JV (see Note 5).

License and Acquisition of Celularity, Inc.’s Portfolio of Commercial-stage Regenerative Biomaterials

On March 6, 2026, the Company entered into an Asset Purchase and Exclusive License Agreement (the “Original License Agreement”) with Celularity Inc. (“Celularity”), pursuant to which Celularity agreed to grant to the Company an exclusive perpetual license to Celularity’s commercial-stage regenerative biomaterials portfolio and certain development-stage programs and to sell to the Company assets related to the portfolio (collectively, the “Celularity Transaction”).

On April 17, 2026, the Company and Celularity entered into Amendment No. 1 to the Original License Agreement (as amended, the “License Agreement”) and concurrently closed the Celularity Transaction.

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Pursuant to the License Agreement, in full consideration for the grant of rights and the transfer of assets, the Company agreed to pay or deliver to Celularity aggregate upfront consideration of $13,300 thousand, consisting of (i) $8,300 thousand in cash funded by the Notes (as defined below) and of which $6,502 thousand has been paid, and (ii) an unsecured convertible promissory note in the original principal amount of $5,000 thousand (the “Celularity Note”). The Celularity Note bears interest at 10% per annum, matures on the eighteen-month anniversary of issuance and is convertible into shares of common stock at an initial conversion price of $0.60 per share, subject to adjustment, on terms substantially identical to the Notes (as defined below). In connection with the Celularity Note, the Company issued warrants to purchase an aggregate of 4,166,667 shares of common stock, on substantially the same terms as the Warrants (as defined below). In addition, the Company is obligated to make up to $20,000 thousand in contingent milestone payments to Celularity upon the achievement of specified commercial milestones under the License Agreement.

The products, technologies, and commercial-stage assets acquired and licensed pursuant to the License Agreement (as defined below) are marketed and sold by the Company under the brand name “BioNx.” References in these notes and elsewhere in this Quarterly Report on Form 10-Q to the “BioNx” line of business, “BioNx surgical” revenue, or similar terms refer to revenue and operations derived from the Celularity Transaction.

April and May 2026 Private Placement

On or about April 17, 2026, in connection with the closing of the Celularity Transaction, the Company entered into a Securities Purchase Agreement (the “April Purchase Agreement”) with certain accredited investors and issued (i) unsecured convertible promissory notes (the “Notes”) in an aggregate original principal amount of $7,375 thousand and (ii) warrants (the “Warrants”) to purchase an aggregate of 6,145,833 shares of common stock, for aggregate gross proceeds to the Company of $7,375 thousand.

The Notes bear interest at 10% per annum, mature on the eighteen-month anniversary of issuance and are convertible into shares of common stock at an initial conversion price of $0.60 per share, subject to customary adjustments and to a downward reset on the twelve-month anniversary of issuance and on the maturity date based on the volume-weighted average prices of the common stock during specified measurement periods. The Warrants have an exercise price of $0.80 per share, subject to customary adjustments, and expire on the five-year anniversary of issuance.

On or about May 11, 2026, the Company issued additional Notes in an aggregate original principal amount of $1,210 thousand and additional Warrants to purchase an aggregate of 1,008,334 shares of common stock, on substantially the same terms as those issued under the April Purchase Agreement, for aggregate gross proceeds to the Company of $1,210 thousand.

2. Going Concern

The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. As of June 30, 2026, the Company had an unrestricted cash balance of $0.5 million. For the six months ended June 30, 2026, the Company incurred a net loss of $4.5 million and had a net usage of cash in operating activities of $2,701 thousand. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In April and May of 2026, the Company raised $8.6 million to be used for the Celularity Transaction. We expect the license and acquisition of Celularity, Inc.’s portfolio of commercial-stage regenerative biomaterials to contribute positive operating cash flows, improve liquidity, and support ongoing operations.

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We expect to continue incurring losses for the near-term future. Our ability to continue to operate as a going concern in the long-term is dependent upon our ability to manage and grow our current products and to ultimately achieve profitable operations. Management may consider various options to raise capital to fund our current business activities, potential acquisitions through equity or debt offerings. There can be no assurances, however, that management will be able to obtain sufficient additional funds, if needed, or that such funds, if available, will be obtained on terms satisfactory to us. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should we be unable to continue as a going concern. Additionally, it is reasonably possible that estimates made in the condensed consolidated financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including the recoverability of long-lived assets.

3. Significant Accounting Policies and Estimates

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and assumptions include allowances for doubtful accounts, inventory reserves, deferred taxes and related valuation allowances, share-based compensation, the valuation of the convertible notes embedded derivative liability and fair value of long-lived assets. Actual results could differ from the estimates.

Segment Reporting

The Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting, requires that an enterprise report selected information about reportable segments in its financial reports issued to its stockholders. The Company has two reportable segments - the NexGel segment and the CGN segment.

The NexGel segment is comprised of the manufacturing of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications, which is based in Langhorne, Pennsylvania as well as the Kenkoderm and Silly George acquisitions, as well as from the Celularity Asset Purchase and License Agreement.

The CGN segment is comprised of the CGN JV used for the Company’s converting and packaging business, which is based in Granbury, Texas.

Reclassifications

Certain prior year amounts in the consolidated financial statements