NEXGEL Announces $975,000 Registered Direct Offering Led by Insiders
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The recent capital raise by NEXGEL through a registered direct offering is a strategic move that appears aimed at bolstering the company's financial position. The issuance of shares and warrants at a combined purchase price of $2.11 per share, with warrants exercisable at $4.00, suggests a potential for future capital inflow if the warrants are exercised. However, the immediate dilutive effect on existing shareholders cannot be overlooked.
With gross proceeds of approximately $975,000 before offering expenses, this capital infusion is relatively modest for a NASDAQ-listed company. It raises questions about the company's current cash burn rate and the sufficiency of these funds to meet projected growth opportunities. The insider participation, including management and Board of Directors, could be seen as a vote of confidence in the company's prospects, although the six-month lock-up period is standard and does not necessarily signal long-term commitment.
The use of a shelf registration statement indicates NEXGEL's preparedness for capital raising, allowing for a quicker response to market conditions. However, the relatively low offering price compared to the exercise price of the warrants may reflect market sentiment about the company's valuation and growth prospects.
From a market perspective, NEXGEL's direct offering could signal to investors that the company is in immediate need of capital to fund its operations and potential growth. The involvement of Alere Financial Partners as the exclusive placement agent suggests a targeted approach to raising capital, which might appeal to specific investors looking for direct investment opportunities in the healthcare sector.
Investor reception to this news could vary. Some may interpret the insider participation as a positive indicator, while others may focus on the potential dilution or question the adequacy of the funds raised. It is essential to monitor the stock's performance and the company's subsequent announcements to gauge the effectiveness of this capital raise.
Moreover, the company's focus on high-water-content hydrogels for healthcare applications positions it within a niche market. The success of the offering and the utilization of the proceeds will likely impact NEXGEL's ability to capitalize on its market position and address the competition within the medical and OTC product spaces.
LANGHORNE, Pa., Feb. 21, 2024 (GLOBE NEWSWIRE) -- NEXGEL, Inc. (“NEXGEL” or the “Company”) (NASDAQ: NXGL), a leading provider of medical and over-the-counter (OTC) products including ultra-gentle, high-water-content hydrogels for healthcare and consumer applications, today announced it has entered into definitive agreements for the issuance and sale of an aggregate of 462,090 of its shares of common stock and the issuance of warrants to purchase up to an aggregate of 231,040 shares of common stock for a combined offering purchase price of
NEXGEL insiders, including members of the management team and Board of Directors, participated in the offering. Insiders are subject to a six-month lock-up period from the date of closing. The gross proceeds from the offering are approximately
Adam Levy, CEO of NEXGEL, commented, “After capital expenditures and strategic acquisition investments made in 2023, management and the Board agreed to provide additional working capital to the Company along with existing and new investors. We believe this capital will allow us to comfortably continue to operate the business and strengthens our balance sheet as we approach significant growth opportunities in the remainder of this year.”
Alere Financial Partners, LLC, a division of Cova Capital Partners, LLC acted as the exclusive placement agent for the offering.
This offering is being made pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-264282) previously filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended, which was declared effective by the SEC on June 7, 2023. A prospectus supplement describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from Cova Capital Partners LLC, 6851 Jericho Turnpike, Suite 205, Syosset, New York 11791, or by telephone at (866) 772-8081.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About NEXGEL, Inc.
NEXGEL is a leading provider of healthcare, beauty, and over-the-counter (OTC) products including ultra-gentle, high-water-content hydrogels. Based in Langhorne, Pa., the Company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades. NEXGEL brands include Silverseal, Hexagels, Turfguard, Kenkoderm, and Dermablock. Additionally, NEXGEL has strategic contract manufacturing relationships with leading consumer healthcare companies.
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. 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, 2022, 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 Contact:
Valter Pinto, Managing Director
KCSA Strategic Communications
212.896.1254
valter@kcsa.com
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