LANGHORNE, PA — NEXGEL, Inc. (NASDAQ: NXGL) announced this week that it has signed definitive agreements for a registered direct offering that will issue and sell 462,090 shares of its common stock along with warrants to purchase up to an additional 231,040 shares. The combined offering purchase price is $2.11 per share, while the warrants have an exercise price of $4.00 per share and are exercisable immediately.
A registered direct offering is a type of public offering that’s sold directly to investors, rather than through a public exchange. It’s a faster and more efficient way for companies to raise capital since it bypasses the traditional underwriting process.
The warrants, which give holders the right to buy more shares at a set price within a certain time period, will remain valid for five years from the date of issue. This offering could potentially provide a significant return for investors if NEXGEL’s stock price rises above the warrant exercise price during the five-year term.
Notably, insiders including members of NEXGEL’s management team and Board of Directors, participated in the offering, subject to a six-month lock-up period from the closing date. Insiders investing in their own companies is often seen as a positive sign, indicating their confidence in the company’s future performance.
The gross proceeds from this offering are estimated to be around $975,000 prior to deducting offering expenses. These funds will provide essential working capital for NEXGEL, bolstering its balance sheet and paving the way for potential growth opportunities throughout the year.
“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,” commented Adam Levy, CEO of NEXGEL. “We believe this capital will allow us to comfortably continue to operate the business and strengthen 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, served as the exclusive placement agent for the offering.
This move by NEXGEL is a strategic step towards securing its financial future. The consumer healthcare industry has seen rapid growth and change in recent years, driven by factors such as technological advancements, changing consumer behavior, and the ongoing impacts of the global pandemic. By raising capital through this registered direct offering, NEXGEL is positioning itself to navigate these changes and seize potential growth opportunities, demonstrating a proactive approach to financial management and a commitment to driving shareholder value.
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