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What changed in NEXGEL, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NEXGEL, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+47 added−60 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-27)

Top changes in NEXGEL, INC.'s 2025 10-K

47 paragraphs added · 60 removed · 44 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Kenkoderm skincare line was originally developed by a dermatologist to provide gentle to the skin products for consumer with psoriasis. In May 2024, we added our third consumer product brand with the purchase of the Silly George brand. Silly George is a beauty brand primarily focused on false eyelashes and other eye related products.
Biggest changeIn May 2024, we added the Silly George brand, a beauty brand primarily focused on false eyelashes and other eye related products. We continue to look for additional potential acquisitions as part of our consumer product “roll-up” strategy. Additionally, we have several more products in our development pipeline.
Other than as discussed above, we believe that, due to the size and scale of production of our suppliers, there should be an adequate supply of components and raw materials from our other suppliers. Customers During the year ended December 31, 2024, no customers accounted for 10% of our revenue.
Other than as discussed above, we believe that, due to the size and scale of production of our suppliers, there should be an adequate supply of components and raw materials from our other suppliers. Customers During the year ended December 31, 2025 and 2024, no customers accounted for 10% of our revenue.
We expect to incur increased costs in the future for our medical device business. Research and development will be an important component in the growth of our business. Human Capital As of December 31, 2024, we had 19 full-time employees.
We expect to incur increased costs in the future for our medical device business. Research and development will be an important component in the growth of our business. Human Capital As of December 31, 2025, we had 19 full-time employees.
Contract Manufacturing Business As described above, we have historically served as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products. Our hydrogels are currently being marketed in the U.S. and abroad by our customers for the following applications: ● Drug Delivery .
Contract Manufacturing Business As described above, we serve as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products. Our hydrogels are currently being marketed in the U.S. and abroad by our customers for the following applications: ● Drug Delivery .
We believe that we are currently compliant with applicable anti-kickback, self-referral, false claims in all material respects. 8 Table of Contents Research and Development Costs For the years ended December 31, 2024 and 2023, we incurred approximately $78 thousand and $103 thousand, respectively, in research and development costs.
We believe that we are currently compliant with applicable anti-kickback, self-referral, false claims in all material respects. 8 Table of Contents Research and Development Costs For the years ended December 31, 2025 and 2024, we incurred approximately $2 thousand and $78 thousand, respectively, in research and development costs.
We are continually working on a human resources strategy that helps drive the right culture, leadership, talent management, performance, reward and recognition, personal development, and ways of working to ensure we achieve our strategic goals while our people benefit from an exceptional experience.
We recognize and value our people as our most important asset in achieving our strategic goals. We are continually working on a human resources strategy that helps drive the right culture, leadership, talent management, performance, reward and recognition, personal development, and ways of working to ensure we achieve our strategic goals while our people benefit from an exceptional experience.
We filed for a patent on NEXDrape under the Patent Cooperation Treaty which provides patent protection in the nations who are members of the treaty. We also rely upon trade secrets and continuing technological innovations to develop and maintain our competitive position.
Patents, Proprietary Rights and Trademarks We own or license trademarks covering our company and our products. We filed for a patent on NEXDrape under the Patent Cooperation Treaty which provides patent protection in the nations who are members of the treaty. We also rely upon trade secrets and continuing technological innovations to develop and maintain our competitive position.
We believe these white labeling opportunities will increase the markets’ awareness of us as a consumer-friendly and reliable supplier of customizable patches. Additionally, we created a process where customers have the ability to create their own custom hydrogel products. Customers pay a development fee, eliminating our financial risk in the success or failure of the custom product.
Additionally, we created a process where customers have the ability to create their own custom hydrogel products. Customers pay a development fee, eliminating our financial risk in the success or failure of the custom product.
Custom and White Label Opportunities We are leveraging our hydrogel products and technologies by allowing other OTC brands to incorporate them into their products. We believe our hydrogels, which do not use chemical cross-linking agents and can be made in paraben free formulations, will be attractive to other OTC brands, especially in the beauty and cosmetics industry, and their customers.
We believe our hydrogels, which do not use chemical cross-linking agents and can be made in paraben free formulations, will be attractive to other OTC brands, especially in the beauty and cosmetics industry, and their customers. We believe these white labeling opportunities will increase the markets’ awareness of us as a consumer-friendly and reliable supplier of customizable patches.
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.
All of our gel products are manufactured using proprietary and non-proprietary mixing, coating and cross-linking technologies.
We currently plan to retain and utilize the services of outside consultants for additional research, testing, regulatory, accounting and tax services, legal compliance, and other services on an as needed basis. We recognize and value our people as our most important asset in achieving our strategic goals.
Our employees are not represented by a labor union or other collective bargaining groups, and we consider relations with our employees to be good. We currently plan to retain and utilize the services of outside consultants for additional research, testing, regulatory, accounting and tax services, legal compliance, and other services on an as needed basis.
We have 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, our own line of branded consumer products sold direct to consumers.
We distribute our products as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products. We also have a line of branded consumer products sold direct to consumers and custom and white label opportunities, which focuses on combining our gels with proprietary branded products and white label opportunities.
We continue to look for additional potential acquisitions as part of our consumer product “roll-up” strategy. Additionally, we have several more products in our development pipeline. We intend for these products to address various market opportunities including the OTC pharmaceutical drug delivery market, pain management, beauty and cosmetics, sports related applications, cannabinoids (“CBD” and/or “THC”) and general podiatry.
We intend for these products to address various market opportunities including the OTC pharmaceutical drug delivery market, pain management, beauty and cosmetics, sports related applications, cannabinoids (“CBD” and/or “THC”) and general podiatry. Custom and White Label Opportunities We are leveraging our hydrogel products and technologies by allowing other OTC brands to incorporate them into their products.
The products we sell under our MedaGel brand primarily relate to healthcare over-the-counter (“OTC”) remedy solutions, such as blister and pain applications. In December 2023 we added a second consumer product brand when we completed the purchase of the Kenkoderm brand.
These products are distributed through a multi-channel strategy that includes direct-to-consumer e-commerce, brick-and-mortar retail partnerships, and specialized medical office channels. The products we sell under our MedaGel brand primarily relate to healthcare over-the-counter (“OTC”) remedy solutions, such as blister and pain applications and the Kenkoderm skincare line provides gentle to the skin products for consumer with psoriasis.
We also believe our hydrogel facility creates a high barrier to entry into our hydrogel and consumer product business. Consumer Products Beginning in the third quarter of 2020, we began selling our own branded products using our hydrogel technology on the Amazon marketplace. In 2022 we expanded access to our products by launching our own direct to consumer website, Medagel.com.
We also believe our hydrogel facility creates a high barrier to entry into our hydrogel and consumer product business. Consumer Products Our branded consumer products are marketed under a diverse portfolio of brands, including our Medagel family of products (SilverSeal, Hexagels, Turfguard), Kenkoderm, and Silly George.
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During the year ended December 31, 2023 one major customer accounted for approximately 20% of our revenue. We cannot be certain as to this customer’s intentions to use our services during and beyond the fiscal year ended December 31, 2024 since we do not currently have a contract with this customer.
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However, we have been supplying this customer for more than 15 years and have no reason to anticipate any change. Our contract manufacturing business, including with respect to this customer, operates on a purchase order basis. Patents, Proprietary Rights and Trademarks We own or license trademarks covering our company and our products.
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Of these employees, five are involved with finance, sales, marketing, and administration and 14 are involved with manufacturing and regulatory matters. Our employees are not represented by a labor union or other collective bargaining groups, and we consider relations with our employees to be good.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSpecifically, we have not designed controls to ensure all accounting journals entries are reviewed and approved. We also identified one individual in our accounting department who has “super user” access and security administration rights to the financial reporting systems. Please see Item 9A - Control and Procedures for more information about identified material weaknesses.
Biggest changeSpecifically, management has concluded that its internal control over financial reporting was not effective as of December 31, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America due to not maintaining proper segregation of duties, including: (i) we have not designed controls to ensure all accounting journals entries are reviewed and approved and (ii) we have one individual in our accounting department who has “super user” access and security administration rights to the financial reporting systems.
The interests of our principal stockholders, officers and directors, who collectively beneficially own approximately 16.3% of our stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. As of March 27, 2025, our principal stockholders, officers and directors beneficially owned approximately 16.3% of our common stock.
The interests of our principal stockholders, officers and directors, who collectively beneficially own approximately 16.3% of our stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. As of March 31, 2026, our principal stockholders, officers and directors beneficially owned approximately 16.3% of our common stock.
As of the date of the filing of this Form 10-K, we may be required to issue: ● 588,397 shares of common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.674538 per share; ● 4,765,205 shares of common stock issuable upon the exercise of warrants at a weighted average exercise price of approximately $5.183120; and ● 21,984 shares of restricted common stock issuable upon vesting and another 33,890 shares of vested shares of restricted common stock.
As of the date of the filing of this Form 10-K, we may be required to issue: ● 907,111 shares of common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $2.940267 per share; ● 5,142,940 shares of common stock issuable upon the exercise of warrants at a weighted average exercise price of approximately $5.111123; and ● 35,494 shares of restricted common stock issuable upon vesting and another 24,962 shares of vested shares of restricted common stock.
Specifically, we expect to implement appropriate controls for accounting journal entry approvals, including the approval of our Chief Financial Officer, and to actively monitor any accounting user with elevated rights or assign another employee outside of an accounting and reporting role with elevated access.
To remediate these material weaknesses, we are working to do the following: (i) implementing appropriate controls for accounting journal entry approvals, including the approval of our chief financial officer, and (ii) either actively monitoring any accounting user with elevated rights or assigning another employee outside of an accounting and reporting role with elevated access.
Currently we do not have sufficient cash resources to meet our plans for the next twelve months from the issuance of the financial statements included herein. Our recurring losses from operations, negative cash flows and potential need for additional capital raise substantial doubt about our ability to continue as a going concern.
Our recurring losses from operations, negative cash flows and potential need for additional capital raise substantial doubt about our ability to continue as a going concern.
While we are designing and implementing measures to remediate the material weaknesses, we cannot predict the success of such measures or the outcome of our assessment of these measures at this time.
We will not be able to fully remediate the material weakness until the actions discussed above have been implemented and operated effectively for a sufficient period of time. While we are designing and implementing measures to remediate the material weaknesses, we cannot predict the success of such measures or the outcome of our assessment of these measures at this time.
We have a history of operating losses and may require but have difficulty or be unsuccessful in raising potentially needed capital in the future to continue to operate as a going concern. While we expect to be cash flow positive by the end of fiscal year 2025, there is no guarantee this will occur.
We have a history of operating losses and may require but have difficulty or be unsuccessful in raising potentially needed capital in the future to continue to operate as a going concern. Currently we do not have sufficient cash resources to meet our plans for the next twelve months from the issuance of the financial statements included herein.
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A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Removed
We are in the process of designing and implementing measures to remediate the material weaknesses described above.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSales of Unregistered Securities during the Fiscal Year Ended December 31, 2024 The Company did not sell any unregistered securities during the fiscal year ended December 31, 2024. Issuer Repurchases of Securities during the Fiscal Year Ended December 31, 2024 The Company did not repurchase any of its securities during the fiscal year ended December 31, 2024.
Biggest changeSales of Unregistered Securities during the Fiscal Year Ended December 31, 2025 The Company did not sell any unregistered securities during the fiscal year ended December 31, 2025. Issuer Repurchases of Securities during the Fiscal Year Ended December 31, 2025 The Company did not repurchase any of its securities during the fiscal year ended December 31, 2025.
Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on NASDAQ Capital Markets under the symbol “NXGL” and certain warrants to purchase our common stock issued on December 27, 2021 are trade on NASDAQ Capital Markets under the symbol “NXGLW.” Holders As of March 27, 2025, there were over 1,047 shareholders of record and 7,654,037 shares of common stock outstanding.
Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on NASDAQ Capital Markets under the symbol “NXGL” and certain warrants to purchase our common stock issued on December 27, 2021 are trade on NASDAQ Capital Markets under the symbol “NXGLW.” Holders As of March 31, 2026, there were over 983 shareholders of record and 8,163,458 shares of common stock outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in our overall revenues was primarily due to sales growth in our branded consumer products, including gross revenue from Silly George of $2,889 for the period of acquisition through December 31, 2024, and an increase in Other Revenues of $238, which mostly consists of shipping revenue on our branded consumer products.
Biggest changeThe increase in our overall revenues was primarily due to sales growth in our branded consumer products, as the prior year period included gross revenue for a partial year from Silly George from May 15, 2024 through December 31, 2024. 21 Table of Contents Cost of revenues are as follows for the years ended December 31, 2025 and 2024 ($ in thousands): Year Ended December 31, 2025 2024 Cost of revenues $ 6,912 $ 5,940 Cost of revenues increased by $972 or 16.4%, to $6,912 for the year ended December 31, 2025, as compared to $5,940 for the year ended December 31, 2024.
Off Balance Sheet Arrangements As of December 31, 2024, we had no off-balance sheet arrangements in the nature of guarantee contracts, retained or contingent interests in assets transferred to entities (or similar arrangements serving as credit, liquidity or market risk support to entities for any such assets), or obligations (including contingent obligations) arising out of variable interests in entities providing financing, liquidity, market risk or credit risk support to us, or that engage in leasing, hedging or research and development services with us.
Off Balance Sheet Arrangements As of December 31, 2025, we had no off-balance sheet arrangements in the nature of guarantee contracts, retained or contingent interests in assets transferred to entities (or similar arrangements serving as credit, liquidity or market risk support to entities for any such assets), or obligations (including contingent obligations) arising out of variable interests in entities providing financing, liquidity, market risk or credit risk support to us, or that engage in leasing, hedging or research and development services with us.
We will manufacture and possibly convert/package the device while the strategic partner brings the product to market. Small market Medical Devices could be launched by us, but also be offered to a distributor to reach the full scale of the market. Other includes freight charged to customers who purchase the Company’s branded consumer products through their Spotify stores.
We will manufacture and possibly convert/package the device while the strategic partner brings the product to market. Small market Medical Devices could be launched by us, but also be offered to a distributor to reach the full scale of the market. Other includes freight charged to customers who purchase the Company’s branded consumer products through their Shopify stores.
In May 2023, we formed a joint venture with CG Laboratories, Inc. called CG Converting and Packaging, LLC, which is located in Granbury, Texas and of which we own a 50% interest, allowing us to expand our ability to deliver finished goods to our growing customer base. 19 Table of Contents We have four distinct lines of business; Contract Manufacturing, Custom & White Label, Consumer Branded Products, and Medical Devices/Other.
Our joint venture with CG Laboratories, Inc. called CG Converting and Packaging, LLC, which is located in Granbury, Texas in which we own a 50% interest, allowing us to expand our ability to deliver finished goods to our growing customer base. 19 Table of Contents Lines of Business We have four distinct lines of business; Contract Manufacturing, Custom & White Label, Consumer Branded Products, and Medical Devices/Other.
We continue to look for additional potential acquisitions as part of our consumer product ‘roll-up” strategy. Medical Devices/Other Medical Devices are a hybrid business, combining elements of Custom & White Label and Consumer Branded Products. Medical Devices, which are not yet marketed, are expected to be distributed through strategic partnerships.
We continue to look for additional potential acquisitions as part of our consumer product ‘roll-up” strategy. 20 Table of Contents Medical Devices/Other Medical Devices are a hybrid business, combining elements of Custom & White Label and Consumer Branded Products. Medical Devices, which are not yet marketed, are expected to be distributed through strategic partnerships.
Overview We manufacture high water content, electron beam cross-linked, aqueous polymer hydrogels, or gels, used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. We specialize in custom gels by capitalizing on proprietary manufacturing technologies. We have historically served as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products.
Overview We manufacture high water content, electron beam cross-linked, aqueous polymer hydrogels, or gels, used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. We specialize in custom gels by capitalizing on proprietary manufacturing technologies. We distribute our products as a contract manufacturer, supplying our gels to third parties who incorporate them into their own products.
This customer base expansion will enable us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder value creation. Our recent capital raise which closed on or about November 20, 2024 provides working capital necessary to continue our strategic objectives (discussed further within Note 13).
This customer base expansion will enable us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder value creation. Our recent capital raise which closed on or about August 5, 2025 provides working capital necessary to continue our strategic objectives (discussed further within Note 14).
Research and development expenses Research and development expenses decreased by $25 to $78 for the year ended December 31, 2024 from $103 for the year ended December 31, 2023. Research and development expenses are related to research costs incurred for potential products for existing or new customers.
Research and development expenses Research and development expenses decreased by $76 to $2 for the year ended December 31, 2025 from $78 for the year ended December 31, 2024. Research and development expenses are related to research costs incurred for potential products for existing or new customers.
Gross profit (loss) Our gross profit was $2,748 for the year ended December 31, 2024 compared to a gross profit of $374 for the year ended December 31, 2023 The increase of $2,374 in gross profit recorded for the year ended December 31, 2024, as compared to December 31, 2023, was primarily due to an increase in branded consumer products.
Gross profit (loss) Our gross profit was $4,509 for the year ended December 31, 2025 compared to a gross profit of $2,748 for the year ended December 31, 2024 The increase of $1,761 in gross profit recorded for the year ended December 31, 2025, as compared to December 31, 2024, was primarily due to an increase in branded consumer products.
We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we anticipate that all available funds and any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders.
For the foreseeable future, we anticipate that all available funds and any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders.
Liquidity and Capital Resources Cash Flow (in thousands) Years Ended December 31, 2024 2023 Net cash used in operating activities $ (3,867 ) $ (3,236 ) Net cash provided by (used in) investing activities (775 ) 4,456 Net cash provided by financing activities 3,749 379 Net increase (decrease) in cash and cash equivalents (893 ) 1,599 Cash and cash equivalents at beginning of year 2,700 1,101 Cash and cash equivalent at end of year $ 1,807 $ 2,700 As of December 31, 2024, we had $1,807 thousand of cash and cash equivalents compared to $2,700 thousand of cash and cash equivalents at December 31, 2023.
Liquidity and Capital Resources Cash Flow (in thousands) Years Ended December 31, 2025 2024 Net cash used in operating activities $ (1,311 ) $ (3,867 ) Net cash provided by (used in) investing activities (68 ) (775 ) Net cash provided by financing activities 630 3,749 Net increase (decrease) in cash and cash equivalents (749 ) (893 ) Cash and cash equivalents at beginning of year 1,807 2,700 Cash and cash equivalent, and restricted cash at end of year $ 1,058 $ 1,807 As of December 31, 2025, we had $317 of cash and cash equivalents and $741 of restricted cash compared to $1,807 thousand of cash and cash equivalents at December 31, 2024.
Net cash provided by financing activities for year ended December 31, 2024 was $3,749 thousand which is attributable to the proceeds from rights offering of $3,772 thousand, proceeds from non-controlling interest of $38 thousand, and proceeds from margin line of credit of $345 thousand, offset by principal payments of notes payments of $77 thousand, and change in contingent consideration of $279 thousand made on the operating lease liability, and $50 thousand of principal payment of financing lease liability.
Net cash provided by financing activities for year ended December 31, 2024 was $3,749 thousand which is attributable to the proceeds from rights offering of $3,772 thousand, proceeds from non-controlling interest of $38 thousand, and proceeds from margin line of credit of $345 thousand, offset by principal payments of notes payments of $77 thousand, and change in contingent consideration of $279 thousand made on the operating lease liability, and $50 thousand of principal payment of financing lease liability. 22 Table of Contents At December 31, 2025, current assets totaled $4,477 thousand and current liabilities totaled $3,095 thousand, as compared to current assets totaling $5,114 thousand and current liabilities totaling $2,470 thousand at December 31, 2024.
Net cash used in operating activities was $3,867 thousand and $3,236 thousand for the years ended December 31, 2024 and 2023, respectively.
Net cash used in operating activities was $1,311 thousand and $3,867 thousand for the years ended December 31, 2025 and 2024, respectively. Net cash used in investing activities was $68 thousand and $775 thousand for the years ended December 31, 2025 and 2024, respectively.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 ($ in thousands) Revenues, net For the year ended December 31, 2024 revenues were $8,688 and increased by $4,599, or 112.5%, when compared to $4,089 for the year ended December 31, 2023.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 ($ in thousands) Revenues, net Year Ended December 31, 2025 2024 Revenues, net $ 11,421 $ 8,688 For the year ended December 31, 2025 revenues were $11,421 and increased by $2,733, or 31.5%, when compared to $8,688 for the year ended December 31, 2024.
Net cash used in investing activities was $775 thousand and net cash provided by investing activities was $4,456 thousand for the year ended December 31, 2024 and 2023, respectively, consisting of the sales of marketable securities of $68 thousand, offset by purchases of capital equipment of $443 thousand and the investment in the subsidiary Semmens Online of $400 thousand for the year ended December 31, 2024 while the sales of marketable securities of $5,699 thousand, offset by purchases of capital equipment of $696 thousand and the Kenkoderm acquisition of $547 thousand were for the year ended December 31, 2023.
Net cash used in investing activities for 2025 was attributable to the purchases of capital equipment while net cash used in investing activities for 2024 was attributable to the sales of marketable securities of $68 thousand, offset by purchases of capital equipment of $443 thousand and the investment in the subsidiary Semmens Online of $400 thousand.
As a result, we had working capital of $2,644 thousand at December 31, 2024, compared to a working capital of $2,503 thousand at December 31, 2023. The increase in the working capital as of December 31, 2024 is primarily attributable to the loss from operations of $3,554 thousand and proceeds from rights offering of $3,772 thousand.
As a result, we had working capital of $1,382 thousand at December 31, 2025, compared to a working capital of $2,644 thousand at December 31, 2024.
Beginning in 2020, we created two new lines of business for the company. First, 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.
We also have a line of branded consumer products sold direct to consumers and 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.
The increase in Selling, general and administrative expenses is primarily attributable to the factors described below. Compensation and benefits increased by $280, or 37.8%, to $1,020 for the year ended December 31, 2024, as compared to $740 for the year ended December 31, 2023.
Selling, general and administrative expenses are as follows for the years ended December 31, 2025 and 2024 ($ in thousands): Year Ended December 31, 2025 2024 Selling, general and administrative expenses $ 7,859 $ 6,224 Selling, general and administrative expenses increased by $1,635 or 26.3%, to $7,859 for the year ended December 31, 2025, as compared to $6,224 for the year ended December 31, 2024.
The increase in cost of revenues is primarily aligned with sales of branded consumer products. As mentioned elsewhere, Silly George was acquired in May 2024 while Kenkoderm was acquired in December 2023. Selling, general and administrative expenses .
The increase in cost of revenues is primarily aligned with sales of branded consumer products and the acquisition of Silly George in the prior year period which increased by 50.8%.
Net cash provided by financing activities for year ended December 31, 2023 was $379 thousand which is attributable to the proceeds of equipment notes payable of $315 thousand, proceeds from margin line of credit of $245 thousand, offset by principal payments of notes payments of $6 thousand and payments of $175 thousand made on the operating lease liability. 22 Table of Contents At December 31, 2024, current assets totaled $5,114 thousand and current liabilities totaled $2,470 thousand, as compared to current assets totaling $5,052 thousand and current liabilities totaling $2,549 thousand at December 31, 2023.
Net cash provided by financing activities for year ended December 31, 2025 was $630 thousand which was attributable to the proceeds from rights offering of $963 thousand, offset by principal payments of notes payments of $97 thousand, and change in contingent consideration of $177 thousand made on the operating lease liability, and $59 thousand of principal payment of financing lease liability.
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All of our gel products are manufactured using proprietary and non-proprietary mixing, coating and cross-linking technologies.
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Gross profit was approximately 39.5% for the year ended December 31, 2025 compared to a gross profit of 31.6% for the year ended December 31, 2024. Selling, general and administrative expenses .
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Gross profit was approximately 31.6% for the year ended December 31, 2024 compared to a gross profit of 9.1% for the year ended December 31, 2023. 20 Table of Contents The components of cost of revenues are as follows for the years ended December 31, 2024 and 2023 ($ in thousands): Year Ended December 31, 2024 2023 Cost of revenues Materials and finished products $ 3,987 $ 2,147 Compensation and benefits 497 451 Share-based compensation 20 14 Depreciation and amortization 280 103 Commission and contract fees 523 245 Equipment, production and other expenses 633 755 Total cost of revenues $ 5,940 $ 3,715 Cost of revenues increased by $2,225 or 59.9%, to $5,940 for the year ended December 31, 2024, as compared to $3,715 for the year ended December 31, 2023.
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The increase in Selling, general and administrative expenses is primarily attributable to an increase in compensation and benefits (including share-based benefits) of $816, advertising and marketing increases of $282, an increase in professional and consulting fees of $258, and other expense of $205.
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The following table highlights selling, general and administrative expenses by type for the years ended December 31, 2024 and 2023 ($ in thousands): Year Ended December 31, 2024 2023 Selling, general and administrative expenses Compensation and benefits $ 1,020 $ 740 Share-based compensation 337 203 Depreciation and amortization 156 126 Advertising, marketing, and Amazon fees 2,220 440 Investor and shareholder services 273 426 Franchise taxes and corporate insurance 157 224 Professional and consulting fees 1,651 1,339 Other expenses and professional fees 410 250 Total selling, general and administrative expenses $ 6,224 $ 3,748 Selling, general and administrative expenses increased by $2,476 or 66.1%, to $6,224 for the year ended December 31, 2024, as compared to $3,748 for the year ended December 31, 2023.
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The decrease in the working capital as of December 31, 2025 is primarily attributable to the loss from operations of $3,352 thousand and proceeds from rights offering of $963 thousand and proceeds from Stada of $1,000 thousand. We have never declared or paid any cash dividends on our common stock.
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The primary increase in expense, when compared to the prior period, is the increase in contract labor with the inclusion of Silly George. Share-based compensation increased by $134, or 66.0%, to $337 for the year ended December 31, 2024, as compared to $203 for the year ended December 31, 2023.
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The increase related to the issuance of stock options and restricted awards to our officers, employees, board of directors, and advisors. 21 Table of Contents Advertising, marketing, and Amazon fees increased by $1,780, or 404.5%, to $2,220 for the year ended December 31, 2024, as compared to $440 for the year ended December 31, 2023.
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The increase is due to the increased Amazon selling fees and an increase in advertising and marketing attributable to promoting Kenkoderm and Silly George. Investor and shareholder services decreased by $153, or 35.9%, to $273 for the year ended December 31, 2024, as compared to $426 for the year ended December 31, 2023.
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The decrease is due to a net reduction of investor services compared to the prior year period. Franchise taxes and corporate insurance decreased by $67, or 29.9%, to $157 for the year ended December 31, 2024, as compared to $224 for the year ended December 31, 2023.
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The vast majority of this decrease pertains to the Company’s reduction in authorized shares, which lowered its franchise tax expense. The Company enjoyed the full benefit of the reduction in authorized shares throughout 2024, as opposed to a partial benefit in 2023.
Removed
Professional and consulting fees increased by $312, or 23.3%, to $1,651 for the year ended December 31, 2024, as compared to $1,339 for the year ended December 31, 2023. We continued to incur accounting and consulting fees associated with public company governance requirements and professional services related to branded consumer products.
Removed
Additionally, consulting fees increased in 2024 with the acquisition of Silly George, which utilizes numerous consultants to assist with marketing, IT, graphic design, and various other services. Other expenses increased by $160, or 64.0%, to $410 for the year ended December 31, 2024 from $250 for the year ended December 31, 2023.
Removed
Other Selling, general and administrative expenses generally consist of normal costs associated with our selling efforts and general management, including information technology, travel, training and credit card processing fees. Credit card processing fees in particular increased significantly from 2023 to 2024 with the inclusion of Silly George.

Other NXGL 10-K year-over-year comparisons