NEXGEL (NXGL) Investor update summary

Strategic review

• A shift from hydrogel manufacturing toward consumer products created commercialization and sales constraints, underperformance, higher-than-forecast capital needs, and an unsustainable cost structure.

• Liquidity needs, an approximately $15M debt burden, insufficient standalone profitability, and fragmented operating capabilities constrained the standalone business.

• The proposal redirects focus toward medical devices and biomedical innovation, combining hydrogel and regenerative-medicine assets with Fountainhead Life Sciences operations.

Proposed platform and contributions

• The proposed structure would consolidate management, manufacturing, and commercialization under one public platform to share infrastructure, diversify revenue, and improve the path to profitability.

• Fountainhead capabilities include NVISION engineering, IP and regulatory support; Sequence cleanrooms and biologics manufacturing; LockHill advanced manufacturing; and a 12-station cadaver lab.

• Sequence operations are described as generating more than $10M of 2026 revenue; contributions also include NVISION’s medical-device pipeline, relationships, and manufacturing capabilities for Interfyl and related products.

• Contributed physical assets are preliminarily valued at $16.5M–$19.5M, including $10M–$12M of inventory, $2.5M of equipment, and $4M–$5M of real estate, subject to independent review.

• The envisioned model emphasizes surgeon engagement, clinical insight, training, product development, and a continuum of care across clinical verticals and reimbursement channels.

Illustrative financial profile

• Standalone illustrative forecasts: FY1 revenue $11.1M, gross margin 24.8%, and operating loss $1.6M; FY2 revenue $13.1M, gross margin 27.1%, and operating loss $0.6M.

• Combined-platform illustrative forecasts: FY1 revenue $20.7M, gross margin 73.2%, and operating loss $1.1M; FY2 revenue $31.3M, gross margin 74.6%, and operating profit $4.5M.

• Both cases assume consumer lines are discontinued; pro forma figures are unaudited, illustrative, not prepared under Regulation S-X Article 11 or U.S. GAAP, and actual results may differ materially.