Nexgel (NXGL) risk factors, FY2025 10-K

Risks Relating to Our Business

1. 01Our future success depends upon market acceptance of our existing and future products
2. 02Our suppliers may fail to deliver components and raw materials and parts according to schedules, prices, quality and volumes that are acceptable to us, or we may be unable to manage these components and raw materials effectively
3. 03We rely heavily on the Amazon and Shopify marketplaces for the sales and distribution of our consumer products, and if we are unable to maintain a good relationship with Amazon and/or Shopify or if Amazon and/or Shopify experience disruptions, our business will suffer
4. 04We have no contracts in place with our customers in either our contract manufacturing or consumer products business. The absence of such contracts could result in periods during which we must continue to pay costs without revenues
5. 05We operate in a highly competitive industry
6. 06As we enter the consumer product business sector to a larger extent, our failure to compete successfully could materially harm our business, financial condition, and operating results
7. 07Our failure to appropriately respond to changing consumer trends, preferences, and demand for new products and product enhancements could materially harm our business, financial condition, and operating results
8. 08If we fail to further penetrate existing markets, the sales of our consumer products, along with our operating results, could be negatively impacted
9. 09We are subject to governmental regulations in all aspects of our business
10. 10As we continue to develop our medical devices, if we fail to protect our intellectual property in the future, our ability to compete could be negatively affected, which could materially harm our financial condition and operating results
11. 11We have limited sales, marketing and distribution capabilities
12. 12Our products risk exposure to product liability claims
13. 13We are reliant upon two manufacturers for key ingredients used to manufacture of our hydrogels
14. 14We 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
15. 15Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel, including our senior management team
16. 16Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition
17. 17Our ability to pursue strategic partnerships may impact our ability to compete in the markets we serve or desire to enter

Risks Relating to our Common Stock and Capital Structure

1. 18Our common stock and certain of our warrants trade on The Nasdaq Capital Market under the symbols “NXGL” and “NXGLW,” respectively
2. 19Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our common stock and warrants
3. 20We cannot assure you that we will pay dividends on our common stock, and our indebtedness may limit our ability to pay dividends on our common stock
4. 21The 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
5. 22We have identified material weaknesses in connection with our internal control over financial reporting which, if not remediated, could adversely affect our business, reputation and stock price56% rewritten
6. 23If securities or industry analysts do not publish research about our business, or publish negative reports about our business, our share price and trading volume could decline
7. 24Future sales or potential sales of our common stock in the public market could cause our share price to decline
8. 25We may issue additional securities in the future upon conversion or exercise of outstanding securities which would result in dilution to our stockholders
9. 26We will incur costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
10. 27Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock
11. 28Our Amended and Restated Bylaws include a forum selection clause, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us