NEXGEL, INC. 8-K

What Happened

• NexGel, Inc. announced on Feb 9–10, 2026 that it entered into a Securities Purchase Agreement for a 10% original-issue-discount (OID) convertible note facility with an institutional investor totaling up to $56,667,667. The company issued Series A senior secured convertible notes on Feb 10, 2026 and received gross proceeds of $1,797,381. Series B convertible notes may be issued in one or more private closings up to an aggregate principal amount of $54,869,286 (subject to mutual agreement and certain stockholder approvals).
• The financing is secured by a first-priority lien on substantially all company assets (Security and Pledge Agreement) and is accompanied by a Registration Rights Agreement requiring the company to register Series B conversion shares within specified deadlines.

Key Details

• Total facility: up to $56,667,667; Series A issued Feb 10, 2026 for $1,797,381 (gross proceeds).
• Interest & maturity: notes bear 10% interest per year (rising to 18% upon Event of Default), with interest paid monthly; each note matures two years after issuance.
• Conversion terms: Series A conversion price fixed at $1.244/share (subject to adjustments); alternate conversion tied to recent VWAP with a Floor Price of $0.2488/share; conversion mechanics differ for Series A (registered) and Series B (initially unregistered).
• Conditions for Series B issuance: issuance conditioned on shareholder approvals including redomestication to Nevada, reserve stock splits (up to aggregate 250-for-1), increase of authorized shares to 250M, and Nasdaq compliance. If an Approved Acquisition closes by April 15, 2026 (and other conditions met), the investor must purchase up to $14,869,286 of Series B notes at an additional closing.
• Placement agent: Palladium Capital Group; fee equal to 7% of gross proceeds (25% of cash fee convertible to a promissory note) and issuance of warrants equal to 7% of the shares sold (cashless exercise, 5‑year term).
• Registration rights: company must file registration statement for Series B conversion shares within 30 days and have it declared effective within 60 days (120 if full SEC review); failure to meet deadlines triggers 2% cash penalties (payable and recurring every 30 days) based on original principal.

Why It Matters

• This financing provides NexGel with near-term cash (Series A proceeds $1.797M) and a pathway to larger funding tied to an Approved Acquisition, but it also creates secured debt and the potential for sizable future dilution because the notes convert into common stock at set or market-linked prices.
• The notes are senior, secured obligations backed by substantially all assets and include typical covenants and default provisions (including higher default interest), which are material to creditors and shareholders. The Series B tranche is contingent on shareholder actions (redomestication, stock-splits, authorized share increase, Nasdaq compliance), so timing and full funding depend on those approvals and satisfying registration requirements.