NEXGEL, Inc. (NASDAQ: NXGL) has secured a $1.797 million senior secured convertible note financing to fund a potential acquisition expected to close in the first quarter of 2026. The funding, arranged through Palladium Capital Group, LLC, is intended to acquire assets that complement the company’s high‑water‑content hydrogel platform and expand its presence in the healthcare and beauty markets.
The notes carry a 10% original issue discount and a 10% annual interest rate, maturing in two years. The financing is contingent on the completion of due diligence by both parties; if the acquisition does not consummate, the funds will be returned to the investor. A follow‑on investment of up to $14.869 million is being considered once due diligence is complete and the acquisition is approved by shareholders.
NEXGEL’s strategy has long focused on acquiring complementary businesses to accelerate growth. The company has previously added the Silly George beauty brand in May 2024 and Kenkoderm in December 2023, both of which broadened its consumer and medical product lines. The new financing aligns with that pattern, providing the capital needed to pursue a target that would enhance the hydrogel technology portfolio and open new distribution channels.
CEO Adam Levy said the company remains committed to “accretive acquisitions that add value to our core hydrogel technology.” He added that the convertible note structure offers flexibility, allowing the company to convert the debt into equity if the acquisition proceeds, thereby aligning investor and shareholder interests.
The financing positions NEXGEL to move quickly on a target that could be finalized by the end of the first quarter. If the acquisition is completed, the company will be able to integrate the target’s assets and customer base, potentially accelerating revenue growth and improving margin profiles through operational synergies. The convertible note also provides a back‑stop for the company’s balance sheet, mitigating dilution risk while preserving capital for future strategic initiatives.
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