NEXGEL, INC. Stock Compensation Disclosure
The 2019 Plan provides for the granting of incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights (“SARs”), restricted stock units, performance awards, dividend equivalent rights and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash, shares of common stock of the Company or a combination of cash and shares of common stock of the Company. Effective as of May 26, 2020, May 3, 2021, and March 23, 2023 respectively, the Board approved an increase of the number of authorized shares of common stock reserved under the 2019 Plan from shares of common stock to , from shares of common stock to shares of common stock, and from shares of common stock to , all of which may be delivered pursuant to incentive stock options.
On December 31, 2024, the Board approved an additional 780,000 shares of common stock to be reserved under the 2019 Plan, bringing the total number of shares underlying the Plan to of which shares have already been awarded or exercised. The Company’s stockholders approved the share increase at the Company’s 2025 Annual Meeting of Stockholders held on June 17, 2025. Subject to adjustments pursuant to the 2019 Plan, the maximum number of shares of common stock with respect to which stock options or SARs may be granted to an executive officer during any calendar year is shares of common stock.
| Awards | Awards | |||||||||||||||
| Reserved for | Awards | Awards | Available for | |||||||||||||
| Issuance | Issued | Exercised | Grant | |||||||||||||
| 2019 Plan(1) | 1,651,429 | 1,132,774 | 173,915 | 518,655 | ||||||||||||
| Awards issued in excess of 2019 Plan(2) | 100,821 | 92,113 | ||||||||||||||
| (1) | Includes incentive stock options and restricted stock units discussed below. |
| (2) | Includes shares of restricted common stock granted outside of the 2019 Plan to our Chief Executive Officer, Adam Levy. |
Stock-Options
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Contractual | |||||||||||
| Number of | Exercise | Term in | ||||||||||
| Options | Price | Years | ||||||||||
| Outstanding at January 1, 2024 | 560,650 | $ | 2.35 | |||||||||
| Granted | 172,000 | 2.68 | ||||||||||
| Exercised | (90,860 | ) | 1.01 | — | ||||||||
| Forfeited | — | |||||||||||
| Cancelled | (39,107 | ) | 1.01 | — | ||||||||
| Expired | (14,286 | ) | 5.25 | — | ||||||||
| Outstanding at December 31, 2024 | 588,397 | 2.67 | ||||||||||
| Granted | 400,000 | 3.26 | ||||||||||
| Exercised | (6,825 | ) | 2.04 | — | ||||||||
| Forfeited | — | |||||||||||
| Cancelled | (60,175 | ) | 2.01 | — | ||||||||
| Expired | (14,286 | ) | 5.25 | — | ||||||||
| Outstanding at December 31, 2025 | 907,111 | $ | 2.94 | |||||||||
| Exercisable at December 31, 2025 | 515,863 | $ | ||||||||||
As of December 31, 2025 and 2024, vested outstanding stock options had $ thousand and $ thousand of intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock, respectively. As of December 31, 2025 and 2024, there were $ thousand and $ of unrecognized share-based compensation related to unvested stock options, which the Company expects to recognize over the next 36 months excluding options fully contingent upon certain sales-based milestones being achieved within to months of commercial release.
The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The following assumptions were used to calculate share-based compensation expense for year ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Volatility | - | % | - | % | ||||
| Risk-free interest rate | - | % | - | % | ||||
| Dividend yield | % | % | ||||||
| Expected term | - years | years | ||||||
The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Accordingly, the Company has elected to use the “simplified method” to estimate the expected term of its share-based awards. The simplified method computes the expected term as the sum of the award’s vesting term plus the original contractual term divided by two.
The Company estimated the expected volatility input for the Black-Scholes model using the historical volatility of its own publicly traded common stock over a period commensurate with the expected term of the option.
The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period.
Restricted stock awards
| Number of | Weighted Average Grant Date | |||||||
| Units | Fair Value | |||||||
| Outstanding at December 31, 2023 | 64,562 | $ | ||||||
| Granted | 57,972 | 2.46 | ||||||
| Exercised and converted to common shares | (62,910 | ) | 2.08 | |||||
| Forfeited | (3,750 | ) | 2.30 | |||||
| Outstanding at December 31, 2024 | 55,874 | |||||||
| Granted | 45,198 | 3.57 | ||||||
| Exercised and converted to common shares | (39,116 | ) | 3.39 | |||||
| Forfeited | (1,500 | ) | 2.72 | |||||
| Outstanding at December 31, 2025 | 60,456 | $ | 2.41 | |||||
| Exercisable at December 31, 2025 | 24,962 | $ | 2.62 | |||||
Compensation expense will be recognized ratably over the total vesting schedule. The Company will periodically adjust the cumulative compensation expense for forfeited awards. The Company recognizes the reversal of any previously recognized compensation expense on forfeited awards in the period the awards are forfeited. As of December 31, 2025, there was $ thousand unrecognized share-based compensation related to unvested RSUs, which the Company expects to recognize through December 2027.
Share-based compensation of $ thousand and $ thousand has been recorded for the year ended December 31, 2025 and 2024, respectively.
Warrants
The following table shows a summary of common stock warrants for the years ended December 31, 2025 and 2024.
| Weighted | Weighted | |||||||||||
| Average | Average | |||||||||||
| Number of | Exercise | Contractual | ||||||||||
| Warrants | Price | Term in Years | ||||||||||
| Outstanding at December 31, 2023 | 3,442,904 | 5.41 | ||||||||||
| Warrants – 2021 IPO(1) | 387,750 | 5.50 | ||||||||||
| Outstanding at January 1, 2024 (corrected) | 3,830,654 | 5.42 | ||||||||||
| Granted | 947,792 | 4.18 | ||||||||||
| Exercised | (5,439 | ) | 2.80 | — | ||||||||
| Forfeited | — | |||||||||||
| Cancelled | (7,802 | ) | 2.80 | — | ||||||||
| Expired | — | |||||||||||
| Outstanding at December 31, 2024 | 4,765,205 | 5.18 | ||||||||||
| Granted | 387,392 | 4.17 | ||||||||||
| Exercised | — | |||||||||||
| Forfeited | — | |||||||||||
| Cancelled | (9,657 | ) | 2.80 | — | ||||||||
| Expired | — | |||||||||||
| Outstanding at December 31, 2025 | 5,142,940 | $ | 5.11 | |||||||||
| Exercisable at December 31, 2025 | 5,142,940 | $ | 5.11 | |||||||||
| (1) | The warrants outstanding have been corrected to reflect additional warrants related to the December 27, 2021 unit offering not previously included in the prior year warrant schedule. |
As of December 31, 2025, vested outstanding warrants had no intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock.
As of December 31, 2024, vested outstanding stock options had $300 thousand intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Apr 10, 2024 | |
| 2022 | Mar 28, 2023 | |
| 2021 | Mar 21, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 30, 2020 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.