Overview

The company manufactures high water content, electron beam cross-linked, aqueous polymer hydrogels used for wound care, medical diagnostics, transdermal drug delivery, and cosmetics. They specialize in custom gels by capitalizing on proprietary manufacturing technologies. The company distributes its products as a contract manufacturer, supplying gels to third parties who incorporate them into their own products. They also have a line of branded consumer products sold direct to consumers and custom and white label opportunities.

Lines of Business

The company has five distinct lines of business:

1. Contract Manufacturing: Customers order rolls of gel (“rollstock”) which is shipped to them for packaging into finished goods. This has historically been the company’s primary source of revenue.

2. Custom & White Label: The company infuses various ingredients into its base gel to develop unique product offerings. The rollstock is converted and packaged into salable units, which are then shipped to the customer.

3. Consumer Branded Products: The company markets and sells finished goods directly to customers through online and retail channels under its own MedaGel, Kenkoderm, and Silly George brands.

4. Biomaterial Products: These are licensed products from the Celularity transaction, for which the company is responsible for sales, marketing, and distribution.

5. Medical Devices/Other: A hybrid business combining elements of Custom & White Label and Consumer Branded Products. The company may manufacture and/or convert/package the devices, while strategic partners bring the products to market.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025:

• Revenues increased by 27.8% to $3,686, primarily due to $814 in new Biomaterial product revenue.
• Cost of revenues increased by 58.5% to $2,578, primarily due to the increase in Biomaterial product sales.
• Gross profit decreased by $149 to $1,109, with gross margin declining from 43.6% to 30.1%, due to lower margins on Biomaterial products and higher inventory write-off, freight, and royalty costs.
• Selling, general and administrative expenses increased by 89.8% to $3,594, primarily due to $657 in costs related to the BioNX Surgical division and $756 in amortization of the Celularity license agreement intangible asset.

Comparison of the Six Months Ended June 30, 2026 and 2025:

• Revenues increased by 11.4% to $6,336, with $814 in Biomaterial product sales offset by a $289 decline in Consumer Branded products.
• Cost of revenues increased by 28.4% to $4,166, primarily due to the increase in sales and higher inventory write-off, freight, and royalty costs.
• Gross profit decreased by $276 to $2,170, with gross margin declining from 43.0% to 34.2%, due to the same factors as the three-month period.
• Selling, general and administrative expenses increased by 45.5% to $5,613, primarily due to the BioNX Surgical division costs and Celularity license agreement amortization.

Liquidity and Capital Resources

• As of June 30, 2026, the company had $1,706 in cash and cash equivalents, compared to $1,058 at December 31, 2025.
• Net cash used in operating activities was $2,701 for the six months ended June 30, 2026, compared to $807 in the prior-year period.
• Net cash used in investing activities was $6,587, primarily due to the $6,502 cash payment for the Celularity license acquisition.
• Net cash provided by financing activities was $9,936, primarily from $10,203 in proceeds from notes payable.
• The company had negative working capital of $8,270 as of June 30, 2026, compared to positive working capital of $1,382 at December 31, 2025, due to the loss from operations, an increase in non-cash derivative liability, and proceeds from convertible debt.
• The company expects to continue incurring losses in the near-term future and its ability to continue as a going concern is dependent on its ability to manage and grow its current products and achieve profitable operations.