VANCOUVER, BC, Jan. 30,
2023 /CNW/ - NEXE Innovations Inc. ("NEXE" or the
"Company") (TSXV: NEXE) (Frankfurt: NX5) (OTC: NEXNF), a
compostable and innovative materials company, is pleased to
announce its financial results for the three-month period ended
November 30, 2022 ("Q2 2023").
During the quarter, the Company was focused on transitioning to
a vertically integrated manufacturing facility in Windsor, Ontario (the "Windsor Facility"). The
Windsor Facility is close to production with the infrastructure and
key equipment in place at the end of January. NEXE is working with
vendors and suppliers to complete various tests, including site
acceptance tests (SATs) and factory acceptance tests (FATs) and
commissioning the equipment for production. At the Windsor
Facility, NEXE expects to control the manufacturing process from
end-to-end, including both component and finished goods
manufacturing.
"We are excited about our Windsor Facility and the progress
we have made with our vertically integrated manufacturing process
that we can scale to producing ~500 million pods annually," stated
Ash Guglani, President, NEXE Innovations, "the team is working on
the final phases and have started to build an operations team in
Windsor".
Key Highlights
- Given the significant advancements made with the vertically
integrated manufacturing process, NEXE decided not to continue
running a parallel production of its current composite single-use
pod (the "NEXE Pod") and decided to consolidate the two different
manufacturing operations sooner than initially planned. As a
result of this transition, NEXE started to reduce the current
composite NEXE Pod inventories to prepare for the switchover. This
resulted in lower revenues in Q2 2023 compared to the previous
quarter Q1 2023. For the new injection molded NEXE Pods, we do
expect production to ramp up over the year as it relates to our
strategy to target private label and co-manufacturing
opportunities.
- NEXE is in the process of acquiring the BPI
certification. As part of this process, NEXE submitted the new
version of the injection molded NEXE Pods to an independent
third-party (approved by BPI) to conduct testing. The rigorous
testing is now in the later stages, and once the third-party
testing is complete, the results will be submitted to BPI for
validation. This BPI certification is not required to produce or
sell our products and not all of our potential clients require
these certifications.
- For the calendar year 2023, a key strategic focus is on
growing the Company's customer base, focusing on private label and
co-manufacturing segments of the market. Currently, the Company
is actively in discussions with several private label and
co-manufacturing companies to secure large commercial contracts as
the Windsor Facility capacity comes online. The sales cycle
associated with private label and co-manufacturing companies does
take time as there are many steps involved including testing and an
auditing phase. Based on the sales pipeline and inbound requests,
we expect we will receive more purchase orders over the next few
months, however there will be a lag between purchase orders and
revenues booked.
- In September 2022, the Company
announced its first U.S. purchase order with Awaken Brands Ventures
Ltd ("Awaken Brands"). The partnership with Awaken Brands is the
first entry point for NEXE to sell its proprietary technology of
fully-compostable NEXE Pods for the Keurig® Brewing Systems into
Awaken Brand's ecosystem and help companies to meet their
sustainability goals. NEXE is currently in the final stages of
onboarding Awaken Brands, such as finalizing designs. The
production for this purchase order is also being transitioned to
the Windsor Facility.
Financial Position
- The Company continues to have a solid balance sheet and is
disciplined with deploying capital and keeping expenses at a
minimum. At the end of Q2 2023, the Company had a working
capital of $26.5 million with cash
and GICs of $21.7 million that
will help weather increased volatility in the financial markets and
with executing NEXE's strategy.
Given the increased focus for companies and governments to
reduce plastic waste, NEXE expects there to be a rapid increase in
demand for compostable alternatives. NEXE's capacity and ability to
set up a vertically integrated manufacturing process will
strengthen NEXE's position in a growing market. NEXE expects that
it will be able to expand into different markets quickly and in a
more cost-effective way.
The Company's Q2 2023 financial statements and related
management's discussion and analysis are available on NEXE's SEDAR
profile at www.sedar.com and the Company's website at
www.nexeinnovations.com.
*NEXE Innovations Inc. is not affiliated with, endorsed, or
sponsored by Keurig®. Keurig® is a registered trademark of Keurig
Dr Pepper Inc.
**NEXE Innovations Inc. is not affiliated with, endorsed, or
sponsored by Nespresso®. Nespresso® is a registered trademark of
Société des Produits Nestlé S.A
About NEXE Innovations Inc.
NEXE Innovations Inc. is a
leader in innovative compostable materials technology based in
British Columbia, Canada. The
first product developed by NEXE Innovations is one of the only
patented, fully-compostable, single-serve coffee pods for use in
existing major single-serve coffee machines.
For more information about NEXE's compostable materials and how
it is well-positioned to meet the growing demand for
environmentally friendly and sustainable products, visit
www.nexeinnovations.com and follow us on social media
@nexeinnovations.
On behalf of the Company:
Ash Guglani
President & Director
For investor relations contact:
Kam Mangat
VP, Investor Relations & Corporate Strategy
invest@nexeinnovations.com
Office +1-604-359-4725
Mobile +1-604-359-4742
For media relations contact: media@nexeinnovations.com
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements in this release are
forward-looking statements or information, which include, but are
not limited to, statements in respect of the Company growing its
customer base, transitioning to a vertically integrated and
injection molding manufacturing process, the Company bringing key
manufacturing processes to commercial scale in-house; filing
patents and obtaining various certifications, the continued
commercialization of NEXE Pods in Keurig® and Nespresso® format
capsules; the NEXE Pod becoming a viable alternative to currently
available plastic coffee capsules; NEXE's ability to meet the
growing demand for environmental friendly and sustainable products
in the single-serve coffee sector and beyond; the Company's ability
to secure large contracts and work with private label and
co-manufacturing coffee branded companies; the Company's ability to
bring the Windsor Facility into production in 2023; the Company's
ability to expand into different markets in a quick and
cost-effective manner; the success of the partnership with Awaken
Brands; the Company's overall business strategy and the Company's
long-term growth and development plans. Forward-looking statements
consist of statements that are not purely historical, including any
statements regarding beliefs, plans, expectations or intentions
regarding the future. Such information can generally be identified
by the use of forwarding-looking wording such as "may", "expect",
"estimate", "anticipate", "intend", "believe" and "continue" or the
negative thereof or similar variations. The reader is cautioned
that assumptions used in the preparation of any forward-looking
information may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted, as
a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company,
including but not limited to, the Company's ability to execute on
its business strategy and those risks set out in the Company's
management's discussion and analysis for the three and six months
ended November 30, 2022 under the
heading "Risk and Uncertainties". Such statements and information
are based on numerous assumptions regarding present and future
business strategies and the environment in which the Company will
operate in the future, including the demand for its products,
anticipated costs, and the ability to achieve goals. Factors that
could cause the actual results to differ materially from those in
forward-looking statements include, receipt of necessary approvals
and general economic, market or business conditions.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The reader is
cautioned not to place undue reliance on any forward-looking
information.
The forward-looking statements contained in this news release
are made as of the date of this news release. Except as required by
law, the Company disclaims any intention and assumes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
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SOURCE Nexe Innovations Inc.