WINDSOR,
ON, Jan. 29, 2024 /CNW/ - NEXE
Innovations Inc. ("NEXE", the "Company", "we", "us" or "our")
(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, 2023 ("Q2 2024").
As a company building from the ground up with an innovative new
product, we are in an exciting phase where we believe we are
building strong foundations with our "B2B" clients. In Q2 2024, we
continued to engage with well-established coffee companies and
distributors, and our innovative compostable single-serve pods have
been well-received, leading to repeat orders.
"It's important to remember that establishing these
relationships takes time. Our clients carefully evaluate our
operations and plan how to introduce our products, often starting
with smaller orders and gradually increasing," stated Ash Guglani,
President and Co-founder of NEXE., "Our revenues might not follow a
straight line but ebb and flow as these relationships solidify and
grow. This is a normal part of the journey for a start-up like
ours, and these fluctuations are steps towards building a robust,
sustainable business".
Highlights:
We believe the fundamentals for the business remain strong and
are supported by macro trends, including the changing regulatory
environment around plastic bans and related health risks.
Management believes that NEXE is well positioned to leverage these
trends, particularly:
- NEXE has a strong cash position to execute its strategy over
the next two years. At the end of Q2 2024, our total cash
position is $11.4 million (including
GICs and term deposit). NEXE is also expected to receive a
government cash refund of $2 million
and, in the event a purchaser agrees to acquire our non-core asset,
the Surrey facility, with
potential proceeds of at least $5.0
million. The total expected cash position for NEXE,
including if the Surrey facility
is sold, is ~$18 million.
- NEXE has minimal debt. The current debt outstanding is
$834,019, related to a government
loan. NEXE's commitments at the end of the quarter were
$2.1 million, and minimal capex is
expected over the next two years.
- The book value per share at the end of Q2 2024 was
$0.37 (based on outstanding shares of
97.3 million shares), including $0.12
per share of cash. Adjusting for the additional cash expected
and market values for the Windsor Facility and equipment, the value
per share is estimated at $0.46. The
current market share price close on January
29, 2024, was $0.26.
NEXE's primary target group is B2B customers, such as
private label opportunities, coffee roasters, and brands. As we
continue our discussions with customers in our pipeline, we will
implement targeted sales and marketing strategies to market our
compostable coffee pod, build brand awareness, and educate the
market. We will also continue building the NEXE team, adding to key
areas, including our in-house coffee expertise.
Fiscal Q2 2024 Results:
During the three months ended November
30, 2023, the Company had a net loss of $1,610,871 or $0.016 per share, compared to a net loss of
$349,887 or $0.004 per share for the comparable period last
year. The change in net loss was predominantly a result of the
following:
- Revenue was $33,729 (November 30, 2022 – $9,301), and cost of goods was $88,060 (November 30,
2022 – $25,908). The cost of
goods included non-cash expenses, such as production machinery and
equipment depreciation. Depreciation in the cost of goods sold
increased as new equipment has come online.
- Selling, General, and Administrative expenses decreased to
$929,130 (November 30, 2022 - $951,161) due to lower overhead costs, lower
consulting fees, and lower compensation. The Company benefitted
from consolidating operations to its Windsor facility. The management team
continues to maintain a disciplined approach to allocating
resources.
- A non-cash share-based compensation expense of $151,062 (November 30,
2022 - $191,954) was recorded
for stock options granted to directors, officers, and
employees.
- Interest and accretion expense decreased to $47,335 (November 30,
2022 - $66,286) due to
declining balances of the government loan and the elimination of
the lease liability.
- Interest income decreased to $24,854 (November 30,
2022 - $201,597) primarily
from the GIC deposits.
- Depreciation increased to $373,394 (November 30,
2022 – $213,472) due to
additional equipment purchased.
- Research and development expenses increased to $76,749 (November 30,
2022 ‐ $56,918) as the company
continues to develop new technology and formulations.
NEXE has a working capital of $15.4
million and a strong balance sheet to help execute its plans
over the next two years. NEXE has also consolidated all of its
operations to its Windsor facility
from Surrey, positively impacting
costs.
The Company's Q2 2024 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 is
focused on providing innovative compostable material solutions and
packaging to the B2B segment to help businesses achieve their
sustainability goals. NEXE Innovations has developed a proprietary
and patented compostable material that can withstand heat,
pressure, and water. Our flagship product, the NEXE Pod, a
BPI-certified compostable coffee pod, showcases our material's
durability and is an ideal substitute for plastic. The NEXE
pod is compatible with major coffee brewing machines and is
manufactured at NEXE's vertically integrated facility based in
North America. Discover our
innovative approach to sustainability at www.nexeinnovations.com
and join our journey on social media @nexeinnovations.
#compostablecoffeepods #sustainability #greentech
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 indications of
interest from potential clients, government regulations, potential
receipt of government refunds, funds to be received from a
potential sale of non-core assets, completion of a potential sale
of non-core assets, NEXE's potential cash position, consumer
trends, Company's use of working capital, sale of property or
assets of the Company, consolidation of operations and the
Company's overall business strategy, increases in production and
revenue, 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, ability to find a buyer of non-core assets
on terms that are favourable or acceptable, increases in interest
rates which may have negative impacts on the real estate market or
property values, potential legal, regulatory or tax changes that
may impact the value of the Surrey
facility, ability of NEXE to meet the conditions for a sale of the
Surrey facility and those risks
set out in the Company's management's discussion and analysis for
year ended May 31, 2023 and quarter
ended November 30, 2023 under the
headings "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.
