## NEXE Innovations Reports Strong Q1 2025 Results, Positions for Growth in Sustainable Manufacturing
Windsor, ON, October 30, 2024 – NEXE Innovations Inc. (TSXV: NEXE, OTCQX: NXENF), a leading innovator in compostable materials, has announced impressive financial results for the three months ended August 31, 2024 (Q1 2025). The company is demonstrating its commitment to sustainable manufacturing and positioning itself for a significant growth trajectory in the coming year.
NEXE, known for its proprietary fully compostable resin and advanced technology, has been actively working with various customers. The company anticipates larger-scale customer production to commence in the second quarter of fiscal 2025, leading to substantial revenue growth throughout the year.
“With our proprietary fully compostable resin, technology, and on-shored facility, we are redefining what’s possible in the sustainable manufacturing space. Larger-scale customer production is on the horizon, and we are positioned to drive transformative growth across different products and industries,” stated Ash Guglani, President and Co-founder of NEXE.
A Strategic Investment in Sustainability and Innovation
Over the past two years, NEXE has strategically invested in developing a compostable solution and building a vertically integrated manufacturing facility in North America. This strategic move has yielded a cost-competitive product that rivals traditional plastic and aluminum pods. The benefits of onshoring and vertical integration include:
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Intellectual Property Protection:
Securing NEXE’s proprietary technology and trade secrets.*
Enhanced Quality Control:
Minimizing errors and ensuring consistent product quality.*
Economies of Scale:
Optimizing production efficiency and reducing costs.*
In-House Tooling:
Facilitating faster prototyping, mold creation, and minimal machine downtime.This in-house tooling capability is expected to enable NEXE to quickly enter new markets and respond to evolving customer demands.
Strong Financial Foundation for Future Growth
While implementing its new business model and fully onshored strategy, NEXE maintained a strong financial position by minimizing costs. The company is well-capitalized to execute its ambitious business plan, with key highlights:
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Robust Cash Position:
NEXE boasts a strong cash position of $15.6 million (including GICs and term deposits) at the end of Q1 2025, providing ample resources to support its strategic initiatives and work with large-scale coffee companies.*
Minimal Debt:
The company has a minimal debt outstanding of $0.6 million, primarily related to a government loan.*
Limited Capital Expenditures:
NEXE’s commitments at the end of the quarter were $1.8 million, with minimal capex expected over the next two years, ensuring financial stability and efficient resource allocation.Q1 2025 Financial Highlights
During the three-month period ended August 31, 2024, NEXE achieved a net income of $2,292,733, or $0.024 per share, a significant improvement compared to a net loss of $2,040,355, or $0.021 per share, in the same period last year. This positive shift can be attributed to several factors:
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Property Sale:
The company realized a gain of $3,700,554 from the sale of its property in Surrey, BC, Canada, on July 30, 2024.*
Cost Optimization:
Selling, general, and administrative expenses decreased due to lower consulting fees, advertising and marketing costs, and streamlined operations following the consolidation of activities at the Windsor facility.*
Share-Based Compensation Reduction:
The non-cash share-based compensation expense was reduced due to a decrease in stock options granted.*
Interest and Accretion Expense Decline:
Interest and accretion expense decreased due to a reduction in government loan balances and the elimination of lease liabilities.Continued Investment in Research and Development
NEXE remains committed to investing in research and development to create innovative products, technologies, and formulations. This ongoing focus will ensure the company remains at the forefront of the compostable materials industry.
Investor Relations Update
NEXE has confirmed its investor relations arrangements with Clarkham Capital Ltd., Torque Capital Partners (SmallCapInvestor), Proactive Investors North American Inc., and Independent Trading Group (ITG) Inc., with fees being paid from the company’s strong cash position and working capital. Chris Kaplan will continue to provide market-making services pursuant to the market-making agreement with ITG Inc.
About NEXE Innovations Inc.
NEXE Innovations is a leading provider of innovative compostable material solutions and packaging for the B2B segment. The company’s mission is to help businesses achieve their sustainability goals. NEXE has developed a proprietary and patented compostable material that offers high performance and durability. Its flagship product, the NEXE Pod, is a BPI-certified compostable coffee pod compatible with major coffee brewing machines. The NEXE Pod is manufactured at the company’s vertically integrated facility in North America.
NEXE Innovations is committed to driving sustainable change in the packaging industry. The company’s focus on innovation, cost optimization, and a strong financial foundation positions it for significant growth in the years ahead.
