NEXE Innovations Inc (TSX-V:NEXE, OTC:NEXNF) told investors that fiscal 2023 was a pivotal year for the company as it completed building its Windsor Facility and entered production of its proprietary compostable, single-serve coffee pod.
Additionally, following the end of its financial year, the company noted in a statement that it has onboarded three co-manufacturing customers – a key segment for NEXE.
The company's shares rose 20% to C$0.32 by noon in Toronto.
NEXE said it successfully met the stringent testing requirements for certification from the Biodegradable Products Institute (BPI) for its beverage pod and associated components at the end of June 2023 and moved into production at the new Windsor Facility at the end of July. Since the beginning of August, it has onboarded Awaken Brands Ventures Ltd., Neighborhood Coffee Company, and Rooted Grounds Coffee Company.
The company said interest surrounding its proprietary BPI-certified pod continues to gain momentum, and it is in discussions to drive private label and co-manufacturing opportunities. It also expects production to continue to ramp up over the next several months, with the goal of building a strong base of recurring revenues.
For the 12 months to May 31, 2023, the company reported an 84% increase in revenues to $49,758, which it said largely represented the sale of the previous composite-based version of the NEXE Pod before it transitioned to the proprietary, BPI-certified single-serve pod.
For the first quarter of its 2024 fiscal year, it expects revenues to come in higher than total revenues in fiscal 2023, noting that the quarter will reflect only one month of revenue generation.
The company’s net loss for the year narrowed to $6.14 million, or $0.06 per share, from $8.34 million, or $0.09 per share in 2022.
It ended the year with working capital of $23 million and no debt. With the proceeds from the sale of its Surrey Facility, the company said management believes it is well-funded to weather current market volatility.
Competitively positioned
NEXE said it is competitively positioned to leverage trends in the green economy due to increasing environmental awareness and a move to more sustainable options, as well as the growing concern about the health impact of plastics.
“Management believes that significant investments will be needed to meet the changing industry requirements and increase in potential demand,” the company said.
“With the expertise gained by the team in onshore manufacturing over the last few years, management believes NEXE will be competitively positioned to replicate and expand its operational capabilities into the US.”
~Updates with share price movement~
Contact the author at stephen.gunnion@proactiveinvestors.com