NEXE Innovations Inc (TSX-V:NEXE, OTC:NEXNF) told investors it has completed the so-called site acceptance test (SAT) for high-speed, automation equipment at its facility in British Columbia, paving the way for the company to produce an additional 50 million compostable coffee pods a year.
It comes after the company successfully completed its factory acceptance test (FAT) in October at its manufacturing partner's facility in Europe.
This is the first of two custom machines that were ordered by NEXE, before the pandemic, in February 2020.
"As we come to year end, we are ecstatic to announce that we have completed a Successful site Acceptance Test on key equipment which can provide an additional 50 million annual pod production capacity," said Ash Guglani, the president of NEXE, in a statement.
"We are now focused on commissioning this equipment in Q1 2022 and await our end of line packaging equipment to meet the market's demand for our sustainable and fully compostable pods. As we enter 2022, expect to hear more news on distribution and corporate updates as to how we will backfill capacity with revenue."
READ: NEXE Innovations says both its XOMA Superfoods and NEXE Coffee beverages to be available for sale on ECSCoffee.com in December
Guglani also noted that the positive SAT proved that the company was able to "consistently produce our pods at a high rate while maintaining the performance and taste profile that our customers demand from a superior pod".
"This successful test demonstrates that NEXE's plant-based materials can be assembled at production speed and proves the scalability of the technology," he added.
NEXE has developed one of the only patented, fully compostable, plant-based, single-serve coffee pods used in single-serve coffee machines.
The company noted it now had custom automation equipment to produce pods that were compatible with two-leading single-serve coffee formats: Keurig and Nespresso OriginalLine, allowing it to address a sizable portion of the growing potential 60 billion per year coffee pod market.
It added that it expects to receive the second proprietary high-speed assembly, filter forming and dosing machine for Keurig compatible pods in calendar Q1 2022, increasing NEXE's production capacity to over 100 million annual Keurig compatible pods.
Contact the writer at giles@proactiveinvestors.com