NEXE Innovations Reports Q1 Fiscal 2027 Results and Business Update

Operating cash use increased to $1,096,265 despite the narrower quarterly net loss.

Rhea-AI Summary

NEXE Innovations (NEXNF) reported fiscal first-quarter revenue of $133,119, up 10.5% year over year, alongside a narrower net loss. For the three months ended August 31, 2026, net loss narrowed 33.7% to $946,396, or $0.01 per share. Gross profit of $16,453 a year earlier became a gross loss of $47,552 as costs rose.

Operating expenses fell 37.4% to $950,956. Management attributed the net loss improvement primarily to lower depreciation, including changed estimates that reduced quarterly depreciation by $269,353. Cash, cash equivalents, GICs and term deposits totaled $8,008,095; working capital fell to $7,693,960 from $8,464,675 at May 31, 2026.

Deliveries began to Just Us! Coffee Roasters, and a U.S. coffee chain was onboarded. Based on customer interest and commercial opportunities in progress, management expects annual pod volumes to exceed 15 million, above the upper end of its previous 10–15 million range.

14 points · 0 major

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0 major · 5 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointRevenue rose 10.5% year over year to $133,119 in Q1 2027.
• Moderate pointNet loss narrowed 33.7% to $946,396; loss per share remained $0.01 versus Q1 2026.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Annual pod volumes are expected to exceed 15 million, above the previous 10–15 million range.
• Minor pointOperating loss before other items improved 33.6% to $998,508 from $1,503,604 in Q1 2026.
• Minor pointOperating-expense depreciation fell 75.9% to $108,103; changed estimates reduced quarterly depreciation by $269,353.

9 minor points

• Minor pointShare-based compensation decreased 94.0% to $13,187 in Q1 2027.
• Minor pointResearch and development expenses decreased 67.7% to $33,447 in Q1 2027.
• Minor pointJust Us! Coffee Roasters deliveries began, and a U.S. coffee chain was onboarded during the quarter.
• Minor pointMaterials procurement is underway for a new Canadian client.
• Minor pointPotential national hotel-chain supply is under discussion with a U.S. brand.
• Minor point. Forward-looking: it has not happened yet and may not happen.Current finished goods capacity is expected to align with production needs for the coming months.
• Minor point. Forward-looking: it has not happened yet and may not happen.Capacity could scale with limited additional investment, including larger molds or additional staff, the company anticipates.
• Minor pointPotential partnerships, licensing and capital-efficient growth initiatives are being evaluated to accelerate commercialization.
• Minor point. Forward-looking: it has not happened yet and may not happen.Costs are expected to trend lower as volumes increase, management believes.

Negative

• Moderate pointGross loss reached $47,552, versus gross income of $16,453 in Q1 2026.
• Moderate pointOperating cash use increased to $1,096,265, compared with $760,265 in Q1 2026.
• Minor pointCost of goods sold rose 73.7% to $180,671 from $104,031 in Q1 2026.
• Minor pointSelling, general and administrative expenses rose 7.4% to $790,139, mainly from compensation-related costs and legal/professional fees.
• Minor pointWorking capital declined to $7,693,960 at August 31, 2026, from $8,464,675 at May 31, 2026.

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WINDSOR, Ontario, Oct. 30, 2026 (GLOBE NEWSWIRE) -- NEXE Innovations Inc. ("NEXE", the "Company", "we", "us" or "our") (TSX.V: NEXE) (Frankfurt: NX5) (OTC: NEXNF), a compostable and innovative materials company, is pleased to announce its financial results for the three-month period ended August 31, 2026 ("Q1 2027").

NEXE grew revenue 10.5% to $133,119 in Q1 2027 from $120,484 in Q1 2026, in a quarter that has, in management's view, been historically seasonally soft for the North American coffee industry, and reduced its net loss 33.7% to $(946,396). During the quarter, NEXE began deliveries to an East Coast fair-trade organic coffee co-operative that previously had no single-serve offering and onboarded a U.S. coffee chain with locations in New York City and Boston. Based on current customer interest and commercial opportunities in progress, management currently expects annual pod volumes to exceed the upper end of the previously announced range of 10 to 15 million compostable coffee pods.

Results for the quarter also reflect higher costs. Gross loss was $(47,552), compared to gross income of $16,453 in the three-month period ended August 31, 2025 ("Q1 2026"), and the net loss improvement was, in management's view, primarily attributable to lower depreciation, including the effect of a change in depreciation estimates.

Q1 2027 Highlights

• Revenue: $133,119, up 10.5% from $120,484 in Q1 2026, in a quarter that has historically been seasonally soft.
  
  
• Net loss: $(946,396), or $(0.01) per share, an improvement of 33.7%, with total operating expenses down 37.4%.
  
  
• Customers: Deliveries began to Just Us! Coffee Roasters, a U.S. coffee chain was onboarded, and the Company is in discussions with a U.S. brand regarding potential distribution to a national hotel chain.
  
  
• Volume outlook: Based on current customer interest and commercial opportunities in progress, management currently expects annual pod volumes to exceed the upper end of the previously announced range of 10 to 15 million pods.
  
  
• Liquidity: Cash, cash equivalents, GICs and term deposits of $8,008,095 and working capital of $7,693,960.
  

"Revenue grew 10.5% in what has historically been a seasonally soft quarter, and we began deliveries to new customers during the period," said Ash Guglani, President of NEXE. "Gross margin in the quarter reflected the costs of onboarding those customers, which we believe may trend lower as volumes build. Our focus for the rest of fiscal 2027 is to convert our commercial pipeline into production volume."

Q1 2027 Financial Results

• Revenue Growth: Revenue was $133,119, compared to $120,484 in Q1 2026, reflecting repeat orders from existing customers and new customers onboarded during the quarter. Shipments were weighted to July and August 2026. The first quarter has historically been seasonally weak, and management believes coffee sales across the industry typically decline during the summer months.
  
  
• Gross Margin: Gross loss was $(47,552), compared to gross income of $16,453 in Q1 2026, as cost of goods sold increased 73.7% to $180,671 from $104,031. Management believes the increase reflects higher volumes, onboarding costs for new customers, higher packaging costs, a larger share of pods filled with coffee purchased by the Company, $54,742 of non-cash production depreciation (recorded in operating expenses in Q1 2026) and $10,685 of inventory write-downs. Management expects that costs will trend lower as volumes increase, as management expects higher volumes will help absorb fixed costs and support bulk purchasing of materials.
  
  
• Operating Expenses: Total operating expenses decreased 37.4% to $950,956 from $1,520,057, and operating loss before other items improved 33.6% to $(998,508) from $(1,503,604). Depreciation in operating expenses decreased 75.9% to $108,103. Effective June 1, 2026, the Company extended the estimated useful lives of its metered production machinery and changed the depreciation method from straight-line to units of use, which reduced Q1 2027 depreciation by $269,353 relative to the previous estimates. Share-based compensation decreased 94.0% to $13,187 and research and development expenses decreased 67.7% to $33,447. Selling, general and administrative expenses increased 7.4% to $790,139, mainly due to higher compensation-related costs and higher legal and professional fees, partially offset by lower management fees, salaries, consulting fees, and advertising and promotion.
  
  
• Net Loss: Net loss improved 33.7% to $(946,396), or $(0.01) per share, from $(1,427,807), or $(0.01) per share, in Q1 2026. The $481,411 improvement reflects lower depreciation, share-based compensation and research and development expenses, partially offset by the gross loss, higher selling, general and administrative expenses, and lower interest income.
  
  
• Balance Sheet: As at August 31, 2026, NEXE had cash and cash equivalents of $3,875,352, investments in GICs of $4,102,743 and term deposits of $30,000, for a total of $8,008,095. Working capital was $7,693,960 (May 31, 2026 – $8,464,675), or $6.0 million excluding $1.7 million of prepayments on manufacturing equipment. Cash used in operating activities was $1,096,265 (Q1 2026 – $760,265), mainly reflecting operating expenditures and working capital movements, including a reduction in trade and other payables and an increase in trade and other receivables.
  

Commercial Update: Management Expects Annual Pod Volumes to Exceed 15 Million

NEXE supplied partners across retail, office coffee services and online channels during Q1 2027, and the previously disclosed partner transition continued through the quarter. NEXE continues to see increased interest in the compostable pod.

During the quarter, NEXE began deliveries to Just Us! Coffee Roasters, an East Coast fair-trade organic coffee co-operative that previously had no single-serve offering, and onboarded a U.S. coffee chain with multiple locations, including New York City and Boston. NEXE is in discussions with a U.S. brand regarding the potential supply of pods for distribution to a national hotel chain and is procuring materials for a new Canadian client.

Management currently expects annual pod volumes to exceed 15 million compostable coffee pods. NEXE anticipates current finished goods capacity aligns with expected production for the coming months and that capacity could be scaled with limited additional investment, such as larger molds or additional staff. The Company is also evaluating strategic opportunities that management anticipates would accelerate commercialization and enhance shareholder value, including potential partnerships, licensing arrangements, and other capital-efficient growth initiatives.

The Company's unaudited condensed consolidated interim financial statements for the three months ended August 31, 2026 and related management's discussion and analysis are available on NEXE's SEDAR+ profile at www.sedarplus.ca 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
Vice President, Investor Relations & Corporate Strategy
invest@nexeinnovations.com

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 regarding anticipated production volumes, including expected annual pod volumes, expected demand from existing and prospective customers, the progress of partner transitions, the outcome of discussions with prospective customers, including potential distribution to a national hotel chain and supply to a new Canadian client, the expected trend in production costs and unit economics, the Company’s production capacity and its ability to scale capacity with limited additional investment, the Company’s commercialization strategy, the evaluation and pursuit of strategic opportunities, including partnerships and licensing arrangements, and the Company’s ability to execute its business strategy. 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, business and economic conditions in the markets in which the Company operates, seasonal fluctuations in demand, the Company's ability to execute on its business strategy, maintain and grow partnerships, onboard new customers, convert discussions with prospective customers into orders, and respond to market conditions, the Company’s ability to achieve anticipated production volumes and improve unit economics, the availability and cost of raw materials and packaging and changes in consumer demand for compostable products, and those risks set out in the Company's management's discussion and analysis for the year ended May 31, 2026 and the three months ended August 31, 2026 under the headings "Business Risks 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, that the Company’s current partners will continue to increase order volumes, that new customer relationships will result in recurring revenue, that the Company will be able to reduce per-pod unit costs as production scales, that the Company’s existing facility can accommodate expected production with limited additional investment, and that general economic and market conditions will not deteriorate. Factors that could cause the actual results to differ materially from those in forward-looking statements include, without limitation, loss of key customer relationships, disruptions to supply chains or manufacturing operations, adverse changes to tariff or trade policies, general economic, market or business conditions, and other factors beyond the Company’s control. 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.

FAQ

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What were NEXE Innovations' Q1 fiscal 2027 revenue and net loss?

NEXE reported $133,119 in revenue and a $946,396 net loss for the three months ended August 31, 2026. Revenue increased 10.5%, while net loss narrowed 33.7% from Q1 2026. Loss per share was $0.01 in both periods.

What is NEXE Innovations' annual compostable coffee pod volume outlook?

Management currently expects annual volumes to exceed 15 million compostable coffee pods, above the upper end of the previously announced range of 10 to 15 million. That expectation is based on current customer interest and commercial opportunities in progress.

Why did NEXE Innovations' cost of goods sold rise in Q1 fiscal 2027?

Management attributes the increase to higher volumes, customer onboarding, packaging costs and a larger share of pods filled with company-purchased coffee, alongside depreciation and inventory write-downs. Cost of goods sold included $54,742 of non-cash production depreciation, recorded in operating expenses in Q1 2026, and $10,685 of inventory write-downs.

How did NEXE Innovations change its machinery depreciation in Q1 fiscal 2027?

Effective June 1, 2026, NEXE extended the estimated useful lives of its metered production machinery and changed depreciation from straight-line to units of use, a method based on usage. The changes reduced Q1 2027 depreciation by $269,353 relative to the previous estimates.