Mr. Ash Guglani reports

NEXE INNOVATIONS ISSUES LETTER TO SHAREHOLDERS

Nexe Innovations Inc.'s president, Ash Guglani, has issued a letter to the company's shareholders.

Dear shareholders,

As we step into 2025, we at Nexe Innovations are energized by the milestones we achieved in 2024 and what we believe are the transformative opportunities ahead. This year marks a pivotal moment in our journey as we continue to innovate, grow and redefine what is possible within sustainable solutions.

In calendar Q4 2024, after an intensive product development cycle and multiple rounds of beta testing, our K-Cup compatible Nexe pod successfully entered commercialization. I believe this achievement demonstrates the dedication of our team and the strength of our vision. I am proud to report that our partnerships to date are driving recurring revenue, with increasing order volumes reflecting what I believe is strong market demand for our products. Our diverse customer base spans multiple channels, including retail, office coffee services (OCS) and e-commerce, which in our view will enable us to reach distinct audiences and broaden our market penetration. Simultaneously, we are onboarding additional customers for our K-Cup-compatible products, ensuring a pipeline for continued growth. We also remain focused on advancing our next-generation compostable Nespresso OriginalLine pods, with sampling efforts under way for two customers, and we anticipate rolling out these pods later this year.

The development of our coffee pod was not without challenges. K-Cup compatible coffee pods face unique obstacles during the brewing process, including exposure to heat, high pressure and water flow. Achieving a consistent and satisfying coffee extraction in a K-Cup compatible machine requires precise engineering to balance these variables. These challenges can impact coffee quality, brewing efficiency and even machine performance. Addressing these complexities demanded significant R&D (research-and-development) efforts to create a capsule capable of meeting these rigorous demands while ensuring a premium coffee experience. However, addressing these challenges led to an incredible breakthrough for us in our proprietary resin. I believe this material now forms the foundation of our competitive edge and has positioned Nexe as an innovator, not only in the coffee industry but across sectors where sustainable alternatives to plastics are increasingly sought.

Since our inception in 2015, our goal has been clear: to eliminate single-use plastics in the coffee industry. Over time, this vision has expanded significantly. Plastics dominate vast markets, presenting challenges that are costly and complex to address. Through extensive R&D, we have developed solutions which I believe has the potential to impact industries beyond the coffee sector. By leveraging our proprietary resin, supported by our growing intellectual property portfolio, management is of the opinion that Nexe will be in a position to address challenges across multiple sectors.

Unlike traditional plastics, our materials, including PLA (polylactic acid), do not persist in the environment. Instead, they are designed to break down into smaller, soluble molecules, eventually biodegrading entirely. This non-persistence supports environmental recovery over time. Moreover, because PLA is derived from plant-based sources that absorb CO2 (carbon dioxide) and water, its composting and degradation processes complete a circular life cycle, making it an ideal solution for a sustainable future.

In my view, one of the most exciting developments at Nexe is the establishment of our in-house tool shop. This capability has significantly reduced the time required to develop prototypes, allowing us to accelerate innovation and meet customer demands more efficiently than ever before. By bringing all aspects of production in house, we have enhanced our ability to innovate and maintain cost competitiveness with traditional plastics -- a critical factor for scaling our solutions.

Additionally, we are currently in conversations with industry leaders who focus on sectors we believe may offer greater market potential and broader growth opportunities where our proprietary resin can serve as a renewable source for waste-to-energy processors. To support these efforts, we are currently building prototypes that showcase our capabilities to key decision-makers in specific industries, demonstrating what we believe to be the versatility and potential of our resin. These opportunities align with our commitment to sustainability and represent a significant step forward in reducing the dependence on plastic.

I believe these advancements have the potential to open new revenue stream opportunities and unlock entry points into industries we had not previously considered. Additionally, we have made the necessary capital investments to scale our proprietary resin across various form factors, extending its applications beyond coffee pods into what I believe to be new and promising markets. With a clear vision and strong partnerships, we expect to expand our impact and deliver long-term value to our shareholders.

Sincerely,

Ash Guglani

President, Nexe Innovations

About Nexe Innovations Inc.

Nexe Innovations is focused on providing innovative compostable material solutions and packaging to the B2B (business-to-business) 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. Nexe's flagship product, the Nexe pod, a BPI-certified compostable coffee pod, showcases the durability of Nexe's material 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.

We seek Safe Harbor.