An anonymous director reports

NEXE INNOVATIONS PROVIDES CORPORATE UPDATE AND OUTLOOK FOR 2021

Nexe Innovations Inc. has highlighted its achievements in 2020 and has provided a 2021 outlook.

Despite a year beset by challenges due to the COVID-19 pandemic, 2020 was a successful year for Nexe with numerous critical milestones reached. It is the company's intention to begin providing quarterly reports to its shareholders going forward, allowing investors to closely monitor its progress.

2020 highlights

Completion of go-public transaction and board of directors formation

In 2020, Nexe completed, by way of reverse takeover, its qualifying transaction to become a publicly listed company on the TSX Venture Exchange. This major milestone was preceded by various brokered and non-brokered financings raising gross proceeds exceeding $20-million over the past 12 months, a significant increase over the original capital raise target. In total, fundraising and government grants have brought in over $35-million to Nexe since its inception in 2015.

Furthermore, the company has strengthened its board of directors with the addition of three new independent members. This is consistent with best corporate governance practices as the majority of the board will be independent. The new members include Haytham Hodaly (senior vice-president, corporate development of Wheaton Precious Metals Corp.), Killian Ruby (president and chief executive officer of Malaspina Consultants Inc.) and Graham Gilley (director of enterprise risk management and data protection at a private academic institution). The new board brings decades of experience in corporate finance, public practice accounting and risk management. In addition, and to complement Nexe's board of directors, it has added key members to the advisory board, who bring unrivalled experience in product marketing, automation and finance.

Strengthening of IP (intellectual property) portfolio, equipment update and interest from CPG (consumer packaged goods) players

A strong IP strategy is the foundation of Nexe's business. The company has substantially strengthened its intellectual property (IP) portfolio in 2020. Nexe engaged a leading IP consulting firm to focus on its proprietary automation processes and materials technology within its pods. The IP firm had identified more than 20 possible patent applications that would further bolster Nexe's competitive advantage, raise barriers to entry and generate potential licensing revenue. The company anticipates that any potential future licensing revenue will complement capsule sales thereby diversifying its revenue streams. It will also safeguard Nexe as it pursues other business lines and further leverage its innovation platform.

In early 2020, Nexe placed orders for custom-built high-speed automation to scale its Nexe Keurig-compatible (K-Cup) pod production capacity from 20 million annually toward capacity of up to 120 million pods/year. The company expects its high-speed automation for its K-Cup-compatible pods to arrive and be commissioned by mid-2021. In addition, the company has begun to commercialize its Nespresso-compatible initiative and expect high-speed automation deliveries in Q2 of 2021. With all of key equipment anticipated to arrive at site through 2021, Nexe will be able to scale its Nespresso and K-Cup-compatible pod production to a combined 220 million pods/year capacity. As equipment arrives, the company will continue to improve supply chain efficiencies and reduce supply chain risk.

Finally, in 2020, Nexe received substantial inbound interest from large consumer packaged goods (CPG) companies which have avoided the single-serve beverage market due to sustainability concerns and see its technology as a sustainable entry point and solution. These discussions are continuing as the company looks to bring its production facility on-line in 2021.

2021 outlook

In 2021, investors can expect an active year as Nexe will primarily focus on commercialization of its plant-based capsule businesses and pursuing collaborations with leading CPG companies that have a shared ethos. The company is also 100 per cent committed to demonstrating the leverage of its innovation platform into new businesses which it believes will be a significant value driver going forward. In addition, Nexe's in-house IP team will continue to work with outside consultants to ensure that it is always expanding its IP portfolio and safeguarding every move it makes. The company will continue its efforts in engaging the various government entities which have been so supportive in its pursuit to tackle the elimination of single-use plastic waste.

The company aims to commercialize its fully compostable capsules for use in Keurig brewing systems in the first half of 2021. It is also targeting the launch of its coffee capsules for use in Nespresso original line brewing systems by the second half of 2021. As Nexe anticipates the arrival of its high-speed automation equipment and the start of commercialization, it is planning a major expansion of its production facility, both in terms of physical space and personnel, to satisfy the high level of demand it expects for its products. The company continues to expand its personnel and believes its new hires are among the brightest minds in the space.

Finally, Nexe Innovations would like to wish a happy new year to all its stakeholders, team members and partners. Though last year was a challenging year for most, it is exceptionally proud of its team's achievements in 2020 and looks forward to an exciting and prosperous year ahead in 2021.

About Nexe Innovations Inc.

Nexe Innovations is an advanced materials innovator and leader in plant-based compostable technology based in British Columbia, Canada. The company has developed one of the only patented, fully compostable, plant-based, single-serve coffee pods for use in existing major single-serve coffee machines. The proprietary Nexe pod is designed to reduce the significant environmental impact caused by single-serve pods (over 40 billion plastic pods discarded every year). With over $35-million raised (equity and government funding) to date and over five years of research and development, Nexe is well positioned to meet the growing demand for environmentally friendly and sustainable products in the single-serve coffee sector and beyond.

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