MISSISSAUGA, Ontario, Nov. 14, 2024 (GLOBE NEWSWIRE) — Next Hydrogen Solutions Inc. (the “Company” or “Next Hydrogen”) (TSXV:NXH, OTC:NXHSF), a designer and manufacturer of electrolyzers, is pleased to report its financial results for the third quarter ended September 30, 2024.
“Next Hydrogen delivered its second-generation system to a customer following an extended factory acceptance test. Further, it passed a key cell performance durability test for this product line which positions us well to deliver on our five demonstrations in 2025,” said Raveel Afzaal, President & CEO. “Next Hydrogen is focused on strengthening its balance sheet to deliver on its growing backlog through (1) $3M of convertible debt offering, (2) $4.6M of approved government grants with an additional $2M in advanced discussions, and (3) on-going discussions with financial institutions about non-dilutive financing options. Successful execution on these three initiatives will capitalize the company into 2026 with potential funding from strategic partners through technology licensing opportunities in certain geographies serving as upside.”
Q3 2024 Financial Highlights
- Cash balance was $3.2M as of September 30, 2024, compared to $10.9M as of December 31, 2023.
- Revenue for the nine-month period ended September 30, 2024 was $1.2M compared to $0.1M in the same period of the prior year.
- Net loss and comprehensive loss for the nine-month period ended September 30, 2024 was $11.2M compared to $8.7M in the same period of the prior year.
Management is proud to highlight several recent milestones that demonstrate significant recent progress:
- In November 2024, the Company announced a private placement offering (the “Offering”) of unsecured convertible debentures (each, a “Debenture”) consisting of up to $3M principal amount of Debentures. The closing of the Offering is expected to take place on November 29, 2024. Next Hydrogen intends to use the proceeds of the Offering to invest in its scale-up efforts and for general corporate purposes.
- In November 2024, Next Hydrogen and Pratt & Whitney announced a collaboration to demonstrate the use of hydrogen in aircraft engines as an enabler for reducing CO2 emissions. This project is partially funded by Canada’s Initiative for Sustainable Aviation Technology (“INSAT”) and will accelerate the Company’s efforts towards high efficiency, low-cost electrolyzers which are needed for establishing hydrogen production infrastructure for aviation fuel. The Company will receive $2M from INSAT for the completion of Phase 1 over the remainder of this year and into 2025.
- In October 2024, the Company successfully completed a durability test of its new second generation water electrolyzer technology (“GEN2”) electrolysis cells used in the efficient production of green hydrogen. The GEN2 cells will be deployed in Next Hydrogen electrolyzers at customer sites for commercial operation. Next Hydrogen previously reported that it has achieved its energy efficiency targets cell performance of 1.90 V/cell at 1 A/cm2 and 70°C for its GEN2 water electrolyzer technology which exceeded the reported US Department of Energy (“DOE”) technical targets status for energy efficiency. The GEN2 performance achievement has positioned the Company to being the industry leader in electrolysis cell performance.
- In October 2024, Next Hydrogen welcomed Premier Doug Ford, Associate Minister Sam Oosterhoff, Minister Stephen Lecce, MPP Deepak Anand and MPP Rudy Cuzzetto to their manufacturing facility. This along with the visit from our Deputy Prime Minister (see below) demonstrates the strong alignment between the Company’s work and the national strategy for Canada to be a leader in green hydrogen production.
- In September 2024, the Company successfully completed an extended Factory Acceptance Test for its second-generation system. The Company plans to commission the system at an external reference site for market demonstration in the coming months.
- In August 2024, the Company was awarded a contract by the University of Minnesota (“UMN”) for its latest generation electrolysis technology to be installed at the UMN West Central Research and Outreach Center (“WCROC”). The WCROC project is supported by the U.S. Department of Energy’s Advanced Research Project Agency (“ARPA-E”) as well as other partners including RTI International (“RTI”) and will include technologies from Casale SA, RTI, UMN, Nutrien and Shell to demonstrate the production of ammonia from renewable energy targeting emerging energy markets and existing agricultural markets. Next Hydrogen will be supplying its latest third-generation Alkaline Water Electrolyzers featuring further advancements in energy efficiency, current density and operating pressure.
- In May 2024 the Company was granted a repayable contribution of $2M from Federal Economic Development Agency for Southern Ontario for the fiscal years 2024 and 2025. This non-interest-bearing contribution is intended to support the Company’s growth initiatives aimed at commercialization and business development advancements. The Company continues to be in advanced discussions about additional government grants to help support its activities for 2024 and 2025.
- In April 2024, Next Hydrogen welcomed Deputy Prime Minister Chrystia Freeland, Minister Kamal Khera and MP Peter Fonseca to their manufacturing facility to announce new investment tax credits which further supported the Canadian clean technology sector. Minister Freeland also stated publicly “Next Hydrogen in Mississauga is changing the game in renewable energy and clean hydrogen production!”
- In November 2023, Next Hydrogen and General Electric Vernova (“GE Vernova”) signed a memorandum of understanding to integrate Next Hydrogen’s electrolysis technology with GE Vernova’s power systems offerings to produce green hydrogen. This collaborative effort will encompass installation, rigorous testing, and the seamless integration of a Next Hydrogen water electrolyzer with a power supply meticulously designed and fabricated by GE Vernova. This collaboration will further support Next Hydrogen’s commitment to pioneering innovative green hydrogen technologies, addressing climate change, and promoting global energy sustainability.
- Following the successful completion of a pilot project, the Company received an order for a project involving a specialized nuclear application worth $7.7M. Under the agreement, Next Hydrogen will conduct design engineering (Phase 1) and subsequently provide the electrolyzer needed (Phase 2) for the project. A $5M purchase order has been received for Phase 1, with a potential follow-on order of $2.7M planned for Phase 2 with electrolyzer delivery expected to occur in 2025. To date, $3.8M of cash has been received, with the remainder $1.2M to be received.
- Next Hydrogen and Casale SA (“Casale”) have signed a memorandum of understanding to develop green ammonia and methanol systems that integrate Next Hydrogen’s electrolysis technology and products. Under this agreement, the companies will bring together their collective experience and capabilities to accelerate and scale-up green ammonia and methanol plants connected to renewable energy sources. This collaboration provides a compelling pathway to producing clean, zero-emission ammonia and methanol from green renewable energy power sources. During 2023, Next Hydrogen received the first purchase order under this development agreement from Casale.
- Next Hydrogen received $0.8M in research and development funding from the National Research Council of Canada Industrial Research Assistance Program (“NRCC IRAP”) toward the development and demonstration of the Company’s next generation products. This will further help the Company accelerate its product roadmap and its mission of driving large scale adoption of green hydrogen solutions to decarbonize the global economy.
- The Company has been awarded $5.1M from Sustainable Development Technology Canada (“SDTC”) towards the development and demonstration of the Company’s next generation electrolysis technology. Further, Next Hydrogen is working with four blue-chip industry partners who are contributing a total of $1.2M as a combination of cash and in-kind contributions towards its product development roadmap. These partners include end-users, suppliers and channel partners to ensure strong product-market fit and positions the Company for high quality revenue generation opportunities. This project, with a budget of over $12M will run to early 2025, resulting in the launch of a GEN2 product line with cost and performance improvements and a third-generation larger-scale product line with further cost and performance improvements. With the launch of these products, Next Hydrogen will be well positioned to support the needs of its customers for both near-term market demonstrations and commercial large-scale green hydrogen systems. The payment for the first milestone in the amount of $1.9M was received from SDTC in 2023, while the payment of $1.9M for the second milestone was received in early 2024.
For a more detailed discussion of Next Hydrogen’s third quarter results, please see the Company’s financial statements and management’s discussion and analysis, which are available on the Company’s website at nexthydrogen.com or on SEDAR+ at www.sedarplus.ca.
In addition, to better understand our achievements from 2023 and the outlook for 2024, please refer to the CEO letter included in the 2023 year-end MD&A.
About Next Hydrogen
Founded in 2007, Next Hydrogen is a designer and manufacturer of electrolyzers that use water and electricity as inputs to generate clean hydrogen for use as an energy source. Next Hydrogen’s unique cell design architecture supported by 40 patents enables high current density operations and superior dynamic response to efficiently convert intermittent renewable electricity into green hydrogen on an infrastructure scale. Following successful pilots, Next Hydrogen is scaling up its technology to deliver commercial solutions to decarbonize industrial and transportation sectors.
Contact Information
Raveel Afzaal, President and Chief Executive Officer
Next Hydrogen Solutions Inc.
Email: rafzaal@nexthydrogen.com
Phone: 647-961-6620
Cautionary Statements
This news release contains “forward-looking information” and “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the risk that the Offering will not be completed as planned or at all; the risks associated with the hydrogen industry in general; delays or changes in plans with respect to infrastructure development or capital expenditures; cell efficiency targets; expected order sizes for the product line; customer relationships and customer terms for testing of products at a customer site; the ability of the Corporation to optimize energy efficiencies; the Corporation’s available resources to double its growing backlog; uncertainty with respect to the timing of any contemplated transactions or partnerships, or whether such contemplated transactions or partnerships will be completed at all; whether the uncertainty of estimates and projections relating to costs and expenses; failure to obtain necessary regulatory approvals and all required TSXV approvals; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to infrastructure developments or capital expenditures; currency exchange rate fluctuations; as well as general economic conditions, stock market volatility; and the ability to access sufficient capital. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, there will be no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
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