FRX Innovations explores sale

CHELMSORD, Mass.—Flame retardant technology firm FRX Innovations Inc. is reviewing strategic options including a possible sale of the company.

In a Sept. 27 news release, officials with FRX said that the firm's board has formed a committee "to explore strategic alternatives to enhance value and to accelerate the utilization of FRX's Nofia-brand of fire retardants."

These alternatives could include joint ventures, strategic partnerships, licenses or alliances and a sale of the company in whole or in part.

"We continue to see compelling long-term opportunities for FRX," CEO Marc Lebel said. "As the (committee) focuses on exploring alternatives, we will continue with our strategy of promptly servicing our customer base … while expanding our applications and driving implementation of Nofia throughout the industry."

Officials said that market conditions will drive strong demand for Nofia that currently exceeds the firm's ability to capture market share on its own resources. They added that the committee "is open to evaluating proposals from key industry participants that can accelerate the adoption of Nofia in a timelier manner than FRX can achieve with its current availability of capital."

"Given the importance and viability of our technology as an environmentally and commercially proven sustainable solution and new regulatory landscape, we believe that now is the right time to explore strategic alternatives in order to increase scale, accelerate the adoption of Nofia and efficiently meet expected demand," Lebel said.

FRX officials said the Nofia line should benefit from challenges to PFAS materials, since Nofia doesn't fall into that category. In April, FRX filed a patent for what the firm believes is a breakthrough in key areas meeting or exceeding FR requirements for polycarbonate and PC alloys. The new material allows for PFAS-free formulations in PC, including elimination of PTFE, a fluoropolymer used as an anti-drip agent.

PFAS replacement opportunities have brought 77 new programs in the last 12 months to FRX's sales pipeline, officials said.

German materials firm Evonik Industries AG owns a 10 percent stake in FRX through its Evonik Venture Capital GmbH investment unit. Earlier this year, FRX and specialty chemicals maker Lanxess AG said they were reviewing a deal under which Lanxess would make and sell FRX's Nofia-brand flame retardants. The two firms should be able to decide on their partnership in early 2024.

In May 2022, FRX went public on the Toronto Stock Exchange through a reverse takeover of a special purpose acquisition company (SPAC). The firm posted sales of $1.5 million in the second quarter of 2023. That amount was more than double its first-quarter sales total.

For full-year 2022, FRX posted a loss of $14.2 million on sales of $3.1 million. The firm's per-share stock price began 2023 at 20 cents but was at 10 cents in late trading Sept. 27.