EnWave Again Expands Presence in Europe

EnWave Corporation (TSXV:ENW – $1.27 CAD & OTC:NWVCF – $1.02 USD), which offers industrial-scale dehydration technology for applications in the food and pharmaceutical spaces, has signed a Technology Evaluation and License Option Agreement (TELOA) with a major European food processor.

The latter will develop a number of dried meat and dairy snack products using EnWave’s Radiant Energy Vacuum (REV) dehydration technology. The food processor has the exclusive option to license the use of REV technology for the production of these snacks within a defined European territory.

No more information about the European company was disclosed. Because not even the countries for which it can get an exclusive license were revealed, we presume that we’re dealing with one of the very big food processors in Europe. The disclosure of the countries would easily signal competitors of the company’s identity.

We did find out however that the exclusivity was granted for a certain region so that it doesn’t conflict with business development initiatives in other European countries.

Short Development Cycle

The food processor entered into the agreement after a thorough review of EnWave’s technology and some initial product development work. More tests are scheduled in August at EnWave’s facility in Ferndale, Washington State. And later this year, more detailed development will occur on a rented 10kW REV machine at the European company’s own plant.

If things work out well, we will see a commercial royalty-bearing agreement and a potential machine purchase order in early 2017.

It is noteworthy that EnWave ensures that the decision-making timeline is kept as short as possible by setting a time frame on a case by case basis. Last week, New Products R&D de C.V. was granted testing exclusivity for cheese products in Mexico for eight months. This new European partner has six months following the receipt of pilot-scale machinery in late 2016 to develop its products and to determine if it’s a no or a go.

The short development cycle indicates that EnWave’s negotiating position is getting much stronger, due to an increasing number of national and international entities becoming aware of the Company’s superior technology.

In addition, the limited product development time forces companies to continually move ahead. If not, product and geographic exclusivity can be given to another company instead.

Meat Snack Market – Another Pillar of EnWave’s Success

In addition to dairy, fruits and vegetables, meat is clearly becoming another pillar of EnWave’s success. The intention of most of these meat companies is to develop a crispy meat chip. Although similar snacks are already being produced with non-REV technology, the texture and taste of most meat chips is poor because they are either air dried or baked.

In the meat category, EnWave has signed a royalty-bearing agreement with the following two companies,

  • Hormel Foods Corporation, is a $15 billion dollar company known for its numerous meat and food products. In addition to a 100kW dryer, Hormel also purchased a 2kW REV machine for product development and a 10kW REV machine for conducting market studies. This indicates that the well-known food processor is eager to develop and test new products with EnWave’s technology; and
  • Perdue Foods, a leading food and agricultural products company, ordered a 10kW REV dryer in July 2016 to process pet food and pet treats in the United States and Canada. The initial TELOA with Perdue was signed in April 2015, after which R&D work commenced on a smaller scale REV unit. Because Perdue ordereda larger REV dryer, we’re convinced that market tests went very well. In fact, we wouldn’t be surprised if they already had some distribution lined up.

Moreover, EnWave has engaged in technology evaluation relationships with four more major meat and protein processors,

  • Maple Leaf Foods Inc, a major Canadian food processing company that employs approximately 12,000 people and exports to more than 20 global markets including the US and Asia. The agreement, which was signed in August 2015, grants Maple Leaf the right to evaluate EnWave’s REV technology for the potential production of a variety of food applications;
  • Jack Link’s, the number one meat snack manufacturer worldwide, extended its technology evaluation and license option agreement into 2016. This indicates that Jack Link’s has already made very good progress with the development of one or more products, and pays a monthly rent for a small test dryer. If it saw no potential in REV dried products, it would have returned the test unit to EnWave and moved on;
  • Campofrio Food Group, Europe’s leader in the processed meats sector is conducting product development work using the REV dehydration technology. The company intends to create a number of new, healthy dried meat products for potential commercialization; and
  • A Major Australasian Meat Processing Company, whom will receive a REV machine in late 2016 to begin product development and testing.

EnWave is in active negotiations with many more companies in this sector in various parts of the world. So we’ll undoubtedly continue to see a steady news flow with developments in the meat area.

Increased Cash Position

In other news, EnWave received $480,000 in cash. These funds were held as a collateral in support of a project-related EUR273,000 letter of credit (LOC) issued to a customer of EnWave’s former subsidiary, Hans Binder Maschinbeau GmbH.

Subsequent to the release of this restricted cash, EnWave no longer has any encumbered funds related to the LOC or Binder.

These funds will be added to EnWave’s already healthy cash position. As of March 31, 2016, the Company had over $5.8 million in cash. Since then, it received $1,530,000 related to the Hans Binder collateral. We’ll find out EnWave’s exact cash position at the end of this month, when the third quarter financials for the period ended June 30, 2016 will be released.


This latest agreement with a big European food processor presents another significant opportunity for EnWave.

Hardly a week goes by in which EnWave doesn’t announce a new partnership. Although investors may become somewhat accustomed to new deals, the huge amount of effort by the Company’s management and business development team to accomplish this feat should not be underestimated.

Meanwhile, EnWave’s stock price keeps climbing higher. We’re convinced this is not over by a long shot as more TELOAs and commercial royalty-bearing agreements will be signed. Buy recommendation.

For important disclosures, please read our disclaimer.Latest Company Report (pdf)

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