EnWave Fully Prepared for Breakthrough Year

EnWave Corporation (TSXV:ENW – $1.23 & OTC:NWVCF – $0.93 & Frankfurt:E4U – €0.72) offers industrial-scale dehydration technology for commercial applications in the food and pharmaceutical spaces. The Company’s Radiant Energy Vacuum (“REV”) platforms are becoming the new global dehydration standard, as they are faster and cheaper than freeze drying, and have better end product quality than both air drying and spray drying.

The Company reported consolidated revenues of $4.52 million for its first quarter of fiscal year 2018, ended December 31, 2017, compared to $3.47 million in the same period last year, an impressive 30% increase.

EnWave also continues to be cash flow positive with cash flow from operations of $315,000 for the first quarter of 2018 compared to a negative cash flow of $112,000 in the same quarter last year. EnWave has clearly set the stage for an outstanding 2018.

Since the start of fiscal year 2018, the Company has signed three royalty-bearing agreements, entered into three Technology Evaluation And License Option Agreements (TELOAs), received very promising feedback from ongoing research at the US Army Natick R&D Center, and secured additional Moon Cheese orders from Costco where the cheese snack is doing very well.

NutraDried’s business performance strengthened significantly in fiscal year 2017, and through the first quarter of 2018. We believe that by obtaining 100% equity ownership, the Company will be able to further drive growth in the revenue and profitability from Moon Cheese sales. The Company is targeting to reach sales of over $10 million in Moon Cheese alone during 2018.

While the regulatory regime may vary from one country to another, the superior processing capacity afforded by the REV technology is likely to motivate producers in other jurisdictions to seek a licensing arrangement with EnWave in the emerging legalized cannabis market. Consequently, we expect to see several agreements and orders from the cannabis space in 2018.

Moreover, we look forward to continued positive developments from ongoing research at the US Army Natick R&D Center. Securing the initial development program collaboration with the US Army Natick R&D Center was a breakthrough for EnWave. Just to get in the front door and be selected as a potential development partner involved an investigation to review the REV processing capabilities, and the Company itself.

A successful outcome to this process would be extremely attractive for EnWave shareholders. Consider that military spending is typically very stable and less affected by variables in market cycles that consumer goods may face. Also, the scale of a production contract for the MREs developed using REV technology would probably involve the sale and installation of numerous large machines, and generate significant long term royalty payments to the Company.

We reiterate our buy recommendation for EnWave Corp. with a price target of $3.49, which is 184% above today’s stock price.

For important disclosures, please read our disclaimer.

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