EnWave Private Placement Oversubscribed

EnWave Corp. (TSXV:ENW – $0.80 CAD & OTC:NWVCF – $0.63 USD) has completed its previously announced bought deal private placement to raise $5 million. The Company’s entire executive management team, several new investors, and existing institutional shareholders, including a European fund and a household name Canadian institution, participated in the financing.

The response to the private placement was very positive. In fact, Cormark Securities, that managed the deal, had committed to only buy 5 million units at $0.80 per unit for gross proceeds to EnWave of $4 million. But because demand was high, Cormark exercised its option to buy an additional 1.25 million units for gross proceeds of $1 million. According to our information, Cormark could have placed even more.

The net proceeds of the offering will mostly be used for machine fabrications. Based on the impressive list of machine purchase orders that EnWave received in recent months and its pipeline of potential sales, more capital was needed to buy equipment and parts. In preparation for the buildup in expected machine orders and installations, two more engineers were recently hired.

EnWave now has about $6 million in the bank. In addition, the Company may receive $1.4 million, which is currently tied up as collateral in regards to the completion of a machine by its German subsidiary Hans Binder. When the machine is successfully commissioned, part, or whole, of these funds will be returned to EnWave. We heard that the machine will most likely be commissioned in the next few weeks.

Spam Snacks Available in Stores

In other news, Hormel Foods, the $15 billion dollar company known for its numerous meat and food products, has rolled out its new Spam Snacks, dried, bite-sized flavored pieces of meat that come in a pouch.

The new product capitalizes on consumers’ appetite for portable, high-protein foods. The snacks are produced with EnWave’s Radiant Energy Vacuum (REV) dehydration technology and are available in three flavors: classic, bacon, and teriyaki. Hormel says they’ll consider adding new flavors in the future.

James Splinter, group vice-president of Hormel’s Grocery Products unit commented, “This represents a breakthrough innovation. We were inspired by the candy bar bites that have been a hit for many candy companies. We think bites are very on-trend, and these fun-to-eat Spam brand product snacks are a perfect complement to the fast-growing dried meat snacking category”.

The meaty snacks are currently available at Wal-Mart and retail at $2.39 for a 1.4 ounce package. Rapid expansion of the distribution is expected when the product sells well.

Sales and Royalties for EnWave

In June 2013, Hormel Foods signed a royalty-bearing commercial license with EnWave to use nutraREV machinery. Early 2015, after conducting successful technology, product and market studies, Hormel entered into a purchase agreement for a 100kW commercial nutraREV unit, which is now up and running at one of Hormel’s production facilities in the United States.

In addition to the 100kW machine order, Hormel agreed to purchase a 2kW REV machine for product development and a 10kW REV machine for market studies that it already had in use. This indicates that they want to continue developing new products with EnWave’s technology.

The sale of the commercial REV machine generated approximately $1.2 million in sales for EnWave. Royalties should vary between $200,000 and $400,000 per year at full utilization.


EnWave now has sufficient funds in the bank to fulfill upcoming machine purchase orders from various customers. Most likely, this was the last private placement in the Company’s history.

Hormel Foods is EnWave’s first commercial partner to use the REV dehydration technology for the production of meat snack products. If the snack becomes a success, Hormel could buy additional REV machines.

Next to Hormel, we anticipate EnWave will receive machine purchase orders from Bonduelle, NutraDried, Gay Lea Foods, and Natural Nutrition, to name a few.

We love seeing management members buy shares of the company that they’re running. There’s no better way of showing confidence in the future. The fact that EnWave’s entire executive management team participated in the recent financing speaks volumes.

The beauty of it all is that currently everyone can purchase shares of EnWave at $0.80, exactly the same price that management paid. We advise you to benefit from this occasion. From now on it’s onwards and upwards.

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

  • Is Enwave still in business with Binder? Didn’t Binder just have record revenues? How could they be insolvent? If they are not working with Binder, who is manufacturing their machines?
    Thanks for all your reports, they are helpful.


    • Mike,

      Thank you for your excellent questions. I’m glad I can totally reassure you.

      The insolvency of Hans Binder is obviously an unfortunate event, but it doesn’t have any negative impact on EnWave, even to the contrary.

      First, it doesn’t affect EnWave’s manufacturing capability. EnWave already manufactured all of its REV machines. Hans Binder only manufactured traditional dryers. And that’s a very competitive market with lumpy sales and small margins. So the insolvency has absolutely no influence on EnWave’s order book.

      Second, it will help EnWave to become cash flow positive faster. Although Binder posted strong revenues for the first nine months of fiscal year 2015, ended June 30, it also recorded a net loss of more than $3.3 million. EnWave always had to cover those losses. That will no longer be the case. EnWave will now be able to use that cash to grow its own business, which has much higher margins.

      Finally, it’s very important to stress that EnWave continues to hold the worldwide rights to the MIVAP technology indefinitely. MIVAP is basically the only competitor for REV on the market. The technology is licensed from iNAP GmbH, a German company that’s partly controlled by the Binder family. The transfer of the worldwide rights was included in the deal when EnWave bought Binder a few years ago. iNAP is not included in the insolvency.

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