EnWave Revenue Increases 150% in Fiscal Year 2016

EnWave Corp’s (TSXV:ENW – $1.13 CAD & OTC:NWVCF – $0.85 USD) fiscal year 2016, which ended September 30, 2016, was extraordinary on all fronts. The Company reported revenues of $14.9 million for the year, compared to $5.9 million in the prior year, up more than 150%. And net loss from continued operations was reduced from $5.0 million last year to $1.8 million in 2016. In its second and third quarter EnWave even achieved a positive net income.

These outstanding numbers can be attributed to the continued growth in sales of royalty-bearing Radiant Energy Vacuum (REV) machines, and the accelerated distribution of Moon Cheese through EnWave’s 51% owned subsidiary, NutraDried LLP.

Thanks to all this activity, the Company reached positive cash flow from operations, one of its major goals for the year, of $1.2 million. In the prior year, it reported negative cash flow of $1.7 million.

Also, fiscal year 2016 was marked with remarkable progress in the commercialization of EnWave’s REV technology. The Company added four royalty bearing licenses and signed numerous Technology Evaluation and License Option Agreements (TELOAs) with prospective royalty partners that are conducting initial testing and product development work.

Moreover, EnWave significantly strengthened its balance sheet, as it raised $5 million cash in a bought deal private placement at the beginning of the fiscal year.

Immense Progress in 2016

Fiscal 2016 marked a year of significant commercial advancement for EnWave. Since October 1, 2015, the Company signed four new royalty-bearing commercial licenses; it received purchase orders for two large-scale and six small-scale commercial REV machines; and it signed or extended no less than thirteen TELOAs.

The first large-scale purchase order was from Gay Lea Foods for a 100 kW nutraREV machine. Gay Lea had been operating a 10kW nutraREV to develop and satisfy initial demand for its Nothing But Cheese snack. Because it had secured additional distribution for the snack, Gay Lea had to purchase a bigger commercial unit. Meanwhile the machine has been successfully commissioned. Royalties from the 100kW machine could reach $250,000 annually when operating at full capacity.

EnWave also received a purchase order from Milne Fruit Products for a 120kW quantaREV machine. After an extensive product and market development effort, Milne’s REV-produced MicroDried products – all-natural fruit pieces and powders with no added sugars, flavors, colors or preservatives – have been gaining traction with a growing network of customers. The new REV machine will double Milne’s processing capacity. It is expected to be installed at Milne’s facility in the spring of 2017.

In addition, EnWave received purchase orders for small-scale REV machines when it signed royalty bearing commercial licenses with the following parties:

  • Agricola Industrial La Lydia, a Costa Rican company for the development of a dried cheese snack;
  • Kesito LLC for dried dairy products in Greece;
  • Perdue Farms to process pet food and pet treats in the United States and Canada; and
  • Ereğli Agrosan, a Turkish company that produces high-value, natural products and derivative products for the food, cosmetic and health sectors. Lots of progress is made at Ereğli, as it purchased two REV machines in the past year.

Finally, Natural Nutrition Limited d.b.a. Nanuva Ingredients, a fruit processor located in Chile, purchased a second small-scale REV machine to expand its commercial production.

Next to signing actual commercial agreements, EnWave also engages in Technology Evaluation and License Option Agreements (TELOA). These agreements are signed with prospective royalty partners that want to evaluate the REV technology. The strategy under these arrangements is to co-develop product applications using the technology for specific partner opportunities and to ultimately convert them into commercial licenses.

It is worth noting that EnWave earns revenues under TELOAs from short-term REV machine rentals as well as fees for access to EnWave’s R&D facilities and product development expertise.

During the past year, EnWave signed a TELOA with companies such as Ultima Foods Incorporated, Maple Leaf Foods Inc., Jack Link’s Inc., and many other groups in Europe, Australasia, and the Americas.

Constant Deal Flow

Ever more companies in a growing number of sectors recognize that EnWave’s REV technology is ideal to distinguish themselves in the worldwide marketplace.

Even during the past week, EnWave signed two more TELOAs. The first one was with a major American pulse crop processor to explore the potential for dried pulse crop products. The agricultural company entered the TELOA after it thoroughly conducted product-focused application trials at EnWave’s pilot plant facilities in 2016. The company will rent a 10 kW REV drier for further product development work at its own facilities. It has a maximum of six months to enter into a commercial agreement.

The second TELOA was signed with Born Wild LLC, a seafood processor located in the United States. Born Wild serves the global seafood market with processing capabilities and sourcing from Alaska, through Canada, Washington, Oregon, and northern California. It is led by several individuals with vast seafood processing experience.

Born Wild will collaborate with EnWave’s product development team at the Company’s pilot plant facility to develop several unique seafood snack products for human consumption. Noteworthy is that EnWave’s food science group has already conducted quite a lot of product development work in the dried seafood snack space.

Born Wild has a term of seven months to exercise its option to license the use of REV dehydration technology.

Another major goal for EnWave in 2017 will be the installation and start-up of both a powderREV and freezeREV machine. The commercialization of both technologies continued to progress during the year, with EnWave advancing the design and manufacture of scaled-up versions of each platform for Sutro Biopharma and Merck.

If the installation of the powderREV and freezeREV platforms yields superior performance to incumbent dehydration technologies, it will solidify EnWave’s value proposition with potential new partners in the pharmaceutical industry.

Fiscal Year 2016 Financials

EnWave earns revenue from two business segments: EnWave Canada and NutraDried. EnWave Canada generates revenue from the sale of REV machinery to royalty partners, rental revenue from short term rentals of REV machinery to prospective royalty partners, and royalties earned from royalty partners. NutraDried generates revenue from the sale of Moon Cheese to retail and wholesale distribution channels.

Fiscal Year Ended
September 30
Amounts in $000’s
EnWave Canada Sales
NutraDried Sales
Total Sales
Direct Costs
General & Administrative
Sales & Marketing
Research & Develpment
Amortization of Intangible Assets
Income (Loss) From Operations
Income (Loss) from Discontinued Operations
Net Income (Loss)
Earnings Per Share
Shares Out. – Diluted
Most important income statement data for the fiscal years ended September 30, 2016 and September 30, 2015. Source: Company Filings

EnWave Canada had revenue of $8,825,000 for the year ended September 30, 2016 compared to $3,273,000 for the year ended September 30, 2015, an increase of 169%. In fiscal year 2016, revenue was generated from commercial equipment sale contracts with Sutro Biopharma and Merck for powderREV and freezeREV machines in the pharmaceutical vertical. The Company also generated significant revenue from nutraREV and quantaREV machine sales to Gay Lea Foods, Milne Fruit Products, Ereğli Agrosan, Natural Nutrition, and many others.

Part of EnWave Canada’s revenue were royalties, which are payable as a percentage of the value of products produced by sold REV machinery. EnWave Canada earned royalties of $249,000 for the year ended September 30, 2016 compared to $32,000 for 2015, and increase of 678%. This increase was obviously due to EnWave’s royalty partners’ advancing the commercialization of REV products in the marketplace.

Revenues from NutraDried were $6,108,000 for the year ended September 30, 2016 compared to $2,595,000 for the year ended September 30, 2015, another solid increase of 135%. NutraDried’s year-over-year revenue growth is attributable to increased sales and distribution activity with distributors and retail customers of Moon Cheese. A significant portion of sales growth was due to NutraDried sales to Starbucks. Moon Cheese also continues to be sold at thousands of North American retail outlets.

The net loss from continuing operations for the year ended September 30, 2016 was $1,837,000 compared with a loss of $4,993,000 the prior year, another outstanding improvement.

Balance Sheet as of September 30, 2016

On September 30, 2016, the Company had working capital of $6,897,000, compared to $3,044,000 as at September 30, 2015.

Amounts in $000’s
September 30, 2016
September 30, 2015
Cash and Cash Equivalents
Restricted Cash
Trade Receivables
Due from Customers on Contract
Total Current Assets
Property and Equipment
Total Assets
Trade & Other Payables
Total Current Liabilities
Long Term Debt
Total Liabilities
Total Stockholder Equity
Most important balance sheet data on September 30, 2016 and September 30, 2015. Source: Company Filings

Also, the cash and cash equivalents balance was $4,590,000 on September 30, 2016 compared to $1,101,000 as at September 30, 2015, an increase of $3,489,000. EnWave completed a bought deal private placement on October 21, 2015 for aggregate gross proceeds of $5,000,000. Moreover, EnWave secured the release of $1,500,000 of restricted cash relating to a portion of the collateral in support of a project related to a customer of EnWave’s former subsidiary, Hans Binder Maschinbeau GmbH.

Inventory as at September 30, 2016 was $1,681,000 compared with $1,024,000 a year before. The higher inventory, which includes completed machines and parts of EnWave Canada and food product and packaging supplies for NutraDried, is due to increased sales activities by both EnWave Canada and NutraDried.


Investors can only be pleased with EnWave’s outstanding achievements in fiscal year 2016. Although its quarterly results are still a bit lumpy, as can be expected from a company in full expansion, it’s important to look at the progress year-over-year. And that progress is positive by all measures.

To date, EnWave has entered into seventeen royalty-bearing commercial licenses with major food processing and pharmaceutical companies. All of these licenses earn, or may start to earn royalties in the near future, for EnWave. The true beauty of royalties is that they go straight to the bottom line!

Moreover, EnWave continues to pursue revenue growth by signing additional TELOAs that may lead to royalty-bearing licenses that are accompanied by machine purchase orders. In the past two weeks alone, the Company signed four such agreements. Buy recommendation.

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

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