Further International Expansion for EnWave Corporation
Another flurry of recent news reports highlighted an active month for EnWave Corporation (TSXV:ENW – $1.25 CAD & OTC:NWVCF – $0.95 USD & Frankfurt:E4U – €0.81). The Company continues to achieve success in its efforts to attract new clients to utilize its proprietary Radiant Energy Vacuum (REV) technology. Two agreements were announced this week with new international clients engaged in food processing operations.
New Australian Product Development Agreement Announced
The first of these was a Technology Evaluation and License Option Agreement (TELOA) with an Australian dairy company for the purpose of testing REV processing to develop several dehydrated premium dairy ingredients. The objective is to produce a line of dried cheese powders that can be used as ingredients in the production of other foods. Although this is also a dairy company, it’s important to note that this agreement is not a conflict with the existing line of cheese snacks currently marketed by Ashgrove Cheese (see below).
During the development and testing process, the client will rent a smaller 10kW REV machine to experiment with sample batches and fine tune various production options. The machine is expected to be installed in September 2018. A period of six months for testing and development work has been arranged for the TELOA.
It’s clear that Australia is becoming a strategic sales hub in the rollout for the REV technology, as this represents the fourth TELOA in the country. The most advanced TELOA is with a leading manufacturer of fresh and processed meat products. We understand that a commercial decision is pending.
In addition, two other Australian companies have advanced to full royalty partnerships with EnWave. The first is Ashgrove Cheese Pty Ltd., a producer of a premium, shelf-stable cheese snack line called Amazeballs. The snacks are already available at three major supermarket chains in Australia: IGA, Coles and Woolworths. The other royalty partner in Australia is Howe Foods Pty Ltd., which is currently developing several banana-based products for commercial evaluation. Each of these royalty agreements include the sale of REV machines.
EnWave Establishes a Presence in Peru with a Multinational Food Products Company
EnWave followed up with another announcement of an international TELOA, with Fresh Business Consulting S.L. (FBC), a diversified investment company based in Spain. While FBC is active in several countries, it has established relationships with a number of agricultural companies in Peru, and will work in collaboration with EnWave to develop new REV processed food products for this market.
The TELOA grants FBC a six month term to evaluate processing options using REV technology for the development of undisclosed food products. The agreement also involves providing a smaller REV machine to FBC on a rental basis during the initial development phase. The machine will be installed and operating in the city of Lima, Peru.
FBC has been active in Peru since 2015, with a proven track record of product development and successful marketing strategies. During 2017 the company reported total revenues of more than 27 million Euros (~CAD $42 million).
Expansion Underway at NutraDried
Finally, EnWave announced further expansion to the production capacity of its 100% owned subsidiary NutraDried LLC. The subsidiary, based in Ferndale, Washington is involved in the production of Moon Cheese. NutraDried has leveraged the early appeal of this product to where it is now sold in more than 25,000 retail outlets across North America. The continued strong demand for the line has led to the purchase of a second 100kW REV machine.
In addition, EnWave reports that NutraDried has ordered a smaller 10kW REV unit for the purpose of developing and testing other snack food lines. The smaller unit will also enable additional production capacity and provide more flexibility for manufacturing operations in addition to the product development role it will serve.
The second quarter of 2018 has been highly successful for EnWave, both in terms of achieving equipment sales and attracting new client partnerships. These transactions, like the three that were reported in just the latest week, will also contribute to the steady growth in revenues and royalty payments for the Company.
Further supporting the revenue growth is the strongly increasing demand for the Moon Cheese product line. This has led to a new Equipment Purchase Agreement to enable expansion opportunities.
The rollout of REV technology is gaining momentum, and many of the evaluation stage partnerships have already evolved to the establishment of popular new product lines that generate profitable royalty payment streams for the Company. EnWave is advancing towards greater revenue clout and a much lower risk profile while still providing the potential for explosive sales growth as it works to seize new expansion opportunities internationally. Recommendation: BUY.
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