Research Partnership with High Profile University Creates New Opportunities for EnWave Corporation

One of the more appealing aspects to the business model of EnWave Corporation (TSXV:ENW – $1.59 & OTC:NWVCF – $1.21 & Fra:E4U – €1.07) is the potential for individual unit sales to evolve into more significant long term growth opportunities. The first REV machine sale to a new customer is often just the thin edge of the wedge, opening the potential for additional unit sales, new product development, and lucrative royalty agreements that may follow.

This embedded growth potential is very much a part of the latest sale reported by EnWave this week. The Company has announced that a Research and License Agreement was signed with the College of Agricultural and Life Sciences (CALS) at Cornell University, involving the sale of a smaller 10kW REV machine. The REV unit will be installed at the Center of Excellence in Food and Agriculture facility located in Western New York near the city of Geneva.

Cornell University aspires to advance the food and agricultural sector throughout the state of New York. It should be noted that New York is ranked second in the United States, only behind California, in terms of the number of active companies in the sector. In addition, New York ranks in top -10 states for the production of 30 agricultural commodities.

CALS has indicated that the purpose of purchasing the REV machine is to pursue research and development initiates, while exploring new uses for REV technology, and potential commercial ventures that may spin off from this program. The fact that a highly respected institution has recognized the importance of REV processing in the food industry, represents a clear endorsement for EnWave’s technology.

The sale of a REV machine in itself is good news, as each sale generates high margin revenues for the Company. However, it is the intriguing potential to evolve into a much more significant expansion into the food services industry that makes this deal far more significant.

The Center for Excellence serves as a hub to connect New York businesses with services they need by linking them with world-class Cornell researchers, farmers, processors, businesses and consumers.

Opportunity to Achieve New Sales Agreements from Organic Development Program

CALS has established relationships with many of the most important food processing companies operating in New York, and with a presence nationwide, and even internationally. The REV program launch at the Center of Excellence therefore has the opportunity to generate synergies between faculty researchers, students, entrepreneurs, and established businesses across the full spectrum of the food processing and distribution sector. EnWave personnel will also participate in this process and contribute expertise to showcase the capabilities of the REV technology.

Through its Center of Excellence facility, CALS has the mandate to promote investment and development for new products, the formation of corporate partnerships within the food production and processing sector, and the advancement of new technologies and intellectual property related to the industry.

Ultimately, this collaborative arrangement may be successful to achieve the launch of several new food products that have commercial appeal to warrant the investment in REV machines and create leverage to additional license and royalty agreements in the pipeline for EnWave.

The agreement with Cornell University may be regarded as a development program, similar to the research facility operated by EnWave at its corporate headquarters in Vancouver, BC. With the connections at all levels of the food processing sector and the mandate to create and commercialize new food products using REV technology, the program at CALS holds the potential to eventually spin off other innovative companies that may lead to REV machine sales and royalty agreements down the line.

Conclusion

EnWave’s executive management continues to look for opportunities where the REV technology can be exposed to as many royalty bearing licensees as possible via collaboration with either educational institutions or government funded R&D organizations.

The contract with Cornell, for example, is an opportunity to make new inroads with significant players in the food processing industry and achieve a faster growth rate than EnWave could accomplish independently through its own marketing activity. This collaboration enables a faster route to achieve new REV machine sales and royalty bearing agreements in the years ahead.

As the progress of this initiative with Cornell University gains traction, other notable institutions may also become interested in similar agreements that may build further potential commercial opportunities in other regions. EnWave will endeavour to form similar institutional partnerships as part of its growth strategy. As more products are developed, and more royalties are secured, the improved financial clout and recurring income will attract investment and build a premium valuation for the stock. Recommendation: BUY.

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