EnWave Reports Fourth Quarter and Annual 2023 Consolidated Financial Results

VANCOUVER, British Columbia, Dec. 16, 2023 (GLOBE NEWSWIRE) —

EnWave Corporation (TSX-V:ENW | FSE:E4U) (“EnWave”, or the “Company”) today reported the Company’s consolidated financial results for the fourth quarter and fiscal year-ended September 30, 2023.

EnWave’s vacuum-microwave machine and royalty business performed materially better in fiscal 2023 than in fiscal 2020, with record margins and profitability.

NutraDried, the Company’s wholly-owned subsidiary, struggled during the first two fiscal quarters leading to a material restructuring that positively improved results in Q3 and Q4. The turnaround at NutraDried is well underway with new leadership and there are material opportunities to further improve the performance of this business unit in fiscal 2023.

Consolidated Financial Performance:

* Adjusted EBITDA is a non-IFRS financial measure. Refer to the disclosure below and in the Company’s MD&A regarding non-IFRS financial measures.

EnWave’s annual consolidated financial statements and MD&A are available on SEDAR at www.sedar.com and on the Company’s website www.enwave.net.

Key Financial Highlights for Q4 (expressed in ‘000s):

• The Company reported consolidated revenue for Q4 2023 of $6,906 compared to $7,351 in Q3 2023 and $10,784 in Q4 2020.
  • EnWave’s Q4 2023 business unit revenue was $3,879 compared to $1,601 in Q4 2020, an increase of $2,278. EnWave ramped revenues from Radiant Energy Vacuum (“REV^™”) machine sales with current and new licensees for the food and cannabis industries.
  • NutraDried’s Q4 2023 revenue was $3,027 compared to $9,183 for Q4 2020, a decrease of $6,156 largely due to the elimination of a large national buy-one, get-one Costco promotion shipped in Q4 2020. NutraDried continues to rebuild distribution for its Moon Cheese^® product portfolio and subsequently has confirmed new Costco shipments scheduled in Q1 and Q2 2023 on both Canada and the U.S.
• Gross margin for Q4 2023 was 34% compared to 20% for Q4 2020, a major increase due to the confirmation of higher margin REV™ machine sales during the period. Gross margin in Q3 2023 was 36%, and the 34% achieved in this quarter was broadly consistent with a strong margin profile. Throughout 2023, EnWave successfully redeployed three large-scale REV™ machines that were not being utilized from two Canadian cannabis partners, generating robust margins in its machine sales business.
• Adjusted EBITDA^(*), a non-IFRS financial measure, for Q4 2023 was a loss of $223 compared to Adjusted EBITDA^(*) of $20 for Q4 2020 and Adjusted EBITDA^(*) of $937 for Q3 2023. The Adjusted EBITDA^(*) for Q4 2023 was near to break-even, and the Company remains focused on further market penetration at EnWave and NutraDried in pursuit of consistent, growing profitability. The Company made significant progress towards this target since the restructuring and cost control program implemented at NutraDried in Q2 2023.
• EnWave purchased and cancelled 1,572,900 common shares in Q4 under the Normal Course Issuer Bid at an average share price of $1.01 using cash of $1,597.
• Obtained TSX Venture Exchange approval for a normal course issuer bid starting on October 29, 2023 and ending on October 28, 2023 whereby EnWave is entitled to purchase up to 2,204,101 shares in any 30-day period up to a maximum of 10,778,194 shares during the year.

Significant Corporate Accomplishments in Q4 2023:

• Signed a royalty-bearing commercial license agreement and sold a 10kW GMP REV™ machine to Cannaponics PTY Limited, an Australian cannabis company.
• Advanced the development of using REV™ in the pharmaceutical sector through a material transfer agreement with AstraZeneca AB (NASDAQ:AZN) to dry monoclonal antibodies and completed the installation of a pilot-scale pharmaceutical REV™ machine with GEA Lyophil GmbH (“GEA”). EnWave has a joint development agreement with GEA in place to advance the design and application of microwave-assisted lyophilization for pharmaceutical applications, and the pilot-scale machine will be used to conduct demonstrations for interested pharmaceutical companies. GEA has several leading global pharmaceutical companies confirmed to trial REV™ in 2023.
• Completed the commissioning of a third 10kW REV™ machine for the U.S. Army at its third-party manufacturing partner’s facility, Bridgford Foods Corporation (NASDAQ: BRID). The machine will be used by Bridgford Foods to produce Close Combat Assault Rations for field testing under the U.S. Army’s development program.
• Signed a royalty-bearing commercial license agreement and sold a 10kW GMP REV™ to Medical Kiwi Limited, a New Zealand cannabis company.
• Signed a royalty-bearing commercial license agreement with a leading Colombian dairy company and sold a 10kW machine for installation in Colombia to conduct initial commercial market trials. If initial efforts are successful, the Colombian dairy company will require additional REV™ machinery to scale for meaningful commercial production.
• Formed a global strategic partnership with Dole Worldwide Food & Beverages Group for the use of REV™ technology to produce Innovative Nutrition Solutions. Dole purchased a 10kW REV™ machine to conduct intensive market trials. The strategic partnership with Dole will leverage EnWave’s REV™ technology to bring better-for-you snacking options to its global customer base under its industry-leading brand. Concurrent in its snack product development, EnWave and Dole are collaborating on the development of superior functional ingredients that use upcycled fruit materials.
• Signed a royalty-bearing commercial license agreement and sold a 10kW GMP REV™ to a second Australian cannabis company.
• Developed extensive cannabis drying protocols using the Company’s proprietary Terpene Max™ rapid drying protocol and collected empirical data supporting both the quality and processing advantages for EnWave’s technology in the cannabis industry. Results from controlled studies show that cannabis flower dried using TerpeneMax™ on average contains 10-20% more terpenes than room or rack dried flower, and in many instances contained higher THC content than the control samples.
• Signed a royalty-bearing commercial license agreement with one of the largest American multi-state operators (the “MSO”). The MSO conducted extensive diligence over the advantages of using REV™ for the rapid and controlled drying of cannabis for both combustible and extract products and purchased a 120kW REV™ system to commence commercial operations using the technology.
• Added three new sales channel representatives to advance the sales, marketing and licensing of REV™ machinery into the European and Latin American markets.

Significant Corporate Accomplishments Subsequent to Q4 2023:

• Commissioned a 120kW REV™ machine for the large-scale processing of premium smokable cannabis for the Illinois-based cannabis partner. This now provides the second in-market use-case for the value-added processing of cannabis using the Company’s proprietary TerpeneMax™ drying protocol. EnWave anticipates generating the royalties from the partner’s use of the technology in Q1 2023.
• Commissioned a 100kW REV™ machine for Patatas Fritas Torres (“Torres”) in Spain to scale-up the commercial launch of all-natural cheese snacks for the European market. Torres has launched its “Just This” cheese snack brand using the EnWave technology (justthis-snacks.com/en/).
• Secured a national promotion for 10oz Gouda Moon Cheese^® with Costco Canada that is expected to ship in late Q1 and into early Q2 2023. Confirmed an additional rotation for Moon Cheese^® with a U.S. region of Costco for Q2 2023. NutraDried will continue to pursue Costco as a strategic customer for the club channel while aggressively pursuing growth in the U.S. grocery channel and in bulk sales.
• Sold a second 10kW REV™ machine to Dairy Concepts IRL of Ireland to scale-up manufacturing of its lineup of Cheese O’s shelf-stable cheese snacks (cheeseos.ie).
• Signed a Technology Evaluation Agreement with Protein Isolate Plant International Inc. (“PIP International”) to evaluate the potential commercial use of REV™ technology in PIP International’s large scale yellow pea wet fractionation processing facility.
• Entered India, a major new market for REV™ production, by signing a Technology Evaluation and License Option Agreement with M/S Lalsai Dehy Foods (“LD Food”) and placing a 10kW REV™ machine under rental with LD Food for extensive product development on agricultural products for the Indian market.
• Advanced a new product launch opportunity at NutraDried in preparation for a Spring 2023 launch intended to strengthen NutraDried’s competitive advantage as a category innovator in the rapidly growing healthy snack space. NutraDried plans to explore, and when appropriate, launch innovative and exciting new products to leverage the use of REV™ in the better-for-you snack vertical.

EnWave’s executive management will be holding a conference call to discuss its 2023 Fourth Quarter and 2023 Annual Financial Results and the Company’s state of affairs. Prepared remarks will be given followed by a question-and-answer session for shareholders.

Conference Call:

EnWave’s executive management will be holding a conference call to discuss its 2023 Fourth Quarter and 2023 Annual Financial Results and the Company’s state of affairs. Prepared remarks will be given followed by a question-and-answer session for shareholders.

^(*) Non-IFRS Financial Measures:
Adjusted EBITDA is not a measure of financial performance under IFRS. We define Adjusted EBITDA as earnings before deducting amortization and depreciation, stock-based compensation, foreign exchange gain or loss, finance expense or income, income tax expense or recovery and non-recurring impairment, restructuring and severance charges and government assistance. This measure is not necessarily comparable to similarly titled measures used by other companies and should not be construed as an alternative to net income or cash flow from operating activities as determined in accordance with IFRS. Please refer to the discussion included in the Company’s annual MD&A for the year-ended September 30, 2023 for a reconciliation from net loss to Adjusted EBITDA.

About EnWave
EnWave Corporation, a Vancouver-based advanced technology company, has developed Radiant Energy Vacuum (“REV™”) – an innovative, proprietary method for the precise dehydration of food and cannabis applications. The Company has developed patented methods for uniformly drying and decontaminating cannabis through the use of REV™ technology, shortening the time from harvest to marketable cannabis products. EnWave also holds a robust intellectual property portfolio protecting several unique processes relating to specific food applications produced using vacuum-microwave technology.
REV™ technology’s commercial viability has been demonstrated and is growing rapidly across several market verticals in the food, and pharmaceutical sectors, including legal cannabis. EnWave’s strategy is to sign royalty-bearing commercial licenses with innovative, disruptive companies in multiple verticals for the use of REV™ technology. The company has signed over forty-five licenses to date spanning twenty countries and five continents. In addition to these licenses, EnWave established a Limited Liability Corporation, NutraDried Food Company, LLC, to manufacture, market and sell REV™-dried snack products in North America, including the Moon Cheese^® brand, as well as co-manufacture for third parties.  

EnWave has introduced REV™ as a disruptive dehydration platform in the food and cannabis sectors: faster and cheaper than freeze drying, with better end product quality than air drying or spray drying. EnWave currently offers two distinct commercial REV™ platforms:

1. nutraREV^® which is a drum-based system that dehydrates organic materials quickly and at low-cost, while maintaining high levels of nutrition, taste, texture and colour; and,
2. quantaREV^® which is a tray-based system used for continuous, high-volume low-temperature drying.

EnWave is also active in the pharmaceutical industry through a joint development agreement with GEA Lyophil, a leader in GMP drying machinery.

More information about EnWave is available at www.enwave.net.

EnWave Corporation

Mr. Brent Charleton, CFA
President and CEO

For further information:

Brent Charleton, CFA, President and CEO at +1 (778) 378-9616
E-mail: [email protected]       

Dan Henriques, CFO at +1 (604) 835-5212
E-mail: [email protected]

Safe Harbour for Forward-Looking Information Statements: This press release may contain forward-looking information based on management’s expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, expected expenditures, and the expected synergies following the closing are forward-looking statements. All third party claims referred to in this release are not guaranteed to be accurate. All third party references to market information in this release are not guaranteed to be accurate as the Company did not conduct the original primary research. These statements are not a guarantee of future performance and involve a number of risks, uncertainties and assumptions. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.