VANCOUVER, British Columbia, Feb. 23, 2018 (GLOBE NEWSWIRE) -- EnWave Corporation (TSX-V:ENW)
(FSE:E4U) (“EnWave”, or the "Company") today reported the Company’s consolidated financial results for the first
quarter ended December 31, 2017.
During the first quarter of 2018, EnWave made significant progress in the commercialization and deployment of
its Radiant Energy Vacuum (REVTM) dehydration technology. The superior product quality and economic advantages of using
REV™ technology as an alternative to conventional options is being proven in several market verticals on a global basis. The first
quarter of fiscal year 2018 marked the commercial launch of REVTM in to the rapidly growing medical cannabis sector.
EnWave signed a royalty-bearing commercial license agreement with Tilray®, a major licensed producer in Canada, and
received purchase orders for 10kW REVTM and 60kW REVTM machinery. EnWave delivered the 10kW REVTM
machine to Tilray® in February 2018 and has commenced construction of the 60kW commercial processing REVTM
unit. The Company, in partnership with Tilray®, will pursue additional commercial opportunities for REV™ within the
Canadian cannabis sector through a sub-licensing structure outlined in the current agreement.
In addition to the Tilray® license, EnWave also signed royalty-bearing commercial license agreements
with Howe Foods, the second largest banana producer in Australia, and AvoLov LLC, a U.S. based snack food company. Both companies
purchased 10kW REVTM machines to commence commercial royalty-bearing production. EnWave’s technology continues to
capture and increase market share in the food, cannabis and pharmaceutical drying industries. EnWave anticipates continued
commercial success and growth in the worldwide deployment of REV™ technology.
EnWave also continued to expand its royalty partnership and machine sales pipeline through joint produce
development projects under technology evaluation and license option agreements (“TELOAs”) with prospective partner companies. Since
the start of fiscal year 2018, EnWave has entered into three new TELOAs with prospective royalty partners to evaluate the business
case for the adoption of REV™. Currently, the Company has 13 companies actively engaged in TELOA projects and 2 companies with
advanced R&D agreements. EnWave’s strategy under these projects is to demonstrate the product innovation made possible and
attractive processing economics available through the use of REVTM technology.
Further details include:
- Signed a royalty-bearing license agreement with Tilray®, a major Canadian medical cannabis Licensed
Producer. Tilray® has the exclusive right to use and sub-license the Company’s dehydration technology for
cannabis processing in Canada. Tilray® also purchased a large-scale 60kW commercial REV™ machine to initiate
commercial production and a small-scale 10kW commercial REV™ unit to enable advanced product development.
- Signed a royalty-bearing license with Howe Foods, the second largest producer of bananas in Australia. Howe Foods purchased a
small-scale 10kW REVTM machine to initiate commercial production.
- Received an equipment purchase order from Bare Foods Co. (“Bare Foods”) for a 10kW REVTM machine to initiate
commercial production of healthy fruit snack products. Bare Foods’ products are available in the U.S. market in natural and
grocery retailers including Whole Foods Market, Sprouts, Safeway and Publix as well as national retailers such as Target and
Amazon.
- Signed a royalty-bearing license with AvoLov, LLC (“AvoLov”, formerly “AvoChips”), a U.S. based snack company to produce a
new, and innovative avocado snack product. AvoLov purchased a 10kW REVTM machine to initiate commercial
production.
- Achieved a series of positive product development results in partnership with the US Army Natick Soldier R&D Center as
part of an ongoing project to create superior, phytonutrient-rich field rations for soldiers in the field.
- Signed a TELOA with Hampton Farms, a major American peanut and tree nut processor and manufacturer.
- Signed a TELOA with Seven Seas Fish Company Limited, a leading Canadian seafood manufacturer and international
distributor.
- Signed a TELOA with Calbee Incorporated (“Calbee”), the largest snack food manufacturer in Japan. Calbee will evaluate the
use of EnWave’s technology at its facilities in Japan using lab-scale REVTM machinery.
- Secured a trial rotation of Moon Cheese® in the Midwest division of Costco Wholesale Corporation (“Costco”). This
trial launch represents the Company’s first sale of club format product and the Company plans to target additional future club
format distribution opportunities.
Acquisition of Remaining 49% of NutraDried
On February 21, 2018, EnWave completed the acquisition of the 49% non-controlling interest in NutraDried LLP,
bringing the Company’s ownership to 100% of the equity interest in NutraDried LLP (“NutraDried”). NutraDried is a wholly owned
subsidiary in the business of manufacturing and distributing Moon Cheese®, an all-natural crunchy snack food made using
the EnWave’s REVTM technology. The acquisition of the non-controlling interest in NutraDried will allow the Company to
pursue additional commercial opportunities using the installed 100kW nutraREV® processing line, as well as
enhance the ability for EnWave to use NutraDried’s processing capabilities as a showcase to prospective royalty partner companies.
NutraDried is a profitable business segment of the Company, reporting $716,000 in net income for fiscal year 2017, and $416,000 for
Q1 2018.
Key Financial Highlights for Q1 2018 (expressed in $ ‘000s):
- Increasing consolidated revenues with Q1 2018 revenue of $4,519 compared to $3,467 for Q1 of 2017, an increase of 30%.
Royalty revenues for Q1 2018 increased to $203, compared with $122 for Q1 of 2017 and $77 for Q4 2017.
- Continuing to be cash flow positive with cash flow from operations prior to changes in non-cash working capital(*)
of $315 for Q1 2018 compared to negative $112 for Q1 2017, showing positive cash flows from operations before taking to account
changes in working capital.
- Building sales pipeline by way of increased S&M expense to $590 compared to $305 for 2017, an increase of $205. EnWave
Canada maintained consistent S&M expenses and plans to increase investment into S&M activities to drive revenue
growth.
- Containing G&A expense with G&A for Q1 2018 being consistent with Q1 2017, with an increase of $58. G&A expense
as a percentage of revenue for Q1 2018 was 13%, which improved over the 15% for Q1 2017.
- Decreasing R&D expenses with R&D expense for Q1 2018 of $272, compared to $291 for Q1 of 2017, a decrease of $19. The
Company continues to invest strategically to strengthen its patent portfolio and to develop new product innovations with
commercial potential.
- Increasing revenues for NutraDried with Q1 2018 revenues of $2,398 compared to Q1 2017 revenues of $1,322, an increase of
$1,076 or 81%. NutraDried continues to increase points of distribution for its all-natural, crunchy Moon Cheese®
snack.
- Reporting net income at NutraDried of $416 for Q1 2018 compared to $126 for Q1 2017, an increase of 230%. NutraDried
continued to contribute to the growth of the Company. NutraDried’s success solidifies the business case for using
REVTM for creating profitable consumer products and new brands for our royalty partners.
- Strengthening the balance sheet by completing a prospectus offering and concurrent private placement of 9,530,000 Units of
the Company at $1.05 each for combined gross proceeds of $10 million on November 15, 2017. Each Unit consisted of one common
share and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). The Warrants
were accepted for listing by the TSX Venture Exchange and commenced trading under the symbol ENW.WT at the open of the market on
November 22, 2017.
Consolidated Performance Summary:
($
‘000s) |
Three months ended
December 31, |
|
|
2017 |
|
2016 |
|
Change
%
|
|
|
|
|
|
|
|
Revenues |
4,519 |
|
3,467 |
|
30 |
% |
|
Direct costs |
3,093 |
|
2,683 |
|
15 |
% |
|
Gross margin |
1,426 |
|
784 |
|
82 |
% |
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
General and administration |
593 |
|
535 |
|
11 |
% |
|
Sales and marketing |
590 |
|
305 |
|
93 |
% |
|
Research and development |
272 |
|
291 |
|
(7 |
%) |
|
|
1,455 |
|
1,131 |
|
29 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
(397 |
) |
(618 |
) |
(36 |
%) |
|
Loss per share – continuing operations: |
|
|
|
|
Basic and diluted |
(0.01 |
) |
(0.01 |
) |
|
|
EnWave’s interim consolidated financial statements and MD&A are available on SEDAR at www.sedar.com and on the Company’s website www.enwave.net/financials.
(*) Non-IFRS Financial Measures
Cash flow from operations prior to changes in non-cash working capital is not a measure of financial performance under IFRS. 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 MD&A for the three months ended December 31, 2017.
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 organic materials. EnWave has further developed patent-pending methods for
uniformly drying and decontaminating cannabis through the use of REV™ technology, shortening the time from harvest to marketable
cannabis products.
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 industry leaders in multiple verticals for the use of REV™ technology. The company has signed over twenty
royalty-bearing licenses to date, opening up nine distinct market sectors for commercialization of new and innovative products. In
addition to these licenses, EnWave has formed a Limited Liability Partnership, NutraDried LLP, to develop, manufacture, market and
sell all-natural cheese snack products in the United States under the Moon Cheese® brand.
EnWave has introduced REV™ as the new dehydration standard in the food and biological material sectors: faster
and cheaper than freeze drying, with better end product quality than air drying or spray drying. EnWave currently has three
commercial REV™ platforms:
- nutraREV® which is used in the food industry to dry food products quickly and at low-cost, while
maintaining high levels of nutrition, taste, texture and colour;
- powderREV® which is used for the bulk dehydration of food cultures, probiotics and fine biochemicals such
as enzymes below the freezing point, and
- quantaREV® which is used for continuous, high-volume low-temperature drying.
An additional platform, freezeREV®, is being developed as a new method to stabilize and
dehydrate biopharmaceuticals such as vaccines and antibodies. More information about EnWave is available at www.enwave.net.
EnWave Corporation
Dr. Tim Durance
President & CEO
For further information:
John P.A. Budreski, Executive Chairman at +1 (416) 930-0914
E-mail: jbudreski@enwave.net
Brent Charleton, CFA , Senior Vice President, Sales and Business Development at +1 (778) 378-9616
E-mail: bcharleton@enwave.net
Deborah Honig, Corporate Development, Adelaide Capital Markets at + 1 (647) 203-8793
E-mail: dhonig@enwave.net
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.