EnWave (ENW) Planet MicroCap Showcase summary

Business overview and technology

• Focused on commercializing patented vacuum microwave dehydration technology, partnering with over 50 global companies who pay royalties on product sales.

• Revenue is primarily from machinery sales (85%-90%) and royalties, with gross margins around 30%.

• Technology offers faster, more efficient dehydration compared to freeze and air drying, with processing times of 1–3 hours versus 6–15 hours for incumbents.

• ESG benefits include lower energy use, closed-loop cooling, and upcycling lower-grade food into high-value products.

• Holds 18 patents protecting apparatus design and processing protocols, ensuring unique market position.

Financial performance and growth

• Market capitalization has been depressed due to exits by two family offices and modest liquidity, but the company sees strong investment potential.

• Cash position is over CAD 4 million, with no need for near-term capital raises.

• Fiscal 2024 royalty run rate expected at CAD 2 million, up from CAD 1.5 million in 2023, with incremental growth anticipated in fiscal 2025.

• Q3 2024 saw strong revenue and margin due to multiple large-scale machine sales; Q4 is also expected to be strong.

• Positive adjusted EBITDA achieved in Q3 2024 after weak Q1 and Q2.

Market and business model

• Operates in 25 countries with 54 licensed partners across fruit, vegetable, dairy, and other verticals.

• Royalty model is unique in the industry, with partners paying 2–5% of gross revenue from products made using the technology.

• Total addressable market for dehydration equipment was CAD 4.3 billion in 2023; freeze-dried food sales reached CAD 36 billion in 2022.

• Sales cycle ranges from 3–12 months for SMEs to 1–3 years for large CPG companies.

• Remote monitoring and ongoing support are provided to royalty partners, including 24/7 access and innovation sharing.