the global leader in vacuum-microwave dehydration technology

THE GLOBAL LEADER IN VACUUM-MICROWAVE
DEHYDRATION TECHNOLOGY
June 2016
www.enwave.net | TSX.V: ENW
NOTICE
This presentation contains forward-looking information based on management's expectations,
estimates and projections about the future, including statements about EnWave’s strategy for
growth, product development, market position, expected expenditures and operational and financial
results. 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 and are not a guarantee of future
performance and involve a number of risks, uncertainties and assumptions.
All third party references to market information in this presentation are not guaranteed to be
accurate as EnWave did not conduct the original primary research.
Please see “Risk Factors” in EnWave’s Management’s Discussion and Analysis for the year ended
September 30, 2015 available on EnWave’s website at http://www.enwave.net and on SEDAR
under EnWave’s profile at www.sedar.com.
Although EnWave 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. Accordingly, readers should not place undue reliance on forward-looking statements.
EnWave’s forward-looking information is based on the beliefs, expectations and opinions of
management of EnWave on the date the statements are made.
EnWave does not assume any obligation to update forward-looking information, whether as a result
of new information, future events or otherwise, other than as required by applicable law.
Amounts shown herein are in Canadian dollars unless otherwise stated.
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DEFINING THE CORPORATION
EnWave's mission is to disrupt the
global dehydration industry by establishing
Radiant Energy Vacuum technology as the
new standard:
Faster and cheaper than freeze drying.
Better quality than air drying.
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MARKET PROFILE
Exchange Listings
Toronto Venture Stock Exchange (TSX.V)
Frankfurt Stock Exchange (FSE)
Symbols
TSX.V:ENW
FSE:E4U
Share Price*
$0.90
52 week range
$0.65 (February 2016) to $1.06 (September 2015)
Total Shares Outstanding
90.7 mln basic
98.7 mln fully diluted
Daily Trading
Average volume:
Average value:
51,510 shares
$43,268
Market Capitalization
$81.7 mln
Enterprise Value
$77.1 mln
Shareholder Breakdown*
Management/Board – 7%
Seven major shareholders – 42%
Distributed/Retail – 51%
*All share price data as of June 07, 2016.Shareholder breakdown is based on approximations.
*Enterprise value = Market value of common equity + Market value of preferred stock + Market value of debt + Minority Interest − Value of cash and short‐term investments
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COMPANY LEADERSHIP
Board of Directors
John P.A. Budreski
Executive Chairman
Proven history of advancing and accelerating businesses, as well as
tangible engineering experience
30+ years of extensive capital markets and executive management
experience
Dr. Tim Durance
Director, President & CEO
Inventor & company founder
Author of 17 EnWave patents granted or pending
Emeritus Professor Food Science UBC
Mary C. Ritchie
Director, Chair of Audit Committee
President and CEO of Richford Holdings Ltd., member of the Canadian
Institute of Chartered Accountants
Dr. Stewart Ritchie
Director
President of Canadian Poultry Consultants and S.J. Ritchie Research
Farms
Hugh McKinnon
Director
Director & shareholder of Norscot Investments and a Director of
Premium Brands
Dr. Gary Sandberg
Director
Former long-time employee of Lipton
Ph.D. in Food Science from UBC
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SUPERIOR TECHNOLOGY
Radiant Energy Vacuum (“REV™”) technology applies microwave energy to organic materials
under vacuum to achieve fast dehydration at low temperatures with minimal oxidization
Delivers superior retention of flavor, biological activity and nutrients
Enhances the appearance and improves rehydration potential
Key patented discoveries:
1.
Methods for distributing microwave field to avoid plasma discharge in vacuum
2.
Means to achieving reliable, homogeneous dehydration across a large load
17 REV™ patents either issued or pending
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MATERIAL ADVANTAGES
Incumbent Technologies
REV™ Technology
Freeze Drying
Air Drying
Better
Product
Superior Color
Stronger Flavor
High Nutritional Retention
Faster
Process
Minutes or Hours
(1.5 hours for Blueberries)
Hours or Days
(24 – 36 hours for Blueberries)
Hours
(6 hours for Blueberries)
Cheaper
Cost
Up to 80% lower processing
costs than freeze-drying
(combination of lower capital,
labor and energy costs)
High Capital Costs
High Energy Costs
Low Capital Costs
Competitive Energy Costs
High Nutritional Retention
Heat & Oxygen Damages Color,
Flavor, Nutrients & Texture
REV™ is preferable because it is:
• Smaller – seamless integration, smaller footprint
Result
• Continuous Process – reduces large batch write-offs
• Flexible – controllable moisture levels
• Cost Effective – Similar costs to spray / air drying and less than freeze drying
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ADDRESSABLE MARKET
The global freeze drying machinery market was estimated to be worth $1.9 Bln at the end of 2014
and is expected to reach $2.6 Bln by 2019, at a CAGR of 6.2% from 2014 to 2019.
Estimated $400 Bln diverse consumer product market for technology application.
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TECHNOLOGY ON TREND
Radiant Energy Vacuum (“REV™”) technology allows EnWave’s partners to capitalize on the
following important global food processing market trends:
1.
2.
3.
4.
Snackification – snacks now account for one of every five ‘eating occasions’, driving the
demand for shelf-stable, healthy grab-and-go food choices. REV™ technology allows for
the development of many new innovative snacking options.
Naturally functional – global consumer trends are placing increased importance on the
inherent nutritional properties and the subsequent health claims of the foods they are
consuming. REV™ allows food processing companies to retain high nutritional value.
Protein - powered by the ‘naturally functional’ trend, consumers are looking for protein rich
snack options in new forms. REV™ is being used by several partners to produce protein
rich products in the dairy, meat and pulse crop industries.
Dairy 2.0 – companies are looking to make the most of dairy's natural advantages and
deliver new innovative products that coincide with the three other market trends listed
above. REV™ can be used to process cheese, yogurt and milk snack products and
ingredients.
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COMMERCIAL REV™ PRODUCTS
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PATENTED INNOVATIONS
Platform
Functionality
Dehydrates fruits, vegetables, herbs,
dairy products, meats and seafood.
nutraREV®
quantaREV®
Dehydration achieved in high
volumes by way of a rotating basket,
continuous batch process.
High-volume, low-temperature and
gentle dehydration of solids, gels,
liquids or encapsulated products.
Dehydration achieved by way of a
moving tray, continuous batch
process.
powderREV®
Bulk dehydration of temperaturesensitive biomaterials such as
bacteria and enzymes.
A high-speed, continuous, efficient
alternative to lyophilisation.
freezeREV™
(Pre-commercialization)
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High-speed continuous dehydration
of biomaterials in small vials below
freezing.
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ROYALTY DRIVEN BUSINESS
REV™ Technology Royalty
Portfolio
Joint Partnership Revenue
(NutraDried LLP)
REV™ Machinery Revenue
Building a portfolio of aggressive,
incumbent or innovative royalty
partners
Partnership controlled by EnWave
(51%) to sell innovative dried
cheese snack products
REV™ commercial machinery
sales (or leasing) and
maintenance
Royalty revenue is based on a
percentage of revenues or dollar
per lb/kg of products produced &
sold
NutraDried, along with industry
partners, is expanding into other
innovative, REV™ dried snacks
EnWave works with each
commercial licensee to ensure
successful plant design,
installation and start-up
5% royalty paid to EnWave
Target to have annual royalty at a
double digit percentage of
machine sales price
Typical royalty rate on annual
revenues is between 3% - 7%
Traditional pricing and profit model
North American business can be
replicated in other jurisdictions
NutraDried provides a product and
operations showcase to other
prospective royalty partners
Royalty term extends to patent
portfolio term
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PARTNER DEVELOPMENT
PROACTIVE EFFORTS
Increased industry tradeshow attendance; from one to three per year
Improved frequency of pilot plant and NutraDried LLP tours
Custom sample “care packages” sent to every qualified potential partner
High energy, high frequency prospecting; cold calling the C-suite and/or decision makers
MOST RECENT WINS
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BUSINESS DEV PIPELINE
Time at Stage
Number of Companies
• Initial sampling of the technology
1-2 months
85 companies
• Collaboration, product development,
market testing and de-risking
6-12 months
22 partners
• Small-scale REV™; commercial
6-12+ months
7 partners
• Large-scale REV™; commercial
Years
5 partners
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GROWTH IN ADOPTION
Increased frequency of Technology Evaluation and License Option (TELOA) and
Commercial License (CLA) agreements
CLA
TELOA
Timeline
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GROWTH IN ADOPTION
Total installed REV™ machine capacity improving; royalty streams initiating and
building
REV Technology Commercialization
800
Total REV Capacity Installed (kW)
700
600
500
400
REV
300
CLA
TELOA
200
100
0
Timeline
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BUSINESS STRATEGY
REV™ machines sold on a cost-plus model with the goal of machine contribution
covering operating expenses
Machine sales anticipated to accelerate; full business dev pipeline
Seek to maximize royalty streams associated with specific market vertical opportunities
ROYALTY BASE
ROYALTY
BASE
ROYALTY
BASE
ROYALTY BASE
ROYALTY BASE
BREAKEVEN
MACHINE
REVENUE
MACHINE
REVENUE
MACHINE
REVENUE
MACHINE
REVENUE
MACHINE
REVENUE
2016
2017
2018
2019
2020
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MOON CHEESE LEADS THE WAY
Creation of NutraDried LLP to demonstrate commercial
viability of REV™ machinery; 100kW machine installed
Attractive production economics; profitable business unit
Moon Cheese® brand strength; dried crunchy, all-natural
cheese snack product in three flavours
Widespread North American distribution – led by
Starbucks Coffee corporate distribution in 8,900+ stores;
distribution in up to 20,000+ other stores
Replicable model through product iterations in other
geographies
ND pays 5% royalty to EnWave; EnWave consolidates
100% revenue and receives 51% of potential future
profit
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ACCELERATING BUSINESS
Target is build a massive and diverse portfolio of non-correlated royalties
Strategy execution is well underway; machine sales contribution beginning to
cover operating costs, base accumulation royalty streams
Visibility of REV™ technology improving in the consumer and industry
environments through:
Availability and awareness of REV™ retail products
Demonstrated commercial success of royalty partners
Expanding business development pipeline; increased number of active
relationships with prospective partners; increasing frequency of wins
For the first time in its history, the company reported positive:
Cash flow from operations for six months ended March 31, 2016
Net Income from continuing operations in its second quarter
Committed to growing a diversified, global portfolio of royalties in the food and
pharmaceutical processing industries
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WORLDWIDE TARGETTING
Meat
Dairy
Fruit & Veg
Pharmaceutical
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CONTACT
John P.A. Budreski
Brent Charleton
Executive Chairman
Senior Vice President, Business Development
Phone: +1 (416) 930-0914
Phone: +1 (778) 378-9616
Email: [email protected]
Email: [email protected]
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