THE GLOBAL LEADER IN VACUUM-MICROWAVE DEHYDRATION TECHNOLOGY June 2015 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 period ended December 31, 2014 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. 2
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.
MARKET PROFILE Exchange Listings Symbols Share Price* Total Shares Outstanding Market Capitalization Enterprise Value Shareholder Breakdown* Toronto Venture Stock Exchange (TSX.V) Frankfurt Stock Exchange (FSE) TSX.V:ENW FSE:E4U $1.00 52 week range: $0.99 (October 2014) to $1.52 (July 2014) 84,522,759 basic 92,117,716 fully diluted $84.5 million $87.7 million Retail 50% Institutional 43.5% Directors & Officers 6.5% *All share price data as of closing price on May 31, 2015.Shareholder breakdown is based on approximations. 4
COMPANY LEADERSHIP Board of Directors Mr. John P.A. Budreski Executive Chairman Dr. Tim Durance Director, President & CEO Proven history of advancing and accelerating businesses, as well as tangible engineering experience 30+ years of extensive capital markets and executive management experience Inventor & company founder; author of 17 EnWave patents granted or pending Emeritus Professor Food Science UBC Ms. 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 Mr. 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 5
SUPERIOR TECHNOLOGY Radiant Energy Vacuum ( REV ) technology applies microwave energy to product loads under vacuum to achieves fast dehydration at low temperatures with reduced oxidization Better retention of flavor, biological activity and nutrients Enhanced appearance and improved 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 6
MATERIAL ADVANTAGES Incumbent Technologies REV Technology Freeze Drying Air Drying Better Product Superior Color, Stronger Flavor, High Nutritional Retention High Nutritional Retention Heat & Oxygen Damages Color, Flavor, Nutrients & Texture 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 Result REV is preferable because it is: Smaller seamless integration, smaller footprint Continuous Process reduces large batch write-offs Flexible controllable moisture levels Cost Effective Similar costs to spray / air drying and less than freeze drying 7
ADDRESSABLE MARKETS Potential market for REV dehydration as a replacement for freeze, air and spray drying is estimated at $ US400 billion* Market Verticals with Active REV Testing Dried Fruit Snacks Vegetable & Fruit Powders (Puree Substitutes) Cheese Snacks Pet Food Dried Meat Snacks Dairy Powders Beverage Ingredients Cereal & Cereal Bars Soup Ingredients Probiotics Proteins Biopharmaceuticals Enzymes $92 $7 $140B $5 $67 $31 $61 Fruit, vegetables, herbs, meat, soups, sauces, purees, flavors, baby & pet food Coffee & powdered drinks Probiotic, food cultures & proteins Biopharmaceuticals Non-regulated biologics (Reagents) Enzymes Other spray dried absorbent polymers, dyestuffs, detergents, fertilizers & agrochemicals * Source: company data and industry reports. Data represents potential targets for REV. There is no guarantee that EnWave can attract industry interest in these areas, or obtain commercial licenses and machine orders without an industry partner capable of demonstrating technical and economic viability. 8
PATENTED INNOVATIONS Platform nutrarev quantarev powderrev Functionality Dehydrates fruits, vegetables, herbs, dairy products, meats and seafood in a basket based system; Dried products have higher nutritional content, improved appearance, flavour and texture over conventional methods. High-volume, low-temperature and gentle dehydration of solids, gels, liquids or encapsulated products in a tray or belt based system. Bulk dehydration of temperature-sensitive biomaterials such as bacteria and enzymes; A high-speed, continuous, efficient alternative to lyophilisation. freezerev * (In Development) High-speed continuous dehydration of biomaterials in vials. *Platform in pre-commercialization stage 9
ROYALTY DRIVEN BUSINESS REV Technology Royalty Portfolio Building a portfolio of aggressive, incumbent or innovative royalty partners Joint Partnership Revenue (NutraDried LLP) Partnership controlled by EnWave (51%) to sell healthy dried cheese snacks in North America REV Machinery Revenue REV commercial machinery sales (or leasing) and maintenance Royalty revenue is based on a percentage of revenues or dollar per lbs/kg of products produced & sold Target to have annual royalty at a double digit percentage of machine sales price Typical royalty rate on annual revenues is between 3% - 5% 5% royalty paid to EnWave North American business can be replicated in other jurisdictions Nutradried provides a showcase to other prospective royalty partners EnWave and/or Binder work with each commercial licensee to ensure successful plant design, installation and start-up Traditional air dryer sales Cost-plus revenue model Royalty term extends to patent portfolio term 10
MEAT PRODUCTS Commenced collaboration with Hormel Foods (producers of SPAM and Skippy peanut butter) in 2011; commercial license signed in June 2013 Hormel submitted a purchase order for a 100kW nutrarev machine in Jan. 2015; focused on dried meat snack products; installation to be completed Summer 2015. Hormel Foods expects to start-up 100kW machine in 2015, enhancing its commercial production and enabling the launch of new, innovative snack meat products Momentum building in market vertical Campofrio (Europe), Perdue Farms (USA) and Jack Link s Beef Jerky (USA) collaborations. Continuing business devlopment initiatives with several other interested Tier 1 and Tier 2 companies 11
DEHYDROFROZEN PRODUCTS Bonduelle is a dominant producer ($2+ bn in annual revenue) of canned and frozen vegetables in North America and Europe Bonduelle signed royalty-bearing license in November 2013 for exclusive right to produce dehydrofrozen vegetables globally Removal of one-quarter of moisture via REV technology prior to freezing reduces sweating from thawed/cooked products Material quality improvement; end products have texture, taste and color more similar to, or better than, fresh products Market test results illustrated that end consumers in many cases could not tell the difference between fresh and frozen products after cooking Lease agreement signed; 120kW quantarev machinery delivered in May, 2015 with goal of completing a 300-400kW quantarev machine design to be available for purchase by end of 2015 12
DAIRY PRODUCTS EnWave Joint Partnership, NutraDried LLP, produces and sells 100% natural dried cheese snacks in the North American market under the brand Moon Cheese 100kW nutrarev machine installed for Moon Cheese production at Ferndale, Washington Distribution for Moon Cheese in over 2,800 grocery stores in North America Moon Cheese to launch into 3,500 stores of a major coffee chain during summer 2015 Second license signed in November 2014 with Gay Lea Foods, a major Canadian dairy producer, to produce, market and sell dried cheese snack products Third license signed with Umland LLC to product high kosher dried cheese snacks 5% standard royalty paid to EnWave from licensees in this market vertical EnWave pushing business development with several additional dairy product producing companies in North America, Europe and Australasia; recent collaboration signed with Ultima Foods (Canada) 13
FRUIT & VEGETABLES Five royalty-bearing commercial licenses signed in this market vertical First commercial-scale machinery sold (75kW nutrarev ) in 2009 to CAL-SAN, a B.C.-based blueberry producer; major technology advancements since that time Second commercial licensee, Milne Fruit, is a leading U.S. fruit processor; 118kW machine delivered in Q2 calendar 2012 for production; now producing 11 natural dried fruit & vegetables in snack and powdered form Third commercial license licensee signed May 2014 with Canadian vegetable producer; 20kW nutrarev machine purchased Fourth commercial license signed and purchase order received from Chilean fruit processor, Natural Nutrition Ltd, in July 2014; machine installed in May 2015 Fifth license signed with undisclosed fruit producing company Several additional companies currently engaged with EnWave to test products in this market vertical, including Sun Maid Growers, Ocean Spray Cranberries and others 14
HERBS & SPICES Signed royalty-bearing commercial license with Napa Mountain Spice Company (NMSC) in September 2013 Purchase order received for small commercial unit; delivered and installed February 2014 Commercial license (5% royalty) and trademark agreements signed with EnWave Brighter color, stronger flavor and improved nutritional retention enabled by REV Attractive economics and increased capacity for NMSC 100% organic certification granted April 2014 EnWave is leveraging the success of NMSC into additional commercial opportunities in the global spice & herb market vertical 15
PHARMACEUTICALS Independent testing of REV technology demonstrate significant reduction in drying times of vaccines, antibodies, probiotics and enzymes when compared to lyophilization Tests have also shown that REV technology preserves similar efficacy, stability and shelf-life to that produced using lyophlization Commercial license signed with Sutro Biopharma in May 2014 to use powderrev for the dehydration of a cell-free extract for their protein synthesis process Non-exclusive license signed with Merck in December 2014; second generation non-gmp REV dryer for the pharmaceutical industry; Merck retains option to exclusively license REV for the drying of several specific vaccines EnWave signed a technology evaluation agreement in March 2014 with a third pharmaceutical company to dry monoclonal antibodies 16
MACHINE SALES PIPELINE # of Near-Term Machines Customer Market Sector End Product In Operation Ordered/ Anticipated Market Status Hormel (2013) Meat Products Snacks 10kW unit One 100kW nutrarev machine U.S. 100kW installation and start-up expected in 2015; enhances production capabilities Bonduelle (2013) Dehydro Frozen Frozen Vegetables -- One 120kW quantarev North America Commercial license signed Nov. 2013; delivery of quantarev expected early 2015 Milne (2011) Dried Fruit & Vegetables Snacks, Cereals, Baking, Ingredients 118kW machine One 100kW nutrarev North America Commercial plant started-up in April 2012 NutraDried LLP (2013) Cheese Products Snacks 100kW nutrarev One 100kW nutrarev U.S. Launched into Kroger, Overwaitea, etc.; increased distribution and sales expected Napa Mountain (2013) CAL-SAN (2009) Confidential (2014) Gay Lea Foods (2014) Natural Nutrition (2014) Spices & Herbs Berries Vegetables & Herbs Cheese Products Dried Fruit Products Bay Leaves Snacks & Ingredients Undisclosed One 10kW nutrarev 75kW nutrarev 20kW nutrarev -- U.S. -- Canada -- Canada Snacks 10kW unit One 100kW nutrarev Canada Snacks, Nutraceuticals and Functional Ingredients 10kW unit 2 nutrarev units Latin America Machine start-up and commercial production in Feb. 2014 Modest production & royalties since commercial start-up Delivery and start-up of 20kW nutrarev machine complete; commercial sales expected Commercial license and machine order signed in November 2014 Commercial license and machine order signed in July 2014; commercial start-up in May 2015 Sutro Biopharma (2014) Pharma Cell-Free Extract Prototype unit One commercial powderrev U.S. Prototype being used for testing and commercial powderrev order mid 2015 expected Merck (2014) Pharma Vaccines Lab-scale 2 nd generation non- GMP dryer Global Signed 10 year R&D non-exclusive license agreement; continued testing expected 17
PARTNER LIST Licensed Partners Development Partners
MOVING FORWARD Focus on further development, contracting and advancement of existing partners Significantly increased resources dedicated to broadening the prospect list and signing of new partners Continue with reactive partner development, driving on proactive partner development Helping prospective partners to de-risk through process, product development and market efforts Shortening the time frame from first contact to royalty paying Highly scale-able business model Target is build a massive and diverse portfolio of non-correlated royalties 2009 First License Agreement Signed 2010 First Major Research Agreement 2013 Significant Commercial Momentum 2014 Building Foundation for Royalty Growth 2015 Accelerate Prospect Conversion 19
BUILDING MOMENTUM Reasons to own ENW Recent Progress Disruptive technology for massive addressable market Proven royalty-based business model; thirteen licensees and growing Commercialization inflection point occurring in food processing industry Recent milestones with pharmaceutical partners; proving technology value August 2014 Oct. 2014 Dec. 2014 Jan. 2015 Feb. 2015 April 2015 May 2015 Signed R&D agreement with Jack Link s Appointed new Audit Committee Chair Signed non-exclusive R&D license with Merck Received machine purchase order from Hormel Secured cheese snack distribution in major coffee chain Started collaboration with Perdue Farms; signed license and purchase order with Umland LLC Started collaboration with Ultima Foods Strong management team with scientific, engineering and capital market experience 20
INVESTMENT HIGHLIGHTS Business is based upon building a substantial portfolio of diversified royalties Superior technology: better, faster, cheaper Signed royalty partners Hormel & Bonduelle (global businesses) validate core business model and value of REV technology Additional commercial agreements represent near-term catalysts; current licensees also include Gay Lea Foods, Milne, CAL-SAN, Napa Mountain Spice Co., Natural Nutrition Ltd, Sutro Biopharma, Enzyme Partner, Vegetable Partner and NutraDried JP Merck moving forward with non-exclusive research license for vaccine dehydration Expanding I.P. enhances valuation and supports royalty model Significant increase in resources dedicated to royalty partner acquistion Business model: machine sales cover overheads, royalty income fuels dividend growth 21
CONTACT John P.A. Budreski Executive Chairman Phone: +1 (416) 930-0914 Email: jbudreski@enwave.net Brent Charleton Senior Vice President, Corporate Affairs Phone: +1 (778) 378-9616 Email: bcharleton@enwave.net 22