EnWave Corporation
Founded in 1999, out of the University of British Columbia (UBC), EnWave is an industrial technology company that offers commercial-scale microwave vacuum dehydration machinery for applications in the food and pharmaceutical industries. The company is based in Vancouver, British Columbia.
EnWave's proprietary Radiant Energy Vacuum (REV) dehydration technology was developed by Dr. Tim Durance, who is the current Chief Executive Officer of EnWave. Dr. Durance was previously a professor in the Food, Nutrition and Health program at UBC, where he earned a Ph.D.
EnWave's mission is to establish its REV technology as a better alternative than freeze drying, air drying and spray drying. Several studies with herbs, vegetables, meats, and fruits have demonstrated that flavor, color, nutrient, and other biologically ACTIVE chemicals that are sensitive to thermal or oxidative degradation typically exhibit better retention after microwave vacuum drying compared to air drying.
The combination of vacuum and microwave also allows solid food pieces to be dried more rapidly, and thus more cost-effectively, than with other drying methods. A study of three drying technologies, in which 3 mm thick carrot slices were dried, illustrated the rapid dehydration rate that can be achieved using microwave vacuum drying. Freeze drying took approximately 3 days to reach the end point of 9.9 percent moisture, air drying lasted 8 hours, while microwave vacuum drying only required 33 minutes.
EnWave has raised close to $55 million since its inception to develop and commercialize its technology. It generates revenues by building a royalty stream through the licensing of its dehydration technology to companies in the food and pharmaceutical markets.
The company closed its first commercial agreement in February 2008 with CAL-SAN Enterprises, a blueberry producer from British Columbia, Canada. The 75kw REV machine, installed at CAL-SAN’s facilities, continues to produce modest production and royalties.
To date the company has signed sixteen royalty-bearing licenses, with companies that include Hormel Foods, Bonduelle, Gay Lea Foods, Sutro Biopharma, and Napa Mountain Spice Company. In addition, other companies such as Nestlé SA, Kellogg Co, and R.J. Reynolds have tested the technology.
Next to machine sales and royalties, EnWave also generates income from its subsidiary NutraDried LLP, which develops, manufactures, markets and sells cheese snacks under the Moon Cheese brand.
EnWave also had a 86.5% controlling share position in Hans Binder Maschinenbau GmbH, a German company that engineered and built dehydration equipment. In September 2015 however, Hans Binder filed for insolvency.
EnWave has not yet realized profitable operations. In fiscal year 2015, ended September 30, 2015, EnWave reached revenues of $5.8 million and reported a net loss of $9.3 million. The company’s shares trade on both the TSX Venture Exchange (trading symbol: ENW) and the Frankfurt Stock Exchange (trading symbol: E4U).
Technology
Drying Methods
Drying foods is one of the oldest and simplest methods of food preservation. At this moment, there are three main dehydration technologies that dominate the market: spray drying, air drying, and freeze drying.
Industrial scale spray drying has been around since the second half of the nineteenth century. Spray drying can only be used to dry liquids, as they are sprayed into hot air of up to 575°F. That way, the heated air mixes with the atomized liquid and evaporates the moisture within. The solids are recovered as powder. The most common application of spray drying is powdered milk. The major disadvantage of spray drying is that the high temperatures being used in the process often compromise the flavor, color, texture and bioactivity of the dried product.
Air drying on the other hand involves the passing of hot air across a product. Similar to spray drying, the process is cost-effective and efficient, but the heated air again compromises the biological and nutritional integrity of the product.
The first industrial applications of freeze drying occurred in the 1920s. During the process, the product is first frozen. Next, the product is placed in a vacuum, which draws out the frozen water within the product. While freeze drying only removes negligible amounts of nutrients in food, it’s a slow and expensive process.
The idea to combine fast heating of microwave and low temperature processing of vacuum has been investigated by a number of researchers during the past decades. The main purpose of vacuum drying is to enable the removal of moisture at lower temperatures. Water boils on 1 bar at 100°C, but if the pressure is lowered to 40 mbar, then water already boils at 28.96°C. This is an important feature of the microwave vacuum process as the dried products aren’t exposed to high temperatures used in spray and air drying.
Also, in microwave drying, the product is heated from within, requiring approximately 75% less energy than conventional drying methods. The net result is that the speed and efficiency of microwave heating is retained while damaging high temperatures are avoided.
The major limitation for using microwave heating in the dehydration process in the past was the existence of non-uniform temperature distribution, resulting in cold and burn spots. EnWave has eliminated that issue through the use of polyethylene drums inside the vacuum chamber, which ensures a more uniform temperature distribution.
EnWave REV Platforms
EnWave currently has three commercial scale technologies, nutraREV, powderREV, and quantaREV, and two technologies in the pilot-scale stage: freezeREV and bioREV.
nutraREV is designed for the dehydration of fruits, vegetables, herbs, dairy products, meats and seafood. It provides higher nutritional content, and improved appearance, flavor and texture over freeze drying, which is the industry standard for dehydrating many food applications. The nutraREV platform has been built up to 100kW in power, and is capable of producing as much as 300 kg (660 lbs) of dried product per hour.
powderREV technology is designed to dehydrate a wide variety of materials including enzymes, probiotics and food cultures, pharmaceuticals, non-regulated biologicals and certain dry food products. It’s ideally suited to replace the expensive and time consuming process of tray freeze and spray drying, which takes place in a high heat environment and damages sensitive organisms.
quantaREV is designed for high-volume, low-temperature dehydration of solids, liquids, granular or encapsulated products. It uses a continuous belt design in a controlled vacuum-microwave environment with an eventual target of dehydrating several tonnes of material per hour. This low temperature technology is designed to provide a higher-quality end product than what is currently achieved with spray drying or air drying.
freezeREV is designed to provide high-speed dehydration for live and active organisms in vials with the potential for significantly lowering operating costs compared with freeze drying. freezeREV is intended for products which must have a minimum moisture content in order to maximize their shelf-life.
bioREV is designed to dehydrate liquid biological materials in vials such as viruses and antibodies at temperatures above the freezing level. Unlike freezeREV, which is essentially an accelerated freeze drying process, bioREV is a more gentle drying process that is intended to remove moisture from highly sensitive biomaterials that cannot withstand freezing temperatures.
NutraDried LLP
On February 26, 2013 the Company entered into a 70%-30% Partnership Agreement with Lucid Capital Management Ltd. to form NutraDried LLP, a limited liability partnership in the United States of America. EnWave and Lucid established this LLP to develop, manufacture, market and sell 100% all-natural cheese snack products.
EnWave also entered into a royalty-bearing commercial license with NutraDried, which grants the latter the right to use REV technology for the production of its snacks. NutraDried pays EnWave a revenue-based royalty of 5% in return.
Pursuant to the Partnership Agreement, Lucid Capital was granted an option by the Partnership to subscribe for additional interests increasing its ownership to no greater than 49%. On November 21, 2013 this option was exercised in full with the other Partner purchasing additional an 19% interest for $160,236, reducing EnWave’s interest to 51%.
In July of 2013, NutraDried began producing cheese snack products in three specific flavors - Gouda, American Cheddar & Pepper Jack - utilizing a small scale REV machine. First sales occurred shortly thereafter to DPI Specialty Foods, which placed Moon Cheese snacks in 192 Kroger locations under both Fred Meyer and Quality Food Center banners.
After starting production on a smaller unit, NutraDried installed and started-up a 100kW nutraREV machine in Ferndale, Washington State and has been producing commercial product on the new machine since.
In February 2015, NutraDried announced that, beginning in June 2015, Cheddar and Gouda Moon Cheese would be launched in 3,400 stores of a large international coffee chain in the United States. A few months later, the sales distribution in the coffee chain was expanded from 3,400 stores to 7,500 corporate stores. And in November 2015, EnWave announced that also the 1,400 Canadian corporate stores of the coffee chain would start selling Moon Cheese beginning in late 2015.
The number of distributors and end purchasers who supply or sell NutraDried’s Moon Cheese continues to grow. The snacks can now be purchased at over 20,000 locations across the United States and Canada.
In addition, as of August 2015, NutraDried started developing protein matrix products, such as sports nutrients, protein bars, complete meal replacement snacks, and dietary products.
Competition
The market for drying equipment is fragmented with many small companies that tend to have a very regional focus, such as Biopharma Technology Ltd., Cuddon freeze Dry, and Freezedry Specialities Inc. There are a couple of companies that are able to compete globally, such as Thermo Fisher and USIFROID.
Competition in the microwave vacuum dehydration space on the other hand is very limited as this is still a relatively new technology. EnWave is the leader in the sector, both in terms of international footprint and size of business. Competition comes principally from Püschner, Merk Process and Techni Process.
Key Directors
Dr. Tim Durance - President & CEO
One of the founders of EnWave, Dr. Durance has 35+ years’ experience in the processed food industry and is the co-inventor of the Company's Radiant Energy Vacuum technology. As EnWave’s Chairman & CEO, his responsibilities include research and development related to all of the REV technologies, as well as ongoing intellectual property development. Until recently, Dr. Durance was a Professor in the Food, Nutrition and Health Program at the University of British Columbia (UBC), where he has been a member of the faculty since 1987. Dr. Durance is the author of more than 75 peer-reviewed scientific publications, 16 patents, and numerous book chapters, scientific presentations, and invited lectures on technology and food processing.
Mr. John P.A. Budreski - Executive Chairman
Mr. Budreski joined EnWave with over 30 years of extensive capital markets and executive management experience. Mr. Budreski has a professional history of advancing and accelerating businesses, as well as tangible engineering experience. He was formerly a Vice Chairman of Cormark Securities Inc. from 2009 to 2012 and President and CEO of Orion Securities Inc. from 2005 to 2007, prior to its successful sale to Macquarie Bank. He has filled the roles of a Managing Director of Equity Capital Markets and Head of Investment Banking for Scotia Capital Inc. from March 1998 to February 2005 after starting out as a Managing Director of US Institutional Equity Group for Scotia Capital. He also held senior roles in investment banking and equity sales and trading for RBC Dominion Securities.
Mr. Brent Charleton - Senior Vice President, Corporate Affairs
Mr. Charleton has extensive experience working in competitive team-based environments in the public, private and not-for-profit industries. He has managed the marketing, investor relations and corporate affairs mandates for EnWave Corporation since 2010. Brent, an ex-professional athlete, is a graduate of the Marketing Management program at the British Columbia Institute of Technology and has earned a Bachelor of Arts degree in Criminology and Communications from Simon Fraser University. Mr.Charleton is also the President of the BCIT Alumni Association, has completed the Canadian Securities Course and a CFA Level 2 candidate.
Mr. Daniel Henriques - CFO
Mr. Henriques is a Chartered Professional Accountant. Prior to joining EnWave, Mr. Henriques was a manager in the Assurance group at PricewaterhouseCoopers LLP, and supported numerous mid-market companies, including companies listed on the Toronto Stock Exchange, TSX Venture Exchange and the New York Stock Exchange, with financial reporting and compliance. While at PwC, Mr. Henriques provided clients in the manufacturing and technology sectors professional services in the areas of financial audits, financial reporting and tax. Mr. Henriques earned his Bachelors of Science with an Honours Distinction and his Diploma of Accounting at the University of British Columbia. He became a Chartered Professional Accountant in 2012.