Mr. Brent Charleton reports

ENWAVE REPORTS 2023 SECOND QUARTER CONSOLIDATED INTERIM FINANCIAL RESULTS

EnWave Corp. has released its consolidated interim financial results for the second quarter ended March 31, 2023.

All values are in thousands of dollars unless otherwise stated.

Highlights:

• Reported net income from continuing operations of $687 and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,151 for Q2 2023, representing an increase of $2,386 and $2,190, respectively, relative to the comparable period of the prior year. The increase was primarily due to the resale of two large-scale machines and the wind-down of NutraDried in Q2 2023.
• Completed the sale of NutraDried assets and a 100 kW (kilowatt) unit to Creations Foods U.S. incorporated for total consideration of $2,608 (U.S.).
• Reported revenue for Q2 2023 of $4,635, representing an increase of $3,137 relative to the comparable period of the prior year.
• Commissioned two large-scale 120 kW units for the dehydration of fruit and vegetables in Italy and Thailand.

EnWave's annual consolidated financial statements and MD&A (management's discussion and analysis) are available on SEDAR and on the company's website.

Key financial highlights for the six months ended Q2 2023:

• The company reported revenue for the six months ended Q2 2023 of $7,420 compared with $5,564 for the six months ended Q2 2022, an increase of $1,856. The increase in revenue is primarily due to the resale of two large-scale machines in the first half of 2023, relative to the comparable period of the prior year which had one machine resale.
• Royalty revenues of $690 for the six months ended Q2 2023 compared with $750 for the six months ended Q2 2022, a decrease of $60. Some partners had higher base royalties during the calendar year, resulting in a smaller royalty obligation to meet the minimum annual royalty threshold. Additionally, some partners decided to forego exclusivity.
• Gross margin for the six months ended Q2 2023 was 44 per cent compared with 51 per cent for the six months ended Q2 2022. EnWave sold two high-margin machines in the quarter, however, due to increased large-scale machines in fabrication, direct costs increased.
• SG&A (selling, general and administrative) expenses (including R&D (research and development)) were $2,954 for the six months ended Q2 2023 compared with $3,656 for the six months ended Q2 2022, a decrease of $702. The decrease resulted from concerted efforts to reduce discretionary spending, including lower personnel costs in all departments.
• Adjusted EBITDA for the six months ended Q2 2023 was $895 compared with a loss of $430 for the six months ended Q2 2022, an increase of $1,325. The increase in adjusted EBITDA was primarily due to the wind-down of NutraDried and its classification as discontinued operations, the resale of two large-scale machines and the reduction of SG&A expenses (including R&D).

Significant corporate accomplishments in Q2 2023 and subsequently:

• Commissioned a 120 kW large-scale REV machine for Orto al Sole in Italy, for production of premium dried fruits and vegetables for snacking.
• Commissioned a 120 kW large-scale REV machine in Asia for Dole to start production of better for you snack products under the brand Good Crunch using EnWave's REV technology.
• Sold and commissioned a 120 kW REV machine to a major Canadian cannabis company to produce premium smokable flower, cannabis plant material for extraction and edible products.
• Sold two 10 kW REV machines to a current royalty partner, tripling its North American REV manufacturing capacity for production to support a growing market demand.
• Signed a licence with PiP International Inc. to allow for the commercialization of high-value plant-based ingredients. Additionally, PiP purchased a 10 kW REV machine for continued product development.

About EnWave Corp.

EnWave is a global leader in the innovation and application of vacuum microwave dehydration. From its headquarters in Delta, B.C., EnWave has developed a robust intellectual property portfolio, perfected its radiant energy vacuum (REV) technology, and transformed an innovative idea into a proven, consistent and scalable drying solution for the food, pharmaceutical and cannabis industries that vastly outperforms traditional drying methods in efficiency, capacity, product, quality and cost.

With more than 50 royalty-generating partners spanning 26 countries and five continents, EnWave's licensed partners are creating profitable, never-before-seen snacks and ingredients, improving the quality and consistency of their existing offerings, running leaner, and getting to market faster with the company's patented technology, licensed machinery and expert guidance.

EnWave's strategy is to sign royalty-bearing commercial licences with food and cannabis producers that want to dry better, faster and more economical than freeze drying, rack drying and air drying, and enjoy the following benefits:

• Food and ingredients companies can produce exciting new products, reach optimal moisture levels up to seven times faster, and improve product taste, texture, colour and nutritional value.
• Cannabis producers can dry four to six times faster, retain up to 20 per cent more terpenes and 25 per cent more cannabinoids, and achieve at least a three-log reduction in crop-destroying microbes.

We seek Safe Harbor.