Mr. Brent Charleton reports

ENWAVE REPORTS 2023 THIRD QUARTER CONSOLIDATED INTERIM FINANCIAL RESULTS

EnWave Corp. has released its consolidated interim financial results for the third quarter ended June 30, 2023.

All values are in thousands unless otherwise stated.

Highlights:

• Reported revenue for Q3 2023 of $2,486, representing a decrease of $174 relative to the comparable period in the prior year; the decrease was partially offset by royalty revenues of $394, representing an increase of $93 relative to the comparable period in the prior year;
• Reported an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $192 for Q3 2023, an improvement of $32 from the comparable period in the prior year;
• Reported an overall decrease in selling, general and administrative (SG&A) costs (including research and development (R&D)) of $569 for Q3 2023 relative to the comparable period in the prior year, with the decrease primarily related to a continued focus on managing non-revenue-generating spending;
• Reported cash and cash equivalents of $4,471 and no debt as at June 30, 2023, an increase of $984 from March 31, 2023;
• Signed a commercial licence agreement with Bridgford Foods and sold a 120-kilowatt REV (radiant energy vacuum) machine to produce military ration components for the U.S. Army, among others.

EnWave's annual consolidated financial statements and MD&A are available on SEDAR and on the company's website.

Key financial highlights for the nine months ended Q3 2023 (expressed in thousands):

• Revenue for the nine months ended Q3 2023 of $9,906, compared with $8,224 for the nine months ended Q3 2022, an increase of $1,682; the increase in revenue was primarily due to the resale of two large-scale machines, relative to the comparable period of the prior year, which had one machine resale;
• Royalty revenues for the nine months ended Q3 2023 of $1,085, compared with $1,051 for the nine months ended Q3 2022, an increase of $34; the increase in royalties was a result of increased production and sales by current partners in Q3 2023;
• Gross margin for the nine months ended Q3 2023 was 41 per cent, compared with 50 per cent for the nine months ended Q3 2022; the decrease in margin was a result of the overall machine sale mix, including resales, relative to the comparable period of the prior year;
• SG&A expenses (including R&D) for the nine months ended Q3 2023 of $4,140, compared with $5,411 for the nine months ended Q3 2022, a decrease of $1,271; the decrease resulted from concerted efforts to maintain discretionary spending, including lower personnel costs across all departments;
• Adjusted EBITDA for the nine months ended Q3 2023 was $703, compared with a loss of $654 for the nine months ended Q3 2022, an increase of $1,357; the increase in adjusted EBITDA was primarily due to the winddown 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 Q3 2023 and subsequently:

• Sold a 120-kilowatt REV machine to Bridgford Foods in partnership with the U.S. Department of Defence for production of military rations; Bridgford will also use the REV technology to develop additional consumer-branded products at its North Carolina facility;
• Signed a technology evaluation and licence option agreement with Moleciwl Cyf of Wales to develop fruit and vegetable products for the Welsh market;
• Received approval for a cost-shared funding project through the Food Processing Growth Fund, for which EnWave gratefully acknowledges the financial support of the Province of British Columbia through the Ministry of Agriculture and Food; the program will fund up to 75 per cent of approved project costs to a maximum contribution in the amount of $750; the funding will be used for capital additions to the REVworx facility, including, but not limited to, a retail packaging system;
• NutraDried received correspondence from the Internal Revenue Service advising a tax refund of $497 (U.S.), of an estimated total potential $1,183 (U.S.) tax refund, would be issued in Q4 2023 relating to the employee retention tax credit for businesses affected during the COVID-19 pandemic; there has not been any additional correspondence from the Internal Revenue Service concerning the remaining tax refund and there is no certainty it will be issued.

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.