EnWave Corp. announced it has signed a royalty-bearing Commercial License and Equipment Service Agreement with a major North American enzyme producer. Under the terms of the Equipment Agreement EnWave is committed to supplying two commercial powderREV™ machines for the production of several dehydrated enzymes used for a number of food-related applications. The Licensee has an established market for the enzymes with a number of Tier 1 customers.
In addition, the Licensing Agreement provides the Licensee with an option to license powderREV for the production of an additional enzyme protein category to support other business development opportunities being developed by its global affiliates.
The first machine is expected to be delivered to the Licensee's facility in September 2013, followed by the second machine in the summer of 2014. EnWave will pay for the capital cost of the equipment and receive a royalty payment for each kilogram of enzyme dehydrated in the process with a targeted annual return of between 30 percent and 50 percent on capital invested, subject to overall capacity utilization. After the initial installation, there will be a start-up approval process to confirm acceptance by the Licensee's end customers prior to beginning large scale commercial production.
After an extensive evaluation period including several successful efficacy tests, the Licensee has committed to investing in the needed facility modifications and operating personnel to support the installation and use of EnWave's Radiant Energy Vacuum (REV™) technology. The commercialization of powderREV is a significant advancement for the Company's REV technology suite, as powderREV is capable of accelerating the drying times of biomaterials below freezing, while reducing production costs and maintaining high efficacy of the end product. Within the License Agreement, EnWave has the right to showcase the commercial powderREV plant to other potential licensees in the future. The global enzyme market alone is estimated to reach USD$7 billion in 2013 and the Company hopes to further penetrate this market after demonstrating initial commercial success.
"This commercial license opens up an attractive new high value market for EnWave," stated Dr. Tim Durance, chairman and co-CEO. "We continue to gain commercial traction for our game-changing technology and believe we have the opportunity to secure additional licenses later in 2013 in other new product areas."