EnWave Corp (TSX-V:ENW, OTC:NWVCF, FRA:E4U) said Thursday it is winding down its REVworx co-manufacturing operations, a move expected to cut annual operating costs by about $1 million and materially improve net income.
The restructuring reflects the growing maturity of EnWave's Radiant Energy Vacuum drying technology, which the company said has reduced the need for internal co-manufacturing to support customer testing and validation.
EnWave expects the savings to be realized gradually through fiscal 2027, with full run-rate impact by fiscal 2028, when the company's annual operating expense base is projected to fall to approximately $3.7 million. Net income gains from the plan are expected to reach at least $1 million annually starting in fiscal 2028.
The company also plans to monetize property, plant and equipment tied to REVworx, including a 10kW and a 60kW REV machine, with an estimated combined resale value of $2 million. That equipment will be transferred to inventory to support future machine sales.
EnWave said it will retain its core innovation, engineering and commercialization capabilities, and will continue to rely on its network of 52 licensed royalty partners, some of which offer their own commercial-scale REV production capacity, to serve customers requiring outsourced manufacturing.
The company pointed to recent momentum in its sales pipeline, including the purchase of a second 120kW REV system by Procescir, as evidence of growing commercial validation for the technology. Management said it expects the combination of new customer opportunities and expansion among existing royalty partners to support renewed equipment sales growth in fiscal 2027, though the timing of large orders is expected to remain uneven.
EnWave said annualized base royalty collections could reach approximately $3 million by the end of fiscal 2027, which it said would largely cover its pro forma base operating costs.