EnWave Corporation

Q3 revenue was $2.7 million, up 5% year over year, with revenue up $122,000 versus the comparable period. Third-party royalty revenue was $431,000, up $6,000 or 1% year over year, and 9-month third-party royalty revenue was $1.5 million, up $145,000 or 11%. Gross margin was 19% versus 44% in the prior-year quarter. Adjusted EBITDA was a loss of $570,000 versus positive $85,000 a year ago. EnWave ended the quarter with $4.6 million of cash and cash equivalents and $7 million of net working capital surplus, and approximately $2.1 million was available under its Desjardins credit facility, which remained undrawn. For Q4 and beyond, management said it expects continued royalty growth, possible material revenue from selling the fabricated 100-kilowatt nutraREV machine and the refurbished 120-kilowatt quantaREV unit, and completion/commissioning of up to five 10-kilowatt machines before September 30. The company also said the fully subscribed $3 million LIFE offering closed after quarter-end and will be used to manufacture two large-scale machines for inventory.

Brent Charleton framed Q3 as solid and said the company sees improvement ahead if it can close a large-scale machine sale currently being negotiated. He emphasized a broader, more active sales effort across trade shows, outbound outreach and existing royalty partners, and said at least half of the near-term opportunities appear to be repeat orders from current partners. His tone was upbeat and focused on acceleration in fiscal 2026, while stressing that execution on current opportunities will determine how quickly revenue scales.

Dylan Murray focused on the reported numbers and the drivers behind them: revenue of $2.7 million, third-party royalties of $431,000, gross margin of 19%, and adjusted EBITDA loss of $570,000. He said margin compression came from the absence of 10-kilowatt sales, a high-margin large-scale sale in the prior year, and a bulk discount on the MicroDried machines, while SG&A rose to $1.4 million mainly due to sales personnel, trade shows and patent maintenance timing. On liquidity, he cited $4.6 million of cash, $7 million of net working capital surplus, an undrawn Desjardins facility with about $2.1 million available, and the post-quarter $3 million private placement as support for manufacturing two inventory machines and potentially unlocking more facility availability.

In the written questions, management was asked whether REV machine sales could accelerate soon; Brent answered yes, saying he expects acceleration through the rest of the quarter and into fiscal 2026 based on the pipeline. He also said about 50% of opportunities appear to come from existing royalty partners, which could support faster royalty growth once those machines are operating. On the biggest obstacle to faster growth, he said there is no single issue and instead projects face a range of operational and commercial challenges, such as management changes, counterparty restructuring and product-market positioning.