Setup Update

CEO Charleton at the recent Q2 earnings call cited BranchOut Food (BOF) and other partners building inventory ahead of expected sales growth, with the timing aligned to mass-retail SKUs hitting shelves in September. Last week, BranchOut Foods announced its largest retail win ever, with a five-SKU branded launch at a major U.S. mass retailer (Target - TGT) beginning in September 2026.

CEO Charleton was visibly pleased during our meeting and framed it as the breakthrough EnWave’s entire commercial scale-up has been working toward. The implication for EnWave’s base royalty line, which has been declining for eight straight quarters, is a potential step-up in the upcoming quarters.

My pre-Vegas write-up centered on EnWave’s fragmented royalty stream bottleneck: the business development model was dependent on a customer technology innovation. What we are seeing now across multiple verticals is a shift in business development models toward relationship-building. Danna Dunnage joined as VP Global Sales & Business Development in July 2024, bringing her senior-level experience and now producing a high-caliber, multi-vertical funnel that EnWave has never had before.

Ms. Dunnage has direct relationships across the senior-executive ranks of the largest North American food and adjacent-market companies. Before joining EnWave, she served as President of Gordon Food Service (GFS) British Columbia division, North America’s largest broad-line food distributor, where she was responsible for over US$1 billion in annual revenue and 900+ employees. Distributors like GFS sit at the center of the food industry; you cannot run a $1B-plus division without intimate, trust-based relationships with the largest CPG suppliers.

She subsequently formed her own consulting firm and joined TCAP, a food-focused private-equity firm, thereby deepening her exposure to senior food-industry M&A and corporate development executives. Ms. Dunnage has planted the transformational seeds at EnWave:

• The food-major Technology Evaluation and License Option Agreement (TELOA) - The disclosed profile includes $20B annual revenue, distribution in 100+ countries, evaluation spanning grocery, snacks, cereal, frozen, and convenience meals- fits a description of General Mills (GIS), who is evaluating EnWave’s REV at commercial scale across multiple categories simultaneously, This means several independent product teams inside the company are each running real-world validation in parallel. Any one of them converting to a commercial license is a meaningful win; multiple conversions are a potential game changer. It is important to note that CEO Charleton envisions this as an ecosystem flywheel in which EnWave co-develops the product application with General Mills’ R&D team, then routes the commercial production volume to an existing EnWave licensee that co-manufactures the SKU on installed REV capacity. General Mills gets a validated, differentiated product without the capex or operational risk of running drying equipment. The co-manufacturer’s plant utilization rises, pulling forward its next machine order from EnWave. And EnWave earns royalties on every kilogram of the resulting SKU as it moves through General Mills’ retail and foodservice channels — which, at General Mills scale, is a network reaching hundreds of millions of consumers.

  

• The pet-food vertical: CEO Charleton has flagged pet treats as a “proven winner” sector since the start of his current strategic plan, and the meeting confirmed that pet food is active and prioritized. Our working assumption is that Purina is an emerging customer. The fit is natural: REV’s combined drying-and-decontamination is well-suited for premium pet snacks and treats, where ingredient quality and pathogen control are increasingly important sales attributes. Timing and structure remain to be seen, but this is another Dunnage-driven relationship.

  

• The cosmetics vertical: Cosmetics and personal care is a wholly new third vertical, also Dunnage’s lead. The Vegas meeting was the first time I became aware of this avenue, and it warrants its own dedicated section immediately below this one.

  

The Cosmetics Opportunity

The cosmetics and personal-care expansion, to my knowledge, has not appeared in any prior EnWave public filing, press release, or earnings call. The ceiling this vertical creates is potentially the highest in the entire EnWave story. The global cosmetics and personal-care market is worth about $560M and growing. The relevant subset for a dehydration technology, where natural extracts, actives, fragrances, and processed botanicals are sold to formulators, is approximately $8–10 billion and growing at a 7–9% CAGR, well above the broader cosmetics market, driven by clean-beauty, natural-ingredient, and traceable-botanical demand.

The margin economics is what makes this market super attractive. A finished food product sells at dollars per pound; a freeze-dried fruit ingredient earns EnWave a royalty in pennies per kilogram. A high-end botanical extract for skincare, an active ingredient for an anti-aging serum, or a natural perfume can sell for hundreds of dollars per kilogram. A small cosmetics royalty stream can be worth multiples of a much larger food royalty stream in terms of volume. A single commercial license to a major cosmetics formulator producing premium actives could generate annual royalties that exceed EnWave’s entire current royalty book.

Cosmetics formulators are obsessive about preserving the bioactive integrity of botanical extracts, volatile aromatic molecules in perfume materials, color in natural pigments, and antioxidant potency in skincare actives that traditional drying methods destroy. Freeze-drying preserves quality but is slow, expensive, and capital-intensive; hot-air drying oxidizes and degrades; spray-drying produces only powder and loses volatiles. REV beats freeze-drying on cost and speed, beats hot-air drying decisively on quality, and addresses formats that spray drying cannot handle. The cosmetics buyer is far more willing than the food buyer to pay a premium for quality-preserving technology because the underlying ingredient is itself premium-priced.

Two factors make the timing right. First, the consumer shift toward “clean beauty,” natural-ingredient cosmetics, and traceable botanicals has driven growth in cosmetic ingredients materially above that of the broader cosmetics market. Second, Dunnage’s commercial network extends beyond food into adjacent personal-care and ingredient channels, and she is personally driving this expansion. Through her years at Gordon Food Service and TCAP, she has direct lines to senior commercial executives at cosmetic-ingredient suppliers, fragrance houses, and personal-care formulators that EnWave’s pre-2024 technology-led model would never have reached.

Cosmetics is the newest vertical, and EnWave has not (yet) disclosed any named cosmetic-ingredient royalty partner or commercial license. The conversion from active prospect conversation to first commercial royalty in a brand-new vertical is typically 12–24 months\, so we should not yet model any cosmetics revenue contribution. We are flagging it anyway. An $8–10B addressable ingredient segment growing at 7–9%, dramatically higher per-kilogram royalty economics than food, a quality-preservation pitch tailor-made for the category, and a senior commercial executive with the right network actively building the pipeline on a stock priced at C$0.23 for a C$27M market cap is the asymmetric optionality that defines MCO microcap opportunities. This is the highest-ceiling vertical EnWave has ever pursued, and we will push for updates in subsequent write-ups.

Financials and Valuation

The financial picture is unchanged since our initial write-up. The EnWave investment thesis depends on royalties, which have trended essentially flat to down over eight straight quarters.

The balance sheet is functional but tight. The 100kW nutraREV and 120kW quantaREV are 75% complete with no buyer yet. These machines are being built on speculation to reduce lumpiness by compressing fabrication lead time once an order lands. The machines represent C$3.9M in inventory that would otherwise extend the cash runway, making the cash position of C$3.3M the tightest it has been in years. The Desjardins facility gives roughly C$4.6M of accessible liquidity. Against the H1 Adj. EBITDA burn (~C$680K per quarter) implies five to seven quarters of runway. The dilution risk exists without the sale of at least one of the machines.

Food/beverage equipment trades at 1–2x revenue and mid-teens EV/EBITDA when profitable; royalty-licensing businesses trade at 4x revenue and 16x EBITDA. At 3x revenue and 13x annualized base royalties, the market is pricing EnWave as a small food equipment company rather than a royalty-licensing business and is assigning zero value to the BranchOut Target launch, TELOA optionality, and expansion into the cosmetic and pet food verticals.

Updated MCO Checklist

Re-Scored to 4 / 5 (from 3.5)

Moat — PASS (unchanged)

17+ patent families, an effective monopoly on commercial-scale vacuum-microwave dehydration.

Large TAM — PASS (strengthened).

Beyond the previously identified food ($50–60B) and pharma lyophilization ($5B and growing) markets, the meeting added a credible third vertical: the $640B global cosmetics market with an addressable $8–10B cosmetic-ingredients segment, at materially higher per-kilogram royalty economics.

Little or no direct competition — PASS (unchanged).

No direct competitor.

Clear path to profitability — INCOMPLETE (unchanged).

Royalty model should compound at scale; gross margins healthy (~35%); BranchOut’s mass-retailer ramp gives the most credible, visible path EnWave has had in years. But base royalties are still declining on the eight-quarter trend, Adj. EBITDA is negative, and a turnaround is more plausible and more visible than before — but unproven.

Qualified leadership — PASS (strengthened, off probation).

The Dunnage hire is the structural fix to EnWave’s most stubborn historical constraint. Combined with a coherent four-priority framework, leadership is now a clean PASS rather than probationary.

Four pillars are now clearly intact, and two are stronger than before the meeting. The execution pillar — actual royalty growth showing up in EnWave’s numbers, not just at BranchOut’s — remains the single factor keeping EnWave out of the MCO portfolio.

Conclusion

Our conviction in the asset quality and our confidence in the management team have increased, particularly in Danna Dunnage as the structural fix to the company’s most persistent commercial constraint. The Bellagio meeting added credibility, but every multiplier in an upside scenario requires royalty acceleration. This company has spent 26 years one or two quarters away from an inflection point. The discipline that says “we want to see it in the numbers” is what keeps you from owning ENW four years ago at C$0.50 instead of now at C$0.23 with the catalysts visible. Watchlist with sharpened triggers remains the right call.

Disclaimer/Disclosure: This write-up is not financial advice. We share our due diligence and investment decisions that are right for us, but we have no idea how it might fit your investment parameters. The author has a position in EnWave.

Setup Update

CEO Charleton at the recent Q2 earnings call cited BranchOut Food (BOF) and other partners building inventory ahead of expected sales growth, with the timing aligned to mass-retail SKUs hitting shelves in September. Last week, BranchOut Foods announced its largest retail win ever, with a five-SKU branded launch at a major U.S. mass retailer (Target - TGT) beginning in September 2026.

CEO Charleton was visibly pleased during our meeting and framed it as the breakthrough EnWave’s entire commercial scale-up has been working toward. The implication for EnWave’s base royalty line, which has been declining for eight straight quarters, is a potential step-up in the upcoming quarters.

My pre-Vegas write-up centered on EnWave’s fragmented royalty stream bottleneck: the business development model was dependent on a customer technology innovation. What we are seeing now across multiple verticals is a shift in business development models toward relationship-building. Danna Dunnage joined as VP Global Sales & Business Development in July 2024, bringing her senior-level experience and now producing a high-caliber, multi-vertical funnel that EnWave has never had before.

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We loved chatting with CEO Adrian Mendes from Perimeter Medical Imaging AI! We hope you enjoy!

Kicking The Tires

We are adding three stocks to our watchlist/. All three are very early in the investment cycle. One is not trading publicly yet, another is pre-revenue, and the third has not completed its reverse merger.

Juno Industries — Not yet publicly traded.

Juno Industries was co-founded by former Canadian Minister of National Defense Harjit Sajjan, who serves as Executive Chairman, and technology entrepreneur Hunter Scharfe, who serves as CEO. The company is building autonomous robotic systems with AI-native command-and-control software and persistent sensor networks aimed squarely at Canadian and allied sovereignty and national security requirements.

Mr. Sajjan spent years as Canada’s top defense official and brings institutional relationships that are not easily replicated. Scharfe provides the technology execution side. Their senior advisor is Geordie Rose, founder of D-Wave Quantum (QBTS).

Juno raised a $3 million seed round in late 2025, followed by an oversubscribed $12 million round in May 2026, completed in connection with a reverse takeover (RTO) of the TSX Venture-listed capital pool company Trail Blazer Capital Corp. The RTO remains subject to exchange and shareholder approval with no listing date confirmed.
The company’s first disclosed product is Polar Nexus, an autonomous communications and surveillance platform developed in a joint venture with Critical Infrastructure Technologies Ltd. (CITLF), targeted at Arctic and other harsh-environment deployments.

Why it could matter for MCO: The Canadian defense technology sector is converging in ways that should channel meaningful capital toward companies like this. The TAM is enormous, and the company pedigree is exceptional.

MBody AI (MBAI)

MBody AI is a Las Vegas-based company founded in 2024 that specializes in embodied artificial intelligence. Its product is the MBody AI Orchestrator, a hardware-agnostic software platform that deploys, manages, and optimizes autonomous robot fleets for enterprise operators across all industries. The platform handles deployment optimization, predictive maintenance, and full-fleet coordination under long-term subscription agreements.

MBody AI is expected to complete a merger with Check-Cap Ltd., a Nasdaq-listed company, in the next few days. The combined company will trade as MBody AI on the Nasdaq Capital Market when the initial listing review is completed.

MBody AI has reportedly converted at least one Fortune 500 gaming and hospitality operator from a single-site pilot into a multi-property deployment. The revenue model is subscription-based under long-term agreements, which, if durable, creates compounding recurring income as deployments widen.

Why it could matter for MCO: Robots operating in the real world under AI orchestration are becoming a commercial reality. The hardware-agnostic model is appealing because MBody AI doesn’t need to win the robot hardware race; it needs to become the software layer on top of whoever wins it.

Replenish Nutrients — (ERTH.V) (VVIVF |

Replenish is a Canadian company with a patented, chemical-free, zero-waste process for manufacturing granulated and pelletized regenerative fertilizer. The products combine essential macro- and micronutrients with biological material to restore soil biology while delivering crop yields equivalent to or better than those of conventional synthetics. The company was formerly known as EarthRenew and rebranded in 2023 to reflect its pivot away from power generation and toward fertilizer IP.

The business runs on two layers. Direct production at its Beiseker, Alberta, facility is ramping toward 2,000 metric tons per month by Q3 2026, with targeted gross margins of 25–35%. Q1 2026 results demonstrated 29% gross margins on granulated fertilizer, proving that the unit economics work at commercial scale.

The more interesting layer is licensing. Replenish has signed two royalty agreements under which third-party operators build and fund their own facilities using Replenish’s IP and pay approximately $40–60 per ton for every unit produced. A deal with Farmers Union Enterprises covers a 95-year-old U.S. cooperative with reach across roughly 70 million acres in five Midwest states, with initial facility capacity of 50,000 tons per year scalable to 100,000 tons, implying annualized royalty revenue of CAD $2.8–8.2 million from a single agreement.

MJ Ag Solutions in Northern Alberta adds an 8,000 tons/year royalty stream. Both are targeting initial production in Q3 2026. A Hutterite colony partnership at Beiseker adds another 1,000 tons per month of pellet capacity.

The challenge is the balance sheet. Dilution risk is ongoing until royalty and production revenue scale materially.

Why it could matter for MCO: This is a classic capital-light patented IP licensing model setup hiding behind an agricultural ticker. If Q3 2026 delivers on the production ramp and the royalty switches turn on as guided, Replenish crosses a profitability inflection point against a market cap that has priced in essentially none of it. It is a potential Multibagger if licensing accelerates.

THE FULL MEETING LIST

BioSyent — (RX.V) (BIOYF)

Watchlist write-up

BioSyent is a specialty healthcare company that acquires or in-licenses pharmaceutical and oral health products already proven safe and effective in other markets, then navigates Health Canada approval and commercializes them through its Canadian sales infrastructure. Clinical development risk is essentially eliminated. The portfolio includes FeraMAX Pd (Canada’s number one oral iron supplement among doctors and pharmacists), Tibella, Inofolic, RepaGyn, and several other niche specialty products across community pharmacy, hospital, and specialist channels.

In March 2026, BioSyent expanded meaningfully with the acquisition of Oral Science Inc., a Canadian distributor of specialized dental hygiene and oral health products to dental clinics and consumers, adding nearly C$3 million in revenue in its first consolidated month alone. Q1 2026 consolidated revenue was C$13.9 million, up 27% year over year. In May 2026, Health Canada approved Thyconvi, the first and only levothyroxine oral solution in Canada. BioSyent holds the exclusive Canadian license,

The balance sheet carries substantial cash and essentially no debt. The company pays a quarterly dividend of C$0.055 per share. chronic patient population.

Why it matters to MCO: This is a profitable, capital-efficient company with an exclusive licensing moat for each product and an established network of physicians and pharmacists that takes years to replicate. The Oral Science integration has the potential to scale this company into Multibagger territory.

BranchOut Food — (BOF)

Watchlist article

BranchOut is a Bend, Oregon-based food technology company producing patented GentleDry™ dehydrated fruit and vegetable snacks and ingredients using EnWave’s licensed REV™ technology. Products include avocado chips, banana bites, pineapple chips, bell pepper crisps, and a growing range of private-label and industrial-ingredient lines. Distribution includes Walmart and Costco. The company holds 17 patents and has exclusive global rights for certain product categories on REV machines.

Q3 2025 was a breakout quarter with record production of 38,500 kg in September, reaching a $16 million annualized run rate at breakeven. Q1 2026 revenue was only $4.01 million.

Why it matters to MCO: The company committed to a fourth EnWave REV 120kW machine to meet 2026 demand and secured exclusive global rights for dragon fruit production using REV technology. A $30 million revenue target for 2026 has been established by management.

Cybeats Technologies — (CYBT.V) (CYBCF)

Watchlist article

Cybeats is a software supply chain security company built around Software Bill of Materials (SBOM) management. Their flagship platform, SBOM Studio, gives enterprise customers end-to-end visibility into the software components embedded in their products and third-party applications, enabling compliance, vulnerability tracking, and risk management across complex digital supply chains.
SBOM mandates are becoming regulatory reality across defense, healthcare, automotive, and critical infrastructure in both the U.S. and internationally.

Full-year 2025 revenue was C$2.85 million, up 47% year over year. Q1 2026 revenue of C$763K was up 12%. Management has guided toward $5 million in recurring revenue by Q2 2026. Recent wins include a global automotive parts manufacturer and a major enterprise deal with a global industrial software leader for critical infrastructure compliance. A June 2026 SEC registration statement filing signals preparation for a U.S. uplisting.

Why it matters for MCO: Cybeats is one of the few pure-play SBOM platforms with a commercial track record and enterprise-grade deployments.

EnWave Corporation — (ENW.V) (NWVCF)

Watchlist article

EnWave developed and patented Radiant Energy Vacuum (REV™) dehydration technology, a vacuum microwave process that dries food products faster, at lower temperatures, and with better nutrient and texture retention than conventional methods. EnWave sells large-scale REV machines to food, pharmaceutical, and cannabis producers and earns royalties on every unit of product those partners produce. The royalty base is the long-term value driver, while equipment sales provide near-term revenue with inherent lumpiness.

Q1 2026 revenue was C$1.6 million, up 36% year over year, with gross margins expanding to 37% from 29% as the royalty mix improved. Q2 2026 softened to C$1.16 million on fewer machine sales. The full-year fiscal 2026 royalty revenue target is C$2.3 million.

Why it matters to MCO: A Technology Evaluation and License Option Agreement was signed in May with a global packaged food company with revenues exceeding US$20 billion. If that evaluation converts to a commercial license, it would be the largest partner in EnWave’s history and transformative for the royalty base.

NeuroOne Medical Technologies — (NMTC)

Watchlist writeup

NeuroOne develops thin-film electrode and neural interface platforms for the diagnosis and treatment of neurological disorders. Their portfolio includes four FDA-cleared devices, with the OneRF Trigeminal Neuralgia Ablation System as the lead commercial product. A drug delivery platform targeting glioblastoma and epilepsy is accelerating toward commercialization.

Q2 fiscal 2026 product revenue was $2.4 million, up 72% year over year, with 53.8% gross margins. Full-year fiscal 2026 revenue is guided at a minimum of $ 10.5 million.

Why it matters for MCO: The company has several shots at the Multibagger goal. The company has one exclusive partnership and is aiming to establish others.

Paragon Advanced Labs — (PALS.V) (PAVLF)

MCO Portfolio — Multibagger Initiated May 2026 @ C$3.55

Paragon is a Toronto-based operator of PhotonAssay™ technology. which is threatening to displace centuries-old fire assay as the industry standard. PhotonAssay is faster, more accurate, non-destructive, and eliminates the toxic chemicals inherent to fire assay. Paragon and its technology partner, Chrysos Corporation, are the only pure public plays on PhotonAssay. The thesis is a replacement-cycle story: as the global mining industry gradually transitions to PhotonAssay, Paragon serves as the contract lab operator, capturing that volume under a per-sample fee model.

Q1 demonstrated that the thesis is tracking. Paragon is working on a single contract worth C$8 million or more in annualized revenue that was expected to reach full throughput in Q2, and management reported a record April — 40% above any prior month — while guiding the remainder of 2026 to track near that level. Capacity expansion is accelerating on multiple fronts: the Thunder Bay facility opened in April 2026 and is ramping up throughput; investments in sample prep at Timmins and Sparks are ongoing; and a significant geochemical capacity expansion at the Sparks, Nevada, laboratory is nearing completion and is expected to more than double geochemical analysis throughput.

The balance sheet remains the primary risk. Cash was C$635K at Q1 quarter-end with a C$9.06 million working-capital deficiency and a going-concern note. Management bridged it with the USD $4.3 million May 2026 sale of its McEwen Inc. treasury share position. That buys time, but does not eliminate the funding risk — which is higher than our original thesis assumed.

Why it matters for MCO: What the quarter did not challenge is the replacement-cycle case, the moat, or the demand. The C$8 million contract is ramping on schedule, and April’s record throughput is the data point we needed most.

Perimeter Medical Imaging — (PYNKF) (PINK.V)

MCO Portfolio — Multibagger
Initiated March 2026 @ C$0.41

Perimeter makes the CLAIRE™ system, an intraoperative ultrasound imaging platform that allows surgeons to assess surgical margins in real time during cancer excision procedures, with breast cancer as the lead indication. The device addresses a large, documented clinical problem: roughly 20–25% of breast-conserving surgery patients require a second surgery due to positive margins. Real-time intraoperative imaging solves that directly.

Why it matters for MCO: Q1 2026 was a landmark quarter with the first commercial CLAIRE placements and confirmation of the CMS reimbursement application filing.

SANUWAVE Health — (SNWV)

Watchlist write-up

SANUWAVE makes UltraMIST, an FDA-cleared directed energy system that treats chronic non-healing wounds, including diabetic foot ulcers, venous leg ulcers, and pressure injuries, using low-frequency ultrasound delivered through a saline mist. It bills under CPT code 97610, a stable Medicare reimbursement rate that is materially unchanged for 2026.

CMS slashed reimbursement for skin substitutes — the dominant advanced wound care modality — by 90–95% in its 2026 rule changes, sending competitors toward major revenue haircuts and, in some cases, toward exit. UltraMIST sits entirely outside that disruption. The dislocation damaging competitors is a genuine tailwind.

The business model is razor-razorblade. SANUWAVE places generator systems with wound care centers, hospitals, and long-term care facilities, then earns recurring consumables revenue on the single-use applicator used in each treatment. Installed base reached 1,292 active systems as of Q4 2025, with 255 systems placed in Q4 alone — 72% year-over-year placement growth. Consumables accounted for approximately 58% of full-year 2025 revenue and grew faster than hardware. Full-year 2025 revenue was $44.1 million, up 35% year over year, at 77%+ gross margins and $13.6 million adjusted EBITDA. Q1 2026 revenue was $9.6 million — the highest Q1 in company history — and full-year 2026 guidance is $51–55 million. UltraMIST was also added to the Healogics iSupply GPO, expanding access to wound care centers and skilled nursing facilities nationally.

Why it matters for MCO: At a roughly $175 million market cap, this sits at the upper end of MCO’s typical entry zone, but the business quality is high and the competitive moment is appealing.

TAT Technologies (TATT)

MCO Portfolio — Steady Eddie
Initiated January 2026

TAT Technologies is an Israeli aerospace and defense company providing products and services across four segments: OEM of heat transfer solutions and aviation accessories, MRO services for heat transfer components, MRO services for aviation components, and overhaul and coating of jet engine components. Customers span commercial airlines, OEMs, and defense agencies in the U.S., Israel, and internationally.

Full-year 2025 was a record year — revenue of $178 million, net income of $16.8 million, and adjusted EBITDA of $25.5 million, marking a third consecutive year of growth with margin expansion across all profitability measures. The backlog and long-term agreements ended 2025 at approximately $550 million, up from $429 million, providing strong multi-year revenue visibility. Cash was $51.3 million, and shareholders’ equity was $176.4 million. Q1 2026 saw a slight revenue dip due to supply chain issues, but management reaffirmed expectations for record demand and significant full-year growth in revenue and EBITDA.

Why it matters for MCO: The stock has approximately doubled since our January 2025 initiation at $25.31. Three consecutive years of record revenue, expanding margins, a $550 million backlog, and exposure to both the commercial aviation MRO cycle and defense spending tailwinds make it a keeper in our portfolio.

Thermal Energy International — (TMG.V)| (TMGEF)

Watchlist write-up

Thermal Energy provides energy-efficiency and carbon-emission-reduction solutions to Fortune 500 and large multinational industrial companies. Core offerings include proprietary heat recovery systems and GEM steam trap technology that help large manufacturers reduce fuel use and carbon emissions.

Q2 fiscal 2026 was the best quarter in company history: record revenue of C$10.2 million, up 18% year over year, adjusted EBITDA tripling, net income up 20x. Q3 2026 continued with revenue up 62% to C$9.4 million. Trailing twelve-month revenue approximately C$33.3 million. Order backlog was C$16.3 million as of late April — strong near-term visibility. Essentially no bank debt.

Why it matters for MCO: The company is revving up the commercialization of a unique product.

We will be updating all of these stocks after the conference.

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In our mock portfolio, of our 8 open positions, 4 have over 60% gains YTD.

Congrats to those who have been holding some of these gems where the story resonated with you personally. These are some really great companies executing well.

Six of eight positions are in the green from entry, with WYY now up +201% and NRXS up +133%. PYNKF (-22%) and PALS (-22%) are the two positions currently underwater. Both are recent adds with thesis-defining catalysts in the near-term pipeline that the market has not yet priced in.

The Multibaggers

NeurAxis (NRXS)

Added 8/17/24 @ $3.18
Last Closed @ 7.41 +133.0%

NeurAxis reported its first full quarter of post-CPT-Category-I commercialization on May 13. Key takeaway:

• Revenue of $1.61M, +79.5% YoY, the seventh consecutive double-digit growth quarter.

• CEO Carrico introduced a formal KPI framework that the company will report each quarter going forward: ASP $1,017 (+33% YoY, against a $1,195 list), 101M covered lives, prior-authorization approval rate 32% versus 12% in 2025 (the step change), 66 ordering accounts, and revenue per account $24K (+53% YoY).

• At a 100% PA approval rate, Q1 would have generated $4.6M of revenue. That is $18.3M annualized already in the pipeline, waiting for coverage to unlock it.

• Cash $8M, burn improving to $1.2M/qtr. and guided to $1M or less.

On May 20, we published the VA Ramp framework: 7M VA patients × 3% functional dyspepsia × $4K per veteran = $840M theoretical TAM. Benchmarked to electroCore Quell, NRXS economics scale at 8× Quell at FSS pricing, with zero direct competition. Even 0.25% penetration in 2026 adds $2M that no analyst is yet modeling.

The technical picture looks great. Slow stochastics, RSI, and MACD are indicating oversold conditions, while the stock price is riding on support from the rising 50-day moving average.

We are looking forward to:

• Q2 earnings in August

• PA approval rate trajectory

• VA revenue stream added

• ASP toward $1,100

• New major payer policy announcement.

Perimeter Medical Imaging AI (PYNKF) (PINK.V)

Added 3/30/26 @ C$0.41

Last Closed @ C$0.42 -22%

Perimeter reported Q1 2026 on May 28. CEP Adrian Mendez confirmed on the earnings call that the company is filing a CMS reimbursement application “within days.” The mechanism is the MEARIS NT-APC process under Breakthrough Device Designation. A June filing produces a January 1, 2027, effective date with an outside chance of October 1, 2026. This pulls the dedicated reimbursement code 12-18 months ahead of the 2028 timeline analysts had been modeling. No prior earnings call, press release, presentation, or analyst note had mentioned a CMS pathway in motion.

The Claire system commercial rollout began in April, following the Q1 reporting period, but we learned that two Claire systems are already installed at existing S-Series customers. VP Sales Abbey Goodman walked through a funnel of close to 50 qualified leads, 12+ in active pipeline stages, balanced between S-Series upgrades and brand-new accounts.

The stock has not yet responded to the reimbursement disclosure, as we are down 22% from entry. As we saw with NRXS and the CPT Category 1 code, markets sometimes don't react to a reimbursement catalyst until the effective date itself. We may see this development included in the analyst’s research updates.

The stock price rallied in March on news of FDA approval, but has since retreated to previous levels. We anticipate new Claire placement announcements and developments regarding medical insurance reimbursement that will propel the stock higher.

.
New Horizon Aircraft (HOVR)

Added 3/23/26 @ $1.72
Last Closed @ $2.93 +70.3%

We featured three articles on this stock this month, tracking a busy stretch. On May 6, HOVR priced a $20M registered direct at $2.15 (covered May 12). The stock dropped 22% on the news, found a floor at the deal price, and recovered. We wrote that management acted from strength, not weakness, as the stock price had increased 91% YTD.

On May 21, HOVR announced a dual-use certification milestone with Cert Center Canada (3C), the only independent Transport Canada DAO. The stock spiked 25% intraday to $3.10. The underlying theme moving the stock is Ottawa's Defense Industrial Strategy, launched in February 2026, to buy Canadian aircraft. HOVR's Cavorite X7 now has defense-grade certification embedded from inception.

On May 26, HOVR announced another $25M capital raise. Insiders signed lock-ups across the board. Use of proceeds contractually constrained to fully fund the X7 prototype through testing, certification, and commercial production. The stock rose 27% on the news. The positive market reaction reflected recognition that the new funding removed the dilution overhang that we all knew was coming.

The technical picture has been volatile, but the stock price remains above the long-term trend defined by the 200-day moving average and the short-term trend defined by the 20-day moving average.

We are looking forward to a manufacturing partner announcement, the completion of the full-scale prototype, and whether the Defense Industrial Strategy translates into a named procurement program.

WidePoint (WYY)

Added 11/14/24 @ $3.75 as Steady Eddie, promoted to Multibagger 4/26/26 on $57 PT
Last Closed @ $11.29 +201.1%
Q1 2026 results were reported on May 14. Operating leverage is starting to show up in the numbers. Key takeaways:

• Revenue $40.6M, +21% YoY.

• Adjusted EBITDA $752K (vs $92K)

• Free cash flow $674K (vs $65K), and net income $77K. The first GAAP-profitable quarter since 2021.

The stock price is currently in overbought territory, but it can remain there for an extended period. We expect a major movement when the CWMS decision is announced.

CWMS 3.0 was extended again, but only by one month, to June 24. CEO Kang signaled "the contract award in the next few weeks." The Big-3 carrier implementation remains on track for 2H 2026. CEO Kang confirmed initial discussions have opened with the other two Big-3 carriers. Our $57 PT framework is intact.


Paragon Advanced Labs (PALS.V) (PAVLF)

Added 5/11/26 @ C$3.55)
Last Closed @ C$ 2.76 -22.3%
Initiated this month as the newest Multibagger. Paragon is a PhotonAssay pure-play. PhotonAssay is a commercial threat to fire assay, the mining industry standard. Three machines are operational today, with twelve expected by mid-2027, controlling 20% of the contracted global PhotonAssay fleet. Our 12-month PT C$8 (+150%), 24-month C$12 (+275%), 3-year Multibagger case C$22–30.

On May 22, PALS filed its first public Q1 report, which we recapped on May 25. Key takeaways:

• Revenue beat at C$2.21M (slight beat versus C$2.2M guide). +21% sequential and +22% YoY.

• The C$8M annualized contract is ramping up on schedule and will reach full throughput in Q2.

• April revenue was 40% above any prior month, and management guided the rest of 2026 to track near April levels.

Liquidity is tighter than I represented at initiation, with cash reported at C$635K at quarter-end, a C$9.06M working-capital deficiency, and a going-concern note. Management bridged the gap with the US$4.3M May sale of treasury McEwen Inc. shares. The stock has traded down to C$2.76 since initiation — we are down 22% in 18 days, and the entry print looks expensive, but the thesis remains intact.

The stock dropped 41% from its high after reporting as a going concern, but it is now oversold and should stabilize and establish an uptrend as it executes its strategic development plan.

We are looking forward to a Q2 revenue ramp clearing the C$1.5M monthly EBITDA break-even line, gross margin turning positive as volume covers PhotonAssay depreciation, and Mexico (4th) machine deployment.

The Turnarounds

Electrovaya (ELVA)

Added 3/30/26 @ $7.24
Last Closed @ $11.69 +61.5%
Q2 FY26 was reported on May 14. Key takeaways:

• Revenue $18.0M (+20% YoY)

• Gross margin 33.4% (+230 bps)

• Adjusted EBITDA $2.8M (15.7% of sales)

• Operating cash flow $4.3M. Fifth straight profitable quarter.

• We raised our price target from $12 to $14 — 20% upside from today's $11.69 close and 93% from entry.

The strategic shift announced on the earnings call is the reason for our more optimistic outlook. CEO Raj Das Gupta described energy storage systems (ESS) as the company's most significant development initiative and characterized the company's posture as "going all in." The target is not commoditized 2-4-hour grid storage; it's high-power, mission-critical, short-duration ESS leveraging the same ceramic separator and Infinity Platform proven in forklifts. Hyperscaler conversations are active, FEOC-compliant U.S. manufacturing is scarce, and there's a built-in cross-sell from existing inside-the-building customers.

The StoreDot hire (Nir Haimovich, head of product design at the Israeli fast-charging cell developer) and a DOE-funded critical-infrastructure project confirm that the ESS pivot is real. Robotics has emerged as a surprise #2 vertical, with two AMR OEM customers validated and the niobium-oxide platform shared with ESS (manufacturing-scale advantage). Defense delivered two contractor shipments in the quarter; solid-state development accelerated post-dry-room install.

The Jamestown gigafactory is being rigorously de-risked, with the entire cell line run end-to-end in Korea during a 6-week Factory Acceptance Test (FAT) starting in late summer before shipping to Jamestown.

We are looking forward to Korean FAT completed without surprises, tightened backlog disclosure that breaks out the non-material-handling growth verticals (as we explained here), and the first named ESS customer.

Cematrix (CEMX.V)(CTXXF)

added 2/22/26 @ C$0.38)
Last Closed @ C$ 0.52 +36.8%
Q1 2026 was reported on April 29. Key takeaways:

• Revenue C$7.3M, +11%.

• Working capital swing of +C$5.2M from AR collections.

• 9% gross margin (versus 22% in Q1 2025), which management attributed to project mix on more large projects that front-load setup costs before billing catches up.

• Forward demand is intact. New contract awards announced in Q1 totaled C$17.0M (C$7.1M January, C$5.2M February, C$4.7M March) — supporting management's guidance for a record Q2.

• The NCIB was renewed on April 14 (10% of float through April 2027). The previous NCIB bought 1.48M shares at a weighted average of C$0.33. The buyback provides bottom support on weakness.

• C$15.7M cash, no long-term debt.

• At today's C$0.52 close, analyst consensus PT C$0.75 implies +44% from current and +97% from entry.

The stock price is oversold as it tests the uptrend support.

We are looking forward to record Q2 revenue and gross margin normalization toward 25%. Lafarge distribution renewal is the single biggest near-term catalyst. Continued US revenue mix shift. Potential M&A.

STEADY EDDIES

TAT Technologies (TATT)

Added 1/7/25 @ $25.31
Last Closed @ $43.31 +71.5%
Q1 was reported on May 20. Key takeaways:

• Revenue $41.1M (in line with Lake Street)

• Backlog at a record $580M

• Operating cash flow swung from -$5.0M to +$1.9M.

• Our $57 PT is maintained, implying +31% upside from today's $43.41 close.

Management confirmed the supply bottleneck as a two-prong situation. The APU problem is a single Tier-1 Honeywell ERP migration issue, with resolution targeted to H2 2026. Landing gear is a separate, still-unresolved front in the supply chain. TATT exited Q1 with $15.5M in APU and landing gear open work orders on the shop floor, waiting for parts.

Where TATT is able to control its own supply chain, such as for heat exchangers, it achieved 97% on-time delivery, +29% YoY in trading/leasing. APU intake hit a record, so the quarter ended with more contracted work than it started.

Management spent more time on M&A than in any prior call. Active engagement with targets, PE firms, and advisers, with at least one deal targeted in 2026 but "not in a rush." PMA (parts manufacturer approval) and vertical integration ideas are now under review.

We are looking forward to the resolution of the landing-gear issue, information on the 131 program pipeline, and confirmation on whether M&A has moved from sourcing to diligence.

Conclusion

The MCO framework —durable moat, large TAM with limited direct competition, credible path to profitability, qualified leadership with a reasonable business plan—continues to deliver. Average return since added across the eight positions is +66.2% over an average holding period of 252 days, annualizing to +108.8%.

Near-term named catalysts to watch: the formal PYNKF MEARIS filing press release within days, the CWMS 3.0 award decision by June 24, the HOVR manufacturing partnership, PALS Q2 ramp clearing EBITDA break-even, first Claire procedures at PYNKF, and CEMX Q2 gross margin normalization.

We have 14 companies on our meet list, including three current MCO positions (TATT and PYNKF) and one we initiated this month (PALS), for The Planet MicroCap Showcase Las Vegas conference, June 16-18, at the Bellagio. We will have conference notes and follow-up write-ups in the weeks that follow.

Disclaimer - The MCO portfolio consists of microcap stocks we invest in. Our write-ups reflect our investment ideas, not financial advice. We are not qualified investment professionals, and we have no regard or understanding for your investment risk tolerance or objectives. Do your own due diligence

During the Q&A, Paradigm Capital’s Scott McAuley asked about key catalysts for the balance of the year. CEO Mendes responded, “We are working on reimbursements; we’re getting ready to launch an application with CMS here in the next few days with the hope that it gets into place by early next year. We’re feeling pretty good about that process. There’s an interactive period with CMS over the next few months as that application goes through. We have Breakthrough Device Designation, which helps our ability to get to a reimbursable state much quicker than if we did not have that.”

This is the first time Perimeter has publicly discussed a reimbursement strategy. Not in any prior earnings call, press release, investor presentation, or analyst note has the company disclosed that it was actively pursuing a CMS reimbursement application. This is new information, and it confirms the thesis we have been developing.

Due to the Breakthrough Device Designation, the Claire device is eligible for CMS coverage under the MEARISTM NT-APC process we described in detail in our prior coverage. The MEARISTM quarterly schedule with a June filing will result in an effective date of January 1, 2027. It is possible, but unlikely, that the effective date could be October 1, 2026. Either date is 12–18 months ahead of the 2028 assumption the market has been pricing. And as of today, it is confirmed as company strategy, not MCO speculation.

Pricing

Analyst McAuley asked directly about Claire’s pricing. CEO Mendes’s response was:
“It’s going to be relatively higher, significantly higher, let’s say, than the S-Series pricing. We’re not talking about specific pricing at this point as we are testing out the market. You’ll start to see a significant uplift in our revenue model and our margins based on the pricing of the new product.”
Perimeter is in active price discovery, quoting different numbers to different hospital systems and watching where deals close. This is standard early commercialization practice for novel medtech devices. The initial placements are the data points they will use to calibrate.
“Significantly higher” means that our $2,000 modeling assumption is reasonable. However, we should note clearly that Perimeter has not confirmed a per-procedure price. The actual number may be higher or lower, but we can expect, as CEO Mendes said, “a significant uplift in our revenue model and our margins.” The Claire consumable likely carries gross margins materially above those of the S-Series because the value it delivers in the AI algorithm has near-zero marginal cost.

The AI Algorithm: Already Better

Raymond James analyst Michael Freeman asked about the Predetermined Change Control (PCCP) and future AI improvements. CEO Mendes answered: “The version of the software that we ran the trial on is what we call ImgAssist AI 2.0. We got approval in early March, and by late April, we had our next-generation version available and on the machine. In fact, that’s what we demoed at the ASBrS conference. We made great improvements — 20%–25% improvements in both sensitivity and specificity as we went from the algorithm that was in the trial to what we now have on the machine.”
The device that received PMA approval demonstrated 88.1% margin accuracy in the pivotal trial. The device that surgeons saw at the American Association of Breast Cancer Surgeons (ASBrS) conference is already 20–25% better across both key performance metrics, finding more true positives and generating fewer false positives.

The AI does not freeze at approval. It improves continuously within the pre-approved change control parameters. Every procedure performed generates new images that train the next model iteration.

Commercial Update

The first two Claire placements were confirmed from existing S-Series accounts. The reported sales funnel is 50 qualified leads, with 12 in active stages. The sales team structure was revealed by Abbey Goodman, VP of Sales, in her inaugural investor call. She disclosed a three-tier commercial organization:

• Market Development (capital sales and demand creation)

• Clinical Sales Specialists (account management post-install)

• Clinical Application Specialists (OR case coverage).

CEO Mendes said Q2 is “right on track.” It will be the first quarter with any Claire procedure revenue in the financials.

Q1 financials

Overall revenue declined year over year, but this is entirely explained by the absence of a one-time capital equipment sale in Q1 2025. On a recurring revenue basis, growth was 20% year over year. Operating expenses were reduced by 30%. The Claire commercial rollout began in Q2. Overall, it was positive to see recurring revenue rise without a drop-off from customers waiting for the Claire model to be available.

Reimbursement

A January 1, 2027, NT-APC effective date means:

• Q1 2027: The first Medicare and Medicare Advantage claims for Claire procedures are submitted with the new HCPCS code. The 50% of lumpectomy patients covered by Medicare are fully reimbursed.

• Q1–Q2 2027: Major commercial payers, UnitedHealth, Anthem, Cigna, and Aetna, will open formal medical policy reviews citing the CMS determination. The “experimental/investigational” denial basis evaporates, and plans begin adopting coverage on a plan-by-plan basis.

• Q3–Q4 2027: Commercial payer coverage policies finalize. The majority of the remaining commercial population enters active coverage determination.

Near-term catalysts

• CMS application confirmation — a press release announcing the MEARISTM filing, expected within days per the CEO’s statement. This is the first formal public disclosure of the reimbursement process.

• The first Claire procedures. The first commercial case announcement could come any day.

• Q2 2026 financials — the first quarter with Claire ASP visible in the revenue line.

• Additional Claire placements — Each announcement builds the commercialization proof of concept.

• Social Capital debenture closing — the remaining ~$2M from Social Capital closes out the financing, bringing total liquidity to north of $9.5M, plus revenue.

• January 1, 2027, NT-APC (or earlier) effective date. Sometimes markets respond after the fact. Investors in NeurAxis, for example, did not see the market respond to the news about the Cat 1 reimbursement code until after the effective date.

Conclusion

Tonight’s call confirmed: two Claire placements completed, 50-lead funnel building, AI algorithm already 20–25% better than the trial data, pricing “significantly higher” than S-Series with a strong margin profile, and — most importantly — a CMS reimbursement application being filed within days, targeting January 1, 2027.
The analysts covering this company asked the right questions tonight. We are looking for them to adjust their mapping of how reimbursement will work out and what it means in accelerating the sales process.

Disclaimer: This is not intended as investment advice. Do your own due diligence.

Read more

The Terms

Horizon priced a $25.0M registered direct offering that closed on or about May 27. The terms:

• Total: 9,960,160 shares/share-equivalents at $2.51, split into 5,385,646 common shares plus 4,574,514 pre-funded warrants (exercise price $0.001, immediately exercisable, no expiration.

• 45-day company standstill from closing (roughly through mid-July): no new equity issuance or registration statements, subject to customary exceptions.

• Officer/director lock-ups signed by Brandon Robinson, Jason O’Neill, Brian Merker, Trisha Nomura, John Maris, John Pinsent, and Jameel Janjua.

• Use of proceeds, contractually constrained: fully fund the Cavorite X7 prototype and advance toward testing, certification, and commercial production, explicitly not for debt repayment, share redemptions, or litigation settlement.

Why The Raise is a Positive Development

It is rare to see a stock price rally on a discounted capital raise. The new funding strengthens the investment thesis:

• Raising enough to fully fund the completion of the prototype removes the overhang fear of having to raise again from weakness.

• The market will pay up for a funded milestone path that it had previously discounted due to dilution risk.

• The financing round was led by the Company’s largest U.S. existing shareholders.

• Nearly half of the offering (4.57M of 9.96M units) was sold as pre-funded warrants, which allowed insiders to buy above the 9.99% beneficial ownership cap.

The Board

The lockup agreement was signed by all of the members of the Board of Directors and the CFO. It does not mean that they each participated in the financing round, but that they each are supporting the round by agreeing to a lockup.

HOVR brings unusually deep expertise in flight testing and certification to its board. Three directors bring direct expertise:

• Brandon Robinson, Co-Founder and CEO, is a former Royal Canadian Air Force pilot.

• Jameel Janjua joined the board in November 2025. He is a current Virgin Galactic test pilot-astronaut, a former RCAF fighter pilot and instructor at the USAF Test Pilot School, with more than 5,500 hours flown across 65+ aircraft. He holds a B.Eng. from the Royal Military College of Canada, an M.S. from MIT, and an MBA from Wharton.

• Dr. John Maris holds a Ph.D. in Aviation Safety and Human Factors and is an inductee of the Canadian Aviation Hall of Fame. He joined the board in 2024 and was re-elected at the late-2025 annual meeting as a Class II independent director, with a term running through 2028. Per his most recent Form 4 filings, he directly holds 56,654 HOVR shares. Maris is the founder of Cert Center Canada (3C), the partner behind the May 21 dual-use certification announcement, which re-rated the stock by 25%. 3C is Canada’s only Transport Canada-approved independent flight-test and certification DAO, and Horizon’s certification partner for the Cavorite X7.

The other two independent directors are finance/governance rather than aerospace: Trisha Nomura (CPA/CGMA, audit committee chair; also on the board of Pono Capital Two) and John Pinsent (chartered accountant; founder of an Edmonton CPA firm; board member of Enterprise Group, TSX: E).

Conclusion

Horizon had 56,377,283 shares outstanding as of May 26, including the 9.25M shares from the May 6 raise. This deal adds 9,960,160 more (counting the pre-funded warrants), taking the fully diluted count to roughly 66.3M shares. We have absorbed roughly 45%+ dilution in about three weeks.
The market cap is now around $180M for a company with no revenue, no certified aircraft, and a prototype that is not yet complete. There will be more raises. Certification spending dwarfs prototype spending. The only question is whether management can continue to deal from a position of strength, as has been the case.

The market read the new financing round as validation. The deal structure, including pre-funded warrants and lock-up terms, confirms that insiders’ interests are aligned with those of shareholders.

We initiated HOVR at $1.72 on 3/23/26. At today’s price, we are up about 60%, having touched 100% at the spike before giving it back. That give-back is worth dwelling on. I declined to chase both the dual-use pop and the financing rally, and the stock has since pulled back 22% from its high. Patience will continue to be rewarded on HOVR’s current development path.

s.

The Setup

EnWave is a twenty-six-year-old Vancouver technology company with a simple business model. It builds and licenses vacuum-microwave dehydration machinery, branded Radiant Energy Vacuum REV), to food, cannabis, and pharmaceutical producers, then collects a perpetual royalty on what those producers dry.
The problem is that the model has spent twenty-six years almost working. EnWave today has 52 royalty-bearing commercial licenses across 24 countries and a genuine patent moat, yet the company is barely above breakeven in its best quarters and loss-making in its worst.

The stock is down 42% year-to-date, trading at C$0.23 with a C$27M market cap. The Q2 FY2026 quarter, reported May 21 with a call on May 22, was a poor one: revenue fell 69% year over year, and base royalties actually shrank. The central question for any investor is whether EnWave is finally approaching the royalty inflection it has promised for a decade, or whether this is simply the latest chapter in a perpetual “next year” story.

Why This May Be a Timely Look

Beneath the weak Q2 report sit two of the most encouraging strategic threads in the company’s story:

• BranchOut Foods (BOF) is demonstrably scaling in major retail. Management explicitly says BranchOut and other customers are building inventory ahead of expected sales growth. BranchOut Foods hit record monthly production in March 2026 and is guiding to its best-ever financial quarter. We covered BOF in a recent write-up.

  

• A path into pharmaceutical lyophilization, a vertical whose economics dwarf food through an advancing pharmaceutical partnership with GEA Lyophil (detailed below), a multi-year relationship referenced in the Q2 2026 MD&A. It remains early and unmonetized, but it is backed by years of development and independent validation by Merck. The market is currently assigning zero value to this development.

  

• Evaluation deals with one of the world’s largest food companies. EnWave signed a Technology Evaluation and License Option Agreement with a global branded-foods leader generating more than US$20 billion in annual revenue and distributing in 100+ countries across grocery, snacks, cereal, frozen, and convenience meals.

• The cannabis market is enjoying a resurgence in Europe, creating an opportunity for EnWave’s technology.

The risk/reward is starting to skew. A strong one- or two-quarter confirmation could move EnWave from our watchlist to our portfolio.

Company History

EnWave was founded in 1999 to commercialize vacuum-microwave technology developed at the University of British Columbia. Commercial milestones came slowly. Milne Fruit (later Milne MicroDried) became an early U.S. licensee in 2012 and remains the company’s longest-standing and, today, top royalty-generating partner. In 2012, Bonduelle, the French frozen-vegetable giant, signed an exclusive license for “dehydrofrozen” vegetables and commissioned the first commercial 120kW machine in 2015, but never scaled to the larger commitment. Over the years, a roster of marquee names, including Nestlé, Hormel, Merck, and the U.S. Army, was not converted into scaled, royalty-generating production. A pattern that recurs throughout EnWave’s history.
In 2017, Tilray signed as the marquee Canadian cannabis partner, with Aurora taking international rights and The Green Organic Dutchman sublicensing. The cannabis vertical was briefly the headline story before the sector collapsed, and the Tilray license was terminated in November 2020 (details in Risk section). During this period, EnWave also ran a wholly owned snack subsidiary, NutraDried, whose Moon Cheese® brand reached 20,000+ retail doors (Starbucks, Target, Whole Foods, CVS, and others) before commodity cheese inflation and margin pressure forced an orderly wind-down.

The Moon Cheese brand and equipment were sold to Creations Foods in March 2023 for US$2M plus a royalty-bearing license. EnWave is now purely a licensor and machine-builder, not a brand operator.

Products

The core technology. REV (Radiant Energy Vacuum) applies microwave energy under vacuum to remove moisture at low temperature. The vacuum lowers water’s boiling point, so moisture is drawn off quickly without cooking, oxidizing, or thermally degrading the product, yielding dehydration that is dramatically faster than freeze-drying, gentler than hot-air drying, and capable of solid formats that spray-drying cannot produce. The IP moat is 17+ patent families covering the process, machine design, and specific applications.

EnWave builds REV machinery at its Delta, B.C., facility in a tiered range, rated by microwave power (kW):

• 10kW — entry/pilot-scale batch units, used for R&D, product development, and small commercial runs. These are the “land” machines that seed a partner relationship, often via short-term rental or lease with a purchase option.

• 60kW — first true commercial-scale step-up; tray-based (quantaREV) or drum-based (nutraREV) configurations. List price $300K according to the investment deck.

• 100kW — large-scale; e.g., the 100kW nutraREV sold to BranchOut in 2024. List price $2.2M

• 120kW — the flagship continuous large-scale line. A single 120kW machine can process up to 105kg of wet biomass per hour, which EnWave has estimated yields roughly 92,000kg of dried finished product per year on a 16-hour day, 5-day, 50-week schedule. List price $3.2M.

• freezeREV® (pilot-scale) for pharmaceutical lyophilization

• powderREV® for cultures, probiotics, and enzymes.

• Terpene Max™ for the cannabis market.

• REVworx™ is a toll/contract-manufacturing facility housing a 10kW batch and a 60kW continuous line that lets consumer packaged goods (CPG) companies trial REV products without buying a machine.

Unit Economics

EnWave states its machinery is tariff-free, relevant given current trade friction.
The four revenue streams are:

• Equipment sales/rentals —machines sold at a target margin, typically with a deposit plus milestone payments during fabrication.

• Royalties — quarterly payments based on a percentage of partner sales, a per-unit production fee, or a fixed capacity-based amount; split between base royalties and exclusivity (minimum-threshold) royalties a partner pays to retain category/geographic exclusivity.

• Equipment rentals/leases — short-term pilot rentals under Technology Evaluation and License Option Agreements (TELOAs), many with purchase options.

• Toll manufacturing — fee-for-service production through REVworx.

Toll manufacturing has a $2 million capacity, and equipment sales and rentals account for over 80% of total revenue, per the investor deck. EnWave does not publicly disclose its per-machine COGS, or specific royalty percentages, which are confidential under each license agreement. Blended company gross margin runs in the low-to-mid 30s% (35% in Q2 FY2026), which spans both lower-margin machine fabrication and higher-margin royalties.

REV machines are industrial capital equipment built for continuous multi-shift, low-maintenance operation and limited downtime. As with any microwave system, the primary wear/consumable component is the magnetron (the microwave generator), which is periodically replaced rather than the whole machine; vacuum pumps and seals are the other serviceable parts. A REV line has a decade-plus of productive life with routine servicing and magnetron replacement, comparable to other industrial drying/processing equipment, and is not a frequently-replaced consumable. EnWave equipment revenue growth must come from new and expanding partners, not from replacement demand, because the royalty stream is close to pure gross profit once a machine is installed.

Customers

EnWave does not publish a ranked customer-concentration table, but its commentary and press releases identify the largest partners:

• Milne MicroDried, Nampa, Idaho — the longest-standing partner (since 2012) and explicitly EnWave’s top royalty-generating customer. Operates three large-scale REV lines; supplies dried fruit, vegetable, and now dairy (yogurt, cheese, mochi, Greek yogurt) ingredients to many of the largest global CPG companies. Continues to add machines and expand its license.

• BranchOut Food, production in Peru — the fastest-growing partner and the current commercial breakout. Operates four large-scale machines (60kW, two 120kW, and a 100kW), holds expanded global dragon-fruit rights, hit a record 46,000 kg monthly production in March 2026, and supplies branded, private-label, and bulk-ingredient dried snacks into the largest U.S. warehouse clubs and grocers.

• Bonduelle (France) — the original marquee food partner, commissioned a 120kW machine for dehydrofrozen vegetables but never scaled to its larger commitment.

• Patatas Fritas Torres (Spain) — a snack manufacturer that in February 2025 added capacity (100kW+), expanded its product portfolio, and increased minimum royalties.

• Mid-size partners — NuWave Foods (shelf-stable bakery), Hokkai Yamato (Japan; soups, furikake), Procescir (Mexico; 120kW), plus newer signings (The Dry Hub in Egypt, Dairy Concepts in Ireland, Teagasc, Bowen Gumlu in Australia).

Strategy

EnWave’s go-to-market is a “land-and-expand” funnel:

• Seed the market with low-cost 10kW pilot units (often rented under a TELOA with a purchase option)

• Convert that partner to a commercial license backed by a large-scale 60–120kW machine

• Collect compounding royalties as the partner scales production and distribution.

The model’s elegance is that EnWave monetizes at every step from rental and machine sale to perpetual royalty, while the partner carries the production capex and commercial risk.

Execution

EnWave has 52 licenses across 24 countries and roughly a dozen verticals, which sounds like a powerful network, but in a royalty model, the money is made on how much product partners actually dry and sell, not on how many partners have signed. A license at the 10kW pilot stage throws off almost no revenue. EnWave’s royalty streams are fragmented and incur high overhead costs for sales staff, global travel, and technical support, relative to the thin royalties generated by many small relationships. That mismatch is a core reason the company is barely profitable in good quarters and loss-making in bad ones.

The conversion from pilot to commercial scale is where the pipeline leaks. Most partners start with a single 10kW pilot and never commit capital to a 60–120kW production line, while several marquee partners saw their end-market thesis stall. Dehydrofrozen vegetables never broke out for Bonduelle, and cannabis collapsed for Tilray. The end product has to actually win at retail for EnWave royalties to compound, and BranchOut is the clearest case where this may be occurring. The bull case is that BranchOut proves the playbook is now repeatable.

The problem has never been that management has failed to recognize the need to scale for the business model to succeed. The question is execution. Can they actually drive volume at the anchor partners and convert the pipeline?

On the May 22 call, CEO Charleton said that expanding royalty revenue from existing partners is the “highest strategic priority” and laid out five near-term execution levers:

• License amendments that add product categories. The most repeatable lever. A partner licensed for one product receives an amendment granting rights to additional products and pays incremental minimum royalties for those products. MicroDried, for example, was amended to add dairy (yogurt, cheese), mochi, and Greek yogurt on top of its original fruit-and-vegetable license; Patatas Torres expanded its product portfolio with higher minimums. Each amendment lifts the royalty floor without incurring a new customer acquisition cost.

• Selling additional and larger machines to the same partner. As a partner’s volume grows, it buys more capacity. MicroDried now runs three large-scale lines; BranchOut went from one machine to four. Each machine sale is revenue and enlarges the royalty base.

• Geographic/territorial expansion. Extending an existing partner’s license into new countries or regions (or granting expanded global category rights, as with BranchOut’s worldwide dragon-fruit rights) grows the addressable royalty volume under the same relationship.

  

• Capacity-utilization ramp. Even without a new machine, royalties rise as a partner runs installed equipment closer to full utilization and secures more distribution. Management is pointing to partner inventory builds ahead of expected sales, as detailed in our BranchOut Foods write-up.

• Improve conversion of large-scale opportunities. The logic is to stop spreading effort across speculative verticals and steer pilots toward the categories where the pilot-to-commercial conversion rate is demonstrably higher.

• Cost discipline and capital efficiency. Build large machines on spec to compress the time between order and revenue recognition, and address the lumpiness of the business model. The spec-build is a double-edged version of this priority: it speeds fulfillment but consumes working capital.

• Co-manufacturing routing. Directing a new CPG partner’s volume to an existing licensee (the “ecosystem flywheel” ) raises that licensee’s utilization and pulls forward its next machine order.

The ecosystem flywheel is a notable refinement on display in the TELOA EnWave signed on May 22 with the global branded-foods leader. EnWave hosted the conglomerate’s R&D group, led product development, and connected the product to a current licensee likely to co-manufacture. The partner now has a commercialization path without having to buy its own machine. Rather than always selling a machine directly, EnWave increasingly acts as a matchmaker, co-developing a product with a CPG major, then routing the commercial production volume to an existing licensee that co-manufactures it.

Competitive Landscape

EnWave faces competition from other vacuum-microwave dehydration equipment makers, and the much larger universe of legacy drying methods REV is built to displace. It is the clear leader on the first front and a quality-advantaged challenger on the second.
Within vacuum-microwave dehydration, EnWave is the gold standard. Industry surveys of industrial microwave drying consistently rank EnWave’s REV™ platform first for food applications, and EnWave is the only company to have built a commercial-scale, royalty-licensed business model around the technology rather than simply selling equipment. The competitors are all public companies:

• Binder GmbH — Binder’s MIVAP microwave-vacuum system, like REV, produces high-nutrition, high-quality dried food. The key distinction is architectural and has kept the two largely out of each other’s way. EnWave uses a continuous rotating basket/drum design (nutraREV) and a tray system (quantaREV), while Binder uses a continuous tray system. Binder’s tray systems are optimized for fragile, high-moisture items or liquids (e.g., concentrated soup stocks) that would break down or spill in a rotating drum.

• Püschner GmbH - Operates as an equipment vendor without EnWave’s licensing/royalty model or its breadth of validated food partners.

• Sairem — Competes more as a components/power-systems specialist for bespoke builds than as a turnkey food-drying platform.

• Industrial Microwave Systems — Focuses on continuous-flow throughput rather than the low-temperature, high-value, quality-preservation niche where REV dominates.

Direct competitors sell a machine, while EnWave sells a validated, scalable, royalty-bearing platform. That installed base and application know-how is the real moat, reinforced by 15–17+ patent families. Against legacy drying methods, REV is a quality-advantaged challenger. The far bigger competitive battle is displacing the incumbent technologies most food and pharma producers already use:

• Freeze-drying (lyophilization) — the premium incumbent: excellent quality but slow (24–48+ hour cycles), enormously energy-intensive (10–15 kWh per kg of water removed vs. ~1–1.5 kWh for vacuum-microwave), capital-heavy, and batch-based. REV’s pitch is freeze-dryer-grade quality at a fraction of the cycle time and energy cost.

• Hot-air / convection drying — cheap, the default for jerky, raisins, herbs, and pet treats, but high heat oxidizes and degrades flavor, color, and nutrition over cycles that run days. REV wins decisively on quality and speed; it loses on absolute upfront cost.

• Spray drying — fast and cheap, but limited to liquids/slurries and powder output; cannot produce a crispy fruit chip or a structured snack. REV addresses formats that spray drying cannot.

• Drum drying — handles purees and viscous slurries with high thermal damage and limited input forms; same constraints as hot-air drying.

REV usually wins on quality against these methods.

The real challenge is overcoming switching inertia and the higher technical complexity of its machines in an environment where capital equipment buyers have been cautious. CEO Charleton explicitly cited a more cautious capital-spending climate during the recent call as a reason large deals have slipped.
EnWave’s fortunes are tethered to its partners’ success in their end-markets. The technology can win on the merits and still produce no royalties if a partner’s category collapses.

The Pharma Opportunity

EnWave is seeking to establish its technology in the pharmaceutical industry as a viable drying alternative to the standard method for stabilizing temperature-sensitive biologics and vaccines. and other injectable drugs through a multi-year partnership with GEA Lyophil GmbH, a global leader in pharmaceutical freeze-drying. EnWave’s freezeREV® platform targets lyophilization (freeze-drying), the standard method for stabilizing temperature-sensitive biologics such as vaccines, antibodies, and other injectable drugs. The economics of the pharmaceutical vertical dwarf food for three reasons.

• Lyophilization is brutally expensive. The hardware is costly and consumes a large amount of energy.

• Lyophilization is slow. It relies on two delicate, temperature-sensitive phases: sublimation (ice directly to vapor) and desorption (removal of bound water), which cannot be rushed without melting the product or causing structural collapse.

• Pharma royalties are high-value revenue streams in comparison to food licenses.

The current direction in the pharma lyophilization industry is toward energy efficiency and shorter cycles. EnWave’s freezeREV is designed to be added to, rather than replace, existing systems by targeting drying, the slowest, most energy-hungry step, by applying microwave energy under vacuum to collapse a multi-day cycle into a fraction of the time at a fraction of the energy. Microwave-assisted freeze drying: bolting REV onto existing lyophilization lines to accelerate them, rather than asking conservative pharma buyers to rip out validated freeze dryers wholesale.
EnWave’s advantage in this field is not that it owns patented microwave-vacuum technology that the incumbents do not; it also has independent validation from a top-tier pharma company. Merck became an EnWave research partner in 2015 to evaluate REV for vaccine dehydration and installed a 9kW REV machine at its Pennsylvania facility in 2018. Further developments have continued with Merck and GEA Lyophil:

• EnWave signed a Collaboration and License Option Agreement with GEA Lyophil in 2018.

• A formal Joint Development Agreement was signed in 2020 to scale up and integrate freezeREV into GEA’s equipment platform.

• Merck published peer-reviewed research in 2021 confirming that freezeREV produced results comparable to conventional freeze-drying in terms of uniformity and repeatability, with significantly shorter drying times and greater manufacturing flexibility.

  

• GEA purchased a lab-scale REV machine in 2023 to demonstrate the technology to prospective pharma customers and for internal development.

Peer-reviewed validation from Merck, plus a development partnership with a top pharmaceutical freeze-drying company, is a moat no rival microwave-drying vendor (Püschner, Sairem, IMS, Binder) has come close to building in pharma. GEA is one of the top-five lyophilization incumbents whose freeze-drying technology REV could eventually disrupt. Rather than be displaced by microwave-assisted lyophilization, GEA chose to partner to own the next-generation product.
EnWave brings the patented core technology. GEA provides EnWave with deep pharma engineering, regulatory familiarity, sterile-environment expertise, and an existing global pharmaceutical sales and service network. Under the arrangement, GEA is responsible for designing, manufacturing, and selling large-scale REV equipment into the pharmaceutical sector, and EnWave earns an (undisclosed) royalty on those sales. For a ~$ 27 M market-cap company, this is the only realistic way to attack a multibillion-dollar regulated market: monetize the highest-value vertical without funding a pharma sales force or a regulatory team. The same asset-light royalty model it runs in food, pointed at a far richer market. It also frees EnWave to keep its own resources on its food core.
I hope to learn more about Merck and GEA’s relationships with EnWave during my Vegas meeting with management. This is an area with Multibagger potential.

The Cannabis Re-Awakening

EnWave never abandoned its differentiated cannabis IP, and the cannabis market is gaining strength in North America and even more so in Europe. In the U.S., the December 18, 2025, executive order to expedite rescheduling to Schedule III, removing the 280E tax penalty, and easing banking, re-rated cannabis equities, although pricing has not firmed off two-year lows due to oversupply.

The biggest engine for a drying-and-decontamination licensor is Germany, where medical cannabis sales surged in 2025. Critically, Germany imports 95%+ of its supply, and Canada supplies roughly half of that supply.

As volumes scale, the bottleneck is shifting from cultivation to processing: access to German pharmacies demands EU-GMP certification and compliance with microbial decontamination requirements. That is exactly what EnWave’s REV process addresses, and a well-capitalized Canadian LP chasing EU-GMP German export flower is a far better customer than the oversupplied commodity grower of 2020.
Cannabis drying remains technologically primitive in Europe, which is an opportunity for EnWave. The incumbent methods and players EnWave competes with:

• Traditional hang-/rack-drying — Flowers are hung in climate-controlled rooms for 7–14 days. Cheap, but slow, labor- and space-intensive, inconsistent, and mold/contamination-prone. This is the real incumbent to beat.

  

• Cannatrol (Vaportrol®) — A fastest-growing modern competitor employing a closed-loop dry/cure/storage system, citing 16% higher terpene retention, but it requires an 8–10 day cycle rather than rapidly drying and decontaminating.

  

• Cryo Cure — The same freeze-dry economics REV beats in food.

  

• Cann Systems — Engineered low-temperature closed-loop drying rooms; faster and cleaner than hang-drying but without REV’s one-step decontamination or hour-scale speed.

  

EnWave’s edge over the competition is drying and decontamination in one fast step, collapsing harvest-to-marketable from 4–14 days to roughly an hour. Shinyway International (New Zealand) bought a 10kW unit in November 2025 to run as a regional tolling facility for cannabis drying, with room to scale up. Alongside pharma, cannabis is a key topic for my meeting with management in Vegas.

Financials

Year-to-date scorecard: four 10kW units sold, four new commercial licenses signed, and zero large-scale machine sales. CEO Charleton said several large deals expected in Q1/Q2 slipped because partners’ own product launches were delayed, characterizing them as timing slips rather than losses, with some expected to land one to two months into Q3.

The entire bull case rests on royalties compounding, and they are not growing. Last reported quarterly royalties of $434K were down 8% YoY, against an eight-quarter trend that is essentially flat-to-down (~$474K → $425K → $481K → $432K → $434K across Q2’25–Q2’26). Management attributes the softness to the timing of partner revenue recognition and names BranchOut as a partner building inventory ahead of expected growth.

Revenue decreased 69% y/y in the same quarter, reflecting machine-sale timing. The prior-year quarter saw a large-scale machine booked, while this quarter, only one small unit was booked. Revenue is lumpy, and management is trying to fix it by building ahead. A 100–120kW machine takes months to fabricate, so even when a partner commits, revenue can’t be recognized until the build is done. Management’s response, explained on the call, is to build two large-scale machines on spec before securing a buyer.

The trade-off is working capital. Pre-building consumes cash and balance-sheet capacity ahead of demand: inventory jumped to $3.9M from $1.4M at year-end (+179%). If a large order closes soon, that inventory converts rapidly into revenue, and the bet pays off, or the cash sits trapped in unsold machines.

FY2025’s modest Adj. EBITDA inflection ($0.3M) turned to a $1.36M H1 loss. EnWave exited Q2 with $3.3M cash, a $7.9M net working-capital surplus (inflated by $3.9M of spec inventory), and a Desjardins facility authorized to $2.5M with $1.3M undrawn. Profitability reversed during the quarter, so the burn rate becomes a concern. Taking the adjusted EBITDA burn as a cash proxy implies a runway of roughly five to seven quarters at the current operating burn rate, without converting the spec-built machines into cash, and extending the runway.

Valuation

EnWave is hard to value cleanly because it sits at the intersection of three businesses with very different multiples: it is part capital-equipment manufacturer, part food-ingredient/cannabis royalty stream, and part wanna be pharma-technology licensor.

• Food & beverage - If the market views EnWave as a small food-equipment company, 1–2x revenue applies.

• Royalty / IP-licensing - commands far higher multiples of 4x revenue and 16x EBITDA because of incremental high margins and recurring revenue. If EnWave transforms into a royalty compounder, it would support this multiple.

• Pre-profitability microcap technology is typically valued at a 4x price-to-sales ratio.

EnWave trades around 3–4x revenue and 13–15x annualized base royalties. That is a premium to a food-equipment multiple and a discount to a clean royalty-compounder multiple. The royalties are currently shrinking, which is why the stock trades at a food-equipment multiple rather than a licensing multiple.

MCO Checklist

We score every candidate against our five MCO pillars:

• Moat — PASS

  An effective monopoly on commercial-scale vacuum-microwave dehydration, reinforced by 52 embedded partner relationships and accumulated process know-how.

• Large TAM — PASS

  $360B global dehydration market opportunity, including food, cannabis, and pharmaceuticals.

• Little or no direct competition — PASS

  No direct competitor in commercial REV. The “competition” is incumbent drying methods and switching inertia, which REV usually beats on a quality-adjusted basis.

• Clear path to profitability — No

  The model should generate high-margin recurring royalties at scale, but base royalties are shrinking, Adj. EBITDA is negative, and the FY2025 profitability inflection reversed. The path is plausible but unproven, and the timeline keeps slipping.

• Qualified leadership with a reasonable plan — No

  CEO Charleton and CFO Budreski are credible, the strategy is coherent, and the priority framework is reasonable, but this team has guided to inflection before and missed, and the spec-built inventory plus the cash position are aggressive choices.

Risks

The entire thesis depends on a royalty inflection that has not begun. Other areas of concern:

• Revenue lumpiness.

• The spec machines must sell to relieve working-capital pressure.

• Chronic guidance slippage.

• The disclosed fabrication pipeline is dominated by 10kW units; small machines mean small near-term royalties.

• The GEA agreement is a development agreement, not a commercial order. Pharma timelines are long.

• Partner end-market dependence. EnWave’s royalties depend entirely on partners succeeding in their markets, and the technology winning on merit does not protect it when a partner’s category collapses.

• Customer concentration. With MicroDried as the top royalty generator and BranchOut as the fastest-growing, a disproportionate share of royalties and royalty growth now rests on two partners. A stumble at either, BranchOut is itself a small-cap with its own balance sheet and execution risk, which would directly hit EnWave’s trajectory.

• Liquidity and coverage. Thin trading volume and single-analyst coverage (Clarus) limit both exit flexibility and Street validation.

Questions for Vegas

The May 22 call answered some questions and raised others:

• What are the concrete milestones and timeline for the GEA Lyophil pharma partnership now?

• Is a co-developed commercial GMP freezeREV system actually in development, is a pharma end-customer (Merck or otherwise) identified, and where does pharma genuinely rank among your priorities?

• Royalty inflection. BranchOut’s royalties are declining. In which specific quarter do you expect the BranchOut ramp and partner inventory builds to show up as growth in EnWave’s royalty line?

• The two spec-built machines. A 100kW nutraREV and 120kW quantaREV are 75% complete with no buyer. What is the realistic probability and timeline of selling them, and what happens to working capital if they’re unsold at year-end?

• The new global-CPG TELOA. You confirmed it’s among the largest partners by revenue you’ve ever signed. What’s the realistic conversion timeline to a commercial license, and will the volume run through a co-manufacturer or eventually the partner’s own machines?

• Cash and liquidity. $3.3M cash against the burn and inventory. Is the Desjardins facility sufficient, and what is your explicit commitment to avoiding an equity raise at these levels?

• Large-scale pipeline. You cited several large prospects and four deals that slipped from H1. Which sectors are closest, and what is a realistic timing?

• What is your actual pilot-to-commercial conversion rate? Are you prepared to prune sub-scale licenses and concentrate resources?

• Can you frame the typical royalty structure (percentage of partner sales vs per-kg fee), and the blended incremental margin on royalty revenue versus machine sales?
  9. Insider buying. With the stock down 41% YTD and management ownership modest, is there intent to buy in the open market at these levels?

Conclusion

EnWave is a high-quality asset attached to a frustrating income statement. The moat is real, the TAM is enormous, and the technology genuinely beats its incumbents on a quality-adjusted basis. A lead partner appears to be scaling commercially while a long-developed pharma partnership keeps a high-value option alive. Those are the ingredients of a Multibagger.
But the Risk section above explains why EnWave is added to the MCO watchlist, and not to the portfolio. We would move it into the portfolio if we see royalties turn higher for two consecutive quarters.

Disclosure/Disclaimer: This is a watchlist initiation; if a position is established, MCO will disclose it in a subsequent update. The author has a position in BranchOut Foods, although the stock is not included in the MCO Portfolio. Microcap Opportunities is for informational and educational purposes only and does not constitute investment advice. Always do your own due diligence

The Investment Thesis

Paragon is a microcap operator of PhotonAssay (PA), the only commercial technology in decades to meaningfully threaten fire assay, the industry standard for analyzing precious metals for the past century. PA is faster, more accurate, safer, and environmentally cleaner. PA is in the early stages of replacing fire assay. Paragon and its technology partner Chrysos (CHRCF) are, to my knowledge, the only pure public plays on PhotonAssay.

The company has a moat based on contractual regional exclusivity, atop a manufacturing bottleneck. Paragon controls the largest commercially open PA fleet and has a clear path to profitability as it scales.

QI FY2026 Review

• Revenue beat: C$2.21M, slightly ahead of the C$2.2M guide, up 21% sequentially and 22% year-over-year.

• Scaling has begun: working a single contract worth C$8M+ annualized that reaches full throughput in Q2. Management reported a record April, 40% above any prior month, and guided the rest of 2026 to track near April.

• Margins look worse than they are: a reported gross loss of C$217K, but only because C$781K of PhotonAssay depreciation sits in cost of sales.

• Added liquidity: cash of just C$635K at quarter-end, a C$9.06M working-capital deficiency, and a going-concern note. Management is bridging it with the US$4.3M May sale of its McEwen Inc. treasury shares (separate from Rob McEwen’s 27% stake in Paragon).

MCO Thesis Review

The operating thesis is intact, but the funding risk is higher than I first portrayed. Nothing in the quarter challenged the replacement-cycle case, the moat, or the demand. The C$8M contract ramping on schedule is exactly the basis of my bullishness. What changed is the margin of safety on the balance sheet. I estimated at initiation that the company could fund its machine roll-out without a dilutive raise, and the Q1 numbers don’t support that confidence. The bet is now as much about clearing the liquidity bridge over the next two quarters as it is about the assay-replacement cycle.

Going Forward

The position stays in the MCO Multibagger bucket. What I will be keeping an eye on:

• The Q2 ramp. Does the C$8M contract reach full throughput, and does the monthly run rate clear the C$1.5M EBITDA break-even line?

• Reported gross margin turning positive as volume covers the fixed PhotonAssay depreciation.

• The funding plan. Was the McEwen share sale a one-time bridge or part of a broader monetization? Will operating cash flow be sufficient to fund machine deposits, or will a raise be necessary?

• Machine deployments on schedule, starting with the Mexico (4th) unit, which has already slipped slightly into Q2.

• Utilization disclosure across the three active machines

I’ll be putting these questions to management directly at the Planet MicroCap Showcase in Las Vegas next month and will report back.

Disclaimer: The MCO portfolio consists of microcap stocks we invest in. Our write-ups are our research efforts and are not financial advice. We have absolutely zero consideration for your financial circumstances or risk factors, as we are not financial advisors. Do your own due diligence.

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• 3C is Canada’s only independent flight-test and certification Design Approval Organization (DAO) approved by Transport Canada.

• The collaboration embeds both military and civilian certification requirements into the Cavorite X7’s initial design. Dual-use is built in from inception. Retrofitting an airframe for defense compliance after the fact is expensive and slow.

• Management explicitly tied this to Canada’s Defense Industrial Strategy, launched in February 2026, which prioritizes procuring domestic aircraft and technologies to support national security and sovereignty.

The Gap Between The News And The Stock Price Move

Horizon has issued a string of partnership announcements over the past year (wings, fuselage, propulsion, power electronics, design), and the tape’s reaction to each has been uneven, ranging from -5% to +36%. A certification-process partnership is a modest catalyst. On the actual release day (May 21), HOVR moved +3.98%. The 25% spike is a second-day move.

It’s the underlying theme that we have been writing about and management discussed in our video interviews that unlocked momentum. In this case: “Ottawa wants to buy Canadian aircraft, and here’s a Canadian eVTOL OEM with a defense-ready airframe and the country’s only independent DAO .”

Modest catalyst, outsized move, but the underlying development genuinely strengthens the MCO thesis:

• The moat got wider. Dual-use design from inception, plus an exclusive relationship with Canada’s only independent Transport Canada DAO, setting up for defense-grade certification, one of the hardest barriers to replicate in the aerospace industry.

• The TAM increased. Until yesterday, the HOVR addressable market was regional operators, emergency services, and a vague “military customers” line. The Defense Industrial Strategy turns that vague line into a named, government-backed procurement tailwind.

Conclusion

Raise $20M from strength. Clean up the balance sheet, then announce a defense-positioning catalyst to strengthen the story. The MCO thesis is intact and modestly stronger: a wider moat, a bigger TAM, and a management team that sequenced its capital and messaging well.

What I’m watching for next is any sign that the Defense Industrial Strategy translates into an actual program, the completion of the full-scale prototype, and whether the MHIRJ and 3C relationships start producing concrete milestones. An announcement of a manufacturing partnership would be the ultimate rerate catalyst.

Disclaimer: This is not investment advice. Do your own due diligence.

Our March update article on TAT Technologies (TATT) raised questions about how deep the supply chain logjam was, whether it was a one-quarter event, and whether the inventory pre-build would hold up amid scarcity of FAA-certified parts. Yesterday’s Q1 report answered all three questions.

The short version: revenue of $41.1M landed exactly on Lake Street’s estimate, backlog grew to a record $580M, operating cash flow swung from negative $5.0M to positive $1.9M. The APU bottleneck is now projected to be resolved in H2 2026. The new wrinkle revealed in the call is that landing gear is a separate, still-unresolved issue.

The Supply Chain Story

In March, we framed this as a single Tier 1 supplier to Honeywell’s APU operations that was undergoing an ERP migration. The Q1 call refined that in two ways:

• CEO Zamir said, “APU is now scoped.” He described the constrained parts as commodity-level finishing components rather than complex engine parts. CFO Ben-Yair guided the resolution to H2 2026. Zamir cautioned recovery would be gradual and not a “zero-to-one” event. Q2 won’t be a clean reset. The catch-up flows into Q3 and Q4.

• CFO Ben-Yair said, “Landing gear is a new, open front.” He explained that the landing gear supply chain is *not yet improving* and needs continued monitoring. This was not on the table in March.

We now have to treat supply chain risk as two distinct problems with different timelines. TATT exited Q1 with $15.5M in APU and landing gear open work orders sitting in its shops, which could not be completed due to a lack of parts. That is deferred revenue on the shop floor.

TATT’s inventory strategy works where it controls its own supply chain. Heat exchangers delivered 97% of orders on time with growing OEM and MRO demand. Trading and leasing grew 29% YoY. APU and landing gear inventory grew to $81.7M, with APU intake hitting a record, so TATT exited the quarter with more contracted work than it entered; book-to-bill was above 1.

M&A

Management spent more time on M&A than on any prior call. TATT is actively engaged with targets, PE firms, and advisers, with at least one deal targeted in 2026, but “not in a rush.” Notably, Zamir confirmed that PMA (parts manufacturer approval) and vertical integration ideas are under review.

Price Target

We maintain our $57 target, still a discount to the revised consensus, reflecting confirmed APU duration risk into H2, an indefinite landing gear timeline, unmodeled HON spin-off friction, no meaningful 131 revenue, and unmodeled M&A.

Risks

The now-bifurcated supply chain bottleneck, and the absence of any 131 program update on this call. Most of our March risk list stands: Honeywell concentration, spin-off friction, M&A execution, geopolitical, tariff, and currency risks are unchanged.

Conclusion

Margin expanded, cash flow turned positive, backlog set a record, and APU is scoped to H2. The legitimate new concern is the landing gear, which carves another quarter or two off the recovery curve. But the core thesis—record demand, intact long-term agreements, fortress balance sheet, and M&A optionality —remains intact.

As CEO Zamir phrased it: “When parts flow, we are ready. And the backlog tells you exactly what is waiting on the other side.” We’re holding the $57 target and will follow up with management in Vegas in June on landing-gear timing, the 131 pipeline, and whether M&A has moved from sourcing to diligence.

Disclosure/disclaimer: MCO holds TATT in the Steady Eddies bucket (entry 1/7/25 @ $25.31; closed today at $37.20). This is not investment advice. Do your own work.*

VA Addressable Market

7M VA Patients per yr × 3% Functional Dyspepsia Rate = 210K Addressable VA Patients

210K Patients x $4K treatment per Patient = Full-TAM Annual Revenue: $840M theoretical ceiling

Each treatment course consists of four IB-Stim devices. At a VA Federal Supply Schedule price estimated at approximately $1,000 per device (a 10–25% discount to the commercial list of $1,195), revenue per treated veteran is approximately $4,000. The theoretical full-TAM annual revenue is $840 million. noting that, in reality, ramps do not approach full TAM realization in the initial rollout years.

The Comp Set: electroCore Quell

electroCore (ECOR) is a small-cap neuromodulation medtech selling through the VA Federal Supply Schedule. Its May 2025 Quell launch provides four contemporaneous quarters of ramp data for benchmarking.

Quarter Quell VA Revenue Q/Q Growth

Q2 2025 $114,000

Q3 2025 $485,000 +325%

Q4 2025 $900,000 +85%

Q1 2026 $1,000,000 +11%

Cumulative (4 quarters)~$2.5M

electroCore initiated sales of its gammaCore device to the VA in 2019. It took seven years to reach 2.5% penetration of its VA addressable market. NRXS hitting 0.26% in year one is in line with typical ranges for new VA launches.

• Year 1 (0.1% to 0.5% Penetration): Focuses on initial clinical adoption by early-adopting medical centers, navigating VHA evaluations, and securing inclusion on regional formularies.

• Years 2–3 (1% to 5% Penetration): The product begins to scale to larger regional health systems and standardizes across key facility networks.

• Years 4–5 (5%+ Penetration): Widespread acceptance in standard community hospitals and standard protocols.

NRXS Economics Beat Quell

Quell reached approximately $1M in a single quarter after four quarters of VA activity. This device is an at-home treatment with a purchase price and disposables costing about $500 per year. $1M in sales implies 2,000 device sales. If NeurAxis treats the same number of veterans per quarter at its FSS pricing, revenue would scale at 8× the Quell trajectory. The other difference, favoring IB-Stim, faster scaling, is that Quell has direct competition, while IB-Stim has none. We must also account for the fact that electroCore employs a much larger sales team than NeurAxis, which slightly offsets NeurAxis’s monopoly advantage.

Year 2 Is the Inflection

The 2026 → 2027 year-1 transition is the most important year-over-year change. Low revenue, lots of relationship-building, and individual facility commitments. Year 2 is when those commitments compound as procurement contracts shift from one-time to recurring.

Noteworthy factors to watch:

• Federal channel revenue is structurally lumpy. VA revenue is lumpy and unpredictable due to VA budget cycles, contract administration delays, and facility-level purchasing patterns. Quarterly figures will not be smooth.

• Functional dyspepsia prevalence assumption. The 3% figure is from CEO Carrico’s Q1 call and may be conservative. Broader functional GI conditions, including IBS, post-infectious dyspepsia, and PTSD-associated GI symptoms, likely affect a higher percentage of the VA population. If the actual addressable population is closer to 5%, penetration points to proportionally higher revenue.

The Bottom Line

NeurAxis only needs to penetrate 0.25% of the addressable VA population in 2026 to add $2M+ in revenue that no analyst model currently includes. By 2028, even modest penetration of 1–2% produces VA revenue of $8M–$17M annually.

The structural reasons NRXS should outpace electroCore’s Quell trajectory in dollar terms are unambiguous: 10× higher revenue per treated patient, and zero direct competition.

The VA is the channel most likely to surprise the market in 2026 because expectations are zero. The Q2 earnings call in August is the next catalyst. Disclosed VA revenue would validate the ramp trajectory modeled above and likely trigger a Craig-Hallum price target revision.

Disclosure/disclaimer: All figures sourced from NeurAxis SEC filings, the Q1 2026 earnings call transcript, electroCore quarterly filings and earnings call commentary, and publicly available market data. Scenarios are illustrative, not formal forecasts. This publication is for informational purposes only and does not constitute investment advice. Do your own due diligence.

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Q2 FY26 Recap

Electrovaya (ELVA) reported Q2 FY26 after the close on May 14. It is the fifth straight quarter of profitability. The highlights:

• Revenue $18.0M, +20% YoY.

• Six-month revenue $33.6M, +28%.

• Gross margin 33.4%, +230 bps.

• Operating profit $2.2M, +56%.

• Net profit $1.0M.

• Adjusted EBITDA $2.8M, 15.7% of sales.

• $20.4M unrestricted cash, $7.8M facility availability

• $4.3M operating cash flow.

The strategic shift behind the number is the real news. ESS is now the centerpiece of the 2027 inflection.

Strategic Shift

CEO Raj Das Gupta described energy storage products as the company's most significant current development initiative in his prepared remarks during the May 14 call. When Craig-Hallum's Eric Stine pressed specifically on whether ESS had moved forward in priority and near-term revenue contribution, Gupta characterized the company's posture as "going all in."

Management is focused on “high-power, mission-critical, short-duration” energy storage and explicitly not the commoditized 2–4-hour grid storage space dominated by lithium-ion phosphate batteries. The product is engineered to be smaller, denser, and more reliable than incumbent lithium ESS, leveraging the same ceramic separator and Infinity Platform proven in forklift duty cycles. The CEO mentioned targeting the same customer set as Toshiba’s premium-priced batteries with strong safety and cycle life, with claimed higher performance at lower cost. That positioning aligns with the cycle-life data ELVA has already produced (9,000–14,000 cycles in field testing).

Three demand vectors are converging:

• Hyperscaler conversations are active - Management confirmed conversations with one hyperscaler plus several hyperscaler-adjacent power infrastructure players.

• FEOC-compliant - U.S.-manufactured supply is scarce. The list of non-Chinese, U.S.-manufactured lithium ESS suppliers at a meaningful scale is short.

• Built-in cross-sell - CEO Gupta said at the call, “We already have an extremely -- a very good customer roster of folks who are using our batteries inside buildings. Now we're asking them to use them outside the building.”

Jamestown De-Risking

The cell manufacturing line is being assembled in Korea, where ELVA will run a ~6-week Factory Acceptance Test (FAT) starting late summer. A FAT is the standard industrial practice of running production equipment through its full operating paces at the vendor’s facility before it ships to the buyer’s site, to verify that the line works and to fix problems while the equipment is still in the vendor’s hands. Running the line end-to-end before it ships materially reduces on-site startup risk.

ELVA’s approach is unusually rigorous: rather than a partial or sampled test, the entire cell line is being run end-to-end in Korea. Module lines undergo a shorter FAT earlier in the summer. Dry rooms, switchgear, and infrastructure are already on site in Jamestown.

The StoreDot Hire and the DOE Project

A new hire and a DOE-funded project confirm the strategic shift to ESS. Electrovaya recruited Nir Haimovich, formerly head of product design at StoreDot, to lead high-power, high-thermal modeling. StoreDot is the Israeli extreme-fast-charging cell developer behind 10-minute charge technology. The thermal management skill set he brings is exactly what mission-critical high-power ESS demands, and it is exactly what ELVA's niobium-oxide platform requires for the robotics and infrastructure-support applications targeting 2027.

Electrovaya was awarded a DOE-funded collaboration to advance energy storage for critical infrastructure. It is a federal credibility signal validating the technology for prospective customers. Management is planning to install its own ESS at Jamestown in lieu of diesel gensets, putting its money where its mouth is.

Robotics: The Q2 Surprise

Robotics is now the #2 revenue vertical after material handling, and the trajectory is steeper than I modeled in my March write-up. Robotics is not even listed on the Electrovaya product page.

We learned from the Q2 earnings call:

• The customer mix — Current production is primarily going to a surveillance robot OEM, Autonomous mobile platforms with onboard cameras and sensors, the kind of equipment showing up in warehouses, data centers, and perimeter security. Two OEMs are already validated and headed into production this year, both in autonomous mobile robots (AMRs) for material handling. Management cited a mix of American and Japanese OEM partners in current discussions.

• The unit economics - These are smaller batteries than forklift packs, 5–20 kWh versus 80–100 kWh on material handling. Per-unit revenue is lower, but the volume math works because each OEM deployment is multi-unit, and once the qualification process is cleared, platform-wide ordering opens. The 300 packs shipped in Q2 came from a narrow OEM base. This scales by adding OEMs, not by selling more units per OEM.

• The platform crossover - This is the strategic point. The niobium-oxide ultra-fast-charge platform serves robotics and high-power ESS off the same cell architecture. Management is engineering one platform for two end markets that need the same things: high power density, fast charging, long cycle life, and exceptional safety. That is a meaningful manufacturing-scale advantage and a reason to expect gross margin expansion as both verticals ramp up shared-cell production.

Defense

We learned from the Q2 earnings call that two defense contractor shipments had been delivered during the quarter, as management had forecast on the Q1 call. ELVA is selling into defense platforms through Tier-1 and Tier-2 contractor partners. A direct DoD relationship is a distinct possibility, but not the current channel. The EXIM "Make More in America" $50M+ direct loan and the framing of Jamestown around "national security objectives" both signal where this is heading.

The ELVA Infinity Platform's safety profile is the differentiator in applications where battery failure is mission-ending: drones, undersea vehicles, ground systems, and soldier-borne equipment. Long cycle life and a domestic U.S. manufacturing address (Jamestown) close the FEOC-compliance loop.

Management noted on the call that solid-state battery development has accelerated following the installation of the dry room earlier this year. They were explicit: solid-state is a natural fit for defense applications, and the Infinity Platform relationships already developed in defense are the commercial channel into which solid-state will be introduced when it's ready.

Risks

Q3/Q4 softness is possible even with the underlying business strengthening. Management explicitly qualified the FY26 outlook as uncertain. Order timing is going to wobble. “Some FY26 orders — especially airport ground support — may shift to FY27 as customers pull back on capex against higher fuel prices and macro uncertainty. Other customers may pull demand forward to offset.”

I place the backlog disclosure issue that came up during the call here, just to clarify for readers what this number means. The $100–125M figure management cited is not pure backlog. It blends backlog (firm orders), frontlog (orders known to be coming), and pipeline (probability-weighted prospects) into one composite number. That combination leaves investors without knowing what is contracted versus what’s forecast. The bigger issue is that the CFO confirmed the figure covers only material handling: no robotics, no defense, no ESS, no airport ground equipment. So the growth verticals that drive the 2027 thesis are invisible in the disclosure. As robotics, ESS, and defense scale into materiality, there’s no way to track forward visibility into the parts of the business that actually matter.

Final Thoughts

Cell production is projected to begin in late 2026/early 2027. Everything that matters in our investment thesis is now a 2027 story, and the 2027 earnings power has expanded since our April write-up. The April $12 PT didn’t price in ESS as a primary vertical, the DOE validation, robotics as the #2 revenue line, or hyperscale-tier customer engagement. Supporting our PT raise:

• ESS — This is the segment that re-prices the multiple. It has the largest revenue and margin upside, and the line that picks up the full 45X cell credit benefit at $35/kWh.

• Robotics — steepest near-term growth curve, the proof-point that the niobium-oxide platform works in the field, and a meaningful contributor to Jamestown utilization. Shares the cell architecture with ESS, which is why both can scale without competing for capital.

• Material handling — pays the bills, funds the buildout, growing 20%+ on a profitable base. The reason ELVA can chase ESS and Robotics without dilution.

• Defense — small revenue today, but qualification footprint compounds quarter over quarter.

• Airport ground support — still demonstration scale.

What I want to see before re-rating again: clean Q3 print, Korean FAT completed without surprises, tightened backlog disclosure breaking out non-material-handling verticals, and the first named ESS customer.

Disclosure/disclaimer: Figures sourced from the Q2 FY2026 earnings call, the company’s MD&A on SEDAR and EDGAR. This is not investment advice. Do your own diligence.

Reported revenue of $40.6M, +21% YoY. Adjusted EBITDA of $752K vs $92K for the prior year, and free cash flow of $674K compared to $65K the prior year. Net income of $77K represents the first GAAP-profitable quarter since 2021.

CWMS 3.0 and Carrier SaaS

CWMS 3.0 was originally scheduled to be awarded in January and was once again extended, but for only one month, to June 24, 2026. The award has been delayed by the partial government shutdown that left DHS unfunded. CEO Jim Kang cited at the earnings call that the current funding situation may lead to a contract award in the next few weeks. “We are particularly encouraged that it was only extended for 1 month, which leads us to believe that an update from DHS will be provided by the new contract end date. “

The big-3 carrier implementation remains on track for 2H 2026. CEO Kang said at the call, “We continue to remain on track to complete the initial implementation and begin recognizing revenue under this contract in the second half of 2026, as stated in the last quarter's earnings call. A key driver is that the carrier's current platform will no longer be viable at the end of Q2 2026. Without WidePoint's ITMS platform in place, the carrier will be forced to operate without a compliance system.”

The contract is worth $40–47M over five years. Our thesis includes onboarding the two other big carriers with similar deals. CEO Kang confirmed that initial discussions have opened with the other two Big Three carriers.

The $57 Price Target

Our price target projects 2028 revenue of $280M at a 2.0x EV/revenue multiple, yielding $57 per share on 9.89M shares outstanding. The Q1 report confirms our projections:

• The CWMS 3.0 base was sized at $140M annualized.

• WYY's federal core, carrier, and managed services are already running at roughly $140M in annualized revenue.

• The carrier SaaS run-rate was sized at $30M, assuming the announced anchor carrier at full ramp plus a second carrier landing in 2027. The contract value bumped modestly to $40–47M from $40–45M.

• Initial discussions are underway with the other two Big Three carriers.

• Spiral 4 and other DoD were sized at $35M for 2028 with 8 task orders YTD through Q3 2025 and a stated trajectory to a top-5 contract position by the end of 2027.

• IT Managed Services and commercial were sized at $25M.

• The bottler contract is now cumulative at $2.8M in value, with a deeper scope than originally disclosed, including exclusive access to procurement and inventory systems.

• The IT Authority commercial business continues to develop.

• DaaS lifecycle management fees, ex-pass-through, were sized at $20M.

• International and Soft-Ex were previously sized at $30M. No update on the call.

That sums to roughly $280M in 2028 revenue. Apply a 2.0x EV/revenue multiple, consistent with where federal managed services peers, for a $560M enterprise value. Add net cash of $10.9M and no bank debt. Divide by 9.89M shares outstanding, and you arrive at approximately $57 per share.

Conclusion

The Q1 2026 report confirms that operational leverage is starting to show up in the numbers, bolstered by forward guidance for continued positive EPS. The binary catalyst, the CWMS 3.0 award, is now weeks away rather than quarters. The initial discussions with the other two Big-3 carriers are exactly what our thesis projected.
Our PT framework remains intact, and the position remains Multibagger.

Disclaimer: This is not financial advice. Do your own due diligence.