8-K: MDWerks Subsidiary Two Trees to Quintuple Spirits Production Capacity Amid Surging Demand

MDWerks' subsidiary, Two Trees Beverage Company, plans to install a second Spirits Rapid Aging System (SRAS) in August 2025, expected to approximately quintuple its spirits production capacity due to strong demand and projected growth.

Summary

• MDWerks, Inc. announced its subsidiary, Two Trees Beverage Company, will install a second Spirits Rapid Aging System (SRAS) at its Fletcher, North Carolina facilities in August 2025.
• The new, larger SRAS unit, currently in the final stage of construction, will augment an existing SRAS unit to accommodate strong built-in demand.
• The new SRAS unit is expected to approximately quintuple spirits production capacity at the Two Trees facility.
• The expansion is driven by steady demand and projected growth potential for Two Trees' aged white-label distillates and award-winning spirits portfolio.
• MDWerks' subsidiary, RF Specialties, LLC, is designing and building the new SRAS unit.
• Customer demand for Two Trees' aged white-label distillates and award-winning spirits brands has vastly exceeded peak throughput of the existing SRAS, which has been running at or near full capacity since May 2025.
• The new SRAS will provide approximately five times more capacity to meet built-in demand for various white-label products, including single malts, whiskeys, rums, and bourbons.
• Two Trees branded sales continue to grow organically, driven by expanded distribution, enhanced marketing, and successful new product launches.
• The "Whiskey-as-a-Service" business model continues to gain traction, with three SRAS units under contract for installation at other facilities, including one of the largest distilleries in the U.S. and a U.S. broker of bulk spirits.

Sentiment

Score: 9

Explanation: The filing indicates strong demand, significant capacity expansion, and successful commercialization of proprietary technology, all pointing to very positive business momentum and future growth prospects.

Positives

• Installation of a second, larger SRAS unit is expected to approximately quintuple spirits production capacity at the Two Trees facility.
• Strong built-in demand for Two Trees' aged white-label distillates and award-winning spirits portfolio is driving the expansion.
• The existing SRAS unit has been running at or near full capacity since May 2025, indicating robust and sustained customer demand.
• The new SRAS will provide approximately five times more capacity to meet existing demand for various white-label products, including single malts, whiskeys, rums, and bourbons.
• Two Trees branded sales are growing organically through expanded distribution, enhanced marketing, and successful new product launches.
• The "Whiskey-as-a-Service" business model is gaining significant traction, with three SRAS units already under contract for external customers.
• SRAS technology offers substantial benefits over traditional aging methods, including award-winning quality and consistency, less energy consumption, better economics, greater innovation, approximately 90% less wood consumption, faster speed to market (weeks vs. years), less storage space, and a lower carbon footprint.

Risks

• Economic conditions could impact demand for products and services.
• Changes in laws or regulations may affect operations or market conditions.
• Demand for MDWerks' products and services could fluctuate.
• The effects of competition may impact market share and profitability.
• Other factors could cause actual results to differ materially from forward-looking projections.

Future Outlook

The company anticipates continued strong demand for its aged spirits and white-label distillates, leading to significant production capacity expansion. The "Whiskey-as-a-Service" model is expected to drive further growth, with three SRAS units scheduled for installation at major distilleries and bulk spirits brokers through the first half of 2026. Management is actively engaged in discussions with other industry participants, indicating further potential for adoption of their rapid aging technology.

Management Comments

• "Customer demand for Two Trees aged white-label distillates and award-winning spirits brands has vastly exceeded peak throughput of our existing spirits rapid aging system, which has been running at or near full capacity since May 2025."
• "We are deploying a second, larger SRAS unit at Two Trees facilities in August 2025, which will provide approximately five times more capacity to meet built-in demand from several customers for various white-label products, including single malts, whiskeys, rums, and bourbons."
• "Simultaneously, Two Trees branded sales continue to grow organically, driven by expanded distribution, enhanced marketing and successful new product launches."
• "Our Whiskey-as-a-Service business model continues to gain traction."
• "Multiple other conversations are underway with industry participants who recognize the substantial economic and environmental benefits of our proprietary spirits rapid aging technology."

Industry Context

The spirits industry traditionally relies on lengthy and resource-intensive aging processes. MDWerks' SRAS technology offers a disruptive alternative by significantly reducing aging time (weeks vs. years), energy consumption, wood usage, and storage space, while maintaining quality. This innovation positions MDWerks and its subsidiaries, Two Trees and RF Specialties, as leaders in sustainable technology within the beverage sector, addressing growing consumer and industry demand for efficiency and environmental responsibility. The "Whiskey-as-a-Service" model further indicates a shift towards technology-driven solutions for distilleries seeking to optimize production and accelerate market entry.

Comparison to Industry Standards

• Traditional aging methods typically require years for spirits to mature, whereas MDWerks' SRAS units achieve maturity in weeks.
• SRAS technology significantly reduces wood consumption (approximately 90% less) compared to traditional barrel aging, which is a major resource and cost factor for distilleries.
• The technology offers better economics and less energy consumption than conventional methods, providing a competitive advantage in production costs.
• SRAS allows for faster speed to market, enabling companies to respond more quickly to consumer trends and demand, unlike the long lead times associated with traditional aging.
• It requires less storage space compared to the extensive barrel housing needed for traditional aging, optimizing facility utilization.
• The SRAS units deliver a lower carbon footprint, addressing environmental concerns prevalent in the industry, unlike the higher environmental impact of traditional aging.
• The company is building SRAS units for one of the largest distilleries in the U.S., indicating that even established industry players recognize the benefits and are adopting this technology.

Stakeholder Impact

• Shareholders: Positive impact due to increased production capacity, strong demand, and potential for revenue growth from both internal brands and "Whiskey-as-a-Service" contracts.
• Customers (Two Trees): Improved product availability and ability to meet demand for white-label and branded spirits.
• Customers (Whiskey-as-a-Service): Access to innovative, cost-effective, and sustainable aging technology, enabling faster market entry and reduced operational costs.
• Employees: Potential for job creation and stability due to business expansion.
• Suppliers: Increased demand for raw materials and components related to SRAS unit construction and spirits production.

Next Steps

• Installation of the second SRAS unit at Two Trees' Fletcher, North Carolina facilities in August 2025.
• Installation of the first SRAS unit for a large U.S. distillery in Q4 2025.
• Delivery of a second SRAS unit to the large U.S. distillery in Q1 2026.
• Deployment of the third SRAS unit at a U.S. broker of bulk spirits in H1 2026.
• Ongoing conversations with other industry participants regarding SRAS technology adoption.

Key Dates

Recommendation

The filing demonstrates robust organic growth, significant capacity expansion to meet overwhelming demand, and successful commercialization of a proprietary, disruptive technology ("Whiskey-as-a-Service"). The SRAS technology offers substantial economic and environmental benefits over traditional methods, positioning MDWerks as an innovator in a mature industry. The clear pipeline of external SRAS installations further validates the technology's market acceptance and future revenue streams. These factors collectively indicate strong future performance and undervaluation potential.

Keywords

Spirits Rapid Aging System, SRAS, Two Trees Beverage Company, MDWerks, RF Specialties, Whiskey-as-a-Service, sustainable technology, spirits production, capacity expansion, distillates, whiskey, rum, bourbon, craft spirits, beverage industry