BioLargo, Inc
(OTC BB: BLGO)
Dennis Calvert, CEO
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BioLargo, Inc. is engaged in pre-licensing and product evaluation with strategic partners to leverage a suite of patented and patent-pending intellectual property, the BioLargo technology. The BioLargo technology, the centerpiece of which is CupriDyne, works by combining minerals and salts with water from any source to generate and deliver molecular iodine on demand, in controlled dosages, in order to balance efficacy of disinfectant performance with concerns about toxicity. In addition to its BioLargo technology, the Company acquired the rights to market an iodine based water disinfection system (the Isan system) from Ioteq IP Pty. Ltd., an Australian company, and its United States affiliate Ioteq Inc. during the year ended December 31, 2008. The Isan system is an automated water disinfection system that substantially reduces the incidence of fungal growth, spoilage, organisms and pathogens in water and on food.
TRANSCRIPT
WSR: Start off by giving us an update from our last interview regarding the company and some of its products now going into commercialization, some of your new contracts.
Dennis Calvert: You may recall, we have two platform technologies that are both iodine-related. Iodine is an all-natural disinfectant; it’s also used in odor control. Really, in many ways, we’re similar to like a BASF in the way we necessarily make products and make them better.
We’re primarily focused on licensing our technology with other companies to make products. Back in May, we actually launched three new products focused in the animal healthcare sector. We’ve had a really dramatic run of recruiting distributors, building some brand awareness, generating our first revenues, which is significant. We’re very excited about the platform we’ve created.
One of our other technologies, which is called the Isan System under a licensing and a joint venture partnership out of Australia, is an iodine water treatment system, and that won an award since our last interview as one of the top water technologies for the 21st century. So, really, both of our first products are award-winning. We are very, very excited about how they are rolling out.
WSR: Can you talk to us a little bit more about some of the applications, such as your Nature’s Best Solution, and where we may be able to find some of these products?
Dennis Calvert: In terms of actually identifying products that are in the marketplace today, we have a brand that we created back in May called Odor-No-More, and we have three products; we have an Animal Bedding Additive, we have a Facilities and Equipment Wash, and we actually have a Cat Litter Additive. All of these products under the brand Odor-No-More are designed to deliver Nature’s Best Solution, our patent and patent-pending technology, primarily focused on odor control. They’re really unique in the marketplace because they control moisture, and eliminate odor and moisture.
The Animal Bedding product is really a hot product. The first launch was focused on the horse industry and it’s being used to amend our supplement animal bedding where we take care of a horse in a stall to really soak up the moisture from urine and control odor, and create a clean and dry healthy environment for the horse. Now, what’s interesting is, most recently you probably saw our press release, we had a commercial trial that we performed for about 30 days at the big equestrian center, which is a pretty big one, about 460 stalls, so that’s a pretty big center, where we did a 30-day trial and we actually reduced the consumption of bedding by about 75%, which resulted in really dramatic cost savings for the center.
So, immediately after the trial, the product was rolled out to start offering it to its customers for the 460-stall rollout. And really, that’s the first sort of commercial scale example of where the product not only performs for controlling odor and moisture, but it’s definitive proof of significant cost reduction. So, in many ways, that little segment is a platform that creates commercial opportunity for our company to go direct to customers throughout the country.
When we first launched those products in Odor-No-More, our strategy has been and continues to build distribution. So, we are going wholesale to retail channel and that’s through the tack and feed supply industry. Our first major distributor account was with a group called E.T. Horn, which is our master distributor, and they are assisting us in building a platform to roll this out nationally.
So, now we’ve got two plans of attack essentially. We can go directly to the large equestrian centers and prove significant cost savings plus the great benefits of the product. We can also go through the retail channel, wholesale to retail through distributors, which helps us build a platform for consistent revenues. So, we are pretty excited about that.
WSR: Talk to us a little bit more about some of the market trends and how well positioned BioLargo is to capitalize on them?
Dennis Calvert: In light of the world, it has been a shaky time, so cost savings is a huge motivator, especially in the horse industry. The horse enthusiasts and horse lovers industry is a very passionate group that loves their horses. It’s very expensive to take care of horses. In fact, the ability to come into the market and provide such a significant improvement in the quality of environment and the health for the animal, plus the obvious cost savings, really make it a compelling sale. So, it’s an irony, the hard times actually drive customers to us because they are very anxious to figure out how to cut the costs and improve the quality of care. So, that’s a trend that works in our favor.
The other trend is essentially the pet industry and the care of these animals, especially for recreational segment, is really largely recession proof. These animals are so often really considered a part of the family. So, as a result, hard times mean people actually spend more money on their animal in often cases. I saw an article just the other day that made reference to the fact that the number of cats in America had now exceeded 90 million cats, it’s an unbelievable number and that’s about 50 million cat owners in America alone.
WSR: These are cats that are domestic cats or –?
Dennis Calvert: Correct. So, we come into that industry with a product offering, which is Animal Bedding or Cat Litter Additive that truly eliminates odor. Really, from our perspective, it outperforms all products in the space because of the technology additions that we’ve put into the product, it reduces cost, controls odor, eliminates moisture, and making for this clean, healthy environment. So, the challenge for our company really is to get the word out.
From a product that no one has heard about yet to a product that everyone knows is quite a challenge. So, that takes a lot of energy and time, but we are on the mission. Based on our success in the horse industry, we know that it’s just a matter of time before people hear about our product and once they try it they love it, so we’ve got great testimonials. So, now the challenge is to just stay steadfast and get the word out.
WSR: Who are some of your key competitors and what makes your company unique from some of the other players in the sector?
Dennis Calvert: Sure, thank you. That’s a good question. In the horse industry, there are a number of products that have been sort of staple products used for maintaining a horse stall. Most of those products are really focused on using clays and bentonites and zeolites and so very much commoditized, not really significant innovation for years. So, the fact that we come in with this natural chemistry and eco-friendly, and safe and healthy, with such an incredibly significant improvement in performance, while reducing costs really makes us stand out in the crowd, especially when we do a demo. Really, it’s a kind of product that when you do a demo you get a customer.
So, we even offer a 30-day money back guarantee to really promote the product. So far, knock on wood, we haven’t had to return one, which is pretty amazing. So, in the competitive arena, there are competing products, but really none with such a technical innovation and such a high level performance.
Now, in the Cat Litter business, which is a whole other sector really, there is a lot of competition. There are some of the major brands offer products that all have claims of odor control. So, in that market, it really becomes a contest to differentiate our superior performance against very well entrenched brands. So, it’s got some challenges ahead. We know that from a customer satisfaction perspective, however, it really stands out against the competition. So again, the challenge there is not does it work, the challenge is how do you get the world to know about it. So, it becomes a marketing challenge more than anything else.
WSR: Seeing is believing, so if they get to test it out, they could see how it works.
Dennis Calvert: Our position is — you really get the answer very simple. If you don’t like it, send it back, we’ll guarantee it.
WSR: Perhaps, you can walk us through your background and experience Dennis, as well as that of some of the key management over at BioLargo.
Dennis Calvert: Yes, sure. This has been a journey- an exciting, sometimes very challenging journey. The first invention, patented technology, really have a lot — it sprung out from a discovery that goes back almost ten years from our inventor, Kenneth Reay Code, who is a chemist and a big thinker. He made a discovery that you could take these micronutrients, mix them with water and deliver what we call Nature’s Best Solution, which primarily relies upon an iodine technology to control odor and control dangerous microbes. That’s the whole premise of the technology.
In many ways, it’s a world-impacting technology; green, safe, generally recognized as safe by the FDA as food additives, and yet incredibly powerful as a disinfectant to control dangerous microbes. In a world where we are dealing with things like E. coli and salmonella in food, and MRSA and bugs in the hospital, you know, there is sort of an endless list of things that create potential harm for humans and for plants and animals. So, we come into a world with this natural green eco-friendly solution, which is incredibly potent and powerful. It all started with a guy, Kenneth Code, making this discovery and recognizing the potential power of it to make a difference in the world.
So, I met Ken in 2004. Together, we helped to bring in some of the financial support to back the R&D. We actually acquired and rolled into BioLargo, the technology in 2007. Since that time, we have assembled a team of really great professionals. So, we’ve got every component covered, we’ve assembled a team of experts around our company that are available — literally world-class experts in science, environmental technology and water technology and agricultural.
So, we’ve really got quite a team to go to market with now. I think the biggest challenge is to properly capitalize, strategically focus on the applications where you have the ability to get to market, while you advance the technical and patent claims to recruit potential partners for licensure. That’s really our primary focus.
WSR: What are some of the objectives that the team here hopes to accomplish over the course of the next year?
Dennis Calvert: There is a long list, of course. The good news is that we believe with our Odor-No-More platform, if we stay very steadfast and focused on the commercial exportation of that alone, it has the potential of not only taking us to positive cash flow, but really in the foreseeable future presents an opportunity that if we stay steadfast, we can actually generate profits for this company. So, we think that product line has the potential of getting us there sooner than later.
That strategy doesn’t even really touch the other global opportunities associated with our technology. So, while the challenges have been significant to break through the barrier to commercial entry, some of these bigger global markets like agriculture and mini consumer products, healthcare and food treatments, and water, very complicated – difficult, if you will, markets to get into, we nonetheless are particularly optimistic about what those opportunities present for us in the future. So, the focus is to continue to advance the intellectual property through additional patent filings, additional discovery, additional proof of claim, and really becoming more, I think, adept at focusing on the path to commercial deployment with the right partnership, the licensure.
In other words, focus on the things that we can do. So, the near-term for us is really pretty basic, focus on Odor-No-More for generating sales, advance our intellectual property for licensure, be more strategic about the things that have the near-term high-margin commercial opportunity, and focus on those to get to market.
WSR: Just a follow up on something you brought up earlier, in terms of your investment story, do you think that the company’s investment story and your upside potential are completely understood and appreciated by the financial community?
Dennis Calvert: That’s a good question. I think just like in any company, it’s understandable and I think it’s becoming more clear than ever before, but I think the challenge is to get the word out. So, people need to know about you, they need to understand what it is that we are doing as a company, how these commercial opportunities translate to cash flow. So, yes, that’s a journey and it’s something that we are focused on, getting the word out so people know about our story.
Our confidence about those opportunities and our optimism has never been higher. So, we’re particularly pleased with our progress. Again, if you point to the Odor-No-More as an example, right now the Odor-No-More product line is really one little piece of the puzzle, but it’s actually very substantial in terms of its income and revenue capabilities for our company, and yet from a strategic perspective, it’s just one little thumbnail of the opportunity with our technology.
WSR: Great. Before we conclude, why do you believe that investors should consider BioLargo as a good long-term investment opportunity?
Dennis Calvert: It’s a good question. I think the fundamentals really point to, first, the technology. When you really study our technology, what you figure out as that there are multiple, multiple products and industry categories in which this technology is applicable. So, in a time where infection control, disease management, and things that really threaten our earth, our people, our animals, and our plants, people are looking for answers. So, we have got a big piece of the answer for that problem in global markets with a heavy emphasis of course on green technology. So, we’re really in the right space, it’s a hot sector and we’ve got an incredibly powerful technical answer. So, that’s number one.
I think number two is the commercial success and very rapid adoption of our Odor-No-More products is a testimony to the power of the technology. So, careful deployment, high value, high performance product is a winner.
And then of course, third is we have shown that our management team is steadfast and committed. This is not an overnight success by any means; it’s been quite a long, lengthy, difficult journey that we’re proud of. The journey, which even in light of the last year where so many companies have struggled, we’ve managed to not only survive, but thrive. So, we think all those reasons combined really make a compelling argument for people to take a look at our company to see if it makes sense for them.