AOS Filter Breakthrough

Monday, 18 August 2014

As announced on August 18, 2014,  BioLargo, Inc. (OTCQB: BLGO) entered into a manufacturing and distribution license agreement for its Isan® system with Clarion Water, a new operating division of InsulTech Manufacturing, LLC (, the latter of which has over 20 years of commercial success around the globe representing hundreds of millions in sales of technical products to Fortune 100 companies.

Owned in equal parts by BioLargo, Inc. and Peter Holdings, Ltd., the Isan system leverages the power of iodine to provide the world’s most effective disinfection dosing systems. It has been referred to as one of the most important technical advancements in food safety in the past 20 years. It won a ‘top 50 water company award’ by the Artemis Project in 2010 and a DuPont Innovation Award for its excellence in science and innovation in 2004.

Dennis Calvert, BioLargo's president, stated: "This represents a promising opportunity for BioLargo to bring one of our platform technologies to market. As we work on initiatives to commercialize several iodine-based technologies, it was important to us to find a partner with the manufacturing and distribution experience, capabilities and capital resources to fully realize the potential of the Isan system. The global applications for the Isan system are vast as industries all over the world seek a sustainable and cost-effective solution to disinfect water and control disease.”

Iodine is a powerful, broad-spectrum biocide that is a logical replacement for chlorine in applications involving irrigation supply and post-harvest sanitation.  Through its automated and precise dosing system, the Isan system can help increase the quality and shelf life of fruits, vegetables, and other produce, is effective against a host of bacteria and fungi, and helps producers conform to increasingly stringent food safety regulations such as the Hazard Analysis and Critical Control Points (HACCP), which addresses food safety through the analysis and control of raw material hazards.

“The Isan system has been validated through early stage commercialization and comprehensive testing conducted in Australia and New Zealand. Clarion intends to leverage this early work and focus initial commercialization efforts on the vast opportunities for the technology in improving plant quality and shelf life as well as explore additional opportunities for use in select industrial applications. We are excited to bring this technology into the market place through this licensing partnership,” concluded Calvert.

Tom Bercaw, President and Founder of Clarion Water commented, “We are excited about the significant opportunities for the Isan technology around the world. We conducted extensive market research to validate the high global demand for water disinfection systems with the performance and features of the Isan system.  The system features a green, environmentally friendly design focused on solving many of the critical issues faced by agriculture, industry, municipalities and others with regard to safe, effective and responsible water treatment. In addition, the Isan system has been proven to enhance food safety and HACCP compliance, which has been an ever increasing concern in the US and abroad. We believe the Isan system is a good fit for our talents, experience and market presence.”

Terms of Agreement
Per the terms of the agreement, Clarion receives the exclusive global manufacturing and distribution rights to the Isan system and use of all historical data to support its commercial focus. Clarion will pay BioLargo a patent maintenance fee of $25,000 per year paid quarterly in arrears, and royalties on revenue equal to 10% paid quarterly in arrears. There are no minimum royalty payments for the first two years, but at year three (beginning July 1, 2016) the minimum royalties are $50,000 per quarter, at year four $75,000 per quarter, and at year five and onward $100,000 per quarter. The intellectual property subject to the license agreement includes all intellectual property related to the Isan System, including all patents, trademarks, proprietary knowledge, and other similar know-how or rights relating to or arising out of the Isan System or the patents related to the Isan System. The agreement contains other terms and conditions typically found in intellectual property license agreements.

BioLargo and Peter Holdings received a royalty advance of $100,000 upon execution of a letter of intent in February of 2014, which will now be applied to royalties received during the first two years of the agreement. BioLargo retains certain marketing rights to help develop clients for Clarion.

Friday, 15 August 2014

Why Current Water Treatment Technology Can't Solve The Global Water Crisis

 The article and related disclosures are available at Seeking Alpha:

 |  Includes: AWK, BLGO, DOW, GE, VE
  • GE, Veolia, Dow and American Water Works are selling billions in water treatment technology.
  • All their water treatment technologies work or they wouldn't be selling.
  • In spite of effective water treatment technologies, the global water crisis persists.
  • The problem is the high cost of current technologies, therefore the answer lies in lower cost.
  • Promising new ultra-low cost and highly effective water treatment technology recently revealed.
The global water crisis is enormous. Today there are over one billion people without clean water and the number is soaring as water shortages spread globally, including todeveloped nations like the United States.

If you are reading this article, you are fortunate that you are probably relatively insulated and unaware of the magnitude of this problem and most likely have not experienced the harsh reality of living without adequate clean water.

Insatiable global demand for potable water is fuelling big sales and high growth in the $360 billion water treatment industry. There are a large number of water treatment companies selling a large number of different water treatment technologies, yet our global population is still facing the most serious water shortage in history; and the quality of water even in developed nations is declining and posing serious health hazards.

A few leaders in water treatment are General Electric (NYSE:GE), Veolia (NYSE:VE), Dow Chemical (NYSE:DOW) and American Water Works (NYSE:AWK). A few examples of commonly used water treatment technologies are: Advanced Oxidation Process, Reverse Osmosis, Membrane Filtration, Ceramic Filtration, Ultrafiltration, Carbon Filtration and more.

If these technologies are being sold for billions of dollars they must work. If they work, why is there still such an enormous problem?

The answer is very simple and can be explained with just one word - "Cost"!

These technologies all work, but they simply cost too much. Demand for clean water may be "off the charts", but supply is unable to keep up because significant investment capital is required, and operational costs are high. An example of the high cost just for capital investment comes from the small community of Oceanside, California, where they are exploring replacement of an older water treatment facility that was built in 1949. Replacement today is estimated at close to $100 million. And that does not include the high cost of energy for operation and maintenance.

One example of the high cost of energy for operating water treatment is quoted from the American Council For An Energy Efficient Economy, "municipal water supply and wastewater treatment systems are among the most energy-intensive facilities owned and are operated by local governments, accounting for about 35% of energy used by municipalities."

It's logical that a more cost-effective solution is required to have any meaningful impact on the water crisis. Because they are the only options for solutions, current high-cost technologies will remain in big demand and will generate large sales, but they will not solve the lion's share of the problem. The fact that the magnitude of the unsolved problem is still so enormous; and that so many technologies are offered by so many companies; is a strong statement that they cannot solve the global water crisis.

The Global Water Picture Today
Eighty percent of infectious diseases are caused by contaminated water. Five million people die each year from lack of water or from contaminated water. One quarter of the world population has little or no clean water. By 2020, it is estimated that 76 million people will die from lack of water or from contaminated water.

China has 22% of the world's population, but only 7% of the world's fresh water.

Four hundred major cities in China have serious water shortages. Eighty-six percent of China's rivers exceed pollution standards.

Similar problems exist in Africa, India and the Middle East. Droughts combined with water pollution from agriculture, oil recovery, mining and industry are straining available fresh water in the United States, Europe and other developed nations and are constraining economic and social development worldwide.

Global Pollution Sources
Agriculture is the largest user of water swallowing up 70% of all available fresh water. Runoff water from agriculture is massive on a global scale and is known to pollute the groundwater, rivers and lakes with nitrates and pesticides. An example of what nitrates can do is the recent drinking water scare in Toledo, Ohio when it was discovered that nitrates were leaking into Lake Erie and causing toxic algae blooms to grow and contaminate the drinking water supply. Nitrate problems are expected to become widespread and more apparent as monitoring devices to measure for contaminants become more effective and in wider use.

The U.S Geological Survey Water Schoolclaims, "Before the mid-1970s, it was thought that soil acted as a protective filter that stopped pesticides from reaching groundwater. Studies have now shown that this is not the case. Pesticides can reach water-bearing aquifers below ground from applications onto crop fields, seepage of contaminated surface water, accidental spills and leaks, improper disposal, and even through injection waste material into wells."

Oil sands production creates the majority of oil but requires about four gallons of water to extract each gallon of oil from the sand. The wastewater, "produced water", from oil sands recovery becomes contaminated with toxins and is often stored in tailings ponds until a solution can be found to treat the water to safe standards. In Canada, there are over 170 square kilometres of "tailings ponds" containing about one billion gallons of wastewater. There have been reports of significant leakage from these tailings ponds back into the water supply raising concerns about safety. The large water requirements and produced wastewater are becoming serious constraints on oil sands production.

Fracking requires an average of 4.5 million gallons of water per well and there areseveral hundred thousand wells. The wastewater from fracking called "flowback", is toxic and is often injected back into deep disposal wells that are below the ground water table. According to an article in Scientific American, "Records from disparate corners of the United States show that wells drilled to bury this waste deep beneath the ground have repeatedly leaked, sending dangerous chemicals and waste gurgling to the surface or, on occasion, seeping into shallow aquifers that store a significant portion of the nation's drinking water." The difficulty obtaining the necessary water requirements and safely managing the toxic flowback wastewater are becoming serious constraints on fracking.

Mining operations require large amounts of water for recovering targeted minerals from ore and the wastewater tailings are also very toxic. Typically, these wastewater tailings are placed into tailings ponds where they remain for years with the potential to leak into the groundwater and rivers. Massive toxic spills into the water supply were recently reported in CanadaMexico, and West Virginia.
Electric power plants are one of the largest users of water, and depending on the nation, coal-fired power plants contribute anywhere from 41% to 93% of electricity worldwide.

Coal fired power plants have been under scrutiny for decades due to the heavy carbon emissions they release into the atmosphere. They are required to use air scrubbers to clean the air, but the water used to clean the scrubbers picks up the toxic contaminants and carries them to the water supply.

According to the NY Times, Coal fired power plants are the biggest producers of toxic waste. Every year, they release millions of pounds of pollutants, including toxic metals like arsenic, boron, mercury, cadmium, lead and selenium, into rivers, streams, and lakes.

Current Water Treatment Technologies In Use
GE offers a number of water treatment methods that produce 1.7 billion gallons of potable water every day. ZEEWEED ultrafiltration membrane technology for oil refineries allows them to reuse up to 95% of their water from recycling. GE's membrane water treatment recycles 100 million gallons of wastewater every day for agricultural irrigation. GE's "EDR" technology turns raw water into drinking water for metropolitan water systems. This video clip by GE explains their role in water treatment.

Referring to the high cost of operating any water treatment technology, Yuvbir Singh, General Manager engineered systems at GE Water and Process Technology, said, "Over the last couple of years we've been really focused on reducing energy consumption in out wastewater treatment systems, because on a lifecycle basis, that's a big part of operating cost for our customers." In spite of high investment and operating costs, demand for GE water treatment products is expected to remain very strong because the need is so great.

GE is a giant conglomerate with diverse interests across a broad spectrum of the economy and the water division is not expected to significantly impact the company's overall, revenues, profits and valuation.

Veolia is a world leader in delivering drinking water solutions to municipalities. Veolia uses basically the same technologies as their competitors to treat water with their Berkal, Actiflo, Multiflo, Spidflow, Filtraflo and membrane technologies. Veolia's Opaline membrane filters are used to remove pesticides, total organic carbon, endocrine disrupters, and micro-organisms. Veolia's water treatment technologies serve over 150 million people with technologies that are similar to the competition, therefore, capital and operating costs are running high. In spite of the high costs of their products, demand for Veolia water treatment is expected to remain very strong because the need is so great. Veolia's overall business is focused on the water treatment industry and therefore will experience substantial changes in revenues, profits and valuation from its activities in this industry.

Dow Chemical Water Division is estimated to treat 15 million gallons per minute. Dow's technologies include Reverse Osmosis, Ultra Filtration, Fine Particle Filtration, Ion Exchange, Adsorbent Resins, Bio Chromatography and Electro-Deionization. Dow also delivers Reverse Osmosis Filtration for Desalination. In spite of high operating costs for their water treatment technologies, demand for DOW water treatment products is expected to remain very strong because the need is so great.

Dow Chemical is a diversified chemical company with broad interests in many sectors of the economy. Because Dow is not focused on water treatment, the company is not expected to experience large variations in revenues, profits and valuation resulting from water equipment sales.

American Water Works offers water and wastewater services to approximately 1,500 communities in 16 states. It operates approximately 80 surface water treatment plants; 500 groundwater treatment plants; 1,000 groundwater wells; 100 wastewater treatment facilities; 1,200 treated water storage facilities; 1,300 pumping stations; 87 dams; and 47,000 miles of mains and collection pipes.
American Water Works offers traditional filtration systems that have no significant competitive advantage over the competition. High operating costs for their water treatment technologies will be a constraint on sales, but demand is expected to remain very strong because the need is so great.

American Water Works is focused on water treatment and is expected to experience significant changes in revenues, profits and valuations from water treatment sales.

Promising New Technology May Offer Solution
An exciting new technology surfaced recently when an emerging company, BioLargo, Inc. (OTCQB:BLGO) announced a breakthrough in water treatment. This short video clip demonstrates the AOS Filter (actually an electro-chemical reactor and filter) that has been validated by the University of Alberta and proven to decontaminate water from recalcitrant contaminants in seconds versus hours required by current technologies, and at only 1/20th the cost of the closest competing technology.

On January 21, 2014, BioLargo issued the press release: "BioLargo Successfully Concludes Proof of Concept and Progresses to Pilot Phase for Its Oil Sands Decontamination Project With University of Alberta"

On May 15, 2014 BioLargo issued a second press release: "BioLargo's Patented AOS Filter Receives Additional Validation for Use in Water Treatment" Dennis Calvert, BioLargo's president, stated: "BioLargo's AOS Filter has been shown to reduce total acid-extractable organics in water at a rate never before demonstrated commercially. Based on proof of claim there is a belief BioLargo may have the lowest cost sustainable solution for the oil sands process-affected water. Having tested our technology, the esteemed University of Alberta is entering the AOS Filter industrial pilot-scale-testing phase, which we expect to confirm its commercial viability to treat oil sands tailings ponds and then eliminate the need for them on a go forward basis. Oil sands are commonly considered one of the most difficult water contamination situations. As such, this pilot project is expected to provide the groundwork for additional water treatment applications, including refining, fracking, remediation, agriculture and industrial waste among others."

Cash is always a big issue with all microcaps and BioLargo is no different. The company reported that cash increased from $92,457 on December 31, 2013 to $373,373 on March 31, 2014. Current Assets increased from $126,146 on December 31, 2013 to $446,459 on March 31, 2014. Current Liabilities decreased from $732, 157 on December 31, 2014 to $508,652 on March 31, 2014. The number of shares outstanding increased from 71,357,532 on December 31, 2013 to 76,409,578 on March 31, 2014 indicating the company may have raised capital in that period.

The company has multiple profit centers and is not reliant on the AOS Filter and has already reported beginning sales with the U.S. government that could become significant.

Risk tolerant investors will find BioLargo attractive because they have the potential to offer a game-changing solution that is needed to help solve the enormous global water crisis. If they are successful, the rewards could be enormous.

The current water treatment technology offered today by the world's largest companies cannot solve the global water crisis because their technologies are not cost-effective. The global leaders of water treatment have all of the tools they need to deliver massive scale to meet the massive global needs, but their high capital investment and high operating cost is holding them back. The industry yearns for low cost solutions.

In spite of the high costs of their products, Veolia, and American Water works are strong buys because their technologies are the only ones available and serve the purpose well enough to sustain strong and fast growing sales in a world desperate for clean water. GE and DOW are large conglomerates that will benefit to a lesser degree, but are very sound financially. BioLargo is a compelling investment consideration for risk-tolerant investors because the newly announced AOS Filter has the potential to revolutionize the way wastewater is treated and reward investors with exceptional returns.

BioLargo's new AOS Filter technology may be able to solve the global water crisis to a much higher degree than today's technologies because it is so much cheaper and cost-effective.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

Thursday, 3 July 2014

Water is Liquid Gold: 'The hottest commodity in the world'- CNBC article- Points to how BioLargo's AOS Filter will play a big role in this future.

Water is one of natural resource required to sustain all life on the planet, making it already the most important commodity on Earth. 
Although it has been fought over, sold, diverted, dammed, claimed by governments and overseen by authorities, Wall Street has never really gotten its hands in it the way it has with, say, oil.
Looking ahead into the next quarter century, clean drinkable water is expected to become more scarce as the human population grows and climate change shifts the shorelines and weather patterns.
So the question is, Will this most precious commodity become a traded resource that will be bartered for, and traded on a futures exchange, much like oil, corn or gold?
"It's intuitively appealing to talk about water as a traded asset. If you look at projections over the next 25 years, you'll see that global water supply and demand imbalances are on track to get worse," said Deane Dray, a Citigroup analyst who heads up global water-sector research. "The majority of the world population is living in water-scarce and water-stressed regions of the world. "
But Dray and other experts say trading water will be difficult, as water supply is ultimately a local issue all over the world.
"I don't see how you would do it. Water's regulated locally. It's regulated in every state. You can't put a pipe in a waterway and start selling it somewhere else," said Robert Kennedy Jr., president of Waterkeeper Alliance, which promotes watershed protection globally. "The waterways are owned by the people of the state."
History is full of examples where water diversion led to wars or environmental tragedies. The former Soviet Union diverted rivers for crops in the 1960s, ultimately drying out the Aral Sea in Central Asia, where fishing boats are now stranded on dry land.
"Anything that ships water as a commodity out of a watershed would be extremely disruptive environmentally, and it would be disruptive to democracy and the public trust. We've already seen water wars all around the world because of companies trying to do that and governments trying to do that," Kennedy said.
The Middle East has seen many conflicts over water, including in Syria. The Euphrates River has long been a source of conflict between Turkey and Syria, and in the last month Turkey turned off the tap, affecting water flow to Syria and Iraq.
Kennedy said Western law, dating back to Roman times and even the Magna Carta, stated that water belongs to the people.
"Water is a multitrillion-dollar industry now, according to the World Bank, and because it is a commodity that is vital for human life and we're experiencing global shortages because of global warming and population growth ... it's something [that] people will try to figure out a way to commoditize and sell," Kennedy said. "The best measure of how a democracy functions is how the government distributes the goods of the land."
That would include waterways, fisheries, wildlife and public land.
"Economists like the idea of trading [commodities] freely. The process increases economic efficiency," said Professor John Reilly, co-director of the Joint Program on the Science and Policy of Global Change at the Center for Environmental Policy Research at MIT Sloan School of Management.
"In terms of large-scale international trading of water, we already have bottled water moving around. I think its more likely we will see desalinization and other sorts of things—such as water reclaimed, cleaning up and recycling of water—before we see large-scale trading of massive amounts of water, because it would be expensive to move," said Reilly. He said a solution to lack of water may be to move activities that require water, like crop production and manufacturing, from dry areas to wetter regions.
Necessity the mother of invention
Richard Sandor, CEO of Environmental Financial Products, said he believes obstacles will be overcome, and he fully expects to see trading of water via financial instruments in the next five to 10 years—something he's been thinking about for quite some time.
Sandor was behind the creation of interest-rate futures while working as an economist at the CME, and he also was behind the Chicago Climate Exchange, a North American trading system for greenhouse gases, now owned by ICE.
"I think this one is going to require invention. The physical limitations of piping water is a problem that will require creativity," he said.
The more important issue is how to price such financial instruments. As Sandor explained, "The delivery from futures is very small. They're really meant to keep the pricing honest, not to change ownership. The delivery and the threat of delivery is what keeps a price honest and fair, at least on the derivatives side."
Sandor said water trading would have to based on the dynamics of regional markets, and he's been working up a plan. "I think we're going to have to invent something that takes into account the varying geographical differences. We'll have to figure that out," he said.
The U.N., in its 2014 report on world water demand, said demand is expected to grow significantly with the largest growth in the emerging world. Agricultural water consumption could grow by about 20 percent globally by 2050, not counting new efficiencies or conservation.

Water demand for energy could increase by about a third in the period between 2010 and 2035, with non-OECD countries accounting for 90 percent of the growth. The OECD projects fresh water will be increasingly strained with an additional 2.3 billion people living in areas that are highly water stressed, like North and South Africa and South and Central Asia, by 2050.
At the same time, the U.N. paper notes that climate change is impacting surface water, and dry regions should get drier while wet regions will get wetter. The U.N. notes there's also evidence groundwater supplies are diminishing, with an estimated 20 percent of world aquifers overused. Groundwater abstraction is increasing at a rate of 1 percent to 2 percent a year.
"Water is always a local issue. It's prevalent in areas you don't want it, and that's flooding, and it's scarce in areas you do need it, and that's overly populated areas and arid areas. Water is costly to transport. It costs more to pipe water than it does to pipe oil," Dray said.
As for pricing, every country values it differently, and there's no uniformity at all. For instance, Dray said, water is free in Ireland. "They consider it a right. That's part of what you have to overcome. Twenty-five years is a long time for some of these notions to change," he said.
In contrast, Danish consumers pay the most for water—at an estimated average $3.88 per cubic meter, and $8.45 when wastewater charges are included, according to Global Water Intelligence. In the U.S. the average is about $1.48 per cubic meter of water, and in Germany $3.08. Sandor points out that these are the prices of water and infrastructure, not the price of water alone.
Dray also noted that water is the only natural resource that is ingested. "Twenty-five years is a lot of time for things to change. Water demands will increase at a faster rate than supply. Some of the notions about and preconceptions about water being a right could change," he said.
"I do believe [water] will be the commodity of the 21st century."
-Richard Sandor, CEO, Environmental Financial Products
Mark Fulton, founder of Energy Transition Advisors, said the evolution of markets and the changes in the climate over the next 25 years could bring about new systems for trading water and other environmental rights. Fulton is an economist with a background in climate change and markets. He also is a senior fellow with Ceres, a nonprofit that aims to advance sustainability practices globally.
"Global warming is the key driver of climate change, but one of the key aspects of climate change is climate variability," he said. "In a sense, we're going to see more disruption to natural systems, and therefore the property rights over those natural systems are going to have to be properly managed."
Fulton noted there is trading of water rights in Australia and, to a lesser extent, in the Western U.S.
"There are plenty of trading-based water systems. There are versions of them. Will they make it to exchanges? The more this happens and the more it becomes accepted, the more it will become mainstream," Fulton said.
The new liquid gold
Governments may also provide the solution of pricing and distribution. "A couple years ago it was a big focus in China. There was the big question of Yangtze and Yellow Rivers, and they were managing by telling people who would get what and where. They took central management over it," Fulton said.
The drought in the West has put a spotlight on the problems of managing water resources. Climate change and overuse is making the Colorado River supply tight and could result in severe shortages. The Colorado River Compact was made between six of the seven river basin states in 1922, and while it's been revised, it still pits the southern agricultural regions of California, especially in the Imperial Valley, against residential centers in other states. The California farms are dependent on the Colorado River, and so is the rest of the country, since 80 percent of winter vegetables are grown there.
One of the reasons trading water like a commodity makes sense to some is that it is so tied to agriculture and energy. Water is not only used to grow crops, it is used to create hydroelectric power and for hydraulic fracturing. Energy is used to pump water and harvest crops, and water is critical in cooling power plants.
"I do believe it will be the commodity of the 21st century," said Sandor.

"We think we know how to do it in theory. We have a lot of details to work out. I've been hearing this for years. 'You could never commoditize interest rates. That's a stupid idea.' ... I think in fact it can be done," he said.

Saturday, 31 May 2014

Wall Street Analyzer Interviews the President & CEO of BioLargo, Inc.

WSA: Good day from Wall Street. This is Juan Costello, senior analyst with the Wall Street Analyzer. Joining us today is Dennis Calvert, the President and CEO of BioLargo. The company trades on the OTCQB, ticker symbol BLGO. Thanks for joining us today Dennis.
Dennis Calvert:  It is my pleasure, Juan.  Thank you.
WSA: Great, starting off please give us a brief history and overview of the company for some of our listeners that might be new to your story.
Dennis Calvert: BioLargo has recently validated its new invention, the BioLargo™ AOS filter, which is on its way to transform the way water is treated throughout the world.  Our advanced wound care products offer a better solution with a significant cost advantage that will disrupt a $1 billion market.  Our consumer products have proven to be the most effective product in their respective markets and we are building distribution through strategic alliances.
BioLargo is a platform technology company.  All of our platform technologies include some form of iodine.  You may recall that iodine is the broadest spectrum, most potent disinfectant known.  It is also an essential nutrient. All of the work that we have done over the years is to advance our technology for the use of iodine across a number of different market segments.
We are the science company that advances and validates and takes the technology into product design for commercialization.  So we three areas of primary focus.  The first is in water.  The water segment represents a significant breakthrough for science and some really significant commercial opportunities are coming our way.  We also have a host of medical applications and we also have a consumer products division that features that same iodine for its usefulness and product design.
WSA: Great, and can you talk to us about you most recent breakthrough in the water industry?
Dennis Calvert:  Our patented AOS Filter, which is a new invention, was recently validated in proof of concept testing at the University of Alberta in Edmonton, Canada, and the validation showed the technology of the AOS Filter was highly effective at dismantling hard to manage contaminants.  This work is focused on the most difficult contaminants that commonly get trapped in the water.
In that testing we validated that our AOS Filter was able to dismantle and remove those contaminants in seconds versus hours, and it accomplished the task at less than one twentieth of the power consumption of the nearest competitors.  And what that did is validate of our AOS Filter as a disruptive contender to manage difficult contaminants in water flow that has application in just about every segment of the water industry.  So , what does that mean?  Difficult and hard to manage contaminants  are found in just about every water segment. And our invention can apply to each segment which has a a unique set of obstacles to overcome in treating difficult to manage contaminants.
So, for example, in the oil sands that industry must deal with things like naphthenic acid, which are byproducts of production, and drinking water, of course, bacteria and other contaminants that are very dangerous for humans.  But there are also hard to get contaminants like acids and ammonias and solvents; like byproducts from industry production that leach into the ground water like 1,4 – dioxane.  In fracking, there are things like hydrocarbons that get trapped in the water that difficult to manage.  In pharmaceutical production, you may encounter byproducts from pharmaceuticals that get trapped in the water and they cause problems for people, and of course, in food processing you face threats like salmonella and listeria.  So the validation work we have performed is to show that we can do accomplish this difficult task managing  contaminants in a very speedy, very fast way, at approximately one twentieth the power consumption of the nearest competitor, which means that our AOS Filter offers an economically compelling value proposition.
Number two; there are a series of things that recently developed for BioLargo that have validated and positioned the technology for adoption.  Back in January, data started coming through from a research project that we have been working on for quite some time at the University of Alberta, and most recently we announced that we are heading into a pilot phase to take the AOS Filter from proof of claim into a commercial pilot.  So we are now in the design mode and embarking on a commercial validation pilot at the University of Alberta.
Just a few weeks ago we made another announcement about additional accomplishments and some milestone achievements that have occurred in that pilot work.  The work has  provided a confirmation that the role of advanced oxidation AOS Filter is the key mode of action that is doing this ‘heavy lifting’ and tackling these difficult contaminants.  So this recent work included bench scale testing of contaminated water.  The water was taken from actual field operations from the oil sands industry, and the work has proven our effectiveness of dismantling and removing targeted naphthenic acids.
One of these naphthenic acids that we are talking about is the high-value, hard to manage and hard to get contaminants that have been an area of focus in the oil sands industry for just about 15 years.  We have accomplished this recent proof of claim that we tackle the difficult one and our AOS Filter can manage them.
Thirdly, we have reached an agreement with Professor Lynn McMullen at the Department of Agricultural, Food & Nutritional Science at the University of Alberta, and she has agreed to work with us to expand the scope of the AOS Filter in pilot testing into some areas of focus in food process and agricultural production.  That will include livestock areas, CIP and similar applications.
There are a number of applications that the technology will now be validated and tested for efficacy throughout the food industry.
Finally, about 2.5 years ago the company we became a founding member of a research chair sponsored by NSERC.  NSERC stands for Natural Sciences and Engineering Research Council of Canada.  That project was funded through a science grant that was given to the University of Alberta to focus on evaluating all the known technologies that could be brought to bear to help solve the contaminated water issue associated with the oil sands.
The other founding members who joined BioLargo were Suncor, Syncrude Canada, Shell Canada, Canadian Natural Resources, Epcor, Environment Canada and Alberta Innovates, and BioLargo.  We were joined with those leading organizations to form a cooperative of stakeholders to help evaluate all the known technologies to help solve this massive water issue associated with the oil sands production.
All of these developments  have culminated recently to give us significant validation and positioning for acceptance and adoption of our AOS Filter.
WSA: Can you help us comprehend what makes the scientific breakthrough so important?
Dennis Calvert:  Yes, sure. Iodine is the broadest spectrum and most potent disinfectant known.  That is common knowledge.  So, what we have done is we have taken that oxidizer – iodine, and we have combined it with well understood technologies like carbon, filter media, ceramics or membrane technologies and when we combine those components we can extract contaminants from the water flow.  What is unique about that invention is, that we have combined traditional filter media with an oxidizing technology and electricity, which then allows the device to provide an oxidation potential across the surface area of the filter media and an incredibly effective rate.
What that means basically is that we have taken a filter, and we have converted it into a reactor.  So we can then operate at very high flow rates and we operate at incredibly low levels of energy.  So the device features high rates of oxidation, low-power, high-speed and a continuous flow.
To provide a little more detail on that, one of the things that is really helpful in explaining the role of advanced oxidation is to consider how a shipyard anchor rusts over time through oxidation from the sea air. When you enter into a harbor and you see an old shipyard anchor that is on the ground, exposed to the sea air, that over time has turned to rust, right?  Well, how does it do that?
As the salt air comes across the surface of the metal, it adds oxygen and it grabs electrons and eventually, over time, it breaks down he metal, it dismantles it, and the oxidation converts that anchor into a dusty pile of post-oxidation rust.  Well that is advanced oxidation.  That concept is the very mechanism of action that the role of iodine plays in all these inventions.  So what we have done is we have taken that iodine chemistry, we have combined it with electrolysis and we have combined it with filter media so that we get a very high rate of oxidation at very low power levels across the surface of the filter.
The net result is expected to yield unparalleled cost effectiveness. What is the significance of the breakthrough then? Well, our proof of claim work showed that our AOS Fitler performed at greater than10 times faster, and at about one twentieth the power consumption of the closest competitor to dismantle and remove these very hard to get contaminants in a continuous flow of water.  The combination of those results provide a scientific breakthrough in the way that water can be treated and managed in a continuous flow device.  It is really quite a special validation and we know that the AOS Filter has a big a role to play across the entire industry.
WSA: Right so you feel the technology will be useful across a number of segments of the water industry, then why is BioLargo starting in the oil sands industry?
Dennis Calvert:  Right.  It is a good question, being an innovator, working to bring technologies to market is always a challenge.  There are incumbents and other significant barriers to entry.  So, why the oil sands?  The oil sands may be considered one of the most difficult, challenging water treatment situations in the world.  As an innovator, what we are always looking for is the opportunity and market demand that can help pull us through the barrier to entry..  So that demand pull could be leveraged. It could be in the form of an economic opportunity or compelling political reasons or, the right relationships or the important validations necessary to help pull it through the barrier to entry.
The oil sands is a fascinating marketplace.  The Canadian oil sands, in particular, are widely considered the second or third largest deposit of oil in the world.  The process by which operators extract that oil is a highly water intensive process.  In fact for about every barrel of oil that is produced there is about 3.5 barrels of water that is used in the process of producing that oil.
They use a heat process, where they essentially use hot water and steam assisted gravity drainage to extract the various fractions and one of the byproducts is a highly contaminated, concentrated water.  In fact, there is about a billion cubic meters on the ground already in the Athabasca oil sands.  The current treatment technology is to put that water into settling ponds or tailings ponds as a holding tank so that it can be treated over time and they have accumulated over years of production about a billion cubic meters.  In addition they are producing about 177 million cubic meters of contaminated water which add to the tailings ponds..
So the stress on the system, for that market, is that the industry would very much like to double production, in fact they are forecasting to double production over about the next 15 years.  And if you think about the magnitude of that goal,  you’re talking about 177 million cubic meters of water already being produced at existing levels and the increase then, is a major water volume.  It has already got a billion cubic meters on the ground and the industry wants to double its production, and they use 3.5 times as much water as they – to produce one barrel of crude.  So the scale of these numbers is simply not sustainable.
Everyone in the industry knows, the politicians know, the government regulators know that these metrics will not work.  So the stakeholders really want to come together and figure out how to find an acceptable solution that is economically viable.  Years ago the government set up reclamation fund.  It is essentially a super fund of about $3.5 billion.  It is supported through tariff on each barrel of production.  And that fund is growing.  That fund was created for the reclamation, which includes land and water.
The water has really got some difficult challenges for it.  So from our perspective, why are we in the oil sands? Well, the oil sands is a key starting point because it is a segment where we’re very well positioned.  We are positioned for validation.  We are positioned for acceptance.  We are a co-founder of one of the leading research projects in the industry with some of the top players in that market place and we have been able to align ourselves with the key research and technical validators across that industry, which is at the University of Alberta, widely considered a center of excellence in the industry.
So in the oil sands case there is this massive problem begging for an answer.  They are looking for the right technology, they are looking for a way to getting it commercial.  The situation has got the infrastructure to get through validation and support in way that key stakeholders can support it.  In this situation it is just the perfect spot for BioLargo.
WSA: Good.  So how long will the commercial pilot take, Dennis, and how will BioLargo expand into other areas beyond the oil sands?
Dennis Calvert:  The current pilot work is focused on the design and validation phase.  So now we are taking various components of the AOS Filter, we are breaking it down into subsets and we are optimizing it for performance of high flow rate, low power and then managing the byproducts of the reaction.  So the first phase is design phase.  The next phase really is commercial scale testing and validation.  And so we are forecasting that in the oil sands in particular over the next 6 to 12, maybe 18 months we will have done enough work to validate the AOS Filter’s effectiveness for use in the oil sands and maybe some other markets sufficient to get early stage adoption on a commercial approacOur most recent announcement also spoke to the fact that we are expanding the scope to include agricultural work.  Again the invention is the AOS Filter, its application can touch many different markets.  So the opportunities to expand into other markets are already presenting themselves, and we are already talking with potential strategic alliance partners, and potential licensing partners in other markets where specific contaminants are of such importance that we see the demand ‘pull’ that can help us get into the marketplace.
The total pilot project that we have agreed to pursue with the university, should span a four-year period.  The first phase is to get to focus on this oil sands produced water scenario, which is the tailings ponds, and then expand into other markets like – like agriculture, which is already in motion and then continue to expand the scope to focus on very specific contaminants in applications across multiple markets.  So, first phase 6 to 12 maybe 18 months; total project, probably a 4-year project; to broaden the scope across the entire water industry.
WSA: Great and how do you describe management’s level of confidence about future commercial success in this area?
Dennis Calvert:  From our perspective, we are on the inside looking at the data, looking at the proof of claim.  As you might imagine, this has been quite a journey. This technical breakthrough did not just happen overnight.  So, from our perspective, given the data from the proof of claim, we believe commercial success is just a matter of time.  It primarily depends on our ability to remain steadfast and precise, as we have done throughout our journey  So when you look at the claims we are reporting; less than one tenth of the time and one twentieth of the power of the nearest competitor, they are obviously dramatic and have far reaching implications. To our knowledge we can become the low-cost, economic contender in just about every market.
The data we continue to accumulate supports these claims.  Now, there is more work to do. We need to validate a commercially scalable device. We need to continue to refine its application and the design components. But we know it works.  So our confidence about the question,  does the device work? And, is it going to find a commercial application of importance for BioLargo and for our shareholders?  We certainly believe the answer is YES and YES.
The data is being validated at the highest level.  It is so critical, that as we take an emerging technology to marketplace, it is more important what other people say about our technology than what we say.  We know this fact.  The third reason that we are confident about our future, is that the technology is simple.  Sometimes the most simple technology is the best.  Simple is easy for adoption, and in many ways our AOS Filter is elegantly simple technology.
It is a discovery.  It is new and it is novel.  It is different, and we are achieving results that as far as we can tell, have never been seen before.  This advancement positions us with a very confident position as we push through the barriers, as we gain adoption, as we recruit the right strategic alliances and as we continue to move our technology forward. Finally a reason we can be so confident is because of the leadership of our Chief Science Officer and inventor, Kenneth Reay Code.  He is so disciplined to set this technical performance bar high and above reproach and establish defensible claims. His discipline has proved invaluable as we introduce the technology to industry and work to gain acceptance.
Having technology is one thing.  Getting the acceptance is another, and that is a journey.  That is not an endpoint.  That is a continual journey of taking technology from proof of claim to validation and commercial success.  In this case, our confidence is really high because the technology is just that good.
WSA: And I guess what everybody wants to know including investors and the financial press is how will BioLargo make money with this technology?
Dennis Calvert:  The AOS Filter in particular has a number of commercial opportunities ahead of it.  Of course, you know, the big success commercially is going to rely first on getting through this pilot phase, which is a journey.  So there is an early stage journey and there will be a later stage journey.  The commerical opportunities really take three different forms.  One opportunity would be to provide integrated services.  When you look at the water industry, you can observe that the bulk of the dollars that are spent in the water industry really focus on engineering and the implementation of technology and technical support and engineering to customize these technologies to solve very specific problems that the industry faces. Those industries are forced focus on the very local circumstances, the flow rates, and contaminants and all these variables that can be unique to each customer.
It is a very customized process.  In fact, within the industry you hear, ‘water is a global industry practice locally’, water quality, water contaminants, the systems that these companies and the customers use, all have different variables.  That is what we mean when we say integrated services mean.  It comes into the situations and focuses on solving problems for a customer.  It is where the bulk of the money is in this enormous industry.
In this type of opportunity, our AOS Filter can be such a significant advancement in the way that water can be treated that it could provide an integrated services company such a significant competitive advantage. So much so, that we believe there are significant commercial opportunity to advance that infrastructure to be able to go out and solve problems for the client.  Obviously, the AOS Filter is also a piece of equipment.  So what that means is, we could license its deisgn into equipment manufacturers, we could partner with them or we could make our own.  We could sub-contract out manufacturing. For BioLargo, making those decisions really will be largely determined  by our measure of readiness, speed, adoption rate, capitalization, infrastructure and expertise.
We think the AOS Filter also creates a great opportunity to partner with potential manufacturing, and of course, finally, intellectual property licensing.  You know, when we talk about licensing for an intellectual property company like BioLargo, we are talking about an opportunity that really touches every segment of the globe, and it can be broken down by segment and it can be broken down by region.  So, as we emerge from this pilot phase with sufficient scalable proof of claim for commercial viability, we believe the opportunities exist throughout the world, by both segment and by industry region.  So there is a lot of ways to make money with this technology.
WSA: Well, Dennis, BioLargo’s breakthrough in water sounds like a pretty big deal, but the company has other commercial opportunities that are also important, can you describe how it is that an emerging technology company like BioLargo can have such a broad reach and how will those other technologies get to market?
Dennis Calvert:  Yes, I sure can, Juan, thank you. The, advanced oxidation… remember the analogy we spoke about, the shipyard anchor and the situation where the salt air adds oxygen and grabs electrons.  Okay, so that basic reaction is what iodine chemistry does.  In all of the platforms that we focused on, we take that basic mode of action and refine it for a specific target or purpose for use in a product or market application.
We are really an advanced oxidation specialist, and we are really good at using iodine, the all- natural, broad-spectrum potent disinfectant.  Okay.  So, for things like consumer products the key is to deliver that for disinfection, odor control and moisture control.  We can do so in a way that is all safe, non-toxic, non-staining.  In the medical field, we are raising the bar with those basic claims to meet FDA standards, for precise dosing, safety and efficacy, but we rely on the same basic mode of action, advanced oxidation, gentle, safe, broad-spectrum, potent.
And now with the recent developments of the AOS Filter we take that same basic reaction and we raised the bar again.  This time we excite the molecule to a very hot oxidation state and we install it into a system that allows us to dismantle these very difficult to get contaminants.
In addition, you may also recall that we have a system called the Isan System that was first developed in Australia, and we have recently received a deposit on the license agreement and that technology and delivery system is now being advanced and prepared to go to market in the agricultural field, which is really focused on a dosing mechanism for iodine.
So, they all weave together, it is that basic mode of action, oxidation, and it is the core of our technology. We have secured 8 or 10 patents.  We have another 10 or so in process, with plans to  file more.  The water industry applications are clearly the most robust opportunity in our arsenal, but any of these technology applications can move the needle for BioLargo, and we believe they will do just that.
WSA: Right.  Well, I guess you have, you know, several products that could fit under that technology including the Odor-No-More platform.
Dennis Calvert:  Exactly.
WSA: So what does the next 12 months look like for the company?
Dennis Calvert:  The next 12 months are going to be pretty dynamic.  I think the milestones in the water technology are probably going to get the most visibility because of the importance ot that marketplace. There will be a series of confirmations of grant aid, expansion of strategic alliances, data that continues to come through and refine its application for specific targets.  All of this effort is geared to head as rapidly as possible into the commercial mode, and so we think the AOS Filter is going to be number one focus for investors.
Number two, in the consumer products category, we have done so much work over an extended period of time that has lead to meaningful discussions with a number of potential licensing candidates. We believe the technology in this area, makes a strong case for adoption.  So the  challenge is really to find the right strategic alliance that can break through some of the barriers for market adoption.
And then in the medical area, we are gearing up to finish the work in preparation of an FDA application and we are pursuing a 510 (k) strategy, which is a predicate device route.  So it is a pretty quick process, but being ready is the most critical and we are in the ‘getting ready phase’. Once we get through that stage, then, we would face about 6 to 9 months to get through the FDA process.  So we are targeting, assuming we can get through the get ready phase, sometime in 2015 to secure that FDA approval for those devices.
WSA: And do you believe investors understand BioLargo’s value proposition and why should they take a look at the company now?
Dennis Calvert:  I really don’t think they have been able to do that as well as they can now.  If you look at our journey, we have had various forms of validation and we have been very careful because we have never really wanted to put more information than we could back up out in the marketplace.  If you take a look at the business today and you ask what is different today about, our Company since last year and even more so, since the year before, the answer is that the validations and the swell of confirmations about our claims are so substantial, and they are being validated at the highest level in what I would argue is probably one of the largest commercial opportunities known- water treatment.
The water treatment industry is a massive commercial opportunity.  So, do  investors understand the value?  A lot of people simply don’t know about it yet.  We are in an early stage of disclosure, and we now believe that we are able to back up our claims.  We are now sharing our story because we know it is very exciting and important., Our steadfast and  trustworthy approach in the way we release this information about our emerging technology has held us back…until now.  And now it is different. Why is it different? We now we have the credibility, the standing, research partners and the validations necessary to breakthrough that barrier of credibility.
So our business is very exciting and it is certainly dynamic at this stage.  There is a lot going on with BioLargo, and our patented technology is right on the leading edge and our AOS Filter has opened up this promise of a huge commercial opportunity for BioLargo.  Our culture is very entrepreneurial at heart and we strive on this challenge and the adventure to create and validate and commercialize these breakthrough technologies.
This is a moment.  More than any moment in our journey before, a time in which our confidence about our bright future is so high, that we believe we are  still just showing the tip of the iceberg of our future commercial opportunities.  This is part of the reason we want to do the interview with you Juan, to get the word out, make sure that people have a sense of the significance of our technology– of where we sit and where we’re going.  So we are very excited.
WSA: Well that is certainly appreciated and once again joining us today is Dennis Calvert, CEO and President of BioLargo, which trades on the OTCQB, ticker symbol BLGO, currently trading at $0.79 a share, market cap is in the $60 million range, and we like to thank you for taking the time to join us today Dennis and update our investor audience on BLGO.  It is always good to have you on.
Dennis Calvert:  Juan.  Thank you for having us.  It is our pleasure.
Juan Costello:  Anytime.

Safe Harbor Statement
The statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, the risks and uncertainties included in BioLargo’s current and future filings with the Securities and Exchange Commission, including those set forth in BioLargo’s Annual Report on Form 10-K for the year ended December 31, 2013.
*This transcript was edited from the actual live interview to provide clarification for the reader where deemed appropriate and the original unedited version is available at the link on this page.