BioLargo, Inc. (OTCBB: BLGO) is focused on leveraging Nature’s Best Solution® - iodine – to solve a variety of common problems around the world. In an industry containing billion dollar companies like Clorox Company (NYSE: CLX), Colgate Palmolive (NYSE: CL ) and maker of Lysol, Reckitt Benckiser (LON: RB), the company’s all-natural iodine is a safe, environmentally friendly, economical and efficacious molecule for odor control disinfection related uses and even enhanced moisture control when combined with a variety of other absorbent materials.
The company’s CupriDyne® is a proprietary technology that delivers iodine by incorporating many of the same safe ingredients found in multivitamins. The result is that BioLargo can deliver an iodine wash product that is just as powerful as competing household cleaners and disinfectants, but is also non-toxic, “green”, part of a natural cycle, has no known capacity for acquired resistance, and is made completely of ingredients that are generally regarded as safe by the FDA and are commonly used in food products. And as the first to market with this technology, the company is in a unique position to profit.
A Highly-Promising Proof-of-Concept and Landed Its First Major Commercial License
BioLargo’s first major license is in the pet industry with an initial focus on odor and moisture control applications for pets. Its technology has application across multiple product categories within the pet industry like bedding products, puppy pads, stain and odor remover and even cat litter. The market for cat litter alone is massive with 92 million cats and an estimated annual turnover at $1.9 billion US per year and growing. Environmentally safe cat litter alone represents 20% of the $1.1 billion per year eco-friendly cat products market, according to a report by MarketResearch.com called “Natural, Organic and Eco-Friendly Pet Products in the U.S.” Future products will include liquids, puppy pads, litters, bedding and more.
After winning awards, including a ‘Product of the Year’ award in the equine market, the company attracted the attention of Central Garden & Pet Company (NASDAQ: CENT), which is the largest seller and distributor of pet products in the U.S. Under the terms of a recent agreement, disclosed in an 8-K filing with the SEC, the company has secured a $100,000 down payment and significant future minimum purchases in order for Central to maintain its exclusive rights in the pet industry:
The minimum run rate from this agreement and sales into this pet industry category could take the company to $3.5 to $5 million per year, using sales figures from competing products and standard industry margins. The opportunity appears to far exceed the minimums of the agreement and the products developed appear ready to launch in early 2012. These near-term revenues could equate to significant value for shareholders as the firm’s management expects to transition to positive cash flows and net income. Given the nature of the platform technology and the platform business relationship with the industry leader, sales could expand and grow for decades to come.
Significant Long-term Potential in Many Verticals
The revenues from this agreement and the pet industry related sales may be significant, but they pale in comparison to BioLargo’s long-term potential. The company already has a number of new products on the launch pad and has identified dozens of additional products over the long run. If these new products experience just a fraction of Odor-No-More’s success, like being recognized in its industry segment as a top performing product, then the new products could spell strong top and bottom line growth ahead as the company seeks to build distribution alliances with industry leaders in various industry sectors.
Beyond the pet supplies market, the company is also diligently working to develop their iodine technology for various “CleanTech” segments. Many industries are in need of disinfectants, odor and moisture control, and contaminated water solutions, ranging from medical to food and beverage to oil and gas. As a result, the revenue potential for these products is virtually endless.
The company’s plan to capitalize on these new verticals is simple: They do enough work to prove commercial viability and recruit one or more of the vertical’s market leader and then they become the supplier. With a partnership agreement already in place with The Horn Group, (that just celebrated its 50th anniversary as a leading distributor in the specialty ingredients and materials supply industry) the company has the supply chain established with a proven ability to execute on these agreements to what appears to be substantial scale.
In the end, BioLargo Inc. (OTCBB: BLGO) represents an attractive investment opportunity at these levels with near-term revenues and long-term potential. To learn more about this company, please see the following links: