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DENVER, CO / ACCESSWIRE / November 28, 2017 / While covering BioLargo (OTCQB: BLGO), Tamarack Advisors has watched the company advance its disruptive technologies in the large markets of water treatment, air quality/treatment, and advanced wound care. It’s been a long journey that has tested management and investors, but for those patient investors that held on, the company’s most recent press release and 10Q filing could signal a tipping point. The company is beginning to deliver sales on one of its many award-winning products, and appear poised for considerable growth in the years to come.
BioLargo recently reported on their progress in a press release. Tamarack Advisors sat down with BioLargo’s CEO, Dennis Calvert to learn more about BioLargo’s progress.
Tamarack Advisors:
You’ve claimed that CupriDyne Clean is the only odor control product used by the waste handling industry that actually works, breaking down odor-causing compounds without using masking fragrances. The solid waste industry and wastewater segments are sizable verticals for BioLargo to target. Having said that, what will it take for the company to generate sales in the $300,000 per month or $4,000,000 annual range or greater?
Dennis Calvert:
The short answer is that we are just getting started with CupriDyne Clean. The three National Purchasing Agreements already in place and our new engineering division, BioLargo Engineering Science & Technologies set the stage for our continued expansion, as our existing customers expand the use of our products across their very large organizations. We are pleased to see these early-stage revenues because they are a good indicator of industry adoption and we do expect our sales to grow far more quickly as we break out within these companies. We also have additional corporate accounts in the works. We believe our sales will grow faster and should even exceed those figures. How will we do this? We’ll continue to sell our way up to the top decision makers who control the deployment of solutions like ours for large national companies. We will invest in more sales and support staff to support the growth. We will increase our marketing efforts to help get the word out. We are also starting to expand CupriDyne Clean into new markets, such as wastewater treatment facilities. There are more than 900 public wastewater treatment facilities in California alone, and our first clients are some of the largest and most well-known operations in the industry. To help understand the size of the wastewater treatment industry, the 2015 Census figures report that the total wastewater industry in California alone includes 740,303 active firms (including municipalities and private companies) and represents just under $1 billion in payroll. The number of large California firms employing more than 500 people is reported at 6,060 representing about 50% of the total payroll for the California industry alone.
Tamarack Advisors:
How has the acquisition of your new engineering division changed things for CupriDyne Clean? How do you expect that to accelerate market adoption of this product?
Dennis Calvert:
Our recent addition of the company’s new in-house engineering team is allowing us to expand our capabilities and open new opportunities with existing and new clients. For example, one client has asked us to design and build a portable misting system that could deliver our CupriDyne Clean product over the surface of a landfill. Our engineers are working on the project as we speak. In another example, our engineers recently conducted a small study that shows our CupriDyne Clean can eliminate some dangerous contaminants out of a gas plume, which refers to the flow of pollutants in the form of vapors or smoke released into the air like you might see coming from a power generation plant. Early success in this study points to expanding high-value uses of the product to help maintain air quality for industry. Our continued success working with clients to manage VOC’s (Volatile Organic Compound) is an expanding market well beyond simple odor control.
We believe CupriDyne Clean may provide solutions to a number of very large industrial operations we haven’t even considered yet, helping maintain and improve air quality for numerous industries. And, now we have the team on board with the experience and knowledge to serve these customers. We are exploring multiple commercial opportunities.
Tamarack Advisors:
Assuming you can capture a good segment of the odor control and air quality control market – does that mean the opportunity for CupriDyne Clean is a $15 to $20 million annual business or is it potentially bigger?
Dennis Calvert:
We believe the potential is much bigger! The international markets are also quite large, and we are just now able to invest some time and money pursuing those markets. Most recently, we participated in a trade mission to China which helped us understand the needs in this area. Their air quality problems are widely reported. The trade mission allowed us to sit and talk with more than a dozen industrial companies that all expressed interest in the large and important odor and air quality control markets there, and rolling out CupriDyne to China, something we are working on currently.
Tamarack Advisors:
BioLargo is arguably best known for its breakthrough in water treatment with the AOS, (Advanced Oxidation System). We understand and agree that projecting sales is difficult, but can you tell us where BioLargo is in terms of its expectation of first revenues from this $860 billion market?
Dennis Calvert:
The AOS is one of our star products for sure and you are correct, newly developing sales are very difficult to forecast. We are quite proud of the fact that even though our first foray into the water industry began only 3 years ago, our breakthrough technology is already nearing its commercial launch. The first research project, I’ll remind you, was a research project at the University of Alberta to help solve the contaminated water issues around the oils sands industry. Until then, the AOS technology was just an idea. Our success in that early proof of claim work encouraged us to start BioLargo Water. Now, after three years of hard work, we have arrived at this point with a proven technology, a number of strategic relationships, over 50 government grants, and the early attention of a very large $860 billion industry as an up-and-coming contender. Of course, there is work to do to get our AOS seated in the marketplace and we are facing the important task of scaling up the technology with our new engineering team. We believe our proven AOS value propositions of high performance and low cost will be the successful drivers to make it happen.
Tamarack Advisors:
What’s your strategy for monetizing the AOS?
Dennis Calvert:
We are very active in pursuing three pathways to monetize the AOS: first, acquire large grants from public funding agencies to help us break through to commercialization via rigorous commercial piloting. Second, develop strategic alliances with larger companies; and third, pick a segment and go direct-to-market. We are working diligently and are highly encouraged by a long list of stakeholders in each area to continue to pursue all three strategies and I can confidently predict our inevitable success with this product because of this.
With respect to funding grants, we have been awarded more than 50 research grants and climbing, from various Canadian public and private agencies, including the Canadian National Research Council – Industrial Research Assistance Program (NRC-IRAP) and the National Science and Engineering Research Council of Canada (NSERC). Through a project funded by a grant from the Metropolitan Water District of Southern California pursuant to its Innovative Conservation Program, we confirmed the technical capabilities of our AOS system to disinfect and decontaminate poultry, dairy and municipal tertiary effluent wastewater. We are engaged in active discussions with a number of very large funding agencies and are preparing formal submissions to occur in the near term.
With respect to strategic alliances, we have a number of ongoing discussions under NDA with leading companies in industry. These include dedicated water treatment companies and actual corporate clients from specific industries like food processing, where we have already completed significant testing to prove our claims. Our scale-up work with our engineers is critical to support these discussions and we believe that we will find success in this area as that work is completed. We expect to more fully report on our work in this area in the coming months. As for timing, we could see early revenues from our AOS in 2018, depending on the status of our strategic licensing and grant efforts. This opportunity has an enormous potential to become very big, very fast. Our go-direct-to-market efforts could have us in the field in late 2018.
Tamarack Advisors:
Let’s change gears and talk about your subsidiary, Clyra Medical. Wound care is an $18 billion-dollar industry that appears to have a substantial unmet need for better solutions because of stubborn and difficult-to-treat wounds such as diabetic wounds, pressure wounds, antimicrobial resistance, and the high cost of current solutions. You recently submitted a 510(k) application for your Clyra Medical product – what can you tell us about this?
Dennis Calvert:
Our wound care products are very exciting because we figured out how to incorporate the ”gold standard” of antimicrobials – iodine – into products without its traditional cytotoxicity issues. In addition, our third-party testing also confirms that the product has some extended antimicrobial efficacy which makes it a perfect complement to an infection control and regenerative tissue therapy strategy. So, I suppose in summary, the applications for our products are broad and extremely important.
In late September, Clyra submitted an application for premarket notification under Section 510(k) for a wound care product. It is now in the formal 90-day review process by the FDA, which we hope is completed around the end of the year or in the first part of 2018. In anticipation of FDA approval of this first product, and of additional products already in development, Clyra accepted $1,000,000 of investments, $250,000 of which was from BioLargo.
Tamarack Advisors:
So, once the FDA process is complete, how is Clyra going to commercialize your technology in the medical field? What are its future plans?
Dennis Calvert:
For the wound care product under FDA submission, Clyra’s management is actively engaged in arranging for clinical work with what are called ”key opinion leaders.” For example, you may have seen our reporting about Dr. Brock Liden’s involvement. Dr. Liden is a practicing wound care specialist physician and has been working with our technology for some time. Additionally, Clyra management has had discussions with multiple potential strategic partners for distribution or licensing of the initial wound care product. These discussions are dependent on a successful FDA process and have been preliminary in nature, so we will have to wait and see on their success.
As far as future plans, Clyra has two additional products that are far along in the development stage. Once ready, they will be submitted to the FDA under the same 510(k) process. We’re very excited about those additional products – one is in the dental field – and we will announce them as soon as Clyra’s ready to do so.
Tamarack Advisors:
Having followed your company for quite some time, we were quite surprised when you announced the acquisition of an in-house engineering team. What advantages do you see it providing? How will it help BioLargo make money?
Dennis Calvert:
We had been working with this group of lead engineers since 2016 through our relationship with Chicago Bridge & Iron (NYSE: CBI). When a large division of CB&I was sold, managing Engineer Randy Moore and his team became available and reached out to us. The decision to bring them in-house was easy. As lead engineers with one of the largest engineering companies in the world, the team has incredible backgrounds working to solve some of the most well-known natural and industrial challenges in recent history. As lead technical innovators serving clients around the world, our team is equipped to address even the most demanding situations in the marketplace.
We expect our engineers to help the company in three primary ways – through the provision of professional services to outside clients; commercializing AOS; and by developing technologies for our other existing products.
With respect to outside professional services, our team is currently evaluating, bidding, negotiating, and generally pursuing commercial opportunities. They have decades of relationships with clients that require their services and are reaching out to those clients. They are also providing subcontracted services to CB&I (their former employer) which has recently been sold and is now known as APTIM.
With respect to AOS, the team is taking the AOS from the lab to the field. In the coming months, they will be working to design a pilot-ready system capable of field-testing and subsequent commercialization.
They are also there to assist with existing products. Just last week, they met with one of our industrial odor clients to design and build a portable system that can deliver our CupriDyne Clean product to the surface of landfills for odor control.
Engineering in itself can be a very large business and now we have a world-class team to serve our internal and external client needs.
Tamarack Advisors:
Thanks for your time Dennis. Any final comments?
Dennis Calvert:
We are enjoying the flywheel effect and its momentum is powerful. We are often reminded that our continued focus on our worthy mission to Make Life Better through innovation, as well as our continued ability to attract exceptionally qualified talent and the support of our investors and public funding sources, are all critical components to our success. Technologies like ours can be a catalyst for change for good and we are a living testimony to the power of innovation combined with purpose for the greater good. In many ways, we are just getting started and we can’t wait for tomorrow. I encourage our stakeholders to read the updates in our recently filed quarterly report with the SEC for a complete understanding of the highlights in this interview.
Tamarack Advisors:
Thanks, Dennis, we are very excited to report on your progress in the coming weeks and months.
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Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Flathead Business Solutions LLC, which owns tamarackadvisorsinc.com, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. Flathead Business Solutions LLC may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Flathead Business Solutions LLC may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit http://tamarackadvisorsinc.com/legal-disclaimer/.
SOURCE: Tamarack Advisors
