Westminster, CA – September 30, 2021 –
BioLargo, Inc. (OTCQB:BLGO), a developer of sustainable cleantech technologies
and full-service environmental engineering company, released a “Letter to
Stockholders” discussing the development of several key strategic partnerships
and other business initiatives aimed at expanding the company’s commercial
reach. The Letter to Stockholders is available below.
Dear Stockholder,
I write to provide an
update on the progress that BioLargo and its business units have made in
positioning the company to be the go-to provider for innovative, effective,
scalable solutions to challenging environmental problems. I also want to share
some insights into the strategic partnerships under development and how they
will help grow our top-line revenue and achieve positive cashflow in our future.
In this letter, we
won’t be able to cover all the details that would meet the standards of our
periodic reporting. That level of detail will have to wait for our next
quarterly report, which will publish in November. In some situations, we are
just now seeing the early launch of an important venture, and in some cases
those ventures need to mature before they will become material. Nonetheless, these
are important for you, as a BioLargo stockholder, to understand and be apprised
of, as we believe they hold great promise for a profitable future.
For many of these
initiatives, a common theme is that these partnerships are intended to create
opportunities for revenue channels for our patented technologies without
requiring dramatic expansion of BioLargo’s infrastructure and without requiring
significant intake of new investment capital.
In many cases, these initiatives
may require that our partner secure capital or dedicate financial resources to
execute the plans described below. They are also subject to the inherent risk
of execution, regulatory barriers, competition, and other customary business
risks. Be assured that as each of these initiatives advance, we will update the
information with more details.
Let’s jump in:
Garratt-Callahan
Product Launch
We are launching a new wastewater
treatment product with Garratt-Callahan, the largest privately owned water
treatment company in the United States, founded in 1904. In early 2021, Garratt-Callahan
enlisted the help of our engineers to complete the design of a device, based on
Garratt-Callahan’s patented process, that would salvage usable water from
commercial facilities’ wastewater streams. Garratt-Callahan’s goal for the product
is for BioLargo to provide manufacturing, and Garratt-Callahan to sell to its new
and existing customers.
Over the next few weeks,
we will be finishing manufacturing the first units for final operational
testing to verify its functionality before its full launch in early 2022. Garratt-Callahan
aims to deliver 25-35 units of this new product to its customers in the first
year alone, with each unit selling in a range that we believe will be competitively
priced in the $100,000-$500,000 range. Additional
opportunities with Garratt-Callahan, such as product development, manufacturing,
and the sale of other BioLargo products, are being discussed.
Garratt-Callan issued a
press release about the partnership that
contains this quote from their Technical Project Manager, Kelle Zeiher Ph.D:
“Garratt-Callahan was delighted to partner with BioLargo on a liquid discharge
and waste minimization project. The heart of the process — developed and
patented by Garratt-Callahan scientists — needed the expert equipment and
manufacturing capabilities that BioLargo adds to bring it to fruition. The
resulting collaborative breakthrough, with its modular design, allows small-
and medium-volume manufacturers to approach the industrial gold standard of ‘zero
liquid discharge’ without the million-dollar capital investments often required
by traditional technologies.”
PFAS Treatment Projects
Our PFAS chemical water
treatment device, the Aqueous Electrostatic Concentrator (AEC), is making
progress towards a commercial launch that we expect to occur in the first half
of 2022. We recently launched a formal testing program (https://www.biolargoengineering.com/biolargo-pfas-testing-program/) that we believe will
help develop market exposure for the AEC in advance of its commercial launch.
The PFAS testing
program provides a valuable service to water agencies by testing their PFAS-contaminated
water to help them identify, design, and optimize the best set of treatment
equipment, typically including an AEC, for their specific PFAS contamination
challenge. The service, which is the first stage
of BioLargo’s multi-stage commercial process for its PFAS treatment business, assures
clients that subsequent on-site piloting of the AEC and other PFAS treatment
equipment will be successful.
Our first two client
opportunities are with a leading municipal water agency in California and a U.S.
federal agency. Additional client opportunities of similar magnitude are in the
pipeline. As the first step in serving these clients, we have recently received
the necessary quantities of their PFAS-contaminated water to begin processing
through our PFAS testing program as the first step in our piloting and proposal
process.
PFAS (per- and poly-fluoroalkyl
substances) are a class of man-made chemicals that contaminate all types of surface
and groundwater sources, including drinking water, across the United States.
The chemicals have been linked to myriad health problems, spurring the Federal
government to legislate new drinking water standards as part of their PFAS
Action Act of 2021, which is currently in the Senate. Consequently, this market
is estimated to grow to a size of up to $80 billion a year, and our technology could
become leading solution in the market based on its claims of cost-efficiency
and low waste production. The size of projects for this technology are expected
to range from $500,000 to as high as $30 million.
To access this market quickly
and effectively, we are bringing on board experienced water industry sales
representatives, and will partner with other water treatment equipment and
service providers who will act as distributors and re-sellers for the AEC. We
intend to secure those partnerships after the next phase of our commercial
launch, the execution of initial commercial trials, is complete.
We will soon be
showcasing the AEC with a demonstration unit at the WWOA (Wisconsin Wastewater
Operators Association) trade show in La Crosse, WI, as well as at the Pollutec
wastewater conference in France, both of which occur in October of this year.
New Consumer Product Partnership
Over the past six
months, we have developed a relationship with a company founded by highly
accomplished industry executives from the consumer packaged goods industry who
have executed successful launches of at least five blockbuster products, that
intends to launch a new consumer product based on our patented BioLargo technology.
Our partner, Ikigai Holdings, LLC, has completed preliminary testing, developed
the brand, and is in the process of developing television commercials and other
marketing materials. It intends to begin test marketing the first product in
the coming weeks, and assuming that test marketing phase is successful, will
launch the product with the goal to sell to the major retailers in the United
States.
Our agreements provide
that we will be the manufacturer of the new product (or products), and they will
finance and manage roll-out, distribution, and marketing. We are excited about
the potential for this partnership to create significant new revenue channels
for BioLargo, but of course, at this point, as confident we are in our new partners,
our legal advisors remind us that we cannot predict the future or whether the
new product(s) will ultimately find success in the marketplace. With that
caveat in place, our partners tell us that the initial television launch will provide
highly reliable data indicating the size of the consumer market opportunity. Based
on these results, a go-to-market strategy will be determined, and production
will be planned.
Jane Pak, Co-Founder of
Ikigai Holdings, offered us this quote: “Creating a mass-market brand begins
with finding superior products with unbeatable claims. Our research validated
that the current leading odor eliminating products are inferior to the CupriDyne
formula and we’re thrilled to have the opportunity to disrupt the consumer odor
elimination category with such a compelling offer.”
Aquaco Partnership to
Launch AOS in California Agriculture Market
We have signed a “memorandum
of understanding” with Aquaco Resources, Inc., to sell water treatment
equipment and provide engineering solutions for its customers. Founded by Pat
McEntee, a former executive at Oracle, IBM, and ABC/Disney, Aquaco is dedicated
to delivering best-of-class technical solutions to manage the water needs of agriculture
and food processing industry clients. Its marketing strategy involves
developing strategic alliances with leading universities, cities, industry
associations, researchers and multiple technology and service companies to
deliver modern, long-term, practical solutions for the issues of water
scarcity, water quality, delivery and reuse which are crucial to every
agriculture producer in California. Aquaco will also offer its customers flexible
long-term financing options and dedicated local services to ensure customers’
water security into an uncertain future.
Aquaco is drafting a
series of agreements that would ensure BioLargo and its engineers an important
role in its operations. Aquaco anticipates that once the venture is operational,
it will expand nationally and at capacity, its goal is to generate revenues in
excess of $100 million annually after at least a 4-5 year ramp-up period.
Other Important
Commercial Progress
While some of this has
been reported in recent months, we think it prudent to highlight the ongoing organic
growth of business and new relationships at BioLargo below.
South Korean joint
venture: Our joint venture with one of the leading wastewater treatment technology
companies in South Korea is beginning to make progress after experiencing
delays during COVID. Our partners in South Korea continue to press ahead toward
meaningful success with comprehensive client testing, commercial validation,
and initial sales.
Cannabis industry: Our
distributor’s work in the cannabis industry was likewise slowed due to the pandemic-related
closing of trade shows, but our partners are confident that their investment in
marketing and branding efforts will support expansion of their “Cannabusters”
brand of our odor-control technology, especially as that industry returns to
trade show activity, which is a key facet of marketing products such as this.
CupriDyne Clean: Very
recently, ONM Environmental was recently notified of an award for a multi-year
contract to be the exclusive supplier of air quality control chemistry to a
major municipality. We did experience some slowdown in sales of our odor and
VOC control operations (ONM Environmental) in early 2021, due in large part to the
COVID pandemic, but we are now seeing that operation return to more consistent
base-line revenues. Their work with some of the biggest customers in the
industry shows signs of expansion with more bids, more third-party engineering
firms specifying our solutions, and more big customers now realizing the depth
of our capabilities and services.
Engineering
division: We
announced in June that
our engineering division, BioLargo Engineering, Science & Technologies
(BLEST), had secured over $1.2 million in new contracts with external clients. As you might
imagine, BLEST is in growth mode and will require more team members given the
significant business opportunities already under way. They are working to
expand staffing and increase their revenues, and at the same time are hard at
work helping to launch our AOS and AEC water treatment systems.
AOS pilot project: We
are excited about our ongoing pilot for our Advanced Oxidation System (AOS) water
treatment system at the municipal wastewater treatment pilot near Montreal,
Quebec. Just last week, the scientists operating the pilot confirmed it removed
pharmaceutical micropollutants and simultaneously disinfected the wastewater,
while consuming minimal electricity - a remarkable and unique value proposition
in the wastewater treatment world. We just recently produced a short film
highlighting the AOS pilot project in Quebec, which is operating and collecting
positive results. Watch here: https://biolargo.blogspot.com/2021/09/biolargo-aos-water-treatment-technology.html
Our scientists have
been invited by the Canadian Trade Commissioner Service to showcase our AOS and
AEC technologies at the Pollutec international environmental conferences and
trade show (https://www.pollutec.com/en-gb.html), in France this
October, where our team will have the opportunity to talk about these
breakthrough technologies and their role in water treatment to potential
clients in the European market. In particular, the team will focus on marketing
these technologies as solutions to emerging water contaminants like
micropollutants and PFAS.
Clyra Medical: Finally,
our subsidiary Clyra Medical Technologies, which is commercializing medical products
based on our patented technologies pursuant to a license agreement, recently
launched a new product, Bioclynse, the first
efficacious, safe, and long-acting wound irrigation solution that can be used
throughout the entire surgical procedure, with no need to rinse out. Clyra has
recently landed its first repeat orders from hospitals using the product, and Clyra
management is excited about its future. Help spread the word about this great product
with medical professionals, as we believe this product and products stemming
from it have the potential to improve best practices in surgeries into the
future. Clyra is organizing resources and relationships to expand its marketing
and sales efforts for this great product.
Financial Achievements
We have current
financing in place to meet our short-term capital needs as we continue to grow our
business and convert the projects described above into assets and partnerships
that generate significant revenue, cash flow, and ultimately profits.
Our balance sheet has improved dramatically. As previously
reported, we have continued to reduce our debt, including the payoff of
$406,000 in convertible debt due in August 2021 through the payment of cash and
equity, as reported on Form 8-K filed with the SEC on May 19, 2021. Since
December 31, 2019, the company has reduced its debt by over $4 million.
Other than debt
owed by our partially owned subsidiary Clyra Medical, and a $50,000 fixed-price
convertible note due in 2023, only Small Business Association loans through the
PPP and EIDL programs totaling $464,000 are outstanding, and of that, we’ve applied
for forgiveness on $314,000, and the remainder is low interest and paid over 30
years.
Concluding Remarks
The management team at
BioLargo knows that to achieve its objective of being a go-to provider of
environmental solutions and become a hub in the marketplace, we have to
complement our technical and executive excellence with the right strategic
partners who can help increase our commercial reach. The relationships that I
have detailed in this letter demonstrate our capacity to implement this
approach.
As a result, both myself
and our management team have never been more excited and optimistic than we are
today. We know that we have the talent (in our expert science and engineering
team), the necessary tools (in our unparalleled technologies), and the
opportunity (in market needs) to convert this company into a cleantech
powerhouse.
With the formation of
these new partnerships and the launch of the ventures you’ve read about above,
we are very close to unlocking the potential of our technologies in our pursuit
to make life better. We have other high-impact business opportunities that are in
various stages of development, and we are excited to provide more information
about each of these initiatives as they unfold.
Sincerely,
Dennis P. Calvert
President & CEO
BioLargo, Inc.
About BioLargo, Inc.
BioLargo,
Inc. (OTCQB:BLGO) invents, develops, and commercializes innovative platform
technologies to solve challenging environmental problems like PFAS
contamination, advanced water and wastewater treatment, industrial odor and VOC
control, air quality control, and infection control. With over 13 years of
extensive R&D, BioLargo holds a wide array of issued patents, maintains a
robust pipeline of products, and provides full-service environmental
engineering. Our peer-reviewed scientific approach allows us to invent or
acquire novel technologies and develop them to maturity through our operating
subsidiaries. With a keen emphasis on collaborations with academic, municipal,
and commercial organizations and associations, BioLargo has proven itself with
over 80 awarded grants and numerous pilot projects. We monetize through direct
sales, recurring service contracts, licensing agreements, strategic joint
venture formation and/or the sale of the IP. See our website at www.BioLargo.com.
Contact Information
Dennis
P. Calvert
President
and CEO, BioLargo, Inc.
888-400-2863
Safe Harbor Act
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include without limitation those about BioLargo’s (the “Company”)
expectations regarding the impact of the COVID-19 pandemic; anticipated
revenue; and plans for future operations. These statements involve risks and
uncertainties, and actual results may differ materially from any future results
expressed or implied by the forward-looking statements. Risks and uncertainties
include without limitation: the effect of the COVID-19 pandemic on the
Company’s business, results of operations, financial condition, and stock
price; the effect of regional economic conditions on the Company’s business,
including effects on purchasing decisions by consumers and businesses; the
ability of the Company to compete in markets that are highly competitive and
subject to rapid technological change; the ability of the Company to manage
frequent introductions and transitions of products and services, including
delivering to the marketplace, and stimulating customer demand for, new
products, services, and technological innovations on a timely basis; the
dependency of the Company on the performance of distributors of the Company’s
products. More information on these risks and other potential factors that
could affect the Company’s business and financial results is included in the
Company’s filings with the SEC, including in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” sections of the Company’s most recently filed periodic reports on
Form 10-K and Form 10-Q and subsequent filings. The Company assumes no
obligation to update any forward-looking statements or information, which speak
as of their respective dates.
