BioLargo Inc. (BLGO:OTCQB)'s environmental solutions and core competence suggest that more blockbuster contracts could come from established channel partners and large industry users.
BioLargo, Inc. has dedicated over 10 years to research and development of innovative environmental solutions for clean water, clean air, and disinfection that are all demonstrating high-impact, low-cost, and safety.
With a clear vision of entry into the marketplace, management assembled a world-class engineering firm that has decades of valuable experience and a reputation for designing and implementing hundreds of environmental solution projects.
It appears the company is heading into a great time where years of hard work could materialize into a level of growth that could surprise even the more optimistic followers.
The lead engineers at BioLargo invested their previous careers with engineering giants, Chicago Bridge & Iron, and the Shaw Group and have a combined experience of over 200 years.
They joined BioLargo as coowners in 2017 to create BioLargo Engineering, Science and Technologies, Inc., a subsidiary of BioLargo.
Recently, BioLargo CEO Dennis Calvert appeared on a Benzinga interview (BioLargo interview beginning at 1:08) where he discussed an exciting new award by a channel partner that has other major projects around the world. The contract begins with a feasibility study for a 296-acre waste-to-energy plant that can process over 2 million tons of municipal solid waste annually.
The fact that BioLargo was selected for this contract serves not only as a great win but is also a great compliment to BioLargo.
Randall Moore, the lead engineer for Biolargo, believes that if BioLargo advances beyond the feasibility stage as planned, based on a project of this scale, the contract could see about $50 million spent in the first two years followed by $450 to $500 million spent in years three and four.
At the heart of BioLargo are innovative core products for water treatment to remove micro contaminants and pharmaceuticals, water treatment to safely disinfect biological health hazards, and water treatment to remove PFAS at a low cost and with only a tiny fraction of the carbon footprint of current carbon filtration, air treatment to safely remove odors and VOCs (Volatile Organic Compounds), and disinfection products that have the extreme power of iodine, but are safe and gentle.
When a customer has a problem, they are going to turn to a trusted engineer. Those engineers who have the technical expertise to understand BioLargo’s solutions can become valuable channel partners for BioLargo. Recognizing this, BioLargo is focused on developing trusted relationships with those channel partners who understand how BioLargo solutions can help their customers.
BioLargo Channel Partners and Customers
The following list of established and respected BioLargo channel partners and customers is growing fast. Let’s take a look at a few.
Garratt-Callahan
Having been in business for over 100 years, Garratt-Callahan is the largest and one of the most trusted private water treatment companies in North America. BioLargo engineered and manufactured a commercial prototype of the "minimal liquid discharge" (MLD) water treatment system invented by Garratt-Callahan. The MLD system passed its factory acceptance testing and was proven to remove over 98% of target contaminants from real wastewater provided by Garratt-Callahan customers. A commercial trailer-mounted unit is now being constructed and will be used for on-site demonstration with a Garratt-Callahan customer. Kelle Zeiher, Technical Project Manager at Garratt-Callahan, commented, "I'm excited about helping our customers move from water discharge to water reuse. This technology represents a dramatic, game-changing shift in how we manage industrial water for a more sustainable future." Garratt Callahan is projecting sales of about 30 to 50 units upon the launch at a price of between $250,000 to $500,000. If these numbers hold up, then this suggests initial sales of between $7,500,000 to $25,000,000.
Ikigai Partnership
Ikigai is a marketing company with a very successful team that made major contributions to brands such as Tide, Downy, Advil, Swiffer, OxiClean, and Febreze.
BioLargo established a partnership with Ikigai Marketing Works, LLC to support the roll-out of a new pet odor-control product based on BioLargo's proprietary technology, already finding traction with big-box retailers. Ikigai completed a test-marketing phase to assess the likelihood that the new brand would be a commercial success and subsequently placed orders for the product (manufactured by BioLargo) that exceeded both partners' initial projections.
Ikigai secured a supply chain agreement with BioLargo where IKIGAI will purchase POOPH from BioLargo at a wholesale price and IKIGAI will finance everything including a nationwide marketing campaign to sell the products. Ikigai will also pay BioLargo 20% of any exit event if and when IKIGAI sells POOPH to a big consumer products company. In a recent interview posted on YouTube, Jordan Stanley, the marketing guru behind IKIGAI, says POOPH could be close to a $7 billion opportunity.
BioLargo’s PFAS Aqueous Electrostatic Collector, “AEC”
PFAS (formerly known as PFCs) are a group of chemicals that were created in the mid-1900s to develop nonstick coatings, and they are also used in fire-fighting foam, cosmetics, and food packaging. Because they were designed to last forever, they are hard to break down and are called “forever chemicals.” PFAS are known to cause severe health hazards such as birth defects, endocrine disruptions, and cancers and are considered to be the contaminant of the decade. PFAS have become ubiquitous in the global water supply, and many governments have now made them a high priority to remove.
The most commonly used technology to remove PFAS from water is granulated activated carbon, “GAC.” Carbon is costly for a number of factors. First, the carbon clogs up and must be replaced frequently. Carbon is not able to discriminate between PFAS and other contaminants, therefore it removes much more than PFAS, which tends to clog the filter faster. Second, the PFAS laden carbon filters must be disposed and there is no approved destruction method to dispose of the PFAS laden carbon.
BioLargo has invented and patented (patent pending) a major breakthrough called the Aqueous Electrostatic Collector (AEC). The AEC uses electrodes that attract the PFAS with very little energy and concentrates them into a tiny fraction of the volume of the treated water. The waste stream is only one-thousandth the amount of carbon compared to granular activated carbon. Testing has demonstrated that the AEC removes over 99.99% of PFAS in a single pass, resulting in a level where it is non-detectable.
There is a wide range of estimates from various experts as to how much it could cost each year for the cleanup, but no matter which estimate is correct, the bottom line is that the cost to remove PFAS from water supplies is going to be enormous, and it is going to take years or decades to clean up this problem. It took 30 to 50 years to build up in our water supplies, and it is going to take a long time to remediate.
It looks like BioLargo could be very busy for a long time.
The company reports two channel partners are already in negotiation and a number of high-profile customers are working closely with the company in these early pre-commercial stages.
BioLargo AOS Broad Spectrum, High-Impact, Low-Cost Water Treatment System
A commercial-scale demonstration pilot for the AOS waste treatment system at a municipal wastewater treatment plant near Montreal, Quebec, produced data that cements its value proposition as an energy-efficient treatment solution that tackles hard-to-treat contaminants.
The pilot showed the AOS operates faster and uses less electricity than existing technologies while also disinfecting the wastewater, making it an efficient and uniquely flexible treatment option for hard-to-treat contaminants like pharmaceutical by-products. Recently, an NSERC grant has extended the project to allow for use of a higher flow-rate AOS system, as well as the removal of PFAS chemicals through the installation of a pilot AEC system.
The wastewater treatment market is the crown jewel for both the AOS System and the AEC to remove PFAS.
ONM Environmental
ONM Environmental (formerly known as Odor No More) continues to focus on sales and develop channel partners to help sell its odor and VOC control product, air quality control systems, and associated services. The company has made headway with successful commercial trials and new accounts including in pulp and paper, wastewater, oil and gas, construction, and auto manufacturing. This business unit is expected to report record sales in Q1 2022 and a number of new distributors and industry segments are showing good prospects for growth.
Clyra Medical Technologies
Clyra introduced its new FDA-approved product, Bioclynse, to the market, secured its first hospital customers for the product, established a robust quality control system for FDA compliance, recruited a national director of sales, and is negotiating with three separate channel partners to form a commercial alliance.
BioClynse brings a new generation of disinfection to healthcare, delivering the known power of iodine, but with unprecedented safety and gentleness.
BioLargo Engineering
BioLargo Engineering, Science & Technologies, LLC (BLEST) offers full-service environmental engineering to third parties and provides engineering support services to its internal teams to accelerate the commercialization of its technologies.
BLEST focuses its efforts on three areas.
The subsidiary is located in Oak Ridge, Tennessee, and employs highly accomplished scientists and engineers who collectively worked together for almost 30 years and have experience in diverse engineering fields. The team is led by Randall Moore, who served as Manager of Operations for Consulting and Engineering for the Knoxville office of CB&I Environmental & Infrastructure and was formerly a leader at The Shaw Group, Inc., a Fortune 500 global engineering firm.
BioLargo Financials
BioLargo announced a company-wide quarterly revenue record for the first quarter of 2022.
New Company-Wide Quarterly Revenue Record
BioLargo generated approximately $900,000 in revenue (company-wide) for the first quarter of 2022, representing an approximate 60% increase compared with the same period in 2021.
Leading the way was the subsidiary ONM Environmental with a new quarterly revenue record of approximately $550,000, and BioLargo's engineering subsidiary with quarterly revenue of approximately $350,000, while it continued to support R&D on the company's patented technologies.
With these revenues, each of ONM Environmental and BioLargo Engineering moved closer to generating an operating profit. Note, however, that these preliminary revenue figures have not been reviewed, and are subject to change pending review by the company's independent registered public accounting firm; the company will include its full results of operations in its quarterly report, which it intends to file.
In terms of debt, BioLargo announced their balance sheet continued to improve throughout 2021, with the near-elimination of debt to the point where only one $50,000 fixed-price convertible note due in 2023 and $464,000 of COVID-related low-interest U.S. Small Business Administration loans are owed, in addition to the elimination of debt owed by partially owned subsidiary Clyra Medical Technologies.
Risk Factors
All investors are encouraged to review the list of potential risk factors in the SEC Filings.
Conclusion
Management has successfully navigated through the challenges of the last decade and still has challenges to overcome, but given the current rate of adoption of BioLargo solutions, it appears the company is heading into a great time where years of hard work could materialize into a level of growth that could surprise even the more optimistic followers.
Progress and significant developments at BioLargo are occurring at a faster and faster pace. Be sure to keep a close watch on this company as continued successful technical innovation, team building, and strategic channel partnerships are expected to keep BioLargo busy for decades.
Richard Cavalli is a leading expert on young companies with disruptive green technologies that have the promise to make our world better. The author was one of Charlie Munger’s earliest Securities Analysts in the late 1960’s and he continues to search out promising young companies from an ocean of potential opportunities.
The author is not a registered investment advisor and has no position in this stock. The author was paid $2,500 by BioLargo, Inc. to write this article. This article is provided for information purposes only and is not intended to be investment advice of any kind. Readers are encouraged to do their own due diligence and consult with a licensed investment advisor prior to making any investment decisions.
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