Earnings call transcript: BioLargo Q1 2025 revenue misses forecast, stock dips

BioLargo Inc. (BLGO) reported its Q1 2025 earnings, revealing a revenue of $3.3 million, which fell short of the $5.6 million forecast. The company’s stock reacted negatively, declining by 1.68% to $0.2399, reflecting investor disappointment over the earnings miss and increased net loss. According to InvestingPro data, the company maintains a healthy current ratio of 2.7, indicating strong short-term liquidity despite operational challenges. BioLargo highlighted progress in product innovation and strategic expansions.

Key Takeaways

• BioLargo’s Q1 2025 revenue missed the forecast by $2.3 million.
• The company reported a net loss of $1.9 million, up from $800,000 last year.
• BioLargo’s stock decreased by 1.68% following the earnings announcement.
• The company achieved 510(k) clearance for its CLEAR Medical Device.
• BioLargo is expanding its engineering and sales teams to support growth.

Company Performance

In Q1 2025, BioLargo reported a revenue decline to $3.3 million from $4.7 million in the previous year. The net loss widened to $1.9 million compared to $800,000 last year, indicating financial challenges. InvestingPro analysis shows the company maintains a moderate debt level with a debt-to-equity ratio of 0.29, while achieving a solid gross profit margin of 44.17%. Despite this, the company is investing in product innovations and expanding its workforce to drive future growth.

Financial Highlights

• Revenue: $3.3 million, down from $4.7 million YoY
• Net Loss: $1.9 million, compared to $800,000 last year
• Cash Used in Operations: $1.8 million, versus $480,000 cash production last year
• Total Assets: $10.5 million
• Current Assets: $7.2 million
• Stockholders’ Equity: Declined by approximately $900,000-$1 million

Market Reaction

BioLargo’s stock declined by 1.68% to $0.2399 following the earnings report. While the stock is trading closer to its 52-week low of $0.1606, InvestingPro data reveals a strong six-month price return of 33.85%. The company’s market capitalization stands at $73.54 million, with analysts setting a consensus price target of $0.38, suggesting potential upside despite current challenges. Get access to 7 additional exclusive ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.

Outlook & Guidance

BioLargo is focusing on expanding its product lines, including the CLEAR Medical Device and sodium battery technology. The company aims to secure third-party validation for its battery technology and is targeting contracts for its first battery factory. The PFAS water treatment technology is expected to have its first installation later this year.

Executive Commentary

Dennis Calvert, CEO of BioLargo, emphasized the long-term value of the company’s assets, stating, "Each one of these assets that we’re focused on is worth a career." He highlighted the strategic focus on selling factories rather than individual batteries, underscoring the company’s growth ambitions.

Risks and Challenges

BioLargo faces several challenges, including:

• Financial instability due to declining revenue and increased net loss.
• Potential liquidity concerns with significant cash used in operations.
• Market adoption challenges for new technologies.
• Competitive pressures in the sodium battery and PFAS treatment markets.
• Regulatory hurdles for new product approvals.

Q&A

During the earnings call, analysts inquired about the potential for a reverse stock split to meet national exchange requirements and the ongoing development of iodine copper products. The company addressed differences in its sodium battery technology and acknowledged challenges in market adoption. For deeper insights into BioLargo’s financial health and growth potential, access the comprehensive Pro Research Report, available exclusively on InvestingPro, offering expert analysis and actionable intelligence for smarter investment decisions.

Full transcript - BioLargo Inc (BLGO) Q1 2025:

Conference Operator: Greetings, and welcome to the BioLargo First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. And please note, this call is being recorded. I would now like to turn the call over to your host, Mr. Brian Loper, Investor Relations.

Sir, the floor is yours.

Brian Loper, Investor Relations, BioLargo: Thank you, operator. Good afternoon, everybody. Welcome to the call. Glad to have you here. The 10 Q and eight ks reports are currently being filed with the SEC.

This call is being webcast and available for replay. In our remarks today, we may include statements that are considered forward looking within the meanings of securities laws, including forward looking statements about future results of operations, business strategies and plans, our relationships with our customers, market and potential growth opportunities. In addition, management may make additional forward looking statements in response to your questions. Forward looking statements are based on management’s current knowledge and expectations as of today and are subject to certain risks and uncertainties that may cause the actual results to differ materially from forward looking statements. A detailed discussion of such risks and uncertainties are contained in our most recent Form 10 Q, 10 ks, Form eight ks and other reports filed with the SEC.

Company undertakes no obligation to update any forward looking statements. And with that, I now hand the call over to Bio Largo’s Chief Executive Officer, Dennis Calvert.

Dennis Calvert, Chief Executive Officer, BioLargo: Okay, Brian. Thank you very much, everyone. Appreciate you joining us for the call. And we’re going to cover a lot of territory quick as usual. And so some of you may not know our story.

We’re gonna have a very brief introduction, of course. So we make life better, focus on sustainable innovation for human health, environment, very purpose driven work. And of course, have developed an innovation engine. And that innovation engine has been now inventing and developing technologies for almost over sixteen years. We’ve covered the forward looking statements, of course, they are real.

It’s important to rely on the risk factors. You can refer to the K, the annual report, which was just recently published with a robust list of risk factors that are very worthy of consideration because as we say, we overcome risk every day and the challenges can be daunting. Who are we? Innovators, science, entrepreneurs, engineers, passionate about making a difference, sustainability, human health driven by this purpose, very much purpose driven organization. We focus on best in class, best in class solutions.

If we don’t believe they’re number one or have a chance to be number one in the category, then we we don’t focus on them. So we invest in innovating transformative technologies. We focus on problems without a good solution, and we create a capital conserving strategy that’s aimed on partnerships and spin outs to capitalize our RP and create value for our stockholders. At the engine, there’s there’s a parent company that’s capital strategy direction, sort of the glue that binds, of course, we got a great engineering group based in Oak Ridge, Tennessee, still have the r and d group, of course, in Edmonton, Canada. And we’re investing heavily in the in the operating units, take products to market.

O and M Environmental is focused on odor and VOC control. Clear is a is a medical device company focused on the cutting edge of of use of antimicrobials and products used for advanced wound care, wound care infection control. The equipment group is primarily focused on PFAS, but there’s a number of assets in that portfolio. Some are slow. Some are significant.

They’re finding their way to market, and we’ve been investing heavily there for a couple of years, and we’re really, really excited about that. We’re gonna talk deeply about that. On the energy side, Ballard Energy is focused on a sodium battery as an alternative to lithium. We’re just at a validation stage. We’re gonna talk about that validation work that we’re doing right now, and we’re very excited about the potential growth and impact for that emerging technology as an alternative to lithium focused on non lithium based long duration energy storage battery technology.

One of the fastest growing markets in the world expected to be a massive industry, and we’re right in the middle of it. It’s pretty exciting. One of the things we talk about a lot is the unseen value of the biological portfolio. We’re building value every day. We’re inventing things that will last, that can find a market.

Some are very difficult, of course. Everyone’s known that, but they’re unmatched in their claim set. Unmatched in their claims. It’s very important. And when you peel the onion, what you see is the transformative capability because the claims are unmatched.

We focus heavily on intellectual property, that’s trade secrets and and patent work, and we focus on a capital concerning strategy. We have a team of about 50 people now, 20 something engineers, twelve to 13 PhDs, super smart people. You know, I I always say my job is to focus on something that that really has impact and leveraging our capital strategy and then focus on things that we can get through the cycle, things that we’re capable of doing with our talent set. In the underlying portfolio, the goals are very, very ambitious. You know, we look at the future of Clara.

O and M, of course, we think is gonna have an exit capability because of the work we’ve done. Clara is knocking on the door of significance. And it’s been a long fourteen year development cycle, fourteen years, Invested almost $20,000,000. We believe that that company will now spawn, grow big, and have a chance for an exit through either an IPO or a sale to a strategic, both of which will further its mission to have a high impact for the advancements of human health. Big deal.

The equipment group, it’s it’s slow and steady. It’s much more organic, but we’ve got strategic partners now all around the world. And projects coming coming to us in a very rapid pace. Got a couple nice couple of wins, more wins coming. Big market, and we’re right in the center of that storm with a solution for PFAS.

And then, of course, battery tech is, we think, the the most significant financial opportunity in the portfolio. It also is the earliest, which means there’s work to do before we’re really prepared. Next, I’m gonna have Charlie Dargan address some of the results for the quarter and give a brief summary of that highlight, and then we’ll break some of that down as well. So Charlie, you you with us?

Charlie Dargan, Financial Officer, BioLargo: Yes, I am. Thanks, Dennis. I appreciate it. Thank you. And thank you everyone for being on our twenty twenty five first quarter earnings call.

And well, yes, it was a down quarter. Revenue dropped to about $3,300,000 from $4,700,000 substantially all from a reduction in sales of the Poof product. A bit of an offset there was that the engineering group, had their sales increased by about $240,000. The net loss obviously, from, the reduction in revenue mostly, came in around 1,900,000.0 versus about, 800,000 again, last year. Our SG and A increased by about 300,000, although all of that is non cash expense related from issuing stock options and replacing stock options for our employees and management.

We did the same amount in R and D, so that didn’t change much. And so when you look at it, not a good quarter, but I want to reassure everyone that management is closely managing our costs and expenses. It’s a bit of a silver lining, no question. But we maintained our gross and operating margins. And if you look at it analytically, our revenue was down by about $1,700,000 but our loss only reflected because of our cost maintenance, dollars 1,200,000.0 difference.

So when we look at our cash and cash from operations, it did our cash used in operations increased to about 1,800,000.0. Last year, we actually had cash production of about $480,000 This year, besides what we’ve just gone through on the net loss side, our receivables increased by about $1,000,000 again, related to the Poof product and their operations. We did and have maintained equipment purchasing, but we’ve done most of that now, and a lot of it’s largely with Clara. And so we didn’t need to do any PP and E acquisitions for the quarter. We did raise capital, and we’re very cognizant of the need to maintain our cash, which here we show about $2,500,000 So we are raising capital through equity, and Clara has raised money both from debt obligations and from equity issuances.

And Clara lost approximately 1,300,000.0, net loss, again, much of which is stock option and stock option issuances. But, the company is obviously preparing for product launches, and so, ramping up to meet those is costing cash and money. So, going and looking at our balance sheet, which kind of slide eight summarizes all of it. But let me give you a little bit more on what the balance sheet does look like. And we have about $10,500,000 in total assets, 7,200,000.0 in current assets, so we’re positive with our working capital.

Again, much of some of it has been from our receivables increase. And then when we look at the debt side of the balance sheet, the liabilities, our payables are up, but most of that increase in payables is again from Clara, again from them getting ready for product launches and preparing the management team. So when you summarize it, you come down to what we’re looking at in our stockholders’ equity. It did decline by approximately $900,000 to $1,000,000 much of which obviously is from the net loss. And then, we are and were able to offset some of that through equity and capital raises.

So that’s it for a summary of our financial statements, Dennis, and I’m gonna turn it back to you.

Dennis Calvert, Chief Executive Officer, BioLargo: Thank you, Charlie. Perfect. Yes. You’re welcome. Just read briefly about these operating units.

So poop has been a shining star for us. Of course, we love the product. It’s got a great future. And the reduction in top line revenues is certainly not what everyone hopes for. It is a circumstance that we as a company have very little influence or control over.

It’s controlled by the management team at Poof. We do believe that their success in marketing these products successfully as a real opportunity for continuance. But again, we just don’t have a lot of information in how they’re operating their business. And so we’re anxious to see it continue forward. And remember that in our business deal, we have a basic financial arrangement in which we manufacture products, we receive a markup on the cost of the product, we receive a small royalty on sales at Poof, and then we bargain for 20% of the exit.

So again, great menu of products, an incredible performance last year, and we’re hopeful that things can continue to back to the growth category or the growth mode that they’ve been in historically. And if history’s any indication, we think that they’re the people that can get that done. Okay, on Clara, we’ve had a series of announcements. In fact, as recently as I believe yesterday and then about a month ago, about three about four or five weeks ago regarding the clearance or the of the review of the manufacturing capability. So let’s just let’s just cover real quick.

The CLEAR, again, wanna remind everyone, it has a set of claims about the products here that are unmatched. It has a chance to be a transformative technology across multiple vertical segments in the health care field, med device in particular. We do have five ten ks clearance. Our partner on the manufacturing has invested well over 3,000,000 to build out production facilities that can scale. And scale, our target, which we mentioned before was be in the manufacturing capability of doing a million units times two SKUs.

So that’s been accomplished. That’s very important to note. That was accomplished approximately five weeks ago. And then the final details surrounding some of the products are in motion. And we’re in there in motion as fast as we can go.

We’ve invested a little over 2,000,000 in the CapEx associated with the production line itself. So major investments, big investments for our company, lot of money, lot of time. The team is also expanding it clear in a dramatic way. And then, of course, we made this press release describing a number a series of formalized relationships with wholesale distributors and sales. And the key takeaway from that communication is really driven to say the infrastructure is now in place to support significant sales and sales of multiple products in the portfolio.

Okay? Now I know everyone wants a lot more detail, and we’re at a we’re at a moment in which this category requires a stealth mode. It’s really demanded. So we’re not gonna be able to share a lot about the detail. But in the portfolio of products, we have some products that are available immediately, immediately as in months.

And we have some other products that are gonna take more like six to nine months or so to get through the development cycle to get those products in the field. And we believe that given the nature of the products and where we’re at in the competitive field, it’s very critical that we maintain a level of confidentiality. And I know that that’s frustrating for everyone, but we are extremely excited about these advancements, the milestones that have been achieved, the significant commitment that we’ve made to support these products, the manufacturing capability and infrastructure, and the company is really very well situated for significance in its future. And so fourteen years, about $20,000,000 has been invested, don’t forget it. It’s a critical asset and it’s the culmination of what we believe has a chance to really be transformative in the field.

So stand by for more information. Salinity. We’re pretty excited about Salinity. We talk about it as one of the most significant assets in the portfolio. That’s the cell that you see right there.

Just to remind everybody, it has a claim set that’s that’s unmatched. Unmatched how? Right? Well, number one, very high energy density. It’s a safe battery.

It doesn’t have runway fire miss fire risk. All the components can be recycled. It’s durable. It lasts a long time. Twenty year batteries.

Highly efficient. Efficiency is a function of energy density and energy density out and c rate, c rates charge rate. This is a battery that has a lot of a lot of punch for the weight, high energy density, high voltage as well. And so in that claim set, recall that we purchased this technology, and then we set forth to build out manufacturing capability at a pilot scale for sure and then revalidate all the claims associated with the technology. That’s largely been accomplished.

That doesn’t mean testing ends. It just means the significant claims about the technology have been achieved. And so we believe this this summary as it compares to other technologies is true and accurate, and we’re anxious for third party validation to confirm that for us, and that process is underway. Just to remind everybody, the target here, this is long duration grid steel storage. So we’re talking about big battery sets, 20 foot trailers full of cells that can that pull up to renewable energy, balance the grid as a as a place for loading and unloading off the grid.

Great for data centers, one of the fastest growing trends in the marketplace, estimated to be a multi trillion dollar market in the next six years. Big market, big place, and recall that we’re pursuing a franchise model. Franchise model, we think, has extraordinary value for both our franchises and our investors in the way that it can conserve capital and exploit high yield on our invested dollars. So this timeline is very important. We’re now at the complete third party validation testing stage, And notice we have a little starburst there that says it’s underway.

We’re gonna admit a couple things. When we first started, we said this was gonna take about a million bucks to get the validation work done in about a year. Okay. It took about 2,300,000.0 and it took about two years. And what you find of course is it’s extraordinarily technical.

The good news is it’s been done. And so now we’re in the spot where third parties can come in with technical expertise to help us from a third party perspective validate. So we’re expecting that very soon, hopefully a week or two. It’s in process with wonderful technical experts that we think are adding value to us just on a daily basis. Now I wanna point out the valuation real quick.

We’re currently valued at around 43,000,000. We have about, it’s really five or six factory projects underway in on on the drawing board. Right? Not done done. Just in discussions with real people and real money who want to be in the business of producing batteries.

We anticipate that if some of that comes to bear, including the third party validation, that the valuation will push up to about 400,000,000. Now we currently own 96% of this. Right? This this project, this this company. We own 96% of the equity.

So if you if you round out those numbers on that kind of valuation, what we’re really suggesting is that the valuation of this company is somewhere between that 43 and about a hundred and 50,000,000. We own 96%. Okay? So the point is it’s not really reflected in our value. That’s one of those unseen values in the portfolio.

The modeling, which is the franchise model, really leverages third party resources and partnerships to bring financing to bear to go out and build these large installation to manufacturing. When you run the net present value on the calculation of the model, it comes in somewhere around 1,500,000,000.0. So this is a big deal. Big deal, big asset, ambitious, of course. And, there’s a number of reasons we think that we can win here, but I think there’s a couple of principles.

One is it starts with a better battery. It’s a better battery. Number two, a capital conserving strategy so that we’re not in the the bleeding red ink mode for years. In fact, it’s the opposite. When we find a partner that wants to build a factory, we get paid to build it.

We make money the day we start. Very unusual, very good, good for our financial statements, good for our shareholders. The other is we have people. The people that are associated with this project internally are extraordinary. They’ve thirty years field career, they’ve built $350,000,000 projects, they know how to do this.

And we also have special talent in the battery technology itself. And so really the technical challenge is all about scaling, scaling the capability of producing battery factory with replication so that you can stamp out cells and put them in packs. Packs go into modules, modules go into containers like 20 foot trailers, and they plug into the grid and a computer runs them. It’s pretty basic. And the thing that really makes this business blend out is the cell technology, which we have acquired and now revalidated and are now seeking third party validation.

We anticipate that very soon. A lot of partners and a lot of money on the, that have expressed high level of interest. And of course, it took us a little longer than anticipated, but now we’re in go mode, so it’s pretty exciting. And then lastly, we’re gonna talk briefly about PFAS. This is a very exciting and incredibly demanding field.

Okay? Now we’ve got, I don’t know, three and a half, almost four years of direct marketing. We’ve got our first installation. One of the common questions people are asking is when is that installation gonna actually go in the field? Right now, it’s late August, September is what we’re thinking, and that’s per our customer.

Remember that it’s boxed, created. We’re gonna show you an image. Boxed, created, ready to go, waiting for general contractors, waiting for weather to break, for this for the frozen dirt to thaw, lot permitting, lots of things have gone on that we’ve basically been waiting for. We’ve been on on mark on the timelines and now waiting for other people to say, come on down and put this thing to work. Another important piece of that is we’ve got the New Jersey and the US Federal EPA has agreed to collaborate with us in this project as a field demonstration work that is a commercial site, understand that, it’s a commercial site, but they’ve agreed to participate in such a way that we can secure federal and state validation for the work that we’re doing, which is very important because it comes down to credibility.

Now we have a backlog of projects, pipelines of better work. We have a pipeline of projects that’s astonishing. And the good news, I have a couple of stories for you just real quick. You know, we have examples where some of our technology is taking a long time to get to market. And, you know, what happens is as you build the channel and you establish your credibility, you become a volume purchaser.

Some of some of the things that we’ve done just require volume purchasing. So like manufacturing. Right? What’s happening for us is because of the pipeline and because of the technical claim, we’re becoming viewed as a tool designer of tools for a toolkit that can be used by the marketplace as a component in an integrated system. It’s really good news.

That means that we can touch multiple markets. We have a we have a tool that’s useful for many different markets and frankly, competition. We actually have competition that wants to do business with us. It’s awesome. And we have major engineering firms and regional engineering firms.

We’ve got one engineering firm that has specified our solution in over 26 projects. So the volume is astonishing. And the what’s what’s what’s what’s the breakthrough? When does it happen? Well, somewhere along from where we’re at to getting some market adoption and some installs and some third party validation, it all breaks open.

It’s hard to predict exactly when that’s gonna be, but we’re convinced it will occur. And mostly because the technology is that good, and now we have the infrastructure in place and the credibility in the market because we spent a lot of time building that credibility. Here’s the unit real quick. This is was actually in Oak Ridge about a week ago, and I walked in and I saw this and I thought, look at that beautiful unit. That’s that’s an engineered design on the left.

Those are the those are the electrodes. They’re like a plate and frame, and each one of those is a module that can be plugged in plug and play. Need to produce more water? Make more modules. It’s really simple, and it works, and it works really well.

And the regulatory, I know there’s been a lot of uncertainty. We’ll talk about some of the q and a, regulatory uncertainty around what is and what isn’t with the new administration, with the EPA, a lot of changes in the in the governance, the r and d, all of that’s in flux, makes everyone pause a little. But here’s what we know. P five isn’t gonna go away. Took fifty years to get there, and it’s gonna take fifty years to get it out.

This is a business that will run for decades. And right now, we believe that we’re still the technical innovative leader that has a chance to work with our customers and our engineering firms and our supply chain all over the world, and it’s just a matter of time before it finds its way. The results that we published are astonishing. And, again, the thesis we’ve talked about, they’re unmatched, unmatched claims. Okay, we published this case study just recently.

There’s a lot of work to do that. That’s one of the reasons it takes so long, but that case study has now been been picked up for publication around the industry, and it’s astonishing. And what we basically can say is on the recurring costs associated with installation, we have the chance to save a customer something like somewhere around 7080% of their maintenance costs. And the case study breaks it down so that we analyze transportation, the handling, the replacement of carbon as a comparative because the early adopters in the when the first movers started taking action to clean up PFAS, they used old technology. That old technology is gonna cost them like nine times what ours will be.

And so what that means is they’re gonna change it now. They had to solve the regulatory burden. It’s not the last. We also can work with some of those providers to make their systems more efficient. So this this is gonna be a big win.

It is incredibly slow and demanding. It’s demanding on our staff and demanding on our people. The good news is we’ve kinda now worked through most of the bugs, we’re in the go mode, we’ve got a good selling proposition, we’ve got people selling our technology now over, mostly on the country, some international work coming, but we’ve had a couple of global partners now, big giants coming to really partner with us. Kinda hard to describe this, but I’ll take a second, and that is, you know, what’s different? What’s different today than it was before?

Okay. Well, here’s the we’ve done so much work and we have so much technical data to support our claims and we’ve refined our system so that when we enter into a discussion with a prospective client, we’re perceived as credible when we walk in the door. Okay? So let me let me let me expand on that. We’re technically credible.

We’re scientifically credible. We’re engineering credible. Okay. So in the marketplace where buyers are business people and technical buyers buying on technology, we win. K?

Not every case, but we win. We win and we win as an acceptance and adoption. Where the decisions are political, like water districts, where elected officials are trying to make decisions that aren’t trained for some of these questions, they’re gonna rely on their consulting engineers. And so as early technology in the adoption cycle, a lot of those people just simply can’t choose us. So we’re having to battle through that.

That’s a credibility question that we overcome with time, overcome with third party validation. It’s a numbers game, you keep plugging away. And what I can tell you now is what’s so unusual is the consulting engineers who advise those people, a lot of them are recommending us. And so that’s new. So that’s new.

Okay? So I’m gonna now quit for a minute. I just wanna show you. Right? Make sure you get my email.

Welcome to reach out. We try to respond. DC@bilargo.com. DC at bilargo dot com. I’d love to talk to you anytime.

So let’s open up the q and a and see how we’re gonna we’re gonna do there.

Brian Loper, Investor Relations, BioLargo: Thank you, Dennis. Appreciate the presentation. And it’s just a good reminder for everybody that Q1 has been rough for lots of companies. There’s been a lot of volatility and uncertainty. Bio Largo is not alone in this.

So just keep that in mind as we move forward. Just a few questions today. Let’s start with kind of a general company based question. Has there been any further consideration being given to doing a reverse stock split specifically so

Dennis Calvert, Chief Executive Officer, BioLargo: that Thank you.

Brian Loper, Investor Relations, BioLargo: Solution can invest in by Largo?

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. No. It’s a great question. So we did file a preliminary proxy statement in preparation of our June 19 shareholders meeting. I hope you’ll come.

It’s it’s always valuable. Get to see everyone, and we we try to really spend the time so that people can understand where the business is at. The proxies asked for our stockholders to give the right to make the decision to the board of directors on certain conditions. And the the big condition is not greater than the 10 for one. Not greater than the 10 for one.

Now this is really important. Important to analyze that. What we’re saying when you say that, why first of all, why would we do a why would we do a reverse split? Well, we need to have a minimum stock value to qualify for a national exchange. And, of course, often the preferred exchange is Nasdaq, and that number is is now around four bucks.

Okay. So $4 at today’s stock price, we wouldn’t qualify for Nasdaq. Okay. So this is really important. So what are we saying?

If we don’t have the momentum at the core of the business, performance, we’re not gonna do the reverse split. So hear me clearly. It’s giving the board the authority to make a decision if and when we can perform at a level that we believe our assets and our opportunities will perform at. And so that’s the request. We’ve talked, we’ve done this before.

It’s always been sort of the same thread, which is make sure that the company is well situated so that we have more forecastable revenues, less venture stage and inherently in its portfolio, more validation work, more adoption. And so that’s what we’ve been working diligently to accomplish. So that’s the plan. If anybody has any additional questions, reach out to me. You can certainly put them in Q and A now, happy to consider it.

Next.

Brian Loper, Investor Relations, BioLargo: All right, another general question. Are there any new iodine copper products in play?

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. It’s a great question. The yes. There are. And it has it has such an extensive opportunity, in the medical field and the related fields around medicine.

And we’ve done quite a bit of work just to, I’ll give you just a glimpse. One of the opportunities of course would be through an EPA route, which would be general disinfection. And it has the ability to meet that threshold, but the regulatory burden is pretty high, About a million bucks, take about a year. And it’s also a very highly commoditized category. So it doesn’t mean you won’t do it.

It just means you do it when you have a channel. When you have a channel that will value the the value proposition of this claim, which is probably safer and more gentle and easier to use. Right? That’s probably where it goes. But we’ve done a lot of work in that field.

In addition, in the medical field, there’s subsets of combinations with gels and coatings and bandages, and there’s also potential of therapeutic action. Right? Potential, that’s that would be a drug route. Okay? All of those are innovations that we continue to nurse along, and it really reflects sort of the strength of the core intellectual property asset.

And what I can tell you from our from our experience is we don’t know of any company that’s committed the kinda longevity to advancing intellectual property in this field. So we believe we stand alone in it, and our value proposition is unique. So as we get adoption in the medical field, especially when we talk about some of the major opportunities that are now right here in front of us. As those occur, we think the opportunity for expansion is pretty dramatic. Yes, so there you go.

Brian Loper, Investor Relations, BioLargo: All right. And on that thread of expansion, we have a question here. Could you give some detail on the growth of the company and what the recent hires are?

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. So sure. The engineers are still breaking records, which is awesome. So that unit’s growing dramatically. We have projects that are significant on our plate, and we have more coming.

We also have a hint of a significant future on PFAS, and it’s so significant that it makes everyone nervous about infrastructure. And, of course, part and parcel to our strategy is to be is to to build the swell of demand so that we can become a volume purchaser as we reach back into the supply chain for contract manufacturing and components. All that’s happened at the same moment. So the engineers have continued to grow. Clear also is growing.

They’re adding professional sales organization, QAQC, regulatory compliance, all the things that kinda come with the significance of taking product into a very competitive market. And so so, yeah. So in fact, when you look at the net loss and the SG and A, much of that expansion on a loss side is associated with clear because it’s really pretty much pre revenue. Right? Now the difference in that versus the engineers, we always have a mandate.

We say build it and they will come. We say no, they come and then we build it. That puts a lot of pressure on our staff. I mean, it’s like everybody’s operating with a staff that needs more people. Okay?

And that’s certainly true in the engineering side. And so we’re thankful that they’re resilient and capable of doing that, but they’re gonna have to grow. And some of the contracts, to give you an example, we signed these contracts with the US Air Force, and that’s recurring revenue. And so we had to add some people, of course. The same thing is actually happening on a number of fronts.

And so we’re gonna need more people. No no question. And but, you know, my mandate and everybody knows it is show me the contract and hire the staff. Don’t hire the staff and hope you get a contract, we can’t afford it. And so that discipline is still permeating the company and I think it served us well and it will continue to do so.

We in theory, some of these assets are gonna grow quickly and the volume is gonna be pretty substantial. And so my attitude is worst case, we just slow down a minute and then and then shore up the infrastructure. But we have to get to that early adopter phase, and until we’re through it, we’re not through it. And so that’s the mission, get through it, and then ramp up the infrastructure so you can go bigger. That’s the idea.

Brian Loper, Investor Relations, BioLargo: Excellent. All right. This question came in in kind of response to one of your answers, are we ready for a national exchange without market adoption? Investors want performance over claims and potential.

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. I think so too. Yeah. So, yeah, I think that’s exactly right. Yeah.

We agree, by the way. I mean, the OTC is a hard place to get future value. Right? You know, futures. Right?

Blue sky. It’s hard to get blue sky on the OTC. No question. And when you combine that with the length of time it’s taken, it wears everybody out. So we know.

We know. We understand. And, you know, the good news is that management’s never been a seller. Right? We’re long in this long in the stock, continue to hold a long, long time.

Why? Well, because we believe it’s gonna be significant. And some of the assets that we’ve advanced through adoption, you know, they’re meaningful. It’s really great. We’re thankful for them, but I still think we’ve just scratched the surface.

Now it is different. We have a critical mass that we’ve never had. We’ve got talent that we’ve never had, a depth of talent that’s pretty remarkable. We’ve also been tried and tested on some of these technical assets for how real they are, right, the credibility associated with the claims. We’ve done so much work to validate them for adoption that it really pays off.

So yeah. Right? So so how do you sort of culminate in significance to support a national listing? Well, the answer is real simple. You gotta get them done.

So that’s what we’re doing. We’re gonna get them done, and they’re significant. And so as those come to bear, we think everyone will be rewarded. And, you know, we hope you hang in there for it because we think it’s worth it. It’s worth it’s worth you know, rhetorically speaking, I say this all the time, but I really mean it.

Each one of these assets that we’re focused on is worth a career, every one of them. So we got multiple, that diversity has saved the ship hundreds of times. And so now as a result of our core competency, science, engineering, strategy, those are coming to bear. So we think we’re in a really great position to see those prosper. But that doesn’t mean we don’t take our knocks.

We do. We take a lot of knocks. In fact, it’s very difficult to do what we’re doing. The good news is they’re real, substantial, substantial in their transfer transformative capabilities. So and if you look at the breadth of what we’ve achieved with so little, it’s remarkable.

And so, of course, what’s hard from the outside is to know that they’re real and that these claims are gonna find a market. We know this. Rest assured we know it. Otherwise, we wouldn’t be doing it. And again, we’ve had some delays.

Know, the AOS is a good one. If that question is not out there, let’s talk about it real quick. The AOS is just way ahead of the market. Way ahead. We got all these rumblings now that Europe is hard charging after micropollutants.

And, you know, just for the record, I look at that and I say, yeah. Sort of sort of like ballast water. Right? You know, we took a lot of criticism for the ballast water, you know, and I get it. I get it.

But thank god we didn’t overinvest. You know, that’s a market that got pummeled by regulatory. Twenty five year push down the road for regulatory. I watched 25 companies go bankrupt. We didn’t.

So, you know, this notion of trying to be a front runner in in, you know, early adopter markets is very difficult to do. So we have now such a good deep portfolio that we can play that game. And so we need to get more wins, of course, and that’s what we’re doing. But I actually believe AOS will find its time in the sun, and it’s just not today. So, again, I don’t think we wasted wasted the money.

I do believe, though, timing can be everything, especially in the regulatory front.

Brian Loper, Investor Relations, BioLargo: Hope that helps. And and on the PFAS front, have we secured any new AEC contracts with early adopters?

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. So yes. Well, a couple of things there. One is we’ve gotten some business incremental business around the AEC where we’ve helped solve some problems with clients. I think the total revenue that’s generated through that operation is about 1,700,000.0 over the course of about three years.

So it’s not nothing. Okay? And some of those went through preliminary and then stopped and went on hold. Some were makeshift solutions in preparation for big design. A lot of testing has gone on.

We actually have some small accounts now where we’re actually treating waste streams for a client. And so there’s actually a lot of activity. Now in the contracting phase, some of these can be very long. Bid, scope, price, and wait. And then when when the Trump administration came in with all the the rhetoric about cutting through Doge, through the regulatory agencies, a lot of these regulatory agencies really froze.

They just couldn’t do anything. They didn’t know what to do. And so that’s had an impact for sure. It put a delay into the adoption cycle in the market. But what people need to realize is that while all that’s occurred, Zeldin has come in with the EPA and reaffirmed the commitment to the Clean Water Act and the removal of PFAS from the environment.

He’s pushed down some of the regs for some of the very small chain molecules, another two year adoption cycle, which is probably necessary because no one really has a good solution for those except us and the world may or may not know it. So we need to get our word out. Right? Word out with adoption and scale up. Anyway, PFAS took fifty years to get there.

It’s not gonna go away. And litigation continues. This is another important factor. Litigation continues. So so what’s so the thesis that we put forth in PFAS still holds very true, which is what?

The most efficient collector wins. When you super concentrate, destruction is manageable and easy. At one forty thousand, the waste stream, we win, and that’s what’s happening. And so I know it’s hard. You know, it’s hard because you don’t see it all, but we do.

And we’re sitting in the apex of attention. I’ll remind everybody too that that that’s the reason we were invited to be part of the Environmental Technology Credit Advisory Committee to the Secretary of Commerce. I’m I’m in a meeting every every month there. It’s it’s really good for Bio Largo. It’s really good for our technology.

And we’re we’re in the mix with some of the leaders all around the the country now, and and it will expand globally. So so we’re in a very enviable spot. And because we’ve got such a nice pipeline established now, we get the attention of of major partners and and and participants who wanna see us win. So we believe we’re gonna win big. But it is slow.

I’ll admit it’s slow for sure. Go next.

Brian Loper, Investor Relations, BioLargo: Alright. And speaking of partners, what has been happening with Garrett Callahan? Is the MLD product no longer viable?

Dennis Calvert, Chief Executive Officer, BioLargo: Oh, no. It’s very viable. It’s just slow as can be. Yeah. So that product, remember, its key feature is to recycle water or cooling towers, things like data centers.

And so, you know, let’s give you some macro trends really fascinating. There’s about four and a half years of water in California stored up in the reserve in the reservoirs. Four and half years. And also the snowpack’s probably thicker than it’s been in a decade. And so there’s a moment at which people kinda pause.

And then with the Trump administration coming in and saying, you know, we’re we’re tired of regulations, you know, stopping our economies. A lot of people put some of these projects on hold too. They they kinda pause. Now the commitment to economic and environmental sustainability is still real. And so that’s just a matter of time before people actually pull the trigger.

And so this is an this is an early adopter technology with a country’s largest privately held water company, North America. That would be Garrett Callahan. We are still working through piloting and demonstration projects with customers, and and you’re correct. No one’s landed one yet. They’re actually quite large, and we’re working with some of the, you know, significant players in the in the market that we’re focused on.

And so we’re still are optimistic. What I will remind everyone is very important is that our investment is done. Now we’re demonstrating. And the demonstrations in our facility with the equipment that’s already been paid for. So so what happens now is the selling’s up to here at Callahan.

We’re there to support. We’re technical experts in the field, and we continue to work that process with customers. And they are ongoing and they’re continuing. So yeah, so don’t count it out. Certainly frustrating on how long it’s taken.

Not easy, but actually quite robust.

Brian Loper, Investor Relations, BioLargo: All right. Yep. Let’s move on to our last set of questions here about the battery side, which I think something to be excited about. Just to clarify, what is the difference between the salinity battery and the other sodium ion ion battery management systems?

Dennis Calvert, Chief Executive Officer, BioLargo: It’s a great question. So sodium ion is is uses a mechanism. You can you can Google it or you can do on chat GBT. Ion exchange. Right?

So ion exchange membrane across the electrodes. We don’t have a membrane across the electrodes. So what happens is the as the electrons flow through the membranes, they have a process that’s called the formation of dendrites. Dendrites actually are like miniscule microscopic corrosion across the electrodes. So one of the key features in our battery tech is de minimis, if any, corrosion internally, which means no internal degradation.

So like a like a like a lithium ion, lithium ion, ionic exchange, they all have degradation, which means they have, you know, limited functional life. The sodium ion too is typically has some kind of rare earth in it. Probably got a cobalt or a nickel component and doesn’t have the same, you know, critical features that we talk about. Typically, it’s also gonna have some kind of limitations in the way energy can transfer across the cell itself. Ours is a is a hot.

It’s a hot battery. It runs about 200 c. You don’t have to keep it cool. You like it hot, and hot batteries move very quickly. Electrons can flow rapidly in this in this molten state.

So they’re quite different. Right? They’re quite different. So when people talk about the and there’s been a lot of publication in the last month or two about how the tariff wars have spawned venture capital investments in sodium batteries. Yeah.

For good reason. I mean, this this reliance on the on the on the geopolitical hotbed of China’s supply chain for lithium is a real problem and then manufacturing and the components. It’s it’s a real issue. And especially when you travel internationally like we are, we’re we’re doing business deals, you know, with potential partners all around the world now, And they don’t like it. In fact, they’ll do anything to get away from it.

And so it’s a hot driver. So we actually think the tariff wars push people towards sodium and they push people towards our technologies and alternatives. So it’s really, it really bodes well for us. Now so anyway, it’s a long answer, but the but the simple version is it’s not gonna match our stats. Look at the high energy density and look at the high voltage, and the sodium ion batteries are really not doing that.

So so they’re gonna go through an evolution of r and d, and it is a a good viable alternative to a lithium. But most of those batteries are focused on traditional battery thinking like what? Electric vehicle, EV. EV and portable. Okay?

Well, that’s not us. We’re long duration grid scale. 20 foot trailers, big batteries, big systems, big footprint. Put them in place. Don’t move them.

Run them for twenty years. That’s that’s our model. Different market.

Brian Loper, Investor Relations, BioLargo: Alright. Final final question here. It’s a three part question. But is Salinity superior? And then when will we have that third party validation?

Dennis Calvert, Chief Executive Officer, BioLargo: Yeah. Yeah. We’re hoping to get that yeah. So that’s a good question. I’m really excited.

I’ve been excited about the battery tech for a long time, but my goodness, it took a lot of work to get through the validation stage. And fascinating, really, what we learned a couple things. One is you say, yeah, we’ve got, you know, lots of people in the world that can come out and validate our battery check. Well, it turns out that’s not really true. There’s not very many people, and the ones that are capable may not wanna do it or you don’t want them to for competitive reasons.

So there’s a lot going into that decision tree. Okay? So we found a group that’s technical experts twenty plus years in the field and just bonafide experts. And so they’re they’re doing the validation work. And it’s underway as we speak.

I’m hoping that we can wrap that up in the next week or so. I mean, literally, something like that. Maybe it’s two weeks. Don’t hold me to a week. But it’s something like that.

You know? So we’re in the final stroke. And what they’ve really what they’re helping us do is to confirm the the basic important data is matching what we thought we purchased. That’s that’s it. That’s the mission.

Right? And we already know this, but we don’t have a third party to say it. So we need the third party validation to really advance some of the business deal making, and there’s a lot going on in that. And and what’s fascinating is because of our business model, we’re able to approach it with a very sort of cut and dry approach. You know, who wants to build a factory and do you have money?

I mean, just think about it. Who wants to build a factory and do you have money? Because we’re not we’re not writing all the checks. And so the good news is there’s a whole industry of finance that’s focused on this this long duration storage market, and their the appetite is, as I always say, is insatiable. If you just think through it, you can’t build enough factories to supply the world.

Okay. So what what happens when that when it’s like that? That means batteries that are just okay, you can sell all of them. Batteries that are exceptional can take a market. But you can only take the market to the extent you can manufacture.

So can you actually supply the world? Well, no. You can’t. So the franchise model is a good idea. Right?

You know, we built a model on 10 factories. 10 factories on a net present value. Just think about it. 6% royalty on 10 factories. That’s 30,000,000 a pop.

They’ll do about a half a billion each. That’s 300,000,000 positive cash flow on 10 factories. That’s how you come up with a 1,500,000,000.0 net present value. It’s pretty basic really. Right?

Because we’ve got free cash flow on the deal. That’s what we’re that’s what we’re bargaining for. That’s what we need. Okay. But you can’t build enough factories to meet the demand.

Okay. So is the model to do a factory? No. Is the model to do 10 factories? No.

The model is to do 50 or a hundred factories. Okay. Well, are we ready to do that? Not yet. Starts with one.

One becomes three. Three becomes 10. 10 becomes 40. And then you replicate. And then you become a large volume purchaser of the supply chain.

And you’ve got remote you’ve got distributed manufacturing around the world with local commitments for economic development, for workforce development, for the incentives that are rich from not only the the states, but the DOE itself plus international. And so so that’s a model that scales. And so we just need to get through the process of third party validation and then get the first big contract underway. You know, just to remind everyone, once we have a contract to build a factory, it’s about two and a half years. But here’s the thing, we make money day one.

We make money day one. So we’re in the business of selling factories, not selling batteries. So I think it’s gonna be a big deal. And with given the technology and the talent we surrounded it with, we think it’s just a matter of time. We’re gonna keep plugging away and get through some of those barriers.

Okay?

Brian Loper, Investor Relations, BioLargo: Great. Those are all the questions. Thank you very much, Dennis.

Dennis Calvert, Chief Executive Officer, BioLargo: Alright. I’ll just wrap up real quick. Thanks, everybody. Again, we’re happy to talk to you. Thank you for the support and you know, we’ll keep plugging away and look forward to talking to you soon.

Thanks everybody.

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