BioLargo, Inc. (BLGO) Earnings Call Transcript & Summary

Good day, everyone, and welcome to the BioLargo Annual 2024 Earnings Results. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Brian Loper. Sir, the floor is yours.

Great. Thank you, operator. Good afternoon, everyone, and welcome to BioLargo's Annual 2024 Earnings Results Conference Call. Everyone will have access to the earnings press release being issued tomorrow morning before market open, and the 10-K and 8-K reports have been filed with the SEC. This call is being webcast and is 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 and 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 and may cause the actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties are contained in our most recent Form 10-Q, Form 8-K and other reports filed with the SEC. The company undertakes no obligation to update any forward-looking statements. And with that, I now hand over the call to BioLargo's Chief Executive Officer, Dennis Calvert.

Hi, Brian, and hi, everyone. Thank you for joining us today. We're going to jump right in here. BioLargo, we make life better. The innovation engine for a better tomorrow. As everybody knows, we've been innovating for over 10 years now and have an entire portfolio, early market adoption on a couple of our assets and a number of big projects in the wings that we think will move the needle for the company. Brian just covered all of our forward-looking statement safe harbor disclosures. Make sure we've got that. As always, let's say, yes, here we go. Refer to the Ks and the Qs, look at all the risk factors. They're real. We've been overcoming risk factors for well over a decade, and they do present some real challenges, and we'll talk about some of those today. But really, that's the key to our business. We're overcoming challenges on the way to market adoption. So who are we, right? Innovators, scientists, engineers, passionate about doing something important for sustainability, human health, driven to make life better, high purpose focus. We focus on best-in-class solutions, and we focus on problems that don't have a good solution like our PFAS. There's just not a good solution until we came along. We'll talk about that. And all these assets, right, these assets represent the potential for transformation in the marketplace. And each one of these inventions and the focus is a cornerstone of building a business and a commercial opportunity of significance really focuses with that premise, right? Potential to change a market, transformative technology, easy to say, very difficult to do. And we aim for partnerships, very capital conserving strategy. We invent, proven partner, find great partners, leverage those partners to use our toolkit to go to the marketplace and make change. And as a result, we're able to -- once we find the right partner, get through that adoption phase, get it early market adoption, prove, prove, prove. Derisk them as far as we can, get early market adoption. And when we find a partner to go and go big, it really represents a significant windfall of opportunity for us as evidenced by the Pooph asset, of course. So in the portfolio, we're investing in a whole series of platforms really. So the corporate office, right, focused on strategy and capital and organizational infrastructure, hiring people, CEOs. Often I get the question, how in the world can you do all this? Well, the answer is I don't. We have teams of executives and CEOs in each of these companies who are quite skilled in their art and their field who really carry the ball. They do the work. We have an engineering group, of course, in Oak Ridge, Tennessee, been with us now over 5 years, 30-year career, mega global company experience, literally worked all over the world. As a result of that core competency, that team of PhDs and scientists and engineers can come together and support these various enterprises, as we say, leveraging our core competency. Our core competency is science engineering for a purpose. In these assets, we made substantial investments. In each of these, there's a history, history of how much money do we put in, where are we at in the adoption cycle and why do we do the things that we do. And it's important to understand in the portfolio, we focus on leveraging that core competency with high impact, ultimately get the technology seed in the market, focus on making money, do something great, make some money, but also the exit. There's often a time in the journey when you look deep into the company, you ask yourself, how do you do all this and why? And of course, as we become more skilled and gain traction in the credibility that is so critical in the marketplace by partners and by customers and by financiers as we achieve that critical mass, we marched down the journey towards exits, and we believe the exits that have a potential in our portfolio are of this magnitude, okay? It's very critical, big endeavors that can transform a market, right? And there's a cornerstone that allows that to happen. Unmatched technology. That's right, number one. Capital conserving strategy, highly qualified people, -- oops, a little bit of technology here, one second. I think I get it. There we go. Highly qualified people, engineers, scientists, a bunch of PhDs, smart people driven by this impact opportunity, coalescing around the mission, right, and driven for this high impact. And we always say the high impact is really important, too, and the darkest of ours, and we've had some where you have to sort of just gut it out to get through the adoption cycle that sometimes is taken years, over a decade in many cases. Eclir is a great example. We're now at that moment of significance. And you look at the toll on people and capital and patients to get that technology just right for the adoption cycle that we believe is right here before us. And of course, we look at a huge prize, not only in the impact it can make for human life and human suffering for chronic wounds and infection control, but the financial implications for our company, our stakeholders, our staff, our employees, our leaders. Really, it's an economic engine that we've built, and now we get to watch the fruit of that. And of course, as you look in the portfolio, the PFAS is a big deal. Notice that we said $1 billion. Each of these has a little different dynamic in the way they find adoption, but they're big. They're big. And of course, the battery tech, we really -- when we look at the model and the implication for this technology and the way we're going to market, we think it's a multibillion-dollar opportunity or more. And again, we'll talk about how we got to that model. Okay. I get long-winded on this. I'm going to do it. I want to open up a lot of question and answer. But the next, I think I want to turn it over to Charlie. Charlie, if you want to talk about our results briefly and any commentary you'd like to make, please do so.

Okay. Dennis, thank you very much, and good afternoon, everyone. Thanks for being with us. And before I jump into the financial highlights and Dennis' touched on a few of these -- my comments, which is simply it's taken us a long time, but I think the core strategy of using capital to identify and invest in new technologies with the help of experts in those technologies is working. And you can see it, and I'll explain at least in 3 of our subsidiaries. But after identifying technology and putting great management teams around it and then creating subsidiaries and giving them the capital to go make it work, I think for now, it's coming to fruition. And like I said, I think we'll see it in the financial highlights. So jumping into those, we did have an increase of 45% in our overall sales and revenue, which we hit almost $18 million. And this has continued on a very accelerated growth path, as you see from the slide. And to take that down into some specifics related to our subs, Odor-No-More had its revenue increased 36%. And we had a slight increase in COGS related to raw materials, but the -- but Odor-No-More ended up producing $5.9 million in operating income, a little higher than what we put here. But a very successful year, and we expect that to continue. And of course, much of what that is being developed there is through the Pooph product. BLEST, our engineering division, produced an increase of 183% in its revenue, and this would be third-party revenue. As Dennis has explained, we have them doing a lot of R&D and work for BioLargo that doesn't show up in our numbers because it's related party. For them, the operating loss reduced to $1.45 million versus $1.6 million. And a lot of what's been going on is they have costs related to their fixed fee contracts. And that's a deeper dive than I'm going to do here. And so the work also for the AEC water treatment has taken up quite a lot of engineering time. But in any event, it certainly made progress. Clyra as we mentioned here, is the majority of our net loss. And by the way, our net loss was reduced to $4.3 million from $4.6 million last year. And Clyra is obviously ramping up for its manufacturing. So we've hired additional consultants and professionals and salaries have increased as we brought new players on. And we're very excited about what they're performing. And also just to look at the balance sheet perspective, we've had a considerable increase in our equipment. And much of that, in fact, almost well, a lot of it is due to the equipment and the progress that Clyra is making on its manufacturing. Some of the other increase is related to our battery and AEC equipment needs. And going to the balance sheet, I'll just quickly give you some of the highlights, which is we've got a very strong balance sheet. And we're still sitting on or have been able to have $3.5 million of cash. We've had an increase in accounts receivable, and that's because we're developing more business, not that people aren't paying us. We have very few bad debts. And inventory has gone up. Fixed assets have gone up, as previously mentioned, because we're spending related to equipment. And then actually, overall, our debt has declined certainly in accounts payable. Now we've had an offset to that because of the increase in the progress in manufacturing for Clyra, we have taken on additional AP and some additional debt. But overall, that comes down to a reduction in debt through what we've been able to do. And just a quick discussion of the cash flow because that really gets confusing. We're actually from the pure perspective of operations at the same level or actually have improved year-over-year, even though we're showing an increase in the cash flow from operations. But as part of that cash flow from operations, there's the working capital changes. And those can be confusing to many people because an increase in accounts receivable, which we had is a good thing on the balance sheet. It is a negative on the cash flow statement because it assumes that you're not converting your receivables into cash, and that's another time for another discussion. So realistically, the increase related to our increase in operating activities is solely from our working capital perspective, an increase in receivables, which is a negative. And strangely enough, we have paid down our debt, and that's also a negative. So realistically, we're in an improved overall balance sheet and cash flow situation. And as we've mentioned, the offset to that is, of course, raising equity, but pretty much all of that cash flow from financing is related to Clyra's needs. And so Clyra has been able to raise additional equity related to their needs. And the rest of it is actually exercises from stock options and warrants, and that includes Clyra warrants. So in our lexicon related to actual operations, we've had a major, major improvement. And you can see it also in the slide -- next slide related to our stockholders' equity, which again has increased and it's at about $6 million. So overall, when I look at our year, we had a really, really good year. And going forward, we hope to replicate that and improve on that. So Dennis?

Good. Yes, very good, Charlie. Thank you. Yes. I think we also should mention that over the course of this last year, we added another 10 employees. So we're up to an employee count of about 44. And then we have other consultants who work with us on a regular basis. So we've got some critical mass in talent now that's pretty extraordinary. And the other thing I'll mention and some of these consultants even, they're just at the pinnacle of their career in their space. Clyra in particularly has a number of really high-powered consultants that help us navigate the FDA and things like that. And it's important because they journey with us and become almost an extension of our team, even though they don't show up in the head count. But the fact that we've got such a critical mass of talent gives us staying power. I mean we just have a lot of people that can do a lot of really special things, and it's showing up. The way it shows up is we move faster through the development cycle. We have more support on the customer side. We have the ability to reach out into the market for supply chain and sourcing to really get us into a go mode faster. And it shows and it shows up with our partners and it shows up with our customers in a pretty awesome way. Okay. So we're going to go through the business units. A couple of highlights real quick, I think that are worthy of note. And remember, everyone on the phone may be an old shareholder, but there's new people, too. And so we got to cover a little bit of the old. We're going to do it quick. And I would encourage everyone again to go to look at our social media. We put a lot of information that we try to keep it current. Pooph is the #1 revenue generator in the portfolio. And just to again, give 2-second war story, that's like over 10 years of work. And we estimate we probably invested around $10 million approximately in the journey of developing this product line, and it took a long time, and it was painful, I will say. And then something happened along the way -- something happened along the way, we became expert. That's what happened. And because of our expertise in designing these products and packaging them and labeling them and all the things that go with that, we were able to partner up with someone who brought extraordinary marketing talent, and that was the team from Ikigai Marketing Works, who created the brand Pooph, and that's our partner customer, right, partner customer. And we currently have 8 unique products and 15 SKUs, and they've got something like 35,000 to 40,000 retail outlets approximately in with all the big national chains. And here's the thing. That product works really well and Pooph has figured out how to market it in an extraordinary way, and they're so skilled at what they do. So the major retailers are adopting it. What we hear from feedback all the time is the products are -- they really do work, number one. People love them. They love the brand. Retailers love them because customers come in and ask for them. And so there is an ebb and flow, but Pooph has just been breaking records like crazy. And there is an ebb and flow, right? There's little peaks and valleys. But over time, they've had a record year. And of course, it's brought BioLargo into record territory year-over-year for the last 3.5 years. Remember, they've only been to market about 3 years, 3.5 years. And so the business deal. The business deal is really pretty simple. We made a bargain. We said to Pooph, we'll, support you. We'd love for you to take products, we'd like to help you with the supply chain. So we take a little cost plus a little margin. We get a little royalty on sales, incremental. And then we bargained for exclusivity for a piece of the equity upon exit, okay? So just think about that, right? Supply chain, make a little money, royalty, make a little money, create an exit. We're building brand value. So as Pooph builds brand value, our brand value goes up. That's one of those unseen values in the portfolio at BioLargo. You can't see it yet. You have to think about it. It just doesn't show up, okay? But one day, it shows up in a big way with cash. And so we really do believe that, that product line is going to find a home with a big brand retailer because it's just so well suited. And of course, it demonstrates great. Okay. And so what does all that mean? Here we go. Another year, another record year, 4 basic product lines, more products and expansion. And I want to reiterate that the product is the highlight of the story. The product is the highlight of the story. People love the product. And the chemistry of it says, we know the chemistry says it works. When that chemistry comes across organic matter, it's going to dismantle it. So molecule for molecule, when you put that product on an organic molecule, molecule for molecule, it's going to break it down and it's going to eliminate, right? It doesn't come back. And so that's a winning formula, and they discovered how to market that in an extraordinary way. So we're very optimistic about it, even though there's been ebb and flow, everybody knows that. We've seen some of that ebb and flow with the ad spend and the infrastructure and the buildup. But just remember, we represent about 20% to 25% of their revenue. So if we're doing $15 million, it's probably 3 or 4x on the other side, right? For what they're doing, and that's pretty extraordinary. Show me a product in 3 years that hits that kind of number. They really deserve accommodation, and we're thankful to be in business with those folks, okay? Next on the plate, everybody is so anxious to know about Clyra Medical, okay? I had the privilege of going to a conference in Barcelona this last week, some of these pictures of that from that conference. And we were there for the European Wound Management Association, which is very much a clinical event. And I got to firsthand sit there on the front line for a bit and watch clinicians come by and ask about the product. And the punchline to that story goes like this. They look at the stats, they ask a few questions and you know what the #1 question is, where do I get it? Where do I get it? How can I get this product and use it? I often clinicians say, "Oh my gosh, I needed this last night for one of my patients. And so that's when you know you're hitting home. That's when you know you're hitting home. And you got to remember that, again, in this asset class, the technology and the products are the key feature. This is a 14-year investment, 14 years. I think the total invested capital is pushing about $19 million, $20 million. And you say, who in the world can invest $19 million or $20 million in 13 years to watch an asset find its way to market? Well, we did. And the beauty in this case is that it has such a transformative opportunity to literally take the market and become #1. So we looked at that, we said, we got to get a big partner, a really good partner, something we can trust. And we also did the same thing on manufacturing. Don't build manufacturing, buy manufacturing, right? Rent it, use a third party to really scale up. So as everybody knows, one of the questions that came out of that, our partner for distribution came in and said, we love you. I'm paraphrasing, they didn't say that, but we love you. But you got to be able to produce to scale. If we turn on our machine and start producing, you have to keep up. And so for a small company, that's a pretty tall order. Well, we just had a confirmation meeting with all the parties about 7 or 10 days ago, I can't remember last week, and it was very successful to essentially confirm scaled capability. That's what we did. We confirmed scaled capability. So what does all that mean? It means we're coming in on the launch pad, and we think it's near at hand. That's the point. There's a lot of work to do, though. We described some of that in the 10-K. You can look at it. There's a lot of work to do and there's logistics and some filings and all this stuff has to happen to really see a product take a national rollout. But the fact is that we've paid a dear price to be here. Now our investment in direct and equipment is over $2 million, about $2 million, $2.1 million and plus the burn rate. I mean, supporting all the staff and all this infrastructure, I think the total number was $3.7 million last year, total invested on the Clyra side. So that came from a combination of 2 sources. One is from direct investors who invested in that project, that portfolio asset with the parent company, BioLargo. BioLargo also invested about $900,000 last year. I think about $1.4 million, $1.6 million, something like that over the last 2 years. We've made it clear. So think about that. BioLargo is investing alongside the investors, okay? We're supporting that asset to make sure it can get through the gate and find its channel because we know the prize on the other side is so significant, not just for us, but for human health, for the standard of care, for the distributors, there's a community that we're investing in. And that ecosystem is really critical. Keystone has invested over $3 million. We think the number is going to be close to $5 million by the time they're done. And we've developed a clean room for sterilization. And then, of course, our distribution partners. So we're coming on that moment where we say, okay, what's missing, check the box? Are we ready to go, okay? So stay tuned. We got significant information that will unfold, we think, near at hand. And just to reiterate, the product is the showcase. The product is big market, surgical procedures. The concept really is pretty simple. We have broad spectrum efficacy that means it works across a whole bunch of different pathogens. It works really well. It's a copper iodine complex, right? It's gentle, no tissue damage, no sensitivity. It has proven efficacious, right? Efficacious means it works against biofilm, disrupting biofilms. So that's a big claim and it has some sustained activity. And again, the summary of all those claims mean really one simple thing. Don't me a product that can do all that in one product. You can't find it. And so as a result of the set of claims that combine all those features into a product, it has the potential of being #1 in the world. Make no mistake about what we're talking about, #1 in the world. And is it worth 14 years and $20 million? Oh, yes. it's worth a lot more than that, okay? For impact, for ecosystem, for our investors, for the Clyra direct investors, for the BioLargo investors, I mean, it's taking a community to get that done. And so the market is so big. And again, it's a diverse portfolio, many different markets we can touch. Surgical, we think it's going to go big. Wound and burn is another big one. And that's why we were in Europe at the Barcelona event to establish relationships with distributors. Now there's a lot of complications that go with that international sales. Some of the markets will be able to take product based on an FDA label. FDA-cleared label get us in the game, which we already have. okay? So that's just about scaled support, making sure the distribution knows how to get the product seed in the market. And so that's encouraging because it means you can go a little faster. And then the big prize, especially in the Western European nation is going to require what's called a CE mark. And that mark is basically certification for Europe. And so that takes a little clinical work and a little bit of money. So we're not anxious to plow money into it because we're so close to getting going, perhaps we can find some early distribution using the FDA label, secondary source with a CE mark makes a little cash. You got to put the cash to work, get through clinicals. So all that's in the works. And again, the more we do it, the more we get affirmation that we're on the right track. And so we're very encouraged and excited about the moment and the near-term catalysts that can really move the needle for the company, okay? And we'll open that up for questions in a few minutes, too. So stick with me. I want to talk about battery tech because we think it's probably the biggest in the portfolio. Now PFAS is running #2 as well or 3 and 4. These guys -- both of these are so big. And we did have a delay. I'll tell you, we -- it took an extra year to get through the work that we've done to really prove out the technology internally. And the next step is to get third-party validation for the battery tech. I'm going to show you the time line in a second. That's the battery cell. That's called our Spartan cell. That's a 300-watt hour cell, and that is a big cell. And it's ruggedized. It's kind of heavy. It's got a little w8 to it. And you take those cells and you stack them up into racks and racks make packs and packs make modules and modules go into a trailer. And next thing you know you got a megawatt hour of energy storage. It's grid scale, okay? So it has a bunch of features and the features really, again, promise a potential being #1 in its space. And we believe that. Make no question about it. We believe it. We wouldn't be doing it if we didn't think so. Remember, our thesis, we don't think it's #1, don't do it. Safer, sustainable, durable, efficient, extraordinary efficiency. And why is this important? Because this is a humongous market. This article is now, I don't know, 4 months old, something like that. Clean energy is next trillion-dollar business, long duration energy storage. That's batteries that are grid scale that can be drawn on for an extended period of time and provide energy for a balanced grid, offloading renewables. And no matter what the source of energy, no matter what the source of energy, you need storage that go hand in glove, data centers, big data, AI, okay, renewable energy, grid balancing, you can't make batteries fast enough, okay? So again, in that model, there's also the safety risk associated with lithium. I note that the big lithium -- big lithium battery storage facility up in Moss Landing, I think they're on their third incident with a fire risk, third. And so as a result of those activities, cities and city councils are now banning battery factories, especially for using lithium. There needs to be a better alternative. What's interesting about this, too, is in the international markets, as I go out and talk to people about the opportunity to be partners with us, some of the international markets say, fire is a real thing, you can manage it. But the real issue is the geopolitical risk associated with China dominate the supply chain. And essentially, the world is in an outcry moment. We just can't do it this way. We have to have alternatives. And so we agree and so that we're one of those alternatives that's going to have a chance to really make a big impact. I'm going to get to that third-party validation in a second, but it's coming. And I just want to tell you, it was a lot more difficult to find that tool than I would have ever imagined. And I'll explain that in a second. I'm not going to go through the data on this, but this is a direct comparison to lithium. We put it in here so you can look at it later, okay? Bottom line is it just has a bunch of features that lithium can't stack up. That's the bottom line, okay? And the next one is really very similar. This is a comparison. Again, it's got so much information packed into this little presentation of various other technologies and how we stack up. And here's -- again, here's the bottom line. 2.9x the energy density of lithium, high voltage, okay? And that operates at a higher temp, but we like that because you can insulate it and hold temperature in and no thermal runaways, no extraordinary fire risk and explosion risk. And we have a cost of goods advantage that's astonishing. It can be a 60% to 70% cost of goods advantage. And again, that's producing to scale, okay? Not producing 5 batteries to scale. You have to get to scale. And then in our third-party testing -- excuse me, in our internal testing. We've replicated the data from prior studies. Remember, this technology had 8 years of R&D before we took over. And so we've been able to take it where it was and take it forward and continue to advance it, which we're doing, including improve the technology. There's this little graph to the left, it's pretty techy, okay? But basically, it's 3 reactions in 1. And as the voltage goes up, you get this reaction kinetics and the chemistry that represents a technical breakthrough. It's astonishing. And as a result, we're able to generate energy density, which is sort of punch for the w8, right? It's above your punching w8 and a nice curve, even distribution curve of in and out. And these are recycled curves on the right, which show charge and discharge. When you test the battery, that's what you do. You test the charge and the charge in and charge out time, stability, you're looking for chemistry breakdown and then the reliability of the energy that's coming to come out of a consistent curve. We've done all that, okay? So what's missing? Well, we got to get a third-party validated. Somebody else has got to validate. In fact, I've had groups say to me, if once you get third-party validation, we're in, but I can't do anything until you get it. And that did take some time. In fact, it's probably 9 months longer than we would have ever estimated. We'll talk about that in just a second when I get to that time line. These are the put-ups in the market, okay? So these are competitive products, but they give you order of scale. We're focused on the left side really because it's large format grid scale trailers, and here's an image of what we think our trailer with very close proximity. We're at the cell technology level, okay? Make sure you got that, cell technology. We're developing the cells that go in those racks. And then notice that you open the door and you pull them out of the racks. So they drop in vertical, they stack up. That's how you -- again, cells going to racks, racks going to packs, packs going to module. What's a module? The module is a controller unit. It's a computer that attaches to these modules that spreads energy in and out, monitors its flow in, it's flow out, it's charge, it's heat, all the details that allow you to operate, and it also allows to program uniquely to the integration of how it's going to interact with the grid. There's a whole art to that. It's fascinating. And so we're in the cell technology business to produce cells at scale that then go into modules and modulate the in and out of energy for long-duration storage. What do you do with all that? Well, there's just so many markets. And we think, of course, renewable energy and grid-scale storage is #1, but it's more. If you've got that capability, you're also in the microgrid development. Simple language microgrid is this idea of a source of energy, the storage of energy, the metering out of energy, right, a microgrid. You don't have plug into the big grid, you got to microgrid, self-sufficiency -- balance your microgrid. That's the future. And access to reliable, safe, long-duration storage is critical for microgrid development. And hence, the next $1 trillion business according to the economists, we're going to get a piece of that, okay? So this is a long time line. The first valuation is around $20 million. We're at about a $43 million valuation, just so you know, that's where we raised capital. Very gentle on the investors, very friendly, we think a very ultra-conservative valuation. We think we're going to go up 10x on the next couple of milestones that we click off. So we're at this complete third-party validation testing. We've got a group -- a couple of groups that want to do it. We're coming in into May. And so hopefully, we're going to be able to get that third-party validation that will help us really speak to the investment community, and we think it's critical. And so as you can imagine, people say, we love you, but I need third-party validation. We got it. We understand. And then on the business model, everybody knows this, we decided we don't want to sell batteries, we want to sell battery factories. What does that mean? Capital conserving strategy, making partnerships who will put up capital because they want the price. They want the price. What's the price? Employment, job creation, net exports, energy reliability, grid-scale deployment, all of the above, right? So we're putting people in the business. It's like a franchise. We're franchising battery factories, right? Great business model. So when you run that model on 10 factories, we have about a 1.5 net present value -- $1.5 billion net present value. $1.5 billion on the plant. Of course, there's risk to it. You got to show up with the battery and have third-party validation. You got some work to do. We're not trying to min words on that. The point is it's a great plan, and we have a number of major projects in discussions. The number one objection right now is showing third-party validation. The second is, are you prepared to build to scale? Are you prepared to scale up the engineering? And of course, we point to the pedigree of our engineers and say, we've been building massive -- our team in their 30-year career have proven the ability to scale to this level. And so again, very exciting, I would say, not easy but really meaningful, okay? And then, of course, PFAS is last. And we've got so much going on PFAS. I'm going to keep it really light in the interest of time. PFAS, Forever Chemicals. This is a byproduct of nonstick coatings that is estimated now to be a $17 trillion global problem, all in, okay, all in. You can't look at Internet search like Google, and it's there every day, every day. A hot topic in regulatory. All right. Here's the pipeline. It's in the environment. It's been accumulated for 50 years, and it needs to come out. It's been linked to birth defects and cancer. If you're going to take it out, the alternatives or carbon ion exchange are currently adopted in the marketplace. That's old tech, and you end up with a truck of spent material, a truck, and we end up with a pound or 2 of concentrated PFAS. So that's called selective extraction and super concentration. We super concentrate the contaminant. It turns out if you can super concentrate, then destruction is so much more manageable. So we've, I don't know, 15, 17 trials. We've got a couple of big industrial accounts now coming on. We're speaking all over the world literally as an expert in PFAS, Tonya Chandler. She is a professional expert in this field. And what's happened, it's fascinating, but what's happened and you may recall that I was invited to participate in the Environmental Trade -- Environment Technology Trade Advisory Committee to the Secretary of Commerce. We've had about 4 meetings. We're there because of PFAS, make no mistake about it. We're there because of the PFAS innovation and a chance to potentially influence policy, which is awesome. And we're in a good company there, some of the biggest players in the world. And it's nice. It's a good situation for BioLargo's assets, its team, and our stockholders to have access, right, to that knowledge and relationships. But it just points to the fact that people look at our technology as potentially a transformative tech in a very competitive field, and we have done the work to compete, done the work to compete, okay? And I think we're probably 3 or 4 years ahead of pretty much most of the technology you'll see in the market. I mean we've got an edge when you hang on to it. Our data is compelling. And here's the thing. People talk about drinking water, but it's not just drinking water. It's leachate, it's groundwater, it's industrial wastewater, it's municipal wastewater on and on and on it goes. It's also stripping membranes. And so not we just filed patents on the stripping of membranes. That means some of the competition using membranes to collect, we can actually strip the PFAS off the membrane. So some of our competitors can be our customers, get it, and also PFAS destruction technology, okay? So a big deal. So what happens is this field is evolving and the most -- the slowest to adopt the most difficult client in the world is municipal drinking water. Why? Because it's a political decision. Drinking water is human safety. Most of these people are public officials. They make very slow adoption decisions. Well, who makes fast adoption decisions? Engineers and business people, industrial, they want to move quick. So we've got 2 just new relationships. We just got the go-forward on a commercial-scale pilot. That means we get paid to go through the customization for an industrial client who has a very special situation. Well, that's where we shine the brightest. And guess what, we get paid for it. We get paid to prove it and then we get paid to scale it up. And just think about all of our journey, that's how you do it. And it's easy to say and it's very difficult to do, but we're really excited about it. And then, of course, everybody is waiting for New Jersey as are we. And the New Jersey project, we thought it might push out to the fall, but we got a chance in the summer, but they have broken ground finally because of the ice fall. And so we're in the process now of trying to get the schedule to have access to the installation. Okay. So let me see here if I can get to the next one. Okay. Here we go. We just finished a case study. Now this case study is going to get published all over the industry. And this is a leachate system, and it's unusual because we had access to competitive data, and it was published. And the footnotes are hard to read here on the deck, but you can look after. But the footnotes go through this research history about the competitive profile of competition. Here's the punchline. We save 90%. 90%, are you kidding me, right? So is that real? Well, you got to prove it, but yes, it's real. And so this is an astonishing case study in which we can literally look at a client and say, "Look, if you super concentrate and use our system, you can reduce your maintenance, you can reduce the consumption of carbon, you can reduce the recycling of carbon, you can reduce the necessity to clean up the carbon before you do disposal. " And because of the incremental cost of taking that action, we can save 90% really over life cycle cost. That's pretty astonishing. And so again, that will get published soon, but it's a modified work product that's defensible. Here's our Lake Stockholm, of course. This is a small-scale unit, but still very important as a reference site, as you can imagine. And then I want to show you the leachate because it's really important. Here it comes, leachate. Nasty, nasty water. Leachate is the water that comes out of the bottom of the landfill. And so this is the whole market. I mean -- and firefighting is the whole market and industrial and municipal wastewater is the whole market. Each of these has a nuance. Our technology can work in all of them. And the thing -- people say, what have you been doing? Well, we've been refining the technique for using our technology in all these markets so that we have not one way to make money. We've got 20 ways to make money with invention, okay? And the most successful that we're experiencing, which has just been awesome is what the industry and especially in the engineering side would call is teaming agreements, teaming agreements, teaming agreement. What does that mean? That means an engineering firm has a client that needs a solution. And people like us, our group teams with them to bring the solution to bear for an engineering firm who already has a client. That's a team. You create a team, you go solve the problem for the client. We have engineering firms that now are working on 5 and 10, and we have one that's got brought us 24 projects, 24. And they don't go -- this is a slow selling cycle. Sometimes it's 6 months, a year or even 2 years, but they're very big. They're significant projects. And so our scope of the average project has gone up. Our confidence in our position to transform the industry has gone up. Our data has gone up and our reputation has gone up. We're in a position now where literally, we're presumed credible, and that's new. That's taken us a long time. And of course, it takes a lifetime to get there in a minute to screw it up. And so you got to show up and you got to deliver. And the good news is our engineers have a career of doing that, okay? So we're really confident. So in summary, right, transformative technology, we had a couple of nice -- some wins under our belt. We got more coming, and we think the future for the company is just extraordinarily bright. And again, just think about small public companies trying to find their way on innovation. We've proven a model and a system that works. We have evidence and we have money in the bank and almost no debt and knocking on the door for significance for clear and more coming. And so we just think it's the best time in the history of the company. So I'm going to stop now. We're going to open it up for questions.

All right. Thank you very much, Dennis. Lots of information there, a lot going on with BioLargo. Good times. First question we have here. In your 10-K, you mentioned a 2 day inspection to confirm manufacturer.

Capability. To verify capability, right.

Okay. Yes. So the question is how did the inspection go and what is to be expected over the near term?

Well, it was very successful. There's a lot of techno speak and technical things that are going on in those meetings, and it's a meeting of technical people. And generally, the CEO and the business guys don't go. It's QA/QC, it's tracking, project management, FDA compliance, the data tracking. What happens when there's a mistake? What happens when there's a fix? Who's doing QA/QC on the interaction between the companies? What are the system integration? System integration is not just how do you get an invoice, how do you get an invoice track, QA/QC, comply with the FDA hit all the trouble spots and provide a system that provides confidence for the distributor, right? And so all that's going on at the same time. But the key result of the meeting was to confirm that Keystone is prepared to produce a significant volume of product to meet what we believe is a very large flowing channel that requires speed and volume to be able to fill the inventory of their channels. And that's the primary result. Of course, there's more work to do. But the thing is that we believe that we're now in a position where we can say to our partners, okay, is anybody questioning that we've got the chance to really do this in a very significant and meaningful way to scale? That's the question. The answer is yes. We can do it. And that's what happened. So it was very successful. So what we hope to happen now is the meeting of the minds cross the Ts and dot the Is and let's go. Let's get going. I mean really. Okay? So yes, it's very exciting. We always hesitate, as you can imagine, only because there's so much we don't control. And that's good and bad, but it's just the way it is. And as a result, we're very careful because we know we've spent -- look, think about it, we spent over 13 years and $20 million. And our partner at Keystone, we think is close to pushing $5 million, just to be ready to manufacture. And so you know what I say, just don't screw it up. Don't screw it up. Take your time, get it right. Let's go out and do this, okay?

All right. Changing gears here to the battery. What is the status of the third-party validation of the Spartan cell? What time frame...

We're shooting for [ May ]. Yes, we've got a crew coming in, which is awesome, and we think it's the right fit. So we're going to come in for on-site, and we'll spend a day or 2 really going through the technical evaluation. And it took us a while, but we said what we want is someone to come in and validate what we've done, not what you do, but what we've done, come see what we've done and help us validate it because it's all here. We've got infrastructure and people and processes and equipment and testing and sales, and it's transparent. They come down and help us validate that what we're saying is the truth. And we know it's the truth, but we need someone else to help us say that to the world. And so we're hoping that we can accomplish that end of April, early May, hopefully get into a final report within the May time frame. And so we'll see, right? We hope so. And we've got a lot of people really interested in seeing that. I can tell you that in the deal making that's going on, the basic response is, I hear it all the time. If it's true, here, if it's true, you have a chance to be #1 in the world. I hear it all the time. And I say, well, we know it to be true. That doesn't mean everything is done. So let's be clear on that. What does that mean? Everything is done. It means the art of success in the battery manufacturing field is the scaled manufacturing. That's called -- that needs robotics. It needs scale of supply chain. It needs offtake, and there's a lot of chicken and egg going on, okay? All of that starts with a better technology. That's where we're at. Then third-party validation, then scaled manufacturing, then scaled offput. And so there's a lot going on all at once, but it starts with a better technology in a market that's estimated to be the next trillion business, okay? So understand there's that we're technically -- again, here's the beauty. The inventors that invented this spent 8 years doing the invention before us. And so just if you think about our model, we probably invested about $2 million. $2 million is real money, but $2 million is not $25 million. Most battery companies to get to this stage have dropped $25 million or maybe $150 million, okay? So who can do it for $2 million? Well, BioLargo can. That's the point. That's the point because we kicked it up with 8 years of R&D. We leveraged our core competency. We did incremental investment. We didn't go -- we didn't have to go hire a CEO. We do all that. We didn't have to go hire lead engineers. We've already got all of those. We didn't have to go hire chemists. We've already got all those. We hired a couple of people who are extraordinarily narrowly focused on the skill set and then developed a business model that says, I will build you a factory. How many would you like? It's incredible. And so again, there's a lot of work to do. I'm not suggesting it's fast or easy, but it's real. It's meaty. And so therefore, we believe it's worth the investment. So we're investing to see that future happen for our stakeholders, okay?

All right. All right. Changing gears to Pooph. So it looked like product revenue was down in Q4 from Q3. Why is the product revenue tailing off if there's so much opportunity for more channel partners?

Well, this is a conundrum for everyone. Our business model relies on other people, right, to market and launch the product. That means ad spend and distribution and all the things that go with that. So we're in a position where that's Pooph's business. Pooph is handling their business. So regroup to grow more, stabilize to be ready for the next push, make sure infrastructure is in place, QA/QC, all those things are happening all the time. So I don't have a direct answer. I have an indirect answer, which is that customers love this product. We've watched Pooph go from 0 to a business model that's 4 or 5x of our revenue. So that put it in the $45 million -- $40 million to $50 million range in 3 years. That's remarkable. That's remarkable. don't lose perspective, okay? And it's a brand that has staying power. The product works. It's a unique play because it works so well. They've got an extraordinary brand. So our position is really simple. How can we help? What can we do to help? And let's continue growing and go out and get the market. And let's go poof, right?

Love to hear it. How about CupriDyne? Why isn't it growing in the waste sector or hasn't any other alternative used as a CupriDyne been able to sell?

Well, they're selling some, but you're right. They're not huge home runs. So I was sitting at dinner just the other day with an institutional investor, and we were talking -- and we can write a little -- I can write a term paper on all of these little product designs and how they fit in the world of demand, novelty, margin, acceptance, all these things. We lived it. We've been doing it a long time, okay? So some of these products don't have a lot of margin, okay? So industrial odor control is a low-margin business, all right? So what does that mean low-margin business? It means that you don't have a lot of extra money to plow into marketing and promotion and branding and pay for the distribution of the product. And so it's a hard-earned business. We also find that an industrial odor, a lot of times, people won't spend money unless they're forced to. If the regulator is not pumping them on the head, they're not spending money. And so all those things go into the mix. Yes, it's really fascinating. We've even had customers say, we love your product, but you can't ever mention our name and don't tell anyone we have any odor, okay? So this is the real world, right? So the answer is that's a very nice piece of business for us, but it's not the main piece of business. It pays the bills. It supports infrastructure. It allowed us to become experts. It allowed us to know what we know. The knowledge and the intellectual property that was created from that journey made it possible to do what we're doing with PooF. So it's a good thing. And it's a good thing it's still here because we think it's a nice piece of business. But relative to where you're going to plow your time, energy and passion, you're not going to do it in a low-margin product with a high level of turnover in the marketplace. And so it's that simple. It doesn't mean -- it means it is what it is, and it's a nice piece of business. And by the way, every industrial odor control client in the market should be using our product. Will they? I don't know. There you go.

All right. Quite a few questions here on the water side of the business. We'll start with the toughest one first. Exactly what went wrong with the Garrett Callaghan partnership to market and sell the minimum liquid discharge units?

Well, yes. So it's a good question. So it has not yielded the fruit that we anticipated for sure. Everybody knows that. In fact, we had a really high level of expectation about seeing the fruit bear out sooner, and it simply hasn't. So I'd say it's a couple of things, right? One is, again, it's very -- very much a situation where we're working with a company that has an existing revenue profile, with existing products, with existing margins and, I don't know, 130 years of experience. They're one of the best companies in the market at that, okay? It's still a new product, okay? So you got to find adoption. So we haven't found adoption yet. So that could be early in the market. It could be margin. It could be sensitivity to shifting political winds. All of those can play a role. We believe that asset will find its way to market. And so -- and here's the thing from a financial perspective, and we're thankful to have Garrett Callaghan in our portfolio. We believe they're a winner company. And so we're going to win with them. They're high-quality people with a commitment to excellence in the marketplace, and they've proven that over 100 years. So our association is a good one. And we're going to do whatever we can do to help support them in getting that technology adopted in the marketplace. We're actually still very active. And here's the thing to remember, very active is an interesting word. It means that most of the heavy lifting is already done, okay? So the investment is already made. We're not continuing to plow significant capital into that asset. We're maintaining and operating so we get adoption and it's incremental and Garrett Callaghan is committed to really lead the charge on the client adoption side, and they have a huge presence in the market. So the answer is it hasn't yielded the fruit that we expect it to yield, but we still believe it will. And so it's time to work with our partner and get those deals done, and that's what we're doing.

Yes. And in that same light, what about the New Jersey AEC project? That's been discussed for months, but the 10-K indicates it's still not installed.

Yes. It's hard to keep up. It's funny. I watch the political news. And if you don't watch it every day, it's hard to keep up because it moves so fast. And the same thing is going on at BioLargo, okay? So the general contractor controls the build of the building and until that building is built, we don't have a place to put our machine. And so when the snow sets in and the ground is frozen, they can't build the building, lay the power, do the plumbing. And so now the snowfall happens and when that happens, then they can build the building, we can put the machine in the building. That's it. It's really simple. It's not complicated. And this is the nature of the business. And so permitting is a delay, general contractor is a delay, whatever doesn't matter. We show up when we're able to execute in accordance with our commitment, we show up, and that's what we always do. So it will happen. I wish it was faster because the reference site is very important to us. But here's the problem. It just is what it is. We're going to deal with the best we can and show up when the building is ready. And hopefully, that's summer, we heard -- we actually heard rumblings like fall, and we're like, what the hell, pardon my language, but really -- but anyway, we're going to try and get this thing done right. We're ready. If the building is ready tomorrow, we're ready tomorrow.

Okay. Great. Besides New Jersey, are there any AEC projects ready to announce? Are you proceeding at a pace you expected for the AEC product?

Well, that's a good question. I think that the -- it's interesting because the level of confidence internally and the level of external confidence in us has increased so dramatically, even just -- even the Environmental Technology Trade Advisory Committee role with the Secretary of Commerce. That's -- and as we mentioned earlier, we've got agreement from the EPA to do joint collaboration and testing for validation purposes of both the New Jersey site as well as its research facility in Cincinnati. Remember that Sally Gutierrez was the Executive Director of that research facility for 22 of her 30-year career. Just -- I mean, again, just cut to the chase, okay? I'm sorry, it's taken so long to get that done, but it's about as good as it gets in the world. We are at the pinnacle of publication and validation for that technology, and we have done the work to be credentialed and credible for the world. So what we're witnessing now is a high level of adoption from companies that want to team with us. What does that mean? Remember, we talked about a minute ago. That means an engineering firm with a client has a problem and the engineering firm brings us to the table and we work together to solve it. It's as good as it gets, and we have so much of it now going on. So are we happy? Well, of course, we want more sales faster. Of course. And we're doing everything in our power to do that. But this is the nature of innovation. And again, I'm going to point out to you that every other innovator that's an alternative to carbon and ion exchange, not one of them that we know of has a commercial account. We do. And we also have projects that are stacking up with the team agreements that are incredible and significant. And so we're going to win. And again, I know it's hard for people to be patient, but it's dramatic. And yes, we've had clients that put pause on -- they say we're going to do it, we're going to do it, we're going to do it and then they don't. Okay, what does that tell you? They're waiting for someone to make them do it. They're not going to do it until somebody makes them do it. That's the way it works. Some of these markets, the clients are proactive. They have money. They have capital resources, they're proactive or they're already under EPA mandate. Some of these clients are not even under EPA mandate. They're not going to do it until the government tells them they have to. So the good news is all the regulatory thrust is heading in the direction supporting our agenda, right? That's good news. The other is that we've got the credibility and years of experience to position ourselves as a winner in a very competitive market against billion-dollar competitors, make no mistake about it. They got more money. Just imagine you're on the front line. Oh, are they going to be able to support you? Yes, the answer is yes, which is why we're continuing to muscle up on the infrastructure of our company to be credible in that way. But here's the thing. When you can save somebody 80% or 90% operating cost over a life cycle and you got a proven tech that's now being validated, right? Not done, but being positioned to be collaboratively validated by the U.S. EPA, give me a break. It's as good as it gets. And again, I'm sorry, it's taken so long, but it's incredible, and we're proud of it. So we're going to win. We're going to win big.

All right. Well, since we've been talking, there's been a few questions. It seems investors are pretty excited about Clyra. Let's go back to that when we'll wrap this call up. But can you give us the launch date for that?

I wish I could. My list of God here, we're saying prayers every day that we get that date in our brain. Look, the answer is we don't know. That's the answer. We don't know. I wish we did. And I think it certainly seems like it's right here in front of us, and we've done the work. We've been communicating regularly throughout this process. Our partner wants to know that we can produce to scale. Well, we just did that one. Okay. So what else? Well, there's always something to do, but nothing that's a deal killer. That's the way to think about it. There's nothing of a deal killer. So we should be in go mode soon. We're going to be working very closely. And what Steve Harrison, the CEO at Clyra has done is assembled this extraordinary team, 30-year QA/QC med device production people, project managers is extraordinary for med device companies, FDA compliance people. I mean it's just astonishing the level of talent he's had to put in place, plus the CapEx. So just think about it, most companies can't even get the people and then they don't have the money to do the infrastructure, and we've done all of it. We've put the people in place. We've done the infrastructure. We've done the QA/QC. We've done the financing of the equipment. We've brought in the partners. We've shown we can produce to scale, and we're dealing with some of the biggest companies in the world. And so it's a big deal. And so right, so what I say in the presentation, just don't screw it up. Just get it done, don't screw it up. That's the most important. The most important thing is to make sure the systems are in place to provide QA/QC and produce to scale. And when that's ready, it's going to go. And so we're coming really close to that mark. And I think it's an investment for all kinds of reasons, human health, high impact. This is a global product. Again, I was just in Spain sitting they look at you to say, I wanted it yesterday for my patient, right? And that's what we got. It's a game changer. So it's really good. So soon, that's the answer. We believe it's really soon.

Yes. And then, of course, folks are dying to know, do you have any sales estimates for '25 for once Clyra does launch?

I think it's a little premature. The way to think about it is your partners are pretty big companies. So I'll tell you what we do know. We knew that in order to meet the mark of proving we could produce to scale, right? So that's the benchmark that, that was the ability to produce 1 million units a year 2x products, okay? 1 million units a year 2x products. Okay. So are they going to do half that, all of that, more than that? I'm not really sure. So we just have to go through the process. But at any of those marks, it's pretty significant revenue for Clyra. And nobody says, you got to do 1 million units, but I'm going to sell 10,000. This is just not going to happen. So we just need to let it unfold, right? We're not in a position to really forecast that.

Yes. All right. I mean, 2024 was an exciting year for BioLargo. I think it was something like 45% growth, a company record. And I believe you've been doing that pretty steadily for some years. So can you just kind of wrap up with 2024 and kind of what you're most excited about in the coming quarters here?

Yes. Yes. I mean, gosh, there's so much. Back to the thesis, right, technology that has a chance to be disruptive, high-quality people, capital serving, right, purpose, high impact. Clyra is a high-impact asset for human health that can impact the world for an incredibly good thing, right? Healing wounds, avoiding infections, that's a big deal. So that's fulfilling. I'm very excited about that. And I think we now have scaled manufacturing capability, technology that's proven, clearance with the regulators. I mean, just get the parties aligned and go, go do it. That's where we're at. Big deal. I believe that the PFAS will find adoption through significant teaming agreements with credible players that have been in the business a long time and got big balance sheets. And we're going to see some hits there, nice wins, some nice wins, and it's going to start to multiply. Battery tech. We're near validation. And I hope that we can put some real capital behind that asset directly into the subsidiary, directly into the subsidiary. So it's got the tools to really execute at a level that's required to compete in that market. And so that would be the next milestone. And then of course, Pooph will find its way. We know their stated goals when we started. It's ebbed and flowed slightly with performance, but the products are winners. Pooph has proven that technology has a home in the right market with the right marketing. It takes marketing too. So it's not just technology and all the support to get that distribution done, which is critical. But it's a winner. And so look, the pet industry it's not recession-proof, but pretty near, people love their pets. Okay? And so this is a market that we think will just continue to grow, okay? And so again, what's the beauty of BioLargo, multiple shots on goal, concentrating on its core competency, leveraging those pillars around, right, high impact, capital conserving, very protective of our capital base in a stronger financial position than we've ever been in. We will have a shareholders meeting coming up on June 19. I want to encourage everyone to be there. We think that uplisting to a national market for our securities is a very critical piece of the step. We should, as we execute, continually see an upgrading of our valuation, which means price increase, and we think that will only burn the need to move quicker to get our securities listed in the national market. As I've said since inception, we want to do that when the wind is fully in the sails and the expectations of growth and multiplication of our earnings potential is at hand, okay? And so as we get adoption with a new market like Clyra, that could do it. Any of these assets, as they find adoption, they can propel us into what we would consider prices that are more reflective of the underlying value as described in the slide where we talk about the hidden value of our assets. I mean, right? That's the point. We put these big numbers up because underlying the core assets of our portfolio is a massive value. What does it take to unleash it? What people have to know about it? You got to get off an OTC market. You got to get into a national exchange with the confidence in the revenue and some predictability in your sales cycle and all that's happening. So again, we're proud of the business. And I always say, I'm just so sorry, it's taken so long, but man, is it worth it? I mean, literally, we've got assets that are worth 4 careers and they're in 1 business. And so what we're doing is awesome. I hope that helps you.

Fantastic. Yes, absolutely. Those are all the questions for today.

Okay, everybody. Annual Stockholders Meeting, June 19. Look for the notice. And then, of course, as always, reach out to us. You can look at our website, read our filings for the most up-to-date knowledge and reach out to us if we do any questions. And thank you for your time, everybody. Great year BioLargo. Appreciate it.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.