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

Good day, everyone, and welcome to the Biolage Inc. Townhall Company update. [Operator Instructions] It is now my pleasure to hand the floor over to your host, Matt Kreps. Sir, the floor is yours.

Thank you, and thank you, everyone, for joining us. With me today on the call is Dennis Calver, our CEO; and Charles Dargan, our CFO. We want to thank you for attending the Biolargo shareholder town hall today. We'll begin in just a moment with prepared remarks from Dennis and then taking some of the questions that were submitted through the pathways noted in our announcement press release for this call. Before I turn the call over to Dennis Calvet, please be advised that this presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include, without limitation, statements regarding commercialization plans and timing, product launches, regulatory developments, partnerships and distribution arrangements, financing activity, grant funding, subsidiary valuations and anticipated milestones. Forward-looking statements are based on management's current expectations and assumptions that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially, including those described under Risk Factors in the company's annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. Subsidiary valuation figures pre herein reflect prices paid to outside investors in private transactions that are not the result of a market for those securities. There is no assurance that any such value could be realized. The company undertakes no obligation to update any forward-looking statement, except as required by law. And for the call today, we set the fireside chat with prepared remarks and some questions along the way including those submitted by you as our investors. We'll also take appropriate questions at the end to the extent we have time, which you can submit by the instruction of the PR. And with that, Dennis, please go ahead and welcome to the call.

All right, everyone. This is Dennis. Thank you for being here. We're very thankful to have a chance to speak to the group, the angles some questions. Phillsome of the SCOOP and the advancements that really are quite material. And we know it's been a hard season. And so everyone is anxious to really get some good information. So we're thankful for that. We've assembled an extraordinary portfolio of companies and technologies. We're going to dig a little bit deeper and really provide some insight as to the status of those, you see here, if I can make sure that I've got a little technical 1 second. Can you give an advanced slide for me? You don't see here Actually, I think I'm maybe having the same issue that the next slide, advanced button is not. Yes. Operator, let's get a little help here. hang on everybody. Give us a second. Here we go -- now we're underway. Very good. Perfect. Yes. So there's a basic thesis, right? not really manufacturing product or manufacturing companies. It's kind of obvious in the way the company has evolved over the years. We're going to do a little bit of a deep dive talk about these companies, the technologies that underpin them. why we focus on this strategy as a finance and business development strategy. We can talk about where it's working, maybe where it's not working to invest as much as we like. but really why we're so enthusiastic about our status and our future. And I'm really glad for this format to have Matt here to be able to sort of have a fireside chat, talk through some of these issues. Our goal for the call really is to make sure that you get the information that you want and you need as much as possible. There are certain things, of course, that really require some confidentiality. Some of that's exhausting. I know, so we're empathetic to that. But we're going to do our best to really convey the ideas. So you walk away from this call saying, okay, I learn something. So Matt, what do you think?

Let's dive in. And I think we'll start with the next slide. answer 1 of the questions we had, which was about how we choose the companies that are in this idea of Biolage manufacturing companies. and how you create value down the road by doing so.

Yes. The picking of strategies is interesting. We started this company years ago, and of course, it started with the copper elincomplex had a chance to meet in code, and it's been, gee, it's been a long time. And I remember the first time I met is like it was yesterday. And what he described to me was this idea of some invention, some discovery that he made that had a chance to impact the world for a greater good. And it really resonated. And I said to myself, if you can make money and you can do something really awesome for people for the planet for -- and for life, right? Banks like better, that's our whole slogan. That's worthy of a career and worthy of a cause. That theme has not been lost, do something worthy. And so the portfolio gets picked, number one, by its potential to make an impact. And in that process of picking, we have to fill a gap, something that's missing in the market. We have to decide if it's achievable, something that's within our wheelhouse of talent and time and resource, right? And then focus on getting through the same steps. And here's the slide, right? It works the same way really every time, find a technology that we believe can be #1. It's foundational to the business. And that sometimes we have to defend that, but we do believe we can defend. In fact, most of the journey is about defending that first thesis, which is the #1 technology. It's 1 of a kind, it has a chance to be a foundation of change. something that's number 2 is measurable where you could fill a gap. You can measure it in terms of value, efficiency, allowing something else to happen for a customer or partner, right? And then really advance it to the thesis of adoption, proof of claim, commercialization, regulatory clearance, all these things is sort of derisked. And that third category is exhausting, I can tell you. It's not easy. It's really where most companies fail. And the beauty in our business is we've been able to do that in a consistent way over a very, very long period of time. So we want to carry it until the point where someone else helps us carry -- and we talk about what does that mean? He helps us carry it, both financially, distribution, licensing partnership, all these things that allow us to plug into scale, scale for distribution, scale for something meaningful. And then ultimately, that results in the opportunity for potential exit. So we've been doing this for quite some time, and that's the machine, that's the company. That's what we've been doing and it's pretty remarkable. We've done something remarkable a very really small capital base. I'd say the biggest negative is sometimes it's taking an extraordinarily long time and even this most recent event with the opportunity up in Canada. -- on the oil sands, it's like a full circa story coming back since 2011, and we'll put some more color on that. And it just shows you the durability of technology and a management team that stays the course to find that adoption cycle, be ready when the market is ready and then weather the storm of sometimes things that are beyond our control, regulatory gains, political again, macroeconomic events, and that's 1 of the reasons our diversity has really been so beautiful thing. Anyway, those 4 steps are over and over. They run on separate companies, they create extraordinary leverage. We're going to talk about that relatively small amounts of capital into positions that other people's capital and goodwill and investment they've made for decades, sometimes even 100 years is now available for our leverage. And so this is what the machine is built. Let's go to the next slide. There we go. 7 companies each incorporate to capitalize and monetize, catalyze and monetize a one-of-a-kind value. one-of-a-kind value, that's the argument, of course, and some of these have taken a long time. Clear is a great example. It's over a decade of investment and we've had substantial external investment. We're going to break that down in a little bit more detail. So when you look at the road map here and you say, okay, look at all this stuff, I mean, these things have technologies, they have people and activity in the marketplace to get to adoption. We have 2 new ones, of course, right? So we're talking about that. The CPG, which is the relaunch, Biolage CPG is consumer products. And then this new venture that just got announced this morning and yesterday with Tuna, all the locals call it, unity. Sunapee Water Solutions, which is a venture design to really take technology and business development into a cooperative to do something very special for that region and for our partners and for the people that we serve pretty awesome. So it's a big change, right? Two new even since August, we've already got 2 ventures that really stood up. So no company complete all these steps overnight. It's quite a journey from incubation, proving out, regulatory, scaling through partnership and manufacturing, and this gives us a snapshot. So let's go to the next slide. So these all have a little bit different Incubation, of course, I mean, my goodness, we just announced it this morning, is tuned to P. It's an awesome, it's early stage, of course, proving up solidity, most people believe solidity is the farthest out of reach, we're going to argue that a little bit, but they're not wrong. It's still a proving up stage. We've got to prove that, that technology can stand the test scale and capital and execution and a very, very competitive dynamic market. It's extraordinarily capital-intensive. And for the PFS getting through regulatory is about getting commercial. And so we're finally commercial, which is awesome. We've got about 7 months of operating history now. And so that sets the stage for regulatory, right, the clearance, the proof of claim, the reference site scaling through partnership is really these 2 things, right? Our motor control products with the proof debacle, which is so painful. We talked about the clear medical course, number of distributors, our big commercial partner coming in soon. So we're very excited about that. And then the exit. So the positive is there's a plan. The exit is where a big payoff is. And I think we're going to convince you at some level that some of these assets have a payoff as much sooner than you may think. So we're going to talk about that just a bit and go through the debate. So let's go to the next slide. Matt? Are you still with me? So 1 of the things that this bags, right, and the challenge of that is -- we've got a platform of all these technologies that we believe have extraordinary value and yet our market cap has declined well over 60%, almost 70% last year. And so it begs the question, right? What's up? What do you think, Matt? Help me frame that question.

Yes. So I think Dennis, probably 2 questions to come out of this that we're in the list of the submitted questions. The first is with all of these companies and assets as the prior slide just showed, we've got 2 of them that are getting ready for that commercial or exit type of transition point where they create value. Why do you perceive that the company is being valued at such a low multiple today versus the value of these underlying assets?

Good question, right? So I think it's a couple of things, right? One is certainly time is -- I mean, some of these assets have taken a long time to get to market. and it makes people wonder if they're ever going to come. So that's an obvious issue. The second thing is the fact that we've been investing so heavily in the validation, scaling, the infrastructure design, clear is a great example. I mean, they've just had an extraordinary investment cycle over the last 2 years to get ready to go to scale with giant partners and big distribution. And the good news is they're coming out of that with success but man, it really takes a toll financially as well as manpower to get through that for a small company. But we always say that also builds the moat that's the moat that also protects us on the go-forward plan. So we think it's really critical. We also think it's critical to make some of those investments to protect the intellectual property. One of the things people often forget is that if you're willing to do that hard work, what we call sometimes the most difficult work, you're also proving out value not only for your position in the marketplace, but the expanded intellectual property experience. extraordinary experience from the team living on the front line, really proving up all that throughout that journey. So there's 2 big factors, I think, that are the biggest negatives that we've really had to deal with. And there's 2 that really hit us pretty hard this year. The first would be the proof debacle. It's a really sad circumstance -- and we believe it didn't have to be this way. But we do look at that circumstance, and we say to ourselves, it's critical that we protect the intellectual property. It's critical that we protect our products. and we'll take the good that came from that experience that we'll turn it to something great, and that's what we're doing. We're going to talk about that. But the financial toll on performance was pretty dramatic. Not only did we write down revenue that disappeared from a very significant relationship that we invested quite heavily in. We also took a financial hit on the way out the door. We're close to a $4 million write-down. And so that's a pretty powerful combination coming against the [indiscernible] as we look back on it, I think we're all going to see a silver lining and that is that as we reemerge, we're going to invest in the brand and all the infrastructure so that we can capture that value for our stockholders because we have such a compelling reason to do so. I'm going to come to that a little bit please. The second thing about that is that the delay for the launch of Ceara. The combination that's pretty dramatic. And again, as difficult as it is, I think that 1 of our arguments for the beauty and the company is that most companies would have gone out of business. and we have not and nor do we intend to. So while we've taken our hits, we've actually stabilized, and we're moving forward in a pretty dramatic way. As we mentioned prior in some of our press releases, we expect to launch our consumer products category in the October time frame we're gearing up for that. We'll come back to that. Clear's will got delayed, it's certainly alive and it's pressing hard to get into go-mode in a dramatic way. And during that delay process, we've added 3 distributors. which are all now doing the hard work on the front end to line up significant distribution capability. So I'd say today, with all those negatives coming against us, we've actually stayed the course to advance the commercial thesis that we've advanced these business propositions in a pretty dramatic way. Now let's take a look at the next slide real quick. and that will kind of bring us up to taking a snapshot of the financial implications and what we dealt with over recent history. I'm also going to invite Charlie to say, Hey, Charlie, you're with us.

I am now. I'm off mute. So yes, I'm here.

Okay. Great. So I know we put a lot of this into the queue, of course, we put a lot into the press release that came out a couple of weeks ago. I don't know that we have anything dramatic or new to say, but I think we should sort of highlight, if you will, the highlights of what this financial representation presents to someone looking forward from this point and say, what are the takeaways, so maybe you can walk through some of that in your eyes and some of the content we've provided, what do you think?

Sure. I think, obviously, the Q has been out for almost a month now. And so the numbers are the numbers. But I think when we look at it, from the perspective as we see in the slide, quarter-to-quarter, we've actually had an increase in revenue. And I know the proof business, the loss of the proof business sort of overwhelms everything. But the truth is, if you look behind those kinds of numbers, a lot of the growth in the revenue is coming from our engineering group, which is doing a wonderful job. in increasing revenues and selling to third-party customers. And actually, the remainder of the product and services that O&M provides increased too. So the core business is actually improving quarter-to-quarter. And when we look at the loss, the loss again is overwhelmed, but also because we consolidate Clara, and it is getting to the point where it's launching the -- there's a large expense, a large cost going with that. But they raise third-party capital, which covers that, and you can see that in our cash flow statement for sure. And so as Dennis as you've mentioned and as everyone has been looking at this, if you look at our cash position from the balance sheet with over $2 million in cash, we've been able to maintain our position and through a very difficult time, not only in the loss of the poof business, but also prepping to get Clara into the market, which in my personal opinion, is obviously a success for us. And we've been able to do it by raising third-party capital, granted some of its debt. But still, that is the underlying message, I think, from the quarter-to-quarter versus looking at everything else, which, again, overwhelms what we've been doing. So bottom line there is the core business is growing in revenue. It's stable, and we look forward to the next quarters.

Great, Charlie. That's good. guys, the question we got was kind of around those revenues. Let just jump in here because it's just bought as the question. Losing the proof revenues it's like $1.6 million on this slide is referenced as being from Q2 at '25, we're exiting that business. So what we're kind of seeing here to the question being asked, if we're adding proof back into that, we've got kind of a -- do you see that we have a short runway to get back towards more of a historical revenue rate by recovery in some of that cobusiness sort of products business. Yes. Yes, I should comment on that. We do. And the rate of how fast the consumer products and ramp is an unknown. And so it's uncertain for sure. But when you look at -- I'm going to take around a rough estimate. We look at what proof did, proof started with venture capital backing they had a much larger capital base and inception, not quite at the beginning, but pretty quickly in the process of ramping up. so we're kind of taking that same approach. We look at it and say, let's start, let's get our platform established us create our content, we create our brands and let's launch into that market in a careful way, right, precise. And then as we get some traction and see the model working the way we believe it should, we believe additional capital will be available to that venture. The thing to take note on is that our strategy is to fund the venture but not fund it from the dilution and by Biolargo. And that is a pivotal architectural thing that people need to really lock in here. And so we believe we could do that. And we've done it in other business enters like clear and even like our battery technology. that thesis is a pretty compelling thesis for the way to finance income generating businesses and assets that drive value for Biologics stockholders. So we'll do the same. In a conservative way, if we took half the numbers that proof generated and we said, okay, look, our target should be about half. That's a number that realistically could come in the 15 to plus million range over the first course of 1 year to 1.5 years. It's not going to happen all at once. You got to start and you got to ramp. So when we look at the significance of the way these products are adopted in digital media today, we believe those numbers are very achievable for Biolargo and Biolargo CPG, and we believe that we have the playbook, proven products, the history, the proof of claim and the marketing team to really drive that adoption. And now we're investing in the platform to see that, that platform can be used for our brand. And the difference is that while we were a supply chain partner for the proof business, now we'll own the brand. It's a big difference. And so we'll record the gross and then we'll make decisions about deploying capital for reinvestment into the growth cycle. But I -- if you could paint the magic picture, and that would be people get excited about the business, drive our value, create currency for the company, right, in the value our position so that we could be an investor in our business, an investor to grow and make more money, right? So we think that's what's coming. okay? So that will kick off. And so it's again, it's going to be some reason ful numbers. And we're going to talk about the revenues that Prove generated. It's about $125 million over the life cycle, peak is about $60 million in run rate -- in that's their numbers in 2025, which represents about $15 million to us in the supply chain. But the margin on our business proposition at that time is pretty significant because of the way we struck our business deal. So anyway, that's the answer. So yes, so I think the answer is the good news is that we don't necessarily rely only on the consumer products category to replace that gap. We also have the expanding sales and the distribution initiative with Clara. Of course, we have a big pipeline in the PFOS business. We're going to talk about that with some more specificity. We now have a business management with 2 nope, which is brand new. And that's a business development focus. That's a commercial focus. So we're pretty excited about that. So anyway, there's a number of studies we'll do that. So Matt?

Yes. And 1 more question we've been asked that probably aligns this slide then we should definitely jump ahead into the product slides that are next. But we did have a question about just how much does it cost us pretty ongoing kind of operation of the business on a monthly basis.

Yes, right. So I was talking about that. So the financial statements present for the complete picture of the business as required. So don't fill that. But when you look at that presentation, if you look at the consolidated presentation, of operating units, business companies that have their own P&L, their own balance sheet. And they're consolidated because of our control position. Now we believe some of these 1 day, we won't be in a controlled position. That would be a third-party independent company. that we're connected with as a shareholder, potentially a royalty receiver. So that's the future for the company. Some of these companies are built to spin out. And I want to remind everybody that I know that a lot of people know it, but if you don't know it, it's important to understand, these companies have inherent value because of the technology, the work that's done to solidify their market position. And as that happens, they become very valuable. And as the value can be realized, that could be through a joint venture, a licensing and exit like a sale or even an IPO like a public offering, okay? So when you strip it back from the company and you look at the overhead structure. The parent company basically needs about $250,000 a month to run its current level of operations. And that's pretty skinny. Now that's doing a lot that seems coveting a battery company with staff and logistics. And so what happens is, to the extent capital becomes available in that battery company, we can expand its focus. Same thing in the water technology. we've invested, I don't know, a couple of million dollars in the water technology plus years. We supported an existing overhead. We've generated about all-in on all water-related technologies, about $1.7 million in commercial revenue, and so it's the working capital plus the revenue has allowed us to do what. Well, go out and find a commercial installation, get our first reference site, march through the refinement of the intellectual property and the science itself. So the current run rate is also supporting corporate legal accounting, insurance, all the things that are pretty important, and it's also supporting the incubation, if you will, of our PFS business, our R&D unit that has now landed this relationship with Tumi, which we think is awesome and the battery company itself. So when you step away, the engineering company has had extraordinary growth. They need some working capital here and there, but they're basically self-sufficient and they're in a profitable mode, but for their R&D. When they do R&D for us, that's eliminated in consolidation. And so because of that work because we can't record it as revenue to the engineering group, it's not booked as something that can generate a profit on consolidation. but in an unconsolidated presentation, we believe the engineering group is -- financial performance is quite remarkable. It's awesome. okay?

Yes. I think that's a good answer to that question, and let's keep driving forward towards talking about the businesses.

Yes, it describes that dynamic, right? So what does this slide telling us, right? Clear is in the company that's now able to secure significant independent investment. And when it gets the money, it's going to put it to work. And the way it puts it to work, what's it going to do. It's going to build infrastructure to support massive scale -- massive scale, right? Scale manufacturing to support big boy, big Boyd sales, big Boyd distribution that can support a med tech company that's competing in a very competitive market. So that's what happens. So just look at it. 6. 5% revenue generate 55% of the loss, okay? Now what happens in the consolidation is some of that loss is stripped out and is attributable to investors that own the minority interest of Ceara. And so this is a demonstration of the architecture of the company at the macro level shows the accumulated loss, accumulated deficit. But in reality, it's being financed by investors and clearance. And so how does this work? Well, it means that every time that's investments happening, it's building value in the proposition that Clear presents for the marketplace. inherent value that our Biolargo shareholders get to participate in. So that's a good example. Let's move on to the next slide. Yes. So now overall, company, this is really important. I think sometimes people miss it. So in the total capital -- new capital that was brought into the company on a cash basis, 86% was raised outside the pareto. We brought in about $650,000 through the quarter plus that $650 million also includes some subsequent events post closing, about 650,000 over, let's call it, 4 months. And what does that number match? Well, it's pretty close to the $250,000 that we talked about. And so that's where we've land on our equity line and some of the other instruments that allow us to capitalize, and it's really a very lean overhead compared to the value propositions that we're building. I do think we should note that on the funding that's come in for clearer, we've also guaranteed it. And that's implicit. Why would we guarantee it, Well, because it's worth it. Right now, Clear is operating at close to $100 million valuation, substantial capital still coming into the business. One of the things I think alarm people at the end of the quarter is the burn rate of clearer raising the question, hey, is clear going to be able to get there. Well, the answer is bear's going to raise some more money. And yes, they're going to get there. I mean, we believe that. We believe that's true. And of course, anything we can do to help when we do because of our stockholder fear and some of the pressure we've seen on our stock has made it very difficult for Biolage to be a funder for CLEAR at this moment, but we believe the market will correct that when it figures out what's actually going on. And it's our job to get that message out, and it's 1 of the reasons we're having this call is to make sure we really sink in here that the value proposition is so dramatic. It's worth us investing, okay. So let's go to the next slide. Charlie, you might be able to comment on the next one, just the basic concepts we've covered here.

Yes, sure. Happy to do so. So I think again, we're going back to the lost revenue, but what have we done as a discipline. And the corporation has always been able to maintain its operating expenses. And certainly, it's overhead. And that's what this is -- what we're really talking about here is we've had a reduction in our corporate overhead, largely driven by lower salaries, the offset here is that as we've continued to raise capital, we've obviously paid more out in professional fees. And then obviously, with the litigation, we have additional expenses related to attorneys. But it goes back to the discipline of the corporation from keto, which is we've always maintained a strict operating expense methodology. And so when it's come to corporate overhead and overheads in the divisions and the subsidiaries, we've watched that very closely. And so we've been able to maintain our positions through thick and thin and overall, have kept the corporation moving forward.

Yes. I think that's right. Moving forward is the key operative right? not taking steps back, but figuring out how to tighten the belt, move forward and create an opportunity that can drive value. So we keep doing that. I'll also note that the leaders often the leaders have invested in the company, I've made substantial investments. Also, we've invested in some of the subsidiary projects as has some of the -- many of the executives at Clear have also invested. And so that's a cultural, number one, we believe it resort it, especially at these prices, et cetera bargain. So the Form 4s indicate that. So that's clearly visible. And also, -- can and I, which are the largest stockholders who've also locked up our positions to make sure everyone knows that we're in for the long haul, which, of course, if you can't see it, you're not watching, I mean, it's so evident everywhere. And so that lockup is really important. We're not trading in our securities. We're investing, and we believe that the future is really bright. And we believe it's worth high impact, significant value under -- I had a meeting yesterday at the LD Micro NASDAQ Summit, and it was such a nice opportunity. There's 20 companies presenting. We were the only OTC company there and everybody else is a NASDAQ company or a high-tech start-up, there's a couple there for that in the AI field. Anyway, it was such a wonderful experience and part of the reason that I think people really take a note is because we -- I used to use the language. You have to look at what's under the hood. because what's under the BioLargo hood is really a very powerful engine, and it's built for some horsepower. And that's the challenge, right? The challenge is to convey that because it takes a deep dive. It's pretty technical, and it's not easy. And if you're a fly by, and you just want to watch the stock price, we understand those are probably not the people who are going to take long positions and certainly not the people who are going to accumulate big positions. people that accumulate big positions, they look under the ride. They check the engine. They want to see that horsepower. And so we think that's the main stay of the company. And of course, our job is to turn that into revenue and cash flow and all the other things that are so important. And the beauty is we pay a dear price to be here, and we think we're on track for that future. So now we're going to talk. I think about mat, anything you want to ask about any that? Any questions or comments?

Yes, I think we've hit several of your questions, and we have, I think, given a pretty strong overview of the year. It was a challenging year, but we've worked through it and we're moving towards that value recognition. So let's talk about what that looks like with the commentary on the different businesses. They've got about 25, 30 minutes here. So let's try to use that to really focus on the business line.

So I'm going to have to go fast again. Okay. I can do it. So the battery salinity, right? -- salinity, Infinity sell selenite yes. So the business model is pretty, I think, awesome. that is to sell batteries sell factories. We sell factories, not batteries, okay. So the barrier to entry is astronomically high. I mean it's huge. And so the satcom through that. You can see the barrier, right? And the answer is you don't carry the cost of it, you share it. So we argue it's extraordinarily share the wealth business model. And it's at the time in the world where the market demand for what we're proposing with that salinity battery cell is so overwhelming. It's hard for me to describe. So we've got a number of substantive negotiations. And here's the way I think about the solidity project. it's important that by Largo not be seen as the funder, it's going to carry that CapEx. That CapEx is going to be about $250 million, okay? So what we're going to do is we're going to be the vendor that supplies the technology and the engineering procurement and the design and the build and the architecture to capture extraordinary incentives as much as 50% of the CapEx. We've got a project cooking down in Puerto Rico, where 80-plus percent of the project can get financial incentives. And so there's a push and a pull, right? You've got to prop up a 3-legged stool. In any event, the business model was to take a minority equity a royalty and they get revenue the day you get it financed. So everyone might discount and look at the battery technology and say, "Oh my gosh, that's a dreamer. I say, "Yes, maybe until we land one. And when we do, we're instantly profitable on that business unit. I mean, instantly. Now we'll have to put some money into the derisking on the scaling. So it's not free, but we'll have a balance sheet to do it, and we'll have an offtake committed with a partner to finance the factory. The factor is about $170 million each. So let's go to the next slide, Matt. So remember, my work with Secretary Commerce has been awesome in to serve as the Chairman of subcommittee on enabling innovative technologies. And this is 1 of the thesis that's part of the analysis and the strategic national interest in the United States, okay? critical. U.S. national strategic interest. This is a one-of-a-kind asset, it's got over 15 years of R&D, and there's 4 macro trends that are driving adoption, which are extraordinary versus AI, of course, but it's more than AI. It's the fragile grid. It's the energy, is the demand on energy requires storage, okay? It requires a lot of storage. So many companies are being picked as the growth quarter -- where the market is going to go up 2x, batteries are going to go up 3x and 7x systolics demand, mostly driven by AI, of course. The supply chain is a real problem, and that's mostly China. China supply change the real problem. -- tariffs, geopolitical concerns, rail worth elements, lots of real problems, none of which we have. The Achilles heel of the industry's degradation. That means the minute you take today's batteries that are available at scale and you deploy them, the day you put them in the field, they start losing capacity. The day they start, they lose capacity. So we have evidence to show 5 years no degradation and up to another 10 years, 10 years no degradation, had another 10-year cycle with only 4% degradation under pressure under extreme testing conditions. So 4%, 20-year. We're selling a 20-year technology design in a market that's arguably a 7-year market with up to 15% degradation. It's an extraordinary claim. There's a whole bunch of other things, right? No fire, no runway fire risk, railwork elements, all of that is important. And then the ownership structure is 1 in which we share the ownership with the partners that pull us in with capital balance sheets. So we've got a number of projects in serious discussions. And then ultimately, it's really being driven by this idea of share of the wealth and share the wealth with the people that pull you into the market. And that's a very compelling argument. So caveat, of course, until those are financed, they were not able to execute on the commercial strategy. The idea of bootstrapping a battery company, I don't really want to do it. I don't think that's the way to do it. I think that's a mistake. So the answer is advance the technology to the level at which is psychologically and intellectually derisked at a level to enable significant investment to go to scale all at once. So there you go. Do we cover it, Matt?

We did. And let's jump ahead to Clara, which is the next section as where a lot of the investors were very focused and probably some meaningful updates to share.

Yes. I mean the biggest thing is this year is pretty remarkable. So advanced solution is in. They're now -- they've got a first order stocking inventory. Now if you just think through the logistics of what they're doing. They're taking the technology to the marketplace through interfacing with physicians, that's clinical people and wound care clinics who use the product. those physicians and care providers use the product in the clinical setting, and they get experience with it. They look at the data. They know that it's already got FDA clearance and the claims are proven. Also clinical work advances with key opinion leaders. Key opinion leaders produce data. They do conferences, we talk about the product, and it's being socialized in the market. Advanced Solution also has a significant sales force. I think it's about 350, maybe to 400 people. I'm not sure where that's at. But it's pretty significant. And so they're now laying the groundwork for adoption with major systems. So the way that looks is the physicians support it, they get a buy signal to buy signal translates to purchasing order, purchasing orders goes through a review committee. committees approve it, they then say, okay, you're now eligible to sale. The big systems come back and negotiate pricing and terms and all kinds of things, which is standard fair. We need to compete there. We are. And so all that is in the works, and it's pretty remarkable. So what we think we'll see near term is the fruit of all that work with expanded orders pretty significant pull-through to the clinics and the use of the product and of course, the clinical works expanding. The Hikma, of course, is the Middle East. I can't remember, I think it's 17 countries, and the company with Alkemes been working through the regulatory filings to get the CE mark and the other regulated requirements to be licensed to sell in those countries and Asian states and somewhere between the first 1 and I think it's 17 and the 17 Hikma will begin to start taking inventory and pushing product into the market, but the activity is nonetheless significant to prepare for the launching into the selling process which will probably very much probably take the same route that you work with advanced solutions taken. And then Spartan Medical, that's a super nice win, the medical channel for military and for VA, the GSA schedule is robust. That's a brand-new relationship. And I don't remember the number. I want to say we've got 6 or 7 SKUs as product designs, which is sizing and labeling they're in this catalog now, and so that's just now getting started. And basically, these 3 channels are now active. I would argue that in this case, many of the companies that come through regulatory get to this position and have a very difficult time getting distribution to take up the cause of the product. And so for us to have 3 active distributors that encompass probably 70-plus percent of the market. That's a pretty good start, and it's all happened really in about 7 months. And so we're anxious and we think we'll continue to see the free of that. So let's go on to the next one, if we may. Yes. We've talked a lot about the updates for Clara. And so that's -- a lot of this is in the press -- the last press release, so I don't have to go through all of it. But I want to remind everybody that ViaCeris an FDA-cleared product, leveraging Clearcept and antimicrobial platform that can be used to design dozens and dozens and dozens of products, okay? We surrounded the company now with 14 full-time employees. That's that burn rate, right? That number we've already talked about. Why are we ramping up the infrastructure clearer? Well, that goes down to the bottom right column, which is our fourth big relationship for national distribution. I know everyone's really anxious to get the information about that. We still are under NDA. What I can say is that we're advancing towards the launch. We can see it inside. We think it's near term. in the last communication, I think it's the press release, we talked about 2027 start, and I hope it's really early. That's the target. And so, so far, we're advancing on a daily basis. It's very demanding for the team at Clara. They're handling it wonderfully. The engagement with our big partner is substantial, and it's not daily, but weekly, there's dozens of people that are involved in the decision-making on product design and put up, and we're in the final steps of making the next moves with all the paperwork that gets that product ready to go into very, very, very large-scale distribution. So it's a big one, and we're really anxious for it to get to the next step.

So just clarify on 1 thing on that large partner. We did have several questions submitted. I think a lot of them are addressed by what you've spoken to. But 1 of the questions we didn't quite speak to is that partner already has distribution, sales, access approvals for use and et cetera. So they're kind of a plug and play as opposed to the steps you outlined early on from a pure distribution standpoint.

Well, it's a really good question. It's sort of -- I wish it was a black and white answer. I want to try and give you there. the more accurate version. Here's the way it goes. Some of the major systems are still going to negotiate volume pricing. The difference is that we're negotiating with what we call the big kahuna, a big partner at the table with built-in sales, built in distribution, built in pricing, all these things that can make that happen much faster. So there'll be a lot that will happen fast. But some will also require some time. I mean, it's just the way it works. And it's always a rocky start in these things. But we're forecasting in that operation. I mean here's the way to think of the evidence. Investors keep putting money into Cira. Okay. What's the difference? Well, they have advantage of confidentiality not trading on our stock. It's really that simple. And so we believe, right, that, that will continue because the opportunity is so substantial and the groundwork that's being laid with other distribution channels on Via Clear only strengthened the case. It's all additive to the financial thesis, okay? So -- yes. So some of it will go faster for sure. But I wouldn't expect major systems to concede pricing and volume purchasing overnight. And so there is definitely some set up things that will go on even with the big partner, which is probably something like 3 to 6 months and then we should really see an acceleration occur from that moment forward, and they can't do that work. until the product is finalized and got its -- all the paperwork that allows it to go into the channel, and that's where we're at with that work. So the minute that's done, that can start. All right, let's go ahead and push forward into PFOS. Yes. So the PFAS is a very exciting business unit. There's a number of companies recently that have gotten some pretty substantial funding which is very interesting to me because we know the technical landscape of what's available in the marketplace. And we -- as we always often say, we've not seen a technology yet that can threaten our value proposition. And it's very unique and it's very valuable, okay? In this case, we've invested substantial capital and that capital came from invested capital from BioLargo, and it also came through our balance sheet treatment, right? because we own 100% of this, and it's also come from revenue, about $1.7 million in total revenues in all water-related activities since the inception of this company. So that's a relatively lean budget to do a lot. And what we found in that -- I think we've got about 20 trials, we've got our first commercial installation with a reference site. And because of my role with Secretary of Commerce, I do see this front and center, and that is there's a lot of noise, okay? And the noise is not helpful. It's just not. It makes it hard. So in leadership stands up and says, we're going to review or we're going to take another look at the regulatory stance on enforcement of handling has met materials, okay? That causes a pause in the market. And the market says, "Wait, are we sure we have to as kind of how it works. So some of that's going on and it's a headwind, right? That's against us. What's not changed though is the regulatory stance itself, which is the law has been written, the specs are set, the issues over handling waste streams. It may have some refinement, but fundamentally, you got to clean up the stuff, okay? The other thing that hasn't changed is litigation. So just in the last couple of months, the settlements in New Jersey, I think it was $2.4 billion, $2.5 billion, I can't remember exactly. Then it had to go through another legal hurdle to get review under the class action for settlement. They get reaffirmed. I think there was also a litigation challenge at the Supreme Court for the regulatory stance that the EPA took on regulating these contaminants, PFOS. -- fever chemicals that is tuck-in water in the environment. There's also been lots of push and pull at the U.S. military, and it's really simple. The military says, "Hey, we're busy. We're busy. We got worse to fight. We can be worried about all this cleaning up. It's just the nature of the beast. So here's the beauty. The beauty is that we're way ahead of the game. We've got commercial reference site. We signed a partnership, which is really a strategic relationship we define it careful. It's not really a legal partnership. -- attorneys to remind us. We formed a venture, not even with we formed an alliance to do business with Aquatec and the alliance has got some meat on the bone. That allows us to do bidding as a prime contractor is a subcontractor leveraging both resources of both companies. And we've got some things that really are helpful in the Aquatech world and Aquatech, of course, has a lot of things really helpful for us. So all of that activity is continuing, right? And the 6 month of continuing operation is super important, just super important. We also have finding a little traction at will speak too early, but we've got some commercial pilots going on with Geracalian finding. And that's an area also that's getting a lot of attention because remember, that was all about data center recycling, which if you're watching anything in the news, you're seeing the data centers are get a lot of pressure. Why are they getting so much pressure, well, noise, postdischarge water consumption, potential utility bill implications. There's a whole series of environmental and financial educations in that market. All of that goes to our advantage. because we're a solution provider of mine and the answer. So the other thing is that the technology has now proven very efficacious in not just drinking water, but wastewater, lead shake, treatment of biosolids ultimately, the removal of ultra short chain molecules, which really most, if not all, technologies have a very difficult time with, and we do not by nature of the physics that we operate. So anyway, this is a really nice business situation for us. And we've held on tight to the ownership structure because we could, right, we could. In other words, we thought the number was so small relative to the value, so we saw just recently, a pre-commercial technology came out of the university, they put about $85 million in the bank, and they're not commercial and they're not scaled. And it just shows you that the capital markets are heading towards this market. And so I think it makes our company really right for partnerships right for investment, right for liquidity plays or acquisition. So what we build has an inherent value that is dramatic. And right now, I believe our market cap has given us almost 0 value, and that is an enormous mistake. And of course, it's our job to really educate everybody and make sure that, that we transform now. And we transform with execution, we also transform it with strategics and execution at that front ways to monetize that asset. Okay.

Absolutely. And talking about strategics, let's jump ahead to the newest of the companies, and then we can start bringing it all together with some values and numbers.