Biolargo Inc

Good day, ladies and gentlemen, and welcome to the BioLargo third quarter 2021 earnings results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Brian Loper, Investor Relations. Sir, the floor is yours.

Thank you, operator. Good morning, everyone, and welcome to BioLargo's third quarter 2021 earnings results conference call. By now, everyone should have had access to the earnings press release, which was issued yesterday prior to market open, and the quarterly report filed at 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, 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-K, Form 10-Q, and other reports filed at the SEC. The company undertakes no obligation to update any forward-looking statements. And with that, I'll now hand the call over to BioLargo's Chief Executive Officer, Dennis Calvert.

Hey, thank you, Brian, and thank you, everyone, for joining us. We've got a lot to cover, and we're going to move very rapidly through this and, again, point you to some of the press release and the website, a lot of information about the company. The quarter was an excellent quarter. Significant progress on many fronts. We're going to highlight those and also dig a little deeper into the detail on some. So remember, BioLargo is a solution provider, right? We've evolved from becoming a technology company only to become a full-service solution provider, really centered around this significant knowledge base embodied in our engineering group and our experts. and odor and DOC control, and our R&D team, who's worked diligently to advance the AOS to a commercial status, which is very exciting. I'll remind everyone we also have a minority interest in a subsidiary, Clear Medical. We believe they have an extraordinarily exciting future as well, but we're going to focus primarily on the environmental group. Our mandate's pretty simple, make life better, focus on all things sustainability, and there's a number of developments that we're very excited about. Number one, engineering revenues climbing, PFAS testing is successful, AOS validation at Montreal. We'll talk about some of the details. Our consumer product partnership focused on an odor-controlled product that's being test marketed now. We're about to go live with Derek Callahan, and, of course, there's much more embedded in our portfolio. From a financial perspective, Q1, we did have a dip, mostly surrounding COVID and the logistics that were going on, which is also we've experienced prior years. The magnitude was greater because the numbers are greater. But as the graphic obviously shows, our engineer group is breaking records in particular, and the trending is back on the climb, which is most excellent. We always point out, that the debt reduction over the last year and a half to two years is quite substantial, bringing us down to a level at which there's no remaining convertible debt that has any sort of variability to it, which is very important. So we've eliminated that pressure on the stock, which we think is critical. We also have financing in place to support our near-term capital needs. And, of course, we're heading into what we think is significant commercialization opportunities that can drive revenue and ultimately profit. These are dramatic curves and represent a significant amount of work, and we're quite proud of the trending. It bodes well for our future. We think that these can continue. The PFAS technology... and our PFAS extraction. We've talked about this a number of times. Just briefly, these are the contaminants of the decade, often called forever chemicals. They're extraordinarily significant. A bill just passed at Congress, the PFAS Action Act, essentially making these forever chemicals now classified as a hazardous material. Hazardous material designation means that a lot of federal funding becomes available to people around the country who need to clean up these contaminants, linked to adverse health effects like birth defects and cancer. These forever chemicals were used in nonstick coatings. They were sold for 38 years. And it takes a brief Internet search to really get your head around the magnitude of the impact of these chemicals that are now in drinking water and our soil and our earth. And, of course, in concentration, they're particularly dangerous. They're even tested in the polar ice caps. They're in your food. They're in your cosmetics. And there's been a concerted effort to change that trend over the last few years, of course, but now the contamination into parts per trillion is significant and creates this adverse health problem. Most people say it's an $80 billion a year market. The consensus is not in. But what you'll find when you do that internet search is people are taking action very rapidly. They're using incumbent technologies, primarily carbon. Our thesis is really simple. Our AEC has now been scaled to a commercially feasible design. It is scalable. It works. It's now been tested with our first client waters that have validated the fact that it can meet federal and state regulatory requirements on reduction. It also has this unique feature that allows for optimization. That means that we can dial in the level of contaminant extraction the client wants to focus on, giving it quite a bit of economic flexibility. Fundamentally, the AEC is an efficient extraction technique focused on isolating and selective extraction. Number one, saving money. Number two, it's available in a wide range of waters. It's going to work for most situations, but not all. And then fundamentally its value proposition is that the waste stream can be up to one-one-thousandth, one-one-thousandth of the contaminant stream of an incumbent competing technology like a carbon technology. So this is a very exciting moment. With the heat that's coming from the regulatory front, our timing really couldn't be better. We've been at this about two years preparing for commercialization. We're in the first phases of that commercialization with third-party testing, validation with client water. And the way this will go is that the next step will head into the field, validate it at a scaled level, and then that will put us in a position to begin bidding on projects, and we believe winning. So that's our future. There's the testing program we just mentioned. A very unusual approach to the market, you know, by taking on a testing program, what we're saying to the marketplace is we're here to deliver a solution that works. If ours doesn't work for any reason, which most cases it should work, right? If it doesn't work for any reason, we have the skill, the knowledge, the access to alternatives to guide the client in making the best choice to solve their problem. That special knowledge makes this test program particularly valuable. What you realize is the magnitude of these decisions are so great, if they can get an early screen, an early screen in or an early screen out, that's a very valuable program. And for us, of course, it really focuses on data. The bottom line is it has to work. Whatever we put out in the field has to work. There's no margin of error. And so this is a great way to basically go into the market, provide something of great value, and also have an opportunity to really prove that our solution is a viable economic and technical validated solution for them. It's a great program. We've got a couple of early clients that are just significant, major municipal clients and major federal clients. Early stage, again, as we said, testing first, then field trial, and then commercialization. Announced just, I don't know, in June, just a few months ago, that we'd secured about 1.2 million contracts. You know, and again, just to point out, people often say, you know, is 1.2 million a big number? Well, the concept is that 1.2 million came in in new contracts in literally, you know, like a week or two, right? So it's pretty significant in that regard because it shows the significance of sort of our group finding their way in the marketplace with great reputation and opportunity. And so about half that has been completed. One of the larger contracts will extend into Q1. But, you know, a significant value proposition in terms of increasing our revenue rate, 92% quarter-over-quarter increase, pretty remarkable. It also means that that group has to grow. So as we always point out, some of the challenges that the world is facing with logistics and supply chain and hiring, you know, some of those issues will come to us. But we're very excited about it because, of course, Our clients want our services, and they want our technology, and the opportunities are expanding dramatically. So we're encouraged and very excited. I always want to remind the engineering group, too. Sometimes people forget, but the engineering group, remember, is 30-plus years' experience. A team that's been together for over 20 years joined our group as owner-operators about three years ago, a little over three years ago. and have world-class experience. And so as a result of their experience, our technology, and the combination of sort of the entrepreneurial spirit to focus on significant problems that face our world, the opportunities can almost appear endless. Now, the reality is, right, that it takes manpower, it takes time, energy, and money. And so, again, we think that the powerful combination of of significant knowledge and expertise at the scale-up, integration, design, full service has really given our company a significant boost to help us sell through the market our technology innovations, but primarily focus on serving the customer first. Why is that important? Well, one of our partnerships, Serving Customers First, brings us to Garrett Callahan. About nine months ago or so, we started a relationship with Gary Callahan. They are the largest privately held water company in America since 1904, and customer service is number one. This is a group that has built 100 years of history, clients throughout the country, one of the largest, and a significant footprint and relationship and reputation of excellence. So we came together to build a minimum liquid discharge system. That system has been built. It's actually in our water lab. It's being tested. And we're now starting testing with client waters. And this is most excellent. So just think about that. That's about nine months or so, hard work. Now we're in the go mode. Go mode means test it with client waters and begin taking orders. It's that simple. This is a product that's geared up to go to market. So we're targeting first sales in Q1. And this is an opportunity of significance. Garrett Callahan has mentioned a number of times they think they could do 20 or 30 units. Those units would sell for between $200,000 and half a million project orientation. It's significant business. We are the manufacturer. We'll be working on manufacturer's margins, working with our distribution partner, Garrett Callahan, who will then work on distributor margins. And this is just a very nice win-win to leverage the talent pool by a large on our skill set. and, of course, rely on their most excellent sales and distribution capabilities. It's a big deal, and we're very excited about it. And it's about to go live, so that's exciting. O&M, our most mature unit, has really continued to work hard. I mean, this is a tough business. I always say it's gritty. It's a gritty business. It's working with waste and waste handling industry players. Their response to odor and DOC control is largely driven by regulatory mandate. We have a great solution, and we just recently secured a three-year exclusive supply contract with one of the major municipal clients in Southern California. That's a big deal. What people don't realize is it took us about four or five years just to get in the door. And it's amazing how that happens. It happens because we just keep showing up. We earn our reputation every day. by solving a big problem, most excellent in terms of system integration and builds, you know, really high-quality construction, you know, technical assets like misting systems and pumps and sprayers and all the things that make it work. And we've done it over and over and over. And then the second is that we're getting reputation advancements because engineering firms are beginning to specify our solution into the marketplace. That's pretty remarkable. And then one of these really happened because of that, our continued showing up, delivering quality product, quality solution at affordable price. It's just given us a great boost in the market. So that's a big deal. I always say we're working with two of the largest municipal clients west of the Mississippi, and you can imagine who those are. We're based here in Southern California, and it's a big deal. We announced recently this partnership with Ikigai Holdings. The CEO is Jane Pack, and she's just awesome. And she and her partners really come from this world of significant success, developing marketing campaigns, launching products with an array of blockbusters under their belt. Big names, Febreze, Swiffer, Flawless. Flawless was a recent win. They took Flawless from two sales the first day of testing, Almost 2 million sales within 60 days. The exit there was close to a billion. So this is a group that has operated at that level for a very long time. And so the way this program works is we've done a business deal with them in which they are launching a product campaign based on our technical solution for odor control based on group 9 technology. They're test marketing it. They're not testing the product. Make sure we're clear. They're testing the marketing. And what they're looking for is response to their campaign that translates to a call to action. So they're going through a methodical process as we speak. That's one of the reasons we don't talk a lot about the brand yet. It will come public soon. And the reason is we don't want anyone really to go out and buy the product. We want to watch the response from the marketing campaign primarily through television advertising. It's underway. And so the early response is awesome. James, we talked to her just yesterday and the day before, and she said, we're just so highly encouraged by what's happening. And, of course, everyone knows, loves the product. We've been selling it for years. And what we've learned, all of us, over time, over this extended journey, now Icky Guy as well, is that it is incredibly effective and safe. It works, and it's not going to hurt anyone or anything. So that combination is pretty powerful, and then they put their particular skill and their art to the program of marketing. So this is the kind of program that could, you know, really move the needle. It's not yet. It's in testing. So until that test is complete, it's premature to anticipate, you know, a blockbuster. But I can assure everyone that that's what we hope and are working for. And if we didn't think it was possible, no one would be doing this work and spending the time, energy, and money. So stand by for more information. Their program will focus primarily on driving customers to big box retailers. It's really important. It's not about a web sale. It's not about an Amazon sale. That's just not it. The idea here is to drive response and then ultimately move those customers into big box retail. And so stand by for more activity and results soon. Very exciting. And our work with ICKEY guys has been great. It's really raised our bar. We've had to perform at very high levels in anticipation of a scale-up. And so our supply chain partners are super critical here. Again, I think the testimony that I want to share from my perspective is this opportunity is the culmination of significant work over a significant number of years. It doesn't just happen. You know, the idea of safety, having proven it, the data to support our claims, the real-life experience, to know how and where it works, the ability to scale manufacturing in a rapid fashion, the various tools that make it effective in the way you package and supply, all that knowledge is so critical. And really, in many respects, we're expert at it. And now these experts with marketing and distribution capabilities and driving that consumer activity come together and makes for an incredible combination. I can say that had we not done the things that we've done over the extended period of time, this opportunity would likely never have presented itself. It's critical. It's just critical. And the testimonies that come with our historical performance are also critical. So, again, timing meets opportunity, lots of hard work and preparation. Opportunity to write moments. Here we go. Pretty good. The AOS, we just wrapped up this, and we've got a couple slides on this to talk about the technical validation that's going on in Montreal. It's pretty significant. I mean, pretty significant is understated. It is significant. We've gone through an exhaustive study in real life at a wastewater treatment operation focused on micropollutants by pharmaceutical byproduct products. In other words, these products of pharmaceuticals are stuck in wastewater and successfully extracted them. And so in that regard, it's a very successful performance. The way to think about that is it's a very high mark. That's a category of extraction that most people can't compete with. It's a very difficult technical challenge, and we're successful. The idea they're showing, it's extraordinary value in that emerging and significant market. This is a significant market. But what it also points to, as you go through this process, is some of the flexibility as a disinfection device as well, not just a contaminant destruction or extraction technique, but also efficient disinfection that we've also validated. So that combination is going to work really well in a number of markets, especially in some of the mid- to smaller-tiered wastewater treatment operations around the world who are faced with these significant technical challenges. This is quite exciting. And that validation, as a result of this third-party nature, now continues to optimize. Optimize means figure out where it doesn't work, what are the limits. And also it's a great tool as we head into commercialization. And so we're very excited about that. So remember, we did this work up in Canada with Sunworks Farms, okay? Sunworks Farms' pre-commercial planning was incredibly successful. We got a lot of data, refined our system, proved it was effective for field work, confirmed that it was affordable and cost-effective. Fortunately, our Sunworks Farm project is not moving forward. There's a host of reasons that are really beyond our control, timing, customer needs. One of the delays that we faced was actually cost us one of our financial supporters had a program that ended that made some significant negative financial impact on the funding that was available. And just a host of issues, and I think, you know, really you can talk some of it up to COVID as well, just the logistics. Remember, Canada really shut down during COVID. Here's the good news. Nothing is lost. The government funding, the primary funder, actually has come to us and said, we want to make sure this funding is available to you to get this commercial. So we're already in the process of working with a number of clients, one in particular that we think is going to move forward on another farm and processing facility to really replicate what we built and be in go mode. And the thing that's significant about that is the new client actually is under a regulatory mandate to make change. And so that's a big deal. So this is good news. We took a couple of hits here. It took a long time. The good news is nothing's lost. I wish it was faster. You know, compressed this faster would have been better. The good news is we're emerging alive and well. And, of course, the technology has a great commercial future. There's a number of commercial activities on the AOS, all in development stage. But we're out bidding projects, working with partners, working with distributors, hiring reps. I mean, there's a lot going on. And we'll have more information as that unfolds. We mentioned the Quebec project. Again, super technical paper. This paper is years in the making. The image on the right is sort of a conceptual graphic of what it represents from a chemistry perspective on how our device delivers this extraordinarily highly oxidative and energetic iodine molecules. This has been proven. This paper is a confirmation of technical leap forward. It is an absolute confirmation of a technically forward. And technically forward means what? It's number one. It's number one in its category, right? It has this extraordinary performance metric and extraordinarily low energy. So, you know, it's been validated. Now, what do you do with it? You find the market where it fits. You get that thing into the marketplace. And that is happening, and it's been a long, long, long, expensive journey. But I think these confirmations just continue to stack up, and we'll see additional commercialization coming soon. Here's a brief video to show you this. This will help you a lot.

Micropollutants such as pharmaceuticals, pesticides, industrial chemicals like benzene and other contaminants in the water are not properly removed by conventional wastewater treatment technologies and represent one of the most urgent challenges in the water treatment industry today. Our advanced oxidation system, or AOS, is a new treatment technology that removes these contaminants at the final step in the wastewater treatment plant.

Le Centre de Technologie de l'eau has been collaborating with BioLargo Water since 2016 to validate and optimize the EOS technology in demonstration pilot at a municipal wastewater treatment plant near Montréal in the province of Quebec.

Our expertise in applied water research helps companies implement and accelerate the development of their technologies in all areas of water treatment.

With the AOS, we are contributing to environmental protection and helping communities and industries resolve many critical problems related to wastewater contamination. It's about preserving the environment in Canada, around the world, today, tomorrow, and for generations to come.

There we go. So this AOS, just remember, this is over six years of work. It's a pretty remarkable technical leap forward, of course, but also a significant sort of culmination of commercial industry and academics, right? This has received over 100 grants now, nearly 100. And it's pretty remarkable, and it creates a centerpiece technology of technical advancement that really complements our full-service solution. So here's the way we think about the AOS. Standalone, it competes in the world based on its feature group and its technical claim. Great. When we go into the marketplace, our focus is listen to the customer, bring a solution to meet their needs, and if the AOS is the perfect solution, great. We're there to solve a problem, and if the AOS has that unique tool, then we want to make sure the customer knows about it and deliver it. If it doesn't, we know how to solve the problem. In some cases, we actually invent new solutions. And so, again, a very powerful approach to the marketplace built on that customer relationship that says we can solve problems other people can't. We do it with integrity, fairness, high-level service, a commitment to excellence. And in our toolkit, we have extraordinary science and technologies that give us an advantage. This is a brief, and then I'll open this up for questions. Remember, we've got our joint venture in Korea, which is advancing. It's very exciting. We love our partners in Korea, opening up manufacturing for primarily the Cooper 9 asset. Our relationship with Gary Callahan is expanding, not only focused on the existing project, but the scope is expanding as well, which we're very encouraged by. And this is, in my opinion, probably the best time in the history of the company. Hardest work is done. We're emerging as a credible technical player around the world. We have answers that other people don't. And as a result of that sort of steadfast nature, we're in a position now to win in a way that we've just had a difficult time doing in the past, and that has changed dramatically. So very exciting time. So why don't I open this up to questions now and click some of those off.

Great. Thank you, Dennis. That was a great overview and kind of update on where things are at. It's very positive to see momentum, right? Things are moving forward, and so we're excited to watch things progress. So a couple questions here. So you mentioned the Sunworks Farms deal. So that was a pilot deal. testing the AOS in the poultry market, essentially, and it sounds like it was successful. Can you talk a little bit about the business development efforts and kind of where that leads the company? Can we approach folks like Purdue or Tyson? Is that something in the foreseeable future? It is.

Well, foreseeable future is an interesting question. I think we're going to need more commercial validation before you're going to tackle a Purdue or Tyson. If you think about those companies, they have extraordinary talent and money. Talent and money. They have solutions. They're getting the job done. When they invest in wastewater treatment at a plant of that magnitude, sometimes that could be a $15 and $20 and $30 million installation. This is extraordinarily big business. The modular nature of our solution makes it affordable for the smaller operation in a smaller footprint. Now, would that be attractive to someone like those big national companies? The answer is yes, but they're also extraordinarily slow to adopt. They want to make sure it's de-risked at a level that makes them confident they're not going to have bumps because they won't do anything to disrupt production. So I think the more likely path is to work your way through that industry by serving customers that actually appreciate and want and need a solution today. Now, this is a category that's coming under increasingly intense regulatory pressure. And what is that about? Well, it's about their discharge water. I mean, at the basic level, these processing plants create some very difficult wastewater that has got a lot of nasty stuff in it. And for a small operator, if you ask them when you go into the chicken business or the poultry business or the poultry processing business, did you know you're going to have to be in the wastewater treatment industry? And they say no. Well, guess what? You do. And so this is a great market to prove out a technology. And so the work in Canada is not lost. We're working with the trade associations, working with the government agencies that provide funding. Now, that's pretty typical. Canada is particularly good at that. But there are similar programs down here in America, right? So let's talk about that, for different categories like stormwater. And the idea is that when the regulator wants to see change, They put money up to make it feasible so early adopters can afford to play the game and advance these science and solutions to advance regulatory compliance. That's how it works. And this is normal. So the idea that the government wants to sponsor the poultry industry, that's not unusual. It's awesome. It's normal. Same thing is going on in California for stormwater. You know, there's a mandate called Measure W. Measure W has got about $350 million a year sponsoring work in stormwater. That's an area that we also believe we'll find traction for this system in. Now, what's unique is since we started the AOS, right, so that's six years ago, three years ago we brought in our engineering team. Then we've also added some talent like Tanya Chandler, who's joined our team, who's 20-something-plus years as a, as a technical sales and support business development person in the water industry. So just think about us now. What's happened for BioLargo is that we have a team of people that are bona fide experts. Not just experts at the AOS, but experts at water. In other words, every technology, every competing opportunity. So they know how to, right, where and how to go, how to gain resources, how to open the door and create solutions that can feature our technology and also don't have to. And that's a unique way, essentially, of finding your way into the commercial market and start really selling and distributing and making money and also dragging your technology into commercial adoption. I think it's brilliant. It's taken a long time. And it took getting the right people, but today we do have the right people, and we're going to need some more. You know, I always say, look at the volume of business that's coming. I mean, just the projects that we're outbidding on, some we'll win, some we won't, but we're competing. We're competing for significant business. The business that we're competing for is so significant that our company is going to have to grow in a way that it's never grown before, and that means manpower. I mean, we've got a team of 27 full-time staff, probably another six or seven or eight consultants that are working with us on a continuing basis. That's going to have to double or triple over the near-term future to be able to swallow the business that we believe is coming. Now, we're in a chicken-and-egg moment, to be clear. They're knocking on the door, and they're coming, and you have to be ready. And so there's this really tough balance of being ready and being intellectually ready and being manpower ready and financially ready. And so we're finding our way into those spots where we know that we can succeed. And frankly, I think that we're going to have so much activity coming at us that we're going to experience what we've always predicted, which would be a hyper growth scenario. And it's been a long time coming. And I look at it and I say from a You know, why now do we have such confidence in that hyper-growth opportunity? Well, I'd say number one is the people. You know, we've got some great people here that are bona fide experts in their field. Secondarily, the technology is what it is. It is significant. It's been validated. It's got commercial opportunity. It's scalable. And we've just, you know, suffered long to get that into the spot where it's got that sort of credible position. I mean, just think about this academic article we talked about. You know, that's years of work. This is significant third-party acclaim as a tech position without the confidence. Long answer short, I think the next six months, a year, are going to be extraordinary opportunities for creating value, for ramping revenue, for growing our infrastructure and bringing on – you know, wonderful clients and wonderful more talent. So there you go.

Yeah. Technology and the engineering group is really well positioned to support that, like it is in other areas of the business. And it's pretty incredible, you know, they broke, you know, record revenues this quarter. And they seem very well positioned to support win more contracts, not only in poultry, but other segments, right?

Yeah. Well, so, again, a very unusual marketing approach. You know, the engineering group can supply services, traditional environmental engineering consulting services, but they also can work projects, and we can bring our entrepreneurial partners. you know, project orientation to bear as well and to assume risk in some situations. So that's a very powerful combination, no question. And what's interesting, though, is the margin business, the business that's going to carry the company to significance, is going to be business that has replication and margin, replication and margin. When you're selling services, like engineering consulting services, that's not a high margin, and it's very difficult to replicate. However... Because we have that extraordinary talent, which represents expert status in the marketplace, it allows us to compete with our technical solutions and our full-service system integration solutions in a way that most companies cannot. So the value combination is the power of both. It opens doors. It creates cachet. Think, for example, we just landed another contract with the United States Air Force. it's a lot of hard work. It's a lot of hard work. And working for the government, right, is not high margin, okay? But guess what? It's super critical because what it does is it validates us as a technical expert in the field of air quality management, which we are. And it gives us standing to introduce and to advance our technical solutions for replication and margin. That's the strategy. So as they grow, the other organization, the other components of the organization also grow. So, yes, I think it's very dynamic. And if you will, one of the things we always talk about is the average ticket. The average ticket is going up. In the past, you get a $50,000 project, and now they're a quarter million, and they're going to go to a half a million, and they're going to work their way up to a million. That's just the nature of the beast. And, you know, it's really awesome that we can compete at that level. So, yeah, I think the engineering group is poised for significance. And their challenge to succeed in this way will be staff. You've got to staff up. You've got to have more people. You've got to manage quality control. So there's a lot of work that will go into, quote, building that enterprise. But, you know, we're poised for significance. And so, yeah, I think it's just great. Yeah.

Yeah, so it's clear, you know, BioLargo has some incredible IP and technologies, obviously, proven that with these pilot projects, gotten some great notoriety with just a research paper. And as we move into commercialization, can you help us understand a little bit more about the business development process? And, like, is there a sales force, like with PFAS, for example? How do you sell into that market? Kind of what's the plan?

That's a good question. So those industries often are serviced through independent rep organizations. Our company is at the moment not planning to build out a 100-man sales force for PFAS. What we're doing is we're taking our assets, our money, our time, and we're advancing technical solutions into a fully proven commercial-scale solution that will compete at the highest level. That's where we're at today. The next step, then, is to get some projects under our belt in which we can actually execute fully to deliver a solution to a bona fide significant commercial customer. That's what's ahead of us near term. At that point, the technology becomes a viable competitor with every technology in the marketplace. So now what? Well, I think the answer is you're going to do a couple things. One is you might bring in some strategic relationships with engineering groups who would specify the solution in. Okay, that's one. The second is independent reps with territories. That's how it goes. That's how it goes, okay? And so think about the Garrett Callahan scenario as a comparison. This is a company with a 100-year history, probably something like 250, 300 sales reps, national footprint. It took them 100 years. It also is a significant value proposition for us. So in their world, they serve industrial, you know, mid-tier industrial wastewater treatment clients. Well, guess what? Those clients also have PFAS. So this is an opportunity to leverage their talents and time and resources to also find clients. Independent reps are another great way for markets where Garrett County is not serving, like the municipal drinking water market. Big, huge industry. Now, I think it's reasonable to expect that we're going to have to walk before we run. We're not going to jump to the head of the line first just because we have the number one technical solution. We're going to have to work our way up. The way I think about it is it's a work our way up the food chain. So when you look at the projects on PFAS, they're going to start probably in the quarter to half million dollar range. As a project, that's a full service solution that includes an AEC. So we do design, construct, operate, maintain, service, and then member and exchange program. So that's a lot. There's a lot of business going on. Those projects will start in that range, but they'll go up then to the $3 million to $5 million range. And even just if you do an Internet search, you're going to see projects that are in the $15 million and $30 million range. Okay, so what does that mean for BioLargo? This is the question. What does it mean? Well, let's be real. Tomorrow, solution works, happy, we can scale, no question it works. These are our major municipal clients. going to give BioLargo a $30 million project. What they're going to do is they're going to say, I want you to meet my friend, probably a national engineering company, and I want you to work with them. And that's fine. It's a great situation where we become a technical supplier or manufacturer, and we get a portion of that project, and we make money, and we leverage the skills and distribution of the engineering firms that serve those clients. That's how it goes tomorrow. That's the most likely scenario. And the independent reps, it's a common tool used in the industry. It gives you leverage. And fundamentally, again, I'm just going to point out, fundamentally we win because we have subject matter experts that guide a client in making the wise choice. And then we have tools that are extraordinary. And our commitment is clients get the tools that work. Go ahead, Brian. Thank you.

Yeah. So when investors are thinking about commercialization and getting these incredible technologies into the market, it's good to be reminded of the actual case studies, right? The deal with Garrett Callahan, this deal with Ikigai, those are examples of commercializing these proven technologies, right? And we can expect similar deals like that and maybe not a 100-person sales force. I think so.

I mean, you know, so just think about it. We could certainly find ourselves in a hyper growth scenario, hyper growth, where money flows, capital resources are available, and we want more influence control over that distribution channel in certain markets. So you build your sales force. Today, we're not really built for that. It also would be extraordinarily risky. extremely risky until, like an AEC, finds its way through its first commercial adoption. Having a sales force today to sell an AEC that hasn't gone through that first adoption phase on a real-life commercial project, you'd just be burning money. Very similar for the AOFs. You say, well, build a sales force. No, no, no, no, no, no. No, no, no, no, no. Not yet. Not until it's got itself firmly seated in the marketplace. So in the meantime, you work on projects. You get your commercial footprint in the marketplace. You work through independent reps. And, again, this is one of the beauties. Tanya Chandler joined our company a little over a year ago. And she built the sales channels for one of the largest global water companies for North America, for one of the largest global water companies in the world. So Tanya knows all the competition, all the technologies, and all the reps, and all the distributors. I mean, this is an extraordinary tool. She's awesome. and she's got the tools to really bring that distribution channel to bear in a very rapid way. And we'll have some more information soon about how we intend on really executing to scale, and it is being put together now because we're most decidedly ready for the next commercial steps in working with clients to solve real-life problems, plug in our technology where it works, and make money. And we're on it.

Yeah, and on that note, do we have an ETA on commercialization of an actual unit, like for sale of AOS or AES? AEC?

Yeah, so the AOS, yes. So, yeah, we're sort of right at that moment, which we actually have the ability to install an AOS and make it commercially feasible today. And so... So we have a number of projects that we're working where the AOS can be plugged in as a tool. And to the extent that we win these contracts and we can do so, that's what will happen. So we're there. We also are just now bringing in reps so that we can begin to identify projects in which these tools can be plugged in and sold commercially. So the answer is it's here and now. We need a breather for a minute because it is our first step. But, you know, we're knocking on the door. That's the answer. So it's near term. I'd like to see us have some of these units installed in Q1, and we're working through the details with clients. I think this poultry project for commercialization is very important. You know, the way to think about it is you can perhaps find your way to an early adopter, right, early adopter. But the bulk of the market is going to wait and say, I don't want to be first. I don't want to be first. So that's where we're at. We're getting through that moment. And so the exact timing is uncertain. That's the reality. We'd love to see it actually get into the marketplace in those commercial installations in Q1, Q2. And we're in serious discussions with clients now. And so it's, again, a very exciting time. But standby, we'll report as we get through that journey. The AEC. Great. Thanks for that real briefly. The AEC. Yeah, let's talk about the AEC. So the AEC is a design that can scale. We've just tested our first client water and proved that we can meet state and federal regs. We're also optimizing that design to make sure that we hit the target extraction level mandated by the client. Again, what that points out is the significant flexibility of the design of the system. We can take in a little. We can take out a lot. What do you want to do? What do you want to do? That's unique, that flexibility with our design. Okay, so the next step is then to assemble data, go through that review with client, show the economics and the forecast and what this would look like in the field, and then go into the field for the first commercial field trial. The field trial is probably going to be 60, 90, 120 days. It depends on who the client is, some time. We'll advance the science, and they want to have it there longer. The bottom line is show that it's scalable and start working through the metrics and maintenance. At that point, you're then in the design build of a full-scale project. So the way that would look is someone would say, okay, I know it works. I know I can scale. I see all these value propositions better. We've penciled out maintenance. We've done the economic modeling. We know it's an enhancement to the solution. All right, what's it going to take to do one to scale? And that's a bid. It's a bid and secure project. And then you're an engineer, procure, construct, and probably operate. And so... So that should, you know, as we said, like your accountant, we'd like to be in the selling first orders in Q1, more like Q1, Q2 for AEC. But, man, we need to go. We need to go quick. The market is really pulling us into the space, and so we're going to move just as fast as we possibly can.

That's great. Thank you for that, Dennis. So, you know, pilot projects are excellent. Obviously, sales are even better. So I think we're all rooting for you as these come to fruition in the next coming quarters here.

Oh, yeah. Well, again, our confidence is high. Timing is always difficult. This is, you know, our team operates in the 99.999 range, and that means technical excellence, no failure. Go into the market and win. And so there's an abundance of caution to make sure that it is the most excellent and performs at a very high level. It's taken a lot of time and a lot of money, but we've always known, and the confirmation is to continue to stack up, that the commercial opportunities are significant and imminent, and we believe that they're going to generate significant revenue for this company and create replication and margin. And so our time is coming.

Yeah, sounds like we all need to stay tuned. A lot of good things coming about.

Well, the evidence is more, yeah, certainly. I think, well, the way I would say it is we're proud of what we've done, but we still think this future is going to experience a hyper-growth phase, and we also believe that our solutions will be adopted for what they deserve, which is number one performers in their technical area, solving problems in a way that other technologies and people can't. So we haven't fully commercialized that. Now, we've got the most success in the odor and VOC control. Again, I'm just going to point out to make sure everyone gets it, this opportunity with Ikigai would never have come available had we not done what we've done. All that experience is critical to now be able to execute at a high level for what we think is a hyper-growth opportunity. And that's the way all of them will be. In my humble opinion, I believe all of the technologies in our portfolio will have that moment at which it becomes the technology that finds adoption. And so our challenge is to get it there as fast as we can. with a reasonable amount of money, and we're getting better and better and better, and we also have critical mass and the timing of the world. Listen, who could have predicted PFAS, right? Who could have predicted the PFAS crisis that it is today, now designated by Congress as a hazmat? Holy cow. Are you kidding me? It's like the perfect moment, and we have a technical solution with two years of history that works. No question. And it is scalable, and it's being sold by experts. So, you know, are we optimistic? Yeah. Are you kidding me? It's awesome. So let's go. And, you know, again, just to share internally, the way that looks is, you know, I sit around with our experts and I ask them the hard question. Is it going to work? Oh, yeah. Okay. Are we going to scale? Oh, yeah. All right. What do we need to do? And we have a checklist, and that checklist is a big checklist to get ready. But we check that list and we check off all those items and we march our way into that marketplace. And then the simple idea is it's going to be a technical solution. We'll find adoption across the service and supply industry as a component in a supply chain. That's scalable. That's not rocket science. It's pretty basic. So great moment for BioLargo.

Yeah, absolutely. And we've had a number of very patient investors. A lot of people see the potential in BioLargo. So it's an exciting time. Yes. More patience required, but moving closer and closer to those hyperbaric situations. You've shared with us many times. Yeah, we think so.

Yeah, and yeah, sure. And again, we realize the significant labor and investment that's taken a long time to be able to do the things that we're doing. And without that investment support, we never would have made it, of course. Critical, super critical. I'm always asked this question. We've been optimistic a long time. Why are we more optimistic now? That's the way to think about it. My answer is look around. We've got evidence everywhere. Evidence of what? Technical acclaim, high-quality people, continued customer wins, growth. Not hyper-growth, but growth. All our numbers are improving. All of our debt, you know, all of the debt that's meaningful is gone. All the debt that's meaningful is gone. We're in a reasonable cash business. We're not loaded with cash, but we're in a reasonable cash business to be able to execute what we're doing. I think the next jump to significance will be hyper growth in revenue, opportunity to uplift the national market in a way that's friendly and good for our investors, not bad. And I think as that critical mass continues to sort of gain that snowball effect, we can drive shareholder value for decades to come. There's nothing short about this business. And that's one of the reasons we always tell people to do a deep dive because when you dig in deep, you're going to love it. It's just a great company. And we're punching way above our weight. I mean, that's the thing. not because of our size, but our talent can compete at the highest level, and our size and our talent can compete at the highest level globally. And that's going to be the thing that pulls us to financial significance and drives value for our shareholders. So that's pretty awesome.

Absolutely. All right, Dennis, well, thank you. That was an excellent presentation. I think everyone agrees. We appreciate you going through that with us.

Sure.

I think, yeah, those are all the questions. Well, encourage everyone.

Yeah, encourage everyone to do the deep dive. Reach out to the company. We love connecting with our stockholders. And stay tuned for more significance to come. And some of it we think very soon. So we're excited. Thank you very much, everyone.

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.