Biolargo Inc

Greetings. Welcome to the BioLargo first quarter 2023 earnings results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Brian Loeber. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to BioLargo's Q1 2023 quarterly 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 10Q report filed with the FCC. 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 just a correction, the 10K was filed at the SEC. All right, and with that, I'll now hand the call over to BioLargo's Chief Executive Officer, Dennis Calvert.

Hey, Brian, thank you, and thank you, everyone, for joining us. I appreciate it, and we've got a lot to cover, so we're going to dive right in. So, May 18th, BioLargo, we make life better. We've been inventing for well over a decade. multiple technology platforms, a number of commercial initiatives, and what we call catalysts for driving revenue and growth that we're very excited about. We're going to talk about each of those briefly. Remember, in the company, we really have two groups. We have the environmental group and Clear Medical. And don't count Clear Medical out. In fact, it's coming alive. It's a very nice way with its 510K clearance just before COVID-19. And now it's for sales, building distribution with reps and channel partners. It's got three channel partnerships in negotiation. It actually has a really significant future. And remember, in that asset, BioLargo owns about 58% of the equity. And so it's coming on strong in the near future. We think we're going to start seeing results soon. We'll talk about what soon means in a bit. Environmental. The environmental group, of course, we have engineering, water, mostly R&D, O&M, formerly known as Odor No More, really concentrates on industrial and supporting the supply chain for our retail product called POOF, P-O-O-F, P-O-O-P-H.com, POOF.com. POOF, of course, is driving significant revenue for the company. Oh, we're going to talk about PFAS real quick. On the PFAS solution, we have our first customer engaged. We've scoped and priced phase two. We are literally waiting for the go-ahead from the customer. We've gotten a verbal. We're waiting for a signed contract to begin phase two. We've built a significant distribution channel here. Remember PFAS is per and polyfluoroalkyl substances, which are the contaminants called forever chemicals, often called now the contaminant of the century. The EPA has just published its testing limits down to four parts per trillion. and literally just about every industry that uses water in any way is going to be impacted by PFAS, including food, food production, food processing, water, drinking water, industrial wastewater, leachate from landfills. There is a significant buzz, and we have really positioned ourselves as an expert in this space. We're anxious to get to a full-scale implementation. In the images that you see right now, this is a portable unit, There's the design on the left. There's the actual unit on the right. There's the electrode panels on the bottom right. And this system is actually being configured to go into the field as we speak. We've got a number of clients that want to move forward as an early adopter. We do believe that the key to breaking open wide-scale adoption is getting our first full-scale implementation done. I want to remind everybody, full-scale implementation in this field can be $5 to $20 million. It's a big number. And so we're on the march. I wish it was faster, but our positioning as the solution of choice for economics, for ease of use, for a reduction in the waste stream. And as far as we know, we're the only technology in the market that can actually achieve a non-detect status. That's a level at which science can't detect any residual. For the layman, that means complete elimination. That claim is substantial. It's getting its attention all over the world. And now, of course, we're working on the scaled version to deploy to the marketplace. Still very excited about it. Slow, hard work, a grind. Very exciting, though. So we're going to talk about that as well. POOF. Of course, POOF has led the company in its revenue growth. It is a wonderful product based on our technology. Remember that we're the supply chain partner. We make a small margin on manufacturing. We get a royalty on sales. Our partner buys from us. We sell to them. and we bargained for 20% of the brand equity upon exit, brand equity upon exit. Their stated mission is to get to 100 million, consider selling somewhere between 3 to 7X. That would put that in exit somewhere around 350, upwards of 700 million. The key there is that the product has the capacity, the ability, the wherewithal to support an international brand that can go to a billion in sales, and we certainly believe that's the case. POOP is doing great. Remember that they recently launched nationwide in Walmart. We do have some clarity there. It looks like it's targeted to go into about 3,000 stores. That's the main Walmart stores. And that has been achieved in the last, to our knowledge, and our partners informed us, that that's been achieved in the last 30 days. And so now we're watching the sell-through. The sell-through historically has been three times the minimum expectation. It was adopted then by Walmart for a national rollout. And I think the most critical thing to note for everyone is not only is that marching forward and being successful, but there's also a number of other major retail accounts coming on board. Chewy is very excited. That's the number one online retailer of pet products in the world. I understand they do more revenue than the specialty pet like PetSmart, Petco combined. So this is a major force in the retail buying of pet products. Relative to POOF, I do want to point out that as the model was built and successfully proven on a direct-to-consumer model, and now there's a migration, right? So the migration means that now it's becoming a wholesale product into a retail channel with major retailers. And so the advertising campaign is intended to drive attention and steer customers into retail outlets to buy the product. And so that is a shift that means a couple of things to us. The first it means is that, uh, often as they launch into these national retailer accounts, there's a stocking up of inventory. And of course we witnessed an extraordinary Q1, which we're gonna talk about the revenue in just a minute, uh, you know, massive 78%, you know, quarter over quarter growth. And that is what we believe the representation of the stocking up of inventory that then leads to the sell-through and With the new large retail accounts coming on, we will likely see some lumpiness in that. I think maintaining a 70-plus percent quarter-over-quarter growth rate is an extraordinarily difficult challenge. But we know that in the long run, when we look at this every six months to nine months to a year, we think our growth rate will continue in a very positive way. Everyone's very excited about the product. So revenues are expected to grow. Our partners tell us that they would generally forecast at something like 20% quarter-over-quarter growth for the next year. That's a loose estimate target. Historically, they've exceeded those numbers, and so we're optimistic about the future of POOF. And, of course, it's a game-changer for the company. It's taken us to near profitability, and you're certainly close to positive cash flow, near profitability, and I think the numbers are going to continue to expand over time.

The battery.

This is a sodium sulfur battery, not to be confused with a sodium ion battery. We've done quite a bit of work in this area. The response from the marketplace is pretty incredible. We continue to hear the same thing, that if the claims associated, the technical claims associated with this battery are true, which we certainly believe they are, then we believe that we'll sell as many as we can make. It just fits a niche in the marketplace that's unmet by lithium and by sodium ions. namely in their safety profile, 100% charge-recharge, domestic supply, energy density that matches or beats lithium, and it's primarily designed for fixed site. The other thing I want to point out is the Department of Energy just published an exhaustive paper on LDES, long-duration energy storage, estimating that this massive number of $90 billion is required for the United States to keep up with the demands. You know, being in the battery business over the next decade is being likened to being in the chip business in terms of its magnitude of impact globally. And so we think this is a great way to enter into the market with a design that we believe should be commercially ready soon. We'll be manufacturing. We're actually deploying some capital, building out a prototype manufacturing facility in Oak Ridge as we speak. That means buying parts. We've got a team assembled. We are building equipment. We're building a line. We'll be in the making battery business in the next few months. We had forecasted something like four to six months. Still, that's a good forecast. And we're on the march as we speak. Very exciting. And our response, again, our response in the marketplace to this is remarkable. It has a chance to be arguably the largest revenue asset in the portfolio. Financial performance is still pretty clear. Let's make sure we don't forget clear. We mentioned it briefly. I think the biggest news here is that the regulatory approval is in place to do what it's doing. It has a menu of product designs, but it's singularly focused on its BioCleanse as a wound irrigation solution, fully vetted, cleared under 510K with the FDA for sale. Got its first couple of customers. It's got a number of hospital systems that want to adopt the product. It's got a menu of key opinion leaders who are literally the top physicians in the field. And now channel partners are coming on strong. And we think this is a sleeper that's going to be extraordinarily high growth and margin. And so it's in the works. I think meaningful sales are literally just in front of us. You know, there's a process. To give you an example, when we sign up a major hospital system, That process can take 90 days and sometimes it can take nine months. It's quite a grind. And so that's what's going on. We're signing up hospital systems, going through the QAQC and what they call a formulary to have these products approved for purchase while physicians are asking for them for the purposes of helping keep people safe from infection in the surgical suite. And, of course, our data continues to stack up, support our patent estates. And it is an extraordinarily unusual and unique value proposition to be able to achieve extraordinary results as a leave-in product, high performance, with no toxicity and no systemic and no sensitivity cleared to the bone and tendon. It's a leave-in product, very unusual, matching with the best antimicrobial killing agents known to the industry and yet gentle. And that's a value proposition that's unsurpassed at the moment. Clear is going to have a great future. Remember, on Clear, we own 58% as well, 58% of the equity. Other direct investors and management at Clear own the balance. Okay, 78% quarter over quarter is pretty dramatic. If you look at that on an average, it's about 29% quarter over quarter. That would kind of match what POOF is also forecasting generally, right, as a 20% quarter over quarter for the foreseeable future. And so the balance then is going to be the lumpiness of inventory, right, and launching into big national brands. But when we look at the annual at 132%, you know, year over year, it's extraordinary, and the financial implications to the company are dramatic. We think that this rate generally can continue, although we don't expect to be able to maintain a 78% quarter-over-quarter growth rate. So a little bit of grace will be required, but the optimism for the long haul is just off the charts. you know, we're confident where we're going.

So what does this do to the company?

Well, of course, we've mentioned this before. At one point, our debt had reached a maximum of $7.2 million. All of that's been long since retired. We now have just a few SBA, PPP loan in dispute, wrangling with the bank and with the SBA to make sure that we get it handled properly, and then the long-term 3% SBA loan. That's it. So no convertibles, and certainly no toxic debt, almost none, and revenues are continuing to climb, which means cash flow. Net loss, right? Net loss is shrinking. We mentioned in the press release, it's about a 75% reduction this quarter over a year ago. Pretty dramatic. And our SG&A is pretty static as well. So notice that we're heading into that zero mark towards profitability. Our net loss for the quarter was about $475,000. I'll just point out a lot of that is, most of that is also non-cash, non-cash. So that's a P&L loss, but not a cash loss. Very close to positive cash flow.

Revenue versus SG&A.

We include this really just to point out that we're not dramatically increasing our SG&A. That's important. It's also hard to do. I just want to point, you know, Throughout the company, we have massive plans and visions about what we can accomplish. We try to leverage our partnerships very aggressively. And we do it in a lean operating style so that we don't ramp up significant infrastructure and staffing until we have contracts to pay for them. And that is the hallmark of the company. It's why we're here, why we survived. And we're testing it as we grow because I think the demands on our team is impactful and dramatic. And so we're going to need to increase SG&A. It can't stay static, but we're extraordinarily careful because we're looking at the potential of a near-term profitability, and we think that's a very important mark.

And so that's what we're doing. Net cash use and operating activity. So there you go, right at the line, right?

Very, very close to net positive cash flow. I'll point out that in that cash flow item, we are making some significant investments as well, right? And so that was a big part of our accounting and our reporting this period is to deal with, you know, internally constructed assets like the machines that are going into the field for PFAS, how to properly treat those. And so as a result, we're incurring R&D. We're also building assets. We're using cash to build tools on the infrastructure that we think are critical for commercial success. And so the demands are still there, right? So we're putting money to work for the company. Very, very close to positive cash flow. We also think R&D is just super critical for the business. I mean, think about that. All of these innovations just have a continual refinement. Last year, that number was about 1.5 million in R&D. I don't see that number going down much. We're careful, and we're trying to focus on the things that can bring us near-term revenue, but there's some things we just can't avoid. It's just the nature of our business to continue to advance science and engineering to remain competitive with our assets.

3.55 net shareholder equity is a big number.

I'll just remind everyone that for a NYSE listing, the number is 4 million minimum. And for a NASDAQ listing, it's 5 million. And notice that we've done that sort of organically. We've done it with a combination of growth and small investments here and there. to build that net shareholder equity over time, also deploying some of our capital into assets that can be deployed for income generating purposes and a commercial strategy. That combination over time and a persistent focus on that agenda has created net shoulder equity of significance. You may not realize it, but in the microcap world, we stand out as literally one in 10,000. It's an extraordinary feat. And now, of course, we think we're marching towards the potential significant success and profitability. That's ultimately where we need to get to. So a couple highlights are very important. We'll also break them down just a little bit. 78%, 288%, you know, year over year for the first quarter, big number. 3.742 million. Net loss reduced 68%. Huge improvement in our cash position over the course of a year. $3.264 million in cash. That's whatever, three plus times a year ago. So that's important. It also raises questions about when and what's it going to take for us to be able to position ourselves without a going concern. Very important. And we see that in our future. It's time will be required, time of proving over and over, building the cash reserves, showing that our Our income opportunities have consistency and cash flow. All of those required to really go into analysis of that test. And we'll be looking to test that theory quarterly for the foreseeable future to see if we can position that for that important feat. Our own environmental course leading the way big time, 491%, 5X on Q1, 86% versus Q4 2022. Pretty dramatic. Of course, Poof is really the shining star in that growth. It's remarkable what they're accomplishing, and we're so proud to be their partner and support them with a product that has that capability. We always believed it could, and now we're proving it can and does have that potential to really be a national brand in the billion-dollar range. Now, we haven't proven a billion yet, but I think anybody that's a critic can look at it and say, does it have a chance to do that? I think with the combination of marketing, and its unique value proposition? I think many people would include yes. Farrelly Engineering. Farrelly Engineering, a couple things there, and I know there's a lot of questions that come out about this. The first thing is, you know, how's the engineering group? Well, they have a net loss, and there's a couple reasons. We should talk about it real quick, and I'm sure we'll have some detail. The first is that they have a number of very large contracts that have been promised but not executed yet. So promises don't work, contracts do. And we believe that those promises from the CEOs and our customers are real and they will come to bear. It makes me pause and ask questions about macro impacts of the markets, credit markets, capital expenditures could possibly have some impact. But we have so many that have said we're in, we're in, we're in, that we just rest with that for a moment and know that the volume of business and staffing that will be required to fulfill those contracts is so substantial. that we should consider ourselves fortunate to have a moment to catch a breath. So what do we do when we catch a breath? Well, we advance our PFAS. We build trailers. We focus the team on doing internal things to advance our commercial viability. So time is not wasted. But as a result of having a significant R&D budget component of their expense line, that shows up as a net loss because, of course, they can't record intercompany revenues. And so it does show up as a loss. The other thing to remember is that for Blessed, a year ago, we had very large contracts, very significant rapid growth, and very large. So by comparison, of course, we suffer. And then I just want to reiterate that the engineering group are esteemed professionals, and our confidence in them is extraordinarily high. And we intend to continue to build around them for success. No real change in biological water. There's an R&D component there. I know some of the questions come up about the AOS, and we'll talk about them in the Q&A. And then clear as revenues are kind of not meaningful, but I want you to notice that the infrastructure build to be able to offer a qualified FDA-certified, checking all the boxes product in a highly competitive field are being done and have been done. And again, I just want to encourage everyone Clear has a future that is extraordinarily bright, and it will be a shining star in the portfolio. And I think it's coming. I think it's coming soon.

Okay. So I think we stop there.

We're going to open up for Q&A. Go ahead.

All right. Thank you, Dennis. A lot of exciting things going on, clearly. So, yes, thank you for talking about ClearUp. uh today we have some questions around that sure um so first one here are there any regulatory approvals that biocland is waiting on do you believe we will begin recognizing income from it in q3 yeah yeah uh no there are no um the regulatory approval requirements have been met so certainly it's a highly regulated product but we've already done all this

So it is qualified with the current approvals to do what it's doing in the marketplace. And so that's number one. Number two, yeah, Q2, Q3, yes, we believe that we will begin to see revenue increases. It's hard to predict the exact timing and date, but given the volume of interest from the market, strategic partners, we know that it is near at hand. So whether that's a quarter or two quarters, We're in the march, and the response from the marketplace is so encouraging that we know we've got a winner. So we're not afraid. We're excited. Excellent.

And can you talk a little bit about the distribution for BioCleanse, how it works with the hospital systems? We mentioned in the K that we're in the process with two of those systems for purchasing BioCleanse. Yeah, what happens –

I'll give you the short version because it's a really complicated one and it's fascinating because it kind of illustrates how difficult it is to launch a product into the market. But the simple version goes like this. It starts with a physician who wants to use it. That's how it starts. And a clinician, a clinician who says to an administrator or a purchasing agent at a surgery center or a hospital, I want to use this product. I think this is better and it can help me with my patient quality to manage infection. So then that organization, there's a contact made, whether that's through a rep or through a distributor or direct, either one, and we go through a quality assurance process in which they verify regulatory. They check all your FDA compliance, your supply chain. They basically check all the diligence boxes, and that process goes through a committee. That's a clinical committee, by the way. And they also are going to be looking for economic rationale to justify bringing this product into the portfolio for use. And so that's a process. Some systems do it very fast, maybe because physicians pressure them or they're cutting edge and they've got it down. Some are very slow. Those committees might not meet two or three times a year, so you have to get on schedule. That's what's going on. That's what's going on. And once that happens, then the physicians in the network who are affiliated with those facilities can choose the product and the hospital will begin stocking inventory. And so that's where we're at. That's why it's so slow. It's a really significant burden of time and labor. But again, what's happening is we're establishing customers that will purchase that product every week and every two weeks and every month for the foreseeable future. Now, I do want to point out, I think the thing that people don't often recognize about CLIRA that's of dramatic value You know, we've had a chance since this has taken us a decade, right, to get this product positioned and now seated in the market for its first adoption. We've had a chance to watch all the competition do what they do. And there's been some really big competitors who've carved out market share and spent small fortunes. I mean, big money to establish a market. And in each case, as they've established their position in the marketplace, they begin to lose sales over time, over time, like five to ten years. And why do they lose sales? Well, it turns out that they're all toxic. They're all toxic. We're the only one that's not. So the value proposition is significant. And what's unbelievable is that you can achieve this capacity for killing bugs, this great efficacy in situ in the body and in an open wound. And you can do so without destroying tissue. And so that required significant investment to prove, to prove, to prove, which we've done. But now the gap in the market is getting wider and wider because other products that have significant market share are being terminated because they're toxic. So think about that from selling. One way to sell is to create a market. Oh, my goodness, we've done that. It's really hard. But the other way is to sell by comparison with a market that's established with an alternative that's better. That's what we're doing now. So the market opportunity, one of our guys says it's like a truck can drive through the gap. It's a big gap, and we're filling it. So we're very encouraged because what's really happening is there's a little bit of a buzz going on at the clinical side talking about there's BioCleanse product for these claims that are so astonishing, and astonishing meaning that they literally, with the claims, make it number one in the world. I mean, that's what we have. And we always believed it to be true, and now we've proven it. And now we have to take the market, which is what we're doing. So I think that this is the kind of product that not only will it find traction, it will be one of the leading products in the world. That's the opportunity. So that's clear.

Yeah. And on that note, we have another final question about Clarion here. How many doctors are becoming aware of BioCleanse, the efficacy, kind of what's the marketing program around it?

Well, I think, I don't know exactly. I think we have 12 or so key opinion leaders who are listed on our website. Be sure and take a look at that. In addition, I want to say we've got about 40 reps now, 40 reps signed up. And so a lot of these are independent reps, and they have a portfolio of customers. Imagine a rep might call on 100 doctors, right? So how many have they presented to you? I don't know yet. But this is the way it's done. And then the other thing is marketing in this field is done primarily through what they call professional meetings. And a meeting is an event like a wound event or a burn event or an orthopedics event or a biofilm event where key topics are chosen. Physicians will come in from all over the world, all the country, to get their continuing education credits. and then also participate in these very high-level talks about the cutting edge of science and results. So we're attending those now, right? So part of that's budget. We have national sales people number. We also have reps. And so we're out in the field attending meetings and participating in the education of two positions. So how many is that? I don't know. It's got to be. I mean, it's more than hundreds. It's probably pushing 1,000. But I don't know. Again, remember, But the way this works is when the physician says, I like it, you still have to go get the approval and the vetting for the formulary to be assigned into the hospital. So, you know, the setup is a grind. The fruit on the back end is awesome. That's what we're doing.

All right. So let's change gears here. I've got a three-part question. It's a pretty big question, but let's see how we can do it. Sure. I have a shareholder wondering, can you provide a status update specifically on the waste to energy project in South America, ultrastate nuclear core work, and MLB sales?

That's a lot. Yes. Okay. So, the South American project is on a momentary pause. We finished phase one. We've been, again, given a verbal for phase two. And I believe our client, given some of the political unrest that's going down there, is on pause for a moment, subject to financing, and wants to begin, but we don't know. We don't know when that's going to happen. And we know they're serious. They've invested almost 10 years getting that project positioned for success, and there's a lot of money at stake. So we'll know more soon, and we continue to communicate with the client. And they've also brought us to an additional four opportunities overseas, And they've also given us a verbal on those for phase one, which will be quite significant, you know, in the multiple millions of dollars of services range. And they literally have said any minute. So we're waiting. So that's that. Second part of that question was, what was the second? Give me the three parts again. Yeah, UltraSafe Nuclear has agreed to engage us on the next phase. Very similar. We might have actually received a contract. I'm not sure. I need to verify again. But phase two was additional work, so the relationship there is really good. Again, very similar kind of situation where companies are holding on to capitals, slowing down the process. They need to do it. We've been assured of our position, and so we're confident in the next step. So there you go. And then the third was?

MLD sales.

There's a lot of activity going on with Garrett Callahan. Garrett Callahan, a member, for those who don't remember, is the largest private held water company in North America. So we've been together with them now coming on two and a half years and have built a fully commercialized design and gone through the paces to make sure it's supposed to do what it's supposed to do. And it works. So the selling channel is now in their hands. We had a little bit of lull, so... course, we were originally projecting first commercial success about nine months ago, and it has been delayed. I can tell you that the scope and magnitude of the attention within the organization of Garrett Kellyanne has increased about tenfold. Where we had maybe one or two, we've got dozens of prospects now being positioned in an evaluation and scoping process. I also say that they're aiming very high for the size and magnitude of these accounts, and so It's a very similar situation. It's hard to be patient, but we have no question that we will launch commercially with here at Callahan and that the product has a home for recycling water, primarily associated with heat exchange and water cooling towers. And it's patented and it is somewhat of a breakthrough and it fills a void in the market that's being unmet. So we're, again, no lack of confidence, lots of activity, many, many accounts. The other thing we should mention, too, is Garrett Callahan has also begun selling our PFAS solution. That's a very important thing. Remember, Garrett Callahan came to us with their idea, and now they're adopting our idea, which is awesome. Of course, we're adopting their prowess in selling product into the marketplace, which, of course, they've proven for over 100 years. It's a very good situation. I wish it was faster. I think it's, again, another rude awakening of the complexity and the difficulty and breaking into the market. But you know, we're going to win.

There you go. Yeah. So yeah, let's switch gears here to water. So on that train of thought, with your Callahan AOS client, using AC to clear PFAS. So Does that give us a referenceable PFAS client? Can we use them as a case study? It will. It hasn't yet, but it will. Yeah.

It hasn't yet. We've got a number of early adopters is what we would say, right? So our first account is a very, very large industrial account. Phase one is done. Phase two is proposed. They've given us a verbal. We're waiting for the go-ahead. There's a number of others, really three or four that we believe have a chance to go. The clients are saying, let's do it. We want to go. They're smaller in scale, which is fine. They're not as big. That's fine. But proof of claim is really critical. And so the more we stack up that, the better it is for everyone. And so we think that we'll have some of those early adopters move forward with us. And a number of those are coming from Garrett County. So that's important as well. So, yeah, the key is they're not signed contracts yet, but they're in the process.

Yeah, now we reported with Montreal, I forget, Quebec Innovation Center or something like that. They have the AOS. Will there be sales coming out of that, or is there business development efforts around that project?

Well, sure. Well, the AOS, of course, remember, is advanced oxidation. Advanced oxidation and what the AEC does are very much hand in hand. So, one of the things, for example, that we've discovered is how efficient the AEC is at removing chlorides, which is a big deal, chlorides. So, we have customers who like it for that reason, all right? And so, that's interesting. The other is that the AOS is an anti-oxidation machine focused on extraordinarily difficult tasks like micropollutants or in a turbine environment competing with UV. That's basically its value proposition. So in our lingo, in our world, our focus is to bring solutions to customers. And wherever those tools can be plugged into a treatment train as a full blown proposal for a solution, that's what we're doing. The other thing that's important is that the distribution network we have for selling, which is now about 38 reps, covering the United States primarily, All of the products go into the catalog. So we have a catalog, right? And we've got a lot in that catalog. And we have some assets that we can sell that are made by other people because we're a solution provider. We're the expert that they call when they want to get it right and they want to get it on time and they want to get it on budget. That's why they call us. And it's that customization that allows for us to distinguish ourselves from very well-established companies because most of them are trying to sell widgets. And widgets in the water industry is extraordinarily difficult and fraught with problems. That's how we've differentiated ourselves. So the AOS is a tool in the toolkit. AEC is a tool in the toolkit. RO filtration is a tool in the toolkit, right? All of those things go hand in hand. And then we work with clients to design custom processes. So I believe the first sales for AOS is going to happen that way. We're going to find spots where it definitely fits, can work. And we plug it in through the treatment train, and we find our first commercial adoption that way. The innovation is remarkable. It's ahead of its time. And selling as a standalone is going to be very difficult. Not impossible, but very difficult. And so we continue to plow forward there. The Montreal is a commercial proof of claim by esteemed researchers. And so that will end up being peer-reviewed papers, which goes a long way in positioning yourself in a global market. And so the AOS is still, we believe, going to find a home. What's happening for the companies, we have so many opportunities. There's only so many hours in the day. So rather than say, we're going to be an AOS company, we say we're a solution company with an AOS. And that fits with our mandate. Hope that answers the question.

Yeah. Thank you for that. All right. Let's move on to Cuperdine and odor control. So we launched a partnership with BKT. It's got to be maybe two years ago now. So folks are wondering about the success with that, any holdups, kind of what have we learned from that whole process?

Well, it's another testimony of how difficult it is, which we already knew. I mean, it took us years to get ourselves situated in the U.S. market. And so they're having some of the same difficulties we had in getting through the barrier to entry. They haven't quit, though, and they're excited, and we're in constant communication with them. We're also in communication about expanding opportunities. So there's a lot going on there. It has yet to pay. I'll remind everyone that they made a strategic investment in the company. We took some of that money, invested in a joint venture on a non-diluted 40% equity. So it's a good deal for the company. And also, remember that it positions us to now have manufacturing capability in that region to support Southeast Asia. And that has become increasingly important. In fact, just think about POOF by itself. That sourcing in the international markets will become increasingly important as POOF grabs the international market. So this is strategic. It's long-term. We don't measure it in terms of quarters. We think they're great partners, and we think they're going to land well. And so I wish we were making more money faster, but I think it's a wise move. And we certainly think we've picked some winners there. So the biggest testimony is just how difficult it is. It's a very difficult challenge to break into that market.

Got it. So the deal with Ikigai, very positive, shared a bit about that in the presentation. Sure. One question here, are there talks with Ikigai to pursue additional licensing for Cuperdine in other markets? Sure, always. Yeah, always.

I mean, that's a constant conversation. Notice that they're testing products here and there to what the industry would call to build out what's called a brand block. A brand block would be multiple products that fit the POOF brand in the pet category. There has been discussion about moving beyond pets, although POOF, as you might expect, really wants to maximize its time, energy, and money to build the highest concentrated value in a category. And so they're primarily focused on pets exclusively, and that's where they're making hay. That's where they're building their brand and they're having significant success. So the idea that because they're skilled marketers, they could also branch out into other categories, maybe, maybe not. I think they could. But remember, in this endeavor, they're the capital. They're financing the rollout of a national and potentially international brand. So how many times can you do that? What they're doing, we've always identified as an extraordinarily high risk proposition requiring great capital and great skill. And they have both. So they're doing quite well. The wish upon them is an expanded scope of high risk and high capital requirement. I'm not sure that's really in our best interest at the moment. So the way to think about it is they've acquired the rights to the pet category. We have all other categories still controlled by the company. And as they rise up, literally all ships rise in the rising tide. So that's what we're seeing. And we do think additional strategic partners will come on board, as they already have, right? They're not as big and flashy as what's going on with POOF, but they're in place, and we've got more coming. We like it that way. But, of course, the conversation is always open. They're great partners. We're thankful to be working with the team at POOF. They're extraordinarily skilled at building partnerships content that allows customers to recognize the value proposition and make a yes buying decision intuitively when they watch that video. And they're good at it. I hope that answers the question.

Yeah, it does. Thank you. Yeah, I think we've answered the majority of investor questions. I'll give you a tough one to end on here. So... Folks are wondering your reaction to shareholder reaction to the earnings release, current shareholder price, volume.

You know, are people writing and having – Well, I think there's a better way to do it.

Yeah, let me give you a better – I think there's a better way to do it. You know, we're out into the marketplace talking all the time. We do presentations internationally. We're just in Puerto Rico. High net worth retail investors. I mean, some early stage institutions. And so there's a dichotomy, right? So let's break that down. So the way that works is when people look at the company, the first thing they say is you're way undervalued. So that's pretty much uniform. You're way undervalued. So number one. Number two, congratulations, right? Because you're on the verge of making positive cash flow. You're right there and you've got profit insights. That's a big deal. It took a long time, a lot of money, right? So then people say, congratulations. That's the second response. And then they say, you know, how quickly do you want to uplift? Because what they're saying is, right, trading on OTC is a tough place because you kind of get trapped in this like we are now, in this 20, 25 cent range. We kind of have a bracket. Well, is it going to go beyond that? We certainly believe it should. In many ways, it already should have. Okay? So now we've got standard distribution of an investor base. We've got some overhang to sell through. It's common. We're going to chip away. We're also going to continue to increase our numbers in a dramatic fashion like we have. So the combination will overpower it. I believe that to be true, and I believe that commercial opportunities that we are focused on are so significant that it just won't matter. It just won't matter. Is that a situation that happens today? It depends on what happens with the market. I know that the capital markets in general are in an uproar, and we may have seen a tech rally in the last four or five days, but I think there's a general sentiment that there's caution to hanging on to dollars, and that's going to impact everyone, including us. So for us, what do we represent? Well, we represent an extraordinary high level of return opportunity where the core technologies have in many ways been de-risked to the level of acceptance. We've also demonstrated an ability to execute with some discipline to generate now breaking the cash flow and opportunity for positive cash flow, leveraging a strategy, a strategy of invention, finding the market, leveraging through channel partners. That's a tried and true process. It's the right process for us. And so now you say, well, which of these assets are going to find the market? Well, they all are. That's the answer. Clear is going to go. The battery is going to find a home. PFAS is going to find a way, bundled into a solution provider's umbrella. That's what we're doing. Obviously, the odor control has got a home, and it's got more home to find. So this is a business that I believe at this stage is undervalued. On the optimistic side, of course, that's who we are. We believe in what we're doing. But we're still trading in the OTC market. We've got a lot of investors who've traded into the company in that 2017 to 22, 26 cent range. And, you know, if they're a seller at 21 cents, you know, shame on them. We're bullish on their future. So we think it's a great future. and we're going to continue to execute. So in the long run, we don't think it's going to matter. In the short run, we've got to work through that overhang, and we would encourage people to think long if they can because really in terms of the status of the business from a year ago to today, it's like a new company. People need to view it as a new company ready to roll. We're pretty bullish.

There you go. Excellent. What do you think, Brian? We covered it? Hey, Brian, you there?

It looks like Brian's line has disconnected.

Well, let's do this then. We'll take a minute. I'll just wrap up. We appreciate everyone staying in touch with the company, of course. I want to remind everyone that we've got an annual stockholders meeting on the 6th. So if you're a stockholder record, you're certainly invited. We'd love to spend time with you. It's at 10 a.m. in Aliso, Viejo. Reach out to the company if you haven't. If you're not on our mailing list, every once in a while somebody says, I'm not on the mailing list, please reach out to us. You can send it to info at BioLargo or me or Alex at BioLargo, whatever it takes to get you connected. We're sending out content about once or twice a week at least, and there's a lot going on. If anybody's got questions, we'd love to entertain them. And, again, thank you for the support, and we're really looking forward to continued push. And I think, just again, to reiterate, for POOF, we're going to watch sort of a settling in and then a big push retail. And so we're still figuring out what that means to us, but it's all very exciting.

So there you go. See you on the 6th. Operator, thank you very much.

Thanks. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.