BioLargo Inc. (OTCBB: BLGO) seems like it could be spread too thin at first glance, with its toes in everything from water purification to wound care. But, upon closer inspection, these are all applications of a single iodine-based platform technology that was developed by an impressive team of scientists and led by a world-class management team and set of industry advisors. This team is keenly focused on advancing their previous claims and commercial viability with licensure or sale as its stated endgame.
One Molecule - Three Core Applications
BioLargo’s innovative technology platform, called CupriDyne®, features an iodine-based advanced oxidative system, delivering the same iodine molecule found in nature, designed to eliminate the presence of unwanted species, including bacteria, microbes, volatile organic compounds, odor carrying compounds and even manage heavy metals and particulates in order to purify substances and reduce the chances of infection.
Currently, the company is focused its commercial efforts in three core segments:
1. Clyra Medical Technologies, one of BioLargo’s subsidiaries, is developing advanced wound care products to compete in this industry segment that the Freedonia Group predicts will be $30 billion market by 2016. Clyra’s products are designed to rapidly and effectively control against a host of dangerous pathogens with its gentle and naturally metabolized ingredients that help avoid microbial resistance and help combat biofilms, which are all commonly encountered in the advanced wound care field. Recently, the firm announced positive testing results and a strategic alliance with an FDA-registered manufacturer in preparation of a FDA 510 (k) application.
2. Odor-No-More is a unique additive that reduces pet odors, ranging from indoor cats to outdoor horses to compete within the pet industry. The American Pet Products Association, reports that 62% of U.S. families own a pet, which equates to 72.9 millions homes and the industry generates revenues of more than $50 billion annually. After successful showings at SuperZoo, winning an award for best new product, and winning a Horse Journal: Product of the Year award, the company partnered with Central Garden & Pet Company (NASDAQ: CENT) to market Odor-No-More to independent pet stores. The company is gearing up to also launch a family of products into national markets under its brand Nature’s Best Solution® and DeodorAll®.
3. Water purification studies were recently completed at the University of Alberta Department of Engineering that verify proof at the highest level about claims made by the company for water purification within the oil sands industry that will also serve any industry that must contend with contaminated water. Management reports that these studies will be published in major scientific journals over the coming months.
All of these applications are in multi-billion dollar industries, creating enormous potential for a company of BioLargo’s size and valuation in the < $20 million range. Meanwhile, Odor-No-More has already generated early-stage revenues, Clyra Medical Technologies has near-term potential, and the water purification business could begin to see commercial interest by the end of the year.
Management Team Set on Execution
BioLargo’s management team resembles that of a Fortune 500 company more so than a microcap stock. CEO Dennis Calvert joined the company in 2002 after an extensive career as an entrepreneur, investor and consultant working for many multi-million dollar businesses, including an M&A fund specializing in acquiring medical-related assets and businesses. Having acquired the technology in 2007, the company has built an impressive array of proven technologies and assembled a world-class team. Mr. Calvert is supported by a number of experienced senior advisors, including:
1. Vikram Rao, PhD, is a senior advisor that had worked for Halliburton Company (NYSE: HAL) for more than 30 years, with more than 40 publications and 24 patents in many fields, including metal refining, alloy formulations and oil and gas technology.
2. Harry DeLonge is a senior advisor that spent more than 40 years working for PepsiCo Inc. (NYSE: PEP), with a number of different patents related to water treatment, wastewater treatment technology and water reclamation systems as well as the top awards from American Water Works Association and the International Society of Beverage Technologies
3. Tanya Rhodes is a senior strategy advisor with a career that included 15 years at Smith & Nephew U.S. and more than 20 years in the wound management and skin care industry globally. Over her career, she played an instrumental role in bringing a number of staple wound care technologies to market around the globe. She holds a Masters Degree in Technology Management from the University of Miami and graduated with honors in Chemistry from Hull University, England. She also completed the full research for PhD in Molecular Orbital Computational Stereochemistry before relocating to the US.
4. Tim Johnson began his career with Merck & Co Inc. (NYSE: MRK) before co-founding a wound care device manufacturer, Blue Sky Medical, which successfully sold to Smith & Nephew. Later, he worked with Hygeia II Medical Group selling to both the government and retail sectors.
These advisors lend strong credibility to the company’s product development initiatives in many of these areas, including oil and gas wastewater management, water treatment, and wound care among others. Moreover, the rest of the company’s management team has a strong background in operations necessary to execute on these plans and bring products to market.
Unique Investment Opportunity
There are two things that investors should look for in any potential investment – particularly in microcap stocks: Validation of the technology and an experienced management team capable of execution. In BioLargo’s case, both of these areas are covered extensively, creating a unique investment opportunity for those willing to consider microcap stocks.
The company’s products are backed by an impressive team of advisors that all have extensive industry experience, as well as research that is just now starting to be published which validate its application within one of the hottest industry segments in the world: water. Meanwhile, the firm’s management team has equally strong backgrounds in product development and execution needed to bring these products to market.
Also, the company recently announced the retirement of debt and accounts payable claims in preparation for its commercial focus on water treatment, advanced wound care and pet products. More than $1 million in debt was relieved through the issuance of common stock and options at a 20% premium to the market price of its stock at the time of announcement.
Finally, this retirement of debt was another opportunity for management and the board of directors to show the faith that they have in the BioLargo technology. The conversion of accrued and unpaid payables into common stock by officers of the company is a strong indication that these near term catalysts are likely to be implemented.