June 1, 2010
It is a great time at BioLargo, despite our limited financial resources and the difficult economic climate we are all forced to deal with. Our two platform technologies, CupriDyne™ and the Isan™ System, feature the creation, delivery, precise dosing and control of free iodine, Iodine is a potent oxidizing agent, odor eliminator, nutrient, and catalyst. When formulated properly at appropriate doses and in appropriate delivery systems, it can be useful for sanitizing and disinfection. Please see specific product labeling to verify its intended and appropriate use. By leveraging our patented and patent-pending BioLargo technology, our business strategy is to harness and deliver nature’s best disinfectant -IODINE- in a safe, efficient, environmentally sensitive and cost-effective manner.
Our technology has application in multiple industries, with perhaps as many as 200 potential products. Much of our journey has been focused on first proving our technical claims and securing our intellectual property. During the past year, we were able to validate its use in a number of commercially viable products.
Last year, we launched our award winning Odor-No-More™ products into the national equine market. We are successfully positioning these products with industry leaders and top equine distributors (selling primarily to tack and feed stores), and are actively training and supporting their selling efforts. We believe the market opportunity for our bedding additive product is at least $200 million within the $1.5 billion equine bedding segment. Our products are the number one top performers for odor and moisture control, featuring cost savings and health benefits that customers love.
Our products have garnered the attention of the horse enthusiast community. In addition to great expert and customer testimonials, we have been featured in multiple publications, shown on international TV, and won awards. We also recently landed a key sponsorship role for HITS, a leading “Horseshow-In-The-Sun” circuit of competitive events over the next year which will help further establish our brand in this market.
We are also working to establish sales channels for our Odor-No-More branded pet products. While we are excited about the horse industry, we believe the pet products opportunity is much larger. The American Pet Products Manufactures Association reports that Americans own approximately 93.6 million cats, 15 million birds, 15.9 million small animals and 13.6 million reptiles. Our bedding products, our cat litter additive, and our facilities wash are perfectly suited for this market.
The applications for our technologies extend well beyond horses and pets. As one example, opportunities for odor control technology in the industrial farming industry are rapidly expanding. With over 64 million pigs in the U.S. being raised for slaughter, $97 billion of pork sales in the U.S. alone, and a production of 3 – 5 gallons of liquid manure, per pig per day, the problem and the market opportunities are huge. And, it is getting harder and harder for pig farmers. More government regulations, and a recent $11 million jury verdict against a major industrial pig farmer for their failure to control the odor of one of their farms, makes this a timely opportunity.
The business opportunity is not just about controlling the smell. Research reports from Auburn University in cooperation with the U.S. Poultry & Egg Association teach us that if you can control toxic odors like ammonia (which our products accomplish quite effectively), a livestock farmer like a poultry farmer can improve the conversion of feed to weight by as much as 15%. The USDA also reports that the value of all poultry products like meat and eggs that are sold annually, exceeds $30 billion. The proof that our ammonia controlling technology could help increase weight gain by up to 15% creates many commercial opportunities for us. In addition, we capture the nitrogen that normally releases from manure and thus, we help create a high value fertilizer, creating another potential increased income stream for industrial farmers.
We are in active discussions with industry leaders from the pork and poultry industries to form joint ventures or operating subsidiaries to serve these markets.
We also have a number of important developments outside of the odor control applications:
We have recently secured our first license agreement for the award-winning Isan system (Top 50 Water Technology for the 21st Century by the Artemis Project), which is already commercial in Australia and New Zealand. The Isan water sanitizing system has proven effectiveness for post harvest wash, irrigation supply and hydroponic applications within the agriculture market, and has been called “one of the most important advances in food safety in the past 20 years“, by a leading industry expert, Professor Joe Montecalvo.
We continue field trials in crop protection, testing our technologies for effective applications for protecting and growing healthy plants.
We also have recently assembled technical proof of claims that we believe will lead to massive commercial opportunities in the water treatment industry including water treatment for the Oil & Gas production and oil sands industries. Our advancements in our proof of technical claims to treat contaminated waters is significant and will likely garner global attention as proof of our claims become known. We expect the results of recent research projects in these areas will be published soon.
We are happy with our accomplishments so far, but certainly not satisfied with our current level of sales, nor are we sufficiently capitalized to take immediate advantage of our technical breakthroughs. Both increasing sales and addressing our working capital needs are top priorities for us.
In the past year, we have also successfully established a number of close strategic relationships. They bring high value infrastructure, technology and resources to our business. The ET Horn Company, one of the nation’s premier distributors of raw materials and chemicals for use in coatings, building materials, elastomers, lubrication, nutraceuticals, cosmetics, personal care, food products, animal foods and animal supplements, with a 40-year reputation for quality and integrity, plus a formidable infrastructure for scalable production, national sales and distribution efforts. We also executed our first license for the Isan System with Isan USA and Ioteq, Inc. The relationship reduces capital requirements for BioLargo and converts the relationship from a capital-intensive project, to a positive cash flow situation over time, while providing ample opportunity for financial rewards to Isan USA for their investments to take that technology to market in the United States. Our key academic, government and industry relationships are also expanding.
Regardless of the challenges we have faced, all these developments have been possible because of our steadfast commitment to a greater purpose. They drive us and define us to:
- Help keep people, plants and animals safe
- Operate with integrity in all that we do
- Deliver long-term value for our stockholders
We have both short-term and long-term priorities:
- Sell enough products to generate positive cash flow to cover baseline operating costs
- Properly capitalize our company
- Expand business through strategic licensing or joint ventures
- Deploy capital to maximize our return on investment
- Establish a solid public market for our securities
It is a very exciting time at BioLargo and we thank you for your continued support. Please tell your friends about our products and company. You may also visit our product web site at www.OdorNoMore.com — go to the ‘where to buy‘ tab and consider buying one of great products and give us some feedback. They really work!
Dennis P. Calvert
President & CEO
About BioLargo, Inc.
BioLargo’s business strategy is to harness and deliver Nature’s Best Solution™ — free-iodine — in a safe, efficient, environmentally sensitive and cost-effective manner. BioLargo’s proprietary technology works by combining micro-nutrient salts with liquid from any source to deliver free-iodine on demand, in controlled dosages, in order to balance efficacy of performance with concerns about toxicity. BioLargo’s technology has potential commercial applications within global industries, including but not limited to agriculture, animal health, beach and soil environmental uses, consumer products, food processing, medical, and water. BioLargo’s strategic partner Ioteq IP Pty Ltd. was named a “Top 50 Water Company for the 21st Century” by The Artemis Project™; BioLargo markets Ioteq’s iodine-based water disinfection technology, the Isan system. The company’s website is www.BioLargo.com. The Odor-No-More products are sold by BioLargo’s wholly owned subsidiary, Odor-No-More, Inc. (www.OdorNoMore.com).
Safe Harbor Statement
The statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, BioLargo’s filings and future filings with the Securities and Exchange Commission, including those set forth in the BioLargo’s Annual Report on Form 10-K for the year ended December 31, 2009.