BioLargo Inc. Q1 2023 Earnings Call
Greetings and welcome to the bio Lager with 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.
Once you require operator assistance during the conference. Please press Star zero on your telephone keypad. Please.
Please note this conference is being recorded.
I will now turn the conference over to your host Bryan Lubber you may begin.
Thank you operator, good afternoon, everyone and welcome to <unk> 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 10-Q report filed with the SEC.
This call is being webcast and available for replay.
Our remarks today 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 that may cause the actual results to differ materially from the forward looking statements.
Detailed discussion of such risks and uncertainties are contained in our most recent Form 10-K Form 10-Q.
Our reports filed with the SEC.
The company undertakes no obligation to update any forward looking statements.
And then just a correction the 10-K was.
Filed with the SEC, alright, and with that I will now hand, the call over to Biologics Chief Executive Officer deaths Calvert, Hey, Bryan. Thank you and thank you everyone for joining us.
Appreciate it and we've got lots of coverage. So we're going to dive right in so to may 18th.
We make life better we've been inventing for well over a decade multiple technology platforms, a number of commercial initiatives as a whole we call catalyst for driving revenue growth that we're very excited about we're going to talk about each of those briefly.
Remember in the in the company, we really have two groups, we have the environmental group and clearer medical and don't count clear medical out in fact, it's it's coming alive and like I said, a very nice way.
With it's a five 10-K plants just before Covid and now its first sales building distribution with reps and channel partners. It's got three channel partnerships in negotiation. It actually has a really significant future everywhere and that asset by a larger owns about 58% of the equity and so it's coming on strong in the near future.
We're going to start seeing results.
I'm sure, we'll talk about but soon means in a bit.
Environmental Environmental group of course, we have engineering water must see R&D O&M, formerly known as the odor no more really concentrates on industrial and supporting the supply chain for our retail product called proof P. L. O S. T O L. P H dot com <unk> dot com.
Proof of course is driving significant revenue for the company.
We can talk about P fast real quick on the P. Fast solution, we have our first customer engaged we've scoped and priced to phase two.
We are literally waiting for the go ahead from the customer you've gotten verbal or waiting for a signed contract to begin phase two we.
We built a significant distribution channel here remember P. Foster as per in poly for alcohol substances, which are not which are the containment.
Contaminants.
Called Forever chemicals.
Often called now the containment of the century.
The ft. The EPA has just published it's testing limits down to four parts per trillion.
And literally.
Just about every industry that uses water. It anyway is going to be impacted by paphos, including food food production and food processing water 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 and the images that you see right now there's a 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. This field can be $5 million to $20 million, it's a big number and so we're on the March I wish it was faster, but our position.
<unk> 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 they can actually achieve a non detect status that's a level at which science can't detect any residual with align.
And let me just complete elimination.
That claim is a substantial gas detection all over the world.
And now of course, we're working on with scaled version to deploy it 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.
Of course proof has led the company in its revenue growth. It is a wonderful product based on our technology and remember that where the supply chain partner, we make a small margin on manufacturing, we get a royalty on sales or 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 three to seven ex.
That would put that in accident somewhere around 350 to upwards of $700 million.
The key there is that the product has the capacity the ability the the wherewithal to support international brands that can that go to $1 billion in sales and we certainly believe that's the case who was doing great.
Remember that they recently launched a nationwide in Walmart, we do have some clarity there it looks like it's it's targeted to go into about 3000 stores. That's the main Walmart stores and that has been achieved in the last two our knowledge and our and our partners at formed is that that's been achieved in the last 30 days and so now we're we're watching.
The sell through.
L. Three historically has been three times the minimum expectation it was adopted in 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.
Pet products in the world.
I understand they do more revenue.
The specialty pet like Petsmart and Petco combined so this is a major force in the retail buying the 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 our retail channel with major retailers.
So the advertising campaign is intended to drive attention and steer patient to steer customers into retail outlets to buy the product.
And so that is a shift that that means a couple of things to us. The first it means is that.
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 can talk about the revenue in just a minute, but you know massive 78% 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 extraordinary extraordinarily difficult challenge and but we know that in the long run.
When we look at this over every six months to nine months to a year. We think our growth rate will continue at 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 said something like 20% quarter over quarter growth for the next year.
That's a loose loose estimate target.
Historically, they've exceeded those numbers and so we're optimistic about the future proof 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 and your profitability.
The numbers are going to continue to expand over time.
The battery.
This is a sodium sulfur battery not to be confused with our with our sodium ion battery a lot 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 with technical claims associated with its battery are true, which we certainly believe they are.
And we believe that will sell as many as we can make.
It just fits a niche in the marketplace, that's unmet by lithium by sodium aisle, namely in their safety profile of 100 per cent charge recharge domestic supply energy density that matches or be lithium.
And its primarily designed for fixed site. The other thing I want to point out is the department of energy just published a exhausted paper on L. D S long duration energy storage estimating.
Estimating.
That this massive number of $90 billion is required for the United States to keep up with the demand you know being in the battery business over the next decade as being like them to be in the chip business.
In terms of its magnitude impact globally.
And so we think this is a great way to enter into the market with a design that we believe are.
It should be commercially ready soon it will be 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 the team assembled we are building and equipment were building a line that will be in the making battery business in the next few months, we had forecasted something like four to six months Bill that's a good forecast and we are on the March as we speak.
Very exciting and a response again, our response to the marketplace to this was a remarkable it has a chance to be arguably the largest ER revenue asset in the portfolio.
Yeah.
Financial performance is still pretty clear, let's make sure we don't forget clearer we mentioned it briefly.
I think the biggest news here is that the regulatory approvals in place.
To do what it's doing it has a menu of product designs, but it singularly focused.
On its bio clans as the wound irrigation solution fully vetted cleared under five 10-K with the F D a for sale.
Okay got its first couple of customers.
The number of hospital systems that want to adopt the product it's got a menu.
A menu with key opinion leaders who are.
Literally the top positions in the field and now channel partners are coming on strong and we think this is a sleeper that's gonna be extraordinarily.
Extraordinarily high growth and margin and so it's in the works I think meaningful sales.
Literally just in front of US you know theres a process of giving an example would be 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 the QA QC and what they call a formulary to have these products approved for purchase.
While physicians are asking for that 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 state.
And it is extraordinarily unusual and unique value proposition to be able to achieve extraordinary results as a lead in product high performance with no toxicity and there's no systemic and a sensitivity cleared to the bone attendance. It's a lead in product very unusual matching the best with the.
Best anti microbial, killing agents now to the industry and yet gentle and that's a that's a that's a value proposition that's unsurpassed at the moment.
There is going to have a great future.
Remember in clear, we own 58% as well 50% of the equity.
Other direct investors and management it clear on the balance.
Okay, seven 8% quarter over quarter is pretty dramatic.
If you look at that on an average its about 29% quarter over quarter that would kind of match what.
What proof is also forecasting generally right.
So it is a 20% quarter over quarter for the foreseeable future.
And so the the balance then is gonna be the lumpiness of inventory.
And launching into a big national brands.
But when we look at the annual at 132% you know year over year is extraordinary and the financial implications to the company a 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.
The optimism for the long haul it's just off the chart, we're confident where we're going.
So what does this do to the company well.
Of course, we mentioned this before at one point our dad. It reached a maximum of $7 2 million all of that's been long since retired.
We now have just a few S. P. A P. P P loans and dispute wrangling with the bank and with the S. P. A to make sure that we get it are handled properly and then the long term, 3% SBA loan that's yet.
So no convertibles.
No certainly no toxic debt almost none and revenues exchanged into class, which means cash flow.
Net loss net loss is shrinking Ah we mentioned in the press release, it's about a 75% reduction this quarter over a year ago pretty dramatic.
And.
CNA 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 475000.
I'll just point out a lot of that is most of that is also noncash noncash. So that's a P&L loss, but not a cashless very close to positive cash flow.
Revenue that possess G&A. We include this really just to point out that we're not dramatically increasing our SG&A. That's that's important. It's also hard to do you just want to point you know.
Throughout the company, we have massive plans and visions about what we can accomplish we tried to leverage our partnerships very aggressively and we 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 probably survived and we're testing that as we grow because I think the demands on our team as our 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 were 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 used in operating activities. So there you go right at the line right very very close to net positive cash flow.
I'll I'll point out that in that cash flow item, we are making some significant investments as well right. So and so that was that was a big part of our accounting and our reporting. This period has to deal with you know us because internally constructed assets like the machines that are going into the field for P. Fast.
Properly treat those and so as a result, we're incurring R&D. We're also building assets for using cash to build tools on the infrastructure that we think are critical for commercial success and so are the demands are still there right. So we use 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, you think about that the 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 still some things we just can't avoid it just the nature of our business to continue to advance the science and engineering to remain competitive with our assets.
Yeah.
To your 0.55 net shareholder equity is a big number yeah, I'll, just remind everyone that for NYSE listing the numbers 4 million minimum.
For our NASDAQ listing is $5 million and noticed 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 that shareholder equity over time also deploying some of our capital into our assets.
Assets that can be deployed for income generating purposes, and our commercial strategy that combination over time and a persistent focus on that agenda has created that shoulder equity of significance you may not realize it but in the in the Microcap World, We stand out as a literally one in 10000, it's it's an extraordinary feat.
And now of course, we think well mark marching towards the potential significant success and profitability. That's that's ultimately where we need to get to.
So a couple of highlights are very important and we'll talk to you break them down just a little bit.
The 17% to 288% you know year over year for the first quarter Big number three.
374 2 million.
Our net loss reduced to 68%.
Improvement in our cash position over the course of the year.
Three 2 million six four threep up to six 4 million of cash.
You know that's what they were three three to three plus times a year ago. So that's important. It also raises questions about you know 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 proving over and over building the cash reserves showing that our our income opportunities have consistency in cash flow all of those required to really go into the analysis of that test and we will be looking to test that theory.
Quarterly for the foreseeable future to see if we can.
Position that for that that important seat.
Oh whenever environmental of course, leading the way Big time, 491% times five accident Q1, 80, 286% versus Q4 'twenty to 'twenty two pretty dramatic course, poof Poof is really the the shining star in that growth. It's remarkable what they are accomplishing it were so so proud to be their partner and support.
There was a product that has that capability. We always we always believed it could and now we're proving that it can and does have that potential to really be a national brand of the $1 billion range. So we haven't proven ability and yet, but I think anybody that's a critic and look at it and say it doesn't have a chance to do that I think with the combination of marketing and that she.
Neat value proposition I think many people would include yes.
Finally engineering barely engineering, a couple of things there and I know, there's a lot of questions that come out about this <unk>. The first thing is you know hows, the engineering group well they had a net loss.
And there's a couple of reasons, we should talk about it real quick.
I'm sure we'll have some detail. The first is that there are a number of very large contracts that have been promised that not executed yet so.
So promises don't work contracts do and.
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 you know impacts of the markets credit markets capital expenditures.
Could possibly have some impact, but we have so many that have said we're we're in we're in we're in that.
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 are so substantial that that we should consider ourselves fortunate to have Ah Ah moment to catch your breath. So what do we do when we catch your breath well, we advance our P pause.
Build trailers we.
Focus the team on doing internal things to advance our commercial liability. So time is not wasted.
But as a result of having a significant R&D budgets component of their expense line that shows up as a net of loss because of course, they can't record intercompany Bal intercompany revenues.
I 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 inbox by comparison of course, we suffer.
And then I just want to reiterate that the engineering group or <unk>.
Steam professionals.
And our confidence in them is extraordinarily high and we we intend to continue to build.
Build around them for success.
No real change in biological water, there's R&D component there I know some of the questions come up about the AOS and we'll talk about the the Q&A and then clears revenues are kind of not meaningful but I want you to notice that the infrastructure builds.
You'd be able to offer a high.
Qualified SBA certified checking all the boxes product in a highly competitive field.
<unk> are being done and had been done.
And I again, I just want to encourage everyone that clear it has a future that is extraordinarily bright and it will be a shining star in the portfolio.
And I think it's Kevin I think that's kind of insane.
Yeah.
Okay. So I think we stop there.
Open up for Q&A go ahead.
Alright, Thank you Dennis a lot of exciting things going on clearly.
So yes. Thank you for talking about clearer today, we have some questions around that sure.
So first one here are there any regulatory approvals that bio claims is waiting on do you believe we will begin recognizing income from it in Q3.
Yeah, Yeah, no there are no regulatory approval requirements have been met.
So certainly it's a highly regulated product, but we've already done all of those so it is 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 of 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 we're not we're not afraid we're excited.
Excellent and can you talk a little bit about the distribution for bio cleanse how it works with the hospital systems.
We mentioned in the K that so we're in the process with two those systems for prescribing bio claims.
Yeah, what happens out.
I'll give you the short version because it's a really complicated one.
And it's fascinating because it could you 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 in a clinician a clinician, who says to an administrator or a purchasing agent at a surgery center or hospital I want to use this product I think this is better.
It can help me with a 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 our quality assurance process in which they verify regulatory.
Check all your FDA compliance your supply chain are 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 us.
So that's a process some some systems do it very fast because maybe because physicians pressure them or their cutting edge and they've got a down some are very slow those committees might not meet but every 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 and the network who are affiliated with those facilities.
And choose the products and the hospital will begin stocking inventory.
And so that's where we're at that's why it's so slow it's it's really significant.
Burden of time and labor.
But again, what's happening is we're establishing group customers that will purchase that product every week and every two weeks every month for the foreseeable future.
Now I do want to point out I think the thing that people don't often recognized about clearer that's a dramatic value.
You know we've had a chance since this has taken us a decade trying to get this product positioned to now seeded in the market with 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 carved out market share and spent small fortunes I mean big money to establish a market.
And in each case as they establish their position in the marketplace. They began to lose sales over time.
Overtime like five to 10 years.
Why do they live in sales well it turns out that they're all toxic.
They're all toxin, we're the only one that's not.
Okay. So.
So the value proposition is significant.
And what's unbelievable is that you can achieve this this capacity for killing bugs. There's this great.
Focusing right and since you're 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 crew, which we've done.
Now the gap in the market is getting wider and wider because other other products that have significant market share.
Are being terminated.
Because they're toxic.
So think about that from selling one one way to sell is to create a market Oh my goodness, we've done that it's really hard.
But the other ways to sell by comparison with a market that's established within alternatives that's better that's what we're doing now so.
So the market opportunity is it's one of our Guy says, it's like a truck can drive through the gap.
It's a big gap and we're feeling it. So we're very encouraged because we're what's really happening is there's a little bit of a buzz going on with the clinic clinical side talking about serious bioclean as product for these claims there so astonishing.
An astonishing meaning that they literally.
With the claims.
Make it number one in the world.
I mean, it's that's what we have and we always 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 find traction it will be one of the leading products in the world.
What's the opportunity.
That's clearer yeah, yeah and on that note. We have another final question about Claire round here, how many doctors are becoming aware of biocrime 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 and 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. So imagine a rep might call on 100 doctors right. So how many are they presented to you I don't know yet okay. 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.
The meeting is an event like a wound events or a burn of their tour in orthopedics events are a biofilm events, where key topics are chosen positions 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.
Science and results. So we're attending those now right. So part of that budget, we have national sales people.
People number we also are have reps and so we're out in the field attending meetings and participating in the education to position. So how many of that I don't know if it's gotta be I mean, it's more than hundreds.
Pushing 1000, but I don't know again remember that.
But the way. This works is when a physician says I like it you still have to go get the approval and the vetting for the formulary to be assigned it to the hospital. So it's you know the setup is a grind.
On the backend is awesome.
Now that we're doing.
Alright, so let's change gears here again.
Three part question, it's pretty big question, but let's see how we can do.
Shareholder I'm wondering can you provide a status update specifically on the waste to energy project in South America, I'll, just take 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, you've been given a verbal for phase two and I believe with our client given the some of the political unrest that's going down there is on pause for a moment subject to financing and wants to began but we don't know we don't know when that's going to happen.
And we know Theyre serious they've invested almost 10 years getting that project positioned for success and there's a lot of money at stake so.
Well know more soon.
And we continue to communicate with the quiet and they've also brought us to an additional for opportunities overseas.
And they've also given us a verbal on those phase, one which will be quite significant you now.
And then in the in the multiple millions of dollars of services range and are they literally have said any minute.
So we're waiting so that's that.
Second part of that question was that.
What was the second only the three parts of again nuclear Corp.
Yeah, I'll just take nuclear has agreed to engage on the next phase.
And very similar on a well that had actually received the contract I'm not sure I need to verify again, but it phase two was additional work. So the relationship there is really good.
Again, very similar kind of situation where our.
Companies are holding onto capitals slowing down the process.
They need to do it we've been 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.
A N L D sales.
There's a lot of activity going on with your Callahan, Karen Callahan, our number we remember for those who don't know nurse largest probably all water company North America.
So we've been together with them now coming on two and a half years.
And have built fully you know.
Commercialize design and gone through the paces to make sure is 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 of course, we were originally projecting success commercial person, where she's asked 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 your Italian has increased about 10 fold you know, where we had maybe one or two we've got dozens.
Of prospects now being positioned in an evaluation scoping process also say that there Amy very high for this for the size and magnitude of these accounts.
And so.
It's a very similar situation, it's it's hard to be patient.
But we have no question that we will launch commercially with euro Callahan and that the product has a home for recycling water primarily associated with heat.
<unk> and water cooling towers and it's it's a it's a it's patented and it is a somewhat of a breakthrough and it fills a void in the market that's being met so where where again no lack of confidence lots of activity.
Many many accounts the other thing we should mention too is Gary Kelly Ann has also begun selling our P. Pos solution. That's a very important thing you know remember garik talent that came to us with their idea.
And now they're adopting our idea, which is awesome and of course, we're adopting their prowess and selling product into the marketplace, which they are of course, they proven for over 100 years.
It was a very good situation I wish it was faster I think it's again another.
Rude awakening of the complexity and the difficulty in breaking into the market, but you know.
We're going to win.
Oh yeah.
So yeah, let's switch gears here to water still on that train of thought.
With different Callahan AOS client.
Using a C to clear P. Fast alright, so does that give us a rough principle P. Fast client can we use them as a case it will it hasn't yet, but it will yeah. It hasnt yet we've got a number of our early adopters as what we would say right. So our first account is a very very large industrial cannot take.
One is done in phase two as 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 where the clients are saying, let's do it we want to go there are smaller in scale, which is fine.
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 will have some of those early adopters move forward with us in a number of those are coming from Gary Kelly, So that's important as well.
So.
Yeah. The the the key is there not a signed contracts yet, but there but they are in the process.
Yeah, now we reported with the Montreal forget it.
Quebec innovation center or something like that and they have the AOS municipal there'd be sales coming out of that or is there business development efforts around that project.
Sure well the AOS of course remember its advanced oxidation advanced oxidation and what the H E C does or very much hand in hand.
So one of them one of the things for example is that we've discovered as Hell.
Just how efficient the E C is it removes chlorides.
Which is a big deal chlorides so.
So we have customers who like it for that reason.
Alright, and so that's interesting the other is that the AOS is it.
Our station machine focused on extraordinary difficult task like micro pollutants or.
A turbine environment competing with easy that's basically its value proposition so in in our lingo and 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 now we've got a lot of Nicola.
And we have some assets that we can sell that are made by other people.
Because we are a solution provider, where we're the 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 that's that customization.
<unk> for us to distinguish ourselves from very well established companies because most of them are trying to sell widgets and widgets and the water industry is extraordinarily difficult and fraught with problems.
That was that's how we've differentiated ourselves so the AOS as a tool in the toolkit.
He is a tool in the toolkit.
Oh Ro filtration as a tool to appeal right all of those things go hand in hand, and then we work with clients to design custom custom processes. So.
So I believe the first sales for AOS is going to happen that way.
We're gonna find spots, where it definitely fits can work and we plug it in through the treatment train and we signed our first commercial adoption that way. The innovation is remarkable. It's ahead of its time and selling as a stand alone is going to be very difficult not impossible, but very difficult and so we continue to plow forward. There the Montreal has a commercial proof of claim.
By esteemed researchers and so that will end up being a peer review papers, which goes a long way and position yourself in a global market.
So the AOS is still we believe you're going to find a home.
It's happening through the companies we have so many opportunities there's only so many hours in the day, so rather than say, we're gonna be in AOS company.
We say, we're a solution company with an I O S.
And that fits with our that fits with our mandate.
Hope that answers the question.
Yeah. Thank you for that.
Right, let's move on to Cooper diet and odor control.
So we launched a partnership with BK T Yep Gotta be maybe two years ago now.
So folks are wondering about the success with that Oh. He holds up kind of what have we learned from that whole process.
Well, it's another testimony of how difficult it is which we already knew.
It took us years to get ourselves situated in the U S market.
And so they're they're having some of the same difficulty we had in getting you know through the barrier to entry.
They haven't quit though and they are excited and we were in constant communication with them. We're also in communication about expanding opportunities.
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 it in a joint venture on the 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 South East Asia and that is becoming increasingly important in fact, it's just think about poof by itself.
That sourcing in the international markets will become increasingly important as proof grabs and grabs the international market. So so this is strategic as 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 its a wise move and we certainly think we've picked up pick some winters there.
So it was the biggest testimony is just how difficult it is.
It's a very difficult difficult challenge to break into that market.
Got it.
So the deal with it he guy a very positive shared a bit about that in the presentation.
One question here are there talks with a key guy to pursue additional licensing for Cooper Tushar. There sure always you always I mean, there's that's a constant conversation noticed that they're testing products here and there are two two with with the industry called the build out of what's called a brand block brand block.
It would be multiple products that fit the poof brand in the pet category there.
There has been discussion about moving beyond pets, although who've 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've they're making making hay, that's where they're building their brand and they are having significant success. So the idea that because theres skilled marketers. They could also branch out into other categories, maybe maybe not I think they could but remember in this in this endeavor, they're there the capital.
You know theres there their financing the rollout.
Of a national and potentially international brand.
So how many times can you do that this is what they're doing well.
We've always identified as an extraordinarily high risk proposition.
Requiring great capital in great skill and they have both so they're doing quite well the wish upon them and expanded scope of high risk and high capital requirement I'm not sure that's really in our best interest at the moment.
So.
So the way to think about it as they've acquired the rights to the pet category. We have all other categories still controlled by the company and.
And as as they rise up literally all 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 is what's going on with poop, but they're in place and we've got more coming.
Well, we like it that way, but of course, the conversation is always open and they're great partners, we're thankful to be working with the team to prove they're extraordinarily skilled at building.
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.
That answers the question.
Yeah. It does thank you.
Yeah, I think we've answered the majority of investor questions Hum 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.
Yeah.
Our people will I think right I mean, having better way to do it.
Let me give you a better let me give you a I think there's a better way to do it you know we're out into the marketplace talking all the time so.
We do presentations internationally with just the Puerto Rico, our high net worth retail investors I mean at 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 are way undervalued.
So that's pretty much uniform your way undervalued, so number one number two.
Congratulations right because you're on the verge of making positive cash flow you're right. There in your gut profit insights. That's a big deal took a long time a lot of money right. So then people say congratulations as the second response.
And then they say you know how quickly do you Wanna Uplifts.
Because what they're saying is.
Trading on the OTC is a tough place because you kind of get trapped in this this like we are now in its 2025 cent range. We've kind of have a bracket. What was is it going to go beyond that we certainly believe it should be.
In many ways it already showed up.
So now we've got standard standard distribution of Investor base, We've got some overhang to sell three weeks comment.
We can chip away. We're also going to continue to increase our memories in a dramatic fashion like we have.
So the combination will overpower it I believe that to be true and I believe the commercial opportunities that we are focused on are so significant that it just won't matter.
It just won't matter is that is that a is that a situation that happens today.
It depends on what happens with the market I know that the capital markets in general or in an uproar.
And you know we may have seen the tech rally in the last four or five days, but I think there's a general sentiment that.
You know theres caution to hanging onto 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.
Right, where the core technologies have and in many ways been derisked to the level of acceptance. We've also demonstrated an ability to execute but some discipline.
Now breaking with cash flow and opportunity for positive cash flow leveraging our strategy right 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.
I was gonna go the batteries are going to find a home.
DFAST is going to find a way bundled into a solution providers umbrella is what we're doing.
Obviously odor control, it's got a home and it's got it and it's got more home to find.
So this is a business that I believe at this stage is undervalued.
On the that's on the on the optimistic side of course, that's where we are we believe in what we're doing but we're still trade in the OTC market. We've got a lot of investors who've trading into the company and at 2017 to 22, 26% range.
And.
If they're a salary of 'twenty one sense of you know.
Shame on them.
We're we're bullish on the 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 room, we've got them in the short run we got to work through that overhang and we would encourage people to think long as they can.
Because it's really in terms of like 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 we're pretty bullish.
There you go.
Excellent.
What do you think Brian .
We covered it.
Hey, Brian are you there.
It looks like Bryans line has disconnected.
Well, let's do this and we will take a minute I'll just wrap up we appreciate it we're staying in touch with the company of course, I will remind everyone that we've got our annual stockholders meeting on the sixth.
So if you're a stockholder of record or certainly invited we'd love to spend time with you. It's at 10, a M and the lease of the Yale 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 entitle it by a long ago, our mi for Alex the dialogue do whatever it takes to get you connected we're sending out you know content about wanting one or two once or twice.
This a week at least and Theres a lot going on if anybody's got questions love to entertain them and again. Thank you for the support and we're really looking forward to a continued push.
Think for just to get into really a proposed.
We're gonna 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 it's all very exciting.
So there you go.
Yeah on the sixth.
Yeah.
Operator, thank you very much.
Thank you.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.