Q1 2025 BioLargo Inc Earnings Call

Operator: Greetings and welcome to the BioLargo first quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode.

Greetings and welcome to the bio <unk> first quarter 2025 earnings conference call.

At this time, all participants are on a listen only mode.

Operator: If anybody should require operator assistance during the conference, please press star zero on your telephone keypad and please note this call is being recorded.

If anybody should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This call is being recorded.

Brian Loper: I would now like to turn the call over to your host, Mr. Brian Loper, Investor Relations. Sir, the floor is yours. Thank you, Operator. Good afternoon, everybody. Welcome to the call. Glad to have you here. The 10Q and 8K reports are currently being filed at the FCC. This call is being webcast and available for replay.

Speaker Change: I would now like to turn the call over to your host Mr. Brian Loper Investor Relations, Sir the floor is yours.

Brian Loper: Thank you operator, good afternoon, everybody and welcome to the call, but the happy here.

Brian Loper: The 10-Q and 8-K reports are currently being filed with the SEC. This call is being webcast and available for replay.

Brian Loper: In our remarks today, we may include statements that are considered forward-looking within the meanings of security 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 forward-looking statements. A detailed discussion of such risks and uncertainties are contained in our most recent form, 10Q-10K-form-8K and other reports filed at the SEC.

Brian Loper: Marks today. If 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.

Brian Loper: 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 forward looking statements.

Brian Loper: Tailed discussion of such risks and uncertainties are contained in our most recent Form 10-Q, 10-K form 8-K, and other reports filed with the SEC company undertakes no obligation to update any forward looking statements and with that I'll now hand, the call over to Biologics Chief Executive Officer, Dennis Calvert.

Brian Loper: Company undertakes no obligation to update any forward-looking statements.

Dennis Calvert: And with that, I now hand the call over to BioLargo's Chief Executive Officer, Dennis Calvert. Okay, Brian, thank you very much, everyone. Appreciate you joining us for the call. And we're going to cover a lot of territory quick, as usual. And so, as some of you may not know our story, we're going to have a very brief introduction, of course. So, we make life better, focus on sustainable innovation for human health, environment, very purpose-driven work. And of course, we have developed an innovation engine. And that innovation engine has been now inventing and developing technologies for almost over 16 years.

Dennis Calvert: Okay, Brian. Thank you very much everyone. Appreciate you joining us for the call and we're going to cover a lot of territory quake as usual and so some of you may not know our story a rabbit very brief introduction of course, so we make life better focus on sustainable innovation for human health.

Dennis Calvert: This environment.

Dennis Calvert: Very purpose driven work.

Dennis Calvert: And of course, we have developed an innovation engine and that innovation engine that has been now in Vinci and developing technologies for almost over 16 years.

Dennis Calvert: We've covered the forward-looking statements, of course. They are real. It's important to rely on the risk factors. You can refer to the K, the annual report, which was just recently published, with a robust list of risk factors that are very worthy of consideration because, as we say, we overcome risk every day, and the challenges can be daunting. Who are we? Innovators, science, entrepreneurs, engineers, passionate about making a difference, sustainability and human health, driven by this purpose, very much a purpose-driven organization. We focus on best-in-class, best-in-class solutions. If we don't believe they're number one or have a chance to be number one in their category, then we don't focus on them.

Dennis Calvert: We've covered the forward looking statements of course they are real.

Dennis Calvert: Important to rely on the risk factors because of sort of the Q U K annual report, which was just recently published with a robust list of risk factors there they're worthy of consideration because as we say we overcome risk every day and the challenges can be daunting.

Dennis Calvert: Oh, sorry.

Dennis Calvert: Innovators science.

Dennis Calvert: Entrepreneurs engineers passionate about making a difference.

Speaker Change: The human health driven by this purpose Gary much purpose driven organization.

Speaker Change: That was our best in class Best in class solutions. If we don't believe there number one or have a chance to be number one in their category than we we don't focus on so we invest in innovating transform technologists.

Dennis Calvert: So we invest in innovating transformative technologies. We focus on problems without a good solution, and we create a capital-conserving strategy that's aimed on partnerships and spin-outs to capitalize our RP and create value for our stock market. at the engine. There's a parent company that's capital, strategy, direction, sort of the glue that binds, of course. We've got a great engineering group based in Oak Ridge, Tennessee. Still have the R&D group, of course, in Edmonton, Canada. And we're investing heavily in the operating units, which take products to market. O&M Environmental is focused on odor and VOC control.

Speaker Change: Some problems out a good solution and we create a capital conserving strategy, that's aimed on partnerships and spinouts capitalize on RP and create value for our stockholders.

Speaker Change: Again, Jim is parent company, that's capital strategy direction sort of a glue that buy and so of course, we've got a great Engineering group based in Oakridge, Tennessee still have the R&D group of course in Edmonton, Canada, and we're investing heavily in it in the operating units, which take products to market.

Speaker Change: Our model is focused on odor and Boc control Perez as a medical device company focused on the cutting edge of abuse of Antimicrobials and products used for advanced wound care wound care infection control.

Dennis Calvert: Clear is a medical device company focused on the cutting edge of use of antimicrobials and products used for advanced wound care, wound care infection control. The equipment group is primarily focused on PFAS, but there's a number of assets in that portfolio. Some are slow, some are significant. They're finding their way to market. And we've been investing heavily there for a couple of years and we're really, really excited about that. We're gonna talk deeply about that.

Speaker Change: Uh huh.

Speaker Change: The group is primarily focused on P fast, but there's a number of assets in that portfolio. Some are slower some are significant they're finding their way to market and we've been investing heavily there for a couple of years and we're really really excited about that we're going to talk deeply about that.

Dennis Calvert: On the energy side, BioLargo Energy is focused on a sodium battery as an alternative to lithium. We're just in the validation stage. We're going to talk about that validation work that we're doing right now, and we're very excited about the potential growth and impact for that emerging technology as an alternative to lithium, focused on non-lithium-based long-duration energy storage battery technology. one of the fastest growing markets in the world expected to be a massive industry and we're right in the middle of it. It's pretty exciting. One of the things we talk about a lot is the unseen value, the unseen value of the BioLargo portfolio.

Speaker Change: On the energy side, Palo Verde energy is focused on a sodium battery is they're all trying to lithium.

Speaker Change: We're just in validation stage, we're going to talk about that validation work that we're doing right now and we're very excited about the potential growth and impact for that emerging technology as an alternative to lithium.

Speaker Change: Just on non lithium based long duration energy storage battery technology.

Speaker Change: One of the fastest growing markets in the world expected to be a massive industry and we're right in the middle of its pretty exciting.

Speaker Change: One of the things we talk about a lot.

Speaker Change: Under the umbrella.

Speaker Change: Seen value they'll see value in part of the dialogue of portfolio. We're building value every day, we're inventing things that will last we can find the market. Some are very difficult of course everyone's done that but they are unmatched in their claims yet or not.

Dennis Calvert: We're building value every day. We're inventing things that will last, that can find a market. Some are very difficult, of course. Everyone's known that. But they're unmatched in their claim set, unmatched in their claims. It's very important. And when you peel the onion, what you see is the transformative capability because the claims are unmatched. We focus and patent work. And we focus on a capital conserving strategy. We have a team of about 50 people now. 20-something engineers, 12 to 13 PhDs, super smart people, you know I always say my job is to focus on something that that really has impact and leverage in our capital strategy and then uh… focus on things that we can get through the cycle, things that we're capable of doing with our talent set.

Speaker Change: And their claims it is very important.

Speaker Change: And when you Peel the onion, what you see is the transformative capability because the claims are unmatched to focus heavily on intellectual property, that's trade secrets and patent work and we saw just on the capital conserving strategy.

Speaker Change: We have a team of about 50 people now.

Speaker Change: Twentysomething Engineers 12 to 13 Phds.

Speaker Change: Super Smart people.

Speaker Change: I always say my job is to focus on something that it really has impact and leveraging our capital strategy and then.

Speaker Change: Focus on things that we can get through the cycle things that we're capable of doing with our talent set.

Dennis Calvert: In the underlying portfolio, the goals are very, very ambitious. You know, we look at the future of CLIRA. O&M, of course, we think is going to have an exit capability because of the work we've done. CLIRA is knocking on the door of significance. And it's been a long 14-year development cycle, 14 years. That's almost $20 million. We believe that that company will now grow big and have a chance for an exit through either an IPO or a sale to a strategic, both of which will further its mission to have a high impact for the advancements of human health.

Speaker Change: And the underlying portfolio the goals are very very ambitious we.

Speaker Change: Look at the future of clearer O&M of course, we think is going to have an exit capability because of the work we've done clearer.

Speaker Change: Is is knocking on the door of significance and it's been a long 14 year development cycle 14 years invested almost $20 million. We believe that that company I will now spawn grow big and have a chance for an exit through either an IPO or a sale to a strategic both of which will further its mission to have.

Speaker Change: The impact for the advancement of human Health Big deal.

Dennis Calvert: Big deal. The equipment group, it's slow and steady. It's much more organic, but we've got strategic partners now all around the world. And projects coming to us at a very rapid pace. Got a nice couple of wins, more wins coming. Big market, and we're right in the center of that with a solution for P5.

Speaker Change: Equipment group, it's slow and steady is much more organic but we've got strategic partners now all around the world.

Speaker Change: And God checks coming coming to is a very rapid pace.

Speaker Change: Got a couple of nice couple of wins more wins coming.

Speaker Change: Big market and we're right in the center of that storm with a solution for P fast either.

Dennis Calvert: And then, of course, battery tech is, we think, the most significant financial opportunity in the portfolio. It also is the earliest, which means there's work to do before we're really...

Speaker Change: Then of course battery check is.

Speaker Change: Thank you.

Speaker Change: Significant financial opportunity in the portfolio. It also has the earliest which means there's work to do before were really prepared.

Charles Dargan: Next, I'm going to have Charlie Dargan address some of the results for the quarter and give a brief summary of that highlight, and then we'll break some of that down as well. So, Charlie, you with us? Yes, I am. Thanks, Dennis. I appreciate it.

Speaker Change: Next I'm going to have Charlie Dargan address some of the results for the quarter and give a brief summary that highlight and then we'll break some of that down as well so Charlie you with us.

Charlie Dargan: Yes, sorry, Ann Thanks, Dennis I appreciate it and thank you everyone for being on our 2025 first quarter earnings call.

Charles Dargan: And thank you, everyone, for being on our 2025 first quarter earnings call. And well, yes, it was a down quarter. Revenue dropped to about $3.3 million from $4.7 million, substantially all from a reduction in sales of the POOF product. A bit of an offset there was that the engineering group had their sales increased by about $240,000. The net loss, obviously, from the reduction in revenue mostly, came in around $1.9 million versus about $800,000 again last year. Our SG&A increased by about $300,000, although all of that is non-cash expense related from issuing stock options and replacing stock options for our employees and management.

Charlie Dargan: And well.

Speaker Change: Yes, it was a down quarter.

Charlie Dargan: Our revenue dropped to about $3 3 million from four point.

Charlie Dargan: 7 million.

Charlie Dargan: Statutory all from a reduction in sales of the poof product.

Charlie Dargan: A bit of an offset there was that the.

Speaker Change: Engineering group.

Speaker Change: <unk> had their sales increased by about $240000.

Speaker Change: The net loss obviously from the.

Speaker Change: The reduction in revenue mostly.

Speaker Change: It came in around $1 9 million versus about 800000 again last year.

Speaker Change: Our SG&A increased by about 300000, although all of that is non cash expense related from issuing stock options.

Speaker Change: And replacing stock options for our employees and management.

Speaker Change: We did we say did the same amount in R&D, so that didn't change much.

Speaker Change: And so when you look at it.

Speaker Change: Not a good quarter.

Speaker Change: But I want to reassure everyone that management is closely managing our costs and expenses is a bit of a silver lining no question.

Speaker Change: But we maintained our gross and operating margins.

Speaker Change: And if you look at it.

Speaker Change: Analytically, our revenue was down by about $1 7 million, but our loss only reflected because of our cost maintenance $1 2 million dollar.

Speaker Change: Difference.

Speaker Change: So when we look at our cash and cash from operations. It did a lot of our cash used in operations increased to about $1 8 million.

Speaker Change: Last year, we actually had cash production of about 480000. This year. Besides what we've just gone through on the net loss side.

Speaker Change: Our receivables increased by about $1 million again related to the boost product in their operations.

Speaker Change: We did.

Speaker Change: And have maintained equipment purchasing but we've done most of that now and a lot of it's largely with clearer and so we didn't need to do.

Speaker Change: Do any PP&E acquisitions for the quarter.

Speaker Change: We did raise.

Speaker Change: Raise capital and we're very cognizant of the need to maintain our cash which here we show about $2 $5 million. So we are raising capital through equity and Clara has raised money both from a debt obligations and from equity issuances and clear a washed approx.

Speaker Change: $1 3 million.

Speaker Change: Net loss again, much of which is stock option and stock option issuance.

Speaker Change: But the company is obviously preparing for product launches and so ramping up to meet those as you know.

Speaker Change: Costing costing cash and money.

Speaker Change: So going and looking at our balance sheet.

Speaker Change: Which kind of slide eight summarizes all of it but let me give you a little bit more on what the balance sheet does look like and we have about $10 5 million in total assets.

Charles Dargan: Which kind of slide 8 summarizes all of it, but let me give you a little bit more on what the balance sheet does look like and We have about ten and a half million in total assets 7.2 million in current assets, so we're positive with our working capital again Much of some of it has been from our receivables increase And then when we look at the debt side of the balance sheet the liabilities our payables are up But most of that increase in payables is again from Clara again from them getting ready for product launches and You know preparing the management team So when you summarize it you come down to what we're looking at in our stockholders equity.

Speaker Change: Seven $2 million in current assets. So we're positive with our working capital.

Speaker Change: Again much of some of it has been from our receivables increase.

Speaker Change: And then when we look at the debt side of the balance sheet liabilities. Our payables are up but most of that increase in payables is again from clear again from them.

Speaker Change: Getting ready for product launches and.

Speaker Change: Preparing.

Speaker Change: The management team.

Speaker Change: When you summarize it you come down to what we're looking at in our stockholders equity. It did decline by approximately 900000 to a million dollars.

Charles Dargan: It did decline by approximately 900,000 to a million dollars much of which obviously is from the net loss and Then we are and were able to offset some of that through equity and capital raises So, that's it for a summary of our financial statements, Dennis, and I'm going to turn it back to you.

Speaker Change: Much of which obviously is from the net loss and then.

Speaker Change: And we're able to offset some of that through.

Speaker Change: Equity and capital raises.

Speaker Change: So that's for a summary of our financial statements Dennis and I'm.

Speaker Change: I'm going to turn it back to you.

Dennis Calvert: Thank you, Charlie. Perfect. Yes, you're welcome.

Charlie Dargan: Thank you Charlie perfect, Yes, Youre welcome.

Dennis Calvert: I'll just read briefly about these operating units. So POOF has been a shining star for us. Of course, we love the product. It's got a great future. The reduction in top line revenues is certainly not what everyone hopes for. It is a circumstance that we as a company have very little influence or control over. It's controlled by the management team at POOF. We do believe that their success in marketing these products successfully has a real opportunity for continuance. But again, we just don't have a lot of information in how they're operating their business. And so we're anxious to see it continue forward.

Speaker Change: It was very deeply about these operating units. So I hope it's been a shining star for Us of course, he loved the product has got a great future and.

Speaker Change: The reduction in topline revenues is certainly not what everyone hopes for it is a circumstance that we as a company have very little influence or control over and it's controlled by the management team Poof are we do.

Speaker Change: Believe that their success in marketing these products such as successfully as a real opportunity for continuous continuance.

Speaker Change: But again, we just don't have a lot of information.

Speaker Change: And how they how they're operating their business and so we're anxious to see it.

Speaker Change: Forward and remember that in our business deal, we have a basic financial arrangement in which we manufactured products we receive a <unk>.

Dennis Calvert: And remember that in our business deal, we have a basic financial arrangement in which we manufacture products, we receive a markup on the cost of the product, we receive a small royalty on sales at POOF, and then we bargain for 20% of the exit. So again, great menu of products, an incredible performance last year. And we're hopeful that things can continue back to the growth category or the growth mode that they've been in historically. And if history is any indication, we think that they're the people that can get that and CLEAR-A.

Speaker Change: Mark up on the cost of the product to receive a small royalty on sales improve and then we bargain for 20% of the exit.

Speaker Change: So again, great menu of products and incredible performance last year, and we're hopeful that things can continue to to back to the growth category or the growth mode that they'd been in historically.

Speaker Change: And if history is any indication we think that they are the people that can get there.

Speaker Change: Okay clear up.

Dennis Calvert: We've had a series of announcements, in fact, as recently as I believe yesterday and then about a month ago, about four or five weeks ago, regarding the clearance or the review of the manufacturing capability.

Speaker Change: We've had a series of announcements and in fact as recently as I believe yesterday, and then about a month ago about through about four or five weeks ago regarding the clearance or that of the review of the manufacturing capability. So let's just let's just cover real quick the clearer again want to remind everyone.

Dennis Calvert: So let's just cover real quick. CLRA, again, I want to remind everyone, it has a set of claims about the products here that are unmatched. It has a chance to be a transformative technology across multiple vertical segments in the healthcare field, med device in particular. We do have 510k clearance. Our partner in the manufacturing has invested well over $3 million to build out production facilities that can scale. And scale, you know, our target, which we mentioned before, was to be in the manufacturing capability of doing a million units times two SKUs. So that's been accomplished.

Speaker Change: It has a set of claims about the products here that are unmatched and it has a chance to be a transformative technology across multiple vertical segments in the health care field med device in particular, we do have five 10-K clearance.

Speaker Change: Our partner on the manufacturing is a desk with well over $3 million to build out production facilities that can scale and scale. Our you know our target, which we mentioned before it was too to be in the manufacturing capability of doing a million units times two skus. So that's been accomplished that's very important to note that was accomplished.

Dennis Calvert: That's very important to note. That was accomplished approximately five weeks ago. And then the final details surrounding some of the products are in motion. And they're in motion as fast as we can. We've invested a little over $2 million in the CapEx associated with the production line itself. So major investments, big investments for our company, a lot of money, a lot of time. The team is also expanding it clear in a dramatic way. And then, of course, we made this press release describing a number, a series of formalized relationships with wholesale distributors and sales. And the key takeaway from that communication is really driven to say the infrastructure is now in place to support significant sales and sales of multiple products in the portfolio.

Approximately five weeks ago, and then the final.

Speaker Change: Details surrounding some of the products are in motion and where they're in motion as fast as we can go.

Speaker Change: We've invested a little over 2 million and the Capex associated with the production line itself. So major investments big investments for our company a lot of money a lot of time. The team is also expanding it clearer in a dramatic way and then of course, we made a press release describing.

Speaker Change: Describing a number.

Speaker Change: Our series, a formalized relationships with wholesale distributors and sales and the key takeaway from that communication is really driven to say the infrastructure is now in place to support significant sales and sales of multiple products in the portfolio. Okay. Now I know every.

Dennis Calvert: Okay. Now, I know everyone wants a lot more. and we're at a moment in which this category requires a stealth mode. It's really demanded.

Speaker Change: One wants a lot more detail.

Speaker Change: We're at we're at a moment in which this category requires a stealth mode. It's really demanded.

Dennis Calvert: So, we're not going to be able to share a lot about the detail, but in the portfolio of products, we have some products that are available immediately, immediately as in months, and we have some other products that are going to take more like six to nine months or so to get through the development cycle to get those products in the field. And we believe, given the nature of the products and where we're at in the competitive field, it's very critical that we maintain a level of confidentiality. And I know that that's frustrating for everyone, but we are extremely excited about these advancements, the milestones that have been achieved, the significant commitment that we've made to support these products, the manufacturing capability and infrastructure, and the company is really very well situated for significance in its.

Speaker Change: So we're not gonna be able to share a lot about the detail, but in the portfolio of products. We have some products that are available immediately immediately is in months and we have some other products that are going to take more like six to nine months or so to get through the development cycle to get those products in the field and we believe it.

Speaker Change: Given the nature of the products and where we're at in the competitive field. It's very critical that we maintain a level of confidentiality and I know that that's frustrating for everyone, but we are.

Speaker Change: Extremely excited about these advancements the milestones that had been achieved the significant commitment that we've made to support these products the manufacturing capability infrastructure and the company is really very well situated for significance in its future and so.

Dennis Calvert: and so.

Dennis Calvert: 14 years, about $20 million has been invested. Don't forget it. critical asset, and it's the culmination of. what we believe has a chance to really be transformed.

Speaker Change: 14 years about $20 million has been invested don't forget it.

Speaker Change: It's a critical asset and it's the culmination of.

Speaker Change: Our what we believe is has a chance to really be transformative in the field so standby for more information.

Dennis Calvert: So, stand by for more information. Salinity. We're pretty excited about salinity. We talk about it as one of the most significant assets in the portfolio. That's the cell that you see right there. Just to remind everybody, it has a claim set that's unmatched. Unmatched how, right? Well, number one, very high energy density. It's a safe battery. It doesn't have runaway fire risk. All the components can be recycled. It's durable. It lasts a long time. 20-year batteries, highly efficient. Efficiency is a function of energy density in, energy density out, and C rate. C rate's a charge rate.

Speaker Change: Validity, we're pretty excited about <unk>, we talk about it and it's one of the most significant assets in the portfolio. That's the cell that you see right. There just to remind everybody that has a claim Seth it's that's unmatched unmatched Hal right well number one very high energy density.

Speaker Change: Safe battery doesn't have rally fire Miss a fire risk.

Speaker Change: All of the components can be recycled it's durable last a long time 20 year batteries highly efficient efficiency is a function of the energy density and entered energy density out and see right see rates charge rate. This is a battery that has a lot of a lot of punch for the weight high energy density high voltage as well and so.

Dennis Calvert: This is a battery that has a lot of punch for the weight, high energy density, high voltage as well. And so in that claim set, recall that we purchased this technology, and then we set forth to build out manufacturing capability at a pilot scale for sure, and then revalidate all the claims associated with the technology. That's largely been accomplished. That doesn't mean testing ends. It just means the significant claims about the technology have been achieved. And so we believe this summary, as it compares to other technologies, is true and accurate, and we're anxious for third-party validation to confirm that for us, and that process is underway.

Speaker Change: So in that claim set.

Speaker Change: Recall that we purchased this technology and then we set forth to build out manufacturing capability at a pilot scale for sure and then re validate all the claims associated with technology. That's largely been accomplished that doesn't mean testing is it just means the significant claims about the technology had been achieved and so we believe this this summary as it compares.

Speaker Change: Other technologies.

Speaker Change: It's true and accurate and we're anxious for third party validation to confirm that for us and that process is underway just to remind everybody the target here.

Dennis Calvert: Just to remind everybody, the target here This is long-duration grid-scale storage. So we're talking about big battery sets, 20-foot trailers full of cells that pull up to renewable energy, balance the grid as a place for loading and unloading off the grid. Great for data centers, one of the fastest growing trends in the marketplace. Estimated to be a multi-trillion dollar market in the next six years. Big market, big place. And recall that we're pursuing a franchise model. Franchise model, we think, has extraordinary value for both our franchises and our investors in the way that it can conserve capital and exploit high yield on our invested dollars.

Speaker Change: This is long duration grid scale storage, so we're talking about big battery sets.

Speaker Change: For trailers full of cells that can then pull up to renewable energy.

Speaker Change: Balance of the grid as it is.

Speaker Change: Place for loading and unloading off the grid.

Speaker Change: Great for data centers, one of the fastest growing trends in the marketplace estimate it to be a multi trillion dollar market in the next six years big market Big place and recall that we're pursuing a franchise model.

Speaker Change: Franchise model, we think has extraordinary value for both our franchises and our investors and the way that it can conserve capital and exploit high yield on our invested dollars.

Dennis Calvert: So this timeline is very important. We're now at the complete third-party validation testing stage, and notice we have a little starburst there that says it's underway. We're going to admit a couple things. When we first started, we said this was going to take about a million bucks to get the validation work done in about a year. Okay, it took about 2.3 million, and it took about two years. And what you find, of course, is it's extraordinarily technical. The good news is it's been done. And so now we're in the spot where third parties can come in with technical expertise to help us, from a third-party perspective, validate.

Speaker Change: So at this time is very important we're now at the complete third party validation testing stage and notice we have a little star burst there that says it's underway.

Speaker Change: We're gonna admit a couple of things when we first started we said there is going to take about a million bucks to get the validation work done it about a year. Okay. It took about $2 3 million and it took about two years.

Speaker Change: And what would you find of course is it's extraordinarily technical that'd.

Speaker Change: The good news is it's been done and so now we're in the spot where third parties can come in with technical expertise to read to help us from a third party perspective, all day. So we're expecting that very soon hopefully a week or two it's in process.

Dennis Calvert: So we're expecting that very soon, hopefully a week or two. It's in process with wonderful technical experts that we think are adding value to us just on a daily basis.

Speaker Change: With wonderful technical experts that we think are.

Speaker Change: Adding value to us there's some daily basis, now I want to point out the valuation real quick.

Dennis Calvert: Now, I want to point out the valuation real quick. We're currently valued at around $43 million. We have about really five or six projects underway on the drawing board, right? Not done, done. It's in discussions with real people and real money who want to be in the business of producing battery.

Speaker Change: Ah we're currently valued at around $43 million, we have about it's really five or six factory projects underway on the drawing board right not done done.

Speaker Change: Discussions with real people and real money.

Speaker Change: Who want to be in the business of producing batteries.

Dennis Calvert: We anticipate that as some of that comes to bear, including the third-party validation, that the valuation will push up to about $400 million. Now, we currently own 96 percent of this project, this company, we own 96% of the equity. So if you round out those numbers on that kind of valuation, what we're really suggesting is that the valuation of this company is somewhere between that 43 and about 150 million. We own 96%. Okay, so the point is it's not really reflected in our value. That's one of those unseen values in the portfolio. The modeling, which is the franchise model, really leverages third-party resources and partnerships to bring financing to bear to go out and build these large installations and manufacturing.

Speaker Change: We anticipate that some of that comes to bear, including the third party validation that the valuation will push up to about $400 million now we currently out of 96% of this.

Speaker Change: This project is this company, we are 96% of the equity. So if you if you round out those numbers on that kind of valuation what we're really suggesting is that the valuation of this company is somewhere between that 43 and about $150 million, we have 96%.

Speaker Change: Okay. So the point is it's not really reflected in our value. That's one of those unseen values in the portfolio.

Speaker Change: The modeling, which is the franchise model really Leverages third party resources and partnerships to bring financing to bear to go out and build these large installation of manufacturing when you run the net present value on the calculation of the model. It comes in somewhere around $1 5 billion.

Dennis Calvert: When you run the net present value on the calculation of the model, it comes in somewhere around $1.5 billion. So this is a big deal, big deal, big asset, ambitious, of course, and there's a number of reasons we think that we can win here, but I think there's a couple of principles. One is it starts with a better battery. It's a better battery. Number two, a capital conserving strategy so that we're not in the bleeding red ink mode for years. In fact, it's the opposite. When we find a partner that wants to build a factory, we get paid to build it.

Speaker Change: So this is a big deal Big deal Big asset are ambitious of course, and there's a number of reasons. We think that we can win here, but I think the there's a couple of principles. One is it starts with a better battery, it's a better battery number two our capital conserving strategy. So that we're not in the bleeding red ink node for years.

Speaker Change: In fact, it's the opposite when we find a partner that wants to build a factory, we get paid to build it.

Dennis Calvert: We make money the day we start. Very unusual. Very good. Good for our financial statements. Good for our shareholders. The other is we have people. The people that are associated with this project internally are extraordinary. They have 30 years of field career. They've built $350 million projects. They know how to do this. And we also have special talent in the battery technology itself. And so really the technical challenge is all about scaling. the capability of producing a battery factory with replication so that you can stamp out cells and put them in packs, packs go into modules, modules go into containers like 20-foot trailers, and they plug into the grid, and a computer runs them.

Speaker Change: Make money the day, we start there than usual very good good for financial statements good for our shareholders.

Speaker Change: The other is we have people and the people that are associated with this project internally are extraordinary.

Speaker Change: 30 years of field career, they built $350 million projects. They know how to do this and we also have special talent and the battery technology itself.

Speaker Change: And so really the technical challenge is all about scaling scaling the capability of producing a battery factory with replication. So that he can stamp out sales and put them in ax apps go into modules modules go into containers like 20 foot trailers and they plug into the grid and a computer Russell.

Dennis Calvert: It's pretty basic and the thing that really makes this business stand out is the cell technology which we have acquired and now revalidated and are now seeking third-party validation. We anticipate that very soon. A lot of partners and a lot of money on the expressed high level of interest. And of course, it took us a little longer than anticipated, but now we're in go mode. So it's pretty exciting.

Speaker Change: It's pretty basic and the thing that really makes this business went up as the cell technology, which we have acquired and now re validated and are now seeking third party validation and we anticipate that very soon.

Speaker Change: A lot of partners and a lot of money on the on the.

Speaker Change: As I've expressed high levels of interest and of course, it took us a little longer than anticipated, but npower and go mode. So it's pretty exciting.

Dennis Calvert: And then lastly, we're going to talk briefly about PFAS. This is a very exciting and incredibly demanding field. OK, now we've got three and a half, almost four years of direct marketing. We've got our first installation. One of the common questions people are asking is, when is that installation going to actually go in the field? Right now, it's late August, September is what we're thinking. And that's per our customer. Remember that it's boxed, credited. We're going to show you an image boxed, credited, ready to go, waiting for general contractors, waiting for weather to break. frozen dirt to thaw, permitting, lots of things have gone on that we've basically been waiting for.

Speaker Change: And then lastly, we're going to talk briefly about P. Fast. This is a very exciting and incredibly demanding field okay.

Speaker Change: So we've got I don't know three and a half almost four years of direct marketing we've got our first installation.

Speaker Change: One of the questions people are asking is when does that Insulates you can actually go in the field right. Now. It's late August September is what we're thinking and that's per our customer.

Speaker Change: Remember that the spark spread and we're going to see an image box created ready to go waiting for general contractors waiting for whether your break for us for the <unk>.

Speaker Change: Frozen dirt to soar.

Speaker Change: Lot permitting lots of things have gone on that we basically they're waiting for we've been on mark on the timelines and that waiting for other people to say come on down and put this thing to work.

Dennis Calvert: We've been on mark on the timelines and now waiting for other people to say, come on down and put this thing to work. Another important piece of that is we've got the New Jersey and the U.S. Federal EPA has agreed to collaborate with us in this project as a field demonstration work that is a commercial site. I understand that it's a commercial site, but they've agreed to participate in such a way that we can secure federal and state validation for the work that we're doing, which is very important because it comes down to credibility. Now, we have a backlog of projects.

Speaker Change: Another important piece of that is we've got the.

Speaker Change: New Jersey, and the U S. Federal EPA has agreed to collaborate with US in this project as a field demonstration.

Speaker Change: The work that is a commercial site I understand that's a commercial site, but they've agreed to participate in such a way that we can secure.

Speaker Change: Instead, we'll say validation for the work that we've done which is very important because it comes down to credibility.

Speaker Change: We have a backlog of projects pipelines are better work, we have a pipeline of projects that's astonishing.

Dennis Calvert: Pipeline is a better word. We have a pipeline of projects that's astonishing.

Dennis Calvert: And the good news, I have a couple of stories for you just real quick. You know, we have examples where some of our technology is taking a long time to get to market. You know, what happens is, as you build the channel and you establish your credibility, you become a volume purchaser. Some of the things that we've done just require a volume purchaser. still like manufacturing, right? What's happening for us is because of the pipeline and because of the technical claim, we're becoming viewed as a tool. designer of tools for a toolkit that can be used by the marketplace as a component in an integrated really good news.

Speaker Change: And the good news I have a couple of stories, where you just real quick.

Speaker Change: You know we have examples where some of our technology has taken a long time to get to market and.

Speaker Change: You know what happens is as you build the channel and you establish your credibility you become a volume purchaser some of that some of the things that we've done just require a volume purchasing still like manufacturing right. What's happening for us is because of the pipeline and because of the technical claim we're becoming viewed as a <unk>.

Speaker Change: <unk>.

Speaker Change: Our designer of tools for a tool kit that can be used by the marketplace as a component and an integrated system.

Speaker Change: It's really good news that means that we can touch multiple because we have a we have a tool that's useful for many different markets and frankly, including competition.

Dennis Calvert: That means that we can touch multiple markets. We have a we have a tool that's useful for many different markets and frankly including competition. We actually have competition that wants to do business with us. It's awesome. And we have major engineering firms and regional engineering firms. We've got one engineering firm that has specified our solution in over 26 projects. So the volume is astonishing and the.

Speaker Change: We actually have competition that wants to do business with us it's awesome and we have major engineering firms and regional engineering firms. We've got one engineering firm that has specified our solution and over 26 projects.

Speaker Change: So the volume is astonishing.

Speaker Change: And the.

Dennis Calvert: What's the breakthrough? When does it happen? Well, somewhere along from where we're at. to getting some market adoption and some installs and some third-party validation, it all breaks open. It's hard to predict exactly when that's going to be, but we're convinced it will occur, and mostly because the technology is that good. And now we have the infrastructure in place and the credibility in the market because we spent a lot of time building that credibility.

Speaker Change: What's what's what's what's the breakthrough when does it happen well somewhere along from where we're at.

To getting some market adoption and some installs in some third party validation. It all breaks open it's hard to predict exactly when that's going to be but we're convinced it will occur.

Speaker Change: And mostly because the technology is that good and now we have the infrastructure in place and the credibility in the market because we felt a lot of time building that credibility Here's a unit real quick. This is I was actually in Oak Ridge about a week ago.

Dennis Calvert: Here's the unit real quick. I was actually in Oak Ridge about a week ago, and I walked in and I saw this and I thought, look at that beautiful unit. That's an engineered design on the left. Those are the electrodes, they're like a plate and frame, and each one of those is a module that can be plugged in plug-and-play. need to produce more water. make more modules. It's really simple, and it works, and it works really well.

Speaker Change: And I walked in I saw this and I thought it took it that beautiful unit. That's a that's an engineer design on the left those are the.

Speaker Change: Uh huh.

Speaker Change: Those are the electrodes, they're like a plate and frame and each one of those is a module that can be plugged in plug and play.

Speaker Change: <unk> produce more water.

Speaker Change: More modules, it's really simple and it works and it works really well and the regulatory I know theres been a lot of uncertainty will talk about some of the Q&A regulatory uncertainty around what is and what isn't it with the new administration with the P. A lot of changes in the in the governance. The R&D all of that is influx. It makes everyone pause a little but here's what we know.

Dennis Calvert: And the regulatory, I know there's been a lot of uncertainty, we'll talk about some of the Q&A, regulatory uncertainty around what is and what isn't with the new administration, with the EPA, a lot of changes in the governance, the R&D, all of that's in flux, makes everyone pause a little, but here's what we know. PFAS ain't going to go away. Took 50 years to get there, and it's going to take 50 years to get it out. This is a business that will run for decades. And right now, we believe that we're still the technical, innovative leader.

Speaker Change: <unk> P fast and I'm going to go away to 50 years to get there, it's going to take 50 years to get it out.

Speaker Change: This is a business that will run for decades.

Speaker Change: Right now we believe that we're still the technical innovative leader.

Dennis Calvert: that has a chance to work with our customers and our engineering firms and our supply chain all over the world and it's just a matter of time before it finds us. The results that we publish are astonishing, and again, the thesis we've talked about, they're unmatched. Unmatched. Okay.

Speaker Change: That has a chance to work with our customers and our engineering firms had heart supply chain all over the world.

Speaker Change: And it's just a matter of time before it finds its way.

The results that we publish are astonishing and again.

Speaker Change: And the thesis we've talked about their unmatched unmatched claims.

Speaker Change: Okay. We published a case study just recently, there's a lot of work to do that that's one of the reason it takes so long, but that case studies now been been picked up for publication around the industry.

Dennis Calvert: We published this case study just recently. There's a lot of work to do that. That's one of the reasons it takes so long, but that case study has now been picked up for publication around the industry. And it's astonishing. And what we basically can say is on the recurring costs associated with installation, we have the chance to save a customer something like somewhere around 70 to 80% of their maintenance costs. And the case study breaks it down so that we analyze transportation, the handling, the replacement of carbon as a comparative because the early adopters, when the first movers started taking action to clean up PFAS, they used old technology.

Speaker Change: And it's astonishing and what we basically can say is on the recurring cost associated with installation, we have the chance to save a customer something like somewhere around 70% to 80% of their maintenance costs and the case study breaks it down so that we analyze.

Transportation to handling the replacement of carbon as a comparative because the early adopters and the when the first movers started taking action to cleanup P. Fast they use the old technology dental technology is going to cost some like nine times, what ours would be.

Dennis Calvert: That old technology is going to cost them like nine times what ours was. And so what that means is they're going to change it out. They had to solve the regulatory burden. It's not going to last. We also can work with some of those providers to make their systems more efficient. So this this is going to be a big win. It is incredibly slow. It's demanding on our staff and demanding on our people. The good news is we've kind of now worked through most of the bugs. We're in the go mode. We've got a good selling proposition.

Speaker Change: And so what that means is theyre going to change it out they had to solve the regulatory burden is not the last we also can work with some of those providers to make their systems more efficient. So this this is gonna be a big win it is incredibly slow.

Speaker Change: And demanding is demanding our staff and demand on our people. The good news is we kind of know it works through most of the bugs were and the go mode. We've got a good selling proposition we've got people selling our technology now or mostly on the country. Some international work coming but we have a couple of global partners now Big Giants coming to really.

Dennis Calvert: We've got people selling our technology now mostly on the country. Some international work coming. But we have a couple of global partners now, big giants, coming to really partner with us.

Speaker Change: Partner with us.

Dennis Calvert: Kind of hard to describe this, but I'll take a second. And that is, you know, what's different? What's different today than it was before? Okay, well, we've done so much work and we have so much technical data to support our claims and we've refined our system. so that when we enter into a discussion with a prospective client, we're perceived as credible when we walk in the door. Okay, so let me expand on that. We're technically credible, we're scientifically credible, we're engineering credible. Okay, so in the marketplace where buyers are business people and technical buyers buying on technology, we win.

Speaker Change: It's kind of hard to describe this but I'll take a second and that is you know what's different what's different today than it was before.

Speaker Change: Well, here's what we've done so much work.

Speaker Change: We have so much technical data to support our claims and we've refined our system.

Speaker Change: When we enter into a discussion with a prospective client.

Speaker Change: We're perceived as credible when we walk in the door.

Speaker Change: Okay. So let me let me let me expand on that for technical incredible we're scientifically credible reengineer incredible.

Speaker Change: Okay. So in the marketplace, where buyers are business people.

Speaker Change: And technical buyers buying on technology, we win.

Dennis Calvert: Okay, not every case, but we went we went and we went as an acceptance and adoption where the decisions are political like water districts or elected officials who are trying to make decisions that aren't trained for some of these questions, they're going to rely on their consulting engineers. So as an early technology in the adoption cycle, a lot of those people just simply can't choose us. So we're having to battle through that. That's a credibility question that we overcome with time, overcome with third-party validation. It's a numbers game, you keep plugging away. What I can tell you now is what's so unusual is the consulting engineers who advise those people.

Speaker Change: Not every case, but we went we went in we went as an acceptance and adoption where the decisions of political.

Speaker Change: <unk>.

Speaker Change: Water districts, where <unk>.

Speaker Change: <unk> officials are trying to make decisions that are trained for some of these questions, they're going to rely on their consulting engineers and.

Speaker Change: And so as early as an early technology in the adoption cycle a lot of those people just simply can't choose us. So we're having to battle through that that's credibility question that we overcome with time.

Speaker Change: We've become a third party validation, it's a numbers game you keep plugging away, but what I can tell you now is doing so unusual is the consulting engineers, who advise those people.

Dennis Calvert: a lot of them are recommending us. And so that's new. So that's new. Okay.

Speaker Change: A lot of them are recommending us.

Speaker Change: And so that's new.

Dennis Calvert: So I'm going to now quit for a minute. I just want to show you right. Make sure you get my email. Welcome to reach out. We try to respond. dc at BioLargo.com, dc at BioLargo.com. I'd love to talk to you anytime.

Speaker Change: Okay. So.

Speaker Change: So I'm going to now quit for a minute and just want to show you right make sure you get my email welcome to reach out we tried to respond.

Speaker Change: D C. A dialogue on dot Com D C, a dialogue or dot com I'd love to talk to you anytime so let's open it up for Q&A and see how we're going to work.

Dennis Calvert: So let's open up the Q&A and see how we're going to how we're going to do this.

Speaker Change: We're going to do there.

Dennis Calvert: Thank you, Dennis, appreciate the presentation. and it's just a good reminder for everybody that Q1 has been rough for lots of companies. There's been a lot of volatility and uncertainty. BioLargo is not alone in this, so just keep that in mind. move forward.

Speaker Change: Thank you Dennis I appreciate the presentation.

Speaker Change: And it's just a good reminder, for everybody that Q1 has been rough for lots of companies are there's been a lot of volatility and uncertainty biomarker was not alone in this so just keep that in mind.

Speaker Change: We move forward.

Speaker Change:

Dennis Calvert: Just a few questions today. Let's start with a general company-based question. Has there been any further consideration being given to doing a reverse stock split? specifically so that you can invest in BioLargo. Yeah, no, it's a great question. So we did file a preliminary proxy statement in preparation of our June 19th shareholders meeting. I hope you'll come. It's always valuable. It's see everyone and we try to really spend the time so that people can understand where the business is at. The proxies asked for our stockholders to give the right to make the decision to the board of directors on certain conditions.

Speaker Change: Just a few questions today, let's start with a kind of a general company based question.

Speaker Change: Has there been any further consideration being given to doing a reverse stock split.

Speaker Change: Specifically, we shouldn't invest in biologics.

Speaker Change: Yeah, no. It's a great question so.

Speaker Change: We did file a preliminary proxy statement and preparation of our June 19th shareholders, maybe I hope you'll come.

Speaker Change: It's always valuable it see everyone I mean, we try to really spend.

Speaker Change: It's been a time, so that people can understand where the business there.

Speaker Change: The proxies asked for our stockholders to give the right to make the decision to the board of directors.

Speaker Change: On certain conditions and the big condition is not greater than a 10 for one not greater than a 10 for one.

Dennis Calvert: And the big condition is not greater than a 10 for 1, not greater than a 10 for 1. Now, this is really important, important to analyze that. What we're saying when you say that, first of all, why would we do a reverse split? Well, we need to have a minimum stock value to qualify for a national exchange. And, of course, often the preferred exchange is NASDAQ and that number is now around $4. Okay, so at $4, at today's stock price, we wouldn't qualify. This is really important. So what are we saying? If we don't have the momentum at the core of the business, including performance, we're not going to do the reverse.

Speaker Change: And this is really important it's important to analyze that what we're saying when you say that well first of all why would we do it but when you do a reverse split well we.

Speaker Change: We need to have a minimum stock value to qualify for a national exchange.

Speaker Change: And of course, the often the preferred exchanges NASDAQ and that number is now around four bucks. Okay. So four bucks.

Speaker Change: At today's stock price, we wouldn't qualify for NASDAQ.

Speaker Change: Okay. So it's really important so what are we saying.

Speaker Change: If we don't have the momentum at the core of the business, including performance, we're not going to do the reverse split.

Dennis Calvert: So hear me clearly. It's giving the board the authority to make a decision if and when we can perform at a level that we believe our assets and our opportunities will perform. And so that's the request. We've talked, we've done this before. It's always been sort of the same thread, which is, make sure that the company is well-situated so that we have more forecastable revenues, less venture stage inherently in its portfolio, more validation work, more adoption. And so that's what we've been working diligently to accomplish. So that's the plan.

Speaker Change: So hear me clearly.

Speaker Change: It's giving the board the authority to make a decision if and when we can perform at the level that we believe our assets at our opportunities will perform at.

Speaker Change: And so that's the request we've talked if we've done this before it's always been sort of the same thread, which is make sure that the company is well situated so that we have more forecastable revenues.

Speaker Change: Less venture stage in an inherently in its portfolio more validation work more adoption and so that's what we've been working diligently to accomplish so that's the plan. If anybody has any additional questions reach out to me you can certainly put them in the Q&A now happy to consider it.

Dennis Calvert: If anybody has any additional questions, reach out to me. You can certainly put them in the Q&A now. Happy to consider it.

Dennis Calvert: Next. Alright, another general question, are there any new iodine copper products in play? Yeah, it's a great question. The Yes, there are, and it has such an extensive opportunity, especially in the medical field and the related fields around medicine. And we've done quite a bit of work just to, you know, give you just a glimpse. One of the opportunities, of course, would be through an EPA route, which would be general disinfection. And it has the ability to meet that threshold. But the regulatory burden is pretty high, about a million bucks, take about a year. And it's also a very highly commoditized category.

Speaker Change: Next.

Speaker Change: Alright. Another general question are there any new iodine copper products in play.

Speaker Change: Yeah, It's a great question the Ah.

Speaker Change: Yes, there are and.

Speaker Change: It has it has such an extensive opportunity, especially in the medical field and the related fields around medicine.

Speaker Change: And.

Speaker Change: And we've done quite a bit of work just to give you just a glimpse a one on one of them one of the opportunities of course would be through an EPA route which would be general disinfection.

Speaker Change: And it has the ability to meet that threshold, but the regulatory burdens pretty high about a million bucks take about a year.

Speaker Change: And it's also a very highly commoditized category. So it doesn't mean you won't do it but it just means you do it when you have a channel when you have a channel that will value the value proposition of this claim which is probably safer and more gentle and easier to use right, that's probably where it goes.

Dennis Calvert: So it doesn't mean you won't do it.

Dennis Calvert: It just means you do it when you have a channel, when you have a channel that will value the value proposition of this claim, which is probably safer and more gentle and easier to use, right? That's probably where it goes. But we've done a lot of work in that field. In addition, in the medical field, there's subsets of combinations with gels and coatings. and Bandages. And there's also potential of therapeutic action, right? Potential. That would be a drug route, okay? All of those are innovations that we can continue to nurse along. And it really reflects sort of the strength of the core intellectual property asset.

Speaker Change: But we've done a lot of work in that field and addition in the medical field, there's subsets of combinations with gels, and coatings and and bandages and.

Speaker Change: There's also potential therapeutic action right potential that's that would be a drug route. Okay. All of those are innovations that we can continue to nurse along.

Speaker Change: And it really reflects sort of the strength of the core intellectual property asset.

Dennis Calvert: And what I can tell you from our experience is we don't know of any company that's committed the kind of longevity to advancing intellectual property. that we believe we stand alone in it and our value proposition is unique. So as we get adoption in the medical field, especially when we talk about some of the major opportunities that are now right here in front of us, as those occur, we think the opportunity for expansion is pretty dramatic. Yes, so there you go. All right.

Speaker Change: And what I can tell you that from our from our experiences we don't know of any company that's committed.

Speaker Change: Kind of longevity to advancing intellectual property in this field. So we believe we stand alone in it.

Speaker Change: And our value proposition is unique so as we get adoption in the medical field, especially when we talk about some of the major opportunities that are now right here in front of us as those occur we think the opportunity for expansion, it's pretty dramatic itself, yes. So.

Speaker Change: Bill.

Bill: Alright, and on that threat of expansion. We have a question here could you give some detail on the growth of the company and with the recent hires are.

Dennis Calvert: And on that thread of expansion, we have a question here.

Dennis Calvert: Could you give some detail on the growth of the company and what the recent hires? Yeah, so sure. The engineers are still breaking records, which is awesome. So that unit's growing dramatically. We have projects that are significant. on our plate. And we have more coming. We also have a hint of a significant future on PFAS. and it's so significant that it makes everyone nervous about infrastructure. And of course, part and parcel to our strategy is to build the swell of demand so that we can become a volume purchaser as we reach back into the supply chain for contract manufacturing and components.

Bill: Yeah. So sure. The engineers are still breaking records, which is awesome. So that unit is growing dramatically we have projects that are.

Bill: Significant.

Bill: On our plate and we have more coming.

Bill: We also have a hint of a significant future on P farce.

Bill: And it's so significant that it makes everyone nervous about infrastructure.

Bill: And of course, part and parcel to our strategy is to be is to build the swell of demand. So that we can become a volume purchase or as you reach that from the supply chain for contract manufacturing of components. All of that has happened at the same moment.

Dennis Calvert: All that's happened at the same moment. So the engineers have continued to grow.

Bill: So the engineers are continuing to grow.

Dennis Calvert: CLEAR also is growing. They're adding professional sales organization, QAQC, regulatory compliance, you know, all the things that kind of come with the significance of taking product into a very competitive market. And so, yeah, so in fact, when you look at the net loss and the SG&A, much of that expansion on a loss side is associated with CLEAR because it's really much pre-revenue, right? Now, the difference in that versus the engineers, we always have a mandate. You know, we say, build it and they will come. We say, no, they come, then we build it. That puts a lot of pressure on our staff.

Bill: Clear also is growing they are adding professional sales organization in QA QC.

Bill: Regulatory compliance all the things they kind of come with the significance of taking product into a very competitive market.

Bill: Uh huh.

Bill: And so so yeah, so and in fact, when you look at the net loss in the SG&A.

Bill: Much of that expansion on the loss side is associated with clear because its really pretty much pre revenue right now the difference in that versus the engineers. We always have a mandate you know, we say build it and they will come we say no. They come and then we build it puts a lot of pressure on our staff.

Dennis Calvert: I mean, it's like everybody's operating with. and a staff that needs more people, okay? And that's certainly true in the engineering side. And so, we're thankful that they're resilient and capable of doing that. But they're going to have to grow. And some of the contracts, to give you an example, we signed these contracts with the U.S. Air Force, and that's recurring revenue. And so, we had to add some people, of course. The same thing is actually happening on a number of fronts. And so, we're going to need more people, no question. And but, you know, my mandate, and everybody knows it, is show me the contract and hire the staff, don't hire the staff and hope you get a contract.

Bill: It's like everybody's I'm various operating with.

Bill: Our staff that needs more people, okay, and that's certainly true in the engineering side and so we're thankful that they're resilient and capable of doing that.

Bill: But they're going to have to grow and some of the contracts, giving example.

Bill: These contracts with the U S Air Force and that's a recurring revenue and so we had to add some people of course at the same thing is actually happening on a number of fronts and so we're gonna be more people no no question and but you know my mandate and everybody knows it is a show me the contract didn't hire the staff don't have the staff and I Hope you hear that.

Bill: Contract, we can't afford it and so that discipline is still permitting the company and I think it served us well and it will continue to do so.

Dennis Calvert: We can't afford it. And so, that discipline is still permeating the company. And I think it's served us well, and it will continue to do so. We, in theory, some of these assets are going to grow quickly, and the volume is going to be pretty substantial. And so, my attitude is, worst case, we just slow down a bit. and then shore up the infrastructure, but we have to get to that early adopter phase. And until we're through it, we're not through. and so that's that's the mission get through it and then ramp up the infrastructure so you can go.

Bill: In theory. Some of these assets are going to grow quickly and the volume is going to be pretty substantial.

Bill: And so my attitude is worst case, we just slow down a minute.

And then show up the infrastructure, but we have to get to that early adopter phase.

Bill: And so we're through it we're not through it.

Bill: And so that's that's the mission get through it and then ramp up the infrastructure. So you can go bigger that's the idea.

Dennis Calvert: So that's the idea.

Dennis Calvert: Next. All right.

Bill: Excellent alright.

Dennis Calvert: This question came in in kind of response to one of your answers, but are we ready for a national exchange without market adoption? Investors want performance over claims and potential. Yeah, I think so, too. Yeah. So, yeah, I think that's exactly right. Yeah, we agree, by the way. I mean, the OTC is a hard place to get future value, right? You know, futures, right? Blue sky. It's hard to get blue sky on the OTC, no question. And when you combine that with the length of time it's taken, it wears everybody out. So we know, we know, we understand.

Bill: This question came in a in kind of a response to one of your answers, but are we ready for a national exchange without market adoption investors won't performance over claims and potential.

Bill: Yeah, I think so too yeah. So yeah, I think that's exactly right.

Bill: Yeah, we agree by the way I mean, the OTC is a hard place to get future value right. You know futures right Blue Sky, It's hard to get Blue Sky on the OTC No question.

Bill: And when you combine that with the length of time, it's taken whereas everybody else. So we know.

Bill: Now we understand and you know the good news is that management has never been a seller right. We're long in the long in the stock continued to hold a long long time.

Dennis Calvert: And, you know, the good news is that management's never been a seller, right? We're long in the stock, continue to hold a long, long time. Why? Well, because we believe it's going to be significant. And some of the assets that we've advanced through adoption, you know, they're meaningful. It's really great. We're thankful for them. But I still think we've just scratched the surface. Now, it is different. You know, we have a critical mass that we've never had. We've got talent that we've never had, a depth of talent that's pretty remarkable. We've also been tried and tested on some of these technical assets for their how real they are, right, the credibility associated with the claims. We've done so much work to validate them for adoption that it really pays off.

Bill: Why well because we believe it's going to be significant.

Bill: And some of the assets that we've advanced the adoption you know.

Bill: Are there meaningful it's really great. We're thankful for them, but I still think we've just scratched the surface.

Bill: It is different you know we have a critical mass that we've never had.

Bill: We've got talent that we've never had a depth of talent that's pretty remarkable. We've also been tried and tested in some of these technical assets for their health.

Bill: Real they are right the credibility associated with the claims we've done so much work to validate them for adoption then it really pays off so yeah.

Dennis Calvert: Yeah, right.

Bill: Yeah right. So so how do you sort of culminate in significance to support a national listing well. The answer is real simple you got to get them done.

Dennis Calvert: So how do you sort of culminate in significance to support a national listing? Well, the answer is real simple. You got to get them done. So that's what we're doing. We're going to get them done. And so as those come to bear, we think everyone will be rewarded. And, you know, we hope you hang in there for it because we think it's worth it. It's worth, you know, rhetorically speaking, I say this all the time, but I really mean it. Each one of these assets that we're focused on is worth the cost. every one of them.

Bill: So that's what we're doing.

Bill: Get them done.

Bill: And there are significant and so as those come to bear we think everyone will be rewarded and you know we hope you're hanging in there for it because we think it's worth it. It's worth it's worth you know rhetorically speaking I say this all the time, but I really mean it each one of these assets that we're focused on is worth a career every one of them.

Dennis Calvert: So we've got multiple, that diversity has saved the ship hundreds of times. And so now as a result of our core competency, science, engineering, strategy, those are coming to bear. So we think we're in a really great position to see those prosper. That doesn't mean we don't take our NOCs. We do. We take a lot of NOCs. In fact, it's very difficult to do what we're doing. The good news is they're real, substantial, substantial in their transformative capabilities. And if you look at the breadth of what we've achieved with so little, it's remarkable. And so, of course, what's hard from the outside is to know that they're real and that these claims are going to find a market.

Bill: So we've got multiple that diversity is since saved the ship hundreds of times and so now as a result of our core competency science engineering strategy those are coming to bear. So we think we're in a really great position to see those prosper.

Bill: Doesn't mean, we don't take our Knox, we do take a lot of Nox in fact, it's very difficult to do what we're doing the good news is they're real.

Bill: Anschel substantial in their transfer transfer formative capability so.

Bill: And if you look at the graph of what we've achieved with so little is remarkable and so of course, it's hard from the outside is to know that they're real and that these claims are going to find a market. We know this.

Dennis Calvert: We know that. rest assured we know it. Otherwise, we wouldn't be doing it. And again, we've had some delays.

Rest assured we know otherwise we wouldn't be doing it and again, we've had some delays you know the AOS is a good one if that question is not out there I'm just talking about it real quick the AOS is just way ahead of the market.

Dennis Calvert: You know, the AOS is a good one. If that question is not out there, let's talk about it real quick. The AOS is just way ahead of the market. Wayhead. We got all these rumblings now that Europe is hard charging after micropollutants. And, you know, just for the record, I look at that and I say, yeah, sort of like ballast water. You know, we took a lot of criticism for the Dallas Water, you know, and I get it, I get it, but thank God we didn't over-invest. You know, that's a market that got pummeled by regulatory.

Bill: We had we got all these rumblings now that Europe is hard charging after micro pollutants and that you know just for the record I looked at the NSA.

Speaker Change: Yeah sort of sort of like ballast water.

Speaker Change: Right you know, we took a lot of criticism until the ballast water.

Speaker Change: You know and I get it I get it but thank God, we didn't overinvest that's them.

Speaker Change: Market that got pummeled by regulatory.

Dennis Calvert: 25-year push down the road for regulatory. I watched 25 companies go bankrupt. We didn't. So, you know, this notion of trying to be a frontrunner in, you know, early adopter markets is very difficult to do. So we have now such a good, deep portfolio that we can play that game. And so we need to get more wins, of course. And that's what we're doing. But I actually believe AOS will find its time in the sun. And it's just not today. So, again, I don't think we've wasted the money. I do believe, though, timing can be everything, especially in the regulatory front.

Speaker Change: 25 year pushed down the road for regulatory I watched 25 companies go bankrupt we didn't.

Speaker Change: You know this notion of trying to be a front runner in an early adopter markets is very difficult to do so.

Speaker Change: So we have now such a good deep portfolio that we can play that game.

Speaker Change: So we need to get more wins of course, and that's what we're doing.

Speaker Change: But I actually believe AOS will find its its time in the Sun and its just not today.

Speaker Change: So again I don't think we wasted wasted the money I do believe though timing can be everything, especially on the regulatory front.

Dennis Calvert: And on the PFAS front, have we secured any new AEC contracts with early adopters? Yeah. So, yes.

Speaker Change: Hope that helps.

Speaker Change: And on the PFS front have we secured any new H E C contracts with early adopters.

Speaker Change: Yeah, So yes, well a couple of things there. One is we have gotten some business incremental business around the AC where we've helped solve some problems with clients I think the total revenue that is generated through that operation is about 1.7 million over the course of about three years. So it's not nothing.

Dennis Calvert: Well, a couple of things there. One is we've gotten some incremental business around the AEC where we've helped solve some problems with clients. I think the total revenue that's generated through that operation is about $1.7 million over the course of about three years. So, it's not nothing, okay? And some of those went through preliminary and then stopped and on hold. Some were makeshift solutions in preparation for a big design. A lot of testing has gone on. We actually have some small accounts now where we're actually treating waste streams for a client. And so, there's actually a lot of activity.

Speaker Change: Okay and some of those went through preliminary and then stopped and went on hold.

Speaker Change: Some are mix shifts solutions in preparation for a big design a lot of testing has gone on we actually have some small accounts now where we're actually treating waste streams for our clients.

Speaker Change: So there's there's all there's actually a lot of activity now.

Dennis Calvert: Now, in the contracting phase, some of these can be very long. You bid, scope, price, and wait. And then when the Trump came in with all the rhetoric about cutting through DOJ, through the regulatory agencies, a lot of these regulatory agencies really froze. They just couldn't do anything. They didn't know what to do. And so, that's had an impact for sure. It put a delay into the adoption cycle in the markets.

Speaker Change: In the contracting phase some of these can be very long you know your bids go price and wait and then win when the Trump administration came in with all the the rhetoric.

Speaker Change: Rhetoric about.

Speaker Change: Cutting through does.

Speaker Change: The regulatory agencies a lot of these regulatory agencies really froze. They just couldn't do anything they didn't know what to do and so that's had an impact for sure. They put a delay into the adoption cycle in the market, but what people need to realize is that while all that's occurred.

Dennis Calvert: But what people need to realize is that while all that's occurred, Zeldin has come in with the EPA and reaffirmed the commitment to the Clean Water Act and the environment. He's pushed down some of the regs for some of the very small chain molecules, another two-year adoption cycle, which is probably necessary because no one really has a good solution for those except us. and the world may or may not know it. So we need to get our word out, right? Word out with adoption and scale up.

Speaker Change: Zelda and has come in with the EPA and reaffirmed our commitment to the clean water Act and the removal of P. Fast from the environment. He's pushed down some of the rigs for some of those very small chain molecules. Another two year adoption cycle, which is probably necessary because no. One really has a good solution for those except us.

Speaker Change: And the world May or May not know it.

Speaker Change: So we need to get our word outright brought out with adoption and scale up.

Dennis Calvert: Anyway. PFAS took 50 years to get there. It's not going to go away. And litigation continues. This is another important factor. Litigation continues.

Speaker Change: Anyway.

Speaker Change: The first 50 years ago, there's not going to go away.

Speaker Change: And litigation continues this is another important factor litigation continues so so what's so the thesis that we put forth in P fast.

Dennis Calvert: So the thesis that we've put forth in PFAS still holds very true, which is what? The most efficient collector wins. When you super concentrate, destruction is manageable and easy. at 140,000 the way stream, we win. And that's what's happening. And so I know it's hard. You know, it's hard because you don't see it all. But we do.

Speaker Change: Still holds very true, which is what the most efficient collect the wins when you're super concentrate destruction is manageable and easy.

Speaker Change: At 140000, the waste stream.

Speaker Change: When.

Speaker Change: That's what's happening and so I know, it's hard it's hard because you don't see at all but we do and we're sitting in the apex of attention.

Dennis Calvert: And we're sitting in the apex of attention. I'll remind everybody, too, that that that's the reason we were invited to be part of the Environmental Technology Credit Advisory Committee to the Secretary of Commerce. I'm in a meeting every every month there. It's really good for BioLargo. It's really good for our technology. And we're we're in the mix with some of the leaders all around the country now. And and it will expand globally.

Speaker Change: Remind everybody too that that's the reason we were invited to be part of the.

Speaker Change: Environmental technologies Crazy Advisory can Oleds and secretary of Commerce.

Speaker Change: Every every month there is it's really good for Biologging.

Speaker Change: Really good prior technology, and where we are in the mix with some of the leaders all around the country now and and it will expand globally. So so we're.

Dennis Calvert: So so we're in a very enviable spot. And because we've got such a nice pipeline established now, we get the attention of major partners and participants who want to see us win. So we believe we're going to win big. But it is slow. I'll admit it's slow, for sure.

Speaker Change: We're in a very enviable spot.

Speaker Change: And because we've got such a nice pipeline established now we get the attention of the major partners and participants who want to see US land. So we believe we're gonna window.

Speaker Change: But it is slow element that slow.

Speaker Change: For sure.

Speaker Change: So an excellent alright, and speaking of partners are what has been happening with Gareth Callahan is the MLD product no longer viable.

Dennis Calvert: Speaking of partners, what has been happening with Garrett Callahan? Is the MLD product no longer viable? I don't know. It's very viable. It's just as slow as can be. Yeah, so that product, remember, it's key feature is to recycle water for cooling towers, things like data centers.

Speaker Change: I don't know, it's very viable it's just slow as can be.

Speaker Change:

Speaker Change: Yeah, so that product remember its key feature is to recycle water for cooling towers things like data centers.

Dennis Calvert: And so, you know, let's give you some macro trends, really fascinating. There's about four and a half years of water in California stored up in the reservoirs, four and a half years. Also, the snowpack is probably thicker than it's been in a decade. And so there's a moment at which people kind of pause. And then with the Trump administration coming in and saying, you know, we're trying to regulations, you know, stopping our economies. A lot of people put some of these projects on hold. They kind of pause. Now, the commitment to economic and environmental sustainability is still real.

Speaker Change: And so you know, let's give you some macro trends really fascinating, there's about four and a half years of water in California startup in the reserve and the reservoirs four and a half years, but also the snowpack is probably take them that's been in a decade.

Speaker Change: And so theres, a moment at which people kind of pause and then with the Trump administration coming in and saying you know we're trying to regulations stopping our economy a lot of people put some of these projects on hold to.

Speaker Change: Pause now the commitment to economic and environmental sustainability is still real.

Dennis Calvert: and so that's just a matter of time before people actually pull the trigger.

Speaker Change: And so that's just a matter of time before people actually pull the trigger and so this isn't this is an early adopter technology with a.

Dennis Calvert: And so this is an early adopter technology with a country's largest privately held water company, North America, that would be Garrett Callahan. We are still working through piloting and demonstration projects with customers and you're correct, no one's landed one yet. They're actually quite large and we're working with some of the, you know, significant players in the market that we're focused on. And so we still are optimistic.

Speaker Change: Country's largest privately held water company in North America that would be geared Kelly Ann we are still working through piloting and demonstration projects with customers and you're correct no one's landed one yet there are actually quite large.

Speaker Change: And we're working with some of the you know significant players in the market that we're focused on and so we're still optimistic what I will remind everyone is very important is that our investment is done.

Dennis Calvert: What I will remind everyone, this is very important, is that our investment is done. Now we're demonstrating, and the demonstration's in our facility with the equipment that's already been paid for. So what happens now is the selling's up to Garrett Callahan, we're there to support, we're technical experts in the field, and we continue to work that process with customers, and they are ongoing, and they're continuing. Yeah, so don't count it out. Certainly frustrating how long it's taken. Not easy, but actually quite robust. All right.

Speaker Change: Now we're demonstrating in the demonstrations in our facility with the equipment that's already been paid for it.

Speaker Change: So what happens now is the selling is up to gear Callahan, whereas there to support where technical experts in the field and we continue to work that process with customers and they are ongoing and they're continuing so.

Speaker Change: Yeah, So don't count it out certainly frustrating or how long it's taken.

Speaker Change: Not easy, but actually quite quite robust.

Speaker Change: Right.

Speaker Change: Yep.

Dennis Calvert: Let's move on to our last set of questions here about the battery side. think something to be excited about.

Speaker Change: Let's move on to our last set of questions here about the battery side, but I think something to be excited about.

Dennis Calvert: Just to clarify, what is the difference between the Selenity battery and the other sodium ion battery management systems? It's a great question. So sodium ion is uses a mechanism. You can you can Google it or you can do on chat GPT ion exchange, right? So ion exchange membrane across the electrodes. We don't have a membrane across. So what happens is as the electrons flow through the membrane They have a process that's called the formation of dendrites. Dendrites actually are like minuscule microscopic corrosion across the electron. So one of the key features in our battery tech is de minimis, if any, corrosion internally, which means no internal degradation.

Speaker Change: Just for Claire.

Speaker Change: Clarifying.

Speaker Change: Is the difference between the solemnity battery and the other sodium I am I on battery management systems.

Speaker Change: It's a great question.

Speaker Change: So sodium ion is used as a mechanism you can you can Google it or you can do on chat GBT ion exchange right. So I understand you and Brian across the electrodes, we don't have a membrane across the electrodes.

Speaker Change: So what happens is the as the electrons flow through the membranes.

Speaker Change: They have a process that's called.

Speaker Change: The formation of dendrites dendrites actually are like minuscule.

Speaker Change: Minuscule microscopic corrosion across the electrodes.

Speaker Change: So one of the key features in our battery Tech is de minimus, if any corrosion internally, which means no internal degradation.

Dennis Calvert: So like a lithium ion, lithium ion, ionic exchange, they all have degradation, which means they have, you know, limited functional life. The sodium ion, too, is typically has some kind of rear-earth. probably got a cobalt or a nickel component and doesn't have the same, you know, critical features that we talk about. Typically, it's also going to have some kind of limitations in the way energy can transfer across the cell itself. Ours is a hot, it's a hot battery, it runs about 200 C. You don't have to keep it cool, you like it hot. And hot batteries move very quickly.

Speaker Change: So like like us like a lithium ion lithium ion Ionic exchange. They all have degradation, which means they have limited social life.

Speaker Change: The sodium ion too is typically has some kind of rare earth and it probably got a cold Walter and nickel component.

Speaker Change: Have the same.

Speaker Change: Critical features that we talked about typically it's also going to have some kind of limitations in the way energy can transfer across the cell itself ours is a hot hot battery runs about 200 seats.

Speaker Change: You don't have to keep it cool you like it hot and hot batteries moved very quickly electronics can flow rapidly in this in this molten state.

Dennis Calvert: Electrons can flow rapidly in this molten state. So they're quite different, right? They're quite different.

Speaker Change: So they are quite different right they are quite different so.

Dennis Calvert: So when people talk about the, and there's been a lot of publication in the last month or two about how the tariff wars. have spawned venture capital investments in sodium batteries. Yeah, for good reason. I mean, this reliance on the geopolitical hotbed of China's supply chain for lithium is a real problem. And then manufacturing and the components, it's a real issue. And especially when you travel internationally, like we are, we're doing business deals, you know, with potential partners all around the world now. And they don't like it. In fact, they'll do anything to get away from it.

Speaker Change: When people talk about the and Theres been a lot of publication last month or two about how the tariff wars.

Speaker Change: Have spawned venture capital investments in Saudi and batteries, yeah for good reason.

I mean this this reliance on the on the on the geopolitical hotbed of China's supply chain for lithium is a real problem and then manufacturing under components. It's a real issue, especially when you travel internationally like we are where we're doing business deals with potential partners all around the world now and they don't like it.

Speaker Change: They'll do anything to get away from it.

Dennis Calvert: And so it's a hot driver. So we actually think the terrafores push people towards sodium and they push people towards our technologies and alternatives. So it's really, it really bodes well for us.

Speaker Change: And so it's a hot driver. So we actually think the tariff wars push people towards sodium and they push people towards our technologies and alternatives. So it's really it really bodes well for us now.

Dennis Calvert: So anyway, it's a long answer, but the simple version is it's not going to match our stats. Look at the high energy density and look at the high voltage, and the sodium ion batteries are really not doing that. So they're going to go through an evolution of R&D, and it is a good viable alternative to lithium. But most of those batteries are focused on traditional battery thinking, like what? electric vehicle, EV. easy and portable. Okay, well that's not us.

Speaker Change: So anyway, that's a long answer but the but the simple version is it's not going to match our stats look at the high energy density and look at the high voltage and the Saudi mile batteries are really not doing that so so they're going to go through an evolution of R&D and it is a good viable alternative to a lithium.

Speaker Change: But most of those batteries are focused on traditional battery thinking like what.

Speaker Change: Electric vehicle EV.

Speaker Change: Eating and portable okay, well that's not us.

Dennis Calvert: or long-duration grid scale, 20-foot trailers, big batteries, big systems, big footprint. Put them in place, don't move them, run them for 20 years. That's our model.

Speaker Change: We're long duration grid scale 20 foot trailers big batteries Big systems Big footprint put them in place don't move him run them for 20 years.

Speaker Change: That's our model.

Dennis Calvert: different markets.

Speaker Change: The different market.

Dennis Calvert: All right, final question here.

Speaker Change: Alright. It helps final final question here. It's a three part question, but is salinity superior and then when will we have that third party validation yeah.

Dennis Calvert: It's a three-part question, but is salinity superior, and then when will we have that third-party validation? Yeah, we're hoping to get that. Yeah, that's a good question. I'm really excited. I've been excited about the battery tech for a long time, but my goodness, it took a lot of work to get through the validation. and fascinating really what we learned. A couple things. One is you say yeah we've got you know lots of people in the world that can come out and validate our battery check. Well it turns out that's not really true. There's not very many people and the ones that are capable may not want to do it or you don't want them to for competitive.

Yeah, we're hoping to get that yes, that's a good question.

Speaker Change: I'm really excited I'm very excited about the battery tech for a long time, but my goodness. It took a lot of work to get through the validation stage and passed and I mean really what we learned a couple of things. One is you say yeah. We've got you know lots of people in the world that can come out of the oven or battery check well it turns out that's not really true.

Speaker Change: How many people and the ones that are capable may not want to do it or you don't want them to for competitive reasons.

Dennis Calvert: So there's a lot going into that decision tree, okay? So we found a group that's technical experts, 20 plus years in the field, and just bona fide experts. And so they're doing the validation work, and it's underway as we speak. I'm hoping that we can wrap that up in the next week or so. I mean, literally, something like that. Maybe it's two weeks. Don't hold me to a week. But it's something like that. You know, so we're in the final stroke. And what they've really, what they're helping us do is to confirm the basic important data is matching what we thought we purchased.

Speaker Change: So there's a lot going into that decision tree. Okay that we found a group that's technical experts 20, plus years in the field and just modify the experts and so they're doing the validation work and it's underway as we speak and hoping that we can wrap that up in the next week or so I mean literally it's like something like that maybe it's two weeks don't hold me to a week, but its something like that.

Speaker Change: Yeah. So we're in the final stroke.

Speaker Change: And what they really are what they are helping us do is to confirm the basic important data.

Speaker Change: Is matching what we thought we purchased.

Dennis Calvert: That's it. That's the mission, right? And we already know this, but we don't have a third party to say it. So we need the third-party validation to really advance some of the business dealmaking. And there's a lot going on in that. And what's fascinating is because of our business model, we're able to approach it with a very sort of cut-and-dry approach. You know, who wants to build a factory and do you have money? You need to just think about it. Who wants to build a factory and do you have money? Because we're not, we're not writing all the checks.

Speaker Change: That's it that's the mission right and we already know this but we don't have a third party to say it. So we need the third party validation to really advance some of the business steelmaking and there's a lot going on in that and what's fascinating is because of our business model, we're able to approach it with a very sort of cut and dry approach you know who wants to build it.

Speaker Change: Factoring in do you have money.

Speaker Change: I mean, just think about it.

Speaker Change: The other factor and do you have money.

Speaker Change: Because we're not we're not writing all the checks.

Dennis Calvert: And so the good news is there's a whole industry of finance that's focused on this long-duration storage market. And the appetite is, as I always say, is insatiable. If you just think through it, you can't build enough factories to supply the world. Okay, so what happens when it's like that? That means batteries that are just okay. you can sell all of them. batteries that are exceptional can take a market, but you can only take the market to the extent you can manufacture. So can you actually supply the world? Well, no. can't.

Speaker Change: And so the good news is there's a whole industry of finance that's focused on this this long duration storage market.

Speaker Change: And the appetite is as I always say is insatiable.

Speaker Change: If you just think through it you can't build enough factories to supply the world.

Speaker Change: Okay. So what happens when that plan is like that that means batteries that are just okay.

Speaker Change: You can sell all of them.

Speaker Change: Batteries that are exceptional can take a market.

But you can only take the market to these saying you can manufacturer.

Speaker Change: So can you actually supply the world.

Speaker Change: No.

Speaker Change: You can't so the franchise model is a good idea right now we built the model on 10 factories.

Dennis Calvert: So the franchise model is a good idea, right? You know, we built a model on 10 factors. 10 factories on a net present value. Just think about it, 6% royalty on 10 factories, that's 30 million a pop. They'll do about a half a billion each. That's 300 million positive cashflow on 10 factories. That's how you come up with a 1.5 billion net present value. It's pretty basic really, right, because we've got free cash flow on the deal. That's what we're bargaining for. That's what we need. Okay. but you can't build enough factories to meet the demand.

Speaker Change: Tim factories on a net present value just think about a 6% royalty on 10 factories, there's 30 million a pop they'll do about a half a billion H, that's 300 million positive cash flow in 10 factories.

Speaker Change: How you come up with a $1 5 billion net present value.

Speaker Change: Pretty basic really right.

Speaker Change: Because we've got free cash flow on the deal and that's what we're that's what we're bargaining for that's what we need okay.

But you can't build enough factories to meet the demand.

Dennis Calvert: Okay, so is the model to do a factory? No. Is the model to do 10 factories? No. The model is to do 50 or 100 back. Okay, well, are we ready to do that? Not yet. Starts with 1, 1 becomes 3, 3 becomes 10. 10 becomes 40. and then you replicate. And then you become a large volume purchaser of the supply chain and you've got distributed manufacturing around the world. with local commitments for economic development, for workforce development, for the incentives that are rich for not only the states, but the DOE itself, plus international. So that's a model that scales.

Speaker Change: So as the model to do a factory now as the novel he can factories no.

Speaker Change: Models to do 50 or 100 backwards.

Speaker Change: Okay, well are we ready to do that.

Speaker Change: Not yet.

Speaker Change: With one one becomes three three becomes Chen.

Speaker Change: 10 becomes 40.

Speaker Change: And then you replicate and then you become a large volume purchase from the supply chain and you've got.

Speaker Change: You've got distributed manufacturing around the world with local commitments for economic development for workforce development for the incentives that are rich growing not only the states, but the D O itself plus international and so that's a model that scales and so we just need to get through the process of third party validation.

Dennis Calvert: So we just need to get through the process of third-party validation and then get the first big contract underway. You know, just to remind everyone, once we have a contract to build a factory, it's about two and a half years, but here's the thing, we make money day one. We make money day one, so we're in the business of selling factories, not selling batteries. So I think it's going to be a big deal, and given the technology and the talent we've surrounded it with, we think it's just a matter of time. So we're going to keep plugging away and get through some of those bigger...

Speaker Change: And then get the first big contract underway.

Speaker Change: Just to remind everyone. Once we have a contract to build a factory, it's about two and a half years, but here's the thing.

Speaker Change: We make money day one.

Speaker Change: We make money day, one so we're in the business of selling factories not selling batteries. So.

Speaker Change: I think it's gonna be a big deal and.

Speaker Change: Given the technology and the talent, we surrounded that with we think it's just a matter of time, so we're going to keep plugging away get through some of those barriers.

Speaker Change: Okay.

Dennis Calvert: Great.

Dennis Calvert: Those are all the questions. Thank you very much, Dennis.

Speaker Change: Great those are all the questions. Thank you very much Denis.

Dennis Calvert: All right, I'll just wrap up real quick. Thanks, everybody. Again, we're happy to talk to you. Thank you for the support. You know, we'll keep plugging away and look forward to talking to you soon. Thanks, everybody.

Speaker Change: Alright, I'll just wrap up real quick thanks, everybody again, we're happy to talk to you. Thank you for the support.

Speaker Change: And.

Speaker Change: You know were well keep plugging away and a look forward to talking to you soon thanks everybody.

Operator: Thank you.

Thank you. This concludes today's conference you may disconnect at this time and we thank you for your participation.

Operator: This concludes today's conference. You may disconnect at this time and we thank you for your participation.