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Tech Analyst Sees Powerful Catalyst for This Clean Tech Co.

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This clean tech company's approach to addressing everything from "forever chemicals" in the environment to stubborn pet odors is about to payoff, an analyst says.

Clean tech company BioLargo Inc.'s (OTCQB:BLGO) innovations address contamination from so-called "forever chemicals," help control pet odor, treat wastewater, improve energy-efficiency, and control infections and infectious diseases.

It really is four companies: BioLargo Engineering, BioLargo Water, ONM Environmental, and Clyra Medical Technologies.

The approach is to invent or acquire novel technologies and develop them into products that solve problems and lead to profits. A great example is the pet odor control product Pooph, from subsidiary ONM Environmental and sold by partners at Ikigai, which is finding success at Walmart stores and online and helped BioLargo increase its revenue nearly three-fold in the first quarter.

"That's a full-circle story for the company, to validate not only the concept of why innovation is important, but then to find the market and become an expert and then make the right partnership deal to allow you to exploit it all the way to exit to get the big prize," BioLargo President and Chief Executive Officer Dennis Calvert told Streetwise Reports.

 Analyst Michael Mathison of Singular Research wrote in an update note on June 12 that the revenue "far exceeded expectations" and he expected the company to reach positive operating cash flow in the fiscal year 2024.

BioLargo's revenue increased 288% for the three months ending March 31, 2023, compared to the same period in 2022. Revenue also increased 78% compared to Q4 2022, and the company's net loss was reduced by 68% YoY in Q1 2023 to US$494,000.

While the company said it expects a reduction in topline revenue in Q2 as initial Walmart stocking orders of Pooph decrease, analyst Michael Mathison of Singular Research wrote in an update note on June 12 that the revenue "far exceeded expectations" and he expected the company to reach positive operating cash flow in the fiscal year 2024.

"Pooph pet odor control revenue grew 490% YOY (in Q1 2023) as the retail rollout continues," wrote Mathison, who gave a Buy-Venture rating on the stock with a US$0.28 per share target price, according to a June 12 research note. "Pooph is now on shelves in thousands of Walmart stores nationwide, and rollout through Chewy has begun. Pooph revenue exceeded our forecasts by 60%, and we have increased future Pooph revenue projections as a result."

Mathison said he remained "bullish" on the stock, and "with revenue growing rapidly and expenses largely fixed, we forecast that BioLargo will swing from losses to positive EBITDA in late FY:23 and positive GAAP earnings in FY:24," he wrote.

The Catalysts: Pooph, PFAS

Pooph destroys odors instantly on a molecular level and is clear, odorless, and non-staining, the company said.

It is produced by its ONM Environmental odor and volatile organic compound (VOC) control subsidiary, which saw its revenues grow 491% compared to the first quarter of 2022 to US$3.5 million. Its operating income grew 10,569% YoY to US$1.4 million, BioLargo said.

Pooph comprised 90% of ONM's revenues and 86% of BioLargo's revenues company-wide.

Calvert said the product's availability is expected to go from at least 3,000 stores to as many as 10,000 or 12,000 over the next 18 months.

Technical Analyst Clive Maund wrote that the lawsuits could be a "powerful catalyst" for the company's stock. "Clearly, if even one of the defendants turns to BioLargo to address clearing up this mess, it should be a Big Deal for the company," he wrote.

Another of BioLargo's core products addresses contamination by per- and polyfluoroalkyl substances (PFAS), which are long-lasting chemicals that break very slowly over time and are persistent in people, animals, food, and the environment. DuPont and 3M are facing massive lawsuits over the substances, also known as "forever chemicals."

Technical Analyst Clive Maund of wrote that the lawsuits could be a "powerful catalyst" for the company's stock.

"Clearly, if even one of the defendants turns to BioLargo to address clearing up this mess, it should be a Big Deal for the company," he wrote.

recent report compiled by Swedish non-governmental organization (NGO) ChemSec figured the societal cost of using PFAS across the global economy is as high as US$17.5 trillion a year. Meanwhile, the same study found that profits for the world's largest PFAS manufacturers totaled just US$4 billion annually.

The company's first contract for PFAS remediation is forecast to bring in US$7.5 million. The first phase has been completed, but the pilot client has not yet signed to begin the next phase, Mathison noted.

"Management expects the pilot project to still move forward, with revenue commencing in late FY:23 or early FY:24," he wrote. "BioLargo’s patented AEC technology is one of the few commercially available technologies."

Other Technologies

BioLargo Water works to commercialize its Advanced Oxidation System (AOS) clean water technology and has been awarded more than 70 grants for the development and commercialization of water treatment technology, the company said.

Clyra Medical Technologies is the only company in BioLargo's medical division. Its copper-iodine complex technology creates a gentle but effective oxidative reaction that is effective against disease-causing organisms like viruses, fungi, and antibiotic-resistant strains of bacteria. It can be delivered as a liquid, a gel, a dry solution, or embedded in a pad.

Calvert said Clyra is negotiating with "very large strategic partners."

Putting in 'the Hard Work'

An important part of the company is the engineering group, Calvert said. Members have been with BioLargo for five years and joined the team all at once after being laid off by what was one of the largest engineering firms in the world, Chicago Bridge & Iron, before being merged into McDermott International Inc. (MDR:NYSE)

Calvert said the "group has become a cornerstone of innovation, and it has services that give us entrée to just about any customer in the world."

The company has also acquired battery technology that it said is safer, more cost-effective, and has unlimited charge and discharge cycles. Made of sodium and sulfur, the ingredients are earth-abundant, and the batteries have no serious risk of fires. BioLargo has constructed various-sized prototypes, and a laboratory and prototype manufacturing facility are under construction.

Calvert said it's all about putting in "the hard work" on a diverse portfolio of great ideas.

"We invented it, reshaped it, remarketed it, did all of this stuff to get the spot where our partner could say, 'Man, I could sell a boatload of this,' and we get paid," he said.

Streetwise Ownership Overview*

BioLargo Inc. (OTCQB:BLGO)

*Share Structure as of 7/21/2023

"It's hard for us to envision being the world's greatest PFAS solution provider and go vertical and spend another 25 years building a company when we can do it the way we're doing it and extract the value and cash flow early."

Ownership and Share Structure

About 14.6% of BioLargo is owned by insiders and management, according to Yahoo Finance. They include Chief Science Officer Kenneth Code with 8.77%, CEO Calvert with 3.43%, and Director Jack Strommen with 1.52%, Reuters reported.

About 0.04% is held by the institution First American Trust, Reuters said.

The rest, about 85%, is retail.

Its market cap is US$51.24 million, with about 285 million shares outstanding, about 243 million free-floating. It trades in a 52-week range of US$0.32 and US$0.1601.

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Important Disclosures:

  1. BioLargo Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of BioLargo Inc.
  3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
  5. This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

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