Heliae

March 6, 2014

Transcript:

Ted Simons: Heliae is an Arizona-based company that develops advanced algae production technologies for various products, including nutrition, cosmetics, and therapeutics. Heliae's CEO Dan Simon is here to talk about the growth of the algae industry. Good to see you again.

Dan Simon: Thank you.

Ted Simons: Does that basically what Heliae does? Those kinds of algae byproducts or products I should say?

Dan Simon: Yeah. Since I saw you last the focus has shifted. We were energy focused before, and since then we've moved to personal care, health sciences, agriculture and nutrition.

Ted Simons: What's the -- Start with the biofuel aspect. That's what you were known for, what we talked about in the past. What's the latest there?

Dan Simon: We still think there's an opportunity there. But we think it's way down the path. What we learned over the years as we developed our production methods, that the costs were too high to current market values. If we couldn't deliver the algae at current market price, we didn't want to go there. So we started looking at interesting niche marks.

Ted Simons: And that includes nutrition?

Dan Simon: Nutrition, we make a product in Gilbert, and it's being sold through a contract manufacturer who sells to Wal-Mart and target and CVS.

Ted Simons: What does that product do?

Dan Simon: It's a joint health and it's a supplement like a nutritional supplement. It's used for joint health and eye health and nervous system health.

Ted Simons: OK. Natural fertilizers as well, what's going on with that?

Dan Simon: It's very interesting. We're still learning, but we've done a number of trials and seen some incredible growth. It's not like standard fertilizer, NPK are the start fertilizers, it's more bioactive, things that make wine grapes grow bigger, healthier, taste better, strawberries that are less bunchy so they grow healthier, with tomatoes they grow them juicier, sweeter. These are ingredients that have been around for many years but over the world as people have simplified production methods, they've lost some of these enhancements. Algae puts them back.

Ted Simons: How? Is it a liquid, are they granules?

Dan Simon: Both. Some are sprayed on as a liquid and some are powder that are mixed within a fertilizer mix.

Ted Simons: Is it similar to phosphorus type stuff?

Dan Simon: Much more high end. Phosphorus is basic fertilizer. This is more -- Think of it like your supplement for human, we take vitamins or eat healthy food this, is healthy food for your plants.

Ted Simons: Is it on the shelves?

Dan Simon: It is.

Ted Simons: We talked about therapeutics as well. What are we talking about here, and how does algae play a part?

Dan Simon: Very interesting. We did end up purchasing % of a company based in San Diego, that has some synthetic biology around growing specialty proteins for remedies to things like dysentery, diarrhea, and malaria, and it's all still well out there, but on the front end there's some animal science opportunities. So gut health for dogs, cats, horses, cows, hogs, they eat the algae, it's like a mother's milk effect. It's like eating healthy yogurt. The same idea.

Ted Simons: Is this FDA --

Dan Simon: we're going through regulation right now.

Ted Simons: It still has to go through that process.

Dan Simon: A year or two years before it's really on the market.

Ted Simons: Cosmetics as well?

Dan Simon: That's the easiest one. We didn't even think about it. My background is energy. Cosmetics was new to me. But the industry came to us, once they started seeing what we were producing. The reality is, we were skipping over these healthy oils that would be used for skin for aging and scar tissue improvements. We were skipping over all that when we were making fuel. Now those same products, same algae are being produced and being sold into the cosmetics for antiaging creams and such.

Ted Simons: All these things are either in the market or on the way to the market?

Dan Simon: Yes.

Ted Simons: But biofuels, you haven't given up on biofuels have you?

Dan Simon: I don't think I'd say given up. I've just put it on the long-term perspective. We see it five to years down the road, not in the next one to five years.

Ted Simons: Any of these other subsets do you see one of those exploding as far as algae is concerned?

Dan Simon: Yes, we do. These are multi billion dollar markets, each one of them. The fertilizer market, personal care cosmetic and nutrition space are all large markets. So in the short term they're very good markets for a company like us to sell to, and survive until the bigger value, higher commodity markets work.

Ted Simons: As far as the algae industry, your company, the industry as a whole, how many folks are employed, what kind of numbers?

Dan Simon: The last time I saw you was . We were about people. We're now over . We had -- We're working out of a ,-square-foot facility, now we're working out of the , square feet plus acres of commercial production.

Ted Simons: As far as patents are concerned --

Dan Simon: We had one last time I saw you, we now are sitting with over . We just had our st come in yesterday.

Ted Simons: What's next for the algae industry, and A, and B, is there anything that's keeping algae from just exploding, being on the cover of every magazine, on the front much everyone's mind?

Dan Simon: It's still pretty new in terms of the technology cycle. So no, I don't think you're going to see it explode any time in the next year or two. It's going to grow quickly, but we're still probably one to two years away before you see algae production happening on every state in the country or different parts of the world. But we expect it will.

Ted Simons: All right.

Dan Simon: We're betting on it.

Ted Simons: Congratulations on your success. Good luck. And good to see you again.

Dan Simon: Good to see you Ted.