Pond Technologies Holding Inc. (TSX-V: POND) has developed a universal algae platform that provides optimal growth conditions for virtually any algae strain. This technology has multiple disruptive applications. Pond can grow algae using pure, food grade carbon dioxide (the same gas that makes the bubbles in beer and soda) to make algae-based nutraceutical superfoods that enhance human and animal health.
Natasha Frakes: Hi, I’m Natasha Frakes and you’re watching Market One Minute. Joining us is Steve Martin, CEO of Pond Technologies. Steve, what is Pond Technologies and what does it do?
Steve Martin: Pond Technologies is a company that’s developed a platform that lets us use the natural power of algae to absorb carbon emissions from large final emitters, making an algae product that can be used for animal feed, aquaculture feed, soil amendment, human nutraceuticals, and in fact even fuel.
Natasha Frakes: How does your technology enable you to do that?
Steve Martin: Pond’s technology, the platform we’ve developed, allows us to reap the benefit of the natural appetite that algae has for carbon dioxide. What we have done is develop an integrated system that will take stack gas emissions directly from a large final emitter into our bioreactor and we can include the appropriate growth conditions, the illumination, the harvest, all of the things that make the algae very happy and actually productive.
Natasha Frakes: Are you just a carbon sequestration play, or does your technology enable you to do other things?
Steve Martin: Pond is so much more than a carbon sequestration play. As a matter of fact, we’re really not a carbon sequestration play at all. We’re a carbon recycling play, using the natural power of algae to consume carbon dioxide from large final emitters and turning it into valuable products: aquaculture feed, animal feed, nutraceuticals, fuels, all of the things that are needed to power human societies. They’re as much a part of Pond as the carbon recycling aspect.
Natasha Frakes: And how big is your market, the pollution abatement market and the nutraceutical market?
Steve Martin: The market for Pond solution is virtually without measure. There are more than 10,000 large final emitters in North America, each emitting a hundred thousand tonnes or more of carbon dioxide. All of them are a target for our technology. Every single one of them could benefit from our solution, and the algae that comes out of the system as a result of us reducing the carbon emissions of industry can be used to feed humanity. It can be used for aquaculture feed, for animal feed, and indeed directly for consumption by us as nutraceuticals. This really is a virtuous circle. It really is solving an enormous problem with an enormous market.
Natasha Frakes: Are the world markets for fish meal and nutraceutical products capable of absorbing Pond’s prolific output of algae-derived products?
Steve Martin: In a word, yes. The need for protein has never been greater and the protein that we will be producing as a form of algae coming out of our solution will be more than absorbed by existing markets. Middle classes around the world are demanding ever increasing amounts of protein. Aquaculture is growing very quickly, and there aren’t really sources to supply those markets. Pond, by using stack gas emissions in growing algae, can actually very handily service that need.
Natasha Frakes: Tell us about your revenue model.
Steve Martin: It’s actually impossible to talk about the revenue model without first looking at what we do under current conditions. What does human industry do now? We’re actually in the business of creating carbon dioxide. If you make a tonne of steel, you actually make two and a half tonnes of carbon dioxide, and that carbon dioxide is what we use to grow algae. When you go through the economics, the algae ends up being worth more growing on the by-products of steel production than the steel itself.
So, the value proposition that we offer is pretty substantial. There are four revenue streams, three of which we participate in. The reduction in carbon emissions usually falls to the host plant, so the large final emitter would get that. It’s relatively small. But if the remaining three, all very large, Pond has a very lucrative opportunity. There is sale of proprietary equipment that relates to our patented solution. There are licenses to use that technology and there are royalties and revenue streams that come from production of algae. All in all, we have a very lucrative business model that actually shows that sustainability can pay.
Natasha Frakes: Tell us about your recently completed reverse takeover and your current financial position.
Steve Martin: Pond did recently complete a reverse takeover transaction. We are now happily a TSX.V listed company with our trading symbol POND. The transaction was very successful. We were able to complete a concurrent financing, raising eight and a half million dollars as part of that. It leaves us with a balance sheet that shows 11 and a half or $12 million in cash and equivalents and we are aggressively pursuing our business plan.
Natasha Frakes: Steve, thanks so much for being here.
Steve Martin: Thanks very much, Natasha.