Ohio company that grows (yes) algae says Michigan wants it to cross the border

Cain's Detroit Business

Ohio company that grows (yes) algae says
Michigan wants it to cross the border
Published: January 17, 2012
By Chuck Soder
Crain News Service
A Mayfield Heights, Ohio, company aims to use the $5 million it just raised to build a pilot plant where
the company will grow algae to produce a nutrient that has become a hot commodity.
It is unclear, however, whether the company will remain in northeast Ohio.
AlgiSys LLC has received a $5 million investment commitment from investors in Michigan, said CEO
Michael LoPresti, who would not identify them.
The state of Michigan also has indicated it will provide the company with a "generous, aggressive loan
package" if it moves to Michigan, LoPresti said, adding that AlgiSys plans to seek incentives from counties
and cities in Ohio as well.
AlgiSys, which employs three people full time and five part time, would like to stay in northeast Ohio,
LoPresti said. However, when the company has inquired about incentives offered by the state of Ohio, it
usually is directed toward the Ohio Third Frontier program. And although the economic development
program provides financing for technology companies, AlgiSys wouldn't fit easily into the sectors it
targets, he said.
The company has received other types of support from organizations in Ohio. For instance, in 2010 it
received a $40,000 loan from the Cuyahoga County New Product Development and
Entrepreneurship Loan Fund and paid it back a year later, freeing the company from an obligation to
manufacture in the county.
AlgiSys also has received grant money from the Center for Innovative Food Technology in Toledo
and an investment of a few hundred thousand dollars from two principals at Tower Wealth
Management LLC in Beachwood and a handful of their clients.
In addition, AlgiSys has received assistance services from the Akron Global Business Accelerator, the Crain’s Detroit Business Page 2
University of Akron Research Foundation and BioEnterprise Corp. in Cleveland.
The company aims to grow algae to produce both omega-3 fatty acids and high-protein biomass.
There is particularly high demand for omega-3s, which are believed to have a variety of health benefits.
Studies have shown that they can reduce the risk of heart disease and stroke and can be used to treat
depression, rheumatoid arthritis and high blood pressure.
The omega-3 that AlgiSys wants to produce — known as eicosapentaenoic acid, or EPA — commonly is
found in fish oil. That's because fish eat algae, said Charles Roe, who founded the company with LoPresti
in 2009 after the two men left a Florida company that aimed to make fuel from algae.
AlgiSys looks to produce EPA as a food additive or a supplement, Roe said. AlgiSys plans to sell the highprotein
biomass as a food additive as well, he said.
"The food ... play is a more near-term market," said Roe, the company's chief technology officer.
An official from the Michigan Economic Development Corp. said AlgiSys has not been approved to
receive incentives from the state but said it's possible the parties are in conversations about them.
LoPresti did not respond to a phone message and an email requesting additional information.
AlgiSys could end up staying in Northeast Ohio, but the company can't ignore the benefits of moving to
Michigan, LoPresti said.
"We have to go where there is private investment as well as public support," he said.