What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-14 · 443 added, 298 removed, 946 unchanged (44% of the section changed)

4 unchanged sentences

(in thousands, except for share and per share data)

March 31, 2024

June 30, 2024

Current assets:

8 unchanged sentences

Investment in South Korean joint venture

Right of use, operating lease, net of amortization

Right of use, operating leases, net of amortization

$ 10,053 $ 8,205

7 unchanged sentences

Contract liabilities

Lease liability

Lease liabilities

Total current liabilities

1 unchanged sentence

Debt obligations, net of current

Lease liability, net of current

Lease liabilities, net of current

Total long-term liabilities

1 unchanged sentence

STOCKHOLDERS’ EQUITY:

Preferred Series A, $ 0.00067 Par Value, 50,000,000 Shares Authorized, no Shares Issued and Outstanding, at March 31, 2024 and December 31, 2023

Common stock, $ 0.00067 Par Value, 550,000,000 Shares Authorized, 295,801,370 and 292,945,747 Shares Issued, at March 31, 2024 and December 31, 2023

Preferred Series A, $ 0.00067 Par Value, 50,000,000 Shares Authorized, no Shares Issued and Outstanding, at June 30, 2024 and December 31, 2023

Common stock, $ 0.00067 Par Value, 550,000,000 Shares Authorized, 298,140,188 and 292,945,747 Shares Issued, at June 30, 2024 and December 31, 2023

Additional paid-in capital

16 unchanged sentences

(in thousands, except for share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Product revenue

$ 4,575 $ 3,548

Service revenue

2 unchanged sentences

Cost of goods sold

( 2,440 ) ( 1,797 )

Cost of service

( 74 ) ( 135 )

Total cost of revenue

( 2,514 ) ( 1,932 )

Selling, general and administrative expenses

2 unchanged sentences

Operating loss:

( 763 ) ( 477 )

Other (expense) income:

Interest expense

( 12 ) ( 48 )

Tax credit reversal

PPP loan forgiveness

Total other expense:

( 12 ) ( 17 )

( 775 ) ( 494 )

Net loss attributable to noncontrolling interest

( 365 ) ( 247 )

Net loss attributable to common shareholders

$ ( 410 ) $ ( 247 )

Net loss per share attributable to common shareholders:

Loss per share attributable to shareholders – basic and diluted

$ ( 0.001 ) $ ( 0.001 )

Weighted average number of common shares outstanding:

294,308,798 280,711,278

Comprehensive loss:

$ ( 775 ) $ ( 494 )

Foreign currency translation

Comprehensive loss

( 679 ) ( 500 )

Comprehensive loss attributable to noncontrolling interest

( 365 ) ( 247 )

Comprehensive loss attributable to common stockholders

$ ( 314 ) $ ( 253 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11 unchanged sentences

2,160,348 1 487 — — — 488

Issuance of common stock for services (unaudited)

Issuance of stock for services (unaudited)

288,997 1 82 — — — 83

3 unchanged sentences

— — 429 — — — 429

Clyra Medical stock options issued for services (unaudited)

Stock option compensation expense Clyra (unaudited)

— — 59 — — — 59

Clyra Medical stock issued for services (unaudited)

Stock for service Clyra (unaudited)

— — 52 — — — 52

Clyra Medical common unit offering (unaudited)

Clyra unit offering (unaudited)

— — — — — 475 475

Clyra Medical Preferred Series A dividend (unaudited)

Clyra dividend Series A Preferred stock (unaudited)

— — — — — ( 86 ) ( 86 )

BioLargo Energy Technology Inc.

(BETI) offering (unaudited)

(BETI) sales of stock (unaudited)

— — — — — 50 50

7 unchanged sentences

295,801,370 $ 198 $ 155,606 $ ( 147,508 ) $ ( 181 ) $ ( 2,967 ) $ 5,148

Stock for cash, net offering costs of $ 16 (unaudited)

454,547 1 135 — — — 136

Issuance of stock for services (unaudited)

446,989 — 116 — — — 116

Issuance of common stock in exchange for BETI shares (unaudited)

378,788 — — — — — —

Warrant exercise (unaudited)

561,470 1 140 — — — 141

Stock option exercise (unaudited)

497,024 — 85 — — — 85

Stock option compensation expense (unaudited)

— — 476 — — — 476

Stock option compensation expense Clyra (unaudited)

— — — — — 63 63

Stock for service Clyra (unaudited)

— — — — — 14 14

Clyra unit offering (unaudited)

— — — — — 640 640

Clyra dividend Series A Preferred stock (unaudited)

— — — — — ( 86 ) ( 86 )

Noncontrolling interest allocation (unaudited)

— — ( 2,565 ) — — 2,565 —

Net loss (unaudited)

— — — ( 441 ) — ( 339 ) ( 780 )

Foreign translation adjustment (unaudited)

— — — — ( 61 ) — ( 61 )

Balance, June 30, 2024 (unaudited)

298,140,188 $ 200 $ 153,993 $ ( 147,949 ) $ ( 242 ) $ ( 110 ) $ 5,892

BIOLARGO, INC.

8 unchanged sentences

278,462,706 $ 186 $ 148,435 $ ( 143,594 ) $ ( 149 ) $ ( 2,867 ) $ 2,011

Sale of stock for cash

Sale of stock for cash (unaudited)

4,201,402 3 797 — — — 800

Issuance of common stock for services

Issuance of stock for services (unaudited)

930,490 1 206 — — — 207

Issuance of common stock in exchange for Clyra shares

Issuance of stock in exchange for Clyra shares (unaudited)

527,983 — — —

Stock option compensation expense

Stock option compensation expense (unaudited)

— — 195 — — — 195

Clyra Medical stock options issued for services

Stock option expense Clyra (unaudited)

— — 61 — — — 61

Warrant issued for interest

Warrant issued for interest (unaudited)

— — 30 — — — 30

Clyra Medical Preferred Series A

Clyra sales of Series A Preferred stock (unaudited)

— — — — — 225 225

Clyra Medical Preferred Series A dividend

Clyra dividend Series A Preferred stock (unaudited)

— — — — — ( 27 ) ( 27 )

Biolargo Energy Technology Inc.

(BETI) offering

BETI sales of stock (unaudited)

— — — — — 550 550

Noncontrolling interest allocation

Noncontrolling interest allocation (unaudited)

— — 467 — — ( 467 ) —

Net loss (unaudited)

— — — ( 247 ) — ( 247 ) ( 494 )

Foreign currency translation

Foreign currency translation (unaudited)

— — — — ( 6 ) — ( 6 )

Balance, March 31, 2023

Balance, March 31, 2023 (unaudited)

284,122,581 $ 190 $ 150,191 $ ( 143,841 ) $ ( 155 ) $ ( 2,833 ) $ 3,552

Sale of stock for cash (unaudited)

2,677,169 2 492 — — — 494

Issuance of stock for services (unaudited)

420,911 — 75 — — — 75

Stock option compensation expense (unaudited)

— — 222 — — — 222

Stock option compensation expense Clyra (unaudited)

— — 66 — — — 66

Clyra sales of Series A Preferred stock (unaudited)

— — — — — 1,062 1,062

Clyra dividend Series A Preferred stock (unaudited)

— — — — — ( 45 ) ( 45 )

BETI sales of stock (unaudited)

— — — — — 330 330

Noncontrolling interest allocation (unaudited)

— — 1,461 — — ( 1,461 ) —

Net loss (unaudited)

— — — ( 1,328 ) — ( 298 ) ( 1,626 )

Foreign currency translation (unaudited)

— — — — ( 7 ) — ( 7 )

Balance, June 30, 2023 (unaudited)

287,220,661 192 152,507 ( 145,169 ) ( 162 ) ( 3,245 ) 4,123

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3 unchanged sentences

(in thousands, except for share and per share data)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

$ ( 775 ) $ ( 494 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

1 unchanged sentence

Common stock issued for services

Bad debt expense

Excess and obsolete inventory

PPP loan forgiveness

Amortization of right-of-use operating lease assets

Lease liabilities, net

Interest expense related to amortization of the discount on note payable

4 unchanged sentences

Accounts receivable

( 98 ) ( 17 )

Prepaid expenses and other assets

2 unchanged sentences

Contract liabilities

Lease liability, net

Net cash provided by (used in) operating activities

1 unchanged sentence

Equipment purchases

( 863 ) ( 48 )

Net cash used in investing activities

( 863 ) ( 48 )

Cash flows from financing activities

Proceeds from sale of common stock, net of commissions

Proceeds from sale of BioLargo common stock

Proceeds from warrant exercise

Proceeds from option exercise

Proceeds from sale of BETI common stock

1 unchanged sentence

Repayment by Clyra debt obligations

Proceeds from sale of Clyra Medical preferred stock

Proceeds from sale of Clyra Medical common stock

Proceeds from sales of Clyra Preferred Series A

Proceeds from sales of Clyra common stock

Net cash provided by financing activities

3 unchanged sentences

Cash and cash equivalents at end of period

$ 4,336 $ 3,264

Supplemental disclosures of cash flow information

Cash paid during the period for:

Short-term lease payments not included in lease liability

Short-term lease payments not included in lease liabilities

Non-cash investing and financing activities

Equipment added using capital lease

Conversion of Clyra common stock to BioLargo common stock

Conversion of BETI common stock to BioLargo common stock

Allocation of noncontrolling interest

Preferred Series A Dividend

Leasehold improvements included in accounts payable

Clyra dividend Preferred Series A

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

10 unchanged sentences

we then monetize these technical assets through a variety of business structures that may include licensure, joint venture, sale, spin off, or by deploying direct to market strategies.

We are a Delaware corporation formed in 1991.

We have five wholly-owned subsidiaries:

We are a Delaware corporation formed in 1991, and have five wholly-owned subsidiaries:

BioLargo Life Technologies, Inc., organized under the laws of the State of California in 2006;

11 unchanged sentences

Liquidity / Going Concern

For the three months ended March 31, 2024 , we generated revenues of $ 4,760,000 through our business segments, had a net loss of $ 775,000 , and generated net cash provided by operating activities of $ 481,000 .

At March 31, 2024 , we had current assets of $ 7,176,000 , of which $ 4,336,000 was cash and cash equivalents, current liabilities of $ 3,404,000 , and working capital of $ 3,772,000 .

While we were able to generate $ 481,000 net cash from operating activities during the three months ended March 31, 2024 , we do not have a long history of doing so and are highly reliant upon third parties for the generation of a majority of our revenues.

For the three and six months ended June 30, 2024 , we generated revenues of $ 5,014,000 and $ 9,773,000 and had a net loss of $ 780,000 and $ 1,555,000 For the six months ended June 30, 2024, we generated $ 330,000 net cash from operating activities.

On June 30, 2024 , we had current assets of $ 7,110,000 , of which $ 4,765,000 was cash and cash equivalents, had current liabilities of $ 3,012,000 , and working capital of $ 4,098,000 .

While we were able to generate net cash from operating activities during the six months ended June 30, 2024 , we do not have a long history of doing so and are highly reliant upon one customer for the generation of a majority of our revenues.

We also continue to use cash to invest in capital equipment, research and development, and our new technologies.

For these reasons, we and our partially owned subsidiaries continue to sell securities to ensure available working capital.

During the three months ended March 31, 2024 , we sold (i) $ 260,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”), (ii) $ 228,000 of our common stock and warrants to accredited investors, (iii) $ 475,000 of Clyra Medical common stock, and (iv) $ 50,000 of BETI common stock.

We have been, and anticipate that we will continue to be, limited in terms of our capital resources, and expect to continue to need further investment capital to fund our business plans and investments into our new technologies.

During the six months ended June 30, 2024 , we received $ 2,082,000 from financing activities, including sales of stock (in BioLargo and subsidiaries), warrant exercises, and option exercises.

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) continue to increase revenues, generate cash from operations, or generate cash from financing activities, (ii) convert assets such as our $ 2,104,000 in accounts receivable into cash;

12 unchanged sentences

Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial presentation and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2023 , included in our Annual Report on Form 10 -K filed with the SEC on April 1, 2024.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any future period.

The results of operations for the six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year or any future period.

Foreign Currency

6 unchanged sentences

We do not anticipate non-performance by our financial institution.

As of March 31, 2024 , and December 31, 2023 , our cash balances were made up of the following (in thousands):

March 31, 2024

As of June 30, 2024 , and December 31, 2023 , our cash balances were made up of the following (in thousands):

June 30, 2024

December 31, 2023

5 unchanged sentences

Accounts Receivable

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016 - 13, which sets out the principles for the recognition of measurement of credit losses on financial instruments, including trade receivables.

The standard eliminates the probable initial recognition threshold and requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

The new standard was effective for the Company beginning January 1, 2023 and primarily impacted trade accounts receivable.

Accounts receivable are customer obligations that are unconditional.

1 unchanged sentence

The Company performs ongoing credit evaluations of its customers and, if necessary, provides an allowance for doubtful accounts and expected credit losses.

A provision to the allowances for doubtful accounts for expected credit losses is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Company’s historical experience.

A credit loss expense to the allowances for doubtful accounts for expected credit losses is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Company’s historical experience.

Provisions to the allowances for doubtful accounts for expected credit losses are recorded to general and administrative expenses.

1 unchanged sentence

The Company does not have any off-balance-sheet credit exposure related to customers.

As of March 31, 2024 , and December 31, 2023 , the allowance for doubtful accounts for expected credit losses was $ 84,000 .

As of June 30, 2024 , and December 31, 2023 , the allowance for doubtful accounts for expected credit losses was 93,000 and 84,000 , respectively.

BIOLARGO, INC.

3 unchanged sentences

We have a limited number of customers that account for significant portions of our revenue.

During the three months ended March 31, 2024 and 2023 , the following customers accounted for more than 10% of consolidated revenues:

Three Months ended March 31,

At March 31, 2024 and December 31, 2023 , one customer accounted for more than 10 % of consolidated accounts receivable:

March 31, 2024

During the three and six months ended June 30, 2024 and 2023 , the following customers accounted for more than 10% of consolidated revenues:

Three Months Ended June 30,

Six Months Ended June 30,

70 % 55 % 78 % 77 %

10 % — % — % — %

At June 30, 2024 and December 31, 2023 , one customer accounted for more than 10 % of consolidated accounts receivable:

June 30, 2024

December 31, 2023

Inventories are stated at the lower of cost or net realizable value using the average cost method.

The allowance for obsolete inventory as of March 31, 2024 , and December 31, 2023 , was $ 212,000 .

Inventories consisted of (in thousands):

March 31, 2024

The allowance for obsolete inventory as of June 30, 2024 , and December 31, 2023 , was 4,000 .

Inventories consisted of the following (in thousands):

June 30, 2024

December 31, 2023

5 unchanged sentences

Other non-current assets consisted of (i) security deposits related to our business offices, (ii) three patents acquired on October 22, 2021, for $ 34,000 .

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

We have determined that while we have significant influence over the joint venture through our technology license and our position on the Board of Directors, we do not control the joint venture or are otherwise involved in managing the entity and we own less than a majority of the equity.

Therefore, we record the asset on our condensed consolidated balance sheets and record an increase or decrease of the recorded balance by our percentage ownership of the profits or losses in the joint venture.

Therefore, we recognized the investment on our condensed consolidated balance sheets and record an increase or decrease of the recorded balance by our percentage ownership of the profits or losses in the joint venture.

The joint venture has incurred a loss since inception and our 40 % ownership share reduced our investment interest.

For the three months ended March 31, 2024 , and 2023 , the reduction of our investment interest totaled $ 1,000 and $ 6,000 , respectively.

For the three and six months ended June 30, 2024 , the reduction of our investment interest totaled $ 1,000 , compared to $ 6,000 and $ 12,000 in the same periods in 2023 .

Long-lived and definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

1 unchanged sentence

The impairment loss is measured based on the fair value of the asset.

Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

There were no impairment losses related to intangible assets during the three months ended March 31, 2024 or 2023 .

Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operations.

There were no impairment losses related to intangible assets during the six months ended June 30, 2024 or 2023 .

Loss Per Share

2 unchanged sentences

Diluted LPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock.

For the three months ended March 31, 2024 , and 2023 , the denominator in the diluted LPS computation is the same as the denominator for basic LPS due to the Company’s net loss which creates an anti-dilutive effect of the warrants and stock options.

For the three and six months ended June 30, 2024 and 2023 , the denominator in the diluted LPS computation is the same as the denominator for basic LPS due to the Company’s net loss which creates an anti-dilutive effect of the warrants and stock options.

As of June 30, 2024 , the total stock options and warrants vested and available to be exercised totals 105,358,484 .

Use of Estimates

13 unchanged sentences

The equity instruments are measured at the current fair value, and for stock options, the instruments are measured at fair value using the Black Scholes option model.

The following methodology and assumptions were used to calculate share-based compensation for the three months ended March 31, 2024 , and 2023 :

The following methodology and assumptions were used to calculate share-based compensation for the six months ended June 30, 2024 and 2023 :

Risk free interest rate

24 unchanged sentences

Revenue Recognition

We account for revenue in accordance with ASC 606, “Revenue from Contacts with Customers”.

We account for revenue in accordance with ASC 606, “Revenue from Contracts with Customers”.

The guidance focuses on the core principle for revenue recognition, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

17 unchanged sentences

To date, there have been no discounts or other financing terms for the contracts.

The Company has outstanding contract liability obligations of $ 261,000 and $ 303,000 as of March 31, 2024, and December 31, 2023, respectively.

Revenue from contract liability totaled $ 42,000 during the three months ended March 31, 2024.

The Company has outstanding contract liability obligations of $ 85,000 and $ 303,000 as of June 30, 2024 and December 31, 2023 , respectively.

Revenue from contract liability totaled $ 218,000 during the six months ended June 30, 2024 .

The outstanding balance will be recognized as earned per the terms of the contracts.

Our Canadian subsidiary had a customer deposit outstanding at March 31, 2024 and December 31, 2023, totaling $ 110,000 and $ 113,000 , respectively.

Our Canadian subsidiary had a customer deposit outstanding at June 30, 2024 and December 31, 2023 , totaling $ 80,000 and $ 113,000 , respectively.

These were awarded as part of a grant for a particular project that has been delayed.

ONM Environmental had a customer deposit outstanding at March 31, 2024 and December 31, 2023, totaling $ 116,000 and $ 4,000 , related to customer purchase orders not yet fulfilled.

Revenue from customer deposits totaled $ 4,000 during the three months ended March 31, 2024.

ONM Environmental had a customer deposit outstanding at June 30, 2024 and December 31, 2023 , totaling $ 1,000 and $ 4,000 , related to customer purchase orders not yet fulfilled.

Revenue from customer deposits totaled $ 36,000 during the six months ended June 30, 2024 .

As we generate revenues from royalties or license fees from our intellectual property, a licensee will pay a license fee in one or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property.

22 unchanged sentences

If the tax position is not considered “more-likely-than- not” to be sustained, then no benefits of the position are recognized.

Management believes there are no unrecognized tax benefits or uncertain tax positions as of March 31, 2024 , and December 31, 2023 .

The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of March 31, 2024 , and December 31, 2023 .

Management believes there are no unrecognized tax benefits or uncertain tax positions as of June 30, 2024 and December 31, 2023 .

The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of June 30, 2024 and December 31, 2023 .

Accordingly, a 100% valuation allowance was recorded against the net deferred tax asset.

1 unchanged sentence

Fair Value of Financial Instruments

Management believes the carrying amounts of the Company’s financial instruments as of March 31, 2024 , and December 31, 2023 approximate their respective fair values because of the short-term nature of these instruments.

Management believes the carrying amounts of the Company’s financial instruments as of June 30, 2024 and December 31, 2023 approximate their respective fair values because of the short-term nature of these instruments.

Such instruments consist of cash, accounts receivable, accounts payable, and line of credit.

26 unchanged sentences

The effect of short-term leases on our right-of-use asset and lease liability was not material.

As of March 31, 2024 and December 31, 2023 , the right-of-use assets totaled $ 1,068,000 , and $ 1,092,000 , respectively.

As of March 31, 2024 and December 31, 2023 , the lease liability totaled $ 1,090,000 and $ 1,109,000 , respectively, on our condensed consolidated balance sheets related to our operating leases.

Property and Equipment

Property and equipment includes machinery and leasehold improvements and is stated at cost less accumulated depreciation.

As of June 30, 2024 and December 31, 2023 , the right-of-use assets totaled $ 1,044,000 , and $ 1,092,000 , respectively.

As of June 30, 2024 and December 31, 2023 , the lease liability totaled $ 1,070,000 and $ 1,109,000 , respectively, on our condensed consolidated balance sheets related to our operating leases.

Equipment and Leasehold Improvements

Equipment and leasehold improvements and are stated at cost less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 - 10 years or the remaining lease term.

5 unchanged sentences

Noncontrolling interests are required to be presented as a separate component of equity on a consolidated balance sheets.

Accordingly, the presentation of net income (loss) is modified to present the income (loss) attributed to controlling and non-controlling interests.

Accordingly, the presentation of net loss is modified to present the loss attributed to controlling and non-controlling interests.

The noncontrolling interest on the Company’s consolidated balance sheets represents equity not held by the Company.

In accordance with ASC 810 - 10 - 20, “Noncontrolling Interests” BioLargo consolidates three non-wholly owned subsidiaries - Clyra, BLEST and BETI.

Noncontrolling interest of Clyra represents 47 % as of December 31, 2023 and 2022.

Noncontrolling interest of BLEST represents 23 % and 18 % as of December 31, 2023, and 2022, respectively.

Noncontrolling interest of BETI represents 4 % as of December 31, 2023.

BETI started operations in 2023.

Noncontrolling interest of Clyra represents 47 % as of June 30, 2024, and December 31, 2023 .

Noncontrolling interest of BLEST represents 22.5 % as of June 30, 2024 and December 31, 2023 .

Noncontrolling interest of BETI represents 4 % as of June 30, 2024, and December 31, 2023 .

BIOLARGO, INC.

9 unchanged sentences

This registration statement was declared effective on January 19, 2023.

During the three months ended March 31, 2024 and 2023 we sold 766,175 and 545,402 shares of our common stock to Lincoln Park, and received $ 260,000 and $ 105,000 , respectively, in gross proceeds.

During the three months ended June 30, 2024 , we did not sell any shares to Lincoln Park.

During the six months ended June 30, 2024 , we sold 766,175 shares of our common stock to Lincoln Park and received $ 260,000 in gross and net proceeds.

During the three and six months ended June 30, 2023, we sold 1,098,221 and 1,643,623 shares of our common stock to Lincoln Park, and received $ 194,000 and $ 299,000 , respectively, in gross and net proceeds.

Unit Offerings

During the three months ended March 31, 2024 , we sold 1,394,173 shares of our common stock and received $ 267,000 gross proceeds and $ 228,000 net proceeds from five accredited investors.

During the three months ended March 31, 2023, we sold 3,656,000 shares of our common stock and received $ 695,000 in gross and net proceeds from eleven accredited investors.

During the three months ended June 30, 2024 , we sold 454,547 shares of our common stock and received $ 152,000 gross proceeds and $ 136,000 net proceeds from two accredited investors.

During the six months ended June 30, 2024 , we sold 1,848,720 shares of our common stock and received $ 419,000 in gross and $ 364,000 in net proceeds from seven accredited investors.

During the three and six months ended June 30, 2023, we sold 1,578,948 and 5,234,948 shares of our common stock and received $ 300,000 and $ 995,000 in gross and net proceeds from accredited investors.

In addition to the shares, we issued each investor a six -month and a five -year warrant to purchase additional shares.

1 unchanged sentence

Debt Obligations

The following table summarizes our debt obligations outstanding as of March 31, 2024 , and December 31, 2023 (in thousands).

The following table summarizes our debt obligations outstanding as of June 30, 2024 and December 31, 2023 (in thousands).

The table does not include debt obligations of our partially owned subsidiary Clyra Medical (see Note 8, “Debt Obligations of Clyra Medical”).

March 31, 2024

June 30, 2024

December 31, 2023

9 unchanged sentences

Total long-term debt, net of current

For the three months ended March 31, 2024 , we recorded $ 12,000 , of interest expense related to the coupon interest from our debt obligations.

For the three months ended March 31, 2023 , we recorded $ 48,000 , of interest expense related to the amortization of discounts on convertible notes payable and coupon interest from our debt obligations.

For the three and six months ended June 30, 2024 , we recorded $ 2,000 and $ 14,000 of interest expense related to the coupon interest from our debt obligations.

For the three and six months ended June 30, 2023 , we recorded $ 12,000 and $ 60,000 of interest expense related to the amortization of discounts on convertible notes payable and coupon interest from our debt obligations.

On February 7, 2023, we entered a loan agreement with Bank of America for the purchase of a commercial vehicle used in operations totaling $ 80,000 , at 5.29 % annual interest which matures March 7, 2029.

The loan agreement requires monthly payments of $ 1,000 .

As of March 31, 2024, the balance of this loan totals $ 64,000 .

As of June 30, 2024 , the balance of this loan totals $ 61,000 .

SBA Program Loans

On February 7, 2022, we received notice that the SBA had forgiven $ 174,000 of the ONM Environmental $ 217,000 Paycheck Protection Program (PPP) loan.

As of March 31, 2024 , the outstanding balance on this loan totals $ 43,000 .

On June 28, 2024, we received notice that the SBA had forgiven all of the $ 97,000 BLEST Paycheck Protection Program (PPP) loan.

On February 7, 2022, we received notice that the SBA had forgiven $ 174,000 of the ONM Environmental $ 217,000 PPP loan.

As of June 30, 2024, the outstanding balance on this loan totals $ 43,000 .

The partial forgiveness decision has been appealed, and during such time, loan payments are deferred.

On May 12, 2022, we received notice that the SBA had denied the forgiveness application of BLEST’s $ 97,000 PPP loan.

We have appealed that decision.

During the period upon which a forgiveness decision is on appeal, loan payments are deferred.

The maturity date of the BLEST PPP loan was officially extended on our request to May 2025.

In July 2020, ONM Environmental received an Economic Injury Disaster Loan from the SBA in the amount of $ 150,000 .

In July 2020, ONM Environmental received an Economic Injury Disaster Loan (EIDL) from the SBA in the amount of $ 150,000 .

The note has a 3.75 % annual interest rate, requires monthly payments of $ 700 , and matures July 2053.

As of March 31, 2024, the balance of this loan totals $ 146,000 .

As of June 30, 2024 , the balance of this loan totals $ 146,000 .

BIOLARGO, INC.

4 unchanged sentences

Payment of Officer Salaries

No shares were issued to officers as payment of salary during the three months ended March, 31, 2024.

No shares were issued to officers as payment of salary during the three or six months ended June 30, 2024 .

On June 30, 2023, an officer agreed to convert an aggregate $ 12,000 of accrued and unpaid salary into 68,541 shares of our common stock at $ 0.18 per share.

On March 31, 2023, an officer agreed to convert an aggregate $ 6,000 of accrued and unpaid salary into 30,747 shares of our common stock at $ 0.20 per share.

Shares issued to Officers are unvested at the date of grant and subject to a lock-up agreement restricting vesting and sale until the earlier of (i) the consummation of a sale (in a single transaction or in a series of related transactions) of BioLargo by means of a sale of (a) a majority of the then outstanding common stock of BioLargo (whether by merger, consolidation, sale or transfer of common stock, reorganization, recapitalization or otherwise) or (b) all or substantially all of the assets of BioLargo;

and (ii) the successful commercialization of BioLargo’s products or technologies as demonstrated by its receipt of at least $ 3,000,000 in cash, or the recognition of $ 3,000,000 in revenue, over a 12 -month period from the sale of products and/or the license of technology;

and (iii) the Company’s breach of the employment agreement between the Company and Officer and resulting in Officer’s termination.

Payment of Consultant and Vendor Fees

On June 30, 2024, we issued 446,989 shares of our common stock at $ 0.26 per share in lieu of $ 116,000 of accrued and unpaid obligations to consultants and vendors.

On March 31, 2024, we issued 288,997 shares of our common stock at $ 0.35 per share in lieu of $ 83,000 of accrued and unpaid obligations to consultants and vendors.

On June 30, 2023, we issued 352,370 shares of our common stock at $ 0.18 per share in lieu of $ 63,000 of accrued and unpaid obligations to consultants and vendors.

On March 31, 2023, we issued 899,743 shares of our common stock at $ 0.20 per share in lieu of $ 201,000 of accrued and unpaid obligations to consultants and vendors.

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Stock Option Expense

During the three months ended March 31, 2024 , we recorded an aggregate $ 488,000 and $ 256,000 , in selling general and administrative expense related to the issuance of stock options.

We issued options through our 2018 Equity Incentive Plan, and outside of this plan.

Included in these totals is option expense related to issuances by our subsidiary, Clyra Medical, totaling $ 59,000 and $ 61,000 in the three months ended March 31, 2024 and 2023.

During the three and six months ended June 30, 2024, we recorded an aggregate $ 539,000 and $ 1,027,000 , and during the three and six months ended June 30, 2023, we recorded an aggregate $ 288,000 and $ 544,000 , in selling general and administrative expense related to the issuance of stock options.

We issued options through our 2024 Equity Incentive Plan, our 2018 Equity Incentive Plan, and outside of these plans.

Included in these totals is option expense related to issuances by our subsidiary, Clyra, totaling $ 63,000 and $ 122,000 in the three and six months ended June 30, 2024, and $ 66,000 and $ 127,000 in the three and six months ended June 30, 2023.

( See Note 8.

2024 Equity Incentive Plan

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(i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards.

The number of shares available to be issued under the 2018 Plan increases automatically each January 1 st by the lesser of (a) 2 million shares, or (b) such number of shares determined by our Board.

As of March 31, 2024 , 52,000,000 shares are authorized under the plan, and 9,343,614 remain available for grant.

Activity for our stock options under the 2018 Plan during the three months ended March 31, 2024 , and 2023 , is as follows:

The number of shares available to be issued under the 2024 Plan increases automatically on January 1 of each year by the lesser of (a) 2 million shares, or (b) such number of shares determined by our Board.

As of June 30, 2024 , 50,000,000 shares are authorized under the plan, and 48,170,243 remain available for grant.

Activity for our stock options under the 2024 Plan during the six months ended June 30, 2024 , is as follows:

Options outstanding

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Balance, December 31, 2023

Granted 1,320,498 0.20

Balance, March 31, 2023 29,805,047 0.19 7.5 678,000

1,829,757 $ 0.26

Balance, June 30, 2024

1,829,757 $ 0.26 10 $ —

( 423,868 ) $ 0.26

Vested, June 30, 2024

1,405,889 $ 0.26 10 $ —

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.26 at June 30, 2024 .

The options granted to purchase 1,829,757 shares during the six months ended June 30, 2024 with an aggregate fair value of $ 428,000 were issued to board of directors, employees and consultants:

(i) we issued options to purchase 367,648 shares of our common stock to members of our board of directors for services performed, in lieu of cash;

the fair value of these options totaled $ 84,000 ;

(ii) we issued options to purchase 423,868 shares of our common stock to employees as part of employee retention plans;

the fair value of employee retention plan options totaled $ 98,000 and vest over time or based on performance metrics;

(iii) we issued options to purchase 338,241 shares of our common stock to consultants in lieu of cash for expiring options and for services performed;

the fair value of these options totaled $ 77,000 and (iv) we issued options to purchase 700,000 shares of our common stock to our Chief Financial Officer with a fair value of $ 169,000 for expiring options.

All stock option expense is recorded on our consolidated statement of operations as selling, general and administrative expense.

As of June 30, 2024 , there remains $ 97,000 of stock option expense to be expensed over the next four years.

2018 Equity Incentive Plan

On June 22, 2018, our stockholders adopted the BioLargo 2018 Equity Incentive Plan ( “2018 Plan”) as a means of providing our directors, key employees, and consultants additional incentive to provide services.

Both stock options and stock grants may be made under this plan for a period of 10 years.

It is set to expire on its terms on June 22, 2028.

Our Board of Director’s Compensation Committee administers this plan.

As plan administrator, the Compensation Committee has sole discretion to set the price of the options.

The plan authorizes the following types of awards:

(i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards.

The number of shares available to be issued under the 2018 Plan increases automatically each January 1 st by the lesser of (a) 2 million shares, or (b) such number of shares determined by our Board.

As of June 30, 2024 , the 2018 Plan is closed to further stock option grants.

The 2018 Plan closed with 9,343,614 shares unissued.

Activity for our stock options under the 2018 Plan during the six months ended June 30, 2024 , and 2023 , is as follows:

Options outstanding

Weighted average price per share

Weighted average remaining life

Aggregate intrinsic Value(1)

Balance, December 31, 2023

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1,547,938 $ 0.30

Balance, March 31, 2024

( 497,024 ) $ 0.15

Balance, June 30, 2024

42,159,362 $ 0.19 7.3 $ 2,698,000

Vested, March 31, 2024

( 4,087,382 ) $ 0.22

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.35 at March 31, 2024 .

The options granted to purchase 1,547,938 shares during the three months ended March 31, 2024 with an aggregate fair value of $ 418,000 were issued to board of directors, employees and consultants:

Vested, June 30, 2024

38,071,980 $ 0.19 7.3 $ 2,429,000

Balance, December 31, 2022

28,484,549 $ 0.19

1,320,498 $ 0.20

Balance, June 30, 2023

29,805,047 $ 0.19 8.3 $ 402,000

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.26 at June 30, 2024 .

The options granted to purchase 1,547,938 shares during the six months ended June 30, 2024 with an aggregate fair value of $ 418,000 were issued to board of directors, employees and consultants:

(i) we issued options to purchase 267,746 shares of our common stock to members of our board of directors for services performed, in lieu of cash;

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All stock option expense is recorded on our consolidated statement of operations as selling, general and administrative expense.

As of March 31, 2024, there remains $ 5,025,000 of stock option expense to be expensed over the next 4 years.

The options granted to purchase 1,320,498 shares during the three months ended March 31, 2023 with an aggregate fair value of $ 248,000 were issued to an officer, board of directors, employees and a consultant:

(i) we issued options to purchase 347,730 shares of our common stock at an exercise price on the respective grant date of $ 0.20 per share to members of our board of directors for services performed, in lieu of cash;

the fair value of these options totaled $ 65,000 ;

(ii) we issued options to purchase 570,204 shares of our common stock to employees as part of an employee retention plan at an exercise price on the respective date of $ 0.20 per share;

the fair value of employee retention plan options totaled $ 108,000 and will vest quarterly over four years as long as they are retained as employees;

(iii) we issued options to purchase 102,564 shares of our common stock to consultants in lieu of cash for expiring options at $ 0.20 per share totaling $ 19,000 , and (iv) we issued 300,000 options to our Chief Financial Officer with a fair value of $ 56,000 .

All stock option expense is recorded on our consolidated statement of operations as selling, general and administrative expense.

BIOLARGO, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2007 Equity Incentive Plan

As of June 30, 2024 , there remains $ 741,000 of stock option expense to be expensed over the next four years.

The options granted to purchase 2,636,712 shares during the six months ended June 30, 2023, with an aggregate fair value of $ 474,000 were issued to an officer, board of directors, employees and a consultant.

The exercise price for all options were issued on their respective grant date of March 31, 2023 ( $ 0.20 per share) and June 30, 2023 ( $ 0.18 per share):

(i) we issued options to purchase 864,290 shares of our common stock to members of our board of directors for services performed, in lieu of cash;

the fair value of these options totaled $154,000;

(ii) we issued options to purchase 1,137,301 shares of our common stock to employees as part of an employee retention plan;

the fair value of employee retention plan options totaled $ 203,000 and will vest quarterly over four years as long as they are retained as employees;

(iii) we issued options to purchase 335,121 shares of our common stock to consultants in lieu of cash and for expiring options at $ 0.20 per share totaling $ 61,000 , and (iv) we issued 300,000 options to our Chief Financial Officer with a fair value of $ 56,000 (see “Chief Financial Officer Contract Extension” immediately below).

All stock option expense is recorded on our consolidated statement of operations as selling, general and administrative expense.

On September 7, 2007, and as amended April 29, 2011, the BioLargo, Inc.

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As of September 2017, the Plan was closed to further stock option grants.

Activity for our stock options under the 2007 Plan for the three months ended March 31, 2024 and 2023 is as follows:

Activity for our stock options under the 2007 Plan for the six months ended June 30, 2024 and 2023 is as follows:

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2007 Equity Incentive Plan

Options Outstanding

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1,564,085 $ 0.61

Balance, March 31, 2023

( 844,085 ) $ 0.61

Balance, June 30, 2024

720,000 $ 0.60 2.0 $ —

Balance, December 31, 2022

1,904,085 $ 0.56

Balance, March 31, 2024

( 40,000 ) $ 0.28

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.35 at March 31, 2024 .

Balance, June 30, 2023

1,864,085 $ 0.56 3.0 $ —

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.26 at June 30, 2024 .

Non-Plan Options

Activity of our non-plan stock options issued for the three months ended March 31, 2024 and 2023 is as follows:

Activity of our non-plan stock options issued for the six months ended June 30, 2024 and 2023 is as follows:

Non-plan Options outstanding

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Balance, December 31, 2023

Granted 48,804 $ 0.20

Balance, March 31, 2023 19,072,633 $ 0.39 4.1 $ 88,000

Balance, December 31, 2023

( 528,071 ) $ 0.17

( 463,882 ) $ 0.54

Balance, March 31, 2024

Balance, June 30, 2024

16,398,777 $ 0.40 2.9 $ 201,000

( 437,500 ) $ 0.45

Vested, March 31, 2024

Vested, June 30, 2024

15,961,277 $ 0.39 2.9 $ 201,000

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.35 at March 31, 2024 .

Balance, December 31, 2022

19,023,829 $ 0.39

Balance, June 30, 2023

19,083,869 $ 0.39 4.1 $ 46,000

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.26 at June 30, 2024 .

BIOLARGO, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2024 , we did not issue options out of plan.

As of March 31, 2024, there remains $ 1,056,000 of stock option expense to be expensed over the next four years.

During the three months ended March 31, 2023, we issued options to purchase an aggregate 48,804 shares of our common stock at $ 0.20 per share to vendors for fees for services.

During the six months ended June 30, 2024 , we issued options to purchase an aggregate 15,686 shares of our common stock at $ 0.26 per share to vendors for fees for services.

The fair value of the options issued totaled an aggregate $ 4,000 and is recorded in our selling, general and administrative expense.

As of June 30, 2024 , there remains $ 109,000 of stock option expense to be expensed over the next four years.

During the three months ended June 30, 2024, investors exercised stock options and we received $ 85,000 of proceeds and issued 497,024 shares of our common stock.

During the six months ended June 30, 2023 , we issued options to purchase an aggregate 60,040 shares of our common stock at $ 0.20 per share to vendors for fees for services.

The fair value of the options issued totaled an aggregate $ 11,000 and is recorded in our selling, general and administrative expense.

We have certain warrants outstanding to purchase our common stock, at various prices, as described in the following table:

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Balance, December 31, 2023

Granted 7,512,000 $ 0.25

Expired ( 4,684,986 ) $ 0.21

Balance, March 31, 2023 51,850,412 $ 0.26 $ 2.4 $ 122,000

Balance, December 31, 2023

( 967,748 ) $ 0.23

Balance, June 30, 2024

49,187,314 $ 0.27 1.9 $ 735,000

Balance, December 31, 2022

49,023,398 $ 0.26

10,669,896 $ 0.25

Balance, March 31, 2024

( 5,173,209 ) $ 0.21

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.35 at March 31, 2024 .

Balance, June 30, 2023

54,520,085 $ 0.26 2.5 $ —

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.26 at June 30, 2024 .

During the six months ended June 30, 2024, investors exercised warrants to purchase 967,748 shares of our common stock, and we received $ 216,000 in proceeds.

Warrants issued in Unit Offerings

During the three months ended March 31, 2024 , we issued six -month stock purchase warrants to purchase an aggregate 1,394,737 shares of our common stock at $ 0.23 per share, and five -year stock purchase warrants to purchase an aggregate 1,394,737 shares of our common stock at $ 0.29 per share, in conjunction with the sale of stock to investors in our Unit Offerings (see Note 3 ).

In addition to warrants issued to investors, we issued five -year stock purchase warrants to purchase an aggregate 428,948 shares of our common stock at $ 0.19 per share as commissions.

During the three months ended June 30, 2024, we issued six -month stock purchase warrants to purchase an aggregate 454,547 shares of our common stock at $ 0.33 per share, and five -year stock purchase warrants to purchase an aggregate 454,547 shares of our common stock at $ 0.33 per share, in conjunction with the sale of stock to investors in our Unit Offerings (see Note 3 ).

The relative fair value of the warrant component of the units sold to investors totaled $ 93,000 .

The Black-Scholes model was used to calculate relative fair value, further discounted by the beneficial conversion feature and the value of the common stock component.

During the three months ended March 31, 2023, pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 3,656,000 shares of our common stock at $ 0.23 per share, and five -year stock purchase warrants to purchase an aggregate 3,656,000 shares of our common stock at $ 0.29 per share.

The relative fair value of these warrants totaled $ 1,097,000 .

During the six months ended June 30, 2023, pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 5,234,948 shares of our common stock at $ 0.23 per share, and five -year stock purchase warrants to purchase an aggregate 5,234,948 shares of our common stock at $ 0.29 per share.

The fair value of these warrants totaled $ 913,000 .

Warrant issued in conjunction with amendment to note payable

On March 6, 2023, we entered into an agreement with the holder of a $ 50,000 note (see Note 4, “Convertible note payable, matures March 1, 2023”) to convert that note into common stock of BETI.

On March 6, 2023, we entered into an agreement with the holder of a $ 50,000 note to convert that note into common stock of BETI.

As payment for interest, a warrant to purchase 200,000 shares of BioLargo common stock at $ 0.21 was issued to the investor, expiring five years from the grant date.

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Accounts Payable and Accrued Expenses

As of March 31, 2024 , accounts payable and accrued expenses included the following (in thousands):

As of June 30, 2024 , accounts payable and accrued expenses included the following (in thousands):

Intercompany amounts

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The note may be converted by its holder at any time prior to the maturity date, and automatically converts to stock upon (i) Clyra’s sale of $ 5,000,000 or more of its common or preferred stock, or (ii) the maturity date, at a conversion price equal to 70 % of the lowest price-per-share of shares sold to a future investor prior to the maturity date.

As of March 31, 2024 and December 31, 2023 , the balance outstanding on this note payable totals $ 100,000 .

As of June 30, 2024 and December 31, 2023 , the balance outstanding on this note payable totals $ 100,000 .

BIOLARGO, INC.

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Line of Credit

On June 30, 2020, Clyra Medical entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC committed to provide a $ 1,000,000 inventory line of credit.

On June 30, 2020, Clyra Medical entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC ("Vernal") committed to provide a $ 1,000,000 inventory line of credit.

Since inception, Clyra Medical received $ 260,000 in draws and made repayments totaling $ 126,000 .

Clyra issued Vernal Bay 32,200 shares of its common stock as a commitment fee for the line of credit, valued at $ 70,000 .

A security agreement of the same date grants Vernal Bay a security interest in Clyra’s inventory, as that term is defined in the Uniform Commercial Code.

Clyra issued Vernal 32,200 shares of its common stock as a commitment fee for the line of credit, valued at $ 70,000 .

A security agreement of the same date grants Vernal a security interest in Clyra’s inventory, as that term is defined in the Uniform Commercial Code.

Clyra may prepay the note at any time.

On December 13, 2022, Clyra Medical entered into an amendment of the Revolving Line of Credit Agreement whereby the maturity date of the line of credit was extended to September 30, 2024, and the payment terms were modified such that amounts of principal due in each month are capped at a maximum of 15 % of the principal amount then due under the note.

Additionally, BioLargo agreed to allow Vernal Bay to elect to convert, any time prior to the note’s maturity date, the 32,200 shares of Clyra common stock it received as consideration for the line of credit into shares of Biolargo common stock at the then market price of BioLargo’s common stock.

On January 9, 2023, Vernal Bay elected to convert Clyra shares to 527,983 BioLargo shares of common stock.

As of March 31, 2024 December 31, 2023 , the balance outstanding on this line of credit totals $ 134,000 .

On December 13, 2022, Clyra and Vernal amended the Revolving Line of Credit Agreement extending the maturity date of the line of credit to September 30, 2024, and modifying the payment terms such that amounts of principal due in each month are capped at a maximum of 15 % of the principal amount then due under the note.

Additionally, BioLargo agreed to allow Vernal to elect to convert, any time prior to the note’s maturity date, the 32,200 shares of Clyra common stock it received as consideration for the line of credit into shares of BioLargo common stock at the then market price of BioLargo’s common stock.

On January 9, 2023, Vernal elected to convert Clyra shares into 527,983 shares of BioLargo common stock.

As of June 30, 2024 , the balance outstanding on this line of credit totals $ 134,000 .

Equity Transactions

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All share numbers stated herein, regardless of date, reflect the foregoing 1 -for- 100 stock split.

During the three months ended March 31, 2024, Clyra issued 27,600 shares of its common stock at $ 2.71 per share as per a development agreement.

During the six months ended June 30, 2024 , Clyra issued 27,600 shares of its common stock at $ 2.71 per share as per a development agreement.

The fair value totaled $ 52,000 and recorded as part of research and development expense on our condensed consolidated statement of operations.

Because Clyra is a private company with no secondary market for its common stock, the resulting fair value was discounted by 30 %.

As of March 31, 2024 , Clyra had 10,095,749 shares issued and outstanding, of which 746,418 were Preferred Series A shares.

As of December 31, 2023 , Clyra had 10,000,749 shares issued and outstanding, of which 746,418 were Preferred Series A shares.

As of March 31, 2024 , and December 31, 2023, of the outstanding amount, BioLargo owned 5,322,775 common shares and 165,765 Preferred Series A shares.

As of June 30, 2024 , Clyra had 10,374,635 shares issued and outstanding, of which 746,183 were Series A Preferred shares.

As of December 31, 2023 , Clyra had 10,000,749 shares issued and outstanding, of which 746,183 were Series A Preferred shares.

As of June 30, 2024 , and December 31, 2023 , of the outstanding amount, BioLargo owned 5,471,156 and 5,322,775 , respectively, common shares and 165,765 Series A Preferred shares.

BioLargo Conversion of Intercompany Balances

In July 2023, BioLargo converted $ 96,000 owed to it by Clyra into 30,833 shares of Clyra Series A preferred shares.

In June 2024, BioLargo converted $ 741,000 owed to it by Clyra into 148,156 shares of Clyra common stock.

Sales of Common Stock

During the three months ended March 31, 2024, Clyra sold 95,000 shares of its common stock, and issued warrants to purchase 47,500 shares of its common stock at $ 7.50 per share, expiring February 28, 2027, from five accredited investors.

During the six months ended June 30, 2024 , Clyra sold 223,000 shares of its common stock, and issued warrants to purchase 111,500 shares of its common stock at $ 7.50 per share, expiring February 28, 2027, from five accredited investors.

In exchange, it received $ 1,115,000 in gross proceeds.

During the three months ended March 31, 2023, Clyra did not sell shares of its common stock.

During the three months ended June 30, 2024, Clyra issued 2,730 shares in lieu of cash to a vendor for services performed.

The fair value of the services performed totaled $ 14,000 .

During the six months ended June 30, 2023 , Clyra did not sell shares of its common stock.

Sales of Series A Preferred Stock

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Accrued dividends may be converted to common stock at a conversion rate of $ 3.10 per share.

As of March 31, 2024 and December 31, 2023, the Preferred Series A accrued and unpaid dividend totaled $ 327,000 and $ 241,000 , respectively.

As of June 30, 2024 and December 31, 2023 , the Preferred Series A accrued and unpaid dividend totaled $ 327,000 and $241,000, respectively.

Each investor also entered into an agreement with BioLargo whereby the investor may exchange some or all of its Series A Preferred stock, plus accrued dividends, into shares of BioLargo common stock, at a price equal to a 20% discount of the volume weighted average price over the 30 prior trading days.

Elections may made during the period beginning January 1, 2025, and ending on June 30, 2026.

Elections may be made during the period beginning January 1, 2025, and ending on June 30, 2026.

BIOLARGO, INC.

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Balance, December 31, 2023

Granted 42,582 1.48

Balance, March 31, 2023 1,625,911 $ 0.09 7.5

Balance, December 31, 2023

1,478,922 $ 0.31

50,055 $ 4.03

Balance, March 31, 2024

Balance, June 30, 2024

1,528,977 $ 0.43 6.8

( 3,075 ) $ 2.71

Balance, March 31, 2024

Balance, June 30, 2024

1,525,902 $ 0.43

Balance, December 31, 2022

1,583,329 $ 0.06

Balance, June 30, 2023

1,669,144 $ 0.13 7.5

Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis.

The fair value of the options issued totaled $ 59,000 in the three months ended March 31, 2024 , and $ 61,000 in the three months ended March 31, 2023 .

The Black-Scholes model is used to calculate the initial fair value, during the three months ended March 31, 2024 and 2023, we used a stock price on the date of gr ant of $ 4.50 and $2.

The fair value of the options issued totaled $ 122,000 in the six months ended June 30, 2024, and $ 127,000 in the six months ended June 30, 2023.

The Black-Scholes model is used to calculate the initial fair value, during the six months ended June 30, 2024 and 2023 , we used a stock price on the date of gr ant of $ 4.50 and $2.

71 per share, respectively.

Because Clyra is a private company with no secondary market for its common stock, the resulting fair value was discounted by 30 %.

March 31, 2024

June 30, 2024

December 31, 2023

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Clyra Warrants

Clyra warrants outstanding Weighted average price per share Weighted average remaining life

Clyra Options Outstanding

Weighted average price per share

Weighted average remaining life

Balance, December 31, 2023

Granted 72,581 $ 3.72

Balance, March 31, 2023 280,094 $ 3.72 3.5

749,911 $ 3.74

111,500 $ 7.50

Balance, June 30, 2024

861,411 $ 4.22 2.50

Balance, December 31, 2022

Granted 47,500 $ 7.50

Balance, March 31, 2024 797,411 $ 3.96 2.7

207,513 $ 3.72

Balance, June 30, 2023

622,810 $ 3.72 $ 3.24

As part of the Clyra unit offering, it issued three -year warrants to purchase 111,500 shares of Clyra common stock at an exercise price of $ 7.50 per share.

The fair value of these warrants issued totaled $ 135,000 and is limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the Clyra stock.

The Black-Scholes model is used to calculate the initial fair value, during the six months ended June 30, 2024 and 2023 , we used a stock price on the date of gr ant of $ 4.50 and $2.

71 per share, respectively.

Because Clyra is a private company with no secondary market for its common stock, the resulting fair value was discounted by 30 %.

Accounts Payable and Accrued Expenses

At March 31, 2024 , and December 31, 2023 , Clyra had the following accounts payable and accrued expenses (in thousands):

At June 30, 2024 , and December 31, 2023 , Clyra had the following accounts payable and accrued expenses (in thousands):

Accounts payable

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The profit interest and option shares are subject to a five -year vesting schedule tied to the performance of the subsidiary.

As of December 31, 2023 and March 31, 2024, Class B members have earned 22.5 % profit interest.

As of June 30, 2024 and December 31, 2023, Class B members have earned 22.5 % profit interest.

BioLargo Energy Technologies, Inc.

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BioLargo purchased 9,000,000 shares of its common stock upon its formation and was its sole stockholder.

During the three months ended March 31, 2024 , BETI sold 20,000 shares of its common stock at $ 2.50 per share to one accredited investor and received $ 50,000 in gross proceeds.

During the three months ended March 31, 2023, BETI sold 325,000 shares of its common stock at $ 2.00 per share to six accredited investors.

During the six months ended June 30, 2024 , BETI sold 20,000 shares of its common stock at $ 2.50 per share to one accredited investor and received $ 50,000 in gross proceeds.

Each investor also entered into an agreement with BioLargo whereby the investor may exchange some or all of its shares of BETI common stock into shares of BioLargo common stock, at a price equal to a 20 % discount of the volume weighted average price over the 20 trading days prior to the election to exchange.

Elections must be made during calendar year 2024.

During the three months ended June 30, 2024, an investor elected to convert 50,000 shares of BETI common stock, based on the volume weighted average price of BioLargo common stock for the 30 business days preceding the election, into 378,788 shares of BioLargo common stock.

During the six months ended June 30, 2023 , BETI sold 325,000 shares of its common stock at $ 2.00 per share to six accredited investors.

Of that amount, BioLargo purchased 50,000 shares for $ 100,000 , and one investor converted a $ 50,000 note owed by BioLargo into 25,000 shares.

Proceeds from third parties totaled $ 550,000 .

As of March 31, 2024 , BETI had 9,467,000 issued and outstanding shares, of which BioLargo holds 9,050,000 .

Elections must be made during calendar year 2024.

As of June 30, 2024 , BETI had 9,487,000 issued and outstanding shares, of which BioLargo holds 9,100,000 .

BIOLARGO, INC.

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BETI and Clyra Medical have also been funded by third party investors who invest directly in exchange for equity ownership in that entity.

The segment information for the three months ended March 31, 2024 , and 2023 , is as follows (in thousands):

Three Months Ended March 31,

The segment information for the three and six months ended June 30, 2024 , and 2023 , is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

ONM Environmental

$ 4,012 $ 1,316 $ 8,586 $ 4,859

1,259 538 1,615 901

BioLargo Canada

Clyra Medical

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ONM Environmental

( 8 ) ( 6 ) ( 13 ) ( 10 )

( 18 ) ( 2 ) ( 36 ) ( 4 )

Clyra Medical

( 2 ) ( 9 ) ( 4 ) ( 19 )

$ ( 38 ) $ ( 26 ) $ ( 72 ) $ ( 48 )

Research and development expense

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257 417 428 587

$ ( 623 ) $ ( 587 ) $ ( 1,407 ) $ ( 1,152 )

Operating income (loss)

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( 247 ) ( 450 ) ( 692 ) ( 818 )

( 226 ) ( 297 ) ( 381 ) ( 384 )

( 49 ) — ( 115 ) —

BioLargo Canada

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$ ( 890 ) $ ( 1,559 ) $ ( 1,653 ) $ ( 2,037 )

Interest expense

Interest income (expense)

BioLargo corporate

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ONM Environmental

6 ( 2 ) 4 ( 4 )

Clyra Medical

( 6 ) ( 6 ) ( 13 ) ( 16 )

$ ( 2 ) $ ( 12 ) $ ( 14 ) $ ( 60 )

BIOLARGO, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024

As of June 30, 2024

Tangible assets

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Short-term leases less than one -year are not included in our analysis.

For the three months ended March 31, 2024 , rental expense was $88,000;

for the three months ended March 31, 2023 , rental expense was $ 83,000 .

For the three and six months ended June 30, 2024 , rental expense totaled $88,000 and $176,000;

for the three and six months ended June 30, 2023 , rental expense totaled $ 83,000 and $ 166,000 .

The lease of our Westminster facility expires August 2024.

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Since there is no explicit interest rate in our leases, management used its incremental borrowing rate, which is estimated to be 18 % to determine lease liability.

As of March 31, 2024, the weighted average remaining lease term for our operating leases was seven years.

As of December 31, 2023 , our weighted average remaining lease term is seven years and the total remaining operating lease payments is $ 2,042,000 .

Our minimum lease payments over the next five years are as follows:

As of June 30, 2024 , the weighted average remaining lease term for our operating leases was seven years and the total remaining operating lease payments is $1,906,000.

December 31, 2024

62,000 77,000 139,000

December 31, 2025

125,000 157,000 282,000

December 31, 2026

129,000 160,000 289,000

December 31, 2027

133,000 163,000 296,000

December 31, 2028

79,000 166,000 245,000

— 655,000 655,000

Total minimum lease payments

Less imputed interest

Total operating lease liability

$ 528,000 $ 1,378,000 $ 1,906,000

Subsequent Events

Sale of Stock for Cash

From April 1, 2024, through May 13, 2024, we sold 454,547 shares of our common stock and received $ 150,000 from two accredited investors.

In addition to the shares, we issued each investor a six -month and a five -year warrant to purchase additional shares.

(See Note 3 "Unit Offerings" and Note 6 “Warrants Issued in Unit Offering”.)

Exercise of Stock Options and Warrants

From April 1, 2024, through May 13, 2024, we issued 194,818 shares of our common stock pursuant to the exercise of stock options.

From April 1, 2024, through May 13, 2024, we issued 10,000 shares of our common stock pursuant to the exercise of warrants.

Exchange of BETI common stock

Each third party that purchased BETI common stock entered into a Share Exchange Agreement with BioLargo at the time of investment whereby the BETI Stockholder could exchange its shares of BETI common stock into BioLargo common stock.

Subsequent to April 1, 2024, a BETI stockholder elected to exchange 20,000 shares of BETI common stock into 378,788 shares of BioLargo common stock pursuant to such agreement.

Stock Issuances

From July 1, 2024, through August 13, 2024, we issued 350,000 shares of our common stock pursuant to the exercise of stock options.

From July 1, 2024, through August 13, 2024, we issued 2,100,295 shares of our common stock pursuant to the exercise of warrants.

From July 1, 2024, through August 13, 2024, we issued 28,846 shares of our common stock to vendors in exchange for reduction in payables.

Extension of Agreement with Chief Financial Officer

On August 13, 2024, we and our Chief Financial Officer Charles K.

Dargan, II agreed to extend the term of his engagement agreement dated February 1, 2008 ( the “Engagement Agreement”, which had been previously extended multiple times), pursuant to which Mr.

Dargan has been and continues to serve as our Chief Financial Officer.

The Engagement Extension Agreement dated as August 13, 2024 ( the “Engagement Extension Agreement”) expires January 31, 2025 ( the “Extended Term”), at which time the agreement will automatically renew for subsequent one -year periods.

As the sole compensation for the Extended Term, Mr.

Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock.

The Option vests over the period of the Extended Term in monthly installments of 25,000 shares, so long as the agreement is in full force and effect.

The Option is exercisable at $ 0.24 per share, the closing price of BioLargo’s common stock on the August 13, 2024 grant date, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

The Option is Mr.

Dargan’s sole compensation for the Extended Term.

As was the case in all prior terms of his engagement, there is no cash component of his compensation for the Extended Term.

Dargan is eligible to be reimbursed for business expenses he incurs in connection with the performance of his services as the Company’s Chief Financial Officer (although he has made no such requests for reimbursement in the past).

All other provisions of the Engagement Agreement not expressly amended pursuant to the Engagement Extension Agreement remain the same, including provisions regarding indemnification and arbitration of disputes.

Upon each renewal of the agreement, Mr.

Dargan will be issued an option to purchase 300,000 shares, at an exercise price equal to the closing price of the Company's common stock on the prior business day, vesting over one year.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless otherwise expressly stated herein, all statements, including forward-looking statements, set forth in this Form 10-Q are as of March 31, 2024, unless expressly stated otherwise, and we undertake no duty to update this information.

Unless otherwise expressly stated herein, all statements, including forward-looking statements, set forth in this Form 10-Q are as of June 30, 2024, unless expressly stated otherwise, and we undertake no duty to update this information.

When we refer in this report to “BioLargo,” the “Company,” “our Company,” “we,” “us” and “our,” we mean BioLargo, Inc., and our subsidiaries, including BioLargo Life Technologies, Inc., which holds our intellectual property;

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We operate our business in distinct business segments:

Odor and VOC control products, including consumer products, such as the Pooph-branded pet-odor control product, and our flagship industrial odor control product, CupriDyne Clean Industrial Odor Eliminator, sold by our subsidiary ONM Environmental, Inc.;

Odor and VOC control products, including consumer products, such as the Pooph-branded pet-odor control product, and our industrial odor control product, CupriDyne Clean Industrial Odor Eliminator, sold by our subsidiary ONM Environmental, Inc.;

Water treatment equipment and solutions, including our PFAS removal system the Aqueous Electrostatic Concentrator (AEC), our water reuse and recycling technology co-developed with Garratt-Callahan called AROS, and our micro-pollutant treatment and energy-efficient disinfection solution, the AOS, all sold by our subsidiary BioLargo Equipment Solutions & Technologies, Inc.;

Battery energy storage system solutions being developed by our partially owned (95.4%) subsidiary BioLargo Energy Technologies, Inc.;

Battery energy storage system solutions under the brand name Cellinity TM being developed by our partially owned (96%) subsidiary BioLargo Energy Technologies, Inc.;

Medical products based on our technologies, including the FDA-cleared Bioclynse surgical wound irrigation solution sold by our partially owned (53%) subsidiary Clyra Medical Technologies, Inc.;

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ONM Environmental, Inc.

is BioLargo’s wholly-owned subsidiary that delivers robust and comprehensive products and services to control and mitigate odor and VOCs for both industrial and consumer applications.

Its flagship product – CupriDyne Clean – is applied to odor-emitting masses such as landfills and composting facilities by misting systems, sprayers, water trucks and similar water delivery systems designed, manufactured and installed by ONM.

It is also sold to third parties under private label brands, including for consumer brands such as the “Pooph pet odor eliminator".

("ONM") is BioLargo’s wholly-owned subsidiary that delivers robust and comprehensive products and services to control and mitigate odor and VOCs for both consumer and industrial applications.

Pooph - Consumer Private-Label Products

We sell privately labeled products based on our technologies to third parties who market and sell the products under their own brand names.

The most successful thus far is the Pooph branded pet odor control product sold by third party Pooph Inc, directly to consumers and to national retailers including Walmart, Amazon, Home Depot, Ace Hardware, Chewy.com and others.

ONM sells privately labeled odor-control products based on our technologies to third parties who market and sell the products under their own brand names.

The most successful of these products is the "Pooph" branded pet odor control product sold by Pooph Inc.

both directly to consumers and to national and regional retailers including Walmart, Amazon, Home Depot, Ace Hardware, Chewy.com, Target, Ralphs, and others.

Pooph is advertised on television nationally, and is expanding its product lines to other products based on our odor technologies.

In addition to purchasing product from us at an agreed-upon manufacturing margin, Pooph Inc.

pays us six percent royalty on their sales in exchange for exclusive rights to our technology for pet odors.

During the year ended December 31, 2023, revenues from sales to Pooph comprised 82% of our company-wide revenue.

The success of Pooph is an example of our goal to develop distribution channels that do not rely on our in-house sales and distribution infrastructure.

During the three and six months ended June 30, 2024, revenues from sales to Pooph comprised 70% and 78% of our company-wide revenue

The success of Pooph is an example of our strategy of developing distribution channels that do not rely on our in-house sales and distribution infrastructure, and do not require our investment in marketing dollars.

We continue to explore potential partnerships and products along these lines with other parties, and to support existing private label products.

Industrial Odor and VOC Solutions

We believe CupriDyne Clean is the number-one performing industrial odor-control product in the market, and that it offers substantial savings to our customers compared with competing products.

We believe ONM's industrial odor control product, CupriDyne Clean, is the number-one performing industrial odor-control product in the market, and that it offers substantial savings to our customers compared with competing products.

We have been and expect to continue selling product to municipalities and some of the largest solid waste handling companies in the country, with a portion of chemistry product sales resulting from national purchasing agreements (NPAs).

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South Korean Joint Venture

Prior to the Covid-19 pandemic, we partnered with a leading wastewater treatment solution provider based in South Korea in a joint venture to commercialize our CupriDyne Clean products in South Korea.

In 2020, we partnered with a leading wastewater treatment solution provider based in South Korea in a joint venture to commercialize our CupriDyne Clean products in South Korea.

We own 40% of the joint venture.

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Each brings their significant and distinctive experience from decades in the water industry to BEST’s board to help the company create the necessary regulatory and industry connections that will be critical for its efforts to secure larger and more high-profile projects for its PFAS treatment and other water treatment technologies.

Securing sales in the water and wastewater industry is a very technically intensive process, and can be long and arduous.

The entirety of the sales cycle can be lengthy, in some cases even taking many months or in very large projects, multiple years.

The sales process in the municipal and industrial water and wastewater industry is a very technically intensive process, and can be long and arduous.

The entirety of the sales cycle can be lengthy, in some cases even taking many months or in very large projects, multiple years to complete bench-scale in-house validation testing and piloting, field piloting, project scoping and bidding, and contracting, before a project starts.

The process is also very engineering-intensive, and therefore the staff required to secure contracts for water treatment projects need to be engineers, in most cases.

In our company, BLEST’s engineers fill this role.

Having secured its first contract to install an AEC system to remove PFAS from drinking water, BLEST has been actively in scoping and bidding water treatment projects for over a year and as a result has developed a substantial pipeline of potential projects in which customers indicate a high level of interest.

In addition, BLEST regularly receives inquiries for new projects in development through the company’s network of manufacturer’s sales representatives.

Having secured its first contract to install an AEC system to remove PFAS from drinking water, BEST has been actively in scoping and bidding water treatment projects for over a year and as a result has developed a substantial pipeline of potential projects in which customers indicate a high level of interest.

In addition, BEST regularly receives inquiries for new projects in development through the company’s network of manufacturer’s sales representatives.

It is important to note that additional staffing is needed to meet what we believe is, and will continue to be a rapidly escalating level of customer interest in our solutions.

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Our subsidiary BioLargo Energy Technologies, Inc.

(“BETI”) was started to capitalize on the ongoing shift toward renewable energy production and the growth in global electricity demand, and the consequent expansion in energy storage capacity in the U.S.

and world-wide that will be needed to accommodate increased demand and the intermittent nature of renewable energy sources like wind and solar.

The growth in AI (Artificial Intelligence) based computing is increasing demand for expanded data centers and in turn increasing energy demand.

We believe there is a market opportunity for alternatives to lithium-based long-duration battery energy solutions.

Since its inception, BETI has sold $1,005,000 of its common stock to third parties.

As of May 13, 2024, BioLargo owns 95.4%.

(“BETI”) was founded to commercialize a novel battery technology with the potential to help facilitate the ongoing shift toward renewable energy production by providing a safer, longer lasting, more eco-friendly, and more affordable alternative to lithium-ion batteries.

Designed for long duration energy storage, also known as battery energy storage solutions (BESS), our battery, called Cellinity™, uses a novel “liquid sodium” chemistry that involves common materials that can be sourced domestically, and which has, for a variety of reasons, significant advantages over other battery chemistries for use in stationary, long-duration energy storage.

BETI has constructed a pilot-scale battery production facility in our Oak Ridge Tennessee engineering headquarters, and is currently attempting to manufacture prototype batteries for testing to confirm energy efficiency, useful life expectancy, energy density, safety profile, number of charge/discharge cycles, and other technical claims that we believe will differentiate the battery from incumbent technologies.

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The first target market for this product is orthopedics, including hip and knee replacement surgeries.

Management believes Bioclynse outperforms competing products as it has proven performance in biofilm disruption and inhibition, is non-toxic and non-cytotoxic, is non-sensitizing to tissue, and unlike competing products, does not require it to be rinsed and/or removed from a surgical cavity.

Management believes Bioclynse outperforms competing products as it has proven performance in biofilm disruption and inhibition, is non-toxic and non-cytotoxic, is non-sensitizing to tissue, and unlike competing products, does not need to be rinsed and/or removed from a surgical cavity.

Clyra management is focused on developing partnerships with large, well-established distributors who can help rapidly accelerate the product’s access to clinicians and surgeons in hospitals around the country.

In first quarter 2024, Clyra placed orders for approximately $800,000 in capital equipment to support anticipated growth in sales of its Bioclynse line of products, and has contracted with third parties for product manufacturing, as it does not intend to build its own manufacturing facility.

During the three months ended March 31,2024, Clyra sold $475,000 in common stock to support these efforts.

It, and its manufacturing partner, Keystone Industries, have invested in manufacturing equipment to support at-scale manufacturing for the Bioclynse product's use in sterile settings, such as in surgery.

In total, Clyra has committed approximately $1.5 million in equipment and related assets to support an expected national roll out of Bioclynse.

During the six months ended June 30, 2024, Clyra sold $1,115,000 in common stock to support these efforts.

Full Service Environmental Engineering

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Air Force bases for air quality control.

In the second quarter of 2024, BLEST secured new contracts to provide air quality control compliance services to additional U.S.

Air Force bases, increasing its ongoing contract-based revenue to approximately $100,000 per month.

Efforts to expand this work as well as with other clients are consistently ongoing.

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When we combine the demands of current revenue generating projects and expected growth, we are presented with an obvious challenge to manage quality, timely performance as well as access to qualified staff.

We are working carefully to find balance to help insure we meet the demands of both in a practical customer centric and capital conserving way.

We are working carefully to find balance to help ensure we meet the demands of both in a practical customer centric and capital conserving way.

It may be for example, when we secure larger and larger contracts for PFAS or Garrett Callan related work, we will need to depend heavily on our contact manufactures to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.

Results of Operations

Our revenues increased 27% to $4,760,000 in the three months ended March 31, 2024, as compared with the same period in 2023, primarily due to sales of our pet odor product private labeled to a third party under the brand name “Pooph”, which comprised 88% of our company-wide revenues.

Our revenues increased 247% and 88% in the three and six months ended June 30, 2024, as compared with the same periods in 2023, primarily due to an increased volume of sales of our pet odor control product private labeled to a third party under the brand name “Pooph”, which comprised 70% and 78%, respectively of our company-wide revenues in such periods.

Our financial statements separate revenue based on products and services.

Revenues from the sale of products for the three months ended March 31, 2024, were $4,575,000, a 29% increase over the same period of 2023.

Revenues from services for the three months ended March 31, 2024, were $185,000, a 5% decrease from the same period of 2023.

Revenues from the sale of products for the three and six months ended June 30, 2024, increased 272% and 95% over the same periods in 2023.

Revenues from services for the three and six months ended June 30, 2024, decreased 5% over the same periods in 2023.

ONM Environmental

Our wholly-owned subsidiary ONM Environmental generates revenues through (i) sales of our flagship product CupriDyne Clean, including related design, installation, and maintenance services on the systems that deliver CupriDyne Clean at its clients’ facilities, and (ii) sale of private-label products to third parties, including the Pooph branded pet odor product.

Revenue (ONM Environmental)

ONM Environmental’s revenues increased 29% to $4,575,000 in the three months ended March 31, 2024, compared with the same period in 2023.

ONM Environmental’s revenues increased 205% (to $4,012,000) and 77% (to $8,586,000) in the three and six months ended June 30, 2024, compared with the same periods in 2023.

The increase in revenues was almost entirely due to an increase in the volume of sales of our pet odor product private labeled to a third party under the brand name "Pooph".

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ONM Environmental’s cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products.

As a percentage of revenue, ONM Environmental’s costs of goods for the three months ended March 31, 2024, were 53%, an increase of 4%, compared to the same period in 2023.

The current period increase in cost of goods is due an increase raw material costs.

As a percentage of revenue, ONM Environmental’s costs of goods for the three and six months ended June 30, 2024, were 55% and 54%, an increase of 41% and 14%, compared to the same period in 2023.

The current period increase in cost of goods is due an increase in raw material costs.

Selling, General and Administrative Expense (ONM Environmental)

ONM Environmental’s selling, general and administrative expenses decreased 6% during the three months ended March 31, 2024, as compared with the same period in 2023.

The decrease is due to a reduction in salaries.

ONM Environmental’s selling, general and administrative expenses increased 11% during each of the three and six months ended June 30, 2024, as compared with the same period in 2023.

The increase is due to additional employees.

Operating Income (ONM Environmental)

ONM Environmental generated operating income of $1,798,000 in the three months ended March 31, 2024, compared to operating income of $1,387,000 for the three months ended March 31, 2023.

The generation of operating income for the three months ended March 31, 2024, was entirely dependent on sale of Pooph branded products.

ONM Environmental generated operating income of $1,490,000 and $3,288,000 in the three and six months ended June 30, 2024, compared to operating income of $428,000 and $1,815,000 for the three and six months ended June 30, 2023.

The generation of operating income for the three and six months ended June 30, 2024, was entirely dependent on sale of Pooph branded products.

BLEST (engineering)

Revenue (BLEST)

Our engineering segment's (BLEST's) revenues decreased 25% to $185,000, net of intersegment revenue, in the three months ended March 31, 2024, as compared with the same period in 2023.

In addition to providing service to third party clients, BLEST provides services to BioLargo and its subsidiaries for internal BioLargo projects.

These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation of our financial statements.

In the three months ended March 31, 2024, intersegment revenue for BLEST totaled $171,000 and for the three months ended March 31, 2023, intersegment revenue for BLEST totaled $169,000.

The decrease in third party revenue in the three months ended March 31, 2024 as compared with the same period in 2023 is a result of BLEST's focus on these internal projects and a reduction of third party contracts.

Cost of Services Sold (BLEST)

BLEST’s cost of services includes employee labor as well as subcontracted costs.

In the three months ended March 31, 2024, cost of services were 40% of its revenues, versus 69% in the same period in 2023.

In 2024, BLEST has been able to perform per the estimates and there were no unforeseen costs that increase the costs of services.

Our engineering segment's (BLEST's) revenues increased 665% (to $1,002,000) and 267% (to $1,187,000), net of intersegment revenue, in the three and six months ended June 30, 2024, as compared with the same periods in 2023.

The increase in revenue in the three and six months ended June 30, 2024 , as compared with prior periods is due to $878,000 of revenue recognized in the quarter from the sale of water treatment equipment.

Although we are focused on sales of water treatment equipment such as our AEC, AOS, and AROS systems, the sales cycle for municipal and industrial water treatment equipment is long, and management does not expect a to record similar level revenue from equipment sales in either the third or fourth quarter of 2024.

With recent new contracts, our engineers are generating approximately $100,000 in monthly services revenues for air quality management services at U.S.

Air Force bases.

These ongoing contracts are expected to continue provide a monthly base revenue, in addition to regular work for other clients.

In the future, equipment sales will be primarily handled through our subsidiary dedicated for that purpose - BioLargo Equipment Solutions & Technologies, Inc.

In addition to providing services to third pa rty clients, BLEST provides services for internal BioLargo projects.

These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation o f our financial statements.

In the three and six months ended June 30, 2024, intersegment revenue for BLEST totaled $257,000 and $428,000 and for the three and six months ended June 30, 2023, intersegmen t revenue for BLEST totaled $408,000 and $578,000.

Cost of Revenues (BLEST)

BLEST’s cost of revenues includes employee labor, subcontracted costs and cost of goods sold.

In the three and six months ended June 30, 2024, costs were 67% and 63% of revenues, versus 56% and 64% in the same period in 2023.

The increase is related to lower margins on equipment sales.

In future periods, equipment sales are expected to be through our subsidiary BEST.

Selling, General and Administrative Expense (BLEST)

BLEST’s SG&A expenses were $203,000, in the three months ended March 31, 2024, compared to $184,000, in the three months ended March 31, 2023, the increase is due to an additional employee.

BLEST’s SG&A expenses were $238,000 and $441,000, in the three and six months ended June 30, 2024, compared to $214,000 and $399,000, in the three and six months ended June 30, 2023, the increase is due to an additional employee.

In June and July 2024, BLEST has hired four additional full time employees.

Operating Loss (BLEST)

BLEST incurred an operating loss of $445,000, in the three months ended March 31, 2024, compared to an operating loss of $368,000 in the three months ended March 31, 2023.

BLEST incurred an operating loss of $247,000 and $692,000, in the three and six months ended June 30, 2024, compared to an operating loss of $450,000 and $818,000 in the three and six months ended June 30, 2023.

This operating loss is reflective of the focus at BLEST on internal BioLargo projects.

While we are unable to record revenues generated from services by the engineering group to other BioLargo operating divisions for important projects such as the development of the battery, AOS and AEC technologies, it is important to note that its operating loss would be eliminated if it were selling these services to a third party at fair market value.

The increase in operating loss was due to lower third party-revenues, and an increase in intercompany research and development activities for both the battery and AEC projects.

The decrease in operating loss was due to an increase in third party-revenues.

Because the subsidiary had an operating loss, we invested cash during the quarter to allow it to maintain operations.

Clyra Medical

In the three months ended March 31, 2024, Clyra Medical did not generate revenue, had $546,000 in total costs and expenses, which included $121,000 in research and development expenses.

In the same period in 2023, Clyra generated $6,000 in revenue, had $431,000 in total costs and expenses, which included $134,000 in research and development expenses.

Clyra Medical did not generate revenue in 2024, and it generated $6,000 in the three months end June 30, 2023.

In the three and six months ended June 30, 2024, had $616,000 and $1,161,000 in total costs and expenses, which included $100,000 and $220,000 in research and development expenses.

In the same period in 2023, had $396,000 and $823,000 in total costs and expenses, which included $60,000 and $194,000 in research and development expenses.

We expect Clyra's losses to continue in the near future as Clyra works to finalize agreements with third parties to distribute its products.

BETI has not generated generate revenue from its inception, and for the three months ended March 31, 2024 and 2023, had an operating loss of $155,000 and $87,000, respectively, primarily related to the development of its battery technology.

BETI has not generated generate revenue, and for the three and six months ended June 30, 2024, had $226,000 and $381,000 in total costs and expenses, which included $133,000 and $213,000 in research and development expenses.

In the same periods in 2023, had $297,000 and $384,000 in total costs and expenses, which included $271,000 and $303,000 in research and development expenses.

The primary focus of BETI is the development of its battery technology.

We do not expect BETI to generate revenue in the near future as it continues its research and development activities.

Formed in 2024 to develop and commercialize our various water treatment equipment, including the AEC.

BEST did not generate revenue during the three months ended March 31, 2024, and incurred $66,000 in expenses primarily related to salaries and marketing.

BEST did not generate revenue during 2024.

During the three and six months ended June 30, 2024 incurred $49,000 and $115,000 in total expenses primarily related to salaries and marketing.

Selling, General and Administrative Expense – consolidated

Our SG&A expenses include both cash (for example, salaries to employees) and non-cash expenses (for example, stock option compensation expense).

Our consolidated SG&A increased in the aggregate by 29% in the three months ended March 31, 2024, to $2,225,000 .

For the three and six months ended June 30, 2024 consolidated SG&A increased in the aggregate by 34% (to $2,404,000) and by 32% (to $4,629,000).

The largest components of our SG&A expenses included (in thousands):

Three Months Ended March 31,

Three Months Ended

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Salaries and payroll related

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Total Selling, General & Administrative

In the three months ended March 31, 2024, our non-cash expenses from stock for service and stock option expense totaled $623,000, compared to $463,000 for the three months ended March 31, 2023.

This increase is due to stock option issuances for previously issued stock options that expired during the three months ended March 31, 2024.

In the three and six months ended June 30, 2024, our non-cash expenses from the issuance of stock and stock options totaled $669,000 and $1,292,000 compared to $363,000 and $826,000 for the three and six months ended June 30, 2023.

This increase is due to stock option issuances for previously issued stock options that expired during the three and six months ended June 30, 2024.

The majority of this stock option expense is recorded in Consulting expense.

Salaries and payroll related expense increased due to the addition of new employees at our BLEST and Clyra subsidiaries.

Salaries and payroll related expense increased due to the addition of new employees;

company wide, there are 36 full time employees.

Professional fees increased due to the addition of our BEST subsidiary, private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals.

Investor relation expense increased as BioLargo works to tell our story to the public markets through speaking events and trade shows.

Investor relation expense increased as we continue to tell the BioLargo story to the public markets through speaking events and trade shows.

Research and Development

In the three months ended March 31, 2024, we spent $784,000 in the research and development of our technologies and products.

This was an increase of 39% compared to the three months ended March 31, 2023.

In the three and six months ended June 30, 2024, we spent $623,000 and $1,407,000 in the research and development of our technologies and products.

This was an increase of 6% and 22% compared to the three and six months ended June 30, 2023.

The increase is primarily due to work related to (i) the battery project, and (ii) the AEC.

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Interest expense

Our interest expense for the three months ended March 31, 2024, was $12,000, compared to $48,000 in the three months ended March 31, 2023.

Our interest expense for the three and six months ended June 30, 2024, was $2,000 and $14,000 compared to $12,000 and $60,000 in the three and six months ended June 30, 2023.

The decrease is due to a decrease in financing activities.

Other Income and Expense

For the three months ended March 31, 2024, we had no grant income, as compared with the $31,000 in three months ended March 31, 2023.

For the three and six months ended June 30, 2024, we had $15,000 of grant income, as compared with the $32,000 in the three and six months ended June 30, 2023.

Grant income is primarily generated through our wholly owned Canadian subsidiary, we have been awarded more than 80 research grants over the years from various public and private agencies, including the Canadian National Research Institute – Industrial Research Assistance Program (NRC-IRAP), the National Science and Engineering Research Council of Canada (NSERC), and the Metropolitan Water District of Southern California’s Innovative Conservation Program “ICP”.

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Grant funds paid directly to third parties are not included as income in our financial statements.

Net loss for the three months ended March 31, 2024, was $775,000 a loss of $ (0.003) per share, compared to a net loss for the three months ended March 31, 2023, of $494,000 , a loss of $ (0.001) per share.

Our net loss for the three months ended March 31, 2024, increased because of the increase in selling, general and administrative expense, offset by the increase in product revenue.

Net loss for the three and six months ended June 30, 2024, was $780,000 and $1,555,000 a loss of $ (0.001) and $ (0.003)per share, compared to a net loss for the three and six months ended June 30, 2023, of $1,626,000 and $2,120,000, a loss of $ (0.005) and $ (0.006) per share.

Our net loss for the three and six months ended June 30, 2024, decreased because of the increase in revenue offset by an increase in SG&A expense.

Of the SG&A expense, $669,000 and $1,292,000 in the three and six months ended June 30, 2024, are non-cash expenses related to the issuance of stock and stock options.

The net income (loss) per business segment is as follows (in thousands):

Three Months Ended March 31,

Three Months Ended

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

BioLargo corporate

Clyra Medical

BioLargo Water

BioLargo Canada

Liquidity and Capital Resources

For the three months ended March 31, 2024, we generated revenues of $4,760,000 through our business segments, had a net loss of $775,000, and generated net cash provided by operating activities of $481,000.

At March 31, 2024, we had current assets of $7,176,000, of which $4,336,000 was cash and cash equivalents, current liabilities of $3,404,000, and working capital of $3,772,000.

While we were able to generate $481,000 net cash from operating activities during the three months ended March 31, 2024, we do not have a long history of doing so and are highly reliant upon third parties for the generation of a majority of our revenues.

For the three and six months ended June 30, 2024, we generated revenues of $5,014,000 and $9,773,000 and we had a net loss of $780,000 and $1,555,000 For the six months ended June 30, 2024, we generated $330,000 net cash from operating activities.

On June 30, 2024, we had current assets of $7,110,000, of which $4,765,000 was cash and cash equivalents, had current liabilities of $3,012,000, and working capital of $4,098,000.

While we were able to generate net cash from operating activities during the six months ended June 30, 2024, we do not have a long history of doing so and are highly reliant upon one customer for the generation of a majority of our revenues.

We also continue to use cash to invest in capital equipment, research and development, and our new technologies.

For these reasons, we and our partially owned subsidiaries continue to sell securities to ensure available working capital.

During the three months ended March 31, 2024, we sold (i) $260,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”), (ii) $228,000 of our common stock and warrants to accredited investors, (iii) $475,000 of Clyra Medical common stock, and (iv) $50,000 of BETI common stock.

For these reasons, we continue to sell securities to ensure available working capital, both directly and through our subsidiaries;

during the six months ended June 30, 2024, we received net proceeds of $1,789,000.

Additionally during the six months ended June 30, 2024, we received $301,000 in net proceeds from the exercise of stock options and warrants.

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) continue to increase revenues, generate cash from operations, and/or generate cash from financing activities, (ii) convert assets such as our $2,104,000 in accounts receivable into cash;

or, (iii) if necessary, reduce ongoing cash obligations by curtailing portions of our operations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements