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Item 5. Market for Registrant’s Common Equity

2025-03-31 compared with 2024-04-01 · 59 added, 54 removed, 170 unchanged (40% of the section changed)

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Market Information

Since January 23, 2008, our common stock has been quoted on the OTC Markets “OTCQB” marketplace (formerly known as the “OTC Bulletin Board”) under the trading symbol “BLGO”.

The OTCQB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities.

The OTCQB securities are traded by a community of market makers that enter quotes and trade reports.

Since January 23, 2008, our common stock has been quoted on the OTC Markets (formerly known as the “OTC Bulletin Board”) under the trading symbol “BLGO”.

Since May 2024, it has listed on the OTCQX, the OTC Market's highest marketplace.

The OTC Markets is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities.

OTCQX securities are traded by a community of market makers that enter quotes and trade reports.

This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our common stock.

Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of March 27, 2024, there were approximately 600 registered holders of our common stock.

This does not include beneficial owners.

As of March 28, 2025, there were approximately 530 registered holders of our common stock, and 5,300 beneficial owners.

We have never declared or paid a cash dividend to stockholders.

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Equity compensation plans approved by security holders

42,672,533 (1)

Equity compensation plans not approved by security holders(2)

Includes 1,157,500 shares issuable under the 2007 Equity Plan, which expired September 6, 2017;

includes 41,108,448 shares issuable under the 2018 Equity Incentive Plan adopted by the Board on March 7, 2018 and subsequently approved by stockholders on May 23, 2018.

This includes various issuances of warrants or options to specific individuals either as a conversion of un-paid obligations pursuant to a plan adopted by our board of directors, or as part of their agreement for services.

includes 42,171,386 shares issuable under the 2018 Equity Incentive Plan which expired March 2024;

includes 5,493,920 shares issuable under the 2024 Equity Plan, adopted by our stockholders June 13, 2024.

This includes various issuances of options to specific individuals either as a conversion of un-paid obligations pursuant to a plan adopted by our board of directors, or as part of their agreement for services.

Sales of Unregistered Securities

The following is a report of the sales of unregistered securities in the past two years not previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.

During the three months ended December 31, 2023, we issued 68,502 shares of our common stock to reduce amounts owed to a vendor in the aggregate amount of $11,000.

During the three months ended December 31, 2023, we sold 2,894,739 shares of our common stock and received $550,000 in gross proceeds, and $495,000 in net proceeds, from fourteen accredited investors.

In addition to the shares, we issued the investors six-month warrants to purchase an aggregate 2,894,739 additional shares at $0.228 per share, and five-year warrants to purchase an aggregate 2,894,739 additional shares at $0.285 per share.

Commissions paid to a licensed broker included a 10% cash fee and a warrant to purchase 10% of the shares purchased.

In December 2023, Clyra Medical began an offering of its common stock and warrants, and received $35,000 in gross and net proceeds from one accredited investor, and in exchange issued the investors 7,000 shares of its common stock and a warrant to purchase 3,500 shares of common stock at $7.50 per share.

During 2024, Clyra Medical sold shares of its common stock and warrants and received $2,005,000 gross proceeds from 29 accredited investors, and in exchange issued the investors 373,835 shares of its common stock and a warrant to purchase 205,670 shares of common stock at $7.50 per share.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

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Clyra Medical, which develops and sells medical products based on our technology;

BETI, which develops our battery technology;

BEST, which sells equipment based on our technology;

BioLargo Canada, located in Edmonton, Alberta Canada, our primary research and development activities;

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Our consolidated revenue for the year ended December 31, 2024 was $17,779,000, which is a 45% increase over the same period in 2023.

Services revenue decreased 47% (by $680,000), while revenue from product sales increased by 158%, $7,026,000.

The decrease in service revenues was related to the focus by our subsidiary BLEST on supporting internal projects such as the AEC and battery technology, as opposed to servicing third-party clients.

Services revenue increased 32% by $247,000, while revenue from product sales increased by 46%, $5,302,000.

The increase in service revenues was related to additional engineering consulting service contracts.

The increase in product revenues was almost entirely due to an increase in the volume of sales of private-label odor-control products, specifically the Pooph branded pet-odor product.

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The increase in revenues was almost entirely due to an increase in the volume of sales of private label odor-control products, specifically the Pooph branded pet-odor product (which increased by $3,976,000).

Because ONM Environmental has no control over the marketing and sales activity or levels of Pooph, it cannot predict sales volumes related to it in future periods.

Pooph management has indicated their intentions to continue their national advertising campaign as they place the product in national retail chains, including the introduction of the product in Walmart nationally.

While they have performed well in the past, their execution of those future plans has inherent risks that are out of our control.

Because Pooph is owned and marketed by a third party, ONM Environmental has no control over the marketing and sales activity or levels of the Pooph brand.

Because the brand has only been on the market for three years, it is difficult to identify trends and uncertainties in sales volumes, especially so for longer periods of time.

For the interim period ending March 31, 2025, as the first quarter of 2024 remains our highest recorded revenue period from Pooph, we expect a downturn in revenue in the comparative period.

A reduction of revenue from sale of Pooph will adversely impact our company-wide revenue.

(See the Risk Factor above titled “A significant portion of our revenue is concentrated with one customer.”)

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Revenue (BLEST)

BLEST generated $770,000 of revenue from third parties in 2023, compared to $1,453,000 in 2022, representing a 47% decrease from the prior year.

BLEST generated $2,182,000 of revenue from third parties in 2024, compared to $770,000 in 2023, representing a 183% increase from the prior year.

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 year ended December 31, 2023, it totaled $1,627,000, primarily used to further engineer and develop our AEC PFAS treatment system and battery technology.

The decrease in third party revenue in 2023 as compared to 2022 is a result of BLEST's focus on these internal projects.

Cost of Goods (Services) Sold (BLEST)

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

In 2023, its cost of services were 51% of its revenues, versus 61% in 2022.

This decrease is due to contracts with better margins.

The increase in third party revenue in 2024 as compared to 2023 is a result of $878,000 of revenue recognized in the second quarter of 2024 from the sale of AEC water treatment equipment.

In the year ended December 31, 2024, intersegment revenues totaled $1,015,000 compared to $1,627,000 in 2023.

Intersegment revenue is primarily used to further engineer and develop our AEC PFAS treatment system and battery technology.

Cost of Goods Sold (BLEST)

BLEST’s cost of goods includes employee labor, materials, as well as subcontracted labor costs.

In 2024, its cost of goods were 74% of its revenues, versus 51% in 2023.

The increase is related to increased costs on fixed fee contracts, and work attributed to the AEC water treatment equipment.

We expect the cost of services to remain consistent in 2025 based on the contracts currently in progress.

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BLEST's SG&A expenses were $872,000 in 2024, compared to $722,000 in 2023, due to increased head-count related expenses.

We expect these expenses to continue to increase in the current year as more resources are devoted to BLEST's operations.

We expect these expenses remain consistent in 2025 based on the contracts currently in progress.

Operating Loss (BLEST)

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Because the subsidiary had a net loss, we invested cash during the year to allow it to maintain operations.

Clyra Medical

Clyra Medical has not yet begun commercial sales of its Bioclynse surgical wound irrigation product and thus has not generated revenues in 2024;

past revenues have been nominal.

In 2024, Clyra had an operating loss totaling $3,324,000, which included $827,000 in research and development expenses.

In the same period in 2023, operating loss totaled $2,102,000, which included $335,000 in research and development expenses.

The increases in costs and expenses is related to our development of Bioclynse for commercialization.

Management is not yet in a position to disclose when Clyra will begin generating revenue.

BioLargo Energy Technologies, Inc., (BETI) is focused on development of our Cellinity battery, and has not generated generate revenue.

In 2024, BETI had an operating loss totaling $642,000, which included $379,000 in research and development expenses.

In the same period in 2023, the operating loss totaled $1,179,000, which included $1,043,000 in research and development expenses.

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

BioLargo Equipment, Sciences and Technologies, Inc.

(BEST), was formed in 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC.

As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues.

We intend future water treatment projects to be contracted through BEST.

During 2024 BEST had an operating loss totaling $273,000.

Selling, General and Administrative Expense – consolidated

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Investor relations

The increases in professional fees, consulting, office expense, and sales and marketing were due to increased company activities and revenues, including new company projects such as the liquid sodium battery.

The increases in salaries and payroll related is primarily due to the fair value of the stock options issued.

The increase in professional fees, consulting, office expense, sales and marketing and investor relations were due to increased company activities and revenues, including new company projects such as the liquid sodium battery.

Office expense increased due to an increase in square footage of rented space and an increase in general office expenses related to expanded operations.

Board of director expense increased due to the replacement of expired out-of-the-money options.

Board of director expense was consistent with prior year activity.

Impairment Expense

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In the year ended December 31, 2024, we spent $2,882,000 in the research and development of our technologies and products.

This was an increase of 73% ($963,000) compared to 2022, due to increased activity related to development of AEC and battery products.

This was an increase of 26% ($600,000) compared to 2023, due to increased activity related to development of Bioclynse, our AEC water filtration and Cellinity battery products.

Other Income and Expense

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

Our Canadian subsidiary applied for and received a refund on our income taxes pursuant to the “Scientific Research and Experimental Development Program”, a Canadian federal tax incentive program designed to encourage Canadian businesses to conduct research and development in Canada.

For the years ended December 31, 2023 and 2022, we recorded an expense of $54,000 and a refund of $63,000, respectively.

Interest expense

Our interest expense for the year ended December 31, 2023, was $91,000, an increase of 72% compared with 2022.

The significant increase in interest expense is related to the timing of when we entered into our debt obligations as there was a full year of interest during 2023 versus 2022.

During 2023, $58,000 was paid in cash and $33,000 related to the amortization of debt discounts related to warrants issued in conjunction with debt instruments.

During 2022, $36,000 was paid in cash.

Our non-cash interest expenses were $17,000 in amortization of debt discounts related to warrants issued in conjunction with debt instruments.

As of December 31, 2023, the total debt on our balance sheet was $258,000, not including $234,000 owed by Clyra Medical.

The $258,000 is comprised of $190,000 is from SBA loans at low interest rates, and a $68,000 vehicle loan.

We do not intend to take on additional debt in the current year, and expect our interest expense in 2024 to decrease as compared with 2023.

Our interest expense for the year ended December 31, 2024, was $33,000, a decrease of 64% compared with 2023.

The significant decrease in interest expense is related to reduced debt and our interest income, offsetting the interest expense.

We expect our interest expense to increase in 2025 as compared with 2024 due to increased debt obligations at Clyra Medical.

Net loss for the year ended December 31, 2024, was $4,347,000 a loss of $0.01 per share, compared to a net loss for the year ended December 31, 2023, of $4,648,000 a loss of $0.01 per share, a decrease in net loss of 6%.

Our net loss this year declined because of the increase in gross margin related to our increase in revenues, offset by a smaller increase of selling, general and administrative expense.

Our net loss this year declined because of the increase in gross margin related to the increase in our revenues, offset by an increase of selling, general and administrative expense.

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

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Consolidated net loss

In the year ended December 31, 2023, approximately 68% of our net loss was attributable to non-cash expenses, including $2,124,000 of stock option compensation expense (of which $260,000 was from options issued by Clyra Medical), $384,000 of services paid by the issuance of our common stock, and $394,000 related to the impairment of our Clyra prepaid marketing agreement.

(See Note 10).

In the year ended December 31, 2022, approximately 50% of our net loss was attributable to non-cash expenses, including $2,071,000 of stock option compensation expense (of which $408,000 was from options issued by Clyra Medical), and $291,000 of services paid by the issuance of our common stock.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business.

For the year ended December 31, 2023, we had a net loss of $4,648,000, used $2,295,000 cash in operations, and at December 31, 2023, we had working capital of $3,652,000, and current assets of $6,362,000.

We do not believe gross profits in 2024 will be sufficient to fund our current level of operations, and therefore we will have to obtain further investment capital to continue to fund operations.

During the year ended December 31, 2024, we generated revenues of $17,779,000, had a net loss of $4,347,000, and used $3,206,000 cash in operations.

At December 31, 2024, we had working capital of $4,489,000, and current assets of $7,137,000.

We do not believe gross profits in the year ending December 31, 2025 will be sufficient to fund our current level of operations.

We have been, and anticipate that we will continue to be, limited in terms of our capital resources.

As of December 31, 2024, our cash and cash equivalents totaled $3,548,000, and our total liabilities included $1,079,000 in debt obligations, of which $838,000 were owed by Clyra Medical.

Of the remaining amount, $66,000 is due within one year.

During the year ended December 31, 2023, we generated revenues of $12,230,000, through our subsidiaries (see Note 12).

Other than ONM Environmental, our subsidiaries did not generate enough revenues or gross profits to fund their operations or fund our corporate operations or other business segments.

To meet our cash obligations, during the year-ended December 31, 2023, we (i) sold $995,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”) (see Note 3), (ii) sold $1,158,000 of our common stock and warrants to accredited investors (see Notes 3 and 6), (iii) sold $1,575,000 of Clyra Medical Series A Preferred Stock and $35,000 of Clyra Medical common stock (see Note 10), and (iv) sold 1,005,000 of BETI common stock (see Note 9).

If we are unable to rely on our current arrangement with Lincoln Park to fund our working capital requirements, we will have to rely on other forms of financing, and there is no assurance that we will be able to do so, or if we do so, it will be on favorable terms.

Of this remaining amount, $ 552,000 is due within one year.

Therefore, we intend to continue to raise investment capital through the sale of our securities and the securities of our subsidiaries.

To meet our cash obligations during the year-ended December 31, 2024, we (i) sold $260,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”) (see Note 3), (ii) sold $334,000 of our common stock and warrants to accredited investors (see Notes 3 and 6), (iii) sold $2,005,000, of Clyra Medical common stock (see Note 10), and (iv) sold $50,000 of BETI common stock (see Note 9).

To reduce our operational cash burdens, we regularly issue officers and vendors stock or options in lieu of cash and anticipate that we will continue to be able to do so in the future.

We and Clyra Medical have continued to sell common stock to Lincoln Park for working capital subsequent to December 31, 2023 (see Note 14).

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to continue to raise funds through stock sales to Lincoln Park or other private financings, and in the long term, our ability to attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our technologies.

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to continue to rely on our agreement with Lincoln Park or other private financings, and in the long term, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our technologies.

The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

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Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities.

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of offerings of debt with equity or derivative features which include the valuation of the warrant component, any beneficial conversion feature and potential derivative treatment, and share-based payments.

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We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.

The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its financial statements.

The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its consolidated financial statements.

Revenue Recognition

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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-K

Item 5. Market for Registrant’s Common Equity