What changed in this filing

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Item 9A. Controls and Procedures

2026-03-04 compared with 2025-03-31 · 388 added, 315 removed, 1066 unchanged (40% of the section changed)

35 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this section is incorporated by reference from the section entitled “Proposal One—Election of Directors” in the Proxy Statement.

The information required by this section is incorporated by reference from the section titled “Proposal One—Election of Directors” in the Proxy Statement.

Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16 of the Exchange Act.

This disclosure is incorporated by reference to the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement.

The information required by this Item with respect to our executive officers is contained in Item 1 of Part I of this Annual Report under the heading “Business—Executive Officers”.

This disclosure is incorporated by reference to the section titled “Section 16 (a) Beneficial Ownership Reporting Compliance” in the Proxy Statement.

EXECUTIVE COMPENSATION

The information required by this section is incorporated by reference from the information in the section entitled “Executive Compensation” in the Proxy Statement.

The information required by this section is incorporated by reference from the information in the section titled “Executive Compensation” in the Proxy Statement.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this section is incorporated by reference from the information in the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

The information required by this section is incorporated by reference from the information in the section titled “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this section is incorporated by reference from the information in the section entitled “Certain Relationships and Related Transactions” in the Proxy Statement.

The information required by this section is incorporated by reference from the information in the section titled “Certain Relationships and Related Transactions” in the Proxy Statement.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this section is incorporated by reference from the information in the section entitled “Ratification of Appointment of Independent Auditor” in the Proxy Statement.

The information required by this section is incorporated by reference from the information in the section titled “Ratification of Appointment of Independent Auditor” in the Proxy Statement.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

21 unchanged sentences

Stock Option Award Agreement under 2018 Equity Incentive Plan

Notice of Stock Option Grant under 2018 Equity Incentive Plan

Restricted Stock Unit Award Agreement under 2018 Equity Incentive Plan

Notice of Restricted Stock Unit Award under 2018 Equity Incentive Plan

Revolving Line of Credit Agreement dated June 30, 2020, between Clyra Medical and Vernal Bay

2 unchanged sentences

Warrant issued in BioLargo Unit Offerings

Amendment to March 2018 $50,000 Convertible Note, dated March 1, 2021

Warrant issued to $50,000 Convertible Noteholder on March 1, 2020

Satisfaction of March 2018 $50,000 Convertible Note, dated March 6, 2023

BioLargo license to Clyra Medical Technologies, Inc., dated March 1, 2024

1 unchanged sentence

license to BioLargo dated March 1, 2024

Consulting Agreement dated December 30, 2015 with Beach House Consulting LLC

Commercial Office Lease Agreement for Westminster California

9 unchanged sentences

Provenzano Employment Agreement dated May 28, 2019

Purchase Agreement, dated as of March 30, 2020 by and between BioLargo, Inc.

and Lincoln Park Capital Fund, LLC.

Amendment dated June 30, 2020 to Consulting Agreement dated December 30, 2015 between Clyra Medical and Beach House Consulting LLC

2022 Engagement Extension Agreement with CFO

Registration Rights Agreement, dated as of December 13, 2022, by and between BioLargo, Inc.

and Lincoln Park Capital Fund, LLC

Purchase Agreement, dated as of December 13, 2022, by and between BioLargo, Inc.

1 unchanged sentence

Form of indemnity agreement between the Company at its officers and directors

2023 Engagement Extension Agreement with CFO

Form of Share Exchange Agreement between BioLargo, Inc., and purchasers of Clyra Medical Series A Preferred Stock

1 unchanged sentence

2024 Engagement Extension Agreement with CFO

License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated May 17, 2021

First amendment to License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated August 16, 2021

Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated July 9, 2021

First amendment to Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated June 6, 2025

Form of Promissory Note issued by Clyra Medical Technologies, Inc.

(2026 Guaranteed Note)

filed herewith

Form of Payment Guaranty (Clyra Medical 2026 Guaranteed Note)

filed herewith

Code of Ethics

filed herewith

List of Subsidiaries of the Registrant

79 unchanged sentences

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

To the Stockholders and the Board of Directors

BioLargo, Inc.

We conducted our audits in accordance with the standards of the PCAOB.

46 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except for per share data)

(in thousands, except per share data)

Current assets:

5 unchanged sentences

Total current assets

Equipment and leasehold improvements

Equipment and leasehold improvements, net

Other non-current assets

Investment in South Korean joint venture

Operating lease right-of-use assets, net of amortization

Financing lease right-of-use asset

Financing lease right-of-use asset, net of amortization

Clyra Medical note receivable

Investment in South Korean joint venture

$ 8,311 $ 10,513

17 unchanged sentences

Total liabilities

CONTINGENCIES (Note 14)

STOCKHOLDERS’ EQUITY:

18 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except for per share data)

(in thousands, except per share data)

Year ended December 31,

3 unchanged sentences

Total revenue

17,779 12,230

Cost of revenue

9 unchanged sentences

Impairment expense

Credit loss expense

Total operating expenses

4 unchanged sentences

PPP forgiveness

Tax credit expense

Interest income

Interest expense

31 unchanged sentences

292,945,747 $ 196 $ 154,023 $ ( 147,098 ) $ ( 277 ) $ ( 2,642 ) $ 4,202

Stock for cash

Stock for cash, net offering costs of $ 85

2,614,895 2 592 — — — 594

1 unchanged sentence

1,107,594 1 283 — — — 284

Stock Share Exchange - VB

Issuance of common stock in exchange for BETI shares

378,788 — — — — — —

Warrant Interest

Warrant exercise

3,278,337 3 753 — — — 756

1 unchanged sentence

— — 1,535 — — — 1,535

Stock option compensation expense Clyra

Stock option exercise

948,882 — 153 — — — 153

Clyra stock option exercise

Clyra Medical stock option compensation expense

— — — — — 528 528

Clyra preferred stock offering

Clyra Medical stock issued for services

— — — — — 132 132

Clyra unit offering

Clyra Medical dividend Series A Preferred stock

— — — — — ( 345 ) ( 345 )

Clyra dividend Series A Preferred stock

Clyra Medical warrant exercise

— — — — — 30 30

BETI sales of stock

Clyra Medical warrant fee

— — — — — 106 106

Clyra Medical stock unit offering

— — — — — 2,005 2,005

Clyra Medical conversion of note payable and interest

— — — — — 119 119

Clyra Medcial fair value of warrants issued with note payable

— — — — — 160 160

BETI unit offering

— — — — — 50 50

Noncontrolling interest allocation

— — 993 — — ( 993 ) —

Net loss for the period

— — — ( 2,402 ) — ( 1,945 ) ( 4,347 )

3 unchanged sentences

301,274,243 $ 202 $ 158,332 $ ( 149,500 ) $ ( 183 ) $ ( 2,795 ) $ 6,056

Stock for cash, net offering costs of $ 85

2,614,895 2 592 — — — 594

Issuance of stock for services

1,107,594 1 283 — — — 284

Issuance of common stock in exchange for BETI shares

Sale of common stock for cash, net of offering costs of $ 310

12,876,702 9 2,018 — — — 2,027

Warrant exercise

Issuance of common stock for services

2,807,771 2 555 — — — 557

3 unchanged sentences

265,800 — — — — — —

Stock option compensation expense Clyra

Exchange of BETI stock for Biolargo common stock

153,261 — — — — — —

Stock for service Clyra

Clyra Medical stock option compensation expense

— — — — — 1,203 1,203

Clyra dividend Series A Preferred stock

Clyra Medical stock issued for services

— — — — — 76 76

Clyra warrant exercise

Clyra Medical stock issued to convert debt

— — — — — 250 250

Clyra warrant fee

Clyra Medical sales of Series B Preferred stock

— — — — — 2,145 2,145

Clyra unit offering

Clyra Medical stock unit offering

— — — — — 445 445

Clyra conversion of note payable and interest

Clyra Medical dividend Series A Preferred stock

— — — — — ( 347 ) ( 347 )

Warrants issued with Clyra note payable

Clyra Medical fair value warrant issued with debt

— — — — — 231 231

BETI sales of stock

Clyra Medical Unit Warrant offering

— — — — — 1,894 1,894

BETI unit offering

— — — — — 425 425

BETI stock issued for services

— — — — — 15 15

Noncontrolling interest allocation

1 unchanged sentence

— — — ( 11,780 ) — ( 3,409 ) ( 15,189 )

Foreign translation adjustment

Foreign currency translation

— — — — ( 24 ) — ( 24 )

Balance, December 31, 2024

Balance, Year Ended December 31, 2025

317,377,777 $ 213 $ 165,316 $ ( 161,280 ) $ ( 207 ) $ ( 2,516 ) $ 1,526

10 unchanged sentences

Common stock issued for services

Impairment expense

Inventory reserve

Credit loss expense

Operating lease right-of-use assets amortization

Lease liabilities, net

Finance lease right -of-use asset amortization

Operating lease liabilities, net

( 137 ) ( 82 )

Finance lease liability, net

Interest expense related to amortization of the discount on note payable

3 unchanged sentences

Depreciation expense

Bad debt expense

Changes in assets and liabilities:

1 unchanged sentence

( 1,814 ) ( 569 )

( 177 ) ( 89 )

Prepaid expenses and other assets

Accounts payable and accrued expenses

( 226 ) ( 58 )

Accounts payable and accrued expenses

Clyra accounts payable and accrued expenses

5 unchanged sentences

( 46 ) ( 1,235 )

Clyra note receivable

Net cash used in investing activities

Clyra Medical note receivable — ( 82 )

Repayment of note receivable

Net cash provided by (used in) investing activities

435 ( 1,317 )

Cash flows from financing activities

Proceeds from sale of common stock

Proceeds from sale of common stock, net of offering costs

Proceeds from BioLargo stock option exercise

Proceeds from BioLargo warrant exercise

(Repayments) proceeds from debt obligations, net

Repayment by Clyra Medical on inventory line of credit

Proceeds (repayments) from debt obligations, net

Proceeds from sale of preferred stock in Clyra Medical

Proceeds from sale of common stock in Clyra Medical

Proceeds from Clyra Medical stock option exercise

Proceeds from Clyra Medical warrant exercise

Proceeds from sale of common stock unit offering in Clyra Medical

Proceeds from Clyra Medical unit warrant exercise

Proceeds from Clyra Medical note payable

10 unchanged sentences

Non-cash investing and financing activities

Conversion of accounts receivable to a note receivable

Clyra preferred series A dividend

Conversion of debt into shares of BioLargo common stock

Conversion of Clyra note payable into Clyra shares

Conversion of BETI common sotck to BioLargo common stock

Fair value of warrants issued with Clyra Medical note payable

BioLargo debt obligations exchanged for BETI noncontrolling interest

Present value of new Clyra Medical right-of-use asset and operating lease liability

Present value of new financing right of use and lease liability

Allocation of stock option expense within noncontrolling interest

Allocation of noncontrolling interest

$ 2,649 $ 993

See accompanying notes to consolidated financial statements and report of Independent Registered Public Accounting Firm

16 unchanged sentences

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

As of December 31, 2025 , our cash and cash equivalents totaled $ 3,883,000 , and our total liabilities included $ 2,079,000 debt, of which $ 1,814,000 was owed by Clyra Medical and of that amount, $ 1,395,000 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 meet our cash obligations during the year-ended December 31, 2025 , we (i) sold $ 2,122,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”) (see Note 3 ), (ii) sold $ 215,000 of our common stock and warrants to accredited investors (see Note 3 and Note 6 ), (iii) sold $ 2,339,000 , of Clyra Medical common stock and sold $ 2,145,000 Clyra Medical Series B Preferred stock (see Note 10 ), and (iv) sold $ 425,000 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.

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.

Since January 1, 2026, through March 4, 2026 ( see Note 16, Subsequent Events ), Clyra Medical has received $ 1,705,000 and issued three -year promissory notes in that amount, BETI has sold $ 462,000 of its common stock, and BioLargo Inc.

sold $ 170,704 of common stock to Lincoln Park (prior to the February 1, 2026 expiration of our Purchase Agreement with Lincoln Park).

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to continue to rely on an institutional equity line such as our arrangement 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.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We are a Delaware corporation formed in 1991.

18 unchanged sentences

The Company considers all highly liquid investments with maturities of three months or less when acquired to be cash equivalents.

Substantially all cash equivalents are held in short-term money market accounts at one of the largest financial institutions in the United States.

Substantially all cash equivalents are held in short-term money market accounts at one of the largest financial institutions in the United States (“U.S.”).

From time to time, our cash account balances are greater than the Federal Deposit Insurance Corporation insurance limit of $250,000 per owner per bank, and during such times, we are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the financial institution.

6 unchanged sentences

$ 3,883 $ 3,548

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable

3 unchanged sentences

A credit loss expense 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.

Expected credit losses are recorded to general and administrative expenses.

The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable.

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

As of December 31, 2024 and 2023 , the allowance for expected credit losses was $ 97,000 and $ 84,000 , respectively.

During the years ended December 31, 2024 , and 2023, the Company recorded bad debt expense totaling $ 13,000 and $ 85,000 , respectively.

As of December 31, 2025 and 2024 , the allowance for expected credit losses related to accounts receivable was $ 700,000 and $ 97,000 , respectively.

Allowance for Credit Losses

The Company recognizes an expected allowance for credit losses with respect to its accounts receivable.

The Company recognizes an expected allowance for credit losses with respect to its note and accounts receivable.

In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded.

2 unchanged sentences

The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses.

The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery.

If any recoveries are made from any accounts previously written off, they will be recognized in earnings or an offset to credit loss expense in the year of recovery, in accordance with the entity's accounting policy election.

There were no write-offs of accounts receivable during the years ending December 31, 2024 and 2023.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company writes off receivables when there is information that indicates the customer is facing significant financial difficulty and there is no possibility of recovery.

If any recoveries are made from any accounts previously written off, they will be recognized in operations or an offset to note and credit loss expense in the year of recovery, in accordance with the entity's accounting policy election.

On June 6, 2025, ONM Environmental entered into an amendment to the June 2021 Preferred Master Manufacturing Agreement with Ikigai Holdings, LLC and Pooph Inc.

to allow Pooph Inc.

to pay past due amounts of $1,378,141 in royalties and $ 2,385,468 on product invoices through a weekly payment plan bearing 10 % interest and maturing July 3, 2026 ( the “PMMA Amendment”).

This amount was recorded on our consolidated balance sheet at June 30, 2025, as a note receivable.

The PMMA Amendment also modified payment and invoicing terms on existing and future product purchase orders, and allowed ONM Environmental to withhold product if the payment terms were not met.

On August 5, 2025, Pooph Inc.

delivered a royalty report due for the second quarter of 2025, but did not pay the $ 463,520 in royalties due.

On August 15, 2025, it failed to make the weekly payment required pursuant to the PMMA Amendment, and has not made a payment since.

On September 19, 2025, Pooph Inc.

disclosed that it had been working independently on developing a new formula for Pooph-branded products to replace BioLargo's formula, and that it was terminating the Preferred Master Manufacturing Agreement, citing ONM's refusal to deliver products.

On September 24, 2025, BioLargo and ONM delivered notice to Pooph that its license grant was immediately revoked due to Pooph’s failure to pay royalties, and that it was terminating the License Agreement in its entirety with 150 days’ notice.

The notice further advised that Pooph is not allowed to market or sell products that incorporate, use, or are based on, in whole or in part, BioLargo’s patents and proprietary information, including but not limited to know-how, disclosed to Pooph, and that absent reinstatement of the grant of license, Pooph must immediately stop marketing and selling any such products in its possession, custody or control (or sold through market portals or platforms such as Amazon).

On November 11, 2025, BioLargo Inc.

and ONM Environmental filed a lawsuit against Pooph Inc.

and Ikigai Marketing Works LLC (successor entity to Ikigai Holdings LLC) in the United States District Court for the Central District of California in part to recover the amounts due for product purchases and royalties.

(See Note 14 , "Legal Proceedings".)

During the year ended December 31, 2025, BioLargo management determined that the note receivable and accounts receivable owed by Pooph Inc.

were fully impaired, resulting in a $ 3,886,000 credit loss expense recorded on our consolidated statement of operations, which reduced operating income and current assets by that amount.

There were no write-offs of accounts receivable during the years ended December 31, 2025 and 2024.

During 2025 the Company had a $ 3,764,000 write off of a note receivable.

Credit Concentration

1 unchanged sentence

During the years ended December 31, 2025 and 2024 there was one customer that accounted for more than 10% of consolidated revenues, as follows:

We had one customer that accounted for more than 10 % of consolidated accounts receivable at December 31, 2024 and 2023 , as follows:

We had one customer that accounted for more than 10% of consolidated accounts receivable at December 31, 2024 , as follows:

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

2 unchanged sentences

Finished goods

Other Non-Current Assets

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

Security deposits

BIOLARGO, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Non-Current Assets

Other non-current assets consisted of (i) security deposits related to our business offices and leases, (ii) three patents acquired on October 22, 2021 (in thousands):

Security deposits

Equity Method of Accounting

5 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 consolidated balance sheet and record an increase or decrease the recorded balance by our percentage ownership of the profits or losses in the joint venture.

During the years ended December 31, 2024 and 2023 , the joint venture incurred a loss and our 40 % ownership share reduced our investment interest by $ 5,000 and $ 14,000 , respectively.

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

During the years ended December 31, 2025 and 2024 , the joint venture incurred a loss and our 40 % ownership share was determined by management to be impaired and we reduced our investment interest by $ 14,000 and $ 5,000 , respectively, such that as of December 31, 2025, it is completely written off.

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.

2 unchanged sentences

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.

For the year ended December 31, 2023 , management determined that there was complete impairment of Clyra’s prepaid marketing asset (see Note 10 ).

For the year ended December 31, 2023, Clyra recorded impairment expense totaling $ 394,000 .

Loss Per Share

3 unchanged sentences

For the years ended December 31, 2025 and 2024 , 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.

Potentially dilutive securities not included in the calculation of diluted LPS attributable to common stockholders because to do so would be anti-dilutive as of December 31, 2024 and 2023, are as follows (in common stock equivalent shares):

Potentially dilutive securities are not included in the calculation of diluted LPS attributable to common stockholders because to do so would be anti-dilutive as of December 31, 2025 and 2024 , are as follows (in common stock equivalent shares):

Stock options

6 unchanged sentences

The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results of our consolidated financial statements.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation Expense

14 unchanged sentences

10 5 - 10 10 10 10

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Expected price volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option.

12 unchanged sentences

As present, these equity features of the convertible promissory notes have recorded a discount to the convertible notes that is substantially equal to the proceeds received.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-Cash Transactions

23 unchanged sentences

The Company has outstanding contract liability obligations of $ 280,000 and $ 0 as of December 31, 2025 and 2024 , respectively.

The outstanding balance was recognized per the terms of the contracts.

In 2024 our Canadian subsidiary had a customer deposit outstanding at December 31, 2024 and 2023 , totaling $ 76,000 and $ 113,000 , that was awarded as part of a grant for a particular project that has been delayed.

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

BioLargo Water, our Canadian subsidiary, had a customer deposit outstanding at December 31, 2025 and 2024 , totaling $ 80,000 and $ 76,000 , that was awarded as part of a grant for a particular project that has been delayed.

ONM Environmental had a customer deposit outstanding at December 31, 2025 and 2024 , totaling $ 109,000 and $ 14,000 , related to customer purchase orders not yet fulfilled.

8 unchanged sentences

This cooperative research allows us to utilize (i) a depth of resources and talent to accomplish highly skilled work, (ii) financial aid to support research and development costs, (iii) independent and credible validation of our technical claims.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The grants typically provide for (i) recurring monthly amounts, (ii) reimbursement of costs for research talent for which we invoice to request payment, and (iii) ancillary cost reimbursement for research talent travel related costs.

4 unchanged sentences

Not all of our grant applications have been awarded, and no assurance can be made that any pending grant application, or any future grant applications, will be awarded.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of asset and liabilities.

10 unchanged sentences

Management believes the carrying amounts of the Company’s financial instruments as of December 31, 2025 and 2024 approximate their respective fair values because of the short-term nature of these instruments.

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

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

The carrying amount of debt instruments are believed to approximate fair value as the stated interest rates are reflective of the prevailing market rates.

2 unchanged sentences

If our Canadian subsidiary does not have taxable income in a reporting period, we will not receive tax refund from the Canadian Revenue Authority.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At inception of a lease contract, we assess whether the contract is, or contains, a lease.

23 unchanged sentences

As of December 31, 2025 and 2024 , the operating lease liability totaled $ 1,074,000 and $ 1,027,000 , respectively, on our consolidated balance sheets related to our leases.

The finance lease is related to Clyra.

As of December 31, 2024, the finance right-of-use asset for Clyra totaled $ 451,000 and the finance lease liability totaled $ 448,000 (see Note 10 ).

The finance lease is related to Clyra Medical.

As of December 31, 2025 and 2024 , the finance lease right-of-use asset for Clyra Medical totaled $ 338,000 and $ 451,000 , and the finance lease liability totaled $ 360,000 and $ 448,000 (see Note 10 ).

Equipment and leasehold improvements

3 unchanged sentences

Expenditures for repairs and maintenance are charged to expense as incurred.

For assets sold or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts, and any related gain or loss is reflected in income for the period.

Equipment and leasehold improvements as of December 31, 2025 and 2024 is as follows (in thousands):

6 unchanged sentences

$ 1,643 $ 1,742

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Noncontrolling Interest

6 unchanged sentences

Noncontrolling interest of BLEST represents 30 % and 26 % as of December 31, 2025 and 2024 , respectively.

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

Noncontrolling interest of BETI represents 5 % and 4 %as of December 31, 2025 and 2024 .

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued an update that, among other things, requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, provide an amount for other segment items by reportable segment and provide all segment disclosures required on an annual basis in interim periods.

Additionally, the update requires entities to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

This was effective January 1, 2024, and interim periods within fiscal years beginning after December 15, 2024.

Retrospective application is required.

BioLargo adopted this update effective December 31, 2024.

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 09, “Improvements to Income Tax Disclosures.” ASU 2023 - 09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 09, “Improvements to Income Tax Disclosures.” ASU 2023 - 09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold.

The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold.

The standard is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted.

The Company does not expect the adoption of the standard to have a material impact on its disclosures.

The adoption of the standard did not have a material impact on the Company's disclosures.

In November 2024, the FASB issued ASU 2024 - 03, “Expense Disaggregation Disclosures.” ASU 2024 - 03 requires disclosure to disaggregate prescribed expenses within relevant income statement captions.

2 unchanged sentences

The Company is evaluating the impact of the changes to its existing disclosures.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In July 2025, the FASB issued ASU No.

2025 - 05, Financial Instruments – Credit Losses (Topic 326 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets The ASU provides an optional practical expedient for estimating future credit losses based on current conditions as of the balance sheet date and assuming those conditions do not change over the remaining life of the accounts receivable.

This standard is effective for the Company on January 1, 2026.

The adoption of this ASU did not have a material impact on the consolidated results of operations and financial condition.

In September 2025, the FASB issued ASU No.

2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software.

The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs.

This standard is effective for the Company on January 1, 2028.

The Company is currently evaluating this ASU’s impact on the consolidated results of operations and financial condition.

Sale of Stock for Cash

Lincoln Park Financing

On December 13, 2022, we entered into a stock purchase agreement (the “2022 LPC Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of $ 10,000,000 of our common stock (subject to certain limitations) from time to time over a period of three years.

The agreement allows us, at our sole discretion, to direct Lincoln Park to purchase shares of our common stock, subject to limitations in both volume and dollar amount.

On December 13, 2022, we entered into a stock purchase agreement (the “Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of $ 10,000,000 of our common stock (subject to certain limitations) from time to time until February 1, 2026.

The agreement allowed us, at our sole discretion, to direct Lincoln Park to purchase shares of our common stock, subject to limitations in both volume and dollar amount.

The purchase price of the shares that may be sold to Lincoln Park under the agreement is the lower of (i) the lowest sale price on the date of purchase, or (ii) the average of the three lowest closing prices in the prior 12 business days.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties, or liquidated damages other than a prohibition on entering into a “Variable Rate Transaction,” as defined in the agreement.

Concurrently with the 2022 LPC Purchase Agreement, we entered into a Registration Rights Agreement, pursuant to which we filed a registration statement on Form S- 1 with the SEC on December 23, 2022.

Concurrently with the Purchase Agreement we entered into a Registration Rights Agreement, pursuant to which we filed a registration statement on Form S- 1 with the SEC on December 23, 2022.

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

During the years ended December 31, 2024 and 2023 , we sold 766,175 and 3,833,230 shares of our common stock to Lincoln Park, and received $ 260,000 and $ 995,000 , respectively, in gross and net proceeds.

Of the sales in the year ended December 31, 2024, all were in the first calendar quarter.

During the years ended December 31, 2025 and 2024 , we sold 11,745,123 and 766,175 shares of our common stock to Lincoln Park, and received $ 2,122,000 and $ 260,000 , respectively, in gross proceeds.

Our Consolidated Statements of Stockholder Equity includes a $ 250,000 offering cost due pursuant to the Purchase Agreement that as of December 31, 2025, was outstanding.

Unit Offerings

During the year ended December 31, 2025 , we sold 1,131,579 shares of our common stock and received $ 215,000 and $ 155,000 in gross and net proceeds from accredited investors.

During the year ended December 31, 2023, we sold 8,170,287 share of our common stock and received $ 1,158,000 in gross and net proceeds.

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

During the year ended December 31, 2024 , we sold 1,848,720 shares of our common stock and received $ 419,000 and $ 334,000 in gross and net proceeds from accredited investors.

(See Note 6 , “Warrants Issued in Unit Offering”.)

5 unchanged sentences

Vehicle loan, current portion

Term loan, current portion

SBA EIDL Loan, matures July 2053, current portion

2 unchanged sentences

Vehicle loan, matures March 2029

SBA Paycheck Protection Program loans, matures May 2025

Term loan, matures April 2028

SBA EIDL Loan, matures July 2053

Total long-term debt, net of current

For the years ended December 31, 2024 and 2023 , we recorded $ 66,000 and $ 91,000 of interest expense related to the coupon interest from our convertible notes and lines of credit.

Interest expense for the year ended December 31, 2024, was offset by $ 33,000 of interest income.

BIOLARGO, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2025 and 2024 , we recorded $ 540,000 and $ 71,000 of interest expense related to the coupon interest from our convertible notes and lines of credit, inclusive of Clyra Medical.

For the years ended December 31, 2025 and 2024 , we recorded $ 200,000 and $ 38,000 of interest income, inclusive of Clyra Medical.

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.

1 unchanged sentence

As of December 31, 2025 and 2024 , the balance of this loan totaled $ 42,000 and $ 54,000 .

Convertible note payable, matures March 1, 2023

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.

(See Note 6 ).

On April 5, 2025, we entered a term loan agreement with American Express for working capital in the principal amount of $ 50,000 , at 7.98 % annual interest, which matures April 10, 2028, and requires monthly payments of $ 2,000 .

As of December 31, 2025 and 2024 , the balance of this loan totaled $ 39,000 and $ 0 .

SBA Program Loans

12 unchanged sentences

The unpaid salary is converted on the last day of each quarter as follows:

on December 31, 2025 , officers agreed to convert $ 134,000 of accrued and unpaid salary into 808,908 shares of our common stock at $ 0.18 per share;

on September 30, 2025, we issued 177,235 shares of our common at $ 0.17 per share in lieu of $ 30,000 of accrued and unpaid obligations to two officers.

On June 30, 2025, we issued 350,751 shares of our common at $ 0.21 per share in lieu of $ 70,000 of accrued and unpaid obligations to two officers.

On March 31, 2025, we issued 11,250 shares of our common at $ 0.28 per share in lieu of $ 3,000 of accrued and unpaid obligations to an officer.

During the year ended December 31, 2024, certain of our officers agreed to convert an aggregate $ 13,000 of accrued and unpaid salary into 57,666 shares of our common stock.

The unpaid salary is converted on the last day of each quarter as follows:

on December 31, 2024, an officer agreed to convert $ 4,000 of accrued and unpaid salary into 16,579 shares of our common stock at $ 0.19 per share;

1 unchanged sentence

There were no shares of our common stock issued in exchange for unpaid salary during the three months ended June 30, 2024, or March 31, 2024.

During the year ended December 31, 2023, certain of our officers agreed to convert an aggregate $ 48,000 of accrued and unpaid salary into 292,029 shares of our common stock.

The unpaid salary is converted on the last day of each quarter as follows:

on December 31, 2023, we issued 123,178 shares of our common stock at $ 0.17 per share;

on September 30, 2023, we issued 69,563 shares of our common stock at $ 0.17 per share;

on June 30, 2023, we issued 68,541 shares of our common stock at $ 0.18 per share;

on March 31, 2023, we issued 30,747 shares of our common stock at $ 0.20 per share.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Payment of Consultant Fees

During the year ended December 31, 2024 , certain of our consultants agreed to convert an aggregate $ 271,000 accrued and unpaid obligations to consultants and vendors into 1,049,928 shares of our common stock.

Payment of Consultant and Vendor Fees

During the year ended December 31, 2025 , we issued 1,459,627 shares of our common stock in lieu of $ 320,000 accrued and unpaid obligations to consultants and vendors.

The unpaid obligations were converted on the last day of each quarter as follows:

on December 31, 2025 , we issued 539,236 shares of our common stock at $ 0.17 per share in lieu of $ 94,000 of accrued and unpaid obligations;

on September 30, 2025, we issued 147,059 shares of our common at $ 0.18 per share in lieu of $ 25,000 of accrued and unpaid obligations to consultants and vendors.

On June 30, 2025, we issued 564,252 shares of our common at $ 0.25 per share in lieu of $ 143,000 of accrued and unpaid obligations to consultants and vendors.

During the three months ended March 31, 2025, we issued 209,080 shares of our common at $ 0.27 per share in lieu of $ 58,000 of accrued and unpaid obligations to consultants and vendors.

During the year ended December 31, 2024, we issued 1,049,928 shares of our common stock $ 271,000 accrued and unpaid obligations to consultants and vendors.

The unpaid obligations were converted on the last day of each quarter as follows:

on December 31, 2024, we issued 94,126 shares of our common stock at $ 0.19 per share in lieu of $ 18,000 of accrued and unpaid obligations;

on September 30, 2024, we issued 219,816 shares of our common stock at $ 0.23 per share in lieu of $ 54,000 of accrued and unpaid obligations;

1 unchanged sentence

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.

During the year ended December 31, 2023, certain of our consultants agreed to convert an aggregate $ 336,000 accrued and unpaid obligations into 1,659,512 shares of our common stock.

The unpaid obligations were converted on the last day of each quarter as follows:

on December 31, 2023, we issued 261,276 shares of our common stock at $ 0.17 per share;

on September 30, 2023, we issued 146,123 shares of our common stock at $ 0.17 per share;

on June 30, 2023, we issued 352,370 shares of our common stock at $ 0.18 per share;

on March 31, 2023, we issued 899,743 shares of our common stock at $ 0.20 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.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Option Expense

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As of December 31, 2025 , 42,000,000 shares are authorized under the plan, and 25,206,986 remain available for grant.

Activity for our stock options under the 2024 Plan during the nine months ended December 31, 2024 , is as follows:

Activity for our stock options under the 2024 Plan during the years ended December 31, 2025 and 2024 , is as follows:

Options outstanding

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11,299,094 $ 0.20

Balance, December 31, 2025

16,793,014 $ 0.21 9.1 32,000

( 4,351,214 ) $ 0.17

Vested, December 31, 2025

1 unchanged sentence

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.18 at December 31, 2025 .

The options granted to purchase 5,493,920 shares during the year ended December 31, 2024 with an aggregate fair value of $ 1,121,000 were issued to board of directors, employees and consultants:

(i) we issued options to purchase 2,113,286 shares of our common stock to members of our board of directors for services performed, in lieu of cash;

the per share exercise price ranged between $ 0.19 and $ 0.26 and the fair value of these options totaled $ 397,000 ;

(ii) we issued options to purchase 1,683,018 shares of our common stock to employees as part of employee retention plans;

the per share exercise price ranged between $ 0.19 and $ 0.26 and the fair value of employee retention plan options totaled $ 336,000 and vest over time or based on performance metrics;

(iii) we issued options to purchase 697,616 shares of our common stock to consultants in lieu of cash for expiring options and for services performed;

the per share exercise price ranged between $ 0.24 and $ 0.26 the fair value of these options totaled $ 154,000 and (iv) we issued options to purchase 1,000,000 shares of our common stock with a per share exercise price range between $ 0.24 and $ 0.27 to our Chief Financial Officer with a fair value of $ 234,000 for expiring options and extension of agreements.

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

The options granted to purchase 11,299,094 shares during the year ended December 31, 2025 with an aggregate fair value of $ 1,925,000 were issued to board of directors, employees and consultants and the per share exercise price ranged between $ 0.17 and $ 0.28 :

(i) we issued options to purchase 1,750,369 shares of our common stock to members of our board of directors for services performed, in lieu of cash, and the fair value of these options totaled $ 311,000 ;

(ii) we issued options to purchase 4,182,205 shares of our common stock to employees as part of employee retention plans, and the fair value of employee retention plan options totaled $ 730,000 and vest over time or based on performance metrics;

(iii) we issued options to purchase 5,066,520 shares of our common stock to consultants in lieu of cash for expiring options and for services performed, and the fair value of these options totaled $ 817,000 ;

and (iv) we issued options to purchase 300,000 shares of our common stock to our Chief Financial Officer with a fair value of $ 67,000 for extension of agreements.

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

As of December 31, 2025 , there remains $ 760,000 of stock option expense to be expensed over the next four years.

Extension of Agreement with Chief Financial Officer

On January 31, 2025, the Engagement Agreement with our Chief Financial Officer Charles K.

Dargan, II automatically extended for a one -year period to expire January 31, 2026 ( the “2025 - 26 Term”).

As the sole compensation for the 2025 - 26 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 $ 0.2536 per share, the closing price of BioLargo’s common stock on the last trading day of January 2025, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

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

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Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock (this issuance is included in the total identified in (iv) above).

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.

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

The Option was 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 was 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.

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

Dargan is eligible to be reimbursed for business expenses he incurred 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 remained the same, including provisions regarding indemnification and arbitration of disputes.

Upon each renewal of the agreement, Mr.

1 unchanged sentence

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 issued under this plan for a period of 10 years.

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

Both stock options and stock grants could be issued 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:

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

The plan authorized 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.

7 unchanged sentences

1,547,938 $ 0.30

Balance, December 31, 2023

( 485,000 ) $ 0.15

Balance, December 31, 2024

42,171,386 $ 0.19

6 unchanged sentences

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.18 at December 31, 2025 .

During 2025, an option holder elected to exercise 566,951 options using the cashless exercise option in exchange for 265,800 shares of our common stock.

As of December 31, 2025 , there remains $ 334,000 of stock option expense to be expensed over the next three years.

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

5 unchanged sentences

the exercise price on the respective grant date was $ 0.35 per share and the fair value of these options totaled $ 160,000 .

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

As of December 31, 2024 , there remains $ 554,000 of stock option expense to be expensed over the next three years.

The options granted to purchase 12,623,899 shares during the year ended December 31, 2023 , with an aggregate fair value of $ 2,058,000 were issued to officers, board of directors, employees and consultants:

(i) we issued options to purchase 560,435 shares of our common stock at an exercise price on the respective grant date ranging between $ 0.17 - $ 0.20 per share to our officers to replace options that had expired and resulted in a fair value of $151,000;

(ii) we issued options to purchase 2,213,180 shares of our common stock at an exercise price on the respective grant date ranging between $ 0.17 – $ 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 $365,000;

(iii) we issued options to purchase 4,080,138 shares of our common stock to employees as part of an employee retention plan at an exercise price on the respective date ranging between $ 0.17 – $ 0.20 per share;

the fair value of employee retention plan options totaled $ 658,000 and will vest quarterly over four years as long as they are retained as employees;

(iv) we issued options to purchase 5,470,146 shares of our common stock to consultants in lieu of cash for expiring options and per agreement totaling $ 884,000 , and (v) we issued 300,000 options to our Chief Financial Officer with a fair value of $ 56,000 (see “Chief Financial Officer Contract Extension” above).

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

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2007 Equity Incentive Plan

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

2007 Equity Incentive Plan ( “2007 Plan”) was adopted 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, which expired on September 7, 2017 .

The Board’s Compensation Committee administers this plan.

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

On September 7, 2007 , and as amended April 29, 2011 , we adopted the 2007 Equity Incentive Plan ( “2007 Plan”) as a means of providing our directors, key employees and consultants additional incentive to provide services.

Both stock options and stock grants could be made under this plan for a period of 10 years, which expired on September 7, 2017 .

The Board’s Compensation Committee administered this plan.

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

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

15 unchanged sentences

( 463,882 ) $ 0.17

Balance, December 31, 2023

( 1,308,771 ) $ 0.46

Balance, December 31, 2024

15,687,642 $ 0.40

4 unchanged sentences

( 250,000 ) $ 0.18

Vested and outstanding, December 31, 2024

Vested, December 31, 2025

13,789,129 $ 0.39 1.8 $ 35,000

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.18 at December 31, 2025 .

During the year ended December 31, 2024 , we issued options to purchase an aggregate 85,251 shares of our common stock at exercise prices ranging between $ 0.23 and $ 0.26 per share to vendors for fees for services.

The fair value of the options issued totaled an aggregate $ 18,000 and is recorded in our selling, general and administrative expense.

As of December 31, 2024 , there is a total of $ 55,000 unvested fair value that will expense in the next 2 years.

During the year ended December 31, 2023 , we issued options to purchase an aggregate 60,040 shares of our common stock at exercise prices ranging between $ 0.18 – $ 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.

BIOLARGO, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2025 , we issued options to purchase an aggregate 444,921 shares of our common stock at exercise prices ranging between $ 0.18 and $ 0.28 per share to vendors for fees for services.

The fair value of the options issued totaled an aggregate $ 72,000 and is recorded in our selling, general and administrative expense.

As of December 31, 2025 , there is a total of $ 39,000 unvested fair value that will expense in the next two years.

During the year ended December 31, 2024, we issued options to purchase an aggregate 85,251 shares of our common stock at exercise prices ranging between $ 0.23 and $ 0.26 per share to vendors for fees for services.

The fair value of the options issued totaled an aggregate $ 18,000 and is recorded in our selling, general and administrative expense.

We have certain warrants outstanding to purchase our common stock, at various prices, issued for the years ended December 31, 2025 and 2024 is as follows:

Remaining term

Balance, December 31, 2023

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( 3,278,337 ) $ 0.23

Balance, December 31, 2023

( 20,823,863 ) $ 0.24

Balance, December 31, 2024

31,615,616 $ 0.29

4 unchanged sentences

( 1 ) – Aggregate intrinsic value based on closing common stock price of $ 0.18 at December 31, 2025 .

There were no warrants exercised during 2025.

During 2024, investors exercised warrants to purchase 3,278,337 shares of our common stock, and we received $ 756,000 in proceeds.

Warrants issued in Unit Offerings

During the year ended December 31, 2024 , pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 1,849,284 shares of our common stock at prices ranging between $ 0.23 and $ 0.40 per share, and five -year stock purchase warrants to purchase an aggregate 2,278,232 shares of our common stock at prices ranging between $ 0.19 and $ 0.50 per share.

During the year ended December 31, 2025 , pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 1,131,580 shares of our common stock at $ 0.23 per share, and five -year stock purchase warrants to purchase an aggregate 1,131,580 shares of our common stock at $ 0.29 per share.

The relative fair value of the warrant component of the units sold to investors totaled $ 174,000 .

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 year ended December 31, 2023 , pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 8,129,687 shares of our common stock at prices at $ 0.23 per share, and five -year stock purchase warrants to purchase an aggregate 8,129,687 shares of our common stock at $ 0.29 per share.

During the year ended December 31, 2024, pursuant to our Unit Offerings (see Note 3 ), we issued six -month stock purchase warrants to purchase an aggregate 1,849,284 shares of our common stock at prices ranging between $ 0.23 and $ 0.40 per share, and five -year stock purchase warrants to purchase an aggregate 2,278,232 shares of our common stock at prices ranging between $ 0.19 and $ 0.50 per share.

The relative fair value of the warrant component of the units sold to investors totaled $ 230,000 .

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.

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.

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.

The fair value of this warrant totaled $ 30,000 and was recorded as interest expense on our consolidated statements of operations.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value – Warrants

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The expected life in years is based on the contract term of the warrant.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Payable and Accrued Expenses

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12 68 40 — — — — 120

Accrued interest

25 — — — — — — 25

See Note 10 , “Accounts Payable and Accrued Expenses”, for the accounts payable and accrued expenses of Clyra Medical.

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However, the state of Tennessee charges franchise and excise taxes for limited liability companies, and thus BLEST will incur a nominal franchise tax and will not pay an excise tax unless and until it is profitable.

The Company’s losses before income taxes consist primarily of losses from domestic operations but also included relatively nominal losses from foreign operations.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of income tax expense (benefit) computed at the statutory federal tax rates to income taxes as reflected in the financial statements is as follows:

Pretax loss from continuing operations is as follow (in thousands):

$ ( 14,661 ) $ ( 3,843 )

Foreign ( 528 ) ( 504 )

$ ( 15,189 ) $ ( 4,347 )

A reconciliation of income tax expense (benefit) computed at the statutory federal tax rates to income taxes as reflected in the financial statements is as follows (in thousands):

Statutory U.S.

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State and local income taxes, net of federal benefit

— 0.0 % — 0.0 %

Stock compensation 623 4.1 % 433 10 %

3 unchanged sentences

Total $ — 0.0 % $ — 0.0 %

As of December 31, 2025 and 2024 , management was not aware of any uncertain tax positions that could have a material adverse effect on the Company's consolidated financial statements.

There were no cash paid for taxes in December 31, 2025 and 2024

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.

9 unchanged sentences

The Company reevaluates the positive and negative evidence at each reporting period.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2025 , the Company had utilizable federal net operating loss carry forwards of approximately $ 95.2 million.

The federal operating losses prior to 2005 have expired.

As of December 31, 2025, the Company had federal net operating loss carryforwards of approximately $ 62.8 million that expire at various dates beginning in 2026 until 2037, as well as net operating loss carryforwards of approximately $ 32.4 million generated after 2017 that do not expire but are subject to an annual utilization limitation of 80% of taxable income.

Utilization of the U.S.

3 unchanged sentences

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

The Company is subject to tax in the United States (“U.S.”) and files income tax returns in the U.S.

The Company is subject to tax in the U.S.

and files income tax returns in the U.S.

Federal jurisdiction and several states and local jurisdictions where the Company has determined it has tax nexus.

6 unchanged sentences

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

During the year ended December 31, 2024, BETI sold 20,000 shares of its common stock and received $ 50,000 During the year ended December 31, 2023, BETI sold 467,000 shares of its common stock and received $ 1,005,000 .

Of that amount, $ 100,000 in shares were purchased by BioLargo and $ 50,000 related to a conversion of BioLargo debt.

During the year ended December 31, 2025, and 2024, BETI sold 114,865 and 20,000 shares of its common stock and received $ 425,000 and $ 50,000 , respectively.

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 have been made during calendar year 2024.

As of December 31, 2025 , BETI had 9,605,826 issued and outstanding shares, of which BioLargo holds 9,095,000 .

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Noncontrolling Interest – Clyra Medical

As discussed in Note 2 above, we consolidate the operations of our partially owned subsidiary Clyra Medical, of which we owned 48 % of its outstanding shares as of December 31, 2025 .

On December 15, 2023, Clyra filed a Certificate of Conversion with the Delaware Secretary of State, formally changing its corporate domicile from California to Delaware.

In association with the change, for each one share of common stock of the California corporation, 100 shares of the Delaware corporation were issued.

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

Impairment of Other Asset, Prepaid Marketing

On December 30, 2015 , Clyra entered into a consulting agreement with Beach House Consulting, LLC, through which Jack B.

Strommen is obligated to provide consulting services to Clyra Medical related to its sales and marketing activities, in exchange for $ 23,000 per month for a period of four years.

On June 30, 2020 , at Clyra’s request, Beach House Consulting agreed to accept 3,639 shares of Clyra common stock valued at $ 788,000 , in lieu of cash, as full prepayment of the consulting fee.

The obligation to provide the consulting services is dependent on Clyra generating an average of $ 250,000 in monthly sales over three consecutive months, which has not been met.

The value of the shares issued to Beach House totaled $ 788,000 , and the obligation was recorded as a non-current asset on our consolidated balance sheets.

During 2023, Clyra Medical's revenue did not improve, and management determined as of December 31, 2023 , to impair the remaining asset balance totaling $ 394,000 .

The impairment amount was charged to impairment expense on our consolidated statements of operations.

Debt Obligations of Clyra Medical

Promissory Notes

Secured Promissory Notes

During the year ended December 31, 2024, Clyra issued promissory notes in the aggregate amount of $ 1,064,000 , the funds of which were used to purchase and secured by equipment for at-scale production of its wound irrigation solution products.

1 unchanged sentence

The notes bear interest at the rate of 15 % per annum, mature in two years, and require interest-only payments until maturity.

On April 8, 2022 , Clyra Medical issued a promissory note in the principal amount of $ 100,000 to an individual investor, payable April 8, 2024 , and bearing 8 % annual interest.

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.

During July 2024, the note holder elected to convert the outstanding principal and interest totaling $ 119,000 , and in exchange received 34,126 shares of Clyra common stock.

During 2025, Clyra issued secured promissory notes in the aggregate amount of $ 436,000 , the funds of which were used to purchase equipment for at-scale manufacture of its products.

The notes bear interest at the rate of 15 % per annum, mature on October 31, 2026, require interest-only payments until maturity, and may be pre-paid at any time.

Each investor received a warrant to purchase the number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $ 6.00 per share, expiring October 31, 2029.

Warrant to purchase 72,667 shares of Clyra common stock were issued.

The fair value of the warrants totaled $ 99,000 and is recorded as a debt discount, which is amortized as interest expense over the term of the secured promissory note.

As of December 31, 2025, and December 31, 2024, the balance outstanding totaled $ 1,300,000 and $ 864,000 .

Convertible Promissory Notes

During 2025, Clyra issued convertible promissory notes in the aggregate amount of $ 250,000 .

The notes bear interest at the rate of 15% per annum, mature two years after the issuance date, require interest-only payments until maturity, and may be pre-paid at any time.

Each investor received a warrant to purchase the number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $ 7.50 per share, expiring August 1, 2027.

Warrants to purchase 41,667 shares of Clyra common stock were issued.

The fair value of these warrants issued totaled $ 52,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the convertible promissory note.

During the year ending December 31, 2025, these notes were converted into 41,667 shares of Clyra common stock.

Guaranteed Note Offering

During 2025, Clyra issued guaranteed promissory notes in the aggregate amount of $ 575,000 .

The notes bear interest at the rate of 15 % per annum, matures July 15, 2027, and is guaranteed by the Company’s largest stockholder, BioLargo Inc.

The notes may be converted at $ 6.00 per share by the holder at any time, and by Clyra upon the occurrence of certain events which have been satisfied as of May 15, 2025.

Each investor received a warrant to purchase an aggregate of number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $ 6.50 per share, expiring July 15, 2028.

Warrants to purchase 88,462 shares of Clyra common stock were issued.

The fair value of these warrants issued totaled $ 80,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the guaranteed promissory notes.

As of December 31, 2025, the balance outstanding totals $ 575,000 .

The Black-Scholes model is used to calculate the initial fair value of the warrants issued as part of the Clyra Medical debt obligations, we used a stock price on the date of grant of $ 6.00 per share, volatility ranging between 21 - 43 %.

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

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Clyra Medical received $ 260,000 in draws and made repayments totaling $ 99,000 .

Funds from the line of credit must be used to produce inventory.

Additional draws are conditional upon the presentation of invoices or purchase orders to the lender equal to the greater of one -half of principal outstanding on the line of credit, and $ 200,000 .

The line of credit note bears interest at 15%, matures in one year, and requires Clyra pay interest and principal from gross product sales.

For the first 180 days, on a monthly basis, Clyra was required to pay 30 % of gross product sales to reduce amounts owed, and thereafter 60 % of gross sales.

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 may prepay the note at any time.

On December 13, 2022 , Clyra and Vernal 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 based on the volume weighted average price of BioLargo common stock for the 30 business days preceding the election.

Vernal Bay elected to convert these shares into 527,983 shares of BioLargo common stock in January 2023.

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

The interest rate on this line of credit is 15 %.

On December 13, 2022, Clyra and Vernal amended the Revolving Line of Credit Agreement extending the maturity date of the line of credit indefinitely 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.

The maturity date has not been further extended, and Clyra continues to provide monthly reporting and make interest payments to Vernal as required.

As of December 31, 2025 and 2024 , the balance outstanding on this line of credit totaled $ 134,000 .

Clyra continues to make monthly interest payments.

Sale and leaseback of equipment

On December 4, 2024, Clyra entered into an agreement whereby it sold and leased back certain equipment to be used in the manufacturing of its wound irrigation solution.

Clyra received $ 350,000 cash and a secured promissory note in the principal amount of $ 82,000 which bears interest at 15 %, requires interest be paid monthly, and the principal balance due on December 4, 2028.

The obligations of the Note are secured by the equipment pursuant to a security agreement.

Concurrently, Clyra leased the equipment for a 49 -month term with monthly payments totaling $ 600,000 .

At the end of the lease term, Clyra has the option to purchase the equipment for $ 82,000 .

December 31, 2025

December 31, 2026

December 31, 2027

December 31, 2028

Total minimum lease payments

Less imputed interest

Total financing lease payments

Equity Transactions

As of December 31, 2024 , Clyra had an aggregate 10,544,527 shares outstanding, of which 746,418 were Series A Preferred shares.

Of that amount, BioLargo owned 5,470,921 shares, of which 165,765 were Series A Preferred shares.

As of December 31, 2025 , Clyra had an aggregate 11,375,860 shares outstanding, of which 746,418 and 330,000 were Series A and Series B Preferred shares, respectively.

As of December 31, 2024 , Clyra had an aggregate 10,544,527 shares outstanding, of which 746,418 were Series A Preferred shares.

Of that amount, BioLargo owned 5,322,775 shares, of which 165,765 were Series A Preferred shares.

Sales of Common Stock

During the year ended December 31, 2024 , Clyra sold 373,875 shares of its common stock, from 29 accredited investors.

In exchange, it received $ 2,005,000 in gross and net proceeds.

The fair value of these warrants issued total $ 163,000 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.

During the year ended December 31, 2023, Clyra sold 7,000 shares of its common stock, and issued a warrant to purchase 3,500 shares of its common stock at $ 7.50 per share, expiring February 28, 2027, from one accredited investor.

In exchange, it received $ 35,000 in gross and net proceeds.

The fair value of this warrant issued total $ 4,000 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.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 and 2024 , BioLargo owned 5,470,921 shares, of which 165,765 were Series A Preferred shares.

Sales of Series A Preferred Stock

During the year ended December 31, 2023, Clyra sold 508,072 shares of its Series A Preferred Stock, and in exchange received $ 1,575,000 in gross and net proceeds from 35 accredited investors.

Purchasers of the Series A Preferred Stock also received a 3 -year warrant to purchase the same number of additional shares of common stock for $ 3.72 per share.

The fair value of the warrants issued totaled $ 410,000 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 Series A Preferred Stock.

Shares of Series A Preferred Stock earn a dividend of 15 % each year, compounding annually;

4 unchanged sentences

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

On July 20, 2023, BioLargo converted $ 96,000 owed to it by Clyra into 30,833 shares of Clyra Series A preferred common stock.

There were no sales of Series A Preferred Stock during the years ended December 31, 2025 and 2024.

Sales of Series B Preferred Stock

In an offering that closed in October 2025, Clyra sold 330,000 shares of its Series B Preferred Stock, and in exchange received $ 2,145,000 in gross and net proceeds.

Purchasers of the Series B Preferred Stock also received warrants to purchase an aggregate 165,000 shares of common stock for $ 7.50 per share, expiring three years from the grant date.

The fair value of the warrants issued totaled $ 94,000 .

Sales of Common Stock

During the year ended December 31, 2025 , Clyra sold 72,244 shares of its common stock, and issued 36,122 warrants to purchase shares of its common stock at $ 7.50 per share, expiring February 28, 2027, from six accredited investors.

In exchange, it received $ 445,000 in gross proceeds.

The relative fair value of these warrants totaled $ 45,000 .

During the year ended December 31, 2024, Clyra sold 373,875 shares of its common stock, from 29 accredited investors.

In exchange, it received $ 2,005,000 in gross and net proceeds.

BioLargo Conversion of Intercompany Balances

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

Common Stock issued for services

During 2025, Clyra issued 37,582 shares of its common stock to vendors for services performed in lieu of cash totaling $ 100,000 and issued a warrant to purchase 5,707 shares of its common stock at $ 6.00 per share, expiring 5 years from the grant date.

The relative fair value of these warrants totaled $ 7,000 .

During 2024, Clyra issued 11,331 shares of its common stock to vendors for services performed in lieu of cash totaling $ 29,000 .

Warrant issued for accounts payable

During 2025, Clyra issued a warrant to purchase 13,847 shares of common stock to a vendor in exchange for services.

The warrant has an exercise price is $ 7.50 , expires three years from the date of grant, and the fair value totaled $ 8,000 .

Warrant Holder Unit Offering

During 2025, Clyra allowed existing warrant holders to purchase up to two times the number of warrants they held at their current exercise price and receive, in addition to the shares exercised, an additional warrant equal the number of shares purchased with an exercise price is $ 7.50 per share to expire June 30, 2028.

Clyra received $ 1,894,000 in gross and net proceeds and issued warrants to purchase 336,916 shares of its common stock from 26 accredited investors.

The relative fair value of these warrants totaled $ 212,000 .

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

2 unchanged sentences

497,942 $ 0.85

( 296,389 ) $ 1.97

Balance, December 31, 2024

4 unchanged sentences

( 854,685 ) $ 3.97

Balance, December 31, 2024

Vested Balance, December 31, 2025

2,159,007 $ 1.46 8.6

1 unchanged sentence

During the years ended December 31, 2025 and 2024 , Clyra issued options to purchase 1,036,829 and 497,942 shares of its common stock, respectively.

Each option vests upon issuance and has an expiration date 10 years from the date of grant.

Of the 497,942 options granted during the year ended December 31, 2024 , the exercise price of 400,000 are $0.01 per share, 6,666 are exercisable at $1.00 and the remainder are exercisable at $ 4.50 per share.

Of the 191,981 options granted during the year ended December 31, 2023 , the exercise price of 52,700 are $0.01 per share, and the remainder are $ 2.71 per share.

Each option vests per the terms of the issuance and has an expiration date 10 years from the date of grant.

Of the 1,036,829 options granted during the year ended December 31, 2025 , the exercise price of 965,930 shares are $4.50 per share, and 70,899 shares are exercisable at $3.10 per share.

The fair value of the options issued in the year ended December 31, 2025 and 2024 totaled $ 1,760,000 and $ 528,000 , respectively;

1 unchanged sentence

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

During the year ended December 31, 2024, we used a risk-free rate ranging between 3.95 % - 4.34 % compared to the year-ended December 31, 2023, we used a risk-free rate ranging between 3.48 % - 4.45 % , a volatility of 43 % - 49 % and an expected life of 10 years.

As of December 31, 2024 , there remains $ 944,000 of stock option expense to be expensed over the next two years.

During the year ended December 31, 2025 , we used a risk-free rate ranging between 3.48 % - 4.45 % and volatility of 21 - 49 %, compared to the year-ended December 31, 2024, we used a risk-free rate ranging between 3.95 % - 4.34 % , a volatility of 43 % - 49 % and an expected life of 10 years.

As of December 31, 2025 , there remains $ 1,490,000 of stock option expense to be expensed over the next three years.

Clyra Warrants Outstanding

4 unchanged sentences

441,336 $ 6.70

( 8,065 ) $ 3.72

Balance, December 31, 2024

11 unchanged sentences

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

We used a risk-free rate ranging between 3.44 % - 4.58 % , a volatility ranging between 43 % - 49 % and expected lives of 3 - 5 years.

For the year-ended December 31, 2025, we used a risk-free rate ranging between 3.48 % - 4.45 %, compared to the year-ended December 31, 2024, we used a risk-free rate ranging between 3.95 % - 4.34 % , a volatility of 21 % - 49 % and an expected lives of .5 - 5 years.

Sale and leaseback of equipment

On December 4, 2024, Clyra entered into an agreement whereby it sold and leased back certain equipment to be used in the manufacturing of its wound irrigation solution.

The obligations of the Note are secured by the equipment pursuant to a security agreement.

At the end of the lease term, Clyra has the option to purchase the equipment for $ 82,000 .

Concurrently, Clyra leased the equipment for a 49 -month term.

The remaining lease payments total $ 450,000 .

December 31, 2026

December 31, 2027

December 31, 2028

Total minimum lease payments

Less imputed interest

Total financing lease liability

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Payable and Accrued Expenses

3 unchanged sentences

Accrued dividend

Accrued interest

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BioLargo Engineering, Science & Technologies, LLC

$ 1,592 $ 867

Noncontrolling Interest – BioLargo Engineering, Science & Technologies, LLC

In September 2017 , we commenced a full-service environmental engineering firm and formed a Tennessee entity named BioLargo Engineering, Science & Technologies, LLC (“BLEST”).

10 unchanged sentences

In December 2025 , the committee determined that a portion of the performance metrics were met and issued additional profit interests would be vested ( 30 % in the aggregate) and vested additional option interests ( 1,750,000 option shares in the aggregate).

In December 2024 , the committee determined that a portion of the performance metrics were met and issued additional profit interests would be vested ( 26.25 % in the aggregate) and vested additional option interests ( 1,750,500 option shares in the aggregate).

The vesting of option shares during the years ended December 31, 2024 and 2023 resulted in a fair value totaling $ 55,000 and $ 17,000 and is recorded on our consolidated statements of operations as selling, general and administrative expense .

The vesting of option shares during the years ended December 31, 2025 and 2024 resulted in a fair value totaling $ 55,000 each year and is recorded on our consolidated statements of operations as selling, general and administrative expense .

Business Segment Information

7 unchanged sentences

BioLargo Equipment Solutions & Technologies ("BEST") - which sells our water treatment equipment;

BioLargo Canada (formerly named BioLargo Water) - the main hub of our scientists researching and developing our technologies, located in Edmonton, Alberta Canada.

BioLargo Canada - the main hub of our scientists researching and developing our technologies, located in Edmonton, Alberta Canada.

Other than ONM Environmental, none of our operating business units have operated at a profit, and therefore each required additional cash to meet its monthly expenses, funded through sales of debt or equity, research grants, and tax credits.

14 unchanged sentences

$ ( 865 ) $ ( 1,173

ONM Environmental

( 617 ) ( 1,158

11 unchanged sentences

( 2,317 ) 5,920

( 1,091 ) ( 1,453

Clyra Medical

1 unchanged sentence

( 639 ) ( 642

( 276 ) ( 273

BioLargo Canada

3 unchanged sentences

BioLargo corporate

$ ( 38 ) $ ( 42

ONM Environmental

Clyra Medical

$ ( 145 ) $ ( 155

Stock option expense

3 unchanged sentences

( 1,203 ) ( 528

$ ( 2,965 ) $ ( 2,063

Interest income (expense)

BioLargo corporate

$ ( 6 ) $ ( 49 )

ONM Environmental

Clyra Medical

( 60 ) ( 36 )

BioLargo Canada

5 unchanged sentences

( 2,227 ) 5,951

( 1,032 ) ( 1,356

Clyra Medical

1 unchanged sentence

( 639 ) ( 642

( 276 ) ( 273

BioLargo Canada

2 unchanged sentences

$ ( 15,189 ) $ ( 4,347

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025

2 unchanged sentences

$ 694 $ 2,331 $ 2,650 $ 1,169 $ 4 $ 321 $ ( 224 ) $ 6,945

Operating lease right-of-use

238 — 175 615 — — — 1,028

Investment in South Korean joint venture

Finance lease right-of-use

— — 338 — — — — 338

4 unchanged sentences

$ 775 $ 5,879 $ 1,696 $ 790 46 $ 104 $ ( 234 ) $ 9,056

Operating lease right-of-use

333 — — 659 — — — 992

Finance lease right-of-use

— — 451 — — — — 451

Investment in South Korean joint venture

1 unchanged sentence

$ 1,122 $ 5,879 $ 2,147 $ 1,449 $ 46 $ 104 $ ( 234 ) $ 10,513

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have long-term operating leases for office, industrial and laboratory space in Westminster, California, Oak Ridge, Tennessee, and Alberta, Canada.

7 unchanged sentences

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 December 31, 2024 , our weighted average remaining lease term is seven years and the total remaining operating lease payments is $ 1,766,000 .

As of December 31, 2025 , our weighted average remaining lease term is five years, and the total remaining operating lease payments is $ 1,686,000 .

Payments over the remaining lease terms is as follows:

3 unchanged sentences

December 31, 2027

113 59 163 335

December 31, 2028

7 unchanged sentences

$ 239 $ 184 $ 651 $ 1,074

Legal Proceedings.

November 11, 2025, BioLargo Inc.

and ONM Environmental Inc.

filed a lawsuit against Pooph Inc.

(and related party Ikigai Marketing Works LLC) in the United States District Court, Central District of California, case number

02516, alleging patent infringement (

271 ), false advertising (

1125 ), and state law claims including breach of contract, false promise, unfair and fraudulent business practices, and constructive fraud.

In the suit, we seek (i) an order that the defendants have infringed on our patents, an injunction enjoining defendants from further infringing on our patents, and accounting for defendants' gains and profits;

(ii) an order that defendants have violated Section

43 (a) of the Lanham Act, an injunction preventing defendants from using product reviews based on our proprietary technology with their newly formulated products, and an accounting and damages for these violations;

(iii) compensatory damages for unpaid royalties of

(iv) compensatory damages for unpaid product purchased from ONM Environmental of

$2,154,110, (v) compensatory damages in an amount according to proof for false promises and unfair and fraudulent business practices;

(vi) treble and/or exemplary damages;

and (vii) costs and attorneys fees.

November 11, 2025, Pooph Inc.

served ONM Environmental with a lawsuit venued in the Orange County, California Superior Court filed

September 11, 2025, case number

01511009, alleging ONM Environmental breached the terms of, and the implied covenant of good faith and fair dealing of, the Preferred Master Manufacturing Agreement, seeking damages in an amount to be determined, as well as unjust enrichment, interest, and attorneys fees and costs, arising out of the manufacture and sale of the Pooph-branded products, including the Litterizer cat-litter additive, and ONM Environmental's refusal to fill purchase orders while Pooph Inc.

was in breach of contract for failure to pay past due monies.

ONM Environmental disputes the allegations and intends to vigorously defend the lawsuit.

While the outcomes of the lawsuits are uncertain, management believes that the resolutions of these proceedings will

not have a material adverse effect on the Company's financial position, results of operations, or cash flows.

However, adverse outcomes could materially impact future financial results.

Related Party Transactions.

Management performed an internal review and inspection and noted there are no material transactions with related parties as defined in ASC 850, except those disclosed in Note 5 Share-based compensation to officers.

BIOLARGO, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Subsequent Events.

Management has evaluated subsequent events through the date of the filing of this Annual Report and management noted the following for disclosure.

CFO Extension

On January 31, 2026, the Engagement Agreement with our Chief Financial Officer Charles K.

Dargan, II automatically extended for a one -year period to expire January 31, 2027 ( the “2026 - 27 Term”).

As the sole compensation for the 2026 - 27 Term, and in accordance with his contract, 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 $ 0.179 per share, the closing price of BioLargo’s common stock on the last trading day of January 2026, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

Clyra Medical

From January 1, 2025, through March 31, 2025, Clyra Medical sold 49,168 shares of its common stock, and issued warrants to purchase an aggregate 24,587 shares of its common stock at $ 7.50 per share, expiring August 1, 2027, from eleven accredited investors.

In exchange, it received $ 295,002 in gross and net proceeds.

From January 1, 2025, through March 31, 2025, Clyra Medical received $ 390,000 , and issued promissory notes secured by equipment used in at-scale production of its wound irrigation solution products.

The notes bear interest at the rate of 15 % per annum, mature in two years, and require interest-only payments until maturity.

Warrants allowing for the purchase of an aggregate 65,000 shares at $ 6.00 per share were issued to the investors, expiring December 31, 2029.

From January 1, 2026, through March 4, 2026, Clyra Medical received $ 1,705,000 and issued unsecured promissory notes in the aggregate principal amount of $ 1,705,000 , bearing interest at the rate of 15 % per annum, which mature February 28, 2029, and require interest-only payments until maturity (titled its 2026 Guaranteed Note).

Clyra Medical also issued the investors warrants allowing for the purchase of an aggregate 133,282 shares of its common stock at $ 7.50 per share, expiring February 28, 2031.

Payment of the promissory notes are guaranteed by BioLargo Inc.

BioLargo Energy Technologies, Inc.

From January 1, 2026, through March 4, 2026, BETI sold 124,867 shares of its common stock and received $ 462,000 from seven investors.

Each investor also entered into an agreement with BioLargo Inc.

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 date of election.

Stock Issuances

From January 1, 2026, through March 4, 2026, we sold 984,188 shares of our common stock to Lincoln Park (see Note 3 ), and received $ 170,704 in gross and net proceeds.

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 9A. Controls and Procedures