Filed 2026-03-04 · Period ending 2025-12-31 · 46,957 words · SEC EDGAR
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# BIOLARGO, INC. (BLGO) — 10-K
**Filed:** 2026-03-04
**Period ending:** 2025-12-31
**Accession:** 0001437749-26-006926
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/880242/000143774926006926/)
**Origin leaf:** a858db51a59b8ddd2d3cdbeb63a9c14f7e76ae1b446d7f7d6d394aeda519d0d9
**Words:** 46,957
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FORM 10-K**
[Table of Contents](#toc)
**UNITED STATES**
**SECURITIES AND EXCHANGE COMMISSION**
**Washington, D.C. 20549**
**FORM 10-K**
**(Mark One)**
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
**For the Fiscal Year ended December 31, 2025**
**OR**
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
**For the Transition Period from****to******
**Commission File Number: 000-19709**
| BIOLARGO, INC. | |
| (Exact Name of registrant as specified in its Charter) | |
| Delaware | | 65-0159115 | |
| (State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) | |
| 14921 Chestnut St., Westminster, CA | 92683 | |
| (Address of principal executive offices) | (Zip Code) | |
**Registrant****s telephone number, including area code: (888) 400-2863**
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
| Common Stock | BLGO | OTCQX | |
Securities registered under Section12(g) of the Exchange Act: none
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.YesNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section13 or Section15(d) of the Act.YesNo
Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YesNo
[Table of Contents](#toc)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | Accelerated filer | |
| Non-accelerated filer | Smaller reporting company | |
| | Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. YesNo
If securities are registered pursuant to Section12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YesNo
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common stock was last sold as of the last business day of the registrants most recently completed second fiscal quarterwas $63,071,415.
The number of shares outstanding of the issuers class of common equity as of March 2, 2026,was 319,750,855. No preferred shares are issued or outstanding as of that date.
DOCUMENTS INCORPORATED BY REFERENCE
Information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K are incorporated by reference from the Registrants definitive Proxy Statement for its annual meeting of stockholders to be filed within 120 days of the end of the Registrants fiscal year ended December 31, 2025.
[Table of Contents](#toc)
**TABLE OF CONTENTS**
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PART I. |
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Item1. |
Business |
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Item1A. |
Risk Factors |
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Item1B. |
Unresolved Staff Comments |
14 |
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Item 1C. |
Cybersecurity |
14 |
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Item2. |
Properties |
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Item3. |
Legal Proceedings |
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Item 4. |
Mine Safety Disclosures |
14 |
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PART II. |
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Item5. |
Market for Registrants Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities |
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Item6. |
Selected Financial Data |
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Item7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Item7A. |
Quantitative and Qualitative Disclosures About Market Risk |
20 |
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Item8. |
Financial Statements and Supplementary Data |
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Item9. |
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure |
20 |
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Item9A. |
Controls and Procedures |
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Item9B. |
Other Information |
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PARTIII. |
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Item10. |
Directors, Executive Officers, and Corporate Governance |
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Item11. |
Executive Compensation |
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Item12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
22 |
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Item13. |
Certain Relationships and Related Transactions, and Director Independence |
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Item14. |
Principal Accounting Fees and Services |
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PARTIV. |
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Item15. |
Exhibits, Financial Statement Schedules |
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Signatures |
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Index to Financial Statements |
F-1 |
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Report of Independent Registered Public Accounting Firm |
F-2 |
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Consolidated Financial Statements for the Years Ended December 31, 2025and 2024 |
F-4 |
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[Table of Contents](#toc)
**PART I**
**ITEM****1. BUSINESS**
**USE OF FORWARD-LOOKING STATEMENTS IN THIS REPORT**
This annual report on Form 10-K for the year ended December 31, 2025 (the Annual Report) contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, included in this Annual Report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are forward-looking statements. These forward-looking statements include, but are not limited to, predictions regarding:
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our business plan; |
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the commercial viability of our technology and products incorporating our technology; |
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the effects of competitive factors on our technology and products incorporating our technology; |
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expenses we will incur in operating our business; |
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our liquidity and sufficiency of existing cash; |
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the success of our financing plans; and |
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the outcome of pending or threatened litigation. |
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You can identify these and other forward-looking statements by the use of words such as anticipates, believes, estimates, expects, intends, may, plans, projects, will, would and similar expressions, or the negative of such terms, although not all forward-looking statements contain these identifying words. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.
We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations underlying our forward-looking statements are reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Therefore, you should not place undue reliance on our forward-looking statements. We have included important risks and uncertainties in the cautionary statements included in this Annual Report; particularly, the section titled Risk Factors incorporated by reference herein. We believe these risks and uncertainties could cause actual results or events to differ materially from the forward-looking statements that we make. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections or expectations prove incorrect, actual results, performance or financial condition may vary materially and adversely from those anticipated, estimated or expected. Our forward-looking statements do not reflect the potential impact of future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We do not assume any obligation to update any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law. In the light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made.
When we refer in this report to BioLargo, the Company, our Company, we, us and our, we mean BioLargo, Inc., and our subsidiaries, including BioLargo Life Technologies, Inc., which holds our intellectual property; ONM Environmental, Inc., which manufactures, markets, sells and distributes our odor and volatile organic compound ("VOC") control products; BioLargo Energy Technologies, Inc. (BETI), formed to commercialize our proprietary battery technology;BioLargo Canada, Inc., our primary research and development team operating in Edmonton, Alberta Canada; BioLargo Engineering, Science & Technologies, LLC (BLEST), a professional engineering services division in Oak Ridge Tennessee; BioLargo Equipment Solutions & Technologies, Inc., which sells our water treatment products; BioLargo Development Corp., which employs and provides benefits to our employees; and Clyra Medical Technologies, Inc. (Clyra Medical), which commercializes our technologies in the medical and dental fields. All subsidiaries are wholly owned, except for BETI, BLEST and Clyra Medical.
**Our Company**
BioLargo, Inc. is a corporation organized under the laws of the state of Delaware. Our common stock is quoted on the OTC Markets highest level marketplace, the OTCQX,under the trading symbol BLGO.
Our corporate offices are located at 14921 Chestnut St., Westminster, California 92683. We have a research facility and offices at the University of Alberta in Canada, and our engineering team is located at 105 Fordham Road in Oak Ridge, Tennessee.Our medical products company is located at 10770 N. 46th Street, Unit C-300,in Tampa, Florida.Our telephone number is (888) 400-2863. We operate through multiple wholly- and partially-owned subsidiaries.
Our principal corporate website is www.BioLargo.com. We also maintain a blog at www.BioLargo.com/blog and other websites including www.ONMEnvironmental.com, www.CupriDyne.com, www.ClyraMedical.com, www.BioLargoEnergy.com, www.BioLargoEquipment.com, www.BioLargoEngineering.com, www.bestPFAStreatment.com, and www.BioLargoWater.com. The information on our websites and blog are not, and shall not be deemed to be, a part of this Annual Report on Form 10-K.
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**Our Business - Innovator and Solution Provider**
BioLargo is in the business of creating new cleantech technologies to solve tough, globally relevant problems. We invent, develop, then commercialize technologies that tackle difficult challenges in air quality, water, environmental engineering, battery energy storage, and advanced antimicrobial medical device platforms. Our model is to invent new technologies that solve specific problems, develop them and prove they work, and then commercialize them with purpose-suited subsidiaries, identify and secure the right partnerships to increase their commercial reach, or potentially sell the intellectual property.
Why do we do this work? Every member of our team including PhD scientists, engineers, and entrepreneurs has a passion for seeking new, never-before-seen innovations that can make life better around the world. We care about safeguarding the environment and human health for future generations. We care about making technologies that are affordable and flexible enough to be accessed around the world. And we care about being the best at what we do creating best-in-class technologies to solve meaningful cleantech challenges.
Some of our areas of focus include environmental problems like PFAS contamination, water pollution by pharmaceuticals and micropollutants, air pollution by VOCs, hard-to-treat odors from landfills and sewage plants, infection and wound healing and the creation of energy storage systems that are more affordable, efficient, safer and environmentally friendly.
Below youll read about the cleantech ventures and projects we are focused on commercialization today. Behind those, however, is a pipeline of other cleantech innovations in various stages of development associated with our expansive array of issued and pending patents, and that havebeen funded in part by over 90 government grants.
We operate our business in distinct business segments:
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Odor and VOC control products, including consumer pet and household products and CupriDyne Clean Industrial Odor Eliminator, sold by our wholly-owned subsidiary ONM Environmental, Inc.; |
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Water treatment equipment and solutions, including our PFAS remediation system the Aqueous Electrostatic Concentrator (AEC), our water reuse and recycling technology co-developed with Garratt-Callahan called AROS, and sold by our wholly-owned subsidiary BioLargo Equipment Solutions & Technologies, Inc.; |
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Battery energy storage systems designed for grid-scale energy storage and other industrial uses under the brand name CellinityTM being developed by our partially owned (95%) subsidiary BioLargo Energy Technologies, Inc.; |
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Medical products based on our technologies sold by our partially owned (48%) subsidiary Clyra Medical Technologies, Inc.; |
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Our professional engineering services division, which, in addition to serving outside clients on a fee for service basis, supports our internal business units, through our partially owned (70%) subsidiary BioLargo Engineering, Science & Technologies, LLC ("BLEST"); |
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Our research and support personnel, through our wholly-owned subsidiary BioLargo Canada, Inc., located on campus at the University of Alberta, Edmonton, Canada. |
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**Odor Control (Consumer and Industrial)**
ONM Environmental, Inc. ("ONM") is BioLargos wholly-owned subsidiary that delivers robust and comprehensive products and services to control and mitigate odor and VOCs for both consumer and industrial applications. Its flagship product CupriDyne Clean is applied to odor-emitting masses such as landfills and composting facilities by misting systems, sprayers, water trucks and similar water delivery systems designed, manufactured and installed by ONM. It is also sold to third parties under private label brands.
**Consumer Private-Label Products**
We sell odor-control products based on our technologies to third parties who market and sell the products under their own brand names. The most successful thus far has been pet odor control products sold under the brand name "Pooph" by Pooph Inc. In addition to purchasing product from us at an agreed-upon manufacturing margin, Pooph Inc. agreed to pay us a six percent royalty on their sales in exchange for exclusive rights to our technology for pet odors, and agreed that if they sold their brand to a third party, we would receive 20% of the exit value. Pooph defaulted on their payments, we revoked their license to sell pet products with our technology, and sued Pooph for patent infringement and other claims in order to protect ourintellectual property. (See subheading "[Impairment/Credit Loss Expense, Pooph Litigation](#Impairment_Credit_Loss_Expense_Pooph)" in Results of Operations,below.)
We are focused on redeploying its technology with new partners that share our commitment to quality, transparency, and integrity, andexpandthe reach of our proven odor-control technology into new markets, providing consumers with safe, effective, and environmentally friendly products. We do not expect the Pooph litigation to materially affect our other business units or growth strategy.The success of the pet-odor consumer products is an example of our goal to develop distribution channels that do not rely on our in-house sales and distribution infrastructure. While Pooph is by far the companys most successful private label product thus far, we sell other private label odor-control products and continueto pursue related business opportunities as a means of tapping into newmarkets.
**Industrial Odor and VOC Solutions**
We believe CupriDyne Clean is the number-one performing industrial odor-control product in the market, and that it offers substantial savings to our customers compared with competing products. We have been and expect to continue selling product to municipalities and some of the largest solid waste handling companies in the country to help control odorsemitted from waste handling and sanitation sites and landfills. In addition to selling products, ONM Environmental offers a menu of services to landfills, transfer stations, wastewater treatment facilities as well as facilities in non-waste related industries. These services include engineering design, construction, installation, ongoing maintenance and on-site support services to assist our clients in the implementation and continued use of the various systems that deliver our liquid products in the field (such as misting systems). A significant portion of industrial odor control product and service revenue comes from ongoing contracts with cities and counties in Southern California, where ONM has installed comprehensive odor control systems to mitigate nuisance odors emitted from municipal waste handling and sanitation sites.
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**BioLargo Equipment Solutions & Technologies****Innovative Water Treatment Solutions**
Over the years, we have developed multiple innovative technologies and equipment platforms that focus on challenging issues in the water treatment industry, including the AEC (developed to remove per- and polyfluoroalkyl substances, aka "PFAS"), and the AROS water reuse technology (for industrial cooling tower water recycling such as in data centers, co-developed with Garratt-Callahan). We sell these products through our wholly-owned subsidiary BioLargo Equipment Solutions & Technologies, Inc. (BEST), which manages the sales and distribution of our water treatment products and related services.
BLEST's board of directors includes Jeffrey Kightlinger, former CEO of the Metropolitan Water District of Southern California, Sally Gutierrez, retired career senior executive from the US Environmental Protection Agency (EPA), and Larry Dick, former Vice Chairman of the Metropolitan Water District of Southern California and board member of the Municipal Water District of Orange County. Each brings their significant and distinctive experience from decades in the water industry to BESTs board to help the company create the necessary regulatory and industry connections that will be critical for its efforts to secure larger and more high-profile projects for its PFAS treatment and other water treatment technologies. These board members have been instrumental in efforts to raise awareness of our innovative treatment solutions within the water industry and EPA.
Securing sales in the water and wastewater industry is a very technically intensive process and can be long and arduous. The entirety of the sales cycle can be lengthy, in some cases even taking many months or, in the case of very large projects, multiple years. A typical sales timeline for a municipal drinking water or wastewater customer, from introduction to signing the contract for a full-scale install, usually requires feasibility studies, on-site pilot projects, budget approvals, State regulatory approvals, and more. Industrial clients may have a shorter sales cycles but are under pressure to ensure that the Return on Investment (ROI) fits into company standards, so their reviews can also be lengthy. For any water treatment project, the process is also very engineering-intensive, and therefore the staff required to secure contracts for water treatment projects need to be highly technical engineers. In our company, BLESTs engineers fill this role.
**AEC, a solution for the PFAS forever-**chemicals**crisis**
One of the most significant and timely innovations in our portfolio is our per- and polyfluoroalkyl substance (PFAS) water remediation system the Aqueous Electrostatic Concentrator (AEC), a novel water treatment system that removes PFAS from water while generating only a fraction of the PFAS-laden waste of the most common currently used solutions (carbon filtration, ion exchange, and reverse osmosis), and oftentimes at a lower cost. PFAS are a group of man-made chemicals used for decades in the manufacture of both household and industrial goods, which have been detected in drinking water around the world. PFAS are a concern because they do not break down in the environment, can move through soil and contaminate drinking water sources, and build up (bioaccumulate) in fish, wildlife and humans. PFAS chemicals have been linked to cancer, immune disorders, liver dysfunction, and many other human health problems. Detection of unsafe levels of PFAS around the world has given rise to a number of market opportunities for treatment and remediation technologies, including in drinking water, industrial wastewater, municipal wastewater, solid waste, landfill leachate, organic foods and more.
We have successfully validated the AEC as an effective system to selectively extract and collect PFAS chemicals from contaminated water, including performance testing that shows non-detect levels of removal, which meet and exceedEPA standards. We have demonstrated more than 10,000 hours of continuous operation showing no materially significant degradation of the AEC systems components or performance over timeand believe the costs to operate our system will be far less than that of the two primary incumbent technologies.
As a modular system, we believe the AEC is scalable to small commercial units used in smaller remediation projects for groundwater, wastewater, or landfill leachate, as well as large commercial installations of drinking water treatment facilities, and we believe that our engineering team has the experience to deliver systems to meet the needs of any sized commercial installation. In order to provide a full turn-key solution for our customers, we have developed an expanded offering whereby we can bundle a service package with each customer project that includes a membrane exchange program, the collection of PFAS, and transport and destruction of the PFAS using a novel electrooxidation process which our studies have shown is capable of reaching non-detect levels of PFAS after treating AEC-concentrated PFAS containing water, wastewater, or even landfill leachate (the contaminant-laden water that drains from landfills).
Our AEC unit has been installed and is up and running in Lake Stockholm, New Jersey, removing PFAS from drinking water for local residents. The AEC's performance is undergoing regular testing by both the U.S. EPA and the New Jersey Department of Environmental Protection. This project may representa key milestone for the commercialization of the AEC, as we believe industry validation of the technology in a first municipal drinking water treatment project will play an important role in showcasing the AECs distinct advantages over incumbent technologies like carbon filtration and ion exchange.As we progress through the commercial rollout of our AECtechnology, we continue to invest in innovation aimed at enhancing its commercial viability. These efforts are focused on improving system performance, reducing lifecycle costs, and strengthening the AECs competitive economic position within the PFAS treatment market. We remain committed to delivering scalable, cost-effective solutions that align with evolving regulatory requirements and market demand.
We believe we are well-positioned in the PFAS-removal market for multiple reasons. We have successfully completed over a dozen pilot studies with prospective customers PFAS contaminated waterfrom a variety of source waters including groundwater, wastewater and leachate; we have successfully maintained operation of our AEC PFAS treatment system for over 10,000 hours continuously, thus demonstrating its resilience to long-term use; we have submitted bids and proposals and have received indications of interest from a wide range of customer types; we have added several high-profile experts from the industry to our team who are assisting in opening doors to potential clients and collaborators; we have entered into discussions about partnership and opportunities for collaboration with industry-leading firms who have a gap in their PFAS treatment technology portfolio. While these opportunities do not convert into commercial sales overnight, but they represent strong avenues for accelerating adoption of our PFAS treatment solution.
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**AROS Minimal Liquid Discharge Water Treatment**
In partnership with Garratt-Callahan, one of the countrys oldest and largest privately held water treatment companies, our engineers helped developa minimal liquid discharge wastewater treatment system called the Aqueous Reuse Optimization System (AROS) that is designed to minimizeindustrial wastewater discharges and create water for reuse in other areas of an industrial plant. The system is particularly well-suited for cooling towers at data centers and other high-water-use facilities. Garratt-Callahan, who invented and patented the technology, is actively marketing the AROS system to its existing customer base and to new prospective customers. BLEST will serve as the manufacturing partner and Garratt-Callahan will serve as the selling distributor to leverage their national sales force and over one hundred years of providing services and products to customers.
**Advanced Oxidation System****(AOS)**
The Advanced Oxidation water treatment system (AOS) is our patented water treatment device that generates highly oxidative and energetic species of iodine and other molecules which allow it to eliminate pathogenic organisms and organic contaminants rapidly and effectively as water passes through the device. The key value proposition of the AOS is its ability to reduce or eliminate a wide variety of waterborne contaminants with high performance, including the normally hard-to-treat class of recalcitrant water contaminants called micropollutants, while using very little electricity and input chemicals.The AOS has been proven capable of removing hard-to-treat organic micropollutants such as pharmaceuticals from water more quickly and energy-efficiently than other technologies. While the AOS has demonstrated exceptional performance in both laboratory and pilot-scale testing, current U.S. regulatory frameworks have not yet matured to support broad adoption of advanced oxidation technologies for micropollutant removal. Additionally, the domestic market remains dominated by low-cost chemical disinfection solutions. In light of these market conditions, we have elected to pause daily development activities on the AOS in the near term. However, we continue to monitor evolving regulatory trends in the U.S. and are exploring the possibility of international commercialization opportunities, particularly in Europewhere regulatory mandates for micropollutant removal are more advanced. Our business development efforts remain focused on strategic partnerships in the European market and on domestic industrial and pharmaceutical wastewater applications where micropollutants are a significant driver of surcharge fee.
**BioLargo Energy Technologies, Inc.**
Our subsidiary BioLargo Energy Technologies, Inc. (BETI) was founded to commercialize a novel battery technology with the potential to help facilitate the ongoing shift toward renewable energy production by providing a safer, longer lasting, more eco-friendly, and more affordable alternative to lithium-ion batteries. Designed for long duration energy storage, also known as "battery energy storage solutions" (BESS), our battery, called Cellinity, uses a novel liquid sodium chemistry that uses common domestically sourced materials, and which has significant advantages over other battery chemistries for use in stationary, long-duration energy storage.
BETI operates out of a pilot-scale battery production facility in our Oak Ridge Tennessee engineering headquarters, and is currently manufacturing and testing prototype battery cells. A third party has confirmed many of the technology's exceptional performance claims that we believe will make it an attractive battery technology for long duration energy storage and other industrial uses such as artificial intelligence data centers, electric vehicle charging stations, and renewal energy, including the stability of the chemistry of the battery cell and the reliability of the component construction as a sealed, non-venting cell design with no self-discharging, and the battery's ability to quickly charge and discharge at a high voltage. It has also been proven that the battery can withstand catastrophic physical insults without causing fire or explosion, one of the batterys key features. With this data confirmed by a third party, our engineers have begun work advancing Cellinity's development, including the design ofa larger sized battery cell that would then be incorporated into battery packs, modules and batteries meant for industrial facilities. Simultaneously, our engineers are working to develop manufacturing processes that would allow scale production and a supply chain necessary to ensure costs of goods in line with market demand and conditions.
We believe our Cellinity batteries will have features that far surpass comparable lithium-ion batteries, the dominant incumbent technology in the market, including:
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Increased safety, no runaway fire risks, and a more sustainable design with no rare-earth elements that is capable of being manufactured completely from a domestic supply chain; |
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Ability to charge and discharge completely, with no degradation of performance, ensuring virtually unlimited charge/discharge cycles, and without self-discharge and no out-gassing; and |
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Increased energy efficiency and energy density in comparison to lithium-ion batteries, and a longer useful life expectancy of at least 10 years and expected to be up to 20 years. |
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We are exploring multiple opportunities to commercialize our Cellinity batteries through joint ventures with third parties. The third parties would finance the construction of independent battery manufacturing facilities designed and built under the direction of our engineers, and the joint venture would market, manufacture and distribute batteries. BioLargo would (i) receive a minority equity position in each joint venture, (ii) separately manufacture and sell at a profit to the joint venture certain proprietary battery components, and (iii) receive a royalty on the revenues of the joint venture.
Given the global growing demand for better batteries, and, while we are witnessing a number of current examples in which battery manufacturers have secured forward-contracts to supply batteries to its customers with backlogs of orders that amount to multiple years of production capacity, we believe our offer to partner with customers to secure needed inventory provides for a clear potential pathway to access capital, and more readily scale up production to meet demand around the world. At this point, we do not intend to finance and build our own manufacturing facilities, nor would we develop in-house sales channels, although that possibility remains an option to explore if needed
**Clyra Medical Technologies, Inc.**
Our partially owned subsidiary Clyra Medical Technologies, Inc. is a healthcare company that is developing and commercializing products based on our technologies designed to safely treat wound and skin infections and promote wound healing, while reducing the need for antibiotics. Clyra's first products are based on its patented Clyrasept technology, which utilizes a Copper-Iodine Complex Solution (CICS) and received premarket clearance from the FDA under Section 510(k). Its first product is ViaCLYR, a pH-balanced wound management solution formulated from copper sulfate and potassium iodide in a balanced sodium chloride solution, indicated for wound management, cleansing, irrigation, moisturization, and debridement of acute and chronic wounds and burns, sold through wholesale distributors and sales agents.Clyra received a first purchase order for the ViaCLYR product from adistributor in February 2026. Clyra is working closely with Keystone Industries, a medical device and cosmetics manufacturer founded over 50 years ago, to ready at-scale manufacturing of its second wound irrigation solution product. Keystone has invested over $3 million in equipment and infrastructure in its manufacturing facilities,and Clyra has invested over $2 million in molds, equipment and resources. Clyras management team includes Chief Medical Officer Dr. Steven J. Kavros, a twenty-year veteran of the Mayo Clinic in roles such as Director at the Rochester Mayo Clinics Gonda Vascular Wound Healing Center, Nick Valeriani, who had a 34-year career with Johnson and Johnson where he held numerous leadership positions in engineering, manufacturing, sales and marketing, and Linda Park of Edwards Lifesciences, where she serves as Corporate Secretary, Senior Vice President and Associate General Counsel, and as a board member of the Edwards Lifesciences Foundation.
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**Full Service Environmental Engineering**
BioLargo Engineering, Science & Technologies, LLC (BLEST) offers full service environmental engineering to third parties and provides engineering support services to our internal teams to accelerate the commercialization of our technologies.
BLEST focuses its efforts in these three areas:
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providing engineering services to third-party clients as well as affiliated BioLargo entities; |
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supporting internal product development; and |
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advancing their own technical innovations such as the AEC PFAS treatment technology. |
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BLEST operates out of our engineering facility in Oak Ridge, Tennessee (a suburb of Knoxville), and employs a group of scientists and engineers, many of whom are owners of the entity (BioLargo owns 70%as of December 31, 2025). The team is led by Randall Moore, who served as Manager of Operations for Consulting and Engineering for the Knoxville office of CB&I Environmental & Infrastructure and was formerly a leader at The Shaw Group, Inc., a Fortune 500 global engineering firm. Many of the other team members are also former employees of CB&I and Shaw, with the exception of more recent staff hires. The team is highly experienced across multiple industries and we believe are considered experts in their respective fields, including: chemical engineering, wastewater treatment (including design, operations, data gathering and data evaluation), process safety, energy efficiency, air pollution, design and control, technology evaluation, technology integration, air quality management & testing, engineering management, permitting, industrial hygiene, applied research and development, air testing, environmental permitting, HAZOP review, chemical processing, thermal design, computational fluid dynamics, mechanical engineering, mechanical design, NEPDES permitting, RCRA/TSCA compliance and permitting, project management, storm water design & permitting, computer assisted design (CAD), bench chemistry, continuous emission monitoring system operator, data handling and evaluation and decommissioning and decontamination of radiological and chemical contaminated facilities. The team has decades of high-level experience in the energy industry. The engineering team has also developed an extended network of trusted engineering subcontractors that assist in serving specific client projects as needed.
BLEST engineers generate revenue through services to third party clients, as well as for internal BioLargo projects such as the AEC and battery (revenues from internal projects are eliminated in the consolidation of our financial statements and are designed intersegment revenue). Third party contracts include ongoing work at U.S. Air Force bases for air quality control which generate ongoing contract-based revenue of approximately $100,000per month.Efforts to expand this work as well as with other clients are consistently ongoing.
The staff time devoted to supporting the AEC (PFAS) and battery related work is demanding, and, BLEST needs to hire more qualified staff to meet and expanding demand for our growing list of customers and/or expected customers. When we combine the demands of current revenue generating projects and expected growth, we are presented with an obvious challenge to manage quality, timely performance as well as access to qualified staff. We are working carefully to find balance to help ensure we meet the demands of both in a practical customer centric and capital conserving way. It may be for example, when we secure larger and larger contracts for PFAS or Garrett Callan related work, we will need to depend heavily on our contact manufactures to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.
**Share Purchase Agreement with** **Lincoln Park**
On December 13, 2022 we entered into a purchase agreement (the Purchase Agreement)with Lincoln Park Capital Fund, LLC (Lincoln Park)pursuant to which Lincoln Park committed to purchase up to $10million of our common stock. The Purchase Agreement expired February 1, 2026. In the aggregate, we sold 17,368,716 shares of Common Stock to Lincoln Park for $3,216,147. During the year ended December 31, 2025, we sold11,745,123shares of common stock to Lincoln Park and received $2,122,000in gross proceeds. During the year ended December 31, 2024, we sold766,175 shares of common stock to Lincoln Park and received $260,000 in gross proceeds. Our Consolidated Statement of Stockholder Equity at December 31, 2025, includes a $250,000 fee due pursuant to the Purchase Agreement. This amount has been partially paid and as ofMarch 2, 2026, $97,000 is outstanding. We do not intend to enter into a new purchase agreement with Lincoln Park at this time.
**Intellectual Property**
We have 34patents issued, including 26in the United States, and multiple applications pending, and our patents have an average remaining duration of seven years. We believe these patents provide a foundation from which to continue building our patent portfolio, and we believe that our technology is sufficiently useful and novel that we have a reasonable basis upon which to rely on our patent protections. We also rely on trade secrets and technical know-how to establish and maintain additional protection of our intellectual property. As our capital resources permit, we expect to expand our patent protection as we continue to refine our inventions as well as make new discoveries. We regard our intellectual property as critical to our ultimate success. Our goal is to obtain, maintain and enforce patent protection for our products and technologies in geographic areas of commercial interest and to protect our trade secrets and proprietary information through laws and contractual arrangements.
We incurred$2,593,000and $2,882,000in expense related to our research and development activities in the years ended December 31, 2025and 2024.
**Competition**
Our operational subsidiaries operate in diverse markets and each competes against large, well established companies. For industrial odor control, we compete against national companies such as Weaver Consulting Group, Atmos Technologies, Chemstation and OMI Industries. Our Cellinity battery energy storage systems will compete against lithium-ion batteries made by Tesla, Chinese companies CATL (Contemporary Amperex Technology Co.), BYD (Build Your Dreams) and MANLY, and other global leaders such as Panasonic and LG. Our AEC system competes against granular activated carbon, ion-exchange and reverse osmosis systems made by companies such as Veolia, AECOM, Xylem and Pentair.We believe we our products each offer advantages not available to competing products.
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**Executive Officers**
As of December 31, 2025, and as the date of this report, our executive officers were:
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Dennis P. Calvert: Chief Executive Officer, President and Chairman of the Board |
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Charles K. Dargan II: Chief Financial Officer |
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Joseph L. Provenzano: Corporate Secretary and Sr. Vice President of Operations |
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Our operational subsidiaries are led by:
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President |
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ONM Environmental, Inc. |
Joseph L. Provenzano |
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BioLargo Engineering, Science & Technologies, LLC ("BLEST") |
Randall Moore |
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BioLargo Canada, Inc. |
Richard Smith |
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Clyra Medical Technologies, Inc. |
Steven V. Harrison |
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BioLargo Energy Technologies, Inc. ("BETI") |
Dennis P. Calvert |
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BioLargo Equipment Solutions & Technologies, Inc. ("BEST") |
Tonya Chandler |
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**Employees**
As of March 2, 2026, we had 46employees, of which 44were full-time. Our employees including professional engineers, masters of engineering, and PhDs, as well as sales, support and administrative personnel. We also utilize consultants and independent contractors on an as-needed basis who provide certain specified services, such as professional engineers used from time to time by our engineering group in Tennessee.
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**ITEM****1A. RISK FACTORS**
Our future results of operations, financial condition and liquidity and the market price for our securities are subject to numerous risks, many of which are driven by factors that we cannot control. The following cautionary discussion of risks, uncertainties and assumptions relevant to our business includes factors we believe could cause our actual results to differ materially from expected and historical results. Other factors beyond those listed below, including factors unknown to us and factors known to us which we have not currently determined to be material, could also adversely affect our business, results of operations, financial condition, prospects and cash flows. Also see [Forward-looking Statements](#Forward_Looking_Statements) in Part I, Item I, above.
**Risks relating to our Financial Condition**
**We****have incurred net losses on an annual basis since our inception****and may continue to experience losses and negative cash flow in the future.**
We have not yet generated enough revenue or gross profit from operations to fund our expenses, and, accordingly, we have incurred net losses every year since our inception. For the year endedDecember 31, 2025we recorded a net loss of $15,189,000, of which$3,886,000was a credit loss expense resulting from a customer's contractual defaults (see Note2*,*"[Allowance for Credit Losses](#Note_2_Allowance_for_Credit_Losses)"), and which is the subject of litigation (see [Note 14](#NOTE_14_Legal_Proceedings)), compared to anet loss of $4,347,000for the year ended December 31, 2024. At December 31, 2025, we had $3,883,000in cash and cash equivalents. We have funded the majority of our activities through the issuance of equity securities, both at corporate level (BioLargo Inc.) and through direct third-party investments in our subsidiaries (such as Clyra Medical ([see Note 10](#Note_10_Clyra_Medical)) and BETI ([see Note 9](#Note_9_BETI))). Our ability to reach positive cash flow depends on many factors, including our ability to fund sales and marketing activities, the rate of client adoption of our products, and the efforts and success of third parties, such as the companies distributing our medical products. We may continue to incur losses and experience negative cash flows from operations for the foreseeable future, and intend to continue to raise additional capital on acceptable terms.
**Our cash requirements are significant. We will continue to require additional financing to sustain our operations and without it we may not be able to continue operations.**
Our cash requirements and expenses continue to be significant. For the year ended December 31, 2025, we used $8,297,000cash in operations, and at December 31, 2025, we had a working capital of $51,000and current assets of $5,114,000. In order to become profitable, we must significantly increase our revenues. We expect to continue to use cash for the foreseeable future as it becomes availableto advance our developing technologies, ramp up staffing to accommodate growth and increase support infrastructure, and expect to continue to need to sell our securities to fund operations at both the corporate level (BioLargo Inc.) and through our subsidiaries.
Our auditors report for the year ended December 31, 2025, includes an explanatory paragraph in their audit opinion stating that our recurring losses from operationsraise substantial doubt about our ability to continue as a going concern. We do not currently have sufficient financial resources to fund our operations or those of our subsidiaries. Therefore, we need additional financing to continue these operations.
We have relied on private securities offerings, as well as sales of stock to Lincoln Park Capital Fund, LLC (see [Share Purchase Agreement with Lincoln Park](#Share_Purchase_Agreement_with_Lincoln_Park) above), to provide cash needed to close the gap between operational revenue and expenses. Our agreement with Lincoln Park expired February 1, 2026. Although we do not intend to enter into a new purchase agreement with Lincoln Park, we are negotiating terms of a similar arrangement with a third party. Furthermore, our ability to rely on private financing from individual investors may change due to many economic factors outside of our control, including whether the United States enters a recession, the Dow Industrial Average or Nasdaq composite decline significantly, interest rates rise, real estate values decline, international events affect the global economy, or many other factors that impact private investors willingness to invest in high-risk companies. Thus, while we have been able to rely on private investments in the past, we may not be able to do so in the near future.
During the year ended December 31, 2025, we (i) sold $2,122,000of our common stock to Lincoln Park ([see Note 3](#Note_3_Sale_of_Stock_for_Cash)), (ii) sold $215,000of our common stock and warrants to accredited investors (see [Note3](#Note_3_Sale_of_Stock_for_Cash) and [Note 6](#Note_6_Warrants)), (iii) sold $2,339,000of Clyra Medical common stock and $2,145,000 of Clyra Medical Series B Preferred Stock([see Note 10](#Note_10_Clyra_Medical)), and $425,000from the sale of BETIcommon stock ([see Note 9](#Note_9_BETI)).The sale of stock is dilutive to our existing stockholders, and the stockholders of our subsidiaries. We intend to continue these financing activities and thus intend to continue to dilute existing and future stockholders.
**Our ability to access capital markets could be limited.**
From time-to-time, we may need to access capital markets to obtain long-term and short-term financing. However, our ability to access capital markets could be limited or adversely affected by, among other things, the performance of the stock market in general, interest rates, our asset base, our track record in the industries in which we operate, our financial condition, and the health or market perceptions of the US or global economy. In addition, many of the factors that affect our ability to access capital markets, including the liquidity of the overall capital markets in general and the lack of liquidity for our common stock and the state of the economy, among others, are outside of our control. No assurance can be given that we will be able to access capital markets on terms acceptable to us when required to do so, which could adversely affect our business, financial condition and results of operations.
**We expect to incur future losses and may not be able to achieve profitability.**
Although we are generating revenue from the sale of our products and from providing services, and we expect to generate revenue from new products we are introducing, and eventually from other license or supply agreements, we anticipate net losses and negative cash flow to continue for the foreseeable future until our products are expanded in the marketplace and they gain broader acceptance by resellers and customers. Our current level of sales is not sufficient to support the financial needs of our business. We cannot predict when or if sales volumes will be sufficiently large to cover our operating expenses. We intend to expand our marketing efforts of our products as financial resources are available, and we intend to continue to expand our research and development efforts. Consequently, we will need to generate significant additional revenue or seek additional financings to fund our operations. This has put a proportionate corresponding demand on capital. Our ability to achieve profitability is dependent upon our efforts to deliver a viable product and our ability to successfully bring it to market, which we are currently pursuing. Although our management is optimistic that we will succeed in licensing our technology, we cannot be certain as to timing or whether we will generate sufficient revenue to be able to operate profitably. If we cannot achieve or sustain profitability, then we may not be able to fund our expected cash needs or continue our operations. If we are not able to devote adequate resources to promote commercialization of our technology, then our business plans will suffer and may fail.
Because we have limited resources to devote to sales, marketing and licensing efforts with respect to our technology, any delay in such efforts may jeopardize future research and development of technologies and commercialization of our technology. Although our management believes that it can finance commercialization efforts through sales of our securities and possibly other capital sources, if we do not successfully bring our technology to market, our ability to generate revenues will be adversely affected.
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**Some of our revenues are dependent on the marketing efforts of third parties.**
We manufacture and sell private-labeledproducts to third parties who market those products to businesses, consumers and retailers. We have no control over the marketing budgets,sales activities or efforts of these third parties. We cannot predict if their current level of efforts will increase, decrease, or stay the same. A significant portion of our revenues has historically comefrom the sale of private label products. In 2025, our largest private-label customer ceased purchasing products from us, and as a resultour annual revenues decreased by 56%as compared to the prior year. This customer failed to pay for products purcahsed from us and for license royalties, and we are involved in litigation with them. (See subheading[Credit Loss Expense, Pooph Litigation](#Impairment_Credit_Loss_Expense_Pooph)in Results of Operations below.)While we intend to defend our interests vigorously, litigation is inherently uncertain and adverse judgments, settlements, injunctions, or government actions could occur. These outcomes could require substantial payments, restrict or delay aspects of our operations, divert management time, increase insurance or legal costs, or otherwise negatively affect our financial condition and results of operations. We cannot predict the timing, outcome, or ultimate impact of any pending matter, or whether, if we were to prevail in such litigation, we would be able to collect on any judgment we obtain.
**We do not have contracts with customers that require the purchase of a minimum amount of our products.**
Very few of our customers provide us with firm, long-term or short-term volume purchase commitments. As a result, we could have periods during which we have no or limited orders for our products but will continue to have fixed costs. We may not be able to find new customers in a timely manner if we experience no or limited purchase orders. Periods of no or limited purchase orders for our products would adversely affect our business, financial condition and results of operations.
**Supply Chain Challenges**
As we emerge with new products like our AEC and AOS water treatment systems, and battery storage systems, we mayface supply chain challenges, including supply and pricing volatility, that will be beyond our control that might include steel, electrodes, membranes, electronic components (like chips), raw chemicals. We predict that at some level we may face delays and or extended delivery times for systems sold to clients and that could lead to delays in our anticipated growth. Tariffs on imported goods may adversely affect prices of our raw materials.
**We rely on a small number of key supply ingredients in order to manufacture our odor control products, including CupriDyne Clean and our private-label products.**
The raw ingredients used to manufacture our liquid odor control products are readily available from multiple suppliers. However, commodity prices for these ingredients can vary significantly, and the margins that we are able to generate could decline if prices rise. If our manufacturing costs rise significantly, we may be forced to raise the prices for our products, which may reduce their acceptance in the marketplace.
**If any party to which we have outsourced certain functions fails to perform its obligations under agreements with us, the commercialization of our technology could be delayed or curtailed.**
To the extent that we rely on other companies to manufacture the chemicals used in our technology, our products, or sell or market products incorporating our technology, we will be dependent on the timeliness and effectiveness of their efforts. If any of these parties does not perform its obligations in a timely and effective manner, the commercialization of our technology could be delayed or curtailed because we may not have sufficient financial resources or capabilities to continue such efforts on our own.
**If our technology or products incorporating our technology do not gain market acceptance, it is unlikely that we will become profitable.**
The potential markets for products into which our technology can be incorporated are rapidly evolving, and we have many successful competitors including some of the largest and most well-established companies in the world. The commercial success of products incorporating our technology will depend on the adoption of our technology by commercial and consumer end users in various fields.
Market acceptance may depend on many factors, including:
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the willingness and ability of consumers and industry partners to adopt new technologies from a company with little or no history in the industry; |
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our ability to convince potential industry partners and consumers that our technology is an attractive alternative to other competing technologies; |
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our ability to license our technology in a commercially effective manner; |
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our ability to continue to fund operations while our products move through the process of gaining acceptance, before the time in which we are able to scale up production to obtain economies of scale; and |
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our ability to overcome brand loyalties. |
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If products incorporating our technology do not achieve a significant level of market acceptance, then demand for our technology itself may not develop as expected, and, in such event, it is unlikely that we will become profitable.
**If we are not able to manage our anticipated growth effectively, we may not become profitable.**
We anticipate that expansion will continue to be necessary to address potential market opportunities for our technologies and our products. Our existing infrastructure is limited.While we believe our current manufacturing processes as well as our office and warehousing provide the basic resources to expand to sales ofmore than $2 million per month, our infrastructure will need more staffing to support manufacturing, customer service, administration as well as sales/account executive functions. Therecan be no assurance that we will have the financial resources to create new infrastructure, or that any such infrastructure will be sufficiently scalable to manage future growth, if any. There also can be no assurance that, if we invest in additional infrastructure, we will be effective in expanding our operations or that our systems, procedures or controls will be adequate to support such expansion. In addition, we will need to provide additional sales and support services to our partners if we achieve our anticipated growth with respect to the sale of our technology for various applications. Failure to effectively manage an increase in customer demands could result in a material adverse effect on customer satisfaction, our ability to meet our contractual obligations, and our operating results.
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**Some of the products incorporating our technology will require regulatory approval.**
The products in which our technology may be incorporated have both regulated and non-regulated applications. The regulatory approvals for certain applications may be difficult, impossible, time consuming and/or expensive to obtain. While our Company management believes such approvals can be obtained for the applications contemplated, until those approvals from the FDA or the EPA or other regulatory bodies, at the federal and state levels, as may be required are obtained, we may not be able to generate commercial revenues for regulated products. Certain specific regulated applications and their use require highly technical analysis and additional third-party validation and will require regulatory approvals from organizations like the FDA. Certain applications may also be subject to additional state and local agency regulations, increasing the cost and time associated with commercial strategies. Additionally, most products incorporating our technology that may be sold in the European Union (EU) will require EU and possibly individual countrys regulatory approval. All such approvals, including additional testing, are time-consuming, expensive and do not have assured outcomes of ultimate regulatory approval.
**Our internal controls are not effective.**
We have determined that our disclosure controls and procedures and our internal controls over financial reporting are currently not effective. The lack of effective internal controls, has not yet, but could in the future, materially adversely affect our financial condition and ability to implement our business plan, and the accuracy of our consolidated financial statements.As more financial resources become available, we need to invest in additional personnel to better manage the financial reporting processes.
**If we lose our key personnel or are unable to attract and retain additional personnel, we may be unable to achieve profitability.**
Our future success is substantially dependent on the efforts of our senior management, particularly Dennis P. Calvert, our president and chief executive officer. The loss of the services of Mr. Calvert or other members of our senior management may significantly delay or prevent the achievement of product development and other business objectives. Because of the scientific nature of our business, we heavily rely on our ability to attract and retain qualified marketing, scientific and technical personnel. There is intense competition among specialized and technologically-oriented companies for qualified personnel in the areas of our activities. If we lose the services of, or do not successfully recruit, key marketing, scientific and technical personnel, then the growth of our business could be substantially impaired. At present, we do not maintain key man insurance for any of our senior management, although management is evaluating the potential of securing this type of insurance in the future as may be available. As we expand the scope of our operations, we will need to obtain the full-time services of additional senior management and other personnel. Competition for highly-skilled personnel is intense, and there can be no assurance that we will be able to attract or retain qualified senior personnel. Our failure to do so could have an adverse effect on our ability to implement our business plan. As we add full-time senior personnel, our overhead expenses for salaries and related items will increase from current levels and, depending upon the number of personnel we hire and their compensation packages, these increases could be substantial.
**Nondisclosure agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.**
In order to protect our proprietary technology and processes, we rely in part on nondisclosure agreements with our employees, potential licensing partners, potential manufacturing partners, testing facilities, universities, consultants, agents and other organizations to which we disclose our proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. Since we rely on trade secrets and nondisclosure agreements, in addition to patents, to protect some of our intellectual property, there is a risk that third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect unauthorized use or take appropriate and timely steps to enforce our intellectual property rights.
**We may become subject to product liability claims.**
As a business that manufactures and markets products for use by consumers and institutions, we may become liable for any damage caused by our products, whether used in the manner intended or not. Any such claim of liability, whether meritorious or not, could be time-consuming and/or result in costly litigation. Although we maintain general liability insurance, our insurance may not cover potential claims of the types described above and may not be adequate to indemnify for all liabilities that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could harm our business and operating results, and you may lose some or all of any investment you have made, or may make, in our company.
**Litigation or the actions of regulatory authorities may harm our business or otherwise distract our management.**
Substantial, complex or extended litigation could cause us to incur major expenditures and distract our management. For example, lawsuits by employees, former employees, investors, stockholders, partners, customers or others, or actions taken by regulatory authorities, could be very costly and substantially disrupt our business. As a result of our financing activities over time, and by virtue of the number of people that have invested in our company, we face increased risk of lawsuits from investors. Such lawsuits or actions could from time to time be filed against our company and/or our executive officers and directors. Such lawsuits and actions are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or actions on terms favorable to our company.
**If we suffer negative publicity concerning the safety or efficacy of our products, our sales may be harmed.**
If concerns should arise about the safety or efficacy of any of our products that are marketed, regardless of whether or not such concerns have a basis in generally accepted science or peer-reviewed scientific research, such concerns could adversely affect the market for those products. Similarly, negative publicity could result in an increased number of product liability claims, whether or not those claims are supported by applicable law.
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**Our revenues and operating results are likely to continue to fluctuate from quarter to quarter.**
We believe that our future operating results will fluctuate due to a variety of factors, including:
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delays in product development by us or third parties; |
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market acceptance of products incorporating our technology; |
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changes in the demand for, and pricing of, products incorporating our technology; |
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competition and pricing pressure from competitive products; and |
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fluctuations in the activities of third parties that market and sell products based on our technologies. |
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Although our revenues have increased year-over-year for the past nine years, much of our revenue is dependent upon the activities of third parties, which are out of our control. We expect our operating expenses will continue to fluctuate significantly in future periods, as we continue to develop and introduce new productsto market, and increase our sales, marketing and licensing efforts. Moreover, our operating results in some quarters may not meet the expectations of stock market analysts and investors; in that case, our stock price could decline.
**The licensing of our technology or the manufacture, use or sale of products incorporating our technology may infringe on the patent rights of others, and we may be forced to litigate if an intellectual property dispute arises.**
If we infringe or are alleged to have infringed another partys patent rights, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, do not successfully defend an infringement action or are unable to have infringed patents declared invalid, we may:
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incur substantial monetary damages; |
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encounter significant delays in marketing our current and proposed product candidates; |
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be unable to conduct or participate in the manufacture, use or sale of product candidates or methods of treatment requiring licenses; |
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lose patent protection for our inventions and products; or |
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find our patents are unenforceable, invalid or have a reduced scope of protection |
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Parties making such claims may be able to obtain injunctive relief that could effectively block our companys ability to further develop or commercialize our current and proposed product candidates in the United States and abroad and could result in the award of substantial damages. Defense of any lawsuit or failure to obtain any such license could substantially harm our company. Litigation, regardless of outcome, could result in substantial cost to, and a diversion of efforts by, our company.
**Our patents are expensive to maintain, our patent applications are expensive to prosecute, and thus we are unable to file for patent protection in many countries.**
Our ability to compete effectively will depend in part on our ability to develop and maintain proprietary aspects of our technology and either to operate without infringing the proprietary rights of others or to obtain rights to technology owned by third parties. Pending patent applications relating to our technology may not result in the issuance of any patents or any issued patents that will offer protection against competitors with similar technology. We must employ patent attorneys to prosecute our patent applications both in the United States and internationally. International patent protection requires the retention of patent counsel and the payment of patent application fees in each foreign country in which we desire patent protection, on or before filing deadlines set forth by the International Patent Cooperation Treaty (PCT). We therefore choose to file patent applications only in foreign countries where we believe the commercial opportunities require it, considering our available financial resources and the needs for our technology. This has resulted, and will continue to result, in the irrevocable loss of patent rights in all but a few foreign jurisdictions.
Patents we receive may be challenged, invalidated or circumvented in the future, or the rights created by those patents may not provide a competitive advantage. We also rely on trade secrets, technical know-how and continuing invention to develop and maintain our competitive position. Others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets.
**We are subject to risks related to future business outside of the United States.**
Over time, we may develop business relationships outside of North America, and as those efforts are pursued, we will face risks related to those relationships such as:
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foreign currency fluctuations; |
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unstable political, economic, financial and market conditions; |
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import and export license requirements; |
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trade restrictions; |
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increases in tariffs and taxes; |
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high levels of inflation; |
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restrictions on repatriating foreign profits back to the United States; |
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greater difficulty collecting accounts receivable and longer payment cycles; |
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less favorable intellectual property laws, and the lack of intellectual property legal protection; |
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regulatory requirements; |
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unfamiliarity with foreign laws and regulations; and |
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changes in labor conditions and difficulties in staffing and managing international operations. |
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**The volatility of certain raw material costs may adversely affect operations and competitive price advantages for products that incorporate our technology.**
Most of the chemicals and other key materials that we use in our business, such as minerals, fiber materials and packaging materials, are neither generally scarce nor price sensitive, but prices for such chemicals and materials can be cyclical. Supply and demand factors, which are beyond our control, generally affect the price of our raw materials. We try to minimize the effect of price increases through production efficiency and the use of alternative suppliers, but these efforts are limited by the size of our operations. If we are unable to minimize the effects of increased raw material costs, our business, financial condition, results of operations and cash flows may be materially adversely affected.
**Certain of our product sales historically have been highly impacted by fluctuations in seasons and weather.**
Industrial odor control products have proven highly effective in controlling volatile organic compounds that are released as vapors produced by decomposing waste material. Such vapors are produced with the highest degree of intensity in temperatures between 40 degrees Fahrenheit (5 degrees Celsius) and 140 degrees Fahrenheit (60 degrees Celsius). When weather patterns are cold or in times of precipitation, our clients are less prone to use our odor control products, presumably because such vapors are less noticeable or, in the case of precipitation, can be washed away or altered. This leads to unpredictability in use and sales patterns for, especially, our CupriDyne Clean product line which accounts for 76% of our total revenue.
**There may be battery technologies that we are not aware of, and some of them may be subject to patent applications.**
We may not be aware of technologies that are similar or identical to our liquid sodium battery. We may not be aware of patent applications that have been filed that may include claims that are similar or identical to portions of our liquid sodium battery or our manufacturing process. No assurance can be made that our liquid sodium battery, or our proprietary manufacturing process, does not infringe on the intellectual property rights of third parties. If our technology or manufacturing process infringes on the intellectual property rights of third parties, we may be subject to litigation, or required to pay royalties, to such third parties, and our results of operations and financial condition may be adversely affected.
**We expect to face strong competition for our products from a growing list of established and new competitors.**
The worldwide battery market is highly competitive today and we expect it will become even more so in the future. For example, Tesla is one of the largest companies in the United States as measured by its market capitalization, and sells lithium-ion batteries for grid-scale applications, commercial and home storage, as well as in its vehicles. There are many other well capitalized and established companies that manufacture and/or sell batteries. Many of the companies have significantly greater or better-established resources than we do to devote to the design, development, manufacturing, distribution, promotion, sale and support of their products. This competition may prevent us from entering the marketplace, or if we do, may prevent us from establishing market share.
**There may not be a market for our liquid sodium battery.**
While we believe that there will be customer demand for our liquid sodium battery provided that we are able to prove its competitive advantages, there is no assurance that there will be any market acceptance of it, or any broad market acceptance. There also may not be broad market acceptance of our liquid sodium battery if competitors offer batteries which are preferred by prospective customers. In such event, there may be a material adverse effect on the companys results of operations and financial condition, and the company may not be able to achieve its goals.
**Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.**
Our operations, and those of our contractors and consultants, could be subject to pandemics, earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, acts of terrorism, acts of war and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely in part on third-party manufacturers to produce and process our products or the raw materials used to make our products. Our ability to obtain supplies of our products or raw materials could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster, pandemics, epidemics, or other business interruption. Our corporate headquarters and offices of ONM are in Southern California near major earthquake faults and fire zones. Our operations and financial condition could suffer in the event of a major earthquake, fire or other natural disaster.
**General Risks**
**Increased information technology security threats and more sophisticated computer crime pose a risk to us and our subsidiaries, vendors, systems, networks, products and services.**
We rely upon information technology systems and networks in connection with a variety of business activities, some of which are managed by third parties (which we refer to collectively as our associated third parties). Additionally, we and our associated third parties collect and store data that is of a sensitive nature, which may include names and addresses, bank account or financial information, and other types of personally identifiable information or sensitive business information. The secure operation of these information technology systems and networks, and the processing and maintenance of this data is critical to our business operations and strategy.
We may face attempts to gain unauthorized access to our information technology systems or products or those of our associated third parties for the purpose of improperly acquiring trade secrets or confidential business information. The theft or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position and the value of our investment in research and development.
Threats to our systems and our associated third parties systems can derive from human error, fraud, or malice on the part of employees or third parties, or may result from accidental technological failure. Globally, these types of threats have increased in number and severity and it is expected that these trends will continue. These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. Should an attack on our or our associated third parties information technology systems and networks succeed, it could expose us and our employees, customers, dealers and suppliers to misuse of information or systems, the compromising of confidential information, manipulation and destruction of data, production downtimes and operations disruptions.
The occurrence of any of these events could adversely affect our reputation, competitive position, business, results of operations and cash flows. While we have a cybersecurity program, expenses, damages and claims arising from cybersecurity incidents could cause a material adverse effect on our business. See [Part I. Item 1C. Cybersecurity](#CYBERSECURITY) for additional details on our cybersecurity program.
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**Economic uncertainties, recession, and domestic or world events and policies may adversely affect our business and operations.**
Domestic and world events continue to create economic uncertainties, including the wars in Iran and the Ukraine, international trade policies, including tariffs, and inflationary pressures. The Federal Reserve could raise interest rates in the United States in response to price inflation. Any myriad of factors could cause a sharp downward correction in stock market. We cannot predict how the foregoing factors will affect the market for our products and services, but the impact may be adverse. If the U.S. economy were to contract into a recession or depression, our existing clients, and potential future clients, may divert their resources to other goods and services, and our business may suffer.
**Risks Relating to our Common Stock**
**The sale or issuance of our common stock to****any equity line provider****causes dilution, and the sale of the shares of common stock acquired by any such provider, or the perception that such sales may occur, could cause the price of our common stock to fall.**
On December 13, 2022, we entered into a purchase agreement with Lincoln Park("PurchaseAgreement"), 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 expiring February 1, 2026(see [Share Purchase Agreement with Lincoln Park](#Share_Purchase_Agreement_with_Lincoln_Park) above). Although we have not yet done so, we intend to enter in to a similar agreement with another institutional investor that would allow us to control the timing and amount of any sales of our shares to such party. Sales of our common stock, if any, to such third party will depend on market conditions and other factors to be determined by us, and we may ultimately decide to sell to some, all or none of the shares of our common stock that may be available for us to sell pursuant to any such new agreement. If and when we do enter into a new agreement and sell shares to the third party, after such third party has acquired shares, they may resell all, some or none of those shares at any time or from time to time atits discretion. Therefore, sales of our shares by us could result in substantial dilution to the interests of other holders of our common stock, as well as sales of our stock into the open market causing fluctuations or reductions in the price of our common stock. Additionally, the sale of a substantial number of shares of our common stock to an institutional investor, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise desire to effect sales.
**Our common stock is thinly traded and largely illiquid.**
Our stock is currently quoted on the OTC Markets (OTCQX). Although it is the highest level platform on the OTC Markets, it is not a national exchange, which can prevent institutional investors from trading in our stock, and results in a lower frequency of trades and trading volume than stocks quoted on a national exchange. Continued trading on the OTCQX may also adversely affect our ability to obtain financing in the future due to the decreased liquidity of our shares and other restrictions that certain investors have for investing in securities not traded on a national exchange. While we intend to seek listing on the Nasdaq Stock Market (Nasdaq) or another national stock exchange when our company is eligible, there can be no assurance when or if our common stock will be listed on Nasdaq or another national stock exchange. Until then, we expect our stock to remain volatile and lack the liquidity of larger companies.
**The market price of our stock is subject to volatility.**
Our stock price has been and is likely to continue to be volatile. As a result of this volatility, investors may not be able to sell their common stock at or above their purchase price. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
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developments with respect to patents or proprietary rights; |
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announcements of technological innovations by us or our competitors; |
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announcements of new products or new contracts by us or our competitors; |
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actual or anticipated variations in our operating results due to the level of research and development expenses and other factors; |
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changes in financial estimates by securities analysts and whether any future earnings of ours meet or exceed such estimates; |
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conditions and trends in our industry; |
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new accounting standards; |
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the size of our public float; |
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short sales, hedging, and other derivative transactions involving our common stock; |
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sales of large blocks of our common stock including sales by our executive officers, directors, and significant stockholders; |
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general economic, political and market conditions and other factors; |
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our decision to sell our stock to any third party or institutional investor; |
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the activities of third parties that market and distribute our products, and decisions made by them to increase or decrease such activities, resulting in increases or decreases in product purchases from us and thus our revenues; and |
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the occurrence of any of the risks described herein. |
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**You may have difficulty selling our stock because it is deemed a****penny stock****and not quoted on a national exchange.**
Because our common stock is not quoted or listed on a national securities exchange, if the trading price of our common stock remains below $5.00 per share, which we expect for the foreseeable future, trading in our common stock will be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), whichrequire additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-Nasdaq equity security that has a market price of less than $5.00 per share, subject to certain exceptions). Such rules require the delivery, before any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with a spouse). For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchasers written consent to the transaction before the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer and current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealers presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed on broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of our common stock and the ability of holders of our common stock to sell their shares.
**Because our shares are deemed a****penny stock,****rules enacted by FINRA make it difficult to sell previously restricted stock.**
Rules put in place by the Financial Industry Regulatory Authority (FINRA) require broker-dealers to perform due diligence before depositing unrestricted common shares of penny stocks, and as such, some broker-dealers, including many large national firms (such as eTrade and Charles Schwab), are refusing to deposit previously restricted common shares of penny stocks. We routinely issued non-registered restricted common shares to investors, vendors and consultants. The issuance of such shares is subjected to the FINRA-enacted rules. As such, it can be difficult for holders of restricted stock, including those issued in our private securities offerings, to deposit the shares with broker-dealers and sell those shares on the open market.
**Because we will not pay dividends in the foreseeable future, stockholders will only benefit from owning common stock if it appreciates.**
We have never declared or paid a cash dividend to stockholders. We intend to retain any earnings that may be generated in the future to finance operations. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase our common stock, and must rely on the benefit of owning shares, and presumably a rise in share price. We cannot predict the future price of our stock, and due to the factors enumerated herein, can make no assurance of a future increase in the price of our common stock.
**We regularly issue stock, or stock options, instead of cash, to pay some of our operating expenses. These issuances are dilutive to our existing stockholders.**
We are party to agreements that provide for the payment of, or permit us to pay at our option, securities rather than cash in consideration for services provided to us. We include these provisions in agreements to allow us to preserve cash. We anticipate that we will continue to do so in the future. All such issuances preserve our cash reservebut are also dilutive to our stockholders because they increase (and will increase in the future) the total number of shares of our common stock issued and outstanding, even though such arrangements assist us with managing our cash flow. These issuances also increase the expense amount recorded.
**Our stockholders face further potential dilution in any new financing.**
During the year ended December 31, 2025, we issuedapproximately 16million shares of our common stock. Our private securities offerings typically offer convertible securities, including notes and warrants. Those warrants often include provisions that require investors to pay for the underlying shares with cash, which if executed would generate working capital for the company. Any additional capital that we raise would dilute the interest of the current stockholders and any persons who may become stockholders before such financing. Given the price of our common stock, such dilution in any financing of a significant amount could be substantial.
**Our stockholders face further potential adverse effects from the terms of any preferred stock that may be issued in the future.**
Our certificate of incorporation authorizes 50 million shares of preferred stock. None are outstanding as of the date hereof. In order to raise capital to meet expenses or to acquire a business, our board of directors may issue additional stock, including preferred stock. Any preferred stock that we may issue may have voting rights, liquidation preferences, redemption rights and other rights, preferences and privileges. The rights of the holders of our common stock will be subject to, and in many respects subordinate to, the rights of the holders of any such preferred stock. Furthermore, such preferred stock may have other rights, including economic rights, senior to our common stock that could have a material adverse effect on the value of our common stock. Preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, can also have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock, thereby delaying, deferring or preventing a change in control of our company.
**Risks Related to Privacy, Cybersecurity, and Our Technology**
**Our business involves the use, transmission and storage of confidential information, and the failure to properly safeguard such information could result in significant reputational harm.**
We may at times collect, store, and transmit information of, or on behalf of, our clients that may include certain types of confidential information that may be considered personal or sensitive, and that are subject to laws that apply to data breaches. We believe that we take reasonable steps to protect the security, integrity, and confidentiality of the information we collect and store, but there is no guarantee that inadvertent or unauthorized disclosure will not occur or that third parties will not gain unauthorized access to this information despite our efforts to protect this information, including through a cyber-attack that circumvents existing security measures and compromises the data that we store. If such unauthorized disclosure or access does occur, we may be required to notify persons whose information was disclosed or accessed. Most states have enacted data breach notification laws and, in addition to federal laws that apply to certain types of information, such as financial information, federal legislation has been proposed that would establish broader federal obligations with respect to data breaches. We may also be subject to claims of breach of contract for such unauthorized disclosure or access, investigation and penalties by regulatory authorities and potential claims by persons whose information was disclosed. The unauthorized disclosure of information, or a cyber-security incident involving data that we store, may result in the termination of one or more of our commercial relationships or a reduction in client confidence and usage of our services. We may also be subject to litigation alleging the improper use, transmission, or storage of confidential information, which could damage our reputation among our current and potential clients and cause us to lose business and revenue.
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**ITEM 1B.****UNRESOLVED STAFF COMMENTS**
None.
[](#)**ITEM 1C. CYBERSECURITY**
The Company has processes for assessing, identifying, and managing material risks from cybersecurity threats. These processes are integrated into the Companys overall risk management systems, as overseen by the Companys chief executive officer and board of directors. The Company engages information technology managed service providers (MSPs) to manage the Companys computer and information systems at its three office locations and remote locations. The MSPs are responsible for evaluating and testing the Companys risk management systems and assessing and remediating potential cybersecurity incidents as appropriate.
The executives in charge of each physical office location are responsible for assessing and managing cybersecurity risks for their locations, and the Companys chief executive officer is responsible for assessing and managing cybersecurity risks to the Company as a whole. Because none of these individuals has specific training or experience in managing cybersecurity risks, MSPs that have expertise and experience in doing so are retained and relied upon. Our chief executive officer is responsible for escalating any cybersecurity matters as appropriate, in consultation with our legal counsel. Our board of directors is ultimately responsible for oversight of cybersecurity risk management and receives regular reports from Company management.
**ITEM****2.****PROPERTIES**
Our company owns no real property. We currently lease approximately 9,000 square feet of office and industrial space at 14921 Chestnut Street, Westminster, California. In addition to serving as our principal offices, it is also a manufacturing facility where we manufacture our products, including our CupriDyne Clean Industrial Odor control product, and the home of our subsidiary ONM Environmental.
We also lease approximately 22,000 square feet of office, warehouse,lab and manufacturing space at 105 Fordham Road, Oak Ridge, Tennessee, for our professional engineering division, BioLargo Engineering, Science & Technologies, LLC, and our battery company, BioLargo Energy Technologies, Inc. Our subsidiary Clyra Medical leasesapproximately 450 square feet of office space at 3802 Spectrum Blvd, Tampa Florida and 2,800 of warehouse/flex space at 10770 N. 46th Stret, Unit C-300, Tampa Florida.Our Canadian subsidiary BioLargo Canada leases approximately 1,500 square feet of office and lab space from the University of Alberta in Edmonton, Canada.
Our telephone number is (888) 400-2863.
**ITEM****3.****LEGAL PROCEEDINGS**
ONM Environmental, Inc., is the defendant in a lawsuit filed by Pooph Inc. in the Orange County, California Superior Court on September 11, 2025. The lawsuit alleges three causes of action, for Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, and Declaratory judgment, and seeks an unspecified amount of damages, allegedly arising from ONMs manufacture of pet odor-control products sold by Pooph Inc.
BioLargo, Inc., BioLargo Life Technologies, Inc., and ONM Environmental, Inc., filed a lawsuit against Pooph, Inc., and Ikigai Marketing Works, LLC, in the United States District Court, Central District of California, on November 11, 2025, for patent infringement, false advertising, breach of contract, false promise, unfair and fraudulent business practices and constructive fraud, seeking to recover, amongst other damages, the defendants failure to pay for product purchases and license royalties in the aggregate amount of $3,821,401.
**ITEM****4.****MINE SAFETY DISCLOSURES**
Not applicable.
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**PART II**
**ITEM 5.****MARKET FOR REGISTRANT****S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES**
**Market Information**
Since January23, 2008, our common stock has been quoted on the OTC Markets (formerly known as the OTC Bulletin Board) under the trading symbol BLGO. Since May 2024, it has listed on the OTCQX, the OTC Market's highest marketplace. The OTC Markets is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities. OTCQXsecurities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our common stock. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
**Holders**
As of March 4, 2026, there were approximately 525registered holders of our common stock, and 5,300 beneficial owners.
**Dividends**
We have never declared or paid a cash dividend to stockholders. We intend to retain any earnings which may be generated in the future to finance operations.
**Securities Authorized for Issuance Pursuant to Equity Compensation Plans**
**Equity Compensation Plan Information as of December 31, 2025**
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Number of securities to be |
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Weighted average |
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issued upon exercise of |
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exercise price of |
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Number of securities |
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outstanding options, |
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outstanding options, |
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remaining available for |
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warrants and rights |
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warrants and rights |
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future issuance |
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Plan Category |
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(a) |
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(b) |
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(c) |
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Equity compensation plans approved by security holders |
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58,777,449 |
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(1) |
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$ |
0.20 |
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25,206,986 |
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Equity compensation plans not approved by security holders(2) |
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13,789,129 |
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$ |
0.39 |
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n/a |
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Warrants |
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31,244,078 |
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$ |
0.29 |
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n/a |
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Total |
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103,810,656 |
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$ |
0.25 |
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25,206,986 |
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(1) |
Includes 380,000shares issuable under the 2007 Equity Plan, which expired September 6, 2017;includes41,604,435 shares issuable under the 2018 Equity Incentive Plan which expired March 2024; includes 16,793,014shares issuable under the 2024 Equity Plan, adopted by our stockholders June 13, 2024. |
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(2) |
This includes various issuances ofoptions to specific individuals either as a conversion of un-paid obligations pursuant to a plan adopted by our board of directors, or as part of their agreement for services. |
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**Sales of Unregistered Securities**
The following is a report of the sales of unregistered securities in the past two years not previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
During the three months ended December 31, 2025, BioLargo sold shares of its common stock andreceived $215,000grossproceeds from twoaccredited investors, and in exchange issued the investors1,131,579shares of its common stock and a six-month warrant to purchase1,131,579shares of common stock at $0.228per share and a 5-year warrant to purchase 1,131,580. shares of common stock at$0.285per share.
During the three months ended December 31, 2025, Clyra Medical sold shares of its common stock and warrants and received 150,000grossproceeds from anaccredited investor, and in exchange issued the investors23,076shares of its common stock and a warrant to purchase11,538 shares of common stock at $7.50 per share.
During the three months ended December 31, 2025, Clyra Medical noteholders converted250,000of outstanding debt into 41,667shares of its common stock.
During the three months ended December 31, 2025, BETI sold shares of its common stock and received $325,000gross proceeds from three accredited investors, and in exchange issued the investors 29,279shares of its common stock at a price of $3.10 per share.
All of these offerings and sales were made in reliance on the exemption from registration contained in Section4(2) of the Securities Exchange Act and/or RegulationD promulgated thereunder as not involving a public offering of securities.
**ITEM 6.****SELECTED FINANCIAL DATA**
Not applicable
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**ITEM 7.****MANAGEMENT****S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this report.
This discussion contains forward-looking statements that involve risks and uncertainties. Such statements, which include statements concerning future revenue sources and concentration, selling, general and administrative expenses, research and development expenses, capital resources, additional financings and additional losses, are subject to risks and uncertainties, including, but not limited to, those discussed above in PartI, Item1 and elsewhere in this Annual Report, particularly in [Risk Factors](#Risk_Factors), that could cause actual results to differ materially from those projected. The forward-looking statements set forth in this Annual Report are as of December 31, 2025, unless expressly stated otherwise, and we undertake no duty to update this information.
**Results of Operations****Comparison of the years ended December 31, 2025 and 2024**
We operate our business in distinct business segments:
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ONM Environmental, which manufactures and sells our odor and VOC control products and services, including our flagship product, CupriDyne Clean; |
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BLEST, which provides professional engineering services supporting our internal business units, advancing innovations like the AEC to remove PFAS contaminants from water, and serving outside clients on a fee for service basis; |
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Clyra Medical, which develops and sells medical products based on our technology; |
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BETI, which is developingour proprietary battery technology; |
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BEST, which sells equipment based on our technology; and |
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BioLargo Canada, located in Edmonton, Alberta Canada, our primary research and development activities; and |
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Our corporate operations, which support the operating segments with legal, accounting, human resources, and other services. |
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Our consolidated revenue for the year ended December 31, 2025 was $7,765,000, which is a 56%decrease over the $17,779,000 in revenues for the year ended December 31,2024. Servicesrevenue increased 96%to $1,998,00, while revenue from product sales decreased66%to $5,767,000. The increase in service revenues was related to additional engineering consulting service contracts. The decrease in product revenues was almost entirely due to the decrease in the volume of sales to our largest private-label odor-control products customer, Pooph Inc.
**ONM Environmental**
Our wholly-owned subsidiary ONM Environmental generates revenues through sales of our flagship product CupriDyne Clean industrial odor and VOC control product, by providing design, installationand maintenance services on the systems that deliver CupriDyne Clean at its clients facilities, and through sales of consumer products based on our CupriDyne Clean technology.
**Credit Loss Expense, Pooph Litigation**
Since 2021, ONM Environmental has been selling odor control products for use with pets to Ikigai Holdings LLC, who sold them to consumers and retailers under the brand name "Pooph", pursuant to aPreferred Master Manufacturing Agreement ("PMMA") and License Agreement.On June 6, 2025, the parties amended the PMMA 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). These amounts were recorded on our consolidated balance sheets 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 BioLargo 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, it 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 PMMA, citing our refusal to deliver products.On September 24, 2025, we delivered notice to Pooph that the grant of license was immediately revoked due to Poophs failure to pay royalties, and that we were 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, BioLargos patents and proprietary information, including but not limited to know-howdisclosed 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,we (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, alleging patent infringement (35 U.S.C. 271), false advertising (15 U.S.C. 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 $1,667,292; (iv) compensatory damages for unpaid product purchased from ONM Environmental of $2,154,110, (v) compensatory damages in an amount according to proof forfalse promises andunfair and fraudulent business practices; (vi)treble and/or exemplary damages; and (vii) costs and attorneys fees. Also on November 11, 2025, Pooph Inc. served ONM Environmental with a lawsuit venued in the Orange County, California Superior Courtfiled September 11, 2025, alleging ONM Environmentalbreached the terms and the implied covenant of good faithand fair dealing ofthe Preferred PMMA, 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, and ONM Environmental's refusal to fullfil 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.
During the three months ended September 30, 2025, BioLargo management determined that the note receivable and accounts receivable owed by Pooph Inc. werefully impaired, resulting in a $3,849,000 credit loss expenserecorded on ourconsolidated statements of operations, which reduced operating income and current assets by that amount.
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**Revenue (ONM Environmental)**
ONM Environmentals revenues for the year ended December 31, 2025, were $5,905,000a decrease of $9,692,000(62%) from the same period in 2024. The decrease in revenues was almost entirely due to adecrease in the volume of sales of private label odor-control products (which decreased by $9,100,000). Because Pooph is owned and marketed by a third party, ONM Environmental has no control over the marketing and sales activity or levels of the Pooph brand. Although we believe the success of the Pooph brand demonstrates the viability of our pet-odor control products, and although we are actively seeking a new partner that can capitalize on the prior success, unless a new partner is found, we expect ONM Environmental's revenues for the year ending the year ended December 31, 2026 to decrease as compared to the year ended December 31, 2025.
**Cost of Goods Sold (ONM Environmental)**
ONM Environmentals cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products. As a percentage of revenue, ONM Environmentals costs of goods decreased2%in2025 to 51%. The decrease was related to normal price fluctuations for raw materials.
**Selling, General and Administrative Expense (ONM Environmental)**
ONM Environmentals SG&A expenses were $1,324,000in 2025, compared to $1,357,000in 2024. We expect these expenses to remain approximately the same in 2026at the current level of operations.
**Operating Loss and Income (ONM Environmental)**
ONM Environmental generated an operating lossof $2,317,000in 2025, compared tooperating income totaling$5,920,000in 2024. The operating loss is primarily due to the decrease in sales volume of Pooph branded products, which has declined in 2025, the credit loss expense for uncollectible account receivables totaling $603,000,and thenote receivablecredit lossexpense totaling $3,283,000.
**BLEST (engineering division)**
**Revenue (BLEST)**
BLEST generated $1,998,000 in third-party service revenues in the year ended December 31, 2025, a 96% increase over the $1,017,000 inthird-party service revenues in the year ended December 31, 2024.This increase was due to an increased volume of services provided to existing and new clients, including increased work at U.S. Air Force bases. As BLESTs revenues in 2024 included product revenue related to the Lake Stockholm project, its overall revenues in 2025 decreased as compared to 2024. In 2025 and future periods, product sales of BioLargo proprietary technology will be through BioLargo Equipment Solutions & Technologies, Inc. - BLEST's role will be to provide supporting engineering services for such products, both at the sales and implementation cycles.
In addition to providing service to third party clients, BLEST provides services to BioLargo and its subsidiaries for internal BioLargo projects. These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation of our financial statements. Intersegment revenue is primarily used to further engineer and develop our AEC PFAS treatment system and battery technology.In the year ended December 31, 2025, intersegment revenuestotaled $685,000compared to $1,015,000in 2024.
**Cost of GoodsSold (BLEST)**
BLESTs cost of goodsincludes employee labor, materials, as well as subcontracted labor costs. In 2025, its cost of goods were 72%of its revenues, versus74%in 2024. The decrease is related to decreased costs on fixed fee contracts. We expect the cost of services to remain consistent in 2026based on the contracts currently in progress.
**Selling, General and Administrative Expense (BLEST)**
BLEST's SG&A expenses were $987,000in 2025, compared to $872,000in 2024, due to increased head-count related expenses. We expect these expenses remain consistent in 2026based on the contracts currently in progress.
**Operating Loss (BLEST)**
BLEST had an operating loss of $1,091,000in 2025, compared to an operating loss of $1,453,000in 2024. This operating loss is reflective of the focus at BLEST on internal BioLargo projects. While we are unable to record revenues generated from services by the engineering group to other BioLargo operating divisions for important projects such as the development of the AOS and AEC technologies, it is important to note that its net loss would be reduced if it were selling these services to a third party at fair market value.Because the subsidiary had a net loss, we invested cash during the year to allow it to maintain operations.
**Clyra Medical**
Clyra Medical did not generaterevenues in the years ended December 31,2025 or 2024. It received a first purchase order for its ViaCLYR product in February 2026, and expects to record revenue in the three-months ending March 31, 2026. In the yearended December 31,2025, Clyra had an operating losstotaling $6,065,000, which included $1,168,000in research and development expenses. In the same periodin 2024, the operating loss totaled$3,324,000, which included$827,000in research and development expenses. The increases in costs and expenses is related to stock option compensation expense and product development expenserelated to readying for scaled commercialization.
In the year ended December 31, 2025, Clyra raised $5,745,000 in debt and equity. In the year ended December 31, 2024, Clyra raised $2,869,000, in debt and equity. From January 1, 2026, through March 4, 2026, Clyra Medical received $1,705,000and issued unsecuredpromissory notes in the aggregate principal amount of $1,705,000, bearing interest at the rate of15% per annum, which matureFebruary 28, 2029, and requireinterest-only payments until maturity (titled its 2026 Guaranteed Note). Clyra Medical also issued the investors warrants allowing for the purchase of an aggregate 133,282shares of its common stock at $7.50 per share, expiring February 28, 2031. Payment of the promissory notes areguaranteed by BioLargo Inc.
17
[Table of Contents](#toc)
**BioLargo Energy Technologies (BETI)**
BioLargo Energy Technologies, Inc.(BETI) is focused on development of our Cellinity battery, which is not yet fully developed and ready for sale, and thus has not generated generate revenue. In 2025, BETI had an operating loss totaling $639,000 ,which included $274,000in research and development expenses. In the same periodin 2024, the operating losstotaled $642,000, which included $379,000in research and development expenses. We do not expect BETI to generate revenue in the year ending December 31, 2026, as it continues its research and development and pre-commercialization activities.
**BioLargo Equipment, Solutions & Technologies (BEST)**
BioLargo Equipment, Sciences and Technologies, Inc. (BEST), was formed in 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC. As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues. We intend future water treatment projects to be contracted through BEST. BEST had an operating loss totaling $276,000 and $273,000 during 2025 and 2024.
**Selling, General and Administrative Expense****consolidated**
Our Selling, General and Administrative expense (SG&A) include both cash (for example, salaries to employees) and non-cash expenses (for example, stock option compensation expense). Our consolidated SG&A increased by27%($2,466,000)in the year ended December 31, 2025, to $11,768,000. Our non-cash expenses (through the issuance of stock and stock options) were $3,613,000in 2025, compared with$2,479,000in2024. Our SG&A expenses included (in thousands):
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
|
Salaries and payroll related |
|
$ |
4,721 |
|
|
$ |
3,276 |
|
|
|
Professional fees |
|
|
1,081 |
|
|
|
944 |
|
|
|
Consulting |
|
|
1,906 |
|
|
|
1,503 |
|
|
|
Office expense |
|
|
1,879 |
|
|
|
1,659 |
|
|
|
Rent expense |
|
|
565 |
|
|
|
377 |
|
|
|
Depreciation expense |
|
|
141 |
|
|
|
150 |
|
|
|
Sales and marketing |
|
|
520 |
|
|
|
494 |
|
|
|
Investor relations |
|
|
399 |
|
|
|
477 |
|
|
|
Board of director expense |
|
|
556 |
|
|
|
422 |
|
|
|
Total |
|
$ |
11,768 |
|
|
$ |
9,302 |
|
|
The increases in salaries and payroll related is primarily due to increased option compensation to employees and the associated fair value, and the increased number of employees at Clyra.The increase in professional and consulting fees are primarily from Clyra as it prepares for the commercialization of its products. The increase in sales and marketing wasdue to increased company activities at Biolargo and at Clyra. Office expense increased due to an increase in square footage of rented space and an increase in general office expenses related to expanded operations. The increase in the Board of Director fees is due Clyra's issuance of equity to its board members.
**Impairment Expense**
During the years ended December 31, 2025 and 2024, managementrecognized an impairment expense of $14,000 and $0, respectively, related toBioLargo's noncontrolling interest in its South Korean joint venture.
***Credit Loss Expense***
During the year ended December 31, 2025, managementrecognized credit loss expense of $3,849,000 related to an ONM Environmental client (see [Credit Loss Expense, Pooph Litigation](#Impairment_Credit_Loss_Expense_Pooph), above).
**Research and Development**
In the year ended December 31, 2025, we spent $2,593,000in the research and development of our technologies and products. This was a decrease of 10%or $289,000compared to 2024, due to decreased activity by Clyra Medical as it approachescommercialization of its wound irrigation solution products.The research and development activity was related to the development of wound irrigation solution medical products, the AEC water filtration system, and the Cellinity battery products.
**Other Income and Expense**
Primarily through our wholly owned Canadian subsidiary, we have been awarded more than 90research grants over the years from various public and private agencies, including the Canadian National Research Institute Industrial Research Assistance Program (NRC-IRAP), the National Science and Engineering Research Council of Canada (NSERC), and the Metropolitan Water District of Southern Californias Innovative Conservation Program ICP. The research grants received are considered reimbursement grants related to costs we incur and therefore are included as Other Income. The amount of grant income decreased $20,000in the year ended December 31, 2025, to $6,000.Grant funds paid directly to third parties are not included as income in our financial statements.
**Interest expense**
Our interest expense for the year ended December 31, 2025, was $540,000, an increase of661%compared with 2024. The significant increase in interest expense is related to Clyra Medical debt, which increased in the year ended December 31, 2025. Weexpect our interest expense to increase in 2026as compared with 2025due to further increased debt obligations at Clyra Medical.
18
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**Net Loss**
Net loss for the year ended December 31, 2025, was $15,189,000a loss of $0.04per share, compared to a net loss for the year ended December 31, 2024, of $4,347,000a loss of $0.01per share. This is a year-over-yearincrease in net loss of249%. Our net loss this year increasedbecause of the decrease in ONM Environmental revenue and the $3,849,000 credit loss expense associated with an ONM Environmental client (see [Credit Loss Expense, Pooph Litigation](#Impairment_Credit_Loss_Expense_Pooph), above).The net income (loss) per business segment is as follows (in thousands):
|
|
|
Year ended |
|
|
Year ended |
|
|
|
Net income (loss) |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
|
ONM Environmental |
|
$ |
(2,227 |
) |
|
$ |
5,951 |
|
|
|
BLEST |
|
|
(1,032 |
) |
|
|
(1,356 |
) |
|
|
Clyra Medical |
|
|
(6,564 |
) |
|
|
(3,490 |
) |
|
|
BioLargo Canada |
|
|
(528 |
) |
|
|
(504 |
) |
|
|
BETI |
|
|
(639 |
) |
|
|
(642 |
) |
|
|
BEST |
|
|
(276 |
) |
|
|
(273 |
) |
|
|
BioLargo corporate |
|
|
(3,923 |
) |
|
|
(4,033 |
) |
|
|
Consolidated net loss |
|
$ |
(15,189 |
) |
|
$ |
(4,347 |
) |
|
**Liquidity and Capital Resources**
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. During the year ended December 31, 2025, we generated revenues of $7,765,000, had a net loss of $15,189,000, and used $8,297,000cash in operations. At December 31, 2025, we had working capital of $51,000, and current assets of $5,114,000. We do not believe gross profits in the year ending December 31,2026 will be sufficient to fund our current level of operations. We have been, and anticipate that we will continue to be, limited in terms of our capital resources. As of December 31, 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, $1,395,000is 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 obligationsduring the year-ended December 31, 2025, we (i) sold $2,122,000of our common stock to Lincoln Park Capital Fund, LLC (Lincoln Park) (see [Share Purchase Agreement with Lincoln Park](#Share_Purchase_Agreement_with_Lincoln_Park) above, and [Note 3](#Note_3_Sale_of_Stock_for_Cash)), (ii) sold $215,000of our common stock and warrants to accredited investors (see [Note3](#Note_3_Sale_of_Stock_for_Cash) and [Note 6](#Note_6_Warrants)), (iii) sold $2,339,000, of Clyra Medical common stock and sold $2,145,000Clyra Medical Series B Preferred stock(see [Note 10](#Note_10_Clyra_Medical)), and (iv) sold $425,000of BETI common stock(see [Note 9](#Note_9_BETI)).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.
Since January 1, 2026, through March 4, 2026 (see [Note 16, Subsequent Events](#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.
**Critical Accounting Policies**
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of offerings of debt with equity or derivative features which include the valuation of the warrant component, any beneficial conversion feature and potential derivative treatment, and share-based payments. We base our estimates on anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.
The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its consolidatedfinancial statements.
**Revenue Recognition**
We adopted ASU 2014-09, Revenue from Contracts with Customers, Topic 606, on January 1, 2018. The guidance focuses on the core principle for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
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We have revenue from two subsidiaries, ONM and BLEST. ONM identifies its contract with the customer through a written purchase order, in which the details of the contract are defined including the transaction price and method of shipment. The only performance obligation is to create and ship the product and each product has separate pricing. ONM recognizes revenue at a point in time when the order for its goods are shipped if its agreement with the customer is FOB ONMs warehouse facility, and when goods are delivered to its customer if its agreement with the customer is FOB destination. Revenue is recognized with a reduction for sales discounts, as appropriate and negotiated in the customers purchase order. ONM also installs misting systems for which it bills on a time and materials basis. It identifies its contract with the customer through a written purchase order in which the details of the time to be billed and materials purchased and an estimated completion date. The performance obligation is the completion of the installation. Revenue is recognized in arrears as the work is performed.
BLEST identifies services to be performed in a written contract, which specifies the performance obligations and the rate at which the services will be billed. Each service is separately negotiated and priced. Revenue is recognized as services are performed and completed. BLESTs contracts typically call for invoicing for time and materials incurred for that contract. A few contracts have called for milestone or fixed cost payments where BLEST bills an agreed-to amount per month for the life of the contract. In these instances, completed work, billed hourly, is recognized as revenue. If the billing amount is greater or lesser than the completed work, a receivable or payable is created. These accounts are adjusted upon additional billings as the work is completed. To date, there have been no discounts or other financing terms for the contracts.
**Warrants**
Warrants issued with our convertible and non-convertible debt instruments are accounted for under the fair value and relative fair value method.
The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative and not qualify for equity treatment, then it is measured at fair value using the Black Scholes option model, and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is marked-to-market).
If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, 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 convertible note.
The warrant relative fair values are also recorded as a discount to the convertible promissory notes. At 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.
**Share-based Payments**
It is the Companys policy to expense share-based payments as of the date of grant or over the term of the vesting period in accordance with Auditing Standards Codification Topic 718 Share-Based Payment.Application of this pronouncement requires significant judgment regarding the assumptions used in the selected option pricing model, including stock price volatility and employee exercise behavior. Most of these inputs are either highly dependent on the current economic environment at the date of grant or forward-looking expectations projected over the expected term of the award.
**Fair Value Measurement**
Generally accepted accounting principles establishes a hierarchy to prioritize the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest ranking to the fair values determined by using unadjusted quoted prices in active markets for identical assets (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). Observable inputs are those that market participants would use in pricing the assets based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Companys assumptions about inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company has determined the appropriate level of the hierarchy and applied it to its financial assets and liabilities.
Management believes the carrying amounts of the Companys 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 include cash, accounts receivable, prepaid assets, accounts payable, line of credit, and other assets and liabilities. The carrying amount of debt instruments are believed to approximate fair value as the stated interest rates are reflective of the prevailing market rates.
**Recent Accounting Pronouncements**
See [Note 2](#Note_2_Summary_of_Significant_Accounting_Policie) to the Consolidated Financial Statements, Summary of Significant Accounting Policies Recent Accounting Pronouncements, for the applicable accounting pronouncements affecting the Company.
**ITEM 7A.****QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**
Not applicable.
**ITEM 8.****FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
Our consolidated financial statements as of and for the years ended December 31, 2025 and 2024 are presented in a separate section of this report following Item14 and begin with the [index on page F-1](#index).
**ITEM 9.****CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**
None.
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**ITEM 9A.****CONTROLS AND PROCEDURES**
**Evaluation of Disclosure Controls and Procedures**
We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report.
Our procedures have been designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. However, our Company is continuing to grow and evolve. The volume of our product sales continues to grow, increasing strain on our accounting systems. And our operations do not yet generate enough cash to fund operations, and thus we rely on financing activities to maintain our level of operations and fund our anticipated growth. In combination, these activities put stress on our overall controls and procedures. Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the evaluation date our disclosure controls and procedures were not effective, due to the material weakness identified below.
It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
**Management****s Report on Internal Control over Financial Reporting**
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules13a-15(f) and 15d-15(f). Our internal control over financial reporting includes those policies and procedures that (i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our chief executive officer and the chief financial officer, we have established internal control procedures in accordance with the guidelines established in the 2013 Framework Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management evaluated the effectiveness of our internal controls, and concluded that due to our limited financial and personnel resources, and the fact that we operate our business in three distinct locations in the U.S. and Canada, we continue to have a material weakness in our internal controls with respect to the closing our financial statements. Until the Company has the financial resources to implement more robust automated systems, or to hire additional dedicated accounting personnel, we expect this material weakness to continue. In reaching this conclusion, management considered that despite this weakness, and others identified in past years, the company has not identified material misstatements in prior financial statements and believes that the material weakness identified herein is not likely to lead to a material misstatement in the financial statements contained within this report.
Management has concluded that its internal controls over financial reporting are not effective. Management identified a material weakness with respect to deficiencies in its financial closing and reporting procedures. Management believes this is due to a lack of resources. Management intends to add accounting personnel and operating staff and more sophisticated systems in order to improve its reporting procedures and internal controls, subject to available capital. A material weakness is a significant deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected. While management has recognized the material weakness, nothing additionally has changed in internal controls over financial reporting in the fourth quarter or the fiscal year ended December 31, 2025.
This Annual Report does not include an attestation report of the Companys independent registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only managements report in this Annual Report.
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting, or any system we design or implement in the future, will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
**Changes in Internal Control over Financial Reporting**
There were no changes in the Companys internal control over financial reporting during the fourth quarter of 2025, which were identified in connection with managements evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
**ITEM 9B.****OTHER INFORMATION**
*None.*
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**PART III**
Certain information required by Part III is incorporated by reference from our definitive Proxy Statement to be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2025, in connection with the solicitation of proxies for our 2026Annual Meeting of Stockholders (the Proxy Statement).
**ITEM 10.****DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE**
The information required by this section is incorporated by reference from the section titled Proposal OneElection of Directors in the Proxy Statement. Item405 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 titled Section *16*(a) Beneficial Ownership Reporting Compliance in the Proxy Statement.
**ITEM 11.****EXECUTIVE COMPENSATION**
The information required by this section is incorporated by reference from the information in the section titled Executive Compensation in the Proxy Statement.
**ITEM 12.****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 titled Security Ownership of Certain Beneficial Owners and Management in the Proxy Statement.
**ITEM 13.****CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**
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.
**ITEM 14.****PRINCIPAL ACCOUNTING FEES AND SERVICES**
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.
**PART IV**
**ITEM****15.** **EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.**
The following documents are filed as a part of this report:
1.*Financial Statements*. The consolidated financial statements required to be filed in this report are listed on the Index to Financial Statements immediately preceding the financial statements.
2.*Financial Statement Schedules*. Separate financial statement schedules have been omitted either because they are not applicable or because the required information is included in the consolidated financial statements or the notes thereto.
3.*Exhibits.*See the ExhibitIndex for a list of the exhibits being filed or furnished with or incorporated by reference into this report.
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**Exhibit Index**
|
|
|
Incorporated by Reference Herein |
|
|
Exhibit Number |
Exhibit Description |
Form |
File Date |
|
|
3.1 |
Bylaws of BioLargo, Inc., as amended and restated |
Form 10-KSB |
5/23/2003 |
|
|
3.2 |
Amended and Restated Certificate of Incorporation for BioLargo, Inc. filed March16, 2007 |
Form 10-KSB |
5/4/2007 |
|
|
3.3 |
Certificate of Amendment to Certificate of Incorporation, filed May 25, 2018 |
Pos Am |
6/22/2018 |
|
|
3.4 |
Certificate of Amendment to Certificate of Incorporation, filed August 30, 2022 |
Form 10-Q |
11/14/2022 |
|
|
4.1 |
BioLargo, Inc. 2007 Equity Incentive Plan |
Form 10-QSB |
11/19/2007 |
|
|
4.2 |
Amendment No. 1 to BioLargo 2007 Equity Incentive Plan |
Def 14C (Exhibit A) |
5/2/2011 |
|
|
4.3 |
Form of Stock Options issued in exchange for reduction in accounts payable. |
Form 10-K |
3/31/2015 |
|
|
4.4 |
2018 Equity Incentive Plan |
Form S-8 |
6/22/2018 |
|
|
4.5 |
Stock Option Award Agreement under 2018 Equity Incentive Plan |
Form S-8 |
6/22/2018 |
|
|
4.6 |
Revolving Line of Credit Agreement dated June 30, 2020, between Clyra Medical and Vernal Bay |
Form 8-K |
7/7/2020 |
|
|
4.7 |
Security Agreement dated June 30, 2020, between Clyra Medical and Vernal Bay |
Form 8-K |
7/7/2020 |
|
|
4.8 |
Revolving Line of Credit Note issued by Clyra Medical to Vernal Bay on June 30, 2020 |
Form 8-K |
7/7/2020 |
|
|
4.9 |
Warrant issued in BioLargo Unit Offerings |
Form 10-Q |
8/14/2020 |
|
|
10.1 |
BioLargo license to Clyra Medical Technologies, Inc., dated March 1, 2024 |
Form 10-K |
4/1/2024 |
|
|
10.2 |
Clyra Medical Technologies, Inc. license to BioLargo dated March 1, 2024 |
Form 10-K |
4/1/2024 |
|
|
10.3 |
Commercial Office Lease Agreement for Westminster California |
Form 8-K |
8/24/2016 |
|
|
10.4 |
Employment Agreement with Dennis P. Calvert dated May 2, 2017. |
Form 8-K |
5/4/2017 |
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|
10.5 |
Lock-Up Agreement with Dennis P. Calvert dated April 30, 2017 |
Form 8-K |
5/4/2017 |
|
|
10.6 |
Lock-Up Agreement with Dennis P. Calvert dated May 2, 2017. |
Form 8-K |
5/4/2017 |
|
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10.7 |
Commercial Office Lease Agreement for Oak Ridge Tennessee |
Form 8-K |
9/8/2017 |
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|
10.8 |
Form of Employment Agreement for Engineering subsidiary employee (BLEST) |
Form 8-K |
9/8/2017 |
|
|
10.9 |
Form of Option issued to founding employees of Engineering subsidiary (BLEST) |
Form 8-K |
9/8/2017 |
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10.10 |
Joseph L. Provenzano Employment Agreement dated May 28, 2019 |
Form 8-K |
6/24/2019 |
|
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10.11 |
Purchase Agreement, dated as of December 13, 2022, by and between BioLargo, Inc. and Lincoln Park Capital Fund, LLC. |
Form 8-K |
12/19/2022 |
|
|
10.12 |
Form of indemnity agreement between the Company at its officers and directors |
Form 10-K |
3/31/2022 |
|
|
10.13 |
Form of Share Exchange Agreement between BioLargo, Inc., and purchasers of Clyra Medical Series A Preferred Stock |
Form 10-Q |
5/17/2023 |
|
|
10.14 |
Form of Share Exchange Agreement between BioLargo, Inc., and purchasers of BioLargo Energy Technologies, Inc. common stock |
Form 10-Q |
5/17/2023 |
|
|
10.15 |
2024 Engagement Extension Agreement with CFO |
Form 10-Q |
8/15/2024 |
|
|
10.16 |
License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated May 17, 2021 |
Form 10-Q |
8/14/2025 |
|
|
10.17 |
First amendment to License Agreementbetween BioLargo, Inc., and Ikigai Holdings, LLC, dated August 16, 2021 |
Form 10-Q |
8/14/2025 |
|
|
10.18 |
Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated July 9, 2021 |
Form 10-Q |
8/14/2025 |
|
|
10.19 |
First amendment toPreferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated June 6, 2025 |
Form 10-Q |
8/14/2025 |
|
|
10.20 |
Form of Promissory Note issued by Clyra Medical Technologies, Inc. (2026 Guaranteed Note) |
|
filed herewith |
|
|
10.21 |
Form of Payment Guaranty (Clyra Medical 2026 Guaranteed Note) |
|
filed herewith |
|
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14.1 |
Code of Ethics |
|
filed herewith |
|
|
21.1* |
List of Subsidiaries of the Registrant |
|
filed herewith |
|
|
23.1* |
Consent of Hacker Johnson & Smith PA |
|
filed herewith |
|
|
31.1* |
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934 |
|
filed herewith |
|
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31.2* |
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934 |
|
filed herewith |
|
|
32* |
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. |
|
filed herewith |
|
|
101.INS** |
Inline XBRL Instance |
|
|
|
|
101.SCH** |
Inline XBRL Taxonomy Extension Schema |
|
|
|
|
101.CAL** |
Inline XBRL Taxonomy Extension Calculation |
|
|
|
|
101.DEF** |
Inline XBRL Taxonomy Extension Definition |
|
|
|
|
101.LAB** |
Inline XBRL Taxonomy Extension Labels |
|
|
|
|
101.PRE** |
Inline XBRL Taxonomy Extension Presentation |
|
|
|
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |
|
|
|
* Filed herewith
** Furnished herewith
Management contract or compensatory plan, contract or arrangement
23
[Table of Contents](#toc)
**SIGNATURES**
Pursuant to the requirements of Section13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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BIOLARGO, INC. |
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Date: March 4, 2026 |
By: |
/s/ Dennis P. Calvert |
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Dennis P. Calvert President and Chief Executive Officer |
|
**POWER OF ATTORNEY**
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Dennis P. Calvert and Joseph L. Provenzano, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated:
|
Name |
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Title |
|
Date |
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/s/ Dennis P. Calvert |
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Chairman of the Board, Chief |
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March 4, 2026 |
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Dennis P. Calvert |
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Executive Officer and President |
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/s/ Charles K. Dargan II |
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Chief Financial Officer |
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March 4, 2026 |
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Charles K. Dargan II |
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(principal financial officer and principal accounting officer) |
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/s/ Kenneth R. Code |
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Chief Science Officer and Director |
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March 4,2026 |
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Kenneth R. Code |
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/s/ Joseph L. Provenzano |
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Executive Vice President, Corporate |
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March 4, 2026 |
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Joseph L. Provenzano |
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Secretary and Director |
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/s/ Jack B. Strommen |
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Director |
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March 4, 2026 |
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Jack B. Strommen |
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/s/ Dennis E. Marshall |
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Director |
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March 4, 2026 |
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Dennis E. Marshall |
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/s/ Linda Park |
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Director |
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March 4, 2026 |
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Linda Park |
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/s/Christina Bray |
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Director |
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March 4, 2026 |
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Christina Bray |
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24
[Table of Contents](#toc)
**INDEX TO FINANCIAL STATEMENTS**
| Report of Independent Registered Public Accounting Firm(PCAOB name:HACKER JOHNSON & SMITH PA andPCAOB ID: 400) | F-2 | |
| | | |
| Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-4 | |
| | | |
| Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 | F-5 | |
| | | |
| Consolidated Statements of StockholdersEquityfor the years ended December 31, 2025 and 2024 | F-6 | |
| | | |
| Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | F-7 | |
| | | |
| Notes to Consolidated Financial Statements | F-8 | |
F-1
[Table of Contents](#toc)
**Report of Independent Registered Public Accounting Firm**
To the Stockholders and the Board of Directors
BioLargo, Inc.
Westminster, California:
*Opinion on the Consolidated Financial Statements*
We have audited the accompanying consolidated balance sheets of BioLargo, Inc. and Subsidiaries (the "Company"), as ofDecember 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for the years then ended and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
*Going Concern*
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations, has negative cash flow from operations and has a significant accumulated deficit. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
*Basis for Opinion*
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits providea reasonable basis for our opinion.
**Critical Audit Matters**
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
*Fair Value of Stock Options and Warrants*- *Critical Audit Matter Description*
As more fully described in Notes 2, 5 and 10 to the consolidated financial statements, the Company issues options from both BioLargo, Inc. as well as its partially-owned subsidiary, Clyra Medical. Management uses the Black-Scholes option-pricing model to estimate the fair value of its stock options and warrants. The Black-Scholes option-pricing model involves the use of significant estimates, including the following:
| - | Risk-free interest rate | |
| - | Expected stock price volatility | |
| - | Expected dividend yieldand | |
| - | Expected life of the award. | |
In addition, management discounts the estimated fair value of the Clyra Medical stock options because the partially-owned subsidiary is a private company with no secondary market for its common stock. Given the significant estimates involved in estimating the fair value of stock options and warrants, the related audit effort in evaluating managements estimates in determining the fair value of stock options and warrants was extensive and required a high degree of auditor judgment.
F-2
[Table of Contents](#toc)
To the Stockholders and the Board of Directors
BioLargo, Inc.
Page Three
*How the Critical Audit Matter was Addressed in the Audit*
We obtained an understanding over the Company's process to estimate the fair value of stock options and warrants, including how the Company develops each of the estimates required to utilize the Black-Scholes option- pricing model. We applied the following audit procedures related to testing the Company's estimates utilized in the Black-Scholes option-pricing model:
| - | We compared the Company's risk-free interest rate used to the comparable United States Treasury yieldfor a term comparable to the stock options' and warrants' expected term. | |
| - | We recalculated the Company's historical stock price volatility for a term comparable to the stock options' and warrants' expected term. For Clyra Medical, we recalculated a comparable public company's historical share price volatility for a term comparable to the stock options' and warrants' expected term. | |
| - | We performed a look-back at the Company's previously issued dividends, noting there were none. We inquired with management of the Company who informed us that no future dividends were currently anticipated. | |
| - | We agreed the expected term of stock options and warrantsgranted to employees and nonemployees to the original contractual term of the option as management deems it likely they will remain outstanding for the entire original term. We further noted that this was consistent with historical options granted. | |
In addition, we reviewed management's analysis over the fair value of the common stock price and discount that was used on the estimated fair value of the Clyra Medical stock options and warrants. We noted that Clyra Medical is a private company and therefore its common stock is not actively traded. We reviewed both the common stock and preferred stock sales history of Clyra Medical, noting the last sales prices. Management concluded that both the illiquidity and lack of marketability warranted a discount to the estimated fair value calculated using the Black-Scholes option-pricing model. From our review of the common stock sales history of Clyra Medical, we noted that the infrequent common stock sales support management's assertions of both illiquidity and lack of marketability. We further researched published articles on valuation discounts and noted that the liquidity and lack of marketability discount used by management was within a reasonable range.
/S/ HACKER, JOHNSON & SMITH PA
Tampa, Florida
We have served as the Company's auditor since 2023.
March 4, 2026
F-3
[Table of Contents](#toc)
**BIOLARGO, INC. AND SUBSIDIARIES**
**CONSOLIDATED BALANCE SHEETS**
(in thousands, exceptper share data)
| | | DECEMBER 31, | | |
| | | 2025 | | | 2024 | | |
| Assets | | | | | | | | | |
| Current assets: | | | | | | | | | |
| Cash and cash equivalents | | $ | 3,883 | | | $ | 3,548 | | |
| Accounts receivable, net of allowance | | | 615 | | | | 3,168 | | |
| Inventories, net of allowance | | | 310 | | | | 330 | | |
| Prepaid expenses and other current assets | | | 306 | | | | 91 | | |
| Total current assets | | | 5,114 | | | | 7,137 | | |
| | | | | | | | | | |
| Equipment and leasehold improvements, net | | | 1,643 | | | | 1,742 | | |
| Other non-current assets | | | 106 | | | | 95 | | |
| Operating lease right-of-use assets, net of amortization | | | 1,028 | | | | 992 | | |
| Financing lease right-of-use asset, net of amortization | | | 338 | | | | 451 | | |
| Clyra Medical note receivable | | | 82 | | | | 82 | | |
| Investment in South Korean joint venture | | | | | | | 14 | | |
| Total assets | | $ | 8,311 | | | $ | 10,513 | | |
| | | | | | | | | | |
| Liabilities and stockholders equity | | | | | | | | | |
| Current liabilities: | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 1,211 | | | $ | 946 | | |
| Clyra Medical accounts payable and accrued expenses | | | 1,592 | | | | 867 | | |
| Clyra Medical debt obligations, net of discount $139 and $80 | | | 1,395 | | | | 486 | | |
| Debt obligations | | | 83 | | | | 66 | | |
| Contract liability | | | 280 | | | | | | |
| Operating lease liability | | | 210 | | | | 105 | | |
| Finance lease liability | | | 103 | | | | 88 | | |
| Deposits | | | 189 | | | | 90 | | |
| Total current liabilities | | | 5,063 | | | | 2,648 | | |
| | | | | | | | | | |
| Long-term liabilities: | | | | | | | | | |
| Debt obligations, net of current | | | 182 | | | | 175 | | |
| Clyra Medical debt obligations, net of current and discount $56 and $80 | | | 419 | | | | 352 | | |
| Operating lease liability, net of current | | | 864 | | | | 922 | | |
| Finance lease liability, net of current | | | 257 | | | | 360 | | |
| Total long-term liabilities | | | 1,722 | | | | 1,809 | | |
| Total liabilities | | | 6,785 | | | | 4,457 | | |
| | | | | | | | | | |
| CONTINGENCIES (Note 14) | | | | | | | | | |
| STOCKHOLDERS EQUITY: | | | | | | | | | |
| Preferred Series A, $0.00067 Par Value, 50,000,000 Shares Authorized, no Shares Issued and Outstanding, at December 31, 2025 and December 31, 2024 | | | | | | | | | |
| Common stock, $0.00067 Par Value, 550,000,000 Shares Authorized, 317,377,777 and 301,274,243 Shares Issued, at December 31, 2025 and December 31, 2024 | | | 213 | | | | 202 | | |
| Additional paid-in capital | | | 165,316 | | | | 158,332 | | |
| Accumulated deficit | | | (161,280 | ) | | | (149,500 | ) | |
| Accumulated other comprehensive loss | | | (207 | ) | | | (183 | ) | |
| Total BioLargo Inc. and subsidiaries stockholders equity | | | 4,042 | | | | 8,851 | | |
| Non-controlling interest (Note 9, 10, 11) | | | (2,516 | ) | | | (2,795 | ) | |
| Total stockholders equity | | | 1,526 | | | | 6,056 | | |
| Total liabilities and stockholders equity | | $ | 8,311 | | | $ | 10,513 | | |
*See accompanying notes to consolidated financial statements and report of Independent Registered Public Accounting Firm.*
F-4
[Table of Contents](#toc)
**BIOLARGO, INC. AND SUBSIDIARIES**
**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**
(in thousands, exceptper share data)
| | | Year ended December 31, | | |
| | | 2025 | | | 2024 | | |
| | | | | | | | | | |
| Revenue | | | | | | | | | |
| Product revenue | | $ | 5,767 | | | $ | 16,762 | | |
| Service revenue | | | 1,998 | | | | 1,017 | | |
| Total revenue | | | 7,765 | | | | 17,779 | | |
| | | | | | | | | | |
| Cost of revenue | | | | | | | | | |
| Cost of goods sold | | | (3,013 | ) | | | (9,065 | ) | |
| Cost of service | | | (1,346 | ) | | | (861 | ) | |
| Total cost of revenue | | | (4,359 | ) | | | (9,926 | ) | |
| | | | | | | | | | |
| Gross profit | | | 3,406 | | | | 7,853 | | |
| | | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Selling, general and administrative expenses | | | 11,768 | | | | 9,302 | | |
| Research and development | | | 2,593 | | | | 2,882 | | |
| Impairment expense | | | 14 | | | | | | |
| Credit loss expense | | | 3,886 | | | | | | |
| Total operating expenses | | | 18,261 | | | | 12,184 | | |
| Operating loss | | | (14,855 | ) | | | (4,331 | ) | |
| | | | | | | | | | |
| Other income (expense): | | | | | | | | | |
| PPP forgiveness | | | | | | | 97 | | |
| Finance fee | | | | | | | (106 | ) | |
| Grant income | | | 6 | | | | 26 | | |
| Interest income | | | 200 | | | | 38 | | |
| Interest expense | | | (540 | ) | | | (71 | ) | |
| Total other expense | | | (334 | ) | | | (16 | ) | |
| | | | | | | | | | |
| Net loss | | | (15,189 | ) | | | (4,347 | ) | |
| Net loss attributable to noncontrolling interest | | | (3,409 | ) | | | (1,945 | ) | |
| Net loss attributable to common stockholders | | $ | (11,780 | ) | | $ | (2,402 | ) | |
| | | | | | | | | | |
| Net loss per share attributable to common stockholders: | | | | | | | | | |
| Loss per share attributable to stockholders basic and diluted | | $ | (0.04 | ) | | $ | (0.01 | ) | |
| Weighted average number of common shares outstanding: | | | 306,954,778 | | | | 298,122,239 | | |
| | | | | | | | | | |
| Comprehensive loss attributable to common stockholders | | | | | | | | | |
| Net loss | | $ | (15,189 | ) | | $ | (4,347 | ) | |
| Foreign currency translation adjustment | | | (24 | ) | | | 94 | | |
| Comprehensive loss | | | (15,213 | ) | | | (4,253 | ) | |
| | | | | | | | | | |
| Comprehensive loss attributable to noncontrolling interest | | | (3,409 | ) | | | (1,945 | ) | |
| Comprehensive loss attributable to stockholders | | $ | (11,804 | ) | | $ | (2,308 | ) | |
*See accompanying notes to consolidated financial statements and report of Independent Registered Public Accounting Firm.*
F-5
[Table of Contents](#toc)
**BIOLARGO, INC. AND SUBSIDIARIES**
**CONSOLIDATED STATEMENTS OF STOCKHOLDERS****EQUITY**
**YEARS ENDED DECEMBER 31, 2025AND 2024**
(in thousands, except for share data)
| | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | |
| | | | | | | | | | | Additional | | | | | | | other | | | Non- | | | Total | | |
| | | Common stock | | | paid-in | | | Accumulated | | | comprehensive | | | controlling | | | stockholders | | |
| | | Shares | | | Amount | | | capital | | | deficit | | | Loss | | | interest | | | equity | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2023 | | | 292,945,747 | | | $ | 196 | | | $ | 154,023 | | | $ | (147,098 | ) | | $ | (277 | ) | | $ | (2,642 | ) | | $ | 4,202 | | |
| 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 | | | 378,788 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Warrant exercise | | | 3,278,337 | | | | 3 | | | | 753 | | | | | | | | | | | | | | | | 756 | | |
| Stock option compensation expense | | | | | | | | | | | 1,535 | | | | | | | | | | | | | | | | 1,535 | | |
| Stock option exercise | | | 948,882 | | | | | | | | 153 | | | | | | | | | | | | | | | | 153 | | |
| Clyra Medical stock option compensation expense | | | | | | | | | | | | | | | | | | | | | | | 528 | | | | 528 | | |
| Clyra Medical stock issued for services | | | | | | | | | | | | | | | | | | | | | | | 132 | | | | 132 | | |
| Clyra Medical dividend Series A Preferred stock | | | | | | | | | | | | | | | | | | | | | | | (345 | ) | | | (345 | ) | |
| Clyra Medical warrant exercise | | | | | | | | | | | | | | | | | | | | | | | 30 | | | | 30 | | |
| 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 | | | | | | | | | | | | | | | (2,402 | ) | | | | | | | (1,945 | ) | | | (4,347 | ) | |
| Foreign translation adjustment | | | | | | | | | | | | | | | | | | | 94 | | | | | | | | 94 | | |
| Balance, December 31, 2024 | | | 301,274,243 | | | $ | 202 | | | $ | 158,332 | | | $ | (149,500 | ) | | $ | (183 | ) | | $ | (2,795 | ) | | $ | 6,056 | | |
| Sale of common stock for cash, net of offering costs of $310 | | | 12,876,702 | | | | 9 | | | | 2,018 | | | | | | | | | | | | | | | | 2,027 | | |
| Issuance of common stock for services | | | 2,807,771 | | | | 2 | | | | 555 | | | | | | | | | | | | | | | | 557 | | |
| Stock option compensation expense | | | | | | | | | | | 1,762 | | | | | | | | | | | | | | | | 1,762 | | |
| Stock option exercise | | | 265,800 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exchange of BETI stock for Biolargo common stock | | | 153,261 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Clyra Medical stock option compensation expense | | | | | | | | | | | | | | | | | | | | | | | 1,203 | | | | 1,203 | | |
| Clyra Medical stock issued for services | | | | | | | | | | | | | | | | | | | | | | | 76 | | | | 76 | | |
| Clyra Medical stock issued to convert debt | | | | | | | | | | | | | | | | | | | | | | | 250 | | | | 250 | | |
| Clyra Medical sales of Series B Preferred stock | | | | | | | | | | | | | | | | | | | | | | | 2,145 | | | | 2,145 | | |
| Clyra Medical stock unit offering | | | | | | | | | | | | | | | | | | | | | | | 445 | | | | 445 | | |
| Clyra Medical dividend Series A Preferred stock | | | | | | | | | | | | | | | | | | | | | | | (347 | ) | | | (347 | ) | |
| Clyra Medical fair value warrant issued with debt | | | | | | | | | | | | | | | | | | | | | | | 231 | | | | 231 | | |
| Clyra Medical Unit Warrant offering | | | | | | | | | | | | | | | | | | | | | | | 1,894 | | | | 1,894 | | |
| BETI unit offering | | | | | | | | | | | | | | | | | | | | | | | 425 | | | | 425 | | |
| BETI stock issued for services | | | | | | | | | | | | | | | | | | | | | | | 15 | | | | 15 | | |
| Noncontrolling interest allocation | | | | | | | | | | | 2,649 | | | | | | | | | | | | (2,649 | ) | | | | | |
| Net loss | | | | | | | | | | | | | | | (11,780 | ) | | | | | | | (3,409 | ) | | | (15,189 | ) | |
| Foreign currency translation | | | | | | | | | | | | | | | | | | | (24 | ) | | | | | | | (24 | ) | |
| Balance, Year Ended December 31, 2025 | | | 317,377,777 | | | $ | 213 | | | $ | 165,316 | | | $ | (161,280 | ) | | $ | (207 | ) | | $ | (2,516 | ) | | $ | 1,526 | | |
*See accompanying notes to consolidated financial statements and report of Independent Registered Public Accounting Firm.*
F-6
[Table of Contents](#toc)
**BIOLARGO, INC. AND SUBSIDIARIES**
**CONSOLIDATED STATEMENTS OF CASH FLOWS**
(in thousands, except for per share data)
| | | YEARS DECEMBER 31, | | |
| | | 2025 | | | 2024 | | |
| Cash flows from operating activities | | | | | | | | | |
| Net loss | | $ | (15,189 | ) | | $ | (4,347 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | |
| Stock option compensation expense | | | 2,965 | | | | 2,063 | | |
| Common stock issued for services | | | 648 | | | | 416 | | |
| Credit loss expense | | | 3,886 | | | | 13 | | |
| Operating lease right-of-use assets amortization | | | 148 | | | | 100 | | |
| Finance lease right -of-use asset amortization | | | 113 | | | | | | |
| Operating lease liabilities, net | | | (137 | ) | | | (82 | ) | |
| Finance lease liability, net | | | (88 | ) | | | | | |
| Interest expense related to amortization of the discount on note payable | | | 196 | | | | | | |
| Fair value of warrants issued for a fee and interest | | | | | | | 106 | | |
| Loss on investment in South Korean joint venture | | | 14 | | | | 5 | | |
| PPP forgiveness | | | | | | | (97 | ) | |
| Depreciation expense | | | 145 | | | | 155 | | |
| Changes in assets and liabilities: | | | | | | | | | |
| Accounts receivable | | | (1,814 | ) | | | (569 | ) | |
| Inventories | | | 20 | | | | (177 | ) | |
| Prepaid expenses and other assets | | | (226 | ) | | | (58 | ) | |
| Accounts payable and accrued expenses | | | 266 | | | | (542 | ) | |
| Deposits | | | 99 | | | | (27 | ) | |
| Clyra accounts payable and accrued expenses | | | 377 | | | | 138 | | |
| Contract liabilities | | | 280 | | | | (303 | ) | |
| Net cash used in operating activities | | | (8,297 | ) | | | (3,206 | ) | |
| Cash flows from investing activities | | | | | | | | | |
| Equipment purchases | | | (46 | ) | | | (1,235 | ) | |
| Clyra Medical note receivable | | | | | | | (82 | ) | |
| Repayment of note receivable | | | 481 | | | | | | |
| Net cash provided by (used in) investing activities | | | 435 | | | | (1,317 | ) | |
| Cash flows from financing activities | | | | | | | | | |
| Proceeds from sale of common stock, net of offering costs | | | 2,027 | | | | 594 | | |
| Proceeds from BioLargo stock option exercise | | | | | | | 153 | | |
| Proceeds from BioLargo warrant exercise | | | | | | | 756 | | |
| Proceeds (repayments) from debt obligations, net | | | 24 | | | | (14 | ) | |
| Proceeds from sale of preferred stock in Clyra Medical | | | 2,145 | | | | | | |
| Proceeds from sale of common stock unit offering in Clyra Medical | | | 445 | | | | 2,005 | | |
| Proceeds from Clyra Medical unit warrant exercise | | | 1,894 | | | | 30 | | |
| Proceeds from Clyra Medical note payable | | | 1,261 | | | | 864 | | |
| Proceeds from sale of BETI common stock | | | 425 | | | | 50 | | |
| Net cash provided by financing activities | | | 8,221 | | | | 4,438 | | |
| Net effect of foreign currency translation | | | (24 | ) | | | 94 | | |
| Net change in cash | | | 335 | | | | 9 | | |
| Cash at beginning of year | | | 3,548 | | | | 3,539 | | |
| Cash at end of year | | $ | 3,883 | | | $ | 3,548 | | |
| Supplemental disclosures of cash flow information | | | | | | | | | |
| Cash paid during the year for: | | | | | | | | | |
| Interest | | $ | 344 | | | $ | 33 | | |
| Income taxes | | $ | | | | $ | | | |
| Short-term lease payments not included in lease liability | | $ | 51 | | | $ | 49 | | |
| Non-cash investing and financing activities | | | | | | | | | |
| Conversion of accounts receivable to a note receivable | | $ | 3,764 | | | $ | | | |
| Clyra preferred series A dividend | | $ | 347 | | | $ | 345 | | |
| Conversion of debt into shares of BioLargo common stock | | $ | | | | $ | 119 | | |
| Conversion of Clyra note payable into Clyra shares | | $ | 250 | | | $ | | | |
| Conversion of BETI common sotck to BioLargo common stock | | $ | 25 | | | $ | | | |
| Fair value of warrants issued with Clyra Medical note payable | | $ | 231 | | | $ | 160 | | |
| Present value of new Clyra Medical right-of-use asset and operating lease liability | | $ | 184 | | | $ | | | |
| Present value of new financing right of use and lease liability | | $ | | | | $ | 451 | | |
| Allocation of noncontrolling interest | | $ | 2,649 | | | $ | 993 | | |
*See accompanying notes to consolidated financial statements and report of Independent Registered Public Accounting Firm*
F-7
[Table of Contents](#toc)
BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Note****1.****Business and Organization**
**Description of Business******
BioLargo, Inc. (BioLargo, or the Company) invents, develops, and commercializes innovative platform technologies to solve challenging environmental problems like PFAS contamination (per- and polyfluoroalkylsubstances), advanced water and wastewater treatment, industrial odor control, air quality control, infection control, and myriad environmental remediation challenges. Our business strategy is straightforward: we invent or acquire technologies that we believe have the potential to be disruptive in large commercial markets; we develop and validate these technologies to advance and promote their commercial success as we leverage our considerable scientific, engineering, and entrepreneurial talent; we then monetize these technical assets through a variety of business structures that *may*include licensure, joint venture, sale, spin off, or by deploying direct to market strategies.
**Liquidity / Going concern**
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. During the year ended *December 31, 2025*, we generated revenues of $7,765,000, had a net loss of $15,189,000, and used $8,297,000cash in operations. At *December 31, 2025*, we had working capital of $51,000, and current assets of $5,114,000. We do *not* believe gross profits in the year ending *December 31,**2026* will be sufficient to fund our current level of operations. We have been, and anticipate that we will continue to be, limited in terms of our capital resources. As of *December 31, 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, $1,395,000is 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 obligationsduring the year-ended *December 31, 2025*, we (i) sold $2,122,000of our common stock to Lincoln Park Capital Fund, LLC (Lincoln Park) (see [Note *3*](#Note_3_Sale_of_Stock_for_Cash)), (ii) sold $215,000of our common stock and warrants to accredited investors (see [Note*3*](#Note_3_Sale_of_Stock_for_Cash) and [Note *6*](#Note_6_Warrants)), (iii) sold $2,339,000, of Clyra Medical common stock and sold $2,145,000Clyra Medical Series B Preferred stock(see [Note *10*](#Note_10_Clyra_Medical)), and (iv) sold $425,000of BETI common stock(see [Note *9*](#Note_9_BETI)).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.
Since *January 1, 2026,*through *March 4, 2026 (*see [Note *16,* Subsequent Events](#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.
**Organization**
We are a Delaware corporation formed in *1991.* We have five wholly-owned subsidiaries: BioLargo Life Technologies, Inc., organized under the laws of the State of California in *2006;* ONM Environmental, Inc., organized under the laws of the State of California in *2009;* BioLargo Equipment Solutions & Technologies, Inc., organized under the laws of the State of California in *2022;* BioLargo Canada, Inc., organized under the laws of Canada in *2014;* and BioLargo Development Corp., organized under the laws of the State of California in *2016.* Additionally, we own 95%(see [Note *9*](#Note_9_BETI)) of BioLargo Energy Technologies, Inc. ("BETI") organized under the laws of the State of California in *2019,*48% (see [Note *10*](#Note_10_Clyra_Medical)) of Clyra Medical Technologies, Inc. (Clyra or Clyra Medical), organized under the laws of the State of California in *2012* and redomiciled to Delaware in *2023,* and70% (see [Note *11*](#Note_11_BLEST)) of BioLargo Engineering Science & Technologies, LLC (BLEST), organized under the laws of the State of Tennessee in *2017.* We consolidate the financial statements of our partially owned subsidiaries (see [Note *2*](#Note_2_Summary_of_Significant_Accounting_Policie), subheading Principles of Consolidation).
**Note****2.****Summary of Significant Accounting Policies**
****
**Principles of Consolidation**
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and partially-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
****
**Foreign Currency**
The Company has designated the functional currency of BioLargo Canada to be the Canadian dollar. Therefore, translation gains and losses resulting from differences in exchange rates are recorded in accumulated other comprehensive loss.
****
**Cash and Cash Equivalents**
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 (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. We do *not* anticipate non-performance by our financial institution.
Our cash balances were made up of the following (in thousands):
| | | December 31, | | | December 31, | | |
| | | 2025 | | | 2024 | | |
| BioLargo, Inc. and subsidiaries | | $ | 2,826 | | | $ | 3,175 | | |
| Clyra Medical Technologies, Inc. | | | 1,057 | | | | 373 | | |
| Total | | $ | 3,883 | | | $ | 3,548 | | |
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
****
**Accounts Receivable**
Accounts receivable are customer obligations that are unconditional. Accounts receivable are presented net of an allowance for credit losses for expected credit losses, which represents an estimate of amounts that*may**not*be collectible. The Company performs ongoing credit evaluations of its customers and, if necessary, provides an allowance for expected credit losses. A credit loss expensefor expected credit losses is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Companys historical experience. 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, 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 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. This estimate is calculated on a pooled basis where similar risk characteristics exist. Accounts receivable are evaluated individually when they do*not*share similar risk characteristics which could exist in circumstances where amounts are considered at risk or uncollectible This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. 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 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 andcredit 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 $1,378,141in royalties and $2,385,468on product invoices through a weekly payment plan bearing10% 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 $463,520in 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 Poophs 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, BioLargos 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*](#NOTE_14_Legal_Proceedings), "Legal Proceedings".)
During theyear ended *December 31, 2025,*BioLargo management determined that the note receivable and accounts receivable owed by Pooph Inc. werefully impaired, resulting in a $3,886,000 credit loss expenserecorded on ourconsolidated statement of operations, which reduced operating income and current assets by that amount. There were*no*write-offs ofaccounts receivable during theyears ended *December 31, 2025*and*2024.* During *2025* the Company had a $3,764,000 write off of a note receivable.
****
**Credit Concentration**
We have a limited number of customers that account for significant portions of our revenue. During the years ended *December 31, 2025*and *2024* there was onecustomerthat accounted for more than *10%* of consolidated revenues, as follows:
| | | December 31, | | | December 31, | | |
| | | 2025 | | | 2024 | | |
| Customer A | | | 59 | % | | | 77 | % | |
We had one customer that accounted for more than *10%* of consolidated accounts receivable at *December 31, 2024**,*as follows:
| | | December 31, | | | December 31, | | |
| | | 2025 | | | 2024 | | |
| Customer A | | | 0 | % | | | 82 | % | |
****
**Inventory**
Inventories are stated at the lower of cost or net realizable value using the average cost method. There was no allowance for obsolete inventoryas of*December 31, 2025*and *2024*.Inventories consisted of (in thousands):
| | | December 31, | | | December 31, | | |
| | | 2025 | | | 2024 | | |
| Raw material | | $ | 125 | | | $ | 210 | | |
| Finished goods | | | 185 | | | | 120 | | |
| Total | | $ | 310 | | | $ | 330 | | |
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BIOLARGO, INC. AND SUBSIDIARIES
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)threepatents acquired on*October 22, 2021***(in thousands):
| | | December 31, | | | December 31, | | |
| | | 2025 | | | 2024 | | |
| Patents | | $ | 34 | | | $ | 34 | | |
| Security deposits | | | 72 | | | | 61 | | |
| Total | | $ | 106 | | | $ | 95 | | |
****
**Equity****Method of****Accounting**
On *March 20, 2020**,*we invested $100,000 into a South Korean entity (Odin Co. Ltd., Odin) pursuant to a Joint Venture agreement we had entered into with BKT Co. Ltd. and its U.S. based subsidiary, Tomorrow Water. We received a 40% non-dilutive equity interest, and BKT and Tomorrow Water each received 30% equity interests for an aggregate $150,000 investment.
We account for our investment in the joint venture under the equity method of accounting. 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 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 $14,000and $5,000, respectively, such that as of *December 31, 2025,*it is completely written off.
****
**Impairment**
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. If the sum of the expected future undiscounted cash flows from the use of the asset and its eventual disposition is less than the carrying amount of the asset, then an impairment loss is recognized. The impairment loss is measured based on the fair value of the asset. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.
****
**LossPer Share**
We report basic and diluted lossper share (LPS) for common and common share equivalents. Basic LPS is computed by dividing reported earnings by the weighted average shares outstanding. Diluted LPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock. For the 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 Companys net loss which creates an anti-dilutive effect of thewarrants and stock options. 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):
| | | 2025 | | | 2024 | | |
| Stock options | | | 72,566,578 | | | | 60,047,577 | | |
| Warrants | | | 31,244,078 | | | | 31,615,616 | | |
****
**Use of Estimates**
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidatedfinancial statements, and revenues and expenses during the year reported. Actual results could differ from those estimates. Estimates are used when accounting for stock-based transactions, debt transactions,allowance for credit losses, asset depreciation and amortization, impairment expense, among others. 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.
****
**Share-Based Compensation Expense**
We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Fair value is determined on the grant date. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes option pricing model.For stock and stock options issued to consultants and other non-employees for services, the Company measures and records an expense as of the earlier of the date at which either: a commitment for performance by the non-employee has been reached or the non-employees performance is complete. The equity instruments are measured at the current fair value, and for stock options, the instruments are measured at fair value using the Black Scholes option pricing model.
The following methodology and assumptions were used to calculate share-based compensation for the years ended *December 31, 2025*and *2024**:*
| | | 2025 | | | | 2024 | | |
| | | Non Plan | | | 2024 Plan | | | Non Plan | | | 2018 Plan | | | 2024 Plan | | |
| Risk free interest rate | | | 4.10 - 4.23 | % | | | 3.69 - 4.58 | % | | | 3.81 - 4.34 | % | | | 4.16 | % | | | 3.75 - 4.58 | % | |
| Expected volatility | | | 87 - 91 | % | | | 73 - 91 | % | | | 95 - 117 | % | | | 99 | % | | | 91 - 96 | % | |
| Expected dividend yield | | | | | | | | | | | | | | | | | | | | | |
| Forfeiture rate | | | | | | | | | | | | | | | | | | | | | |
| Life in years | | | 10 | | | | 5 - 10 | | | | 10 | | | | 10 | | | | 10 | | |
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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. Expected volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility.The risk-free interest rate used in the Black Scholes option pricing model calculation is based on the prevailing U.S. Treasury yield as determined by the U.S. Federal Reserve. We have never paid any cash dividends on our common stock and do *not* anticipate paying cash dividends on our common stock in the foreseeable future.
****
**Warrants**
Warrants issued with our convertible and non-convertible debt instruments are accounted for under the fair value and relative fair value method. The warrant is *first* analyzed per its terms as to whether it has derivative features or *not**.* If the warrant is determined to be a derivative and *not* qualify for equity treatment, then it is measured at fair value using the Black Scholes option pricing model and recorded as a liability on the consolidatedbalance sheets. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is marked-to-market). If the warrant is determined to *not* have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, 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 convertible note.Convertible debt instruments are recorded at fair value, 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 warrant.The warrant relative fair values are also recorded as a discount to the convertible promissory notes. 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.
****
**Non-Cash Transactions**
We have established a policy relative to the methodology to determine the value assigned to each intangible we acquire, and/or services or products received for non-cash consideration of our common stock. The value is based on the market price of our common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered, or product is received.
****
**Revenue Recognition**
We account for revenue in accordance with Accounting Standards Codification ("ASC") *606**,*Revenue from Contacts with Customers. The guidance focuses on the core principle for revenue recognition, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the guidance provides that an entity should apply the following steps:
Step *1:* Identify the contract(s) with a customer.
Step *2:* Identify the performance obligations in the contract.
Step *3:* Determine the transaction price.
Step *4:* Allocate the transaction price to the performance obligations in the contract.
Step *5:* Recognize revenue when (or as) the entity satisfies a performance obligation.
The Companys products are sold through a contract with the customer and a written purchase order, in which the details of the contract are defined including the transaction price and method of shipment. The only performance obligation is to create and ship the product, and each product has separate pricing. Revenue is recognized at a point in time when the goods are shipped if the agreement is FOB manufacturer, and when goods are delivered if FOB destination. Revenue is recognized with a reduction for sales discounts, as appropriate and negotiated in the customers purchase order.
Service contracts are performed through a written contract, which specifies the performance obligations and the rate at which the services will be billed, typically by time and materials. Each service is separately negotiated and priced. Revenue is recognized as services are performed and completed, or, for services related to product installations, at the completion of the installation. A few contracts have called for milestone or fixed cost payments, where we invoice an agreed-to amount per month for the life of the contract. In these instances, completed work, billed hourly, is recognized as revenue. If the billing amount is greater or lesser than the completed work, a receivable or payable is created. These accounts are adjusted upon additional billings as the work is completed. To date, there have been*no*discounts or other financing terms for the contracts.
The Company has outstanding contract liability obligations of $280,000and $0as of*December 31, 2025*and *2024*, respectively.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.
As we generate revenues from royalties or license fees from our intellectual property, a licensee will pay a license fee in*one*or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property. We have entered into a licensing agreement for the CupriDyne Clean product, and we recognize royalty and license fees on a quarterly basis as the product is sold through to*third*parties and reported to us.
****
**Government Grants**
We have been awarded multiple research grants from the private and public Canadian research programs. Income we receive directly from grants is recorded as other income. We have been awarded over *90* grantssince our *first* in *2**015**.* Some of the funds from these grants are given directly to *third* parties (such as the University of Alberta or a *third*-party research scientist) to support research on our technology. The grants have terms generally ranging between six and eighteen months and support a majority, but *not* all, of the related research budget costs. 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.
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. All awarded grants have specific requirements on how the money is spent, typically to employ researchers. *None* of the funds *may***be used for general administrative expenses or overhead in the United States. These grants have substantially increased our level of research and development activities in Canada. We continue to apply for Canadian government and agency grants to fund research and development activities. *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.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
****
**Income Taxes**
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. Deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax asset and liabilities of a change in tax rates is recognized in operationsin the yearthat includes the enactment date.
We account for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. Under GAAP, the tax effects of a position are recognized only if it is more-likely-than-*not* to be sustained by the taxing authority as of the reporting date. If the tax position is *not* considered more-likely-than-*not* to be sustained, then *no* benefits of the position are recognized. Management believes there are no unrecognized tax benefits or uncertain tax positions as of *December 31, 2025*and *2024**.*
The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could *not* be realized as of *December 31, 2025**.*Accordingly, a valuation allowance was recorded against the net deferred tax asset.The Company recognizes interest and penalties on income taxes as a component of income tax expense, should such an expense be realized.
****
**Fair Value of Financial Instruments**
Management believes the carrying amounts of the Companys 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, 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.
****
**Tax Credits**
Our research and development activities in Canada *may***entitle our Canadian subsidiary to claim benefits under the Scientific Research and Experimental Development Program, a Canadian federal tax incentive program designed to encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada. Benefits under the program include credits to taxable income. If our Canadian subsidiary does *not* have taxable income in a reporting period, we will *not* receivetax refund from the Canadian Revenue Authority.
****
**Leases**
At inception of a lease contract, we assess whether the contract is, or contains, a lease. Our assessment is based on: (*1*) whether the contract involves the use of a distinct identified asset, (*2*) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period of the contract, and (*3*) whether we have the right to direct the use of the asset during such time period. At inception of a lease, we allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Leases are classified as either finance leases or operating leases. A lease must be classified as a finance lease if any of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does*not*meet any of these criteria. We have *one* leaseclassified as finance leases. For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, management estimates the incremental borrowing rate, which currently is estimated to be18%. Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will*not*be terminated early. Lease components are included in the measurement of the initial lease liability. Additional payments based on a change in our portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. We have elected*not*to recognize right-of-use assets and lease liabilities for short-term leases that have a term of*12*months or less. The effect of short-term leases on our right-of-use asset and lease liability was*not*material. As of *December 31, 2025*and *2024*, the operating lease right-of-use assets totaled $1,028,000, and $992,000, respectively. As of *December 31, 2025*and *2024*,the operating lease liability totaled $1,074,000and $1,027,000, respectively, on our consolidated balance sheets related to ourleases. The finance lease isrelated 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, andthe finance lease liability totaled $360,000and $448,000 (see [Note *10*](#Note_10_Clyra_Medical)).
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**Equipment and leasehold improvements**
Equipment and leasehold improvements is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 - 10years. Additions, renewals, and betterments that significantly extend the life of the asset are capitalized. 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 operations for the year. Equipment and leasehold improvements as of *December 31, 2025*and *2024* is as follows (in thousands):
| | | 2025 | | | 2024 | | |
| Equipment | | $ | 1,724 | | | $ | 1,678 | | |
| Leasehold improvements | | | 526 | | | | 526 | | |
| Total, at cost | | | 2,250 | | | | 2,204 | | |
| Less: accumulated depreciation | | | (607 | ) | | | (462 | ) | |
| Total equipment and leasehold improvements, net | | $ | 1,643 | | | $ | 1,742 | | |
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
******
***Noncontrolling Interest***
A noncontrolling interest is defined as the portion of the equity in an entity *not* attributable, directly or indirectly, to the primary beneficiary. Noncontrolling interests are required to be presented as a separate component of equity on a consolidated balance sheets. Accordingly, the presentation of net income (loss) is modified to present the income (loss) attributed to controlling and non-controlling interests. The noncontrolling interest on the Companys consolidated balance sheets represents equity *not* held by the Company.In accordance with ASC *810*-*10*-*20,* Noncontrolling Interests BioLargo consolidates *three* non-wholly owned subsidiaries - Clyra, BLEST and BETI.Noncontrolling interest of Clyrarepresents52%and47% as of *December 31, 2025*and *2024*. Noncontrolling interest of BLEST represents30% and26% as of *December 31, 2025*and *2024*, respectively. Noncontrolling interest of BETI represents5%and 4%as of *December 31, 2025*and *2024*.
****
**Recent Accounting Pronouncements**
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 adoption of the standard did*not*have a material impact on the Company'sdisclosures.
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. The standard is effective for fiscal years beginning after*December 15, 2026,*and for interim periods after*December 15, 2027.*Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.
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 materialimpact 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 ASUs impact on theconsolidated results of operations and financial condition.
**Note****3.****Sale of Stock for Cash**
**Lincoln Park Financing**
On*December 13, 2022,*we entered into a stock purchase agreement (thePurchase Agreement) with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of $10,000,000of our common stock (subject to certain limitations) from time to time until *February 1, 2026.*The agreement allowedus, 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. Concurrently with the Purchase Agreementwe 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 theyears ended *December 31, 2025*and *2024*, we sold11,745,123and 766,175shares of our common stock to Lincoln Park, and received $2,122,000and $260,000, respectively, in gross proceeds. Our Consolidated Statements of Stockholder Equity includes a $250,000 offering costdue pursuant to the Purchase Agreement that as of *December 31, 2025,*was outstanding.
***Unit Offerings***
During theyear ended*December 31, 2025*, we sold1,131,579 shares of our common stock and received $215,000and $155,000 in gross and net proceeds from accredited investors. During theyear ended*December 31, 2024*, we sold1,848,720shares of our common stock and received $419,000and $334,000in gross and net proceeds from accredited investors. (See [Note*6*](#Note_6_Warrants),Warrants Issued in Unit Offering.)
**Note****4.****Debt Obligations**
The following table summarizes our debt obligations outstanding as of*December 31, 2025*and *2024* (in thousands). The table does *not* include debt obligations of our partially owned subsidiary Clyra Medical (see [Note *10*](#Note_10_Clyra_Medical)*,* Debt Obligations of Clyra Medical).
| | | December 31, | | |
| | | | | | | | | | |
| | | 2025 | | | 2024 | | |
| Current portion of debt: | | | | | | | | | |
| SBA Paycheck Protection Program loan | | $ | 43 | | | $ | 43 | | |
| Vehicle loan, current portion | | | 13 | | | | 13 | | |
| Term loan, current portion | | | 17 | | | | | | |
| SBA EIDL Loan, matures July 2053, current portion | | | 10 | | | | 10 | | |
| Total current portion of debt | | $ | 83 | | | $ | 66 | | |
| | | | | | | | | | |
| Long-term debt: | | | | | | | | | |
| Vehicle loan, matures March 2029 | | $ | 29 | | | $ | 41 | | |
| Term loan, matures April 2028 | | | 22 | | | | | | |
| SBA EIDL Loan, matures July 2053 | | | 131 | | | | 134 | | |
| Total long-term debt, net of current | | $ | 182 | | | $ | 175 | | |
| | | | | | | | | | |
| Total | | $ | 265 | | | $ | 241 | | |
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BIOLARGO, INC. AND SUBSIDIARIES
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 thecoupon interest from our convertible notes and lines of credit, inclusive of Clyra Medical.
For the years ended *December 31, 2025*and *2024**,* we recorded $200,000and $38,000of interest income, inclusive of Clyra Medical.
**Vehicle loan**
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, at5.29% annual interest which matures*March 7, 2029.*The loan agreement requires monthly payments of $1,000. As of*December 31, 2025*and *2024*, the balance of this loan totaled$42,000 and $54,000.
**Term Loan**
On*April 5, 2025,*we entered a term loan agreement with American Express for working capital in the principal amount of $50,000, at7.98% 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$39,000and $0.
***SBA****Program****Loans***
On*February 7, 2022,*we received noticethat the SBA had forgiven $174,000of the ONM Environmental$217,000Paycheck Protection Program (PPP) loan. As of*December 31, 2025*and *2024*, the outstanding balance on this loan totaled$43,000.
On*May 12, 2022,*we received notice that the SBA had denied the forgiveness application of BLESTs $97,000PPP loan. We successfully appealed that decision and on*June 28, 2024**,*we received noticethat the SBA had forgiven the balance of theBLEST Paycheck Protection Program (PPP) loan.
In*July 2020,*ONM Environmental received an Economic Injury Disaster Loan from the SBA in the amount of $150,000. The note has a3.75% annual interest rate, requires monthly payments of $700, and matures*July 2053.*As of *December 31, 2025*and *2024*, the balance of this loan totaled$141,000 and $144,000.
**Note****5.****Share-Based Compensation**
**Issuance of Common Stock in exchange for Services**
During the years ended *December 31, 2025*and *2024*, we issued2,807,771 and1,107,594 shares, respectively,to officers, consultants, and other *third* parties as payment of amounts owed for services provided to our company, and recorded an aggregate $557,000and $284,000, respectively, in selling general and administrative expense related to these issuances.
**Payment of Officer Salaries**
During the year ended *December 31, 2025*, certain of ourofficers agreed to convert an aggregate $237,000of accrued and unpaid salary into1,348,144 shares of our common stock. The unpaid salary is converted on the last day of each quarter as follows: on *December 31, 2025*, officers agreed to convert $134,000of accrued and unpaid salary into808,908 shares of our common stock at $0.18per share; on*September 30, 2025,*we issued177,235shares of our common at $0.17per share in lieu of $30,000of accrued and unpaid obligations to*two*officers. On*June 30, 2025,*we issued350,751shares of our common at $0.21per share in lieu of $70,000of accrued and unpaid obligations to*two*officers. On*March 31, 2025,*we issued11,250shares of our common at $0.28per share in lieu of $3,000of accrued and unpaid obligations to an officer.
During the year ended*December 31, 2024,*certain of ourofficers agreed to convert an aggregate $13,000of accrued and unpaid salary into57,666shares 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 $4,000of accrued and unpaid salary into16,579shares of our common stock at $0.19per share; on*September 30, 2024,*an officer agreed to convert an aggregate $9,000of accrued and unpaid salary into41,087shares of our common stock at $0.23per share. There werenoshares of our common stock issued in exchange for unpaid salary during the*three*months ended*June 30, 2024,*or*March 31, 2024.*
**Payment of Consultant and Vendor Fees**
During the year ended *December 31, 2025*, we issued1,459,627 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 issued539,236 shares of our common stock at $0.17per share in lieu of $94,000 of accrued and unpaid obligations; on*September 30, 2025,*we issued147,059shares of our common at $0.18per share in lieu of $25,000of accrued and unpaid obligations to consultants and vendors.On*June 30, 2025,*we issued564,252shares of our common at $0.25per share in lieu of $143,000of accrued and unpaid obligations to consultants and vendors.During the*three*months ended*March 31, 2025,*we issued209,080shares of our common at $0.27per share in lieu of $58,000of accrued and unpaid obligations to consultants and vendors.
During the year ended*December 31, 2024,*we issued 1,049,928shares of our common stock $271,000accrued 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 issued94,126shares of our common stock at $0.19per share in lieu of $18,000of accrued and unpaid obligations; on*September 30, 2024,*we issued219,816shares of our common stock at $0.23per share in lieu of $54,000of accrued and unpaid obligations; on*June 30, 2024,*we issued446,989shares of our common stock at $0.26per share in lieu of $116,000of accrued and unpaid obligations; on*March 31, 2024,*we issued288,997shares of our common stock at $0.35per share in lieu of $83,000of accrued and unpaid obligations.
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, or involved shares registered pursuant to our *2024* Equity Plan.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Stock Option Expense**
During the years ended *December 31, 2025*and *2024**,* we recorded an aggregate $2,965,000 and $2,063,000, respectively, in selling general and administrative expense related to the granting of stock options. We issued options through our *2024* Equity Incentive Plan, *2018* Equity Incentive Plan, and outside of theseplans. Of the aggregateamount issued during the years ended *December 31, 2025*and *2024*, $1,203,000 and $528,000, respectively, were issued by our subsidiary Clyra Medical (see [Note *10*](#Note_10_Clyra_Medical)).
**2024****Equity Incentive Plan**
On*June 13, 2024,*our stockholders adopted the BioLargo*2024*Equity Incentive Plan (*2024*Plan) as a means of providing our directors, key employees, and consultants additional incentive to provide services. Both stock options and stock grants*may*be made under this plan for a period of10years. It is set to expire on its terms on*June 13, 2034.*Our Board of Directors Compensation Committee administers this plan. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. The plan authorizes the following types of awards: (i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards. The number of shares available to be issued under the*2024*Plan increases automatically on*January 1*of each year by the lesser of (a)2million shares, or (b) such number of shares determined by our Board. As of *December 31, 2025*,42,000,000shares are authorized under the plan, and25,206,986 remain available for grant.
Activity for our stock options under the*2024*Plan during theyears ended*December 31, 2025*and *2024*, is as follows:
| | | Options outstanding | | | Weighted average price per share | | | Weighted average remaining life | | | Aggregate intrinsic Value(1) | | |
| Balance, December 31, 2023 | | | | | | $ | | | | | | | | | | | |
| Granted | | | 5,493,920 | | | $ | 0.23 | | | | | | | | | | |
| Balance, December 31, 2024 | | | 5,493,920 | | | $ | 0.23 | | | | | | | | | | |
| Granted | | | 11,299,094 | | | $ | 0.20 | | | | | | | | | | |
| Balance, December 31, 2025 | | | 16,793,014 | | | $ | 0.21 | | | | 9.1 | | | | 32,000 | | |
| Non-vested | | | (4,351,214 | ) | | $ | 0.17 | | | | | | | | | | |
| Vested, December 31, 2025 | | | 12,441,800 | | | $ | 0.22 | | | | 9.1 | | | | 32,000 | | |
(*1*) Aggregate intrinsic value based on closing common stock price of $0.18at *December 31, 2025*.
The options granted to purchase11,299,094 shares during the yearended *December 31, 2025*with an aggregate fair value of $1,925,000 were issuedtoboard of directors, employees and consultants and the per share exercise price ranged between $0.17and $0.28: (i) we issued options to purchase1,750,369 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 purchase4,182,205 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 5,066,520shares of our common stock to consultants in lieu of cash for expiring options and for services performed,andthe fair value of these options totaled$817,000; and (iv) we issued options to purchase300,000 shares of our common stock to our Chief Financial Officer with a fair value of $67,000 forextension of agreements. Allstock option expense is recorded on ourconsolidated 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 aone-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 purchase300,000shares of the Companys common stock. The Option vests over the period of the extended term in monthly installments of25,000shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.2536per share, the closing price of BioLargos common stock on the last trading day of*January 2025,*expirestenyears from the grant date, and was issued pursuant to the Companys*2024*Equity Incentive Plan.
On*August 13, 2024,*we and our Chief Financial Officer Charles K. Dargan, II agreed to extend the term of his engagement agreement dated*February 1, 2008 (*the Engagement Agreement, which had been previously extended multiple times), pursuant to which Mr. Dargan has been and continues to serve as our Chief Financial Officer. The Engagement Extension Agreement dated as*August 13, 2024 (*the Engagement Extension Agreement) expires*January 31, 2025(*the Extended Term), at which time the agreement will automatically renew for subsequentone-year periods. As the sole compensation for the Extended Term, Mr.Dargan was issued an option (Option) to purchase300,000shares of the Companys common stock (this issuance is included in the total identified in (iv) above). The Option vestedover the period of the Extended Term in monthly installments of25,000shares, so long as the agreement wasin full force and effect. The Option wasexercisable at $0.24per share, the closing price of BioLargos common stock on the*August 13, 2024,*grant date, expirestenyears from the grant date, and was issued pursuant to the Companys*2024*Equity Incentive Plan. The Option wasMr. Dargans sole compensation for the Extended Term. As was the case in all prior terms of his engagement, there was*no*cash component of his compensation for the Extended Term. Mr. Dargan is eligible to be reimbursed for business expenses he incurredin connection with the performance of his services as the Companys 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. Dargan will be issued an option to purchase300,000shares, at an exercise price equal to the closing price of the Company's common stock on the prior business day, vesting overoneyear.
**2018 Equity Incentive Plan**
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 Directors Compensation Committee administers this plan. As plan administrator, the Compensation Committee hadsole discretion to set the price of the options. The plan authorizedthe following types of awards: (i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards.The*2018*Plan closed in *June 2024*with9,343,614shares unissued.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Activity for our stock options under the *2018* Plan during the years ended*December 31, 2025*and *2024**,*is as follows:
| | | | | | | Weighted | | | Weighted | | | | | | |
| | | | | | | Average | | | Average | | | Aggregate | | |
| | | Options | | | Price per | | | remaining | | | Intrinsic | | |
| | | Outstanding | | | share | | | term | | | Value(1) | | |
| Balance, December 31, 2023 | | | 41,108,448 | | | $ | 0.19 | | | | | | | | | | |
| Granted | | | 1,547,938 | | | $ | 0.30 | | | | | | | | | | |
| Exercised | | | (485,000 | ) | | $ | 0.15 | | | | | | | | | | |
| Balance, December 31, 2024 | | | 42,171,386 | | | $ | 0.19 | | | | | | | | | | |
| Exercised | | | (566,951 | ) | | $ | 0.16 | | | | | | | | | | |
| Balance, December 31, 2025 | | | 41,604,435 | | | $ | 0.19 | | | | 5.8 | | | $ | 499,000 | | |
| Non-vested | | | (1,934,723 | ) | | $ | 0.22 | | | | | | | | | | |
| Vested, December 31, 2025 | | | 39,669,712 | | | $ | 0.19 | | | | 5.7 | | | $ | 493,000 | | |
(*1*) Aggregate intrinsic value based on closing common stock price of $0.18at *December 31, 2025**.*
During*2025,* an option holder elected to exercise566,951options using the cashless exercise optionin exchange for265,800shares 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 purchase1,547,938shares during theyear ended*December 31, 2024*with an aggregate fair value of $418,000were issued toboard of directors, employees and consultants: (i) we issued options to purchase267,746shares of our common stock to members of our board of directors for services performed, in lieu of cash; the exercise price on the respective grant date was $0.35per share andthe fair value of these options totaled$85,000;(ii) we issued options to purchase735,351shares of our common stock to employees as part of employee retention plans or per an employment agreement; the exercise price on the respective grant date was between $0.17and$0.35per share and the fair valuetotaled $173,000and vest over time or based on performance metrics; and (iii) we issued options to purchase544,841shares of our common stock to replaceexpiring options; the exercise price on the respective grant date was $0.35per share and the fair value of these options totaled$160,000. Allstock option expense is recorded on ourconsolidated statements of operations as selling, general and administrative expense.
**2007 Equity Incentive Plan**
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 Boards Compensation Committee administeredthis plan. As plan administrator, the Compensation Committee hadsole discretion to set the price of the options. As of *September 2017**,*the Plan was closed to further stock option grants.
Activity for our stock options under the *2007* Plan for the years ended *December 31, 2025*and *2024* is as follows:
| | | | | | | Weighted | | | Weighted | | | | | | |
| | | | | | | Average | | | Average | | | Aggregate | | |
| | | Options | | | Price per | | | remaining | | | intrinsic | | |
| | | Outstanding | | | share | | | term | | | Value(1) | | |
| Balance, December 31, 2023 | | | 1,564,085 | | | $ | 0.61 | | | | | | | | | | |
| Expired | | | (406,585 | ) | | | 0.61 | | | | | | | | | | |
| Balance, December 31, 2024 | | | 1,157,500 | | | $ | 0.53 | | | | 1.0 | | | | | | |
| Expired | | | (777,500 | ) | | | 0.48 | | | | | | | | | | |
| Balance, December 31, 2025 | | | 380,000 | | | $ | 0.63 | | | | 1.0 | | | $ | | | |
(*1*) Aggregate intrinsic value based on closing common stock price of $0.18at *December 31, 2025**.*
**Non-Plan Options issued**
Activity of our non-plan stock options issued for the years ended *December 31, 2025*and *2024* is as follows:
| | | | | | | Weighted | | | Weighted | | | | | | |
| | | Non-plan | | | average | | | Average | | | Aggregate | | |
| | | Options | | | price per | | | remaining | | | intrinsic | | |
| | | outstanding | | | share | | | term | | | value(1) | | |
| Balance, December 31, 2023 | | | 17,375,044 | | | $ | 0.39 | | | | | | | | | | |
| Granted | | | 85,251 | | | $ | 0.23 | | | | | | | | | | |
| Exercised | | | (463,882 | ) | | $ | 0.17 | | | | | | | | | | |
| Expired | | | (1,308,771 | ) | | $ | 0.46 | | | | | | | | | | |
| Balance, December 31, 2024 | | | 15,687,642 | | | $ | 0.40 | | | | | | | | | | |
| Granted | | | 444,921 | | | $ | 0.19 | | | | | | | | | | |
| Expired | | | (2,093,434 | ) | | $ | 0.41 | | | | | | | | | | |
| Balance, December 31, 2025 | | | 14,039,129 | | | $ | 0.39 | | | | 1.8 | | | | 35,000 | | |
| Non-vested | | | (250,000 | ) | | $ | 0.18 | | | | | | | | | | |
| Vested, December 31, 2025 | | | 13,789,129 | | | $ | 0.39 | | | | 1.8 | | | $ | 35,000 | | |
(*1*) Aggregate intrinsic value based on closing common stock price of $0.18at *December 31, 2025**.*
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended *December 31, 2025**,*we issued options to purchase an aggregate444,921 shares of our common stock at exercise prices ranging between $0.18and$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 twoyears.
During the year ended*December 31, 2024,*we issued options to purchase an aggregate85,251shares of our common stock at exercise prices ranging between $0.23and$0.26per share to vendors for fees for services. The fair value of the options issued totaled an aggregate $18,000and is recorded in our selling, general and administrative expense.
**Note****6.****Warrants**
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:
| | | | | | | Weighted | | | Weighted | | | | | | |
| | | | | | | average | | | average | | | Aggregate | | |
| | | Warrants | | | price per | | | Remaining term | | | intrinsic | | |
| | | outstanding | | | share | | | term | | | value(1) | | |
| Balance, December 31, 2023 | | | 51,590,300 | | | $ | 0.27 | | | | | | | | | | |
| Granted | | | 4,127,516 | | | $ | 0.30 | | | | | | | | | | |
| Exercised | | | (3,278,337 | ) | | $ | 0.23 | | | | | | | | | | |
| Expired | | | (20,823,863 | ) | | $ | 0.24 | | | | | | | | | | |
| Balance, December 31, 2024 | | | 31,615,616 | | | $ | 0.29 | | | | | | | | | | |
| Granted | | | 2,263,160 | | | $ | 0.27 | | | | | | | | | | |
| Expired | | | (2,634,698 | ) | | $ | 0.22 | | | | | | | | | | |
| Balance, December 31, 2025 | | | 31,244,078 | | | $ | 0.29 | | | | 1.7 | | | $ | 5,000 | | |
(*1*) Aggregate intrinsic value based on closing common stock price of $0.18at *December 31, 2025**.*
There were no warrants exercised during *2025.* During *2024,* investors exercised warrants to purchase3,278,337shares of our common stock,and we received $756,000in proceeds.
**Warrants issued in Unit Offerings**
During the year ended *December 31, 2025**,*pursuant to our Unit Offerings (see [Note *3*](#Note_3_Sale_of_Stock_for_Cash)), 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$0.29per 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, 2024,*pursuant to our Unit Offerings (see [Note *3*](#Note_3_Sale_of_Stock_for_Cash)), we issuedsix-month stock purchase warrants to purchase an aggregate1,849,284shares of our common stock at prices ranging between $0.23and$0.40per share, andfive-year stock purchase warrants to purchase an aggregate2,278,232shares of our common stock at prices ranging between $0.19and$0.50per 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.
**Fair Value****Warrants**
To determine interest expense related to our outstanding warrants issued in conjunction with debt offerings, the fair value of each award grant is estimated on the date of grant using the Black-Scholes option pricing model and the relative fair values are amortized over the life of the warrant. For the determination of expense of warrants issued for services, extinguishment of debt and settlement management also uses the option-pricing model. The principal assumptions we used in applying this model were as follows:
| | | 2025 | | | 2024 | | |
| Risk free interest rate | | | 3.67 - 3.73 | % | | | 4.15 - 5.38 | % | |
| Expected volatility | | | 72 - 73 | % | | | 64 - 87 | % | |
| Expected dividend yield | | | | | | | | | |
| Forfeiture rate | | | | | | | | | |
| Expected life in years | | | .5 - 5 | | | | .5 - 5 | | |
The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on historical volatility of our common stock. The expected life in years is based on the contract term of the warrant.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Note****7.****Accounts Payable and Accrued Expenses**
As of *December 31, 2025**,*accounts payable and accrued expenses included the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | Intercompany | | | | | | |
| Category | | BioLargo | | | ONM | | | BLEST | | | BioLargo Canada | | | BETI | | | BEST | | | amounts | | | Totals | | |
| Accounts payable | | $ | 588 | | | $ | 305 | | | $ | | | | $ | 100 | | | $ | 43 | | | $ | | | | $ | (24 | ) | | $ | 1,012 | | |
| Accrued payroll | | | 10 | | | | 85 | | | | 73 | | | | 22 | | | | | | | | 9 | | | | | | | | 199 | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,211 | | |
As of *December 31, 2024**,*accounts payable and accrued expenses included the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | Intercompany | | | | | | |
| Category | | BioLargo | | | ONM | | | BLEST | | | BioLargo Canada | | | BETI | | | BEST | | | amounts | | | Totals | | |
| Accounts payable | | $ | 221 | | | $ | 511 | | | $ | 73 | | | $ | 24 | | | $ | 31 | | | $ | | | | $ | (34 | ) | | $ | 826 | | |
| Accrued payroll | | | 12 | | | | 68 | | | | 40 | | | | | | | | | | | | | | | | | | | | 120 | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 946 | | |
See [Note *10*](#Note_10_Clyra_Medical)*,* Accounts Payable and Accrued Expenses, for the accounts payable and accrued expenses of Clyra Medical.
**Note****8.****Provision for Income Taxes**
Given our historical losses from operations, income tax obligations have been limited to the minimum franchise tax assessed by the State of California. Since *2016**,* we have *not* consolidated for tax purposes with our subsidiary Clyra Medical, as our ownership interest was less than *80%**.* Our subsidiary BLEST is a Tennessee limited liability company and as a pass-through entitydoes *not* pay federal taxes. 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.
Pretax loss from continuing operations is as follow (in thousands):
| | | 2025 | | | 2024 | | |
| Domestic | | $ | (14,661 | ) | | $ | (3,843 | ) | |
| Foreign | | | (528 | ) | | | (504 | ) | |
| Total | | $ | (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):
| | | 2025 | | | 2024 | | |
| | | Amount | | | Rate | | | Amounts | | | Rate | | |
| Statutory U.S. federal tax rate | | $ | (3,188 | ) | | | (21.0 | %) | | $ | (913 | ) | | | (21.0 | %) | |
| | | | | | | | | | | | | | | | | | |
| Permanent differences: | | | | | | | | | | | | | | | | | |
| State and local income taxes, net of federal benefit | | | | | | | 0.0 | % | | | | | | | 0.0 | % | |
| Stock compensation | | | 623 | | | | 4.1 | % | | | 433 | | | | 10 | % | |
| Other | | | 5,079 | | | | 33.5 | | | | 227 | | | | 5.2 | % | |
| Valuation Allowance | | | (2,514 | ) | | | (16.6 | %) | | | 253 | | | | 5.8 | % | |
| 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. The significant components of the Companys deferred tax assets and liabilities as of *December 31, 2025*and *2024* are comprised of the following (in thousands):
| | | 2025 | | | 2024 | | |
| Net operating loss carryforwards | | $ | 19,994 | | | $ | 22,508 | | |
| Valuation allowance | | | (19,994 | ) | | | (22,508 | ) | |
| Total net deferred tax assets | | $ | | | | $ | | | |
The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily of net operating loss carryforwards. Management has considered the Companys history of cumulative net losses in the United States, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than *not* that the Company will *not* realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of *December 31, 2025*and *2024*, respectively. The Company reevaluates the positive and negative evidence at each reporting period.
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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. federal and state net operating loss *may*be subject to a substantial annual limitation under Section*382* and Section*383* of the Internal Revenue Code of *1986,* as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes *may*limit the amount of net operating loss that can be utilized annually to offset future taxable income and tax liabilities, respectively. The Company has *not* completed a study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since its formation. 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 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.The Company is subject to U.S. Federal, state and local income tax examinations by tax authorities for periods after 2021.The Company currently is *not* under examination by any tax authority.
**Note 9. Noncontrolling Interest****BioLargo Energy Technologies, Inc. (BETI)**
BioLargo Energy Technologies, Inc. (BETI) was formed for the purpose of commercializing a liquid sodium battery technology. BioLargo purchased9,000,000shares of BETI common stock upon its formation and was initially its sole stockholder.During the year ended *December 31, 2025,*and *2024,* BETI sold114,865and 20,000shares of its common stock and received $425,000and $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 a20% discount of the volume weighted average price over the*20*trading days prior to the election to exchange.
As of*December 31, 2025*, BETI had9,605,826 issued and outstanding shares, of which BioLargo holds 9,095,000.
**Note****10.****Noncontrolling Interest****Clyra Medical**
As discussed in [Note *2*](#Note_2_Summary_of_Significant_Accounting_Policie) above, we consolidate the operations of our partially owned subsidiary Clyra Medical, of which we owned48% of its outstanding shares as of *December 31, 2025*.
**Debt Obligations of Clyra Medical**
**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. Of this total, $200,000was issued to BioLargo and this eliminates during consolidation of intercompany transactions.The notes bear interest at the rate of15% per annum, mature in*two*years, and require interest-only payments until maturity.
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 of15% 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 $6.00per share, expiring*October 31, 2029.*Warrant to purchase72,667shares of Clyra common stock were issued.The fair value of the warrants totaled $99,000and 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$1,300,000and $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 of15% per annum, maturetwoyears 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$7.50per share, expiring*August 1, 2027.*Warrantsto purchase41,667shares of Clyra common stock were issued.The fair value of thesewarrants issued totaled $52,000and is recorded as a debt discount and will be amortized to interest expense over the term of the convertible promissory note.During the yearending *December 31, 2025,*these notes were converted into 41,667 shares of Clyra common stock.
**Guaranteed Note Offering**
During *2025,* Clyra issued guaranteedpromissory notes in the aggregate amount of $575,000. The notes bear interest at the rate of15% per annum, matures*July 15, 2027,*and is guaranteed by the Companys largest stockholder, BioLargo Inc.The notes*may*be converted at $6.00per 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 $6.50per share, expiring*July 15, 2028.*Warrantsto purchase88,462shares of Clyra common stock were issued.The fair value of thesewarrants issued totaled $80,000and 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 $6.00per share, volatility ranging between21 -43%.Because Clyra is a private company with*no*secondary market for its common stock, the resulting fair value was discounted by30%.
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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 $1,000,000inventory line of credit. Since inception, Clyra Medical received $260,000in draws and made repayments totaling $126,000.The interest rate on this line of credit is15%.On*December 13, 2022,*Clyra and Vernal amended the Revolving Line of Credit Agreement extending the maturity date of the line of credit indefinitely andmodifying the payment terms such that amounts of principal due in each month are capped at a maximum of15% 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.
**Equity Transactions**
As of *December 31, 2025**,*Clyra had an aggregate11,375,860 shares outstanding, of which746,418and330,000 were Series A and Series B Preferred shares, respectively. As of *December 31, 2024**,*Clyra had an aggregate 10,544,527shares outstanding, of which746,418 were Series A Preferred shares. As of *December 31, 2025*and *2024*, BioLargo owned5,470,921 shares, of which 165,765 were Series A Preferred shares.
**Sales of Series A Preferred Stock**
Shares of Series A Preferred Stock earn a dividend of15% each year, compounding annually; the company is under*no*obligation to pay such dividends in cash, and such dividends automatically convert to common stock upon conversion of the Series A Preferred Stock to common stock. Each share of Series A Preferred stock can be converted by the holder at any time for*one*share of common stock, and automatically convert upon the completion of a public offering of shares in which at least $5,000,000of gross proceeds is received by the company. Accrued dividends*may*be converted to common stock at a conversion rate of $3.10per share.Each investor also entered into an agreement with BioLargo whereby the investor*may*exchange some or all of its Series A Preferred stock, plus accrued dividends, into shares of BioLargo common stock, at a price equal to a*20%*discount of the volume weighted average price over the*30*prior trading days. Elections*may*be made during the period beginning*January 1, 2025,*and ending on*June 30, 2026.*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 sold330,000shares of its Series BPreferred Stock, and in exchange received $2,145,000in gross and net proceeds. Purchasers of the Series BPreferred Stock also received warrants to purchase an aggregate165,000shares of common stock for $7.50per share, expiringthreeyears from the grant date. The fair value of thewarrants 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 issued36,122 warrants to purchaseshares of its common stock at $7.50per share, expiring*February 28, 2027,*fromsixaccredited investors. In exchange, it received $445,000in grossproceeds. The relative fair value of these warrants totaled $45,000.
During the year ended*December 31, 2024,*Clyra sold373,875shares of its common stock, from29accredited investors. In exchange, it received $2,005,000in gross and net proceeds.The fair value of thesewarrants issued total $163,000and is limited to a relative fair value based upon the percentage ofits fair value to the total fair value including the fair value of the Clyra stock.
**BioLargo Conversion of Intercompany Balances**
In*June**2024,*BioLargo converted $741,000owed to it by Clyra into148,156shares of Clyra common stock.
**Common Stock issued for services**
During *2025,* Clyra issued37,582 shares of its common stock to vendors for services performed in lieu of cash totaling $100,000and issued a warrant to purchase 5,707 shares of its common stock at $6.00per share, expiring5years from the grant date.The relative fair value of these warrants totaled $7,000.
During *2024,*Clyra issued11,331shares 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 purchase13,847shares of common stock to a vendor in exchange for services. The warrant has an exercise price is $7.50, expiresthreeyears from the date of grant, and thefair valuetotaled $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 purchasedwith anexercise price is $7.50per shareto expire*June 30, 2028.*Clyra received $1,894,000in gross and net proceeds and issued warrants to purchase336,916shares of its common stock from26accredited investors. The relative fair value of these warrants totaled $212,000.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Stock Options**
| | | | | | | Weighted | | | Weighted | |
| | | Clyra | | | average | | | average | |
| | | Options | | | price per | | | remaining | |
| | | Outstanding | | | share | | | term | |
| Balance, December 31, 2023 | | | 1,478,921 | | | $ | 0.31 | | | | | |
| Granted | | | 497,942 | | | $ | 0.85 | | | | | |
| Balance, December 31, 2024 | | | 1,976,863 | | | $ | 1.12 | | | | | |
| Granted | | | 1,036,829 | | | $ | 4.41 | | | | | |
| Balance, December 31, 2025 | | | 3,013,692 | | | $ | 2.17 | | | | 7.3 | |
| Non-vested | | | (854,685 | ) | | $ | 3.97 | | | | | |
| Vested Balance, December 31, 2025 | | | 2,159,007 | | | $ | 1.46 | | | | 8.6 | |
Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis.During theyears ended *December 31, 2025*and *2024**,*Clyra issued options to purchase 1,036,829and 497,942 shares of its common stock, respectively. Each option vests per the terms of the issuance and has an expiration date10years from the date of grant. Of the 1,036,829 options granted during the year ended *December 31, 2025*, the exercise priceof965,930 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 $1,760,000and $528,000, respectively; we used the Black-Scholes model to calculate the initial fair value, assuming a stock price on date of grant of $4.50 and $3.10 per share, respectively. Because Clyra is a private company with*no*secondary market for its common stock, the resulting fair value was discounted by30%. 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 10years.
As of *December 31, 2025*, there remains$1,490,000of stock option expense to be expensed over the next three years.
**Warrants**
| | | Clyra Warrants Outstanding | | | Weighted average price per share | | | Weighted average remaining | |
| Balance, December 31, 2023 | | | 749,911 | | | $ | 3.74 | | | | | |
| Granted | | | 441,336 | | | $ | 6.70 | | | | | |
| Exercised | | | (8,065 | ) | | $ | 3.72 | | | | | |
| Balance, December 31, 2024 | | | 1,183,182 | | | $ | 4.84 | | | | | |
| Granted | | | 760,387 | | | $ | 7.15 | | | | | |
| Exercised | | | (241,073 | ) | | $ | 6.55 | | | | | |
| Balance at December 31, 2025 | | | 1,702,496 | | | $ | 5.39 | | | | 1.6 | |
During*2024,*Clyra issued warrants to purchase an aggregate441,336shares. Included as part of entering in to the Clyra promissory notes,Clyra issued warrants to purchase an aggregate177,333shares at $6.00per share that expire5years from the issue date. The fair value of these warrants totaled $160,000and is recorded as a discount which will be amortized to interest expense over the term of the note. As an incentive to enter into the leaseback, Clyra issued warrants for the purchase of58,333shares of Clyra common stock at $6.00per share, expiringfiveyears after grant date. The fair value of these warrants totaled $106,000, recorded as a financing fee in the consolidated statements of operations. Clyra sold stock for cash in a unit offeringand as part of the unit offeringissued warrants to purchase205,670shares of its common stock at $7.50per share, expiring*February 28, 2027,*or*August 1, 2027.*
Because Clyra is a private company with*no*secondary market for its common stock, the resulting fair value was discounted by30%. 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 livesof .5- 5years.
***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 cashand 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. At the end of the lease term, Clyra has the option to purchase the equipment for $82,000.Concurrently, Clyra leasedthe equipment for a49-month term. The remaining lease payments total$450,000.
| Year ending, | | Total | |
| December 31, 2026 | | $ | 150 | |
| December 31, 2027 | | | 150 | |
| December 31, 2028 | | | 150 | |
| Total minimum lease payments | | | 450 | |
| Less imputed interest | | | (90 | |
| Total financing lease liability | | $ | 360 | |
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Accounts Payable and Accrued Expenses**
At *December 31, 2025*and *2024**,* Clyra had the following accounts payable and accrued expenses (in thousands):
| Category | | 2025 | | | 2024 | |
| Accounts payable | | $ | 634 | | | $ | 247 | |
| Accrued payroll | | | 21 | | | | 30 | |
| Accrued dividend | | | 937 | | | | 590 | |
| Total | | $ | 1,592 | | | $ | 867 | |
**Note****11.****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). In conjunction with the start of this subsidiary, we entered into a three-year office lease in the Knoxville, Tennessee area, and entered into employment agreements with *six* scientists and engineers. (See [Note *12*](#NOTE_12_Segment_Info) Business Segment Information.) BLEST was capitalized with *two* classes of membership units: Class A, 100% owned by BioLargo, and Class B, held by management of BLEST, and which initially have *no* profit interest, as that term is defined in Tennessee law. However, over the succeeding five years, the Class B members can earn up to a 30% profit interest. They also have been granted options to purchase up to an aggregate 1,750,000 shares of BioLargo, Inc. common stock. The profit interest and option shares are subject to a five year vesting schedule tied to the performance of the subsidiary, including gross revenue targets that increase over time, obtaining positive cash flow by *March 31, 2018**(*which was *not* met), collecting 90% of its account receivables, obtaining a profit of 10% in its *first* year (and increasing in subsequent years), making progress in the scale-up and commercialization of our AOS system, and using BioLargo research scientists (such as our Canadian team) for billable work on client projects. These criteria are to be evaluated annually by BLESTs compensation committee (which includes BioLargos president, CFO, and BLESTs president), beginning *September 2018**.*Given the significant performance criteria, the Class B units and the stock options will only be recognized in compensation expense if or when the criteria are satisfied.
The BLEST Compensation Committee has met regularly since the subsidiary commenced operations.In*December 2025**,*the committeedetermined 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 committeedetermined 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. The vesting of option shares during the years ended*December 31, 2025*and *2024*resulted in a fair value totaling $55,000 each year andis recorded on our consolidated statements of operations as selling, general and administrative expense*.*
**Note****12.****Business Segment Information**
For the years ended *December 31, 2025*and *2024*, BioLargo had six operating business segments, plus its corporate entity which is responsible for general corporate operations, including administrative functions, finance, human resources, marketing, legal, etc. The six operational business segments are:
| | 1. | ONM Environmental -- which sells odor and volatile organic control products and services, located in Westminster, California; | |
| | 2. | BLEST - which provides professional engineering services on a time and materials basis for outside clientsand supports our internal operations as needed., located in Oak Ridge, Tennessee; | |
| | 3. | Clyra Medical Technologies (Clyra Medical) -- which developsand sells medical products based on our technologies; | |
| | 4. | BioLargo Energy Technologies, Inc. ("BETI") - which is developing our proprietary battery technology; | |
| | 5. | BioLargo Equipment Solutions & Technologies ("BEST") - which sells our water treatment equipment; and | |
| | 6. | 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. Clyra Medical and BETI have been funded by*third*party investors who invest directly in in these entities in exchange for equity ownership in that entity.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The segment information for the years *December 31, 2025*and *2024**,* is as follows (in thousands):
| | | 2025 | | | 2024 | |
| Revenues | | | | | | | | |
| ONM Environmental | | $ | 5,905 | | | $ | 15,597 | |
| BLEST | | | 2,545 | | | | 3,197 | |
| Clyra Medical | | | | | | | | |
| BioLargo Canada | | | 86 | | | | 72 | |
| Intersegment revenue | | | (771 | ) | | | (1,087 | |
| Total | | $ | 7,765 | | | $ | 17,779 | |
| | | | | | | | | |
| Research and development | | | | | | | | |
| BioLargo corporate | | $ | (865 | ) | | $ | (1,173 | |
| BLEST | | | (617 | ) | | | (1,158 | |
| Clyra Medical | | | (1,168 | ) | | | (827 | |
| BETI | | | (274 | ) | | | (379 | |
| BioLargo Canada | | | (440 | ) | | | (432 | |
| Intersegment research and development | | | 771 | | | | 1,087 | |
| Total | | $ | (2,593 | ) | | $ | (2,882 | |
| | | | | | | | | |
| Operating income (loss) | | | | | | | | |
| BioLargo corporate | | $ | (3,933 | ) | | $ | (4,027 | |
| ONM Environmental | | | (2,317 | ) | | | 5,920 | |
| BLEST | | | (1,091 | ) | | | (1,453 | |
| Clyra Medical | | | (6,065 | ) | | | (3,324 | |
| BETI | | | (639 | ) | | | (642 | |
| BEST | | | (276 | ) | | | (273 | |
| BioLargo Canada | | | (534 | ) | | | (532 | |
| Total | | $ | (14,855 | ) | | $ | (4,331 | |
| | | | | | | | | |
| Depreciation expense | | | | | | | | |
| BioLargo corporate | | $ | (38 | ) | | $ | (42 | |
| ONM Environmental | | | (41 | ) | | | (33 | |
| BLEST | | | (48 | ) | | | (71 | |
| Clyra Medical | | | (9 | ) | | | (9 | |
| BETI | | | (9 | ) | | | | |
| Total | | $ | (145 | ) | | $ | (155 | |
| | | | | | | | | |
| Stock option expense | | | | | | | | |
| BioLargo corporate | | $ | (1,762 | ) | | $ | (1,535 | |
| Clyra Medical | | | (1,203 | ) | | | (528 | |
| Total | | $ | (2,965 | ) | | $ | (2,063 | |
| | | | | | | | | |
| Interest income (expense) | | | | | | | | |
| BioLargo corporate | | $ | 10 | | | $ | (6 | |
| ONM Environmental | | | 90 | | | | 31 | |
| Clyra Medical | | | (499 | ) | | | (60 | |
| BLEST | | | 59 | | | | | |
| BioLargo Canada | | | | | | | 2 | |
| Total | | $ | (340 | ) | | $ | (33 | |
| | | | | | | | | |
| Net income (loss) | | | | | | | | |
| BioLargo corporate | | $ | (3,923 | ) | | $ | (4,033 | |
| ONM Environmental | | | (2,227 | ) | | | 5,951 | |
| BLEST | | | (1,032 | ) | | | (1,356 | |
| Clyra Medical | | | (6,564 | ) | | | (3,490 | |
| BETI | | | (639 | ) | | | (642 | |
| BEST | | | (276 | ) | | | (273 | |
| BioLargo Canada | | | (528 | ) | | | (504 | |
| Consolidated net loss | | $ | (15,189 | ) | | $ | (4,347 | |
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| As of December 31, 2025 | | BioLargo | | | ONM | | | Clyra | | | BLEST | | | BETI | | | BioLargo Canada | | | Elimination | | | Total | | |
| Tangible assets | | $ | 694 | | | $ | 2,331 | | | $ | 2,650 | | | $ | 1,169 | | | $ | 4 | | | $ | 321 | | | $ | (224 | ) | | $ | 6,945 | | |
| Operating lease right-of-use | | | 238 | | | | | | | | 175 | | | | 615 | | | | | | | | | | | | | | | | 1,028 | | |
| Finance lease right-of-use | | | | | | | | | | | 338 | | | | | | | | | | | | | | | | | | | | 338 | | |
| Total | | $ | 932 | | | $ | 2,331 | | | $ | 3,163 | | | $ | 1,784 | | | $ | 4 | | | $ | 321 | | | $ | (224 | ) | | $ | 8,311 | | |
| As of December 31, 2024 | | BioLargo | | | ONM | | | Clyra | | | BLEST | | | BETI | | | BioLargo Canada | | | Elimination | | | Total | | |
| Tangible assets | | $ | 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 | | | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14 | | |
| Total | | $ | 1,122 | | | $ | 5,879 | | | $ | 2,147 | | | $ | 1,449 | | | $ | 46 | | | $ | 104 | | | $ | (234 | ) | | $ | 10,513 | | |
**Note****13.****Leases**
We have long-term operating leases for office, industrial and laboratory space in Westminster, California, Oak Ridge, Tennessee, and Alberta, Canada. Payments made under operating leases are charged to the Consolidated Statement of Operations and Comprehensive Loss on a straight-line basis over the term of the operating lease agreement. Short-term leases less than *one*-year are*not*included in our analysis. For the years ended *December 31, 2025*and *2024**,* rental expense was $404,000and $365,000, respectively. The lease of our Canadian facility is less than*one*year.*None*of our leases have additional terms related to the payments or mechanics of the lease. The leases have*no*additional payment terms such as common area maintenance payments, tax sharing payments or other allocable expenses. Likewise, the leases do*not*contain other terms and conditions of use, such as variable lease payments, residual value guaranties or other restrictive financial terms. Since there is*no*explicit interest rate in our leases, management used its incremental borrowing rate, which is estimated to be18% to determine lease liability.
As of *December 31, 2025**,*our weighted average remaining lease term is fiveyears, and the total remaining operating lease payments is $1,686,000. Payments over the remaining lease terms is as follows:
| Year ending | | BioLargo Corp / ONM | | | CLYRA | | | BLEST | | | Total | | |
| December 31, 2026 | | $ | 166 | | | $ | 58 | | | $ | 160 | | | $ | 384 | | |
| December 31, 2027 | | | 113 | | | | 59 | | | | 163 | | | | 335 | | |
| December 31, 2028 | | | | | | | 60 | | | | 166 | | | | 226 | | |
| December 31, 2029 | | | | | | | 61 | | | | 170 | | | | 231 | | |
| December 31, 2030 | | | | | | | 25 | | | | 173 | | | | 198 | | |
| Thereafter | | | | | | | | | | | 312 | | | | 312 | | |
| Total minimum lease payments | | $ | 279 | | | $ | 263 | | | $ | 1,144 | | | $ | 1,686 | | |
| Less imputed interest | | | (40 | ) | | | (79 | ) | | | (493 | ) | | | (612 | ) | |
| Total operating lease liabilities | | $ | 239 | | | $ | 184 | | | $ | 651 | | | $ | 1,074 | | |
**Note**
**14.**
**Legal Proceedings.**
On
*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, casenumber
*8:25*-cv-
*02516,*alleging patent infringement (
*35*U.S.C.
*271*), false advertising (
*15*U.S.C.
*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
$1,667,292;(iv) compensatory damages for unpaid product purchased from ONM Environmental of
$2,154,110, (v) compensatory damages in an amount according to proof forfalse promises andunfair and fraudulent business practices; (vi)treble and/or exemplary damages; and (vii) costs and attorneys fees. Also on
*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
*30*-
*2025*-
*01511009,*alleging ONM Environmentalbreached the terms of, and the implied covenant of good faithand fair dealing of, the Preferred Master ManufacturingAgreement, 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.
**Note**
**15.**
**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*](#Note_5_ShareBased_Compensation) Share-based compensation to officers.
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BIOLARGO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
**Note****16.****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 purchase300,000shares of the Companys common stock. The Option vests over the period of the extended term in monthly installments of25,000shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.179 per share, the closing price of BioLargos common stock on the last trading day of*January 2026,*expirestenyears from the grant date, and was issued pursuant to the Companys*2024*Equity Incentive Plan.
***Clyra Medical***
From *January 1, 2026,*through *March 4,**2026,***Clyra Medical received $1,705,000and issued unsecuredpromissory notes in the aggregate principal amount of $1,705,000, bearing interest at the rate of15% per annum, which mature*February 28, 2029,*and requireinterest-only payments until maturity (titled its *2026* Guaranteed Note). Clyra Medical also issued the investors warrants allowing for the purchase of an aggregate 133,282shares of its common stock at $7.50 per share, expiring *February 28, 2031.*Payment of the promissory notes areguaranteed by BioLargo Inc.
***BioLargo Energy Technologies, Inc. ("BETI")***
From *January 1, 2026,*through *March 4, 2026,***BETI sold 124,867shares 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 a20% 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*](#Note_3_Sale_of_Stock_for_Cash)), and received $170,704in gross and net proceeds.
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