blgo20260801

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026.

☐	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)

(I.R.S. Employer

Identification No.)

14921 Chestnut St.

Westminster, CA 92683

(Address of principal executive offices)

(888) 400-2863

(Registrant’s telephone number, including area code)

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	OTC Markets (OTCQX)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s Common Stock outstanding as of August 12, 2026 was 328,731,362 shares.

Table of Contents

BIOLARGO, INC.

FORM 10-Q

INDEX

PART I

Item 1	Financial Statements	1

Item 2	Management's Discussion and Analysis and Financial Condition and Results of Operations	25

Item 4	Controls and Procedures	33

PART II

Item 1	Legal Proceedings	34

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 5	Other Information	34

Item 6	Exhibits	36

	Signatures	38

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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Table of Contents

BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	*June 30, 2026*			*December 31,*
	*(unaudited)*			*2025*
*Assets*
Current assets:
Cash and cash equivalents	$	2,188		$	3,883
Accounts receivable, net of allowances		724			615
Inventories		303			310
Prepaid expenses and other current assets		284			306
Total current assets		3,499			5,114

Equipment and leasehold improvements, net		1,768			1,643
Other non-current assets		111			106
Operating lease right-of-use assets, net		927			1,028
Financing lease right-of-use asset, net		282			338
Clyra Medical note receivable		82			82
Total assets	$	6,669		$	8,311

*Liabilities and stockholders’ (deficit) equity*
Current liabilities:
Accounts payable and accrued expenses	$	1,247		$	1,211
Clyra Medical accounts payable and accrued expenses		1,629			1,592
Clyra Medical debt obligations, net of discount $69 and $139		1,331			1,395
Contract liabilities		46			280
Debt obligations		87			83
Operating lease liabilities		231			210
Finance lease liability		111			103
Deposits		83			189
Total current liabilities		4,765			5,063

Long-term liabilities:
Debt obligations, net of current		165			182
Clyra Medical debt obligations, net of current and discount $347 and $56		3,523			419
Operating lease liabilities, net of current		746			864
Finance lease liability, net of current		200			257
Total long-term liabilities		4,634			1,722
Total liabilities		9,399			6,785


STOCKHOLDERS’ (DEFICIT) EQUITY:
Preferred Series A, $0.00067 Par Value, 50,000,000 Shares Authorized, no Shares Issued and Outstanding, at June 30, 2026 and December 31, 2025		—			—
Common stock, $0.00067 Par Value, 550,000,000 Shares Authorized, 325,231,362 and 317,377,777 Shares Issued, at June 30, 2026 and December 31, 2025		217			213
Additional paid-in capital		164,470			165,316
Accumulated deficit		(166,333	)		(161,280	)
Accumulated other comprehensive loss		(206	)		(207	)
Total BioLargo Inc. and subsidiaries stockholders’ (deficit) equity		(1,852	)		4,042
Non-controlling interest (Notes 8, 9, 10, 11)		(878	)		(2,516	)
Total stockholders’ (deficit) equity		(2,730	)		1,526
Total liabilities and stockholders’ (deficit) equity	$	6,669		$	8,311

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

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BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

(unaudited)

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2026*			*2025*			*2026*			*2025*

Revenue
Product revenue	$	421		$	2,006		$	999		$	4,809
Service revenue		827			771			1,364			1,237
Total revenue		1,248			2,777			2,363			6,046

Cost of revenue
Cost of goods sold		(176	)		(907	)		(394	)		(2,417	)
Cost of service		(397	)		(449	)		(836	)		(719	)
Total cost of revenue		(573	)		(1,356	)		(1,230	)		(3,136	)

Gross profit		675			1,421			1,133			2,910

Selling, general and administrative expenses		3,315			2,688			6,069			5,250
Research and development		1,088			535			1,995			1,324
Total operating expenses		4,403			3,223			8,064			6,574
Operating loss:		(3,728	)		(1,802	)		(6,931	)		(3,664	)

Other income (expense):
Interest expense		(285	)		(115	)		(474	)		(208	)
Interest income		13			35			85			63
Finance fee		—			—			(85	)		—
Grant income		—			—			—			6
Total other expense		(272	)		(80	)		(474	)		(139	)
Net loss		(4,000	)		(1,882	)		(7,405	)		(3,803	)

Net loss attributable to noncontrolling interest		(1,233	)		(690	)		(2,352	)		(1,456	)
Net loss attributable to common shareholders	$	(2,767	)	$	(1,192	)	$	(5,053	)	$	(2,347	)

Net loss per share attributable to common shareholders:
Loss per share attributable to shareholders – basic and diluted	$	(0.01	)	$	(0.004	)	$	(0.02	)	$	(0.008	)
Weighted average number of common shares outstanding:		320,983,589			303,196,989			319,847,450			302,240,928

Comprehensive loss:
Net loss	$	(4,000	)	$	(1,882	)	$	(7,405	)	$	(3,803	)
Foreign currency translation		3			—			1			(20	)
Comprehensive loss		(3,997	)		(1,882	)		(7,404	)		(3,823	)
Comprehensive loss attributable to noncontrolling interest		(1,233	)		(690	)		(2,352	)		(1,456	)
Comprehensive loss attributable to common stockholders	$	(2,764	)	$	(1,192	)	$	(5,052	)	$	(2,367	)

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

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BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except for share data)

	*Common stock*				*Additional paid-in*			*Accumulated*			*Accumulated other comprehensive*			*Non-controlling*			*Total stockholders’*
	*Shares*		*Amount*		*capital*			*deficit*			*loss*			*interest*			*(deficit) equity*
Balance, December 31, 2025		317,377,777	$	213	$	165,316		$	(161,280	)	$	(207	)	$	(2,516	)	$	1,526
Sale of common stock for cash, net of offering costs of $15 (unaudited)		1,539,744		1		255			—			—			—			256
Issuance of common stock for services (unaudited)		282,407		—		46			—			—			—			46
Stock option compensation expense (unaudited)		—		—		286			—			—			—			286
Common stock issued as a fee (unaudited)		500,000		—		85			—			—			—			85
Clyra Medical stock option compensation expense (unaudited)		—		—		—			—			—			413			413
Clyra Medical dividend Series A Preferred stock (unaudited)		—		—		—			—			—			(86	)		(86	)
Clyra Medical fair value warrant issued with debt (unaudited)		—		—		—			—			—			232			232
BETI unit offering (unaudited)		—		—		—			—			—			462			462
Noncontrolling interest allocation (unaudited)		—		—		(641	)		—			—			641			—
Net loss (unaudited)		—		—		—			(2,286	)		—			(1,119	)		(3,405	)
Foreign currency translation (unaudited)		—		—		—			—			(2	)		—			(2	)
Balance, March 31, 2026 (unaudited)		319,699,928	$	214	$	165,347		$	(163,566	)	$	(209	)	$	(1,973	)	$	(187	)
Sale of common stock for cash (unaudited)		3,250,000		2		389			—			—			—			391
Issuance of common stock for services (unaudited)		2,281,434		1		235			—			—			—			236
Stock option compensation expense (unaudited)		—		—		472			—			—			—			472
Clyra Medical stock option compensation expense (unaudited)		—		—		—			—			—			250			250
Clyra Medical stock issued for services (unaudited)		—		—		—			—			—			17			17
Clyra Medical stock option exercise (unaudited)		—		—		—			—			—			5			5
Clyra Medical dividend Series A Preferred stock (unaudited)		—		—		—			—			—			(87	)		(87	)
Clyra Medical fair value warrant issued with debt (unaudited)		—		—		—			—			—			121			121
BETI unit offering (unaudited)		—		—		—			—			—			25			25
BETI stock issued for services (unaudited)		—		—		—			—			—			4			4
BCPG stock issued for services (unaudited)		—		—		—			—			—			20			20
Noncontrolling interest allocation (unaudited)		—		—		(1,973	)		—			—			1,973			—
Net loss (unaudited)		—		—		—			(2,767	)		—			(1,233	)		(4,000	)
Foreign currency translation (unaudited)		—		—		—			—			3			—			3
Balance, June 30, 2026 (unaudited)		325,231,362	$	217	$	164,470		$	(166,333	)	$	(206	)	$	(878	)	$	(2,730	)

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BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except for share data)

	*Common stock*				*Additional paid-in*			*Accumulated*			*Accumulated other comprehensive*			*Non-controlling*			*Total stockholders’*
	*Shares*		*Amount*		*capital*			*deficit*			*loss*			*interest*			*equity*
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 $15 (unaudited)		—		—		(15	)		—			—			—			(15	)
Issuance of common stock for services (unaudited)		220,330		—		61			—			—			—			61
Stock option compensation expense (unaudited)		—		—		409			—			—			—			409
Stock option exercise (unaudited)		265,800		—		—			—			—			—			—
Clyra Medical stock option compensation expense (unaudited)		—		—		—			—			—			206			206
Clyra Medical stock issued for services (unaudited)		—		—		—			—			—			36			36
Clyra Medical stock unit offering (unaudited)		—		—		—			—			—			295			295
Clyra Medical dividend Series A Preferred stock (unaudited)		—		—		—			—			—			(86	)		(86	)
Clyra Medical fair value warrant issued with debt (unaudited)		—		—		—			—			—			69			69
Noncontrolling interest allocation (unaudited)		—		—		(522	)		—			—			522			—
Net loss (unaudited)		—		—		—			(1,155	)		—			(766	)		(1,921	)
Foreign currency translation (unaudited)		—		—		—			—			(20	)		—			(20	)
Balance, March 31, 2025 (unaudited)		301,760,373	$	202	$	158,265		$	(150,655	)	$	(203	)	$	(2,519	)	$	5,090
Sale of stock for cash, net offering costs of $15 (unaudited)		4,077,285		3		805			—			—			—			808
Issuance of stock for services (unaudited)		915,003		—		212			—			—			—			212
Stock option compensation expense (unaudited)		—		—		292			—			—			—			292
Clyra Medical stock option compensation expense (unaudited)		—		—		—			—			—			200			200
Clyra Medical stock issued for services (unaudited)		—		—		—			—			—			24			24
Clyra Medical dividend Series A Preferred stock (unaudited)		—		—		—			—			—			(86	)		(86	)
Clyra Medical fair value warrant issued with debt (unaudited)		—		—		—			—			—			93			93
Clyra Medical Unit Warrant offering (unaudited)		—		—		—			—			—			1,309			1,309
Noncontrolling interest allocation (unaudited)		—		—		1,027			—			—			(1,027	)		—
Net loss (unaudited)		—		—		—			(1,193	)		—			(689	)		(1,882	)
Balance, June 30, 2025 (unaudited)		306,752,661	$	205	$	160,601		$	(151,848	)	$	(203	)	$	(2,695	)	$	6,060

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

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BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

(unaudited)

	*Six Months Ended June 30,*
	*2026*			*2025*
Cash flows from operating activities
Net loss	$	(7,405	)	$	(3,803	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock option compensation expense		1,421			1,107
Common stock issued for services		323			333
Credit loss expense		13			37
Amortization of debt discount		132			67
Amortization of right-of-use operating lease assets		101			55
Amortization of right-of-use finance lease asset		56			33
Operating lease liabilities		(98	)		(50	)
Finance lease liability		(49	)		(43	)
Gain on investment in South Korean joint venture		—			(9	)
Depreciation expense		67			78
Changes in assets and liabilities:
Accounts receivable		(122	)		(2,368	)
Inventories		7			(114	)
Prepaid expenses and other assets		17			33
Accounts payable and accrued expenses		39			484
Deposits		(106	)		68
Clyra Medical accounts payable and accrued expenses		(135	)		144
Contract liabilities		(234	)		—
Net cash used in operating activities		(5,973	)		(3,948	)
Cash flows from investing activities
Equipment purchases		(192	)		—
Proceeds from note receivable		—			192
Net cash (used in) provided by investing activities		(192	)		192
Cash flows from financing activities
Proceeds from sale of common stock, net of offering costs		647			793
Proceeds from note payable		—			50
Common stock issued for financing fee		85			—
Repayment of debt obligations		(16	)		(9	)
Proceeds from BETI unit offering		487			—
Proceeds from Clyra Medical debt obligations		3,395			1,261
Repayment of Clyra Medical line of credit		(134	)		—
Proceeds from Clyra Medical stock option exercise		5			—
Proceeds from Clyra Medical unit warrant offering		—			1,309
Proceeds from sales of Clyra Medical common stock		—			295
Net cash provided by financing activities		4,469			3,699
Net effect of foreign currency translation		1			(20	)
Net change in cash		(1,695	)		(77	)
Cash and cash equivalents at beginning of period		3,883			3,548
Cash and cash equivalents at end of period	$	2,188		$	3,471
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	342		$	37
Income taxes	$	—		$	—
Short-term lease payments not included in lease liabilities	$	17		$	12
Non-cash investing and financing activities
Conversion of accounts receivable to a note receivable	$	—		$	3,764
Allocation of noncontrolling interest	$	(2,614	)	$	504
Fair value of Clyra Medical warrants issued as debt discount	$	353		$	162
Clyra Medical dividend Series A Preferred stock	$	173		$	172

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

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 polyfluoroalkyl substances), 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.

Organization

We are a Delaware corporation formed in 1991, and have five wholly-owned subsidiaries: BioLargo Life Technologies, Inc., organized under the laws of the State of California in 2006; 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 48% (see Note 8) 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; 70% (see Note 9) of BioLargo Engineering Science and Technologies, LLC (“BLEST"), organized under the laws of the State of Tennessee in 2017; and 94% (see Note 10) of BioLargo Energy Technologies, Inc. ("BETI") organized under the laws of the State of California in 2019; and 78% (See Note 11) of BioLargo Consumer Products Group, LLC ("BCPG") organized under the laws of the State of California in 2026. We consolidate the financial statements of our partially owned subsidiaries.

Liquidity / Going Concern

For the six months ended June 30, 2026, we generated revenues of $2,363,000, had a net loss of $7,405,000, used $5,973,000 net cash in operating activities, and received $4,469,000 net cash from financing activities. As of June 30, 2026, we had current assets of $3,499,000, including $2,188,000 cash and cash equivalents. As of June 30, 2026, we had current liabilities of $4,765,000, and working capital deficit of $1,266,000. We do not believe gross profits in the year ending December 31, 2026, will be sufficient to fund our operational costs for the reminder of the year, and therefore expect we will continue need further investment capital to fund our business plans and investments in our technologies. The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to increase revenues, generate cash from operations, and/or generate cash from financing activities. If we are unable to raise additional cash through gross profits or financing activities, management may choose to curtail portions of our operations. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Note 2. Summary of Significant Accounting Policies

rinciples of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and partially owned subsidiaries BETI, BLEST, BCPG and Clyra Medical. All intercompany accounts and transactions have been eliminated.

The accounting and financial reporting policies of the Company conform, in all material respects, to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the industry. The condensed consolidated financial statements in the Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but in the opinion of management, reflect all necessary adjustments for a fair presentation of the Company’s condensed consolidated financial position and condensed consolidated results of operations. All adjustments were of a normal and recurring nature. The condensed consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial presentation and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the SEC on March 4, 2026. The results of operations for the six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year or any future period.

Foreign Currency

The Company has designated the functional currency of BioLargo Canada, Inc., our Canadian subsidiary, 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. 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.

As of June 30, 2026, and December 31, 2025, our cash balances were made up of the following (in thousands):

	*June 30, 2026*		*December 31, 2025*
BioLargo, Inc. and subsidiaries	$	1,725	$	2,826
Clyra Medical Technologies, Inc.		463		1,057
Total	$	2,188	$	3,883

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Accounts Receivable

Accounts receivable are customer obligations that are unconditional. Accounts receivable are presented net of an allowance 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 expense is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Company’s historical experience. Credit loss expense is recorded to general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company writes off accounts receivable 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 June 30, 2026, and December 31, 2025, the allowance for expected credit losses were $713,000 and $700,000, respectively.

Allowance for Credit Losses

The Company recognizes an expected allowance for credit losses with respect to its 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 credit loss expense in the year of recovery, in accordance with the entity's accounting policy election.

On June 6, 2025, ONM Environmental entered into an amendment to the June 2021 Preferred Master Manufacturing Agreement with Ikigai Holdings, LLC and Pooph Inc. to allow Pooph Inc. to pay past due amounts of $1,378,141 in royalties and $2,385,468 on product invoices through a weekly payment plan bearing 10% interest and maturing July 3, 2026 (the “PMMA Amendment”). This amount was recognized on our consolidated balance sheet at June 30, 2025, as a note receivable. The PMMA Amendment also modified payment and invoicing terms on existing and future product purchase orders, and allowed ONM Environmental to withhold product if the payment terms were not met. On August 5, 2025, Pooph Inc. delivered a royalty report due for the second quarter of 2025, but did not pay the $463,520 in royalties due. On August 15, 2025, it failed to make the weekly payment required pursuant to the PMMA Amendment, and has not made a payment since. On September 19, 2025, Pooph Inc. disclosed that it had been working independently on developing a new formula for Pooph-branded products to replace BioLargo's formula, and that it was terminating the Preferred Master Manufacturing Agreement, citing ONM's refusal to deliver products. On September 24, 2025, BioLargo and ONM delivered notice to Pooph that its license grant was immediately revoked due to Pooph’s failure to pay royalties, and that it was terminating the License Agreement in its entirety with 150 days’ notice. The notice further advised that Pooph is not allowed to market or sell products that incorporate, use, or are based on, in whole or in part, BioLargo’s patents and proprietary information, including but not limited to know-how, disclosed to Pooph, and that absent reinstatement of the grant of license, Pooph must immediately stop marketing and selling any such products in its possession, custody or control (or sold through market portals or platforms such as Amazon). On November 11, 2025, BioLargo Inc. and ONM Environmental filed a lawsuit against Pooph Inc. and Ikigai Marketing Works LLC (successor entity to Ikigai Holdings LLC) in the United States District Court for the Central District of California in part to recover the amounts due for product purchases and royalties. (See Note 13, "Legal Proceedings".)

There were no write-offs of accounts receivable or note receivable during the three or six months ended June 30, 2026, and 2025.

Credit Concentration

We have a limited number of customers that account for significant portions of our revenue. During the three and six months ended June 30, 2026 and 2025, the following customers accounted for more than 10% of consolidated revenues:

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2026*			*2025*			*2026*		*2025*
Customer A		15	%		—	%	18	%		—	%
Customer B		13	%		—	%	13	%		—	%
Customer C		13	%		—	%	15	%		—	%
Customer D		—	%		57	%	—	%		69	%

At June 30, 2026 and December 31, 2025, the following customers accounted for more than 10% of consolidated accounts receivable:

	*June 30, 2026*			*December 31, 2025*
Customer A		26	%		—	%
Customer B		15	%		—	%
Customer E		11	%		—	%

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Table of Contents

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Inventory

Inventories are stated at the lower of cost or net realizable value using the average cost method. There was no allowance for obsolete inventory as of June 30, 2026, and December 31, 2025. Inventories consisted of the following (in thousands):

	*June 30, 2026*		*December 31, 2025*
Raw material	$	103	$	125
Finished goods		200		185
Total	$	303	$	310

Other Non-Current Assets

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

	*June 30, 2026*		*December 31, 2025*
Patents	$	34	$	34
Security deposits		72		72
Interest receivable		5		—
Total	$	111	$	106

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 operations.

Loss Per Share

We report basic and diluted loss per share (“LPS”) for common and common share equivalents. Basic LPS is computed by dividing reported losses 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 three and six months ended June 30, 2026 and 2025, the denominator in the diluted LPS computation is the same as the denominator for basic LPS due to the Company’s net loss which creates an anti-dilutive effect of the warrants and stock options. As of June 30, 2026 the vested stock options available to be exercised totaled 71,947,417 and the vested warrants available to be exercised totaled 27,529,783.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements, and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used when accounting for stock-based transactions, debt transactions, expected 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 condensed consolidated financial statements.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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-employee’s 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 six months ended June 30, 2026 and 2025:

	*2026*					*2025*
	*Non Plan*		*2024 Plan*			*Non Plan*			*2024 Plan*
Risk free interest rate		—		4.30 - 4.47	%		4.23	%		4.23 - 4.58	%
Expected volatility		—		84	%		91	%		90 - 91	%
Expected dividend yield		—		—			—			—
Forfeiture rate		—		—			—			—
Life in years		—		10			10			10

Expected price volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. The 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 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 condensed consolidated balance 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 pricing 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.

Non-Cash Transactions

We determine the value assigned to each intangible we acquire, and/or services or products received for non-cash consideration of our common stock 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 ASC 606, “Revenue from Contracts with Customers”. The guidance focuses on the core principle for revenue recognition, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 Company’s 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 customer’s 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.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company has outstanding contract liability obligations of $46,000 and $280,000 as of June 30, 2026, and December 31, 2025, respectively. There was $234,000 of revenue recognized in the six months ended June 30, 2026, from the change in contract liability obligations. The outstanding balance will be recognized per the terms of the contracts. Our Canadian subsidiary had a grant deposit outstanding at December 31, 2025, totaling and $80,000, respectfully. These funds were awarded as part of a grant for a particular project that has been delayed. During the six months ended June 30, 2026, $80,000 of deposits were used per the grant terms and recorded against research and development expense. BETI held an investor deposit at June 30, 2026, and December 31, 2025, totaling $5,000 related to an incomplete investor commitment not yet fulfilled.

Government Grants

We have been awarded multiple research grants from the private and public Canadian research programs. The income we receive directly from grants is recorded as other income. We have been awarded over 90 grants since our first in 2015. 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.

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 income in the period that 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 June 30, 2026 and December 31, 2025.

The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of June 30, 2026 and December 31, 2025. Accordingly, a 100% 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 Company’s financial instruments as of June 30, 2026 and December 31, 2025 approximate their respective fair values because of the short-term nature of these instruments. Such instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and debt obligations. The carrying amount of debt instruments are believed to approximate fair value as the stated interest rates are reflective of the prevailing market rates.

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 lease classified as a finance lease. 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 be 18%. 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 June 30, 2026 and December 31, 2025, the operating right-of-use assets totaled $927,000, and $1,028,000, respectively. As of June 30, 2026 and December 31, 2025, the operating lease liability totaled $977,000 and $1,074,000, respectively, on our condensed consolidated balance sheets related to our operating leases. The finance lease is related to Clyra. As of June 30, 2026 and December 31, 2025, the finance right-of-use asset for Clyra totaled $282,000 and $338,000 and the finance lease liability totaled $311,000 and $360,000, respectively, on our condensed consolidated balance sheets.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Equipment and Leasehold Improvements

Equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 - 10 years. 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 period.

	*June 30, 2026*			*December 31, 2025*
Equipment	$	1,916		$	1,724
Leasehold improvements		526			526
Total, at cost		2,442			2,250
Less: accumulated depreciation		(674	)		(607	)
Total equipment and leasehold improvements, net	$	1,768		$	1,643

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 condensed consolidated balance sheets. Accordingly, the presentation of net loss is modified to present the loss attributed to controlling and non-controlling interests. The noncontrolling interest on the Company’s condensed consolidated balance sheets represents equity not held by the Company. In accordance with ASC 810-10-20, “Noncontrolling Interests” BioLargo consolidates four non-wholly owned subsidiaries - Clyra, BLEST and BETI. Noncontrolling interest of Clyra represents 52% as of June 30, 2026, and December 31, 2025. Noncontrolling interest of BLEST represents 30% as of June 30, 2026, and December 31, 2025. Noncontrolling interest of BETI represents 6% and 5% as of June 30, 2026, and December 31, 2025. Noncontrolling interest of BCPG represents 22% as of June 30, 2026.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“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 material impact on the consolidated results of operations and financial condition.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs. This standard is effective for the Company on January 1, 2028. The Company is currently evaluating this ASU’s impact on the condensed consolidated results of operations and financial condition.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies interim disclosure requirements and provides a comprehensive list of interim disclosures that are required by GAAP. The ASU also includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its condensed consolidated financial statements and existing disclosures.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 3. Sale of Stock for Cash

Lincoln Park Financing

During the three months ended March 31, 2026, we sold 984,188 shares of our common stock to Lincoln Park Capital Fund, LLC pursuant to a stock purchase agreement dated December 13, 2022, which has now expired, and received $171,000 in gross and net proceeds. No sales of common stock were made during the three months ended June 30, 2026. During the three months ended June 30, 2025 we sold 4,077,285 shares of our common stock to Lincoln Park and received $823,000 in gross and net proceeds. No sales of common stock were made during the three months ended March 31, 2025.

Clearthink Financing

On March 20, 2026, we entered into a purchase agreement (the “Purchase Agreement”) with Clearthink Capital Partners, LLC (“Clearthink”), pursuant to which Clearthink committed to purchase up to $10.0 million of the Company’s common stock. Under the Purchase Agreement, we have the right, but not the obligation, to sell to Clearthink, and Clearthink is obligated to purchase up to $10.0 million of our common stock. Sales of common stock are subject to certain limitations set forth in the Purchase Agreement, and may occur from time to time, at our sole discretion, over the 36-month period commencing on the date that the conditions to Clearthink’s purchase obligation set forth in the Purchase Agreement are satisfied, including that a registration statement covering the resale by Clearthink of shares of Common Stock that may be issued to Clearthink under the Purchase Agreement, which we filed with the Securities and Exchange Commission (the “SEC”) on April 9, 2026, and which was declared effective by the SEC on April 15, 2026 (the date on which all of such conditions are satisfied, the “Commencement Date”). From and after the Commencement Date and until May 1, 2029 unless we are in default of the Purchase Agreement, on any trading day we select, we may, by written notice delivered to Clearthink, direct Clearthink to purchase up to the lesser of (i) $500,000 of our common stock, and (ii) 300% of the daily average shares traded value for the eight trading days prior to the date of the purchase notice, with a minimum of no less than $25,000. At least five business days must elapse between each purchase notice unless the parties mutually agree otherwise. The purchase price per share of Common Stock sold in each such purchase, if any, will be based on prevailing market prices of the common stock immediately preceding the time of sale as computed under the Purchase Agreement, equal to the average of the two lowest daily closing prices of our common stock during the eight trading days preceding the purchase notice. Actual sales of shares of common stock to Clearthink will depend on a variety of factors we will take into consideration from time to time, including, among others, market conditions, the trading price of our common stock and determinations as to the appropriate sources of funding for the Company and its operations. The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which we sell shares of Common Stock to Clearthink. We expect that any proceeds we receive from such sales to Clearthink will be used for working capital and general corporate purposes. Pursuant to the terms of the Purchase Agreement, we issued Clearthink 500,000 shares of our common stock as payment of the "commitment fee" and we recorded the $85,000 fair value of the shares at $0.17 per share as a financing fee.

From the April 15, 2026 commencement date through June 30, 2026, we sold 3,250,000 shares of our common stock to Clearthink and received $391,000 in gross and net proceeds.

Unit Offering

During the three months ended March 31, 2026, we sold 555,556 shares of our common stock and received $100,000 gross and net proceeds from one accredited investor. No sales of common stock were made during the three months ended June 30, 2026. In addition to the shares, we issued the investor a six-month and a five-year warrant to purchase additional shares. (See Note 6, “Warrants Issued in Unit Offering”.) We did not sell shares of our common stock in Unit Offerings during the six months ended June 30, 2025.

In the three and six months ended June 30, 2026, we recorded a $15,000 financing fee. In the three and six months ended June 30, 2025, we recorded a financing fee of $15,000 and $30,000, respectively.

Note 4. Debt Obligations

The following table summarizes our debt obligations outstanding as of June 30, 2026 and December 31, 2025 (in thousands). The table does not include debt obligations of our partially owned subsidiary Clyra Medical (see Note 8, “Debt Obligations of Clyra Medical”).

	*June 30, 2026*		*December 31, 2025*
Current portion of debt:
SBA Paycheck Protection Program loan	$	47	$	43
Vehicle loan, current portion		13		13
Term loan, current portion		17		17
SBA EIDL Loan, matures July 2053, current portion		10		10
Total current portion of debt	$	87	$	83

Long-term debt:
Vehicle loan, matures March 2029	$	22	$	29
Term loan, matures April 2028		14		22
SBA EIDL Loan, matures July 2053		129		131
Total long-term debt, net of current	$	165	$	182

Total	$	252	$	265

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Interest Expense

For the three and six months ended June 30, 2026, we recognized $285,000 and $474,000, respectively, of interest expense from our debt obligations, inclusive of Clyra Medical debt obligations (see Note 8). For the three and six months ended June 30, 2025, we recognized $115,000 and $208,000, respectively, of interest expense from our debt obligations, inclusive of Clyra Medical debt obligations.

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, at 5.29% annual interest which matures March 7, 2029. The loan agreement requires monthly payments of $1,000. As of June 30, 2026, and December 31, 2025, the balance of this loan totaled $35,000 and $42,000, respectively.

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, at 7.98% annual interest, which matures April 10, 2028, and requires monthly payments of $2,000. As of June 30, 2026, and December 31, 2025, the balance of this loan totaled $31,000 and $39,000, respectively.

SBA Program Loans

On June 3, 2020, ONM Environmental received a $217,000 CARES Act Paycheck Protection Program loan from the U.S. Small Business Administratio ("SBA"). On February 7, 2022, it received notice that the SBA had forgiven $174,000 of the loan. As of June 30, 2026, and December 31, 2025, the outstanding balance on this loan, which is past its maturity date, totaled $47,000 and $43,000, respectively.

In July 2020, ONM Environmental received an Economic Injury Disaster Loan (EIDL) from the SBA in the amount of $150,000. The note has a 3.75% annual interest rate, requires monthly payments of $700, and matures July 2053. As of June 30, 2026, and December 31, 2025, the balance of this loan totaled $139,000 and $141,000, respectively.

Note 5. Share-Based Compensation

Issuance of Common Stock in exchange for Services

Payment of Officer Salaries

On June 30, 2026, we issued 1,143,753 shares of our common stock at $0.11 per share in lieu of $130,000 of accrued and unpaid obligations to two officers. On March 31, 2026, we issued 69,444 shares of our common stock at $0.16 per share in lieu of $11,000 of accrued and unpaid obligations to an officer.

On June 30, 2025, we issued 350,751 shares of our common stock at $0.21 per share in lieu of $70,000 of accrued and unpaid obligations to two officers. On March 31, 2025, we issued 11,250 shares of our common stock at $0.28 per share in lieu of $3,000 of accrued and unpaid obligations to an officer.

Payment of Consultant and Vendor Fees

On June 30, 2026, we issued 1,137,681 shares of our common stock at $0.11 per share in lieu of $106,000 of accrued and unpaid obligations to consultants and vendors. On March 31, 2026, we issued 212,963 shares of our common at $0.16 per share in lieu of $35,000 of accrued and unpaid obligations to consultants and vendors.

On June 30, 2025, we issued 564,252 shares of our common stock at $0.21 per share in lieu of $143,000 of accrued and unpaid obligations to consultants and vendors. On March 31, 2025, we issued 209,080 shares of our common stock at $0.28 per share in lieu of $58,000 of accrued and unpaid obligations to consultants and vendors.

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

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Stock Option Expense

During the three and six months ended June 30, 2026, we recognized an aggregate $722,000 and $1,421,000, respectively, and during the three and six months ended June 30, 2025, we recognized an aggregate $492,000 and $1,107,000, respectively, in selling general and administrative expense related to the issuance of stock options. We issued options through our 2024 Equity Incentive Plan, and outside of the plan. Included in these totals is option expense related to issuances by our subsidiary, Clyra Medical, totaling $250,000 and $663,000 during the three and six months ended June 30, 2026, and $200,000 and $406,000 during the three and six months ended June 30, 2025. (See Note 8.)

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 of 10 years. It is set to expire on its terms on June 13, 2034. Our Board of Director’s Compensation Committee administers this plan. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. The plan authorizes the following types of awards: (i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards. The number of shares available to be issued under the 2024 Plan increases automatically on January 1 of each year by the lesser of (a) 2 million shares, or (b) such number of shares determined by our Board. As of June 30, 2026, 44,000,000 shares are authorized under the plan, and 20,513,196 remain available for grant.

Activity for our stock options under the 2024 Plan during the six months ended June 30, 2026, and 2025, is as follows:

	*Options outstanding*			*Weighted average price per share*		*Weighted average remaining life*		*Aggregate intrinsic Value(1)*
Balance, December 31, 2024		5,493,920		$	0.23
Granted		3,790,347		$	0.24
Balance, June 30, 2025		9,284,267		$	0.24
Unvested		(2,770,232	)	$	0.23
Vested Balance, June 30, 2025		6,514,035		$	0.24

Balance, December 31, 2025		16,793,014		$	0.21
Granted		6,781,011		$	0.13
Forfeited		(87,221	)	$	0.19
Balance, June 30, 2026		23,486,804		$	0.19		9.0	$	—
Unvested		(5,299,487	)	$	0.18
Vested balance, June 30, 2026		18,187,317		$	0.19		8.9	$	—

(1) – Aggregate intrinsic value based on closing common stock price of $0.11 at June 30, 2026.

The options granted to purchase 6,781,011 shares during the six months ended June 30, 2026 with an aggregate fair value of $744,000 were issued to board of directors, employees and consultants: (i) we issued options to purchase 1,067,569 shares of our common stock to members of our board of directors for services performed, in lieu of cash; the fair value of these options totaled $120,000; (ii) we issued options to purchase 1,872,888 shares of our common stock to employees as part of employee retention plans; the fair value of employee retention plan options totaled $214,000 and vest over time or based on performance metrics; (iii) we issued options to purchase 3,540,554 shares of our common stock to consultants in lieu of cash for expiring options and for services performed; the fair value of these options totaled $364,000 and (iv) we issued options to purchase 300,000 shares of our common stock to our Chief Financial Officer with a fair value of $46,000 for expiring options.

As of June 30, 2026, there remains $827,000 of stock option expense to be expensed over the next four years.

The options granted to purchase 3,790,347 shares during the six months ended June 30, 2025 with an aggregate fair value of $816,000 were issued to board of directors, employees and consultants: (i) we issued options to purchase 822,571 shares of our common stock to members of our board of directors for services performed, in lieu of cash; the fair value of these options totaled $172,000; (ii) we issued options to purchase 1,159,573 shares of our common stock to employees as part of employee retention plans; the fair value of employee retention plan options totaled $249,000 and vest over time or based on performance metrics; (iii) we issued options to purchase 1,508,203 shares of our common stock to consultants in lieu of cash for expiring options and for services performed; the fair value of these options totaled $328,000 and (iv) we issued options to purchase 300,000 shares of our common stock to our Chief Financial Officer with a fair value of $67,000 for expiring options.

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

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Extension of Agreement with Chief Financial Officer

On January 31, 2026, the Engagement Agreement with our Chief Financial Officer Charles K. Dargan, II automatically extended for a one-year period to expire January 31, 2027 (the “2026-27 Term”). As the sole compensation for the 2026-27 Term, and in accordance with his contract, Mr. Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock. The Option vests over the period of the extended term in monthly installments of 25,000 shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.18 per share, the closing price of BioLargo’s common stock on the last trading day of January 2026, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

On January 31, 2025, the Engagement Agreement with our Chief Financial Officer Charles K. Dargan, II automatically extended for a one-year period to expire January 31, 2026 (the “2025-26 Term”). As the sole compensation for the 2025-26 Term, Mr. Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock. The Option vests over the period of the extended term in monthly installments of 25,000 shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.25 per share, the closing price of BioLargo’s common stock on the last trading day of January 2025, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

2018 Equity Incentive Plan

On June 22, 2018, our stockholders adopted the BioLargo 2018 Equity Incentive Plan (“2018 Plan”) as a means of providing our directors, key employees, and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan for a period of 10 years. It is set to expire on its terms on June 22, 2028. Our Board of Director’s Compensation Committee administers this plan. As of June 30, 2024, the 2018 Plan closed to further stock option grants. The 2018 Plan closed with 9,343,614 shares unissued.

Activity for our stock options under the 2018 Plan during the six months ended June 30, 2026, and 2025, is as follows:

	*Options outstanding*			*Weighted average price per share*		*Weighted average remaining life*		*Aggregate intrinsic Value(1)*
Balance, December 31, 2024		42,171,386		$	0.19
Exercised		(566,951	)	$	0.16
Balance, June 30, 2025		41,604,435		$	0.19
Unvested		(2,281,725	)	$	0.23
Vested Balance, June 30, 2025		39,322,710		$	0.19

Balance, December 31, 2025		41,604,435		$	0.19
Exercised		—		$	—
Balance, June 30, 2026		41,604,435		$	0.19		5.3	$	—
Unvested		(1,369,387	)	$	0.23
Vested balance, June 30, 2026		40,235,048		$	0.19		5.3	$	—

(1) – Aggregate intrinsic value based on closing common stock price of $0.11 at June 30, 2026

During the six months ended June 30, 2025, an option holder elected to exercise 566,951 options using the cashless exercise option in exchange for 265,800 shares of our common stock.

As of June 30, 2026, there remains $225,000 of stock option expense to be expensed over the next two years.

2007 Equity Incentive Plan

On September 7, 2007, and as amended April 29, 2011, the BioLargo, Inc. 2007 Equity Incentive Plan (“2007 Plan”) was adopted as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan for a period of 10 years, which expired on September 7, 2017. The Board’s Compensation Committee administers this plan. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. As of September 2017, the Plan was closed to further stock option grants.

Activity for our stock options under the 2007 Plan for the six months ended June 30, 2026 and 2025 is as follows:

	*Options Outstanding*			*Weighted average price per share*		*Weighted average remaining life*		*Aggregate intrinsic Value(1)*
Balance, December 31, 2024		1,157,500		$	0.53
Expired		(477,500	)	$	0.42
Balance, June 30, 2025		680,000		$	0.61

Balance, December 31, 2025		380,000		$	0.63
Expired		(40,000	)	$	0.45
Balance, June 30, 2026		340,000		$	0.65		0.6	$	—

⁽¹⁾ – Aggregate intrinsic value based on closing common stock price of $0.11 at June 30, 2026.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Non-Plan Options

Activity of our non-plan stock options issued for the six months ended June 30, 2026 and 2025 is as follows:

	*Non-plan Options outstanding*			*Weighted average price per share*		*Weighted average remaining life*		Aggregate intrinsic Value⁽¹⁾
Balance, December 31, 2024		15,687,642		$	0.40
Granted		32,143		$	0.28
Expired		(1,363,818	)	$	0.35
Balance, June 30, 2025		14,355,967		$	0.39
Unvested		(218,750	)	$	0.44
Vested Balance, June 30, 2025		14,137,217		$	0.40

Balance, December 31, 2025		14,039,129		$	0.39
Expired		(666,577	)	$	0.42
Balance, June 30, 2026		13,372,552		$	0.38		1.4	$	-
Unvested		(187,500	)	$	0.18
Vested balance, June 30, 2026		13,185,052		$	0.39		1.3	$	-

(1) – Aggregate intrinsic value based on closing common stock price of $0.11 at June 30, 2026.

There were no non-plan options issued during the six months ended June 30, 2026. During the six months ended June 30, 2025, we issued options to purchase an aggregate 32,143 shares of our common stock at $0.28 per share to vendors for fees for services. The fair value of the options issued totaled an aggregate $8,000 and is recorded in our selling, general and administrative expense. As of June 30, 2026, there remains $29,000 of stock option expense to be expensed over the next two years.

Note 6. Warrants

We have certain warrants outstanding to purchase our common stock, at various prices, for the six months ended June 30, 2026 and 2025 is as follows:

	*Warrants outstanding*			*Weighted average price per share*		*Weighted average remaining life*		Aggregate intrinsic value⁽¹⁾
Balance, December 31, 2024		31,615,616		$	0.29
Expired		(1,888,170	)	$	0.21
Vested Balance, June 30, 2025		29,727,446		$	0.29

Balance, December 31, 2025		31,244,078		$	0.29
Issued		1,198,832		$	0.24
Expired		(4,913,127	)	$	0.23
Vested Balance, June 30, 2026		27,529,783		$	0.29		1.4	$	—

(1) – Aggregate intrinsic value based on closing common stock price of $0.11 at June 30, 2026.

Warrants issued in Unit Offerings

During the six months ended June 30, 2026, we issued six-month stock purchase warrants to purchase an aggregate 599,416 shares of our common stock at $0.22 per share, and five-year stock purchase warrants to purchase an aggregate 599,416 shares of our common stock at $0.27 per share, in conjunction with the sale of stock to investors in our Unit Offerings (see Note 3). The relative fair value of the warrant component of the units sold to investors totaled $58,000. 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.

We did not issue any warrants in conjunction with unit offerings in the six months ended June 30, 2025.

Warrant Fair Value

We use the Black-Scholes option pricing model to determine the relative fair value of warrants issued in conjunction with debt instruments, common stock, and for services. With respect to debt instruments, relative fair value is amortized over the life of the warrant. The principal assumptions we used in applying the Black-Scholes model were as follows:

	*2026*			*2025*
Risk free interest rate		3.64 - 3.77	%		—	%
Expected volatility		62 - 66	%		—	%
Expected dividend yield		—			—
Forfeiture rate		—			—
Expected life in years		.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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 7. Accounts Payable and Accrued Expenses

As of June 30, 2026, accounts payable and accrued expenses included the following (in thousands):

Category	BioLargo		ONM		BLEST		BioLargo Canada		BETI		BEST		Intercompany amounts			Totals
Accounts payable	$	468	$	270	$	5	$	134	$	—	$	—	$	(3	)	$	874
Accrued payroll		50		73		250		-		—		-		—			373
Total																$	1,247

As of December 31, 2025, accounts payable and accrued expenses included the following (in thousands):

Category	BioLargo		ONM		BLEST		BioLargo Canada		BETI		BEST		Intercompany amounts			Totals
Accounts payable	$	588	$	305	$	—	$	100		43	$	—	$	(24	)	$	1,012
Accrued payroll		10		85		73		22		—		9		—			199
Total																$	1,211

See Note 8, “Accounts Payable and Accrued Expenses”, for the accounts payable and accrued expenses of Clyra Medical.

Note 8. Noncontrolling Interest – Clyra Medical

As discussed in Note 2 above, we consolidate the operations of our partially owned subsidiary Clyra Medical.

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, $200,000 was issued to BioLargo and this eliminates during consolidation of intercompany transactions. The notes bear interest at the rate of 15% 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 of 15% per annum, mature on October 31, 2026, require interest-only payments until maturity, and may be pre-paid at any time. Each investor received a warrant to purchase the number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $6.00 per share, expiring October 31, 2029. Warrant to purchase 72,667 shares of Clyra common stock were issued. The fair value of the warrants totaled $99,000 and is recorded as a debt discount, which is amortized as interest expense over the term of the secured promissory note. As of June 30, 2026, and December 31, 2025, the outstanding balance totaled $1,500,000, of which $200,000 is owed to BioLargo Inc. and eliminated in consolidation.

Guaranteed Note Offering

During the six months ended June 30, 2026, Clyra issued promissory notes in the aggregate amount of $3,395,000. The notes bear interest at the rate of 15% per annum, mature February 28, 2029, and are guaranteed by BioLargo Inc. 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 7.5, divided by two, at an exercise price of $7.50 per share, expiring February 28, 2031. Warrants to purchase an aggregate 226,344 shares of Clyra common stock were issued. The fair value of these warrants issued totaled $353,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the guaranteed note offering.

During 2025, Clyra issued promissory notes in the aggregate amount of $575,000. The notes bear interest at the rate of 15% per annum, matures July 15, 2027, and is guaranteed by BioLargo Inc. Each investor received a warrant to purchase an aggregate of number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $6.50 per share, expiring July 15, 2028. Warrants to purchase an aggregate 88,462 shares of Clyra common stock were issued. The fair value of these warrants issued totaled $80,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the guaranteed promissory notes.

As of June 30, 2026 and December 31, 2025, the outstanding balance on these promissory notes totaled $3,970,000 and $575,000, respectively.

The Black-Scholes model is used to calculate the initial fair value of the warrants issued as part of the Clyra Medical debt obligations, we used a stock price on the date of grant of $6.00 per share, volatility ranging between 35 - 52%. Because Clyra is a private company with no secondary market for its common stock, the resulting fair value was discounted by 30%.

Line of Credit

On June 30, 2020, Clyra Medical entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC ("Vernal") committed to provide a $1,000,000 inventory line of credit. Since inception, Clyra Medical received $260,000 in draws. As of December 31, 2025 the balance outstanding on this line of credit totaled $134,000. During the three months ended June 30, 2026, this line of credit was paid in full.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Equity Transactions

As of June 30, 2026, and December 31, 2025, Clyra had 11,378,545 shares issued and outstanding, of which 746,418 and 330,000 were Series A and Series B Preferred shares, respectively. As of June 30, 2026, and December 31, 2025, of the total outstanding Clyra shares, BioLargo owned 5,305,156, common shares and 165,765 Series A Preferred shares.

Sales of Series A Preferred Stock

In an offering that closed in October 2023, Clyra sold 746,418 shares of its Series A Preferred Stock, and in exchange received $1,800,000 in gross and net proceeds. Purchasers of the Series A Preferred Stock also received a 3-year warrant to purchase the same number of additional shares of common stock for $3.72 per share. The fair value of the warrants issued totaled $524,000. Shares of Series A Preferred Stock earn a dividend of 15% 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 $5,000,000 of gross proceeds is received by the company. Accrued dividends may be converted to common stock at a conversion rate of $3.10 per share. As of June 30, 2026 and December 31, 2025, the Series A Preferred Stock accrued and unpaid dividend totaled $1,109,000 and $937,000, respectively. Each investor also entered into an agreement with BioLargo whereby the investor may exchange some or all of its Series A Preferred Stock into shares of BioLargo common stock during the period beginning January 1, 2025, and ended on June 30, 2026. As of June 30, 2026, no investors have elected to convert.

Sales of Series B Preferred Stock

In an offering that closed in October 2025, Clyra sold 330,000 shares of its Series B Preferred Stock, and in exchange received $2,145,000 in gross and net proceeds. Purchasers of the Series B Preferred Stock also received warrants to purchase an aggregate 165,000 shares of common stock for $7.50 per share, expiring three years from the grant date. The fair value of the warrants issued totaled $94,000.

Sales of Common Stock

There were no sales of common stock by Clyra during the six months ended June 30, 2026.

During the six months ended June 30, 2025, Clyra sold 49,167 shares of its common stock, and issued 24,584 warrants to purchase shares of its common stock at $7.50 per share, expiring February 28, 2027, from five accredited investors. In exchange, it received $295,000 in gross proceeds. The relative fair value of these warrants totaled $38,000.

Common Stock issued for services

During the three months ended June 30, 2026 , Clyra issued 2,685 shares of common stock to a vendor for services performed in lieu of cash totaling $17,000. There were no shares issued for services during the three months ended March 31, 2026.

During the six months ended June 30, 2025, Clyra issued 9,698 shares of its common stock to vendors for services performed in lieu of cash totaling $60,000, and issued a warrant to purchase 7,849 shares of its common stock at $6.00 per share, expiring 5 years from the grant date. The relative fair value of these warrants totaled $6,000.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Clyra Stock Options

	*Clyra Options Outstanding*			*Weighted average price per share*		*Weighted average remaining life*
Balance, December 31, 2024		1,976,863		$	1.00
Granted		50,664		$	4.50
Balance, June 30, 2025		2,027,527		$	1.09
Unvested		(200,000	)	$	0.01
Vested Balance, June 30, 2025		1,827,527		$	1.21

Balance, December 31, 2025		3,013,692		$	2.01
Granted		232,143		$	4.46
Exercised		(500,000	)	$	0.01
Balance, June 30, 2026		2,745,835		$	2.58		7.6
Unvested		(719,791	)	$	4.19
Vested Balance, June 30, 2026		2,026,044		$	2.01		7.0

Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis. The fair value of the options issued totaled $449,000 in the six months ended June 30, 2026, and $92,000 in the six months ended June 30, 2025. The Black-Scholes model is used to calculate the initial fair value, during the six months ended June 30, 2026 and 2025, we used a stock price on the date of grant of $4.50 per share. Because Clyra is a private company with no secondary market for its common stock, the resulting fair value was discounted by 30%.

As of June 30, 2026, there remains $1,278,000 of stock option expense to be expensed over the next two years.

	*June 30, 2026*			*June 30, 2025*
Risk free interest rate		4.20 - 4.36	%		4.36 - 4.45	%
Expected volatility		35 - 39	%		35 - 43	%
Expected dividend yield		—			—
Forfeiture rate		—			—
Expected life in years		10			10

Clyra Warrants

	*Clyra Warrants Outstanding*			*Weighted average price per share*		*Weighted average remaining life*
Balance, December 31, 2024		1,183,182		$	4.84
Granted		470,002		$	6.94
Expired		(224,944	)	$	7.24
Vested Balance, June 30, 2025		1,428,240		$	4.87

Balance, December 31, 2025		1,702,496		$	5.39
Granted		226,344		$	7.50
Expired		(358,810	)	$	3.72
Vested Balance, June 30, 2026		1,570,030		$	6.13		1.8

Accounts Payable and Accrued Expenses

At June 30, 2026, and December 31, 2025, Clyra had the following accounts payable and accrued expenses (in thousands):

Category	*2026*		*2025*
Accounts payable	$	489	$	634
Accrued dividend		1,109		937
Accrued payroll		31		21
Total	$	1,629	$	1,592

Sale and leaseback of equipment

On December 4, 2024, Clyra entered into an agreement whereby it sold and leased back certain equipment to be used in the manufacturing of its wound irrigation solution. Clyra received $350,000 cash and a secured promissory note in the principal amount of $82,000 which bears interest at 15%, requires interest be paid monthly, and the principal balance due on December 4, 2028. The obligations of the note are secured by the equipment pursuant to a security agreement. At the end of the lease term, Clyra has the option to purchase the equipment for $82,000. Concurrently, Clyra leased the equipment for a 49-month term. The remaining lease payments total $375,000.

Year ending
December 31, 2026	$	75
December 31, 2027		150
December 31, 2028		150
Total minimum lease payments	$	375
Less imputed interest		(64	)
Total finance lease liabilities	$	311

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9. BioLargo Engineering, Science and 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 an office lease in the Knoxville, Tennessee area, and entered into employment agreements with six scientists and engineers. 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 had no “profit interest,” as that term is defined in Tennessee law. Class B members were also granted options to purchase up to an aggregate 1,750,000 shares of BioLargo common stock. The profit interest and option shares are subject to a five-year vesting schedule tied to the performance of the subsidiary. As of June 30, 2026 and December 31, 2025, Class B members have earned a 30% profit interest.

Note 10. BioLargo Energy Technologies, Inc.

BioLargo Energy Technologies, Inc. (“BETI”) was formed for the purpose of commercializing a proprietary liquid sodium battery technology. BioLargo purchased 9,000,000 shares of its common stock upon its formation and was initially its sole stockholder.

During the three months ended June 30, 2026, BETI sold 6,757 shares of its common stock at $3.70 per share to one accredited investors and received $25,000 in gross and net proceeds. During the six months ended June 30, 2026, BETI sold 131,624 shares of its common stock at $3.70 per share to seven accredited investors and received $487,000 in gross and net proceeds. No shares of common stock of BETI were sold during the three and six months ended June 30, 2025.

As of June 30, 2026, BETI had 9,738,469 issued and outstanding shares, of which BioLargo holds 9,095,000. During the three months ended June 30, 2026, Biolargo exchanged intercompany payables totaling $525,000 for 141,892 shares of BETI common stock.

Note 11. BioLargo Consumer Product Group, LLC.

BioLargo CPG LLC (“BCPG”) was formed to commercialize household consumer products based on BioLargo's technologies. Company members include management and key service providers. As of June 30, 2026, BioLargo owns 78%.

During the six months ended June 30, 2026, BCPG issued 4,092 membership shares at $5.00 per share to a vendor in lieu of accrued and unpaid services totaling $20,462.

Note 12. Business Segment Information

BioLargo has seven operating business segments, plus its corporate entity which is responsible for general corporate operations, including administrative functions, finance, human resources, marketing, legal, etc. The operational business segments are:

ONM Environmental -- which sells odor and volatile organic control products and services, located in Westminster, California;

Clyra Medical Technologies (“Clyra Medical”) -- which develops and sells medical products based on our technologies, located in Tampa, Florida;

BioLargo Engineering (BLEST) -- which provides professional engineering services on a time and materials basis for outside clients and supports our internal operations as needed, located in Oak Ridge, Tennessee;

BioLargo Canada, Inc. (“BioLargo Canada”) – the main hub of our scientists researching and developing our technologies, operating out of the University of Alberta, Edmonton, Canada;

BioLargo Energy Technologies, Inc. (“BETI”) – which is developing our proprietary battery technology;

	6.	BioLargo Equipment Solutions & Technologies, Inc. (“BEST”) – which manages the sales and distribution of our water treatment products and related services; and
	7.	BioLargo CPG LLC ("BCPG") - founded in 2026 to commercialize household consumer products based on our technologies.

Other than ONM Environmental, none of our operating business units have operated at a profit, and therefore have required additional cash to meet its monthly expenses, funded through sales of debt or equity, research grants, and tax credits. BETI and Clyra Medical have also been funded by third party investors who invest directly in exchange for equity ownership in that entity.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The segment information for the three and six months ended June 30, 2026, and 2025, is as follows (in thousands):

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2026*			*2025*			*2026*			*2025*
Revenue
ONM Environmental	$	471		$	2,006		$	895		$	4,809
BioLargo corporate		9			—			9			—
BLEST		1,090			940			1,888			1,630
Clyra Medical		—			—			154			—
BioLargo Canada		70			—			126			8
Intersegment revenue		(392	)		(169	)		(709	)		(401	)
Total	$	1,248		$	2,777		$	2,363		$	6,046

Stock option expense
BioLargo corporate	$	472		$	292		$	758		$	701
Clyra Medical		250			200			663			406
Total	$	722		$	492		$	1,421		$	1,107

Depreciation expense
BioLargo corporate	$	(10	)	$	(10	)	$	(19	)	$	(19	)
ONM Environmental		(9	)		(10	)		(23	)		(23	)
BLEST		(8	)		(11	)		(17	)		(28	)
Clyra Medical		(2	)		(3	)		(4	)		(4	)
BETI		(2	)		(2	)		(4	)		(4	)
Total	$	(31	)	$	(36	)	$	(67	)	$	(78	)

Research and development expense
BioLargo corporate	$	(323	)	$	(219	)	$	(584	)	$	(466	)
BLEST		(255	)		(82	)		(463	)		(326	)
BETI		(156	)		(54	)		(298	)		(113	)
BioLargo Canada		(87	)		(120	)		(179	)		(256	)
Clyra Medical		(610	)		(229	)		(1,131	)		(564	)
BCPG		(40	)		—			(40	)		—
Intersegment R&D		383			169			700			401
Total	$	(1,088	)	$	(535	)	$	(1,995	)	$	(1,324	)

Operating income (loss)
BioLargo corporate	$	(889	)	$	(1,045	)	$	(1,338	)	$	(1,858	)
ONM Environmental		(110	)		823			(204	)		1,780
BLEST		(45	)		16			(426	)		(364	)
BETI		(339	)		(122	)		(694	)		(217	)
BEST		(75	)		(67	)		(165	)		(125	)
BioLargo Canada		(105	)		(144	)		(218	)		(300	)
BCPG		(60	)		—			(60	)		—
Clyra Medical		(2,105	)		(1,263	)		(3,826	)		(2,580	)
Total	$	(3,728	)		(1,802	)	$	(6,931	)	$	(3,664	)

Interest income (expense)
BioLargo corporate	$	1		$	3		$	64		$	6
ONM Environmental		(3	)		33			(3	)		47
Clyra Medical		(270	)		(116	)		(450	)		(198	)
Total	$	(272	)	$	(80	)	$	(389	)	$	(145	)

Net income (loss)
BioLargo corporate	$	(888	)	$	(1,042	)	$	(1,359	)	$	(1,853	)
ONM Environmental		(113	)		856			(207	)		1,827
BLEST		(45	)		16			(426	)		(363	)
BETI		(339	)		(122	)		(694	)		(217	)
BEST		(75	)		(67	)		(165	)		(125	)
BioLargo Canada		(105	)		(144	)		(219	)		(294	)
BCPG		(60	)		—			(60	)		—
Clyra Medical		(2,375	)		(1,379	)		(4,275	)		(2,778	)
Total	$	(4,000	)	$	(1,882	)	$	(7,405	)	$	(3,803	)

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of June 30, 2026	BioLargo		ONM		CLYRA		BLEST		BETI		BioLargo Canada		Elimination			Total
Tangible assets	$	515	$	1,629	$	2,113	$	1,248	$	46	$	112	$	(203	)	$	5,460
Operating lease right-of use		173		—		162		592		—		—		—			927
Finance lease right-of-use		—		—		282		—		—		—		—			282
Total	$	688	$	1,629	$	2,557	$	1,840	$	46	$	112	$	(203	)	$	6,669

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

Note 13. Leases

Office 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 condensed 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 three and six months ended June 30, 2026, rental expense totaled $102,000 and $210,000 and for the three months ended June 30, 2025, rental expense totaled $92,000. The lease of our Westminster facility expires August 2027. The lease for Clyra Medical expires August 2030. 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 be 18% to determine lease liability. As of June 30, 2026, the weighted average remaining lease term for our operating leases was five years and the total remaining operating lease payments were $1,495,000.

Future minimum lease payments under noncancelable leases, reconciled to the Company’s discounted operating lease liabilities are as follows:

	BioLargo
Year ending	Corp / ONM			CLYRA			BLEST			Total
December 31, 2026	$	84		$	29		$	80		$	193
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	$	197		$	234		$	1,064		$	1,495
Less imputed interest		(20	)		(63	)		(435	)		(518	)
Total operating lease liabilities	$	177		$	171		$	629		$	977

Note 14. 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 ONM’s 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. See Note 2, Allowance for Credit Losses, above.

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.

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BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 15. Subsequent Events

The Company has evaluated subsequent events through the date of the filing of this Quarterly Report and report the following.

Stock Issuances

Subsequent to June 30, 2026, we have sold 3,500,000 shares of our common stock to Clearthink (see Note 3) and received $376,000 in gross proceeds.

Clyra Medical Financing Activities

Subsequent to June 30, 2026, Clyra issued guaranteed promissory notes in the aggregate amount of $325,000 to five accredited investors. The notes bear interest at the rate of 15% per annum, mature July 31, 2029, and are guaranteed by BioLargo Inc. 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 7.5, divided by two, at an exercise price of $7.50 per share, expiring July 31, 2031. Warrants to purchase an aggregate 21,666 shares of Clyra common stock were issued to the investors.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance and include statements regarding our capital needs, business plans, liquidity and financial condition, availability of funds, operating costs, and the markets in which we compete. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," or "continue," or the negative of these terms or other comparable terminology. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These factors include, among others, the risks described in our most recent Annual Report on Form 10-K and, from time to time, in our other filings with the Securities and Exchange Commission. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.

Unless otherwise expressly stated herein, all statements, including forward-looking statements, set forth in this Form 10-Q are as of June 30, 2026, unless expressly stated otherwise, and we undertake no duty to update this information.

When we refer in this report to “BioLargo,” the “Company,” “our Company,” “we,” “us” and “our,” we mean BioLargo, Inc., and our subsidiaries, including BioLargo Life Technologies, Inc., which holds our intellectual property; 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 CPG, LLC ("BCPG"), which was formed in May 2026 to commercialize household consumer products based on our technologies; 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, BCPG and Clyra Medical.

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this report.

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DESCRIPTION OF BUSINESS

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 doing the work well - developing technologies that 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 you’ll 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 have been funded in part by over 90 government grants.

We operate our business in distinct business segments:

●

Odor and VOC control products, including consumer pet and household products and CupriDyne® Clean Industrial Odor Eliminator, sold by our subsidiary ONM Environmental, Inc.;

●

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 subsidiary BioLargo Equipment Solutions & Technologies, Inc.;

●

Battery energy storage systems designed for grid-scale energy storage and other industrial uses under the brand name Cellinity™ being developed by our partially owned (94%) subsidiary BioLargo Energy Technologies, Inc.;

●

Medical products based on our technologies sold by our partially owned (48%) subsidiary Clyra Medical Technologies, Inc.;

●

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");

●

Our research and support personnel, through our wholly-owned subsidiary BioLargo Canada, Inc., located on campus at the University of Alberta, Edmonton, Canada.

Odor Control (Consumer and Industrial)

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

We sell privately labeled odor-control products based on our technologies to third parties who market and sell the products under their own brand names. The most successful 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 our intellectual property. (See Part II, Item 1, Legal Proceedings below.)

We are focused on redeploying its technology with new partners that share our commitment to quality, transparency, and integrity, and expand the 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 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 company’s most successful private label product thus far, we sell other private label odor-control products and continue to pursue related business opportunities as a means of tapping into new markets.

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 odors emitted from waste handling and sanitation sites. 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.

BEST'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 BEST’s board to help the company create the necessary regulatory and industry connections that will be critical for its efforts to secure larger and more high-profile projects for its PFAS treatment and other water treatment technologies. 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 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 engineers, in most cases. In our company, BLEST’s 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 at a lower operating cost while generating only a fraction of the PFAS-laden waste of the most common currently used solutions (carbon filtration, ion exchange, and reverse osmosis). 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, organic foods and more.

Our AEC unit has been installed and is up and running in Lake Stockholm, New Jersey, and has been removing PFAS from drinking water for local residents for over six months. The AEC's performance is undergoing regular testing by both the U.S. EPA and the New Jersey Department of Environmental Protection to ensure it continues to meet their standards. We believe this project can validate for potential customers the AEC's use in municipal drinking water, and can showcase the AEC’s distinct advantages over incumbent technologies like carbon filtration and ion exchange, which include lower hazardous waste disposal costs.

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).

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 meets both state and federal regulations. In addition to the use in Lake Stockholm New Jersey, we have demonstrated more than 10,000 hours of continuous operation showing no materially significant degradation of the AEC system’s components or performance over time, and believe the costs to operate our system will be far less than that of the two primary incumbent technologies.

As we progress through the commercial rollout of our AEC technology, 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 AEC’s competitive 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 water from 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, they represent strong avenues for accelerating adoption of our PFAS treatment solution.

AROS Minimal Liquid Discharge Water Treatment

In partnership with Garratt-Callahan, one of the country’s oldest and largest privately held water treatment companies, our engineers developed a “minimal liquid discharge” wastewater treatment system called the Aqueous Reuse Optimization System (AROS) that is designed to minimize industrial wastewater discharges and thus the associated regulatory fees. 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.

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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 Europe where regulatory mandates for micropollutant removal are more advanced.

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 systems" (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 renewable 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 battery’s key features. With this data confirmed by a third party, our engineers have begun work advancing Cellinity's development, including the design of a 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:

	●	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;
	●	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
	●	Increased energy efficiency and energy density, and expected useful life expectancy of 20 years or more.

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 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 a U.S. based distributor in February 2026, and in May 2026 signed a distribution agreement with Al-Hikma FZCO, a healthcare distribution and marketing group headquartered in Dubai, United Arab Emirates, to exclusively distribute ViaCLYR across 18 countries spanning the Gulf Cooperation Council, the Levant, North Africa, and select adjacent markets.

Clyra has 14 full time employees, and has increased staff and raised capital to ready the company to launch additional products. Clyra’s management team includes Medical Director Dr. Jeffrey Marcus, who is Chief of Plastic, Maxillofacial, and Oral Surgery at Duke University, Nicholas Valeriani, chairman of the board of directors of Edwards Lifesciences and who had a 34-year career with Johnson & 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 three areas:

	●	providing engineering services to third-party clients as well as affiliated BioLargo entities;
	●	supporting internal product development; and
	●	advancing their own technical innovations such as the AEC PFAS treatment technology and the Cellinity battery energy storage system.

BLEST operates out of an 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%). 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 they 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 and 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 and 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 designated “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 $100,000 per month. Efforts to expand this work as well as with other clients are consistently ongoing. In April 2026 BLEST was engaged to design a pilot-scale minerals processing facility that will remediate and, utilizing a patented BioLargo process, will create a beneficial reuse of a legacy mineral waste deposit associated with a historically impacted site in the western United States. Work on the $1.2 million contract has begun and is expected to continue through second quarter of 2027, and is expected to lead to the design and construction of a larger processing facility.

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 an expanding demand for our growing list of 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, that we will eventually need to secure contract manufacturers to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.

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RESULTS OF OPERATIONS

For the three and six months ended June 30, 2026, our revenues decreased 55% and 61% as compared with the same periods in 2025. The decrease is due to the cessation of sales of private-labeled pet odor control products sold to a third party under the brand name “Pooph” in August 2025. During the three and six months ended June 30, 2025, such sales had comprised 57% and 69% of our consolidated revenue. Our financial statements separate revenue based on products and services. Revenues from the sale of products totaled $421,000 and $999,000 for the three and six months ended June 30, 2026, a 79% decrease compared the same periods in 2025. Revenues from services totaled $827,000 and $1,364,000 for the three and six months ended June 30, 2026, an increase of 7% and 10% compared to the same periods in 2025.

ONM Environmental

Our wholly-owned subsidiary ONM Environmental generates revenues through sales of our flagship product CupriDyne Clean to industry, including related design, installation, and maintenance services on the systems that deliver CupriDyne Clean at its clients’ facilities.

Revenue (ONM Environmental)

ONM Environmental’s revenues decreased 77% and 81% in the three and six months ended June 30, 2026, compared with the same periods in 2025. The decrease in revenues was due to a decrease in the volume of sales of our pet odor product private labeled to a third party under the brand name "Pooph", offset by sales of industrial odor control products.

Cost of Goods Sold (ONM Environmental)

ONM Environmental’s cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products. As a percentage of revenue, ONM Environmental’s costs of goods sold for the three and six months ended June 30, 2026, were 37% and 36% a decrease of 8% and 14% compared to the same periods in 2025. The decrease in cost of goods sold is due to the change in revenue concentration across product lines.

Selling, General and Administrative Expense (ONM Environmental)

ONM Environmental’s selling, general and administrative expenses ("SG&A") for the three and six months ended June 30, 2026 totaled $407,000 and $778,000, an increase of 47% and 27% compared with the same periods in 2025. The increase is due to increases in salaries, professional fees and insurance expense.

Operating Income (ONM Environmental)

ONM Environmental generated an operating loss totaling $110,000 and $204,000 in the three and six months ended June 30, 2026, compared to operating income totaling $823,000 and $1,780,000 for the three and six months ended June 30, 2025. The operating loss is primarily due to the decrease in revenues.

BLEST (engineering)

Revenue (BLEST)

BLEST generated $777,000 and $1,314,000 in third-party service revenues in the three and six months ended June 30, 2026, an increase of 1% and 6% compared to the third-party service revenues in the same periods in 2025. This increase was due to an increase in fixed fee contracts at U.S. Air Force bases.

In addition to providing services to third party clients, BLEST provides services for internal BioLargo projects. These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation of our financial statements. In the three and six months ended June 30, 2026, intersegment revenue for BLEST totaled $313,000 and $574,000. In the three and six months ended June 30, 2025, intersegment revenue for BLEST totaled $169,000 and $393,000.

Cost of Revenues (BLEST)

BLEST’s cost of revenues includes employee labor, subcontracted costs and material costs. In the three and six months ended June 30, 2026, costs were 51% and 63% of revenues, versus 58% in the same periods in 2025. The fluctuation is related to our fixed fee contracts, compared to product sales, which had more direct costs.

Selling, General and Administrative Expense (BLEST)

BLEST’s SG&A expenses were $168,000 and $434,000 in the three and six months ended June 30, 2026, compared to $224,000 and $556,000 in the three and six months ended June 30, 2025. The decrease is due to the timing of expenses in the prior period and does not reflect a decrease in SG&A activity or employees.

Operating Loss (BLEST)

BLEST generated an operating loss of $45,000 and $426,000 in the three and six months ended June 30, 2026, compared to an operating income of $16,000 and an operating loss of $364,000 in the three and six months ended June 30, 2025. The operating losses are reflective of the focus at BLEST on advancing internal BioLargo projects such as the Cellinity battery and AEC water treatment system.

Clyra Medical

Clyra Medical did not generate revenue in the three months ended June 30, 2026, and generated revenues of $154,000 in the six months ended June 30, 2026. Clyra Medical did not generate revenue in 2025. The increase in revenue is due to the sale of ViaCLYR wound irrigation solution to a newly engaged distributor. In the three and six months ended June 30, 2026, Clyra incurred an operating loss of $2,105,000 and $3,826,000, which included $610,000 and $1,131,000 in research and development expenses. In the same periods in 2025, the operating loss totaled $1,263,000 and $2,580,000, which included $229,000 and $564,000 in research and development expenses. The increases in costs and expenses are primarily related to an increased number of employees, increased product development work, and stock option expense.

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BETI

BioLargo Energy Technologies, Inc. (BETI) is developing our Cellinity battery, and has not generated revenue. For the three and six months ended June 30, 2026, it incurred total costs and expenses of $339,000 and $694,000, which included $156,000 and $298,000 in research and development expenses. In the same periods in 2025, total costs and expenses were $122,000 and $217,000, which included $54,000 and $113,000 in research and development expenses. We are focused on recruiting business and financial partners to facilitate additional capital investment and move the product to commercialization.

BEST

BioLargo Equipment Solutions & Technologies, Inc. (BEST) was formed in fiscal year 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC. As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues. We intend future water treatment projects to be contracted through BEST. During the three and six months ended June 30, 2026, it incurred $75,000 and $165,000 of total expenses. In the same periods in 2025, it incurred $67,000 and $125,000 in total expenses primarily related to administrative activities.

Selling, General and Administrative Expense – consolidated

Our SG&A expenses include both cash (for example, salaries to employees) and non-cash expenses (for example, stock option compensation expense). For the three and six months ended June 30, 2026 consolidated SG&A increased 23% and 16% as compared with the three and six months ended June 30, 2025. The largest components of our SG&A expenses included (in thousands):

	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Salaries and payroll related	$	1,045	$	1,144	$	1,907	$	2,199
Professional fees		486		281		925		485
Consulting		594		354		869		756
Office expense		646		464		1,262		904
Rent expense		143		125		292		245
Depreciation expense		32		35		64		76
Sales and marketing		73		88		220		265
Investor relations		161		103		273		144
Board of director expense		135		94		257		176
Total Selling, General & Administrative	$	3,315	$	2,688	$	6,069	$	5,250

In the three and six months ended June 30, 2026, our non-cash expenses from the issuance of stock and stock options totaled $975,000 and $1,744,000 compared to $728,000 and $1,440,000 for the three and six months ended June 30, 2025. The majority of this stock option expense is recorded in employee salaries and consulting expense. The reduction in salaries and payroll related expenses is due to an Employee Retention Tax Credit recognized in the six months ended June 30, 2026, offset by an increased number of employees. Professional fees increased in the three and six months ended June 30, 2026, due to increased corporate activity related to new private securities offerings for BioLargo and Clyra, legal proceedings related to ONM Environmental, and other organizational needs that required professionals. Office expense increased due to an increase in insurance premiums.

Research and Development

In the three and six months ended June 30, 2026, we spent $1,088,000 and $1,995,000 in the research and development of our technologies and products. This was an increase of 103% and 51% as compared to the three and six months ended June 30, 2025. The increase is primarily due to the timing of project work and available working capital.

Interest Income and Expense

Our interest income for the three and six months ended June 30, 2026, was $13,000 and $85,000 compared to $35,000 and $63,000 in the three and six months ended June 30, 2025. Our interest expense for the three and six months ended June 30, 2026, was $285,000 and $474,000 compared to $115,000 and $208,000 in the three and six months ended June 30, 2025. The increase is related to the increase of Clyra Medical debt obligations.

Other Income and Expense

For the three and six months ended June 30, 2026, we did not receive any grant income, compared to no grant income for the three months ended June 30, 2025, and $6,000 of grant income for the six months ended June 30, 2025. Grant income is primarily generated through our wholly owned Canadian subsidiary. The research grants received are considered reimbursement grants related to costs we incur and therefore are included as Other Income. Grant funds paid directly to third parties are not included as income in our condensed consolidated financial statements.

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Net Loss

Net loss for the three and six months ended June 30, 2026, was $4,000,000 and $7,405,000 a loss of $ (0.01) and $ (0.02) per share, compared to a net loss for the three and six months ended June 30, 2025, of $1,882,000 and $3,803,000 a loss of $ (0.004) and $ (0.008) per share. Our net loss for the three and six months ended June 30, 2026, increased because of the decrease in revenue.

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

	Three Months Ended						Six Months Ended
	June 30, 2026			June 30, 2025			June 30, 2026			June 30, 2025
BioLargo corporate	$	(888	)	$	(1,042	)	$	(1,359	)	$	(1,853	)
ONM		(113	)		856			(207	)		1,827
Clyra Medical		(45	)		16			(426	)		(363	)
BLEST		(339	)		(122	)		(694	)		(217	)
BETI		(75	)		(67	)		(165	)		(125	)
BEST		(105	)		(144	)		(219	)		(294	)
BCPG		(60	)		—			(60	)		—
BioLargo Canada		(2,375	)		(1,379	)		(4,275	)		(2,778	)
Net loss	$	(4,000	)		(1,882	)		(7,405	)		(3,803	)

Liquidity and Capital Resources

For the six months ended June 30, 2026, we generated revenues of $2,363,000, had a net loss of $7,405,000, used $5,973,000 net cash in operating activities, and received $4,469,000 net cash from financing activities. As of June 30, 2026, we had current assets of $3,499,000, including $2,188,000 cash and cash equivalents. As of June 30, 2026, we had current liabilities of $4,765,000, and working capital deficit of $1,266,000. We do not believe gross profits in the year ending December 31, 2026, will be sufficient to fund our operational costs for the reminder of the year, and therefore expect we will continue need further investment capital to fund our business plans and investments in our technologies. The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to increase revenues, generate cash from operations, and/or generate cash from financing activities. If we are unable to raise additional cash through gross profits or financing activities, management may choose to curtail portions of our operations. The condensed 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 condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our condensed 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.

Our significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements are described in (i) in Part I, Item 1 of this Form 10-Q, Note 2, “Summary of Significant Accounting Policies” and (ii) in the Form 10-K for the year ended December 31, 2025, filed with the SEC on March 4, 2026, in the Notes to Consolidated Financial Statements in Part II, Item 8, and “Critical Accounting Policies and Estimates” in Part II, Item 7. There have been no material changes to the Company’s critical accounting policies and estimates since the filing of its Form 10-K.

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Item 4. 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 Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended – the “Exchange Act”) as of the end of the period covered by this Report. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2026, which were identified in connection with management’s 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 our internal control over financial reporting.

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, as our product and services sales continues to grow, and as we diversify our clients to include municipalities, increasing strain on our accounting systems. These activities put stress on our overall controls and procedures. We do not yet have the resources to implement the more sophisticated control systems used by larger companies. Although we have made some improvements, our chief executive officer and chief financial officer have 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.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-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, the fact that we operate our business in three distinct locations in the U.S. and Canada, and the lack of sophisticated reporting systems, 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.

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 system’s 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.

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PART II

OTHER INFORMATION

Item 1. 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 ONM’s 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. See Note 2, Allowance for Credit Losses, in Part I above.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 5. Other Information

On March 20, 2026, we entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), with Clearthink Capital Partners, LLC (“Clearthink”), pursuant to which Clearthink has committed to purchase up to $10.0 million of our common stock, par value $0.00067 per share (the “Common Stock”), subject to certain limitations and the satisfaction of the conditions set forth in the Purchase Agreement.

Under the Purchase Agreement, we have the right, but not the obligation, to sell to Clearthink, and Clearthink is obligated to purchase up to $10.0 million of our Common Stock. Such sales of Common Stock, if any, will be subject to certain limitations set forth in the Purchase Agreement, and may occur from time to time, at our sole discretion, over the 36-month period commencing on the date that the conditions to Clearthink’s purchase obligation set forth in the Purchase Agreement are satisfied, including that a registration statement covering the resale by Clearthink of shares of Common Stock that may be issued to Clearthink under the Purchase Agreement, which we agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC (the date on which all of such conditions are satisfied, the “Commencement Date”).

From and after the Commencement Date, on any trading day we select, we may, by written notice delivered to Clearthink, direct Clearthink to purchase up to the lesser of (i) $500,000 of our common stock, and (ii) 300% of the daily average shares traded value for the eight trading days prior to the date of the purchase notice, with a minimum of no less than $25,000. At least five business days must elapse between each purchase notice unless the parties mutually agree otherwise. Subject to the foregoing, and pursuant to the terms of the Purchase Agreement, we will control the timing and amount of any sales of our common stock to Clearthink. Clearthink has no right to require us to sell any shares of Common Stock to Clearthink, but Clearthink is obligated to make purchases as we direct, subject to certain conditions.

The purchase price per share of Common Stock sold in each such Regular Purchase, if any, will be based on prevailing market prices of the Common Stock immediately preceding the time of sale as computed under the Purchase Agreement, equal to the average of the two lowest daily closing prices of our Common Stock during the eight trading days preceding the purchase notice.

Actual sales of shares of Common Stock to Clearthink will depend on a variety of factors we will take into consideration from time to time, including, among others, market conditions, the trading price of our Common Stock and determinations as to the appropriate sources of funding for the Company and its operations. The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which we sell shares of Common Stock to Clearthink. We expect that any proceeds we receive from such sales to Clearthink will be used for working capital and general corporate purposes.

The Purchase Agreement prohibits us from directing Clearthink to purchase any shares of Common Stock if those shares, when aggregated with all other shares of Common Stock then beneficially owned by Clearthink (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder), would result in Clearthink beneficially owning more than 9.99% of the then issued and outstanding shares of Common Stock.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement. Clearthink has agreed not to engage in or effect, directly or indirectly, for its own principal account or for the principal account of any of its affiliates, any short sales of the Common Stock or hedging transaction that establishes a net short position in the Common Stock during the term of the Purchase Agreement.

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As consideration for Clearthink’s commitment to purchase shares of our Common Stock from time to time at our direction upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement, we agreed to issue Clearthink 500,000 shares of our Common Stock (the “Commitment Shares”) upon the execution of the Purchase Agreement. The Company will not receive any cash proceeds from the issuance of the Commitment Shares to Clearthink pursuant to the Purchase Agreement.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time with one business days’ notice, at no cost or penalty. During any “event of default” under the Purchase Agreement, Clearthink does not have the right to terminate the Purchase Agreement; however, the Company may not initiate any regular or other purchase of shares by Clearthink, until such event of default is cured.

The foregoing descriptions of the Registration Rights Agreement and the Purchase Agreement are qualified in their entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits 4.1 and 10.1, respectively, and each of which is incorporated herein in its entirety by reference. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

On April 9, 2026, we filed with the SEC a registration statement on Form S-1 registering Clearthink's sale of the shares to be issued to Clearthink under the Purchase Agreement, which was declared effective by the SEC on April 15, 2026. From the April 15, 2026 commencement date through June 30, 2026, we sold 3,250,000 shares of our common stock to Clearthink and received $391,000 in gross and net proceeds. Subsequent to June 30, 2026 through August 12, 2026, we have sold 3,000,000 shares of our common stock to Clearthink and received $323,000 in gross and net proceeds.

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Item 6. Exhibits

See the Exhibit Index for a list of exhibits filed as part of this report and incorporated herein by reference.

Exhibit Index


Exhibit Number	Exhibit Description
3.1	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.5 to the Company's annual report on Form 10-KSB filed on May 23, 2003)
3.2	Amended and Restated Certificate of Incorporation for BioLargo, Inc. filed March 16, 2007 (incorporated by reference to Exhibit 3.1 to the Company's annual report on Form 10-KSB filed on May 4, 2007)
3.3	Certificate of Amendment to Certificate of Incorporation, filed May 25, 2018 (incorporated by reference to Exhibit 3.4 to the Company's Post Effective Amendment on Form Pos Am filed on June 22, 2018)
3.4	Certificate of Amendment to Certificate of Incorporation, filed August 30, 2022 (incorporated by reference to Exhibit 3.4 to the Company's quarterly report on Form 10-Q filed on November 14, 2022)
4.1	Form of Stock Options issued in exchange for reduction in accounts payable. (incorporated by reference to Exhibit 4.12 to the Company's annual report on Form 10-K filed on March 31, 2015)
4.2	2018 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 to the Company's annual report on Form S-8 filed on June 22, 2018)
4.3	2024 Equity Incentive Plan (incorporated by reference to Exhibit 4.3 to the Company's quarterly report on Form 10-Q filed on May 15, 2026)

4.4	Revolving Line of Credit Agreement dated June 30, 2020, between Clyra Medical and Vernal Bay (incorporated by reference to Exhibit 10.6 to the Company's annual report on Form 8-K filed on July 7, 2020)
4.5	Security Agreement dated June 30, 2020, between Clyra Medical and Vernal Bay (incorporated by reference to Exhibit 10.7 to the Company's annual report on Form 8-K filed on July 7, 2020)
4.6	Revolving Line of Credit Note issued by Clyra Medical to Vernal Bay on June 30, 2020 (incorporated by reference to Exhibit 10.8 to the Company's annual report on Form 8-K filed on July 7, 2020)
4.7	Warrant issued in BioLargo Unit Offerings (through January 16, 2024) (incorporated by reference to Exhibit 4.22 to the Company's quarterly report on Form 10-Q filed on August 14, 2020)
4.8	Registration Rights Agreement between BioLargo Inc. and Clearthink Capital Partners LLC dated March 20, 2026 (incorporated by reference to Exbhiti 4.1 to the Company's current report on Form 8-K filed on March 25, 2026)
10.1	BioLargo license to Clyra Medical Technologies, Inc., dated March 1, 2024 (incorporated by reference to Exhibit 10.1 to the Company's annual report on Form 10-K filed on April 1, 2024)
10.2	Clyra Medical Technologies, Inc. license to BioLargo dated March 1, 2024 (incorporated by reference to Exhibit 10.2 to the Company's annual report on Form 10-K filed on April 1, 2024)
10.3	Form of indemnity agreement between the Company at its officers and directors (incorporated by reference to Exhibit 10.23 to the Company's annual report on Form 10-K filed on March 31, 2023)
10.4	Commercial Office Lease Agreement for 14921 Chestnut St., Westminster, CA 92683 (incorporated by reference to Exhibit 10.1 to the Company's annual report on Form 8-K filed on August 24, 2016)
10.5†	Employment Agreement with Dennis P. Calvert dated May 2, 2017. (incorporated by reference to Exhibit 10.1 to the Company's annual report on Form 8-K filed on May 4, 2017)
10.6	Commercial Office Lease Agreement for Oak Ridge Tennessee (incorporated by reference to Exhibit 10.1 to the Company's annual report on Form 8-K filed on September 8, 2017)
10.7†	Employment Agreement with Joseph L. Provenzano dated May 28, 2019 (incorporated by reference to Exhibit 10.1 to the Company's annual report on Form 8-K filed on June 24, 2019)
10.8	Form of Share Exchange Agreement between BioLargo, Inc., and purchasers of Clyra Medical Series A Preferred Stock (incorporated by reference to Exhibit 10.20 to the Company's quarterly report on Form 10-Q filed on May 17, 2023)

10.9	Form of Share Exchange Agreement between BioLargo, Inc., and purchasers of BioLargo Energy Technologies, Inc. common stock (incorporated by reference to Exhibit 10.21 to the Company's quarterly report on Form 10-Q filed on May 17, 2023)
10.10	License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated May 17, 2021 (incorporated by reference to Exhibit 10.17 to the Company's quarterly report on Form 10-Q filed on August 14, 2025)
10.11	First amendment to License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated August 16, 2021 (incorporated by reference to Exhibit 10.18 to the Company's quarterly report on Form 10-Q filed on August 14, 2025)

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10.12	Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated July 9, 2021 (incorporated by reference to Exhibit 10.19 to the Company's quarterly report on Form 10-Q filed on August 14, 2025)
10.13	First amendment to Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated June 6, 2025 (incorporated by reference to Exhibit 10.20 to the Company's quarterly report on Form 10-Q filed on August 14, 2025)
10.14	Purchase Agreement between BioLargo Inc. and Clearthink Capital Partners LLC dated March 20, 2026 (incorporated by reference to Exbhiti 10.1 to the Company's current report on Form 8-K filed on March 25, 2026)
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
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
32*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
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 document and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

† Management contract or compensatory plan, contract or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2026		BIOLARGO, INC. By: /s/ DENNIS P. CALVERT
		Dennis P. Calvert Chief Executive Officer


Date: August 14, 2026		By: /s/ CHARLES K. DARGAN, II
		Chief Financial Officer