BIOLARGO INC

Previous wording

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

Current wording

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.

Previous wording

We sell privately labeled products based on our technologies to third parties who market and sell the products under their own brand names. The most successful thus far is the Pooph branded pet odor control product sold by third party Pooph Inc, directly to consumers and to national retailers including Walmart, Amazon, Home Depot, Ace Hardware, Chewy.com and others. In addition to purchasing product from us at an agreed-upon manufacturing margin, Pooph Inc. pays us six percent royalty on their sales in exchange for exclusive rights to our technology for pet odors. During the year ended December 31, 2023, revenues from sales to Pooph comprised 82% of our company-wide revenue.

Current wording

ONM sells privately labeled odor-control products based on our technologies to third parties who market and sell the products under their own brand names. The most successful of these products is the "Pooph" branded pet odor control product sold by Pooph Inc. both directly to consumers and to national and regional retailers including Walmart, Amazon, Home Depot, Ace Hardware, Chewy.com, Target, Ralphs, and others. Pooph is advertised on television nationally, and is expanding its product lines to other products based on our odor technologies. In addition to purchasing product from us at an agreed-upon manufacturing margin, Pooph Inc. pays us six percent royalty on their sales in exchange for exclusive rights to our technology for pet odors. During the three and six months ended June 30, 2024, revenues from sales to Pooph comprised 70% and 78% of our company-wide revenue

Previous wording

The success of Pooph is an example of our goal to develop distribution channels that do not rely on our in-house sales and distribution infrastructure. We continue to explore potential partnerships and products along these lines with other parties, and to support existing private label products.

Current wording

The success of Pooph is an example of our strategy of developing distribution channels that do not rely on our in-house sales and distribution infrastructure, and do not require our investment in marketing dollars. We continue to explore potential partnerships and products along these lines with other parties, and to support existing private label products.

Previous wording

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, with a portion of chemistry product sales resulting from national purchasing agreements (NPAs). ONM Environmental continues to focus on securing more contracts with existing customers and developing business with new customers. ONM Environmental holds General Engineering, Electrical, Plumbing and Low Voltage contractor licenses issued by the California Contractors State License Board, and 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).

Current wording

We believe ONM's industrial odor control product, CupriDyne Clean, is the number-one performing industrial odor-control product in the market, and that it offers substantial savings to our customers compared with competing products. We have been and expect to continue selling product to municipalities and some of the largest solid waste handling companies in the country, with a portion of chemistry product sales resulting from national purchasing agreements (NPAs). ONM Environmental continues to focus on securing more contracts with existing customers and developing business with new customers. ONM Environmental holds General Engineering, Electrical, Plumbing and Low Voltage contractor licenses issued by the California Contractors State License Board, and 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).

Previous wording

Prior to the Covid-19 pandemic, we partnered with a leading wastewater treatment solution provider based in South Korea in a joint venture to commercialize our CupriDyne Clean products in South Korea. We own 40% of the joint venture. Although the joint venture established manufacturing and is marketing the product, the pandemic significantly impacted the expected growth of the company. While the local management team continues to market the product to industrial clients, their efforts have struggled to gain a foothold. We are not obligated to contribute additional funds to the venture, and cannot predict its future success.

Current wording

In 2020, we partnered with a leading wastewater treatment solution provider based in South Korea in a joint venture to commercialize our CupriDyne Clean products in South Korea. We own 40% of the joint venture. Although the joint venture established manufacturing and is marketing the product, the pandemic significantly impacted the expected growth of the company. While the local management team continues to market the product to industrial clients, their efforts have struggled to gain a foothold. We are not obligated to contribute additional funds to the venture, and cannot predict its future success.

Previous wording

Securing sales in the water and wastewater industry is a very technically intensive process, and can be long and arduous. The entirety of the sales cycle can be lengthy, in some cases even taking many months or in very large projects, multiple years. The 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.

Current wording

The sales process in the municipal and industrial water and wastewater industry is a very technically intensive process, and can be long and arduous. The entirety of the sales cycle can be lengthy, in some cases even taking many months or in very large projects, multiple years to complete bench-scale in-house validation testing and piloting, field piloting, project scoping and bidding, and contracting, before a project starts. The process is also very engineering-intensive, and therefore the staff required to secure contracts for water treatment projects need to be engineers, in most cases. In our company, BLEST’s engineers fill this role.

Previous wording

Having secured its first contract to install an AEC system to remove PFAS from drinking water, BLEST has been actively in scoping and bidding water treatment projects for over a year and as a result has developed a substantial pipeline of potential projects in which customers indicate a high level of interest. In addition, BLEST regularly receives inquiries for new projects in development through the company’s network of manufacturer’s sales representatives. It is important to note that additional staffing is needed to meet what we believe is, and will continue to be a rapidly escalating level of customer interest in our solutions. Although BEST is primarily focused on AEC, AROS and AOS, discussed below, it offers comprehensive water treatment solutions, related equipment, and services, some of which may be manufactured by third parties and sold by BEST as an authorized distributor. The AEC, AROS and AOS are discussed in the following sections.

Current wording

Having secured its first contract to install an AEC system to remove PFAS from drinking water, BEST has been actively in scoping and bidding water treatment projects for over a year and as a result has developed a substantial pipeline of potential projects in which customers indicate a high level of interest. In addition, BEST regularly receives inquiries for new projects in development through the company’s network of manufacturer’s sales representatives. It is important to note that additional staffing is needed to meet what we believe is, and will continue to be a rapidly escalating level of customer interest in our solutions. Although BEST is primarily focused on AEC, AROS and AOS, discussed below, it offers comprehensive water treatment solutions, related equipment, and services, some of which may be manufactured by third parties and sold by BEST as an authorized distributor. The AEC, AROS and AOS are discussed in the following sections.

Previous wording

Clyra Medical Technologies, Inc. is our partially owned subsidiary creating medical products based on our technologies. Its primary product is a surgical wound irrigation solution called Bioclynse that can help manage patient care and outcomes. The first target market for this product is orthopedics, including hip and knee replacement surgeries. Management believes Bioclynse outperforms competing products as it has proven performance in biofilm disruption and inhibition, is non-toxic and non-cytotoxic, is non-sensitizing to tissue, and unlike competing products, does not require it to be rinsed and/or removed from a surgical cavity. Clyra management is focused on developing partnerships with large, well-established distributors who can help rapidly accelerate the product’s access to clinicians and surgeons in hospitals around the country. In first quarter 2024, Clyra placed orders for approximately $800,000 in capital equipment to support anticipated growth in sales of its Bioclynse line of products, and has contracted with third parties for product manufacturing, as it does not intend to build its own manufacturing facility. During the three months ended March 31,2024, Clyra sold $475,000 in common stock to support these efforts.

Current wording

Clyra Medical Technologies, Inc. is our partially owned subsidiary creating medical products based on our technologies. Its primary product is a surgical wound irrigation solution called Bioclynse that can help manage patient care and outcomes. The first target market for this product is orthopedics, including hip and knee replacement surgeries. Management believes Bioclynse outperforms competing products as it has proven performance in biofilm disruption and inhibition, is non-toxic and non-cytotoxic, is non-sensitizing to tissue, and unlike competing products, does not need to be rinsed and/or removed from a surgical cavity. Clyra management is focused on developing partnerships with large, well-established distributors who can help rapidly accelerate the product’s access to clinicians and surgeons in hospitals around the country. It, and its manufacturing partner, Keystone Industries, have invested in manufacturing equipment to support at-scale manufacturing for the Bioclynse product's use in sterile settings, such as in surgery. In total, Clyra has committed approximately $1.5 million in equipment and related assets to support an expected national roll out of Bioclynse. During the six months ended June 30, 2024, Clyra sold $1,115,000 in common stock to support these efforts.

Previous wording

BLEST engineers generate revenue through services to third party clients, as well as for internal BioLargo projects such as the AEC and battery (revenues from internal projects are eliminated in the consolidation of our financial statements and are designed “intersegment revenue”). Third party contracts include ongoing work at U.S. Air Force bases for air quality control. Efforts to expand this work as well as with other clients are consistently ongoing.

Current wording

BLEST engineers generate revenue through services to third party clients, as well as for internal BioLargo projects such as the AEC and battery (revenues from internal projects are eliminated in the consolidation of our financial statements and are designed “intersegment revenue”). Third party contracts include ongoing work at U.S. Air Force bases for air quality control. In the second quarter of 2024, BLEST secured new contracts to provide air quality control compliance services to additional U.S. Air Force bases, increasing its ongoing contract-based revenue to approximately $100,000 per month. Efforts to expand this work as well as with other clients are consistently ongoing.

Previous wording

The staff time devoted to supporting the AEC (PFAS) and battery related work is demanding and , at the same time, BLEST needs to hire more qualified staff to meet and expanding demand for our growing list of customers and/or expected customers. When we combine the demands of current revenue generating projects and expected growth, we are presented with an obvious challenge to manage quality, timely performance as well as access to qualified staff. We are working carefully to find balance to help insure we meet the demands of both in a practical customer centric and capital conserving way. It may be for example, when we secure larger and larger contracts for PFAS or Garrett Callan related work, we will need to depend heavily on our contact manufactures to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.

Current wording

The staff time devoted to supporting the AEC (PFAS) and battery related work is demanding and , at the same time, BLEST needs to hire more qualified staff to meet and expanding demand for our growing list of customers and/or expected customers. When we combine the demands of current revenue generating projects and expected growth, we are presented with an obvious challenge to manage quality, timely performance as well as access to qualified staff. We are working carefully to find balance to help ensure we meet the demands of both in a practical customer centric and capital conserving way. It may be for example, when we secure larger and larger contracts for PFAS or Garrett Callan related work, we will need to depend heavily on our contact manufactures to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.

Previous wording

Our revenues increased 27% to $4,760,000 in the three months ended March 31, 2024, as compared with the same period in 2023, primarily due to sales of our pet odor product private labeled to a third party under the brand name “Pooph”, which comprised 88% of our company-wide revenues. Our financial statements separate revenue based on products and services. Revenues from the sale of products for the three months ended March 31, 2024, were $4,575,000, a 29% increase over the same period of 2023. Revenues from services for the three months ended March 31, 2024, were $185,000, a 5% decrease from the same period of 2023.

Current wording

Our revenues increased 247% and 88% in the three and six months ended June 30, 2024, as compared with the same periods in 2023, primarily due to an increased volume of sales of our pet odor control product private labeled to a third party under the brand name “Pooph”, which comprised 70% and 78%, respectively of our company-wide revenues in such periods. Our financial statements separate revenue based on products and services. Revenues from the sale of products for the three and six months ended June 30, 2024, increased 272% and 95% over the same periods in 2023. Revenues from services for the three and six months ended June 30, 2024, decreased 5% over the same periods in 2023.

Previous wording

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

Current wording

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

Previous wording

ONM Environmental’s revenues increased 29% to $4,575,000 in the three months ended March 31, 2024, compared with the same period in 2023. The increase in revenues was almost entirely due to an increase in the volume of sales of our pet odor product private labeled to a third party under the brand name "Pooph". Because ONM Environmental has no control over the marketing and sales activity or levels of the Pooph branded products, it cannot predict sales volumes related to it in future periods. Pooph management has indicated their intentions to continue advertising and expanding sales. While they have performed well in the past, their execution of those future plans has inherent risks that are out of our control.

Current wording

ONM Environmental’s revenues increased 205% (to $4,012,000) and 77% (to $8,586,000) in the three and six months ended June 30, 2024, compared with the same periods in 2023. The increase in revenues was almost entirely due to an increase in the volume of sales of our pet odor product private labeled to a third party under the brand name "Pooph". Because ONM Environmental has no control over the marketing and sales activity or levels of the Pooph branded products, it cannot predict sales volumes related to it in future periods. Pooph management has indicated their intentions to continue advertising and expanding sales. While they have performed well in the past, their execution of those future plans has inherent risks that are out of our control.

Previous wording

ONM Environmental’s cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products. As a percentage of revenue, ONM Environmental’s costs of goods for the three months ended March 31, 2024, were 53%, an increase of 4%, compared to the same period in 2023. The current period increase in cost of goods is due an increase raw material costs.

Current wording

ONM Environmental’s cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products. As a percentage of revenue, ONM Environmental’s costs of goods for the three and six months ended June 30, 2024, were 55% and 54%, an increase of 41% and 14%, compared to the same period in 2023. The current period increase in cost of goods is due an increase in raw material costs.

Previous wording

ONM Environmental’s selling, general and administrative expenses decreased 6% during the three months ended March 31, 2024, as compared with the same period in 2023. The decrease is due to a reduction in salaries.

Current wording

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

Previous wording

ONM Environmental generated operating income of $1,798,000 in the three months ended March 31, 2024, compared to operating income of $1,387,000 for the three months ended March 31, 2023. The generation of operating income for the three months ended March 31, 2024, was entirely dependent on sale of Pooph branded products.

Current wording

ONM Environmental generated operating income of $1,490,000 and $3,288,000 in the three and six months ended June 30, 2024, compared to operating income of $428,000 and $1,815,000 for the three and six months ended June 30, 2023. The generation of operating income for the three and six months ended June 30, 2024, was entirely dependent on sale of Pooph branded products.

Previous wording

Our engineering segment's (BLEST's) revenues decreased 25% to $185,000, net of intersegment revenue, in the three months ended March 31, 2024, as compared with the same period in 2023. In addition to providing service to third party clients, BLEST provides services to BioLargo and its subsidiaries for internal BioLargo projects. These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation of our financial statements. In the three months ended March 31, 2024, intersegment revenue for BLEST totaled $171,000 and for the three months ended March 31, 2023, intersegment revenue for BLEST totaled $169,000. The decrease in third party revenue in the three months ended March 31, 2024 as compared with the same period in 2023 is a result of BLEST's focus on these internal projects and a reduction of third party contracts.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

BLEST incurred an operating loss of $445,000, in the three months ended March 31, 2024, compared to an operating loss of $368,000 in the three months ended March 31, 2023. This operating loss is reflective of the focus at BLEST on internal BioLargo projects. While we are unable to record revenues generated from services by the engineering group to other BioLargo operating divisions for important projects such as the development of the battery, AOS and AEC technologies, it is important to note that its operating loss would be eliminated if it were selling these services to a third party at fair market value. The increase in operating loss was due to lower third party-revenues, and an increase in intercompany research and development activities for both the battery and AEC projects. Because the subsidiary had an operating loss, we invested cash during the quarter to allow it to maintain operations.

Current wording

BLEST incurred an operating loss of $247,000 and $692,000, in the three and six months ended June 30, 2024, compared to an operating loss of $450,000 and $818,000 in the three and six months ended June 30, 2023. This operating loss is reflective of the focus at BLEST on internal BioLargo projects. While we are unable to record revenues generated from services by the engineering group to other BioLargo operating divisions for important projects such as the development of the battery, AOS and AEC technologies, it is important to note that its operating loss would be eliminated if it were selling these services to a third party at fair market value. The decrease in operating loss was due to an increase in third party-revenues. Because the subsidiary had an operating loss, we invested cash during the quarter to allow it to maintain operations.

Previous wording

In the three months ended March 31, 2024, Clyra Medical did not generate revenue, had $546,000 in total costs and expenses, which included $121,000 in research and development expenses. In the same period in 2023, Clyra generated $6,000 in revenue, had $431,000 in total costs and expenses, which included $134,000 in research and development expenses. We expect Clyra's losses to continue in the near future as Clyra works to finalize agreements with third parties to distribute its products.

Current wording

Clyra Medical did not generate revenue in 2024, and it generated $6,000 in the three months end June 30, 2023. In the three and six months ended June 30, 2024, had $616,000 and $1,161,000 in total costs and expenses, which included $100,000 and $220,000 in research and development expenses. In the same period in 2023, had $396,000 and $823,000 in total costs and expenses, which included $60,000 and $194,000 in research and development expenses. We expect Clyra's losses to continue in the near future as Clyra works to finalize agreements with third parties to distribute its products.

Previous wording

BETI has not generated generate revenue from its inception, and for the three months ended March 31, 2024 and 2023, had an operating loss of $155,000 and $87,000, respectively, primarily related to the development of its battery technology. We do not expect BETI to generate revenue in the near future as it continues its research and development activities.

Current wording

BETI has not generated generate revenue, and for the three and six months ended June 30, 2024, had $226,000 and $381,000 in total costs and expenses, which included $133,000 and $213,000 in research and development expenses. In the same periods in 2023, had $297,000 and $384,000 in total costs and expenses, which included $271,000 and $303,000 in research and development expenses. The primary focus of BETI is the development of its battery technology. We do not expect BETI to generate revenue in the near future as it continues its research and development activities.

Previous wording

Formed in 2024 to develop and commercialize our various water treatment equipment, including the AEC. BEST did not generate revenue during the three months ended March 31, 2024, and incurred $66,000 in expenses primarily related to salaries and marketing.

Current wording

Formed in 2024 to develop and commercialize our various water treatment equipment, including the AEC. BEST did not generate revenue during 2024. During the three and six months ended June 30, 2024 incurred $49,000 and $115,000 in total expenses primarily related to salaries and marketing.

Previous wording

Our SG&A expenses include both cash (for example, salaries to employees) and non-cash expenses (for example, stock option compensation expense). Our consolidated SG&A increased in the aggregate by 29% in the three months ended March 31, 2024, to $2,225,000 . The largest components of our SG&A expenses included (in thousands):

Current wording

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, 2024 consolidated SG&A increased in the aggregate by 34% (to $2,404,000) and by 32% (to $4,629,000). The largest components of our SG&A expenses included (in thousands):

Previous wording

In the three months ended March 31, 2024, our non-cash expenses from stock for service and stock option expense totaled $623,000, compared to $463,000 for the three months ended March 31, 2023. This increase is due to stock option issuances for previously issued stock options that expired during the three months ended March 31, 2024. The majority of this stock option expense is recorded in Consulting expense. Salaries and payroll related expense increased due to the addition of new employees at our BLEST and Clyra subsidiaries. Professional fees increased due to the addition of our BEST subsidiary, private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals. Investor relation expense increased as BioLargo works to tell our story to the public markets through speaking events and trade shows.

Current wording

In the three and six months ended June 30, 2024, our non-cash expenses from the issuance of stock and stock options totaled $669,000 and $1,292,000 compared to $363,000 and $826,000 for the three and six months ended June 30, 2023. This increase is due to stock option issuances for previously issued stock options that expired during the three and six months ended June 30, 2024. The majority of this stock option expense is recorded in Consulting expense. Salaries and payroll related expense increased due to the addition of new employees; company wide, there are 36 full time employees. Professional fees increased due to the addition of our BEST subsidiary, private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals. Investor relation expense increased as we continue to tell the BioLargo story to the public markets through speaking events and trade shows.

Previous wording

In the three months ended March 31, 2024, we spent $784,000 in the research and development of our technologies and products. This was an increase of 39% compared to the three months ended March 31, 2023. The increase is primarily due to work related to (i) the battery project, and (ii) the AEC. As these products mature, we expect the level of research and development to decrease.

Current wording

In the three and six months ended June 30, 2024, we spent $623,000 and $1,407,000 in the research and development of our technologies and products. This was an increase of 6% and 22% compared to the three and six months ended June 30, 2023. The increase is primarily due to work related to (i) the battery project, and (ii) the AEC. As these products mature, we expect the level of research and development to decrease.

Previous wording

Our interest expense for the three months ended March 31, 2024, was $12,000, compared to $48,000 in the three months ended March 31, 2023. The decrease is due to a decrease in financing activities.

Current wording

Our interest expense for the three and six months ended June 30, 2024, was $2,000 and $14,000 compared to $12,000 and $60,000 in the three and six months ended June 30, 2023. The decrease is due to a decrease in financing activities.

Previous wording

For the three months ended March 31, 2024, we had no grant income, as compared with the $31,000 in three months ended March 31, 2023. Grant income is primarily generated through our wholly owned Canadian subsidiary, we have been awarded more than 80 research grants over the years from various public and private agencies, including the Canadian National Research Institute – Industrial Research Assistance Program (NRC-IRAP), the National Science and Engineering Research Council of Canada (NSERC), and the Metropolitan Water District of Southern California’s Innovative Conservation Program “ICP”. 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 financial statements.

Current wording

For the three and six months ended June 30, 2024, we had $15,000 of grant income, as compared with the $32,000 in the three and six months ended June 30, 2023. Grant income is primarily generated through our wholly owned Canadian subsidiary, we have been awarded more than 80 research grants over the years from various public and private agencies, including the Canadian National Research Institute – Industrial Research Assistance Program (NRC-IRAP), the National Science and Engineering Research Council of Canada (NSERC), and the Metropolitan Water District of Southern California’s Innovative Conservation Program “ICP”. 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 financial statements.

Previous wording

Net loss for the three months ended March 31, 2024, was $775,000 a loss of $ (0.003) per share, compared to a net loss for the three months ended March 31, 2023, of $494,000 , a loss of $ (0.001) per share. Our net loss for the three months ended March 31, 2024, increased because of the increase in selling, general and administrative expense, offset by the increase in product revenue.

Current wording

Net loss for the three and six months ended June 30, 2024, was $780,000 and $1,555,000 a loss of $ (0.001) and $ (0.003)per share, compared to a net loss for the three and six months ended June 30, 2023, of $1,626,000 and $2,120,000, a loss of $ (0.005) and $ (0.006) per share. Our net loss for the three and six months ended June 30, 2024, decreased because of the increase in revenue offset by an increase in SG&A expense. Of the SG&A expense, $669,000 and $1,292,000 in the three and six months ended June 30, 2024, are non-cash expenses related to the issuance of stock and stock options.

Previous wording

For the three months ended March 31, 2024, we generated revenues of $4,760,000 through our business segments, had a net loss of $775,000, and generated net cash provided by operating activities of $481,000. At March 31, 2024, we had current assets of $7,176,000, of which $4,336,000 was cash and cash equivalents, current liabilities of $3,404,000, and working capital of $3,772,000.

Current wording

For the three and six months ended June 30, 2024, we generated revenues of $5,014,000 and $9,773,000 and we had a net loss of $780,000 and $1,555,000 For the six months ended June 30, 2024, we generated $330,000 net cash from operating activities. On June 30, 2024, we had current assets of $7,110,000, of which $4,765,000 was cash and cash equivalents, had current liabilities of $3,012,000, and working capital of $4,098,000.

Previous wording

While we were able to generate $481,000 net cash from operating activities during the three months ended March 31, 2024, we do not have a long history of doing so and are highly reliant upon third parties for the generation of a majority of our revenues. We also continue to use cash to invest in capital equipment, research and development, and our new technologies. For these reasons, we and our partially owned subsidiaries continue to sell securities to ensure available working capital. During the three months ended March 31, 2024, we sold (i) $260,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”), (ii) $228,000 of our common stock and warrants to accredited investors, (iii) $475,000 of Clyra Medical common stock, and (iv) $50,000 of BETI common stock. We have been, and anticipate that we will continue to be, limited in terms of our capital resources, and expect to continue to need further investment capital to fund our business plans and investments into our new technologies.

Current wording

While we were able to generate net cash from operating activities during the six months ended June 30, 2024, we do not have a long history of doing so and are highly reliant upon one customer for the generation of a majority of our revenues. We also continue to use cash to invest in capital equipment, research and development, and our new technologies. For these reasons, we and our partially owned subsidiaries continue to sell securities to ensure available working capital. We have been, and anticipate that we will continue to be, limited in terms of our capital resources, and expect to continue to need further investment capital to fund our business plans and investments in our new technologies.

Previous wording

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) continue to increase revenues, generate cash from operations, or generate cash from financing activities, (ii) convert assets such as our $2,473,000 in accounts receivable into cash; or, (iii) if necessary, reduce ongoing cash obligations by curtailing portions of our operations.

Current wording

For these reasons, we continue to sell securities to ensure available working capital, both directly and through our subsidiaries; during the six months ended June 30, 2024, we received net proceeds of $1,789,000. Additionally during the six months ended June 30, 2024, we received $301,000 in net proceeds from the exercise of stock options and warrants. We have been, and anticipate that we will continue to be, limited in terms of our capital resources, and expect to continue to need further investment capital to fund our business plans and investments into our new technologies. The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) continue to increase revenues, generate cash from operations, and/or generate cash from financing activities, (ii) convert assets such as our $2,104,000 in accounts receivable into cash; or, (iii) if necessary, reduce ongoing cash obligations by curtailing portions of our operations.