BIOLARGO, INC.

Previous wording

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 is the Pooph branded pet odor control product sold through national retailers including Walmart, Amazon, PetSmart, PetCo, and Chewy.com by Pooph Inc. 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. If Pooph sells their brand to a third party, we would receive 20% of the exit value. During the year ended December 31, 2024, revenues from sales to Pooph comprised 77% of our company-wide revenue; during the three months ended March 31, 2025, it comprised 79% of our revenue. 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. While Pooph is by far the company’s most successful private label product, we sell other private label odor-control products and continue to pursue related business opportunities as a means of tapping into new odor control markets.

Current wording

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 is the Pooph branded pet odor control product sold through national retailers including Walmart, Amazon, PetSmart, PetCo, and Chewy.com by Pooph Inc. 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. If Pooph sells their brand to a third party, we would receive 20% of the exit value. 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. While Pooph is by far the company’s most successful private label product, we sell other private label odor-control products and continue to pursue related business opportunities as a means of tapping into new odor control markets.

Previous wording

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 new EPA standards. 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,

Current wording

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 new EPA standards. 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.

Previous wording

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 minimizes industrial wastewater discharges and thus the regulatory fees associated with wastewater discharge, including for uses like cooling towers at data centers. Garratt-Callahan, who invented and patented the technology, is currently 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. Presently, both BioLargo and Garratt-Callahan are engaged in pilot projects with potential customers for the AROS system, and the companies are currently engaged in discussions with multiple potential first customers for the technology.

Current wording

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 minimizes industrial wastewater discharges and thus the regulatory fees associated with wastewater discharge, including for uses like cooling towers at data centers. Garratt-Callahan, who invented and patented the technology, is currently 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.

Previous wording

The AOS has, broadly speaking, two target applications: 1) treatment of municipal or industrial wastewater to eliminate bacteria, viruses, other organisms, and regulated organic contaminants, while using less electrical energy than other technologies, and 2) treatment of water or wastewater specifically to eliminate micropollutants/pharmaceuticals, at which the AOS particularly excels at compared to existing technologies. Our work to have the AOS adopted in the US and Canada for the first application has been met with resistance because existing technologies, while less energy efficient than our technology, are effective enough against target contaminants, and our “value-add” of also eliminating hard-to-treat micropollutants is not relevant unless regulations dictate that those chemicals must be removed. Similarly, the second application is only relevant in jurisdictions where those hard-to-treat micropollutants are regulated. Unfortunately, this does not include the US or Canada, but it does include several European countries. For that reason, presently, much of our business development efforts to secure projects for the AOS focus on development of partnerships to demonstrate the AOS for the European micropollutant market, or for domestic industrial or pharmaceutical wastewater treatment purposes where micropollutants are major contributors to facilities’ wastewater surcharge fees.

Current wording

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. Together, these characteristics make the AOS an economical and versatile tool to enable wastewater treatment and reuse in the face of emerging water contaminants and increasing regulatory scrutiny on industrial wastewater discharge, and has, broadly speaking, two target applications: 1) treatment of municipal or industrial wastewater to eliminate bacteria, viruses, other organisms, and regulated organic contaminants, while using less electrical energy than other technologies, and 2) treatment of water or wastewater specifically to eliminate micropollutants/pharmaceuticals, at which the AOS particularly excels at compared to existing technologies. Our business development efforts to secure projects for the AOS have thus far focused on development of partnerships for the European micropollutant market, and for domestic industrial or pharmaceutical wastewater treatment purposes where micropollutants are major contributors to facilities’ wastewater surcharge fees.

Previous wording

Our revenues decreased 31% in the three months ended March 31, 2025, as compared with the same period in 2024, primarily due to a decreased volume of sales of our pet odor control product private labeled to a third party under the brand name “Pooph”, which comprised 79% of our consolidated revenues. Our financial statements separate revenue based on products and services. Revenues from the sale of products for the three months ended March 31, 2025, decreased 39% over the same period in 2024. Revenues from services for the three months ended March 31, 2025, increased 152% over the same period in 2024.

Current wording

Our revenues decreased 45% and 38% in the three and six months ended June 30, 2025, as compared with the same periods in 2024, primarily due to a decreased volume of sales of our pet odor control product private labeled to a third party under the brand name “Pooph”. During the three and six months ended June 30, 2025, revenues from sales to Pooph comprised 57% and 69% of our consolidated revenue; compared to the three and six months ended June 30, 2024, it comprised 70% and 78% of our consolidated revenue. 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, 2025, decreased 59% and 49% over the same periods in 2024. Revenues from services for the three and six months ended June 30, 2025, increased 517% and 300% over the same periods in 2024.

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) sales of private-label products to third parties, including the Pooph branded pet odor control product.

Current wording

Our wholly-owned subsidiary ONM Environmental generates revenues through (i) 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, and (ii) sales of private-label products to third parties, including the Pooph branded pet odor control product.

Previous wording

ONM Environmental’s revenues decreased 39% (to $2,803,000) in the three months ended March 31, 2025, compared with the same period in 2024. The decrease in revenues was almost entirely 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". Because the Pooph brand is owned and marketed by a third party, ONM Environmental has no control over its marketing and sales activity. Because the brand has only been on the market for three years, it is difficult to identify trends and uncertainties in sales volumes, especially so for longer periods of time. For the three months ending June 30, 2025, we expect a decrease in ONM Environmental's revenues as compared with the same period in 2024.

Current wording

ONM Environmental’s revenues decreased 50% and 44% (to $2,006,000 and $4,809,000) in the three and six months ended June 30, 2025, compared with the same periods in 2024. The decrease in revenues was almost entirely 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". Because the Pooph brand is owned and marketed by a third party, ONM Environmental has no control over its marketing and sales activity. Because the brand has only been on the market for three years, it is difficult to identify trends and uncertainties in sales volumes, especially so for longer periods of time. We expect annual revenues for the year ending December 30, 2025, to decrease as compared with 2024.

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, 2025, were 54% an increase of 1%, compared to the same period in 2024. The increase in cost of goods is consistent with the Pooph-branded product volume.

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, 2025, were 45% and 50% a decrease of 10% and 4%, compared to the same periods in 2024. The decrease in cost of goods is due to the change in revenue concentration across product lines.

Previous wording

ONM Environmental’s selling, general and administrative expenses ("SG&A") decreased 1% during the three months ended March 31, 2025, as compared with the same period in 2024. ONM Environmental's selling, general and administrative expenses are expected to remain consistent.

Current wording

ONM Environmental’s selling, general and administrative expenses ("SG&A") decreased 14% and 7% during the three and six months ended June 30, 2025, as compared with the same periods in 2024. ONM Environmental's selling, general and administrative expenses are expected to remain consistent.

Previous wording

ONM Environmental generated operating income of $956,000 in the three months ended March 31, 2025, compared to operating income of $1,798,000 for the three months ended March 31, 2024. The operating income for both periods was entirely dependent on the sale of Pooph branded products.

Current wording

ONM Environmental generated operating income of $823,000 and $1,780,000 in the three and six months ended June 30, 2025, compared to operating income of $1,490,000 and $3,288,000 for the three and six months ended June 30, 2024. The operating income for both periods was primarily dependent on the sales volume of Pooph branded products, which has declined in the 2025 periods.

Previous wording

Our engineering segment's (BLEST's) revenues increased 152% (to $466,000), in the three months ended March 31, 2025, as compared with the same period in 2024. The increase in revenue in thethree months ended March 31, 2025, is related to the 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. These ongoing contracts are expected to continue provide a monthly base revenue, in addition to regular work for other clients.

Current wording

Our engineering segment's (BLEST's) revenues decreased 23% (to $771,000) in the three months ended June 30, 2025 as compared with the same period in 2024, and increased 4% (to 1,237,000) in the six months ended June 30, 2025, as compared with the same period in 2024. The decrease in revenues in the three-month period is due to the timing of recognition of revenue related to the product sales. The increase in revenue in thesix-month periodis related to the 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. These ongoing contracts are expected to continue provide a monthly base revenue, in addition to adding work with other clients.

Previous 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 months ended March 31, 2025, intersegment revenue for BLEST totaled $224,000 and for the three months ended March 31, 2024, intersegment revenue for BLEST totaled $171,000.

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, 2025, intersegment revenue for BLEST totaled $169,000 and $393,000, and for the three and six months ended June 30, 2024, intersegment revenue for BLEST totaled $257,000. and $428,000.

Previous wording

BLEST’s cost of revenues includes employee labor, subcontracted costs and material costs. In the three months ended March 31, 2025, costs were 58% of revenues, versus 40% in the same period in 2024. The increase is related to increased costs on fixed fee contracts, compared to product sales attributed to the AEC project in Lake Stockholm New Jersey.

Current wording

BLEST’s cost of revenues includes employee labor, subcontracted costs and material costs. In the three and six months ended June 30, 2025, costs were 58% of revenues, versus 67% and 62% in the same periods in 2024. The decrease is related to efficiencies on fixed fee contracts, compared to product sales, which had more direct costs, attributed to the AEC project in Lake Stockholm New Jersey.

Previous wording

BLEST’s SG&A expenses were $330,000, in the three months ended March 31, 2025, compared to $203,000, in the three months ended March 31, 2024, the increase is due to additional employees. In June and July 2024, BLEST hired four additional full-time employees.

Current wording

BLEST’s SG&A expenses were $224,000 and $556,000 in the three and six months ended June 30, 2025, compared to $238,000 and $441,000 in the three and six months ended June 30, 2024. The increase in the six-month period is due to the hiring of additional employees in 2025.

Previous wording

BLEST incurred an operating loss of $378,000 in the three months ended March 31, 2025, compared to an operating loss of $445,000 in the three months ended March 31, 2024. This operating loss is reflective of the focus at BLEST on advancing internal BioLargo projects such as the Cellinity battery and AEC water treatment system. Our consolidated financial statements eliminate intersegment revenues. The decrease in operating loss was due to an increase in third party-revenues. Because BLEST had an operating loss, we invested cash during the quarter to maintain operations.

Current wording

BLEST generated operating income of $16,000 and an operating loss of $364,000 in the three and six months ended June 30, 2025, compared to an operating loss of $247,000 and $692,000 in the three and six months ended June 30, 2024. The operating income in the three months ended were related to an increase in third party-revenues. The six-months operating loss is reflective of the focus at BLEST on advancing internal BioLargo projects such as the Cellinity battery and AEC water treatment system. Our condensed consolidated financial statements eliminate intersegment revenues.

Previous wording

Clyra Medical has not yet begun commercial sales of its products and thus did not generate revenues in the three months ended March 31, 2025 or 2024. Historical revenues have been nominal. In the three months ended March 31, 2025, it incurred total costs and expenses of $1,315,000, which included $335,000 in research and development expenses. In the same period in 2024, total costs and expenses were $545,000, which included $121,000 in research and development expenses. The increases in costs and expenses is primarily related stock option expense recorded as selling, general and administrative expenses and product development costs. Management is not yet in a position to disclose when it believes Clyra will begin generating revenue.

Current wording

Clyra Medical has not yet begun commercial sales of its products and thus did not generate revenues in the three and six months ended June 30, 2025 or 2024. In the three and six months ended June 30, 2025, it incurred total costs and expenses of $1,263,000 and $2,580,000, which included $229,000 and $564,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $616,000 and $1,154,000, which included $100,000 and $213,000 in research and development expenses. The increases in costs and expenses are primarily related to stock option expense recorded as selling, general and administrative expenses and also an increase in product development cost. Management is not yet in a position to disclose when it believes Clyra Medical will begin generating revenue.

Previous wording

BioLargo Energy Technologies, Inc. (BETI) is developing our Cellinity battery, and has not generated generate revenue. For the three months ended March 31, 2025, it incurred total costs and expenses of $94,000, which included $60,000 in research and development expenses. In the same period in 2024, total costs and expenses were $155,000, which included $80,000 in research and development expenses. We do not expect BETI to generate revenue in the near future as it continues its research and development activities.

Current wording

BioLargo Energy Technologies, Inc. (BETI) is developing our Cellinity battery, and has not generated generate revenue. For the three and six months ended June 30, 2025, it incurred total costs and expenses of $122,000 and $217,000, which included $54,000 and $113,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $226,000, and $388,000, which included $133,000 and $220,000 in research and development expenses. We are focused on recruiting business partners to facilitate capital investment, and are unable to predict when BETI will generate revenue.

Previous wording

BioLargo Equipment, Sciences and Technologies, Inc. (BEST) was formed in 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC. As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues. We intend future water treatment projects to be contracted through BEST. During the three months ended March 31, 2025 and 2024 BEST incurred $58,000 and $66,000 in total expenses primarily related to sales and marketing activities.

Current wording

BioLargo Equipment, Sciences and Technologies, Inc. (BEST) was formed in 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC. As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues. We intend future water treatment projects to be contracted through BEST. During the three and six months ended June 30, 2025, it incurred $67,000 and $125,000 of total expenses. In the same periods in 2024, it incurred $49,000 and $115,000 in total expenses primarily related to sales and marketing activities.

Previous 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 months ended March 31, 2025 consolidated SG&A increased 15% (to $2,559,000). 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, 2025 consolidated SG&A increased 12% and 13% (to $2,688,000 and $5,250,000). The largest components of our SG&A expenses included (in thousands):

Previous wording

In the three months ended March 31, 2025, our non-cash expenses from the issuance of stock and stock options totaled $712,000 compared to $623,000 for the three and nine months ended March 31, 2024. This increased due to stock option issuances for previously issued stock options that expired during the three months ended March 31, 2025. 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; companywide, there are 44 full time employees. Professional fees decreased due less corporate activity related to new subsidiaries, private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals. Investor relation expense decreased due to fewer trade show and investor events.

Current wording

In the three and six months ended June 30, 2025, our non-cash expenses from the issuance of stock and stock options totaled $492,000 and $1,107,000 compared to $539,000 and $1,027,000 for the three and six months ended June 30, 2024. Our non-cash expenses are related to stock option issuances for previously issued stock options that expired during the three and six months ended June 30, 2025. and 2024. The substantial majority of this stock option expense is recorded in employee salaries and consulting expense. Salaries and payroll related expense increased due to the addition of new employees; companywide, there are 42 full time employees as of the date of this report. Professional fees increased in the three months ended June 30, 2025, due to increased corporate activity related to new private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals. Office expense increased due to an increase in insurance related costs and rent expense. Investor relation expense decreased due to fewer trade show and investor events.

Previous wording

In the three months ended March 31, 2025, we spent $791,000 in the research and development of our technologies and products, of which $335,000 was through Clyra Medical. This was an increase of 1% and compared to the three months ended March 31, 2024. The increase is primarily due to work related preparing for (i) the commercialization of medical products, to (ii) the battery project, and (iii) the AEC. As these products mature, we expect the level of research and development to continue.

Current wording

In the three and six months ended June 30, 2025, we spent $535,000 and $1,325,000 in the research and development of our technologies and products. This was a decrease of 14% and 6% as compared to the three and six months ended June 30, 2024. The decrease is primarily due to the timing of project work.

Previous wording

Our interest expense for the three months ended March 31, 2025, was $65,000 compared to interest expense of $12,000 in the three months ended March 31, 2024. The increase of interest expense is related to the Clyra Medical note payables related to capital expenditures.

Current wording

Our interest expense for the three and six months ended June 30, 2025, was $80,000 and $145,000 compared to interest expense of $2,000 and $14,000 in the three and six months ended June 30, 2024. The increase of interest expense is related to the increase of Clyra Medical debt obligations.

Previous wording

For three months ended March 31, 2025 and 2024, we had $6,000 and $0 of grant income. 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 financial statements.

Current wording

For the six months ended June 30, 2025, we had $6,000 of grant income, compared to $15,000 of grant income for the same periods in 2024. 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.

Previous wording

Net loss for the three months ended March 31, 2025, was $1,921,000 a loss of $ (0.004) per share, compared to a net loss for the three months ended March 31, 2024, of $775,000, a loss of $ (0.001) per share. Our net loss for the three ended March 31, 2025, increased because of the decrease in revenue.

Current wording

Net loss for the three and six months ended June 30, 2025, was $1,882,000 and $3,803,000 a loss of $ (0.004) and $ (0.008) per share, compared to a net loss for the three and six months ended June 30, 2024, of $780,000 and $1,555,000 a loss of $ (0.001) and $ (0.003) per share. Our net loss for the three and six months ended June 30, 2025, increased because of the decrease in ONM Environmental revenue.

Previous wording

For the three months ended March 31, 2025, we generated revenues of $3,269,000 and had a net loss of $1,921,000. As of March 31, 2025, we had current assets of $7,218,000, of which $2,564,000 was cash and cash equivalents. For the three months ended March 31, 2025, we used $1,830,000 net cash used in operating activities. Our cash decreased $984,000 from December 31, 2024, and we had an increase of $1,077,000 in accounts receivable. As of March 31, 2025, we had current liabilities of $3,373,000, and working capital of $3,845,000. We and our partially owned subsidiaries continue to sell securities to ensure available working capital. We do not believe gross profits in the year ending December 31, 2025 will be sufficient to fund our current level of operations. We have been, and anticipate that we will continue to be, limited in terms of our capital resources, and expect to continue to need further investment capital to fund our business plans and investments in our new technologies. During the three months ended March 31, 2025, we and our subsidiaries received $885,000 from financing activities, including sales of stock and the issuance of note payables. 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 $4,208,000 in accounts receivable into cash; or, (iii) if necessary, reduce ongoing cash obligations by curtailing portions of our operations. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Current wording

For the six months ended June 30, 2025, we generated revenues of $6,046,000, had a net loss of $3,803,000, used $3,948,000 net cash in operating activities, and received $3,699,000 net cash from financing activities. As of June 30, 2025, we had current assets of $9,187,000, including $3,471,000 cash and cash equivalents. As of June 30, 2025, we had current liabilities of $4,080,000, and working capital of $5,107,000. We do not believe gross profits in the year ending December 31, 2025, will be sufficient to fund our current level of operations for the reminder of the year, and therefore expect we will continue to be limited in terms of our capital resources, and therefore expect to continue to need further investment capital to fund our business plans and investments in our new technologies. The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) increase revenues, generate cash from operations, and/or generate cash from financing activities, or (ii) convert assets such as our $1,735,000 in accounts receivable and $3,572,000 note receivable into cash. 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.