BIOLARGO, INC.

Previous 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. 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, including for consumer brands such as the "Pooph pet odor eliminator".

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. 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.

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. 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 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 subheading "Credit Loss Expense, Pooph Litigation" in Results of Operations, below.)

Previous wording

Over the years, we have developed multiple innovative technologies and equipment platforms that focus on challenging issues in the water treatment industry, including the AOS technology (developed to remove micro-pollutants), the AEC (developed to remove per- and polyfluoroalkyl substances, or 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.

Current wording

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.

Previous wording

The AEC’s commercial roll-out is being executed with the help of a network of sales representative organizations whose role will be to market and sell the treatment system, related equipment, and the Company’s engineering services to municipal and industrial customers across the country. We have secured channel partner agreements with several sales representative organizations ensuring coverage for most of the continental United States. The AEC for our PFAS project in New Jersey has been built and is ready for delivery and installation, now waiting on the completion of other facilities. We believe the New Jersey project will represent a key milestone for the commercialization of the AEC, as we believe industry validation of the technology in a first municipal drinking water treatment project will play an important role in showcasing the AEC’s distinct advantages over incumbent technologies like carbon filtration and ion exchange.

Current wording

The AEC’s commercial roll-out is being executed with the help of a network of sales representative organizations whose role will be to market and sell the treatment system, related equipment, and the Company’s engineering services to municipal and industrial customers across the country. We have secured channel partner agreements with several sales representative organizations ensuring coverage for most of the continental United States. The AEC for our PFAS project in New Jersey has been built and is ready for delivery and installation, now waiting on the completion of other supporting infrastructure. We believe the New Jersey project will represent a key milestone for the commercialization of the AEC, as we believe industry validation of the technology in a first municipal drinking water treatment project will play an important role in showcasing the AEC’s distinct advantages over incumbent technologies like carbon filtration and ion exchange. 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 economic position within the PFAS treatment market. We remain committed to delivering scalable, cost-effective solutions that align with evolving regulatory requirements and market demand.

Previous wording

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; we have successfully maintained operation of our AEC PFAS treatment system for over 10,000 hours continuously, thus demonstrating its resilience to long-term use; we have submitted bids and proposals and have received indications of interest from a wide range of customer types; we have added several high-profile experts from the industry to our team who are assisting in opening doors to potential clients and collaborators; we have entered into discussions about partnership and opportunities for collaboration with industry-leading firms who have a gap in their PFAS treatment technology portfolio. While these opportunities do not convert into commercial sales overnight, but they represent strong avenues for accelerating adoption of our PFAS treatment solution.

Current wording

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, but they represent strong avenues for accelerating adoption of our PFAS treatment solution.

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.

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 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.

Previous 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.

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. 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. Our business development efforts remain focused on strategic partnerships in the European market and on domestic industrial and pharmaceutical wastewater applications where micropollutants are a significant driver of surcharge fee.

Previous wording

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. Preliminary internal testing has confirmed many of the technology's exceptional performance claims that make it an attractive battery technology for long duration energy storage, 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. These recent tests also helped verify 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. Once prototype batteries are built and tested, and assuming such tests show the batteries have the characteristics we expect would differentiate it from other battery technologies, we will complete the design on a larger sized battery cell that would then be incorporated into battery packs and battery sizes meant for industrial facilities. Once designed, our engineers will work to develop manufacturing processes that would allow scale production to ensure costs of goods in line with market demand and conditions. We are working to obtain technology validation from an independent organization that we believe will serve as a key milestone to the more rapid advancement of our commercial efforts.

Current wording

BETI operates out of a pilot-scale battery production facility in our Oak Ridge Tennessee engineering headquarters, and is currently manufacturing and testing prototype battery cells. A third party has confirmed many of the technology's exceptional performance claims that we believe will make it an attractive battery technology for long duration energy storage and other industrial uses such as artificial intelligence data centers, electric vehicle charging stations, and renewal energy, including the stability of the chemistry of the battery cell and the reliability of the component construction as a sealed, non-venting cell design with no self-discharging, and the battery's ability to quickly charge and discharge at a high voltage. It has also been proven that the battery can withstand catastrophic physical insults without causing fire or explosion, one of the 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.

Previous wording

We are exploring multiple opportunities to commercialize our proprietary liquid sodium 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.

Current wording

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.

Previous wording

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 on the table if needed.

Current wording

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.

Previous wording

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 is working closely with a medical device and cosmetics manufacturer founded over 50 years ago, Keystone Industries, to manufacture its products at scale. Keystone has invested over $3 million in equipment and infrastructure in its manufacturing facilities. Clyra has invested over $2 million in molds, equipment and resources to support scale manufacturing. Clyra has recently formalized relationships with multiple wholesale distributors and sales agents, and has the infrastructure in place to support their efforts to sell Clyra’s products to the medical industry. Clyra’s management team includes Chief Medical Officer Dr. Steven J. Kavros, a twenty-year veteran of the Mayo Clinic in roles such as Director at the Rochester Mayo Clinic’s Gonda Vascular Wound Healing Center, Nick Valeriani, who enjoyed a 34-year career with Johnson and Johnson where he held numerous leadership positions in engineering, manufacturing, sales and marketing, and Linda Park of Edwards Lifesciences, where she serves as Corporate Secretary, Senior Vice President and Associate General Counsel, and as a board member of the Edwards Lifesciences Foundation.

Current wording

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 is working closely with a medical device and cosmetics manufacturer founded over 50 years ago, Keystone Industries, to ready at-scale manufacturing. Keystone has invested over $3 million in equipment and infrastructure in its manufacturing facilities. Clyra has invested over $2 million in molds, equipment and resources to support scale manufacturing. Clyra has recently formalized relationships with multiple wholesale distributors and sales agents, and has the infrastructure in place to support their efforts to sell Clyra’s products to the medical industry. Clyra’s management team includes Chief Medical Officer Dr. Steven J. Kavros, a twenty-year veteran of the Mayo Clinic in roles such as Director at the Rochester Mayo Clinic’s Gonda Vascular Wound Healing Center, Nick Valeriani, who enjoyed a 34-year career with Johnson and Johnson where he held numerous leadership positions in engineering, manufacturing, sales and marketing, and Linda Park of Edwards Lifesciences, where she serves as Corporate Secretary, Senior Vice President and Associate General Counsel, and as a board member of the Edwards Lifesciences Foundation.

Previous 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.

Current wording

Our revenues decreased 75% and 49% in the three and nine months ended September 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” (see discussion of related litigation in Part I, Item 2, above). During the three and nine months ended September 30, 2025, revenues from sales to Pooph comprised 35% and 64% of our consolidated revenue; compared to the three and nine months ended September 30, 2024, it comprised 74% and 76% of our consolidated revenue. Our financial statements separate revenue based on products and services. Revenues from the sale of products for the three and nine months ended September 30, 2025, decreased 80% and 58% over the same periods in 2024. Revenues from services for the three and nine months ended September 30, 2025, decreased 21% and 116% over the same periods in 2024.

Previous 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.

Current wording

ONM Environmental’s revenues decreased 80% and 55% (to $776,000 and $5,583,000) in the three and nine months ended September 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. 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 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.

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 nine months ended September 30, 2025, were 54% and 51% a decrease of 1% and 3%, 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 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.

Current wording

ONM Environmental’s selling, general and administrative expenses ("SG&A") increased 8%during the three and nine months ended September 30, 2025, as compared with the same periods in 2024. The increase is due to increases in salaries, professional fees and insurance expense.

Previous 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.

Current wording

ONM Environmental generated operating loss of $3,807,000 and $2,026,000 in the three and nine months ended September 30, 2025, compared to operating income of $1,382,000 and $4,668,000 for the three and nine months ended September 30, 2024. The operating loss is primarily due to the decrease in sales volume of Pooph branded products, which has declined in the 2025 periods, the credit loss expense for uncollectible account receivables totaling $603,000, and the note receivable credit loss expense totaling $3,283,000.

Previous 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.

Current wording

Excluding intersegment revenue, our engineering segment's revenues decreased 34% (to $327,000) in the three months ended September 30, 2025, as compared with the same period in 2024, and decreased 7% (to 1,565,000) in the nine months ended September 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 (and related deferred revenue recognition) related to its product sales and its fixed fee contracts at U.S. Air Force bases.

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 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.

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 nine months ended September 30, 2025, intersegment revenue for BLEST totaled $123,000 and $515,000, and for the three and nine months ended September 30, 2024, intersegment revenue for BLEST totaled $326,000. and $754,000. The decrease in intersegment revenue is due to a reduced level of liquidity to allocate to the development of the BioLargo technology.

Previous 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.

Current wording

BLEST’s cost of revenues includes employee labor, subcontracted costs and material costs. In the three and nine months ended September 30, 2025, costs were 95% and 66% of revenues, versus 100% and 74% 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 $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.

Current wording

BLEST’s SG&A expenses were $198,000 and $752,000 in the three and nine months ended September 30, 2025, compared to $218,000 and $659,000 in the three and nine months ended September 30, 2024. The increase in the nine-month period is due to the hiring of additional employees in 2025.

Previous 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.

Current wording

BLEST generated an operating loss of $403,000 and $763,000 in the three and nine months ended September 30, 2025, compared to an operating loss of $375,000 and $1,067,000 in the three and nine months ended September 30, 2024. 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. 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 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.

Current wording

Clyra Medical has not yet begun commercial sales of its products and thus did not generate revenues in the three and nine months ended September 30, 2025 or 2024. In the three and nine months ended September 30, 2025, it incurred total costs and expenses of $1,483,000 and $4,063,000, which included $231,000 and $795,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $857,000 and $2,019,000, which included $291,000 and $512,000 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. Although Clyra Medical is working to generate revenue through product sales to multiple distributors, management is not yet in a position to disclose when first sales will commence.

Previous 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.

Current wording

BioLargo Energy Technologies, Inc. (BETI) is developing our Cellinity battery, and has not generated generate revenue. For the three and nine months ended September 30, 2025, it incurred total costs and expenses of $128,000 and $346,000, which included $47,000 and $161,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $194,000, and $575,000, which included $133,000 and $346,000 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 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.

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 nine months ended September 30, 2025, it incurred $83,000 and $208,000 of total expenses. In the same periods in 2024, it incurred $59,000 and $174,000 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 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):

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 nine months ended September 30, 2025 consolidated SG&A increased 48% and 24% (to $3,088,000 and $8,339,000). The largest components of our SG&A expenses included (in thousands):

Previous 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.

Current wording

In the three and nine months ended September 30, 2025, our non-cash expenses from the issuance of stock and stock options totaled $844,000 and $1,951,000 compared to $337,000 and $1,629,000 for the three and nine months ended September 30, 2024. Our non-cash expenses are related to stock option issuances for previously issued stock options that expired during the three and nine months ended September 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 nine months ended September 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. Investor relation expense decreased due to fewer trade show and investor events.

Previous 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.

Current wording

In the three and nine months ended September 30, 2025, we spent $615,000 and $1,934,000 in the research and development of our technologies and products. This was a decrease of 11% and 8% as compared to the three and nine months ended September 30, 2024. The decrease is primarily due to the timing of project work and available working capital.

Previous 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.

Current wording

Our interest expense for the three and nine months ended September 30, 2025, was $144,000 and $352,000 compared to interest income of $(13,000) and interest expense totaling $34,000 in the three and nine months ended September 30, 2024. The increase of interest expense is related to the increase of Clyra Medical debt obligations.

Previous 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.

Current wording

For the nine months ended September 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 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.

Current wording

Net loss for the three and nine months ended September 30, 2025, was $7,244,000 and $11,047,000 a loss of $ (0.02) and $ (0.03) per share, compared to a net loss for the three and nine months ended September 30, 2024, of $1,060,000 and $2,615,000 a loss of $ (0.002) and $ (0.005) per share. Our net loss for the three and nine months ended September 30, 2025, increased because of the decrease in ONM Environmental revenue and the $3,849,000 credit loss expense associated with a note receivable (see also discussion of recent litigation in Part I, Item 2 above).

Previous 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.

Current wording

For the nine months ended September 30, 2025, we generated revenues of $7,148,000, had a net loss of $11,047,000, of which $3,849,000 was a credit loss expense resulting from a customer's contractual defaults and which is the subject of litigation (see "Credit Loss Expense, Pooph Litigation", above), used $6,707,000 net cash in operating activities, and received $7,269,000 net cash from financing activities. As of September 30, 2025, we had current assets of $5,775,000, including $4,546,000 cash and cash equivalents. As of September 30, 2025, we had current liabilities of $3,451,000, and working capital of $2,324,000. 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 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.