BIOLARGO, INC.

Note6. Warrants

We have certain warrants outstanding to purchase our common stock, at various prices, for thenine months ended* September 30, 2025* and2024 is as follows:

Warrants issued in Unit Offerings

We didnot issue any warrants in conjunction with unit offerings in thenine months ended* September 30, 2025*.

There wereno warrants issued during thethree months ended* September 30, 2024.During thethree* months ended* June 30, 2024,we issuedsix-month stock purchase warrants to purchase an aggregate 454,547 shares of our common stock at $0.33 per share, andfive-year stock purchase warrants to purchase an aggregate 454,547 shares of our common stock at $0.33 per share, in conjunction with the sale of stock to investors in our Unit Offerings (see Note3*). The relative fair value of the warrant component of the units sold to investors totaled $93,000. During thethree months ended* March 31, 2024,we issuedsix-month stock purchase warrants to purchase an aggregate 1,394,737 shares of our common stock at $0.23 per share, andfive-year stock purchase warrants to purchase an aggregate 1,394,737 shares of our common stock at $0.29 per share, in conjunction with the sale of stock to investors in our Unit Offerings (see Note3*). In addition to warrants issued to investors, we issued five-year stock purchase warrants to purchase an aggregate 428,948 shares of our common stock at $0.19 per share as commissions. The relative fair value of the warrant component of the units sold to investors totaled $201,000. The Black-Scholes model was used to calculate relative fair value, further discounted by the beneficial conversion feature and the value of the common stock component.

During thenine months ended* September 30, 2024,*investors exercised warrants to purchase 3,278,337 shares of our common stock, and we received $756,000 in proceeds.

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Warrant Fair Value

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

The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on historical volatility of our common stock. The expected life in years is based on the contract term of the warrant.

Note7. Accounts Payable and Accrued Expenses

As of* September 30, 2025*, accounts payable and accrued expenses included the following (in thousands):

As of* December 31, 2024*, accounts payable and accrued expenses included the following (in thousands):

See Note8, “Accounts Payable and Accrued Expenses”, for the accounts payable and accrued expenses of Clyra Medical.

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Note8. Noncontrolling Interest–** Clyra Medical**

As discussed in Note2 above, we consolidate the operations of our partially owned subsidiary Clyra Medical.

Debt Obligations of Clyra Medical

Secured Promissory Notes

During thenine months ended* September 30, 2025*, Clyra issued secured promissory notes in the aggregate amount of $436,000, the funds of which were used to purchase equipment for at-scale manufacture of its products. The notes bear interest at the rate of 15% per annum, mature on* December 31, 2026*, require interest-only payments until maturity, and* maybe pre-paid at any time. Each investor received a warrant to purchase the number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $6.00 per share, expiring December 31, 2029.Warrant to purchase 72,667 shares of Clyra common stock were issued. The fair value of the warrants totaled $99,000 and is recorded as a debt discount, which is amortized as interest expense over the term of the secured promissory note. As of September 30, 2025* and* December 31, 2024*, the balance outstanding totaled $1,300,000 and $864,000.

Convertible Promissory Notes

During thenine months ended* September 30, 2025*, Clyra issued convertible promissory notes in the aggregate amount of $250,000. The notes bear interest at the rate of 10% per annum, maturetwo years after the issuance date, require interest-only payments until maturity, and* maybe pre-paid at any time. Each investor received a warrant to purchase the number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $7.50 per share, expiring August 1, 2027.Warrants to purchase 41,667 shares of Clyra common stock were issued. The fair value of these warrants issued totaled $52,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the convertible promissory note. As of September 30, 2025* the balance outstanding totaled $250,000.

Guaranteed Note Offering

During thenine months ended* September 30, 2025*, Clyra issued the convertible promissory notes in the aggregate amount of $575,000. The notes bear interest at the rate of 15% per annum, matures* July 15, 2027,and is guaranteed by the Company’s largest stockholder, BioLargo Inc. The notes maybe converted at $6.00 per share by the holder at any time, and by Clyra upon the occurrence of certain events which have been satisfied as of May 15, 2025.Each investor received a warrant to purchase an aggregate of number of Clyra common shares equal to the face amount of the note divided by six, at an exercise price of $6.50 per share, expiring July 15, 2028.Warrants to purchase 88,462 shares of Clyra common stock were issued. The fair value of these warrants issued totaled $80,000 and is recorded as a debt discount and will be amortized to interest expense over the term of the guaranteed note offering. As of September 30, 2025* the balance outstanding totals $575,000.

The Black-Scholes model is used to calculate the initial fair value of the warrants issued as part of the Clyra Medical debt obligations, we used a stock price on the date of grant of $6.00 per share, volatility ranging between 35 -43%. Because Clyra is a private company withno secondary market for its common stock, the resulting fair value was discounted by 30%.

Line of Credit

On* June 30, 2020,Clyra Medical entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC ("Vernal") committed to provide a $1,000,000 inventory line of credit. Since inception, Clyra Medical received $260,000 in draws and made repayments totaling $126,000. The interest rate on this line of credit is 15%. On December 13, 2022,Clyra and Vernal amended the Revolving Line of Credit Agreement extending the maturity date of the line of credit to September 30, 2024,and modifying the payment terms such that amounts of principal due in each month are capped at a maximum of 15% of the principal amount then due under the note. The maturity date hasnot* been further extended, and Clyra continues to provide monthly reporting and make interest payments to Vernal as required. As of* September 30, 2025* and* December 31, 2024* the balance outstanding on this line of credit totaled $134,000.

Equity Transactions

As of* September 30, 2025*, Clyra had 11,268,795 shares issued and outstanding, of which 746,418 and 330,000 were Series A and Series B Preferred shares, respectively. As of* December 31, 2024*, Clyra had 10,544,527 shares issued and outstanding, of which 746,418 were Series A Preferred shares. As of* September 30, 2025*, and* December 31, 2024*, of the outstanding amount, BioLargo owned 5,305,156, common shares and 165,765 Series A Preferred shares.

BioLargo Conversion of Intercompany Balances

In* June**2024,* BioLargo converted $741,000 owed to it by Clyra into 148,156 shares of Clyra common stock.

Sales of Series B Preferred Stock

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

Sales of Common Stock

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

During thenine months ended* September 30, 2024,Clyra sold 297,397 shares of its common stock, and issued warrants to purchase 146,083 shares of its common stock at $7.50 per share, expiring February 28, 2027,*from five accredited investors. In exchange, it received $1,290,000 in gross proceeds.

Common Stock issued for services

During thenine months ended* September 30, 2025*, Clyra issued 31,391 shares of its common stock to vendors for services performed in lieu of cash totaling $60,000 and issued a warrant to purchase 7,849 shares of its common stock at $6.00 per share, expiring 5 years from the grant date. The relative fair value of these warrants totaled $6,000.

During thenine months ended* September 30, 2024,*Clyra issued 11,331 shares of its common stock to vendors for services performed in lieu of cash totaling $29,000.

Warrant issued for accounts payable

During thenine months ended* September 30, 2025*, Clyra issued a warrant to purchase 13,847 shares of common stock to a vendor in exchange for services. The warrant has an exercise price is $7.50, expires three years from the date of grant, and the fair value totaled $8,000.

Warrant Holder Unit Offering

During thenine months ended* September 30, 2025*, Clyra allowed existing warrant holders to purchase up totwo times the number of warrants they held at their current exercise price and receive, in addition to the shares exercised, an additional warrant equal the number of shares purchased with an exercise price is $7.50 per share to expire* June 30, 2028.Clyra received $1,894,000 in gross and net proceeds, and issued warrants to purchase 336,916 shares of its common stock from26* accredited investors. The relative fair value of these warrants totaled $212,000.

Sales of Series A Preferred Stock

In an offering that closed in* October 2023,Clyra sold 746,618 shares of its Series A Preferred Stock, and in exchange received $1,800,000 in gross and net proceeds. Purchasers of the Series A Preferred Stock also received a 3-year warrant to purchase the same number of additional shares of common stock for $3.72 per share. The fair value of the warrants issued totaled $524,000. Shares of Series A Preferred Stock earn a dividend of 15% each year, compounding annually; the company is underno* obligation to pay such dividends in cash, and such dividends automatically convert to common stock upon conversion of the Series A Preferred Stock to common stock. Each share of Series A Preferred stock can be converted by the holder at any time forone share of common stock and automatically convert upon the completion of a public offering of shares in which at least $5,000,000 of gross proceeds is received by the company. Accrued dividends* maybe converted to common stock at a conversion rate of $3.10 per share. As of September 30, 2025* and* December 31, 2024*, the Preferred Series A accrued and unpaid dividend totaled $849,000 and $590,000, respectively. Each investor also entered into an agreement with BioLargo whereby the investor* mayexchange some or all of its Series A Preferred stock, plus accrued dividends, into shares of BioLargo common stock, at a price equal to a20%* discount of the volume weighted average price over the30 prior trading days. Elections* maybe made during the period beginning January 1, 2025,and ending on June 30, 2026.As of September 30, 2025,*no investors have elected to convert.

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Clyra Stock Options

Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis. The fair value of the options issued totaled $164,000 in thenine months ended* September 30, 2025*, and $131,000 in thenine months ended* September 30, 2024*. The Black-Scholes model is used to calculate the initial fair value, during thenine months ended* September 30, 2025and2024*, we used a stock price on the date of grant of $4.50 per share. Because Clyra is a private company withno secondary market for its common stock, the resulting fair value was discounted by 30%.

As of* September 30, 2025*, there remains $508,000 of stock option expense to be expensed over the nextone year.

Clyra Warrants

Accounts Payable and Accrued Expenses

At* September 30, 2025*, and* December 31, 2024*, Clyra had the following accounts payable and accrued expenses (in thousands):

Sale and leaseback of equipment

On* December 4, 2024,Clyra entered into an agreement whereby it sold and leased back certain equipment to be used in the manufacturing of its wound irrigation solution. Clyra received $350,000 cash and a secured promissory note in the principal amount of $82,000 which bears interest at 15%, requires interest be paid monthly, and the principal balance due on December 4, 2028.*The obligations of the Note are secured by the equipment pursuant to a security agreement. At the end of the lease term, Clyra has the option to purchase the equipment for $82,000. Concurrently, Clyra leased the equipment for a 49-month term. The remaining lease payments total $486,000.

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Note9. BioLargo Engineering, Science and Technologies, LLC

In* September 2017,we commenced a full-service environmental engineering firm and formed a Tennessee entity named BioLargo Engineering, Science & Technologies, LLC (“BLEST”). In conjunction with the start of this subsidiary, we entered into an office lease in the Knoxville, Tennessee area, and entered into employment agreements withsix* scientists and engineers. BLEST was capitalized withtwo classes of membership units: Class A,100% owned by BioLargo, and Class B, held by management of BLEST, and which initially hadno “profit interest,” as that term is defined in Tennessee law. Class B members were also granted options to purchase up to an aggregate 1,750,000 shares of BioLargo common stock. The profit interest and option shares are subject to afive-year vesting schedule tied to the performance of the subsidiary. As of* September 30, 2025* and* December 31, 2024,*Class B members have earned 26% profit interest.

Note10. BioLargo Energy Technologies, Inc.

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

During thethree months ended* September 30, 2025,BETI sold 27,017 shares of its common stock at $3.70 per share to on accredited investor and received $100,000 in gross and net proceeds. During thethree* months ended* March 31, 2024,BETI sold 20,000 shares of its common stock at $2.50 per share toone* accredited investor and received $50,000 in gross and net proceeds. The investors entered into an agreement with BioLargo whereby the investor* mayexchange some or all of its shares of BETI common stock into shares of BioLargo common stock, at a price equal to a 20% discount of the volume weighted average price over the20* trading days prior to the election to exchange. Elections must be made prior to* December 31, 2025.*

During thethree months ended* September 30, 2025,*an investor elected to exchange 25,000 shares of BETI common stock into 153,261 shares of BioLargo common stock. In exchange for the issuance of the shares of BioLargo common stock, BioLargo received and now holds the 25,000 exchanged shares of BETI common stock.

As of* September 30, 2025*, BETI had 9,514,027 issued and outstanding shares, of which BioLargo holds 9,095,000 (96%).

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Note11. Business Segment Information

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

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

The segment information for thethree andnine months ended* September 30, 2025*, and2024, is as follows (in thousands):

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Note12. Leases

Office Leases

We have long-term operating leases for office, industrial and laboratory space in Westminster, California, Oak Ridge, Tennessee, and Alberta, Canada. Payments made under operating leases are charged to the condensed consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the operating lease agreement. Short-term leases less thanone-year arenot included in our analysis. For thethree andnine months ended* September 30, 2025*, rental expense totaled $72,000 and $264,000; and for thethree andnine months ended* September 30, 2024*, rental expense totaled $92,000 and $268,000 The lease of our Westminster facility expires* August**2027.* In* August* 2025, Clyra Medical entered into a 5-year office lease. The 5-year lease added $184,000 to our right of use and lease liability and on our* September 30, 2025,condensed consolidated balance sheets. The lease of our Canadian facility is less thanone* year.None of our leases have additional terms related to the payments or mechanics of the lease. The leases have no additional payment terms such as common area maintenance payments, tax sharing payments or other allocable expenses. Likewise, the leases donot contain other terms and conditions of use, such as variable lease payments, residual value guaranties or other restrictive financial terms. Since there isno explicit interest rate in our leases, management used its incremental borrowing rate, which is estimated to be 18% to determine lease liability. As of* September 30, 2025*, the weighted average remaining lease term for our operating leases wassix years and the total remaining operating lease payments is $1,788,000.

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

Note13. Subsequent Events

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

Stock Issuances

Subsequent to* September 30, 2025,we have sold 2,309,974 shares of our common stock to Lincoln Park (see Note3*), and received $358,000 in gross and net proceeds.

Clyra Medical Financing Activities

Subsequent to* September 30, 2025,Clyra Medical issued 23,077 shares of its common stock, and warrants to purchase 11,538 shares of its common stock, and in exchange, received a $150,000 investment fromone* accredited investor.

Legal Proceedings

On* November 11, 2025,BioLargo Inc. and ONM Environmental Inc. filed a lawsuit against Pooph Inc. (and related party Ikigai Marketing Works LLC) in the United States District Court, Central District of California, case number8:25*-cv-02516, alleging patent infringement (35 U.S.C.271), false advertising (15 U.S.C.1125), and state law claims including breach of contract, false promise, unfair and fraudulent business practices, and constructive fraud. In the suit, we seek (i) an order that the defendants have infringed on our patents, an injunction enjoining defendants from further infringing on our patents, and accounting for defendants' gains and profits; (ii) an order that defendants have violated Section43(a) of the Lanham Act, an injunction preventing defendants from using product reviews based on our proprietary technology with their newly formulated products, and an accounting and damages for these violations; (iii) compensatory damages for unpaid royalties of$1,667,292; (iv) compensatory damages for unpaid product purchased from ONM Environmental of $2,154,110, (v) compensatory damages in an amount according to proof for false promises and unfair and frau dulent business practices; (vi) treble and/or exemplary damages; and (vii) costs and attorneys fees. Also on* November 11, 2025,Pooph Inc. served ONM Environmental with a lawsuit venued in the Orange County, California Superior Court filed September 11, 2025,case number30*-2025-01511009, alleging ONM Environmental breached the terms of, and the implied covenant of good faith and fair dealing of, the Preferred Master Manufacturing Agreement, seeking damages in an amount to be determined, as well as unjust enrichment, interest, and attorneys fees and costs, arising out of the manufacture and sale of the Pooph-branded products, including the Litterizer cat-litter additive, and ONM Environmental's refusal to fill purchase orders while Pooph Inc. was in breach of contract for failure to pay past due monies. ONM Environmental disputes the allegations and intends to vigorously defend the lawsuit. While the outcomes of the lawsuits are uncertain, management believes that the resolutions of these proceedings willnot have a material adverse effect on the Company's financial position, results of operations, or cash flows. However, adverse outcomes could materially impact future financial results.

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