BIOLARGO, INC.

Note1.** Business and Organization**

Description of Business*** ***

BioLargo, Inc. (“BioLargo”, or the “Company”) invents, develops, and commercializes innovative platform technologies to solve challenging environmental problems like PFAS contamination (per- and polyfluoroalkyl substances), advanced water and wastewater treatment, industrial odor control, air quality control, infection control, and myriad environmental remediation challenges. Our business strategy is straightforward: we invent or acquire technologies that we believe have the potential to be disruptive in large commercial markets; we develop and validate these technologies to advance and promote their commercial success as we leverage our considerable scientific, engineering, and entrepreneurial talent; we then monetize these technical assets through a variety of business structures that* may*include licensure, joint venture, sale, spin off, or by deploying direct to market strategies.

Liquidity / Going concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. During the year ended* December 31, 2025*, we generated revenues of $7,765,000, had a net loss of $15,189,000, and used $8,297,000 cash in operations. At* December 31, 2025*, we had working capital of $51,000, and current assets of $5,114,000. We donot believe gross profits in the year ending* December 31,2026 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. As of December 31, 2025*, our cash and cash equivalents totaled $3,883,000, and our total liabilities included $2,079,000 debt, of which $1,814,000 was owed by Clyra Medical and of that amount, $1,395,000 is due withinone year. Therefore, we intend to continue to raise investment capital through the sale of our securities and the securities of our subsidiaries. To meet our cash obligations during the year-ended* December 31, 2025*, we (i) sold $2,122,000 of our common stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”) (see Note3), (ii) sold $215,000 of our common stock and warrants to accredited investors (see Note3 and Note6), (iii) sold $2,339,000, of Clyra Medical common stock and sold $2,145,000 Clyra Medical Series B Preferred stock (see Note10), and (iv) sold $425,000 of BETI common stock (see Note9). To reduce our operational cash burdens, we regularly issue officers and vendors stock or options in lieu of cash and anticipate that we will continue to be able to do so in the future.

Since* January 1, 2026,through March 4, 2026 (see Note16,* Subsequent Events), Clyra Medical has received $1,705,000 and issued three-year promissory notes in that amount, BETI has sold $462,000 of its common stock, and BioLargo Inc. sold $170,704 of common stock to Lincoln Park (prior to the* February 1, 2026*expiration of our Purchase Agreement with Lincoln Park).

The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to continue to rely on an institutional equity line such as our arrangement with Lincoln Park or other private financings, and in the long term, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our technologies. The consolidated financial statements donot include any adjustments that might be necessary if we are unable to continue as a going concern.

Organization

We are a Delaware corporation formed in1991. We have five wholly-owned subsidiaries: BioLargo Life Technologies, Inc., organized under the laws of the State of California in2006; ONM Environmental, Inc., organized under the laws of the State of California in2009; BioLargo Equipment Solutions & Technologies, Inc., organized under the laws of the State of California in2022; BioLargo Canada, Inc., organized under the laws of Canada in2014; and BioLargo Development Corp., organized under the laws of the State of California in2016. Additionally, we own 95% (see Note9) of BioLargo Energy Technologies, Inc. ("BETI") organized under the laws of the State of California in2019, 48% (see Note10) of Clyra Medical Technologies, Inc. (“Clyra” or “Clyra Medical”), organized under the laws of the State of California in2012 and redomiciled to Delaware in2023, and 70% (see Note11) of BioLargo Engineering Science & Technologies, LLC (“BLEST”), organized under the laws of the State of Tennessee in2017. We consolidate the financial statements of our partially owned subsidiaries (see Note2, subheading “Principles of Consolidation”).

Note2.**** Summary of Significant Accounting Policies