BIOLARGO, INC.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and partially-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Foreign Currency

The Company has designated the functional currency of BioLargo Canada to be the Canadian dollar. Therefore, translation gains and losses resulting from differences in exchange rates are recorded in accumulated other comprehensive loss.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities ofthree months or less when acquired to be cash equivalents. Substantially all cash equivalents are held in short-term money market accounts atone of the largest financial institutions in the United States (“U.S.”). From time to time, our cash account balances are greater than the Federal Deposit Insurance Corporation insurance limit of*$250,000* per owner per bank, and during such times, we are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the financial institution. We donot anticipate non-performance by our financial institution.

Our cash balances were made up of the following (in thousands):

F-8

Accounts Receivable

Accounts receivable are customer obligations that are unconditional. Accounts receivable are presented net of an allowance for credit losses for expected credit losses, which represents an estimate of amounts that* may**not* be collectible. The Company performs ongoing credit evaluations of its customers and, if necessary, provides an allowance for expected credit losses. A credit loss expense for expected credit losses is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Company’s historical experience. The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible andno longer actively pursues collection of the receivable. The Company doesnot have any off-balance-sheet credit exposure related to customers. As of* December 31, 2025and2024*, the allowance for expected credit losses related to accounts receivable was $700,000 and $97,000, respectively.