BIOLARGO, INC.

Note3.** Sale of Stock for Cash**

Lincoln Park Financing

On* December 13, 2022,we entered into a stock purchase agreement (the “Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of $10,000,000 of our common stock (subject to certain limitations) from time to time until February 1, 2026.The agreement allowed us, at our sole discretion, to direct Lincoln Park to purchase shares of our common stock, subject to limitations in both volume and dollar amount. The purchase price of the shares that maybe sold to Lincoln Park under the agreement is the lower of (i) the lowest sale price on the date of purchase, or (ii) the average of thethree* lowest closing prices in the prior12 business days. Concurrently with the Purchase Agreement we entered into a Registration Rights Agreement, pursuant to which we filed a registration statement on Form S-1 with the SEC on* December 23, 2022.This registration statement was declared effective on January 19, 2023.During the years ended December 31, 2025and2024*, we sold 11,745,123 and 766,175 shares of our common stock to Lincoln Park, and received $2,122,000 and $260,000, respectively, in gross proceeds. Our Consolidated Statements of Stockholder Equity includes a $250,000 offering cost due pursuant to the Purchase Agreement that as of* December 31, 2025,*was outstanding.

Unit Offerings

During the year ended* December 31, 2025*, we sold 1,131,579 shares of our common stock and received $215,000 and $155,000 in gross and net proceeds from accredited investors. During the year ended* December 31, 2024*, we sold 1,848,720 shares of our common stock and received $419,000 and $334,000 in gross and net proceeds from accredited investors. (See Note6, “Warrants Issued in Unit Offering”.)

Note4.**** Debt Obligations**

The following table summarizes our debt obligations outstanding as of* December 31, 2025and2024* (in thousands). The table doesnot include debt obligations of our partially owned subsidiary Clyra Medical (see Note10**, “Debt Obligations of Clyra Medical”).

F-13

For the years ended* December 31, 2025and2024**,* we recorded $540,000 and $71,000 of interest expense related to the coupon interest from our convertible notes and lines of credit, inclusive of Clyra Medical.

For the years ended* December 31, 2025and2024**,* we recorded $200,000 and $38,000 of interest income, inclusive of Clyra Medical.

Vehicle loan

On* February 7, 2023,we entered a loan agreement with Bank of America for the purchase of a commercial vehicle used in operations totaling $80,000, at 5.29% annual interest which matures March 7, 2029.The loan agreement requires monthly payments of $1,000. As of December 31, 2025and2024*, the balance of this loan totaled $42,000 and $54,000.

Term Loan

On* April 5, 2025,we entered a term loan agreement with American Express for working capital in the principal amount of $50,000, at 7.98% annual interest, which matures April 10, 2028,and requires monthly payments of $2,000. As of December 31, 2025and2024*, the balance of this loan totaled $39,000 and $0.

SBA Program Loans

On* February 7, 2022,we received notice that the SBA had forgiven $174,000 of the ONM Environmental $217,000 Paycheck Protection Program (PPP) loan. As of December 31, 2025and2024*, the outstanding balance on this loan totaled $43,000.

On* May 12, 2022,we received notice that the SBA had denied the forgiveness application of BLEST’s $97,000 PPP loan. We successfully appealed that decision and on June 28, 2024**,* we received notice that the SBA had forgiven the balance of the BLEST Paycheck Protection Program (PPP) loan.

In* July 2020,ONM Environmental received an Economic Injury Disaster Loan from the SBA in the amount of $150,000. The note has a 3.75% annual interest rate, requires monthly payments of $700, and matures July 2053.As of December 31, 2025and2024*, the balance of this loan totaled $141,000 and $144,000.

Note5.**** Share-Based Compensation**

Issuance of Common Stock in exchange for Services

During the years ended* December 31, 2025and2024*, we issued 2,807,771 and 1,107,594 shares, respectively, to officers, consultants, and otherthird parties as payment of amounts owed for services provided to our company, and recorded an aggregate $557,000 and $284,000, respectively, in selling general and administrative expense related to these issuances.

Payment of Officer Salaries

During the year ended* December 31, 2025*, certain of our officers agreed to convert an aggregate $237,000 of accrued and unpaid salary into 1,348,144 shares of our common stock. The unpaid salary is converted on the last day of each quarter as follows: on* December 31, 2025*, officers agreed to convert $134,000 of accrued and unpaid salary into 808,908 shares of our common stock at $0.18 per share; on* September 30, 2025,we issued 177,235 shares of our common at $0.17 per share in lieu of $30,000 of accrued and unpaid obligations totwo* officers. On* June 30, 2025,we issued 350,751 shares of our common at $0.21 per share in lieu of $70,000 of accrued and unpaid obligations totwo* officers. On* March 31, 2025,*we issued 11,250 shares of our common at $0.28 per share in lieu of $3,000 of accrued and unpaid obligations to an officer.

During the year ended* December 31, 2024,certain of our officers agreed to convert an aggregate $13,000 of accrued and unpaid salary into 57,666 shares of our common stock. The unpaid salary is converted on the last day of each quarter as follows: on December 31, 2024,an officer agreed to convert $4,000 of accrued and unpaid salary into 16,579 shares of our common stock at $0.19 per share; on September 30, 2024,an officer agreed to convert an aggregate $9,000 of accrued and unpaid salary into 41,087 shares of our common stock at $0.23 per share. There wereno shares of our common stock issued in exchange for unpaid salary during thethree* months ended* June 30, 2024,or March 31, 2024.*

Payment of Consultant and Vendor Fees

During the year ended* December 31, 2025*, we issued 1,459,627 shares of our common stock in lieu of $320,000 accrued and unpaid obligations to consultants and vendors. The unpaid obligations were converted on the last day of each quarter as follows: on* December 31, 2025*, we issued 539,236 shares of our common stock at $0.17 per share in lieu of $94,000 of accrued and unpaid obligations; on* September 30, 2025,we issued 147,059 shares of our common at $0.18 per share in lieu of $25,000 of accrued and unpaid obligations to consultants and vendors. On June 30, 2025,we issued 564,252 shares of our common at $0.25 per share in lieu of $143,000 of accrued and unpaid obligations to consultants and vendors. During thethree* months ended* March 31, 2025,*we issued 209,080 shares of our common at $0.27 per share in lieu of $58,000 of accrued and unpaid obligations to consultants and vendors.

During the year ended* December 31, 2024,we issued 1,049,928 shares of our common stock $271,000 accrued and unpaid obligations to consultants and vendors. The unpaid obligations were converted on the last day of each quarter as follows: on December 31, 2024,we issued 94,126 shares of our common stock at $0.19 per share in lieu of $18,000 of accrued and unpaid obligations; on September 30, 2024,we issued 219,816 shares of our common stock at $0.23 per share in lieu of $54,000 of accrued and unpaid obligations; on June 30, 2024,we issued 446,989 shares of our common stock at $0.26 per share in lieu of $116,000 of accrued and unpaid obligations; on March 31, 2024,*we issued 288,997 shares of our common stock at $0.35 per share in lieu of $83,000 of accrued and unpaid obligations.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder asnot involving a public offering of securities, or involved shares registered pursuant to our2024 Equity Plan.

F-14

Stock Option Expense

During the years ended* December 31, 2025and2024**,* we recorded an aggregate $2,965,000 and $2,063,000, respectively, in selling general and administrative expense related to the granting of stock options. We issued options through our2024 Equity Incentive Plan,2018 Equity Incentive Plan, and outside of these plans. Of the aggregate amount issued during the years ended* December 31, 2025and2024*, $1,203,000 and $528,000, respectively, were issued by our subsidiary Clyra Medical (see Note10).

2024 Equity Incentive Plan

On* June 13, 2024,our stockholders adopted the BioLargo2024* Equity Incentive Plan (“2024 Plan”) as a means of providing our directors, key employees, and consultants additional incentive to provide services. Both stock options and stock grants* maybe made under this plan for a period of 10 years. It is set to expire on its terms on June 13, 2034.Our Board of Director’s Compensation Committee administers this plan. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. The plan authorizes the following types of awards: (i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards. The number of shares available to be issued under the2024* Plan increases automatically on* January 1of each year by the lesser of (a)2 million shares, or (b) such number of shares determined by our Board. As of December 31, 2025*,42,000,000 shares are authorized under the plan, and 25,206,986 remain available for grant.

Activity for our stock options under the2024 Plan during the years ended* December 31, 2025and2024*, is as follows:

(1) – Aggregate intrinsic value based on closing common stock price of $0.18 at* December 31, 2025*.

The options granted to purchase 11,299,094 shares during the year ended* December 31, 2025* with an aggregate fair value of $1,925,000 were issued to board of directors, employees and consultants and the per share exercise price ranged between $0.17 and $0.28: (i) we issued options to purchase 1,750,369 shares of our common stock to members of our board of directors for services performed, in lieu of cash, and the fair value of these options totaled $311,000; (ii) we issued options to purchase 4,182,205 shares of our common stock to employees as part of employee retention plans, and the fair value of employee retention plan options totaled $730,000 and vest over time or based on performance metrics; (iii) we issued options to purchase 5,066,520 shares of our common stock to consultants in lieu of cash for expiring options and for services performed, and the fair value of these options totaled $817,000; and (iv) we issued options to purchase 300,000 shares of our common stock to our Chief Financial Officer with a fair value of $67,000 for extension of agreements. All stock option expense is recorded on our consolidated statements of operations as selling, general and administrative expense.

As of* December 31, 2025*, there remains $760,000 of stock option expense to be expensed over the next four years.

Extension of Agreement with Chief Financial Officer

On* January 31, 2025,the Engagement Agreement with our Chief Financial Officer Charles K. Dargan, II automatically extended for aone-year period to expire January 31, 2026 (the“2025*-26 Term”). As the sole compensation for the2025-26 Term, Mr. Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock. The Option vests over the period of the extended term in monthly installments of 25,000 shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.2536 per share, the closing price of BioLargo’s common stock on the last trading day of* January 2025,expiresten years from the grant date, and was issued pursuant to the Company’s2024* Equity Incentive Plan.

On* August 13, 2024,we and our Chief Financial Officer Charles K. Dargan, II agreed to extend the term of his engagement agreement dated February 1, 2008 (the “Engagement Agreement”, which had been previously extended multiple times), pursuant to which Mr. Dargan has been and continues to serve as our Chief Financial Officer. The Engagement Extension Agreement dated as August 13, 2024 (the “Engagement Extension Agreement”) expires January 31, 2025 (the “Extended Term”), at which time the agreement will automatically renew for subsequentone-year periods. As the sole compensation for the Extended Term, Mr. Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock (this issuance is included in the total identified in (iv) above). The Option vested over the period of the Extended Term in monthly installments of 25,000 shares, so long as the agreement was in full force and effect. The Option was exercisable at $0.24 per share, the closing price of BioLargo’s common stock on the August 13, 2024,grant date, expiresten years from the grant date, and was issued pursuant to the Company’s2024* Equity Incentive Plan. The Option was Mr. Dargan’s sole compensation for the Extended Term. As was the case in all prior terms of his engagement, there wasno cash component of his compensation for the Extended Term. Mr. Dargan is eligible to be reimbursed for business expenses he incurred in connection with the performance of his services as the Company’s Chief Financial Officer (although he has madeno such requests for reimbursement in the past). All other provisions of the Engagement Agreementnot expressly amended pursuant to the Engagement Extension Agreement remained the same, including provisions regarding indemnification and arbitration of disputes. Upon each renewal of the agreement, Mr. Dargan will be issued an option to purchase 300,000 shares, at an exercise price equal to the closing price of the Company’s common stock on the prior business day, vesting overone year.

2018 Equity Incentive Plan

On* June 22, 2018**,* the BioLargo2018 Equity Incentive Plan (“2018 Plan”) was adopted as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants could* be issued under this plan for a period of 10 years. It is set to expire on its terms on June*22,* 2028.* Our Board of Director’s Compensation Committee administers this plan. As plan administrator, the Compensation Committee had sole discretion to set the price of the options. The plan authorized the following types of awards: (i) incentive and non-qualified stock options, (ii) restricted stock awards, (iii) stock bonus awards, (iv) stock appreciation rights, (v) restricted stock units, and (vi) performance awards. The2018 Plan closed in* June 2024*with 9,343,614 shares unissued.

F-15

Activity for our stock options under the2018 Plan during the years ended* December 31, 2025and2024**,*is as follows:

During2025, an option holder elected to exercise 566,951 options using the cashless exercise option in exchange for 265,800 shares of our common stock.

As of* December 31, 2025*, there remains $334,000 of stock option expense to be expensed over the next three years.

The options granted to purchase 1,547,938 shares during the year ended* December 31, 2024*with an aggregate fair value of $418,000 were issued to board of directors, employees and consultants: (i) we issued options to purchase 267,746 shares of our common stock to members of our board of directors for services performed, in lieu of cash; the exercise price on the respective grant date was $0.35 per share and the fair value of these options totaled$85,000; (ii) we issued options to purchase 735,351 shares of our common stock to employees as part of employee retention plans or per an employment agreement; the exercise price on the respective grant date was between $0.17 and $0.35 per share and the fair value totaled $173,000 and vest over time or based on performance metrics; and (iii) we issued options to purchase 544,841 shares of our common stock to replace expiring options; the exercise price on the respective grant date was $0.35 per share and the fair value of these options totaled $160,000. All stock option expense is recorded on our consolidated statements of operations as selling, general and administrative expense.

2007 Equity Incentive Plan

On* September7,* 2007,* and as amended* April 29, 2011*,we adopted the2007* Equity Incentive Plan (“2007 Plan”) as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants could* be made under this plan for a period of 10 years, which expired on September 7, 2017**.The Board’s Compensation Committee administered this plan. As plan administrator, the Compensation Committee had sole discretion to set the price of the options. As of September 2017**,*the Plan was closed to further stock option grants.

Activity for our stock options under the2007 Plan for the years ended* December 31, 2025and2024* is as follows:

Non-Plan Options issued

Activity of our non-plan stock options issued for the years ended* December 31, 2025and2024* is as follows:

F-16

During the year ended* December 31, 2025**,*we issued options to purchase an aggregate 444,921 shares of our common stock at exercise prices ranging between $0.18 and $0.28 per share to vendors for fees for services. The fair value of the options issued totaled an aggregate $72,000 and is recorded in our selling, general and administrative expense.

As of* December 31, 2025*, there is a total of $39,000 unvested fair value that will expense in the nexttwo years.

During the year ended* December 31, 2024,*we issued options to purchase an aggregate 85,251 shares of our common stock at exercise prices ranging between $0.23 and $0.26 per share to vendors for fees for services. The fair value of the options issued totaled an aggregate $18,000 and is recorded in our selling, general and administrative expense.

Note6.**** Warrants**

We have certain warrants outstanding to purchase our common stock, at various prices, issued for the years ended* December 31, 2025and2024* is as follows:

There wereno warrants exercised during2025. During2024, investors exercised warrants to purchase 3,278,337 shares of our common stock, and we received $756,000 in proceeds.

Warrants issued in Unit Offerings

During the year ended* December 31, 2025**,pursuant to our Unit Offerings (see Note3*), we issuedsix-month stock purchase warrants to purchase an aggregate 1,131,580 shares of our common stock at $0.23 per share, andfive-year stock purchase warrants to purchase an aggregate 1,131,580 shares of our common stock at $0.29 per share. The relative fair value of the warrant component of the units sold to investors totaled $174,000. 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 the year ended* December 31, 2024,pursuant to our Unit Offerings (see Note3*), we issuedsix-month stock purchase warrants to purchase an aggregate 1,849,284 shares of our common stock at prices ranging between $0.23 and $0.40 per share, andfive-year stock purchase warrants to purchase an aggregate 2,278,232 shares of our common stock at prices ranging between $0.19 and $0.50 per share. The relative fair value of the warrant component of the units sold to investors totaled $230,000. 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.

Fair Value–*** Warrants***

To determine interest expense related to our outstanding warrants issued in conjunction with debt offerings, the fair value of each award grant is estimated on the date of grant using the Black-Scholes option pricing model and the relative fair values are amortized over the life of the warrant. For the determination of expense of warrants issued for services, extinguishment of debt and settlement management also uses the option-pricing model. The principal assumptions we used in applying this 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.

F-17

Note7.**** Accounts Payable and Accrued Expenses**

As of* December 31, 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 Note10**, “Accounts Payable and Accrued Expenses”, for the accounts payable and accrued expenses of Clyra Medical.

Note8.**** Provision for Income Taxes**

Given our historical losses from operations, income tax obligations have been limited to the minimum franchise tax assessed by the State of California. Since2016**, we havenot consolidated for tax purposes with our subsidiary Clyra Medical, as our ownership interest was less than80%**. Our subsidiary BLEST is a Tennessee limited liability company and as a pass-through entity doesnot pay federal taxes. However, the state of Tennessee charges franchise and excise taxes for limited liability companies, and thus BLEST will incur a nominal franchise tax and willnot pay an excise tax unless and until it is profitable.

Pretax loss from continuing operations is as follow (in thousands):

A reconciliation of income tax expense (benefit) computed at the statutory federal tax rates to income taxes as reflected in the financial statements is as follows (in thousands):

As of* December 31, 2025and2024*, management wasnot aware of any uncertain tax positions that could have a material adverse effect on the Company’s consolidated financial statements. There wereno cash paid for taxes in* December 31, 2025and2024*

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets and liabilities as of* December 31, 2025and2024* are comprised of the following (in thousands):

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily of net operating loss carryforwards. Management has considered the Company’s history of cumulative net losses in the United States, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely thannot that the Company willnot realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of* December 31, 2025and2024*, respectively. The Company reevaluates the positive and negative evidence at each reporting period.

F-18

At* December 31, 2025*, the Company had utilizable federal net operating loss carry forwards of approximately $95.2 million. The federal operating losses prior to2005 have expired. As of* December 31, 2025,the Company had federal net operating loss carryforwards of approximately $62.8 million that expire at various dates beginning in2026* until2037, as well as net operating loss carryforwards of approximately $32.4 million generated after2017 that donot expire but are subject to an annual utilization limitation of80% of taxable income. Utilization of the U.S. federal and state net operating loss* maybe subject to a substantial annual limitation under Section382* and Section383 of the Internal Revenue Code of1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes* maylimit the amount of net operating loss that can be utilized annually to offset future taxable income and tax liabilities, respectively. The Company hasnot* completed a study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since its formation. Any limitation* may*result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

The Company is subject to tax in the U.S. and files income tax returns in the U.S. Federal jurisdiction and several states and local jurisdictions where the Company has determined it has tax nexus. The Company is subject to U.S. Federal, state and local income tax examinations by tax authorities for periods after 2021. The Company currently isnot under examination by any tax authority.

Note9. Noncontrolling Interest–BioLargo Energy Technologies, Inc. (BETI)

BioLargo Energy Technologies, Inc. (“BETI”) was formed for the purpose of commercializing a liquid sodium battery technology. BioLargo purchased 9,000,000 shares of BETI common stock upon its formation and was initially its sole stockholder. During the year ended* December 31, 2025,and2024,* BETI sold 114,865 and 20,000 shares of its common stock and received $425,000 and $50,000, respectively. Each investor also 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.

As of* December 31, 2025*, BETI had 9,605,826 issued and outstanding shares, of which BioLargo holds 9,095,000.

Note10.**** Noncontrolling Interest**–** Clyra Medical**

As discussed in Note2 above, we consolidate the operations of our partially owned subsidiary Clyra Medical, of which we owned 48% of its outstanding shares as of* December 31, 2025*.

Debt Obligations of Clyra Medical

Secured Promissory Notes

During the year ended* December 31, 2024,Clyra issued promissory notes in the aggregate amount of $1,064,000, the funds of which were used to purchase and secured by equipment for at-scale production of its wound irrigation solution products. Of this total, $200,000 was issued to BioLargo and this eliminates during consolidation of intercompany transactions. The notes bear interest at the rate of 15% per annum, mature intwo* years, and require interest-only payments until maturity.

During2025, 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* October 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 October 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 December 31, 2025,and December 31, 2024,*the balance outstanding totaled $1,300,000 and $864,000.

Convertible Promissory Notes

During2025, Clyra issued convertible promissory notes in the aggregate amount of $250,000. The notes bear interest at the rate of 15% 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. During the year ending December 31, 2025,*these notes were converted into 41,667 shares of Clyra common stock.

Guaranteed Note Offering

During2025, Clyra issued guaranteed 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 promissory notes. As of December 31, 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 21 -43%. Because Clyra is a private company withno secondary market for its common stock, the resulting fair value was discounted by 30%.

F-19

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 indefinitely 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* December 31, 2025and2024*, the balance outstanding on this line of credit totaled $134,000.

Equity Transactions

As of* December 31, 2025**,Clyra had an aggregate 11,375,860 shares outstanding, of which 746,418 and 330,000 were Series A and Series B Preferred shares, respectively. As of December 31, 2024**,Clyra had an aggregate 10,544,527 shares outstanding, of which 746,418 were Series A Preferred shares. As of December 31, 2025and2024*, BioLargo owned 5,470,921 shares, of which 165,765 were Series A Preferred shares.

Sales of Series A Preferred Stock

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. 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.There wereno sales of Series A Preferred Stock during the years ended December 31, 2025and2024.*

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, expiring three years from the grant date. The fair value of the warrants issued totaled $94,000.

Sales of Common Stock

During the year ended* December 31, 2025**,Clyra sold 72,244 shares of its common stock, and issued 36,122 warrants to purchase shares of its common stock at $7.50 per share, expiring February 28, 2027,*fromsix accredited investors. In exchange, it received $445,000 in gross proceeds. The relative fair value of these warrants totaled $45,000.

During the year ended* December 31, 2024,*Clyra sold 373,875 shares of its common stock, from 29 accredited investors. In exchange, it received $2,005,000 in gross and net proceeds. The fair value of these warrants issued total $163,000 and is limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the Clyra stock.

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.

Common Stock issued for services

During2025, Clyra issued 37,582 shares of its common stock to vendors for services performed in lieu of cash totaling $100,000 and issued a warrant to purchase 5,707 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 $7,000.

During2024, 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

During2025, 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

During2025, 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 from 26 accredited investors. The relative fair value of these warrants totaled $212,000.

F-20

Stock Options

Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis. During the years ended* December 31, 2025and2024**,* Clyra issued options to purchase 1,036,829 and 497,942 shares of its common stock, respectively. Each option vests per the terms of the issuance and has an expiration date 10 years from the date of grant. Of the 1,036,829 options granted during the year ended* December 31, 2025*, the exercise price of 965,930 shares are*$4.50* per share, and 70,899 shares are exercisable at*$3.10* per share. The fair value of the options issued in the year ended* December 31, 2025and2024* totaled $1,760,000 and $528,000, respectively; we used the Black-Scholes model to calculate the initial fair value, assuming a stock price on date of grant of $4.50 and $3.10 per share, respectively. Because Clyra is a private company withno secondary market for its common stock, the resulting fair value was discounted by 30%. During the year ended* December 31, 2025*, we used a risk-free rate ranging between 3.48% -4.45% and volatility of 21 -49%, compared to the year-ended* December 31, 2024,we used a risk-free rate ranging between 3.95% -4.34%,* a volatility of 43% -49% and an expected life of 10 years.

As of* December 31, 2025*, there remains $1,490,000 of stock option expense to be expensed over the next three years.

During2024, Clyra issued warrants to purchase an aggregate 441,336 shares. Included as part of entering in to the Clyra promissory notes, Clyra issued warrants to purchase an aggregate 177,333 shares at $6.00 per share that expire 5 years from the issue date. The fair value of these warrants totaled $160,000 and is recorded as a discount which will be amortized to interest expense over the term of the note. As an incentive to enter into the leaseback, Clyra issued warrants for the purchase of 58,333 shares of Clyra common stock at $6.00 per share, expiring five years after grant date. The fair value of these warrants totaled $106,000, recorded as a financing fee in the consolidated statements of operations. Clyra sold stock for cash in a unit offering and as part of the unit offering issued warrants to purchase 205,670 shares of its common stock at $7.50 per share, expiring* February 28, 2027,or August 1, 2027.*

Because Clyra is a private company withno secondary market for its common stock, the resulting fair value was discounted by 30%. For the year-ended* December 31, 2025,we used a risk-free rate ranging between 3.48% -4.45%, compared to the year-ended December 31, 2024,we used a risk-free rate ranging between 3.95% -4.34%,* a volatility of 21% -49% and an expected lives of.5 -5 years.

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 $450,000.

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Accounts Payable and Accrued Expenses

At* December 31, 2025and2024**,* Clyra had the following accounts payable and accrued expenses (in thousands):

Note*11.*Noncontrolling Interest– **BioLargo Engineering, Science & 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 athree-year office lease in the Knoxville, Tennessee area, and entered into employment agreements withsix* scientists and engineers. (See Note12 “Business Segment Information”.) 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 haveno “profit interest,” as that term is defined in Tennessee law. However, over the succeeding five years, the Class B members can earn up to a 30% profit interest. They also have been granted options to purchase up to an aggregate 1,750,000 shares of BioLargo, Inc. common stock. The profit interest and option shares are subject to afive year vesting schedule tied to the performance of the subsidiary, including gross revenue targets that increase over time, obtaining positive cash flow by* March 31, 2018** (which wasnot* met), collecting 90% of its account receivables, obtaining a profit of 10% in itsfirst year (and increasing in subsequent years), making progress in the scale-up and commercialization of our AOS system, and using BioLargo research scientists (such as our Canadian team) for billable work on client projects. These criteria are to be evaluated annually by BLEST’s compensation committee (which includes BioLargo’s president, CFO, and BLEST’s president), beginning* September 2018**.*Given the significant performance criteria, the Class B units and the stock options will only be recognized in compensation expense if or when the criteria are satisfied.

The BLEST Compensation Committee has met regularly since the subsidiary commenced operations. In* December 2025**,* the committee determined that a portion of the performance metrics were met and issued additional profit interests would be vested (30% in the aggregate) and vested additional option interests (1,750,000 option shares in the aggregate). In* December 2024**,* the committee determined that a portion of the performance metrics were met and issued additional profit interests would be vested (26.25% in the aggregate) and vested additional option interests. The vesting of option shares during the years ended* December 31, 2025and2024* resulted in a fair value totaling $55,000 each year and is recorded on our consolidated statements of operations as selling, general and administrative expense*.*

Note12.**** Business Segment Information**

For the years ended* December 31, 2025and2024*, BioLargo hadsix operating business segments, plus its corporate entity which is responsible for general corporate operations, including administrative functions, finance, human resources, marketing, legal, etc. Thesix operational business segments are:

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

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The segment information for the years* December 31, 2025and2024**,* is as follows (in thousands):

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Note13.**** 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 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 the years ended* December 31, 2025and2024**,* rental expense was $404,000 and $365,000, respectively. 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 haveno 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* December 31, 2025**,*our weighted average remaining lease term isfive years, and the total remaining operating lease payments is $1,686,000. Payments over the remaining lease terms is as follows:

Note 14.** ** 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 fraudulent 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.

Note 15.** ** Related Party Transactions.**

Management performed an internal review and inspection and noted there areno material transactions with related parties as defined in ASC850, except those disclosed in Note5 Share-based compensation to officers.

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Note16.**** Subsequent Events.**

Management has evaluated subsequent events through the date of the filing of this Annual Report and management noted the following for disclosure.

CFO Extension

On January 31, 2026, the Engagement Agreement with our Chief Financial Officer Charles K. Dargan, II automatically extended for a one-year period to expire January 31, 2027 (the “2026-27 Term”). As the sole compensation for the 2026-27 Term, and in accordance with his contract, Mr. Dargan was issued an option (“Option”) to purchase 300,000 shares of the Company’s common stock. The Option vests over the period of the extended term in monthly installments of 25,000 shares, so long as the agreement is in full force and effect. The Option is exercisable at $0.179 per share, the closing price of BioLargo’s common stock on the last trading day of January 2026, expires ten years from the grant date, and was issued pursuant to the Company’s 2024 Equity Incentive Plan.

Clyra Medical

From January 1, 2026, through March 4, 2026,* *Clyra Medical received $1,705,000 and issued unsecured promissory notes in the aggregate principal amount of $1,705,000, bearing interest at the rate of 15% per annum, which mature February 28, 2029, and require interest-only payments until maturity (titled its 2026 Guaranteed Note). Clyra Medical also issued the investors warrants allowing for the purchase of an aggregate 133,282 shares of its common stock at $7.50 per share, expiring February 28, 2031. Payment of the promissory notes are guaranteed by BioLargo Inc.

BioLargo Energy Technologies, Inc. (“BETI”)

From January 1, 2026, through March 4, 2026,* *BETI sold 124,867 shares of its common stock and received $462,000 from seven investors. Each investor also entered into an agreement with BioLargo Inc. whereby the investor may exchange 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 the 20 trading days prior to the date of election.

Stock Issuances

From January 1, 2026, through March 4, 2026,* *we sold 984,188 shares of our common stock to Lincoln Park (see Note 3), and received $170,704 in gross and net proceeds.