10-Q

­­­UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012.

or

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to 

Commission File Number 000-19709

BIOLARGO, INC.

(Exact name of registrant as specified in its charter)

Delaware	65-0159115
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

16150 Heron Avenue

La Mirada, California 90638

(Address, including zip code, of principal executive offices)

(949) 643-9540

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x No      ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer     ¨	Accelerated filer ¨
Non-accelerated filer       ¨	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the Registrant’s Common Stock outstanding as of November 12, 2012 was 66,585,656 shares.

Table of Contents

BIOLARGO, INC.

FORM 10-Q

INDEX

PART I
Item 1	Financial Statements (unaudited)
Item 2	Management's Discussion and Analysis and Financial Condition and Results of Operations
Item 4	Controls and Procedures
PART II
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds
Item 6	Exhibits
	Signatures
Exhibit Index
4.1  Form of Warrant issued in Summer 2012 Offering
Exhibit 31.1
Exhibit 31.2
Exhibit 32
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

i

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BIOLARGO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2011 AND SEPTEMBER 30, 2012

	December 31, 2011				September 30, 2012 (unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	128,498			$	427,842
Accounts receivable, net of allowance			10,476				7,254
Inventory			61,865				52,331
Prepaid expenses			1,346				--
Total current assets			202,185				487,427
FIXED ASSETS
Equipment, net			2,700				741
OTHER ASSETS			41,502				54,647
TOTAL ASSETS		$	246,387			$	542,815
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	706,688			$	971,266
Convertible notes payable, current portion			670,410				413,775
Discount on convertible notes, current portion net ofamortization			(255,914	)			(13,465	)
Note payable			100,000				100,000
Deferred revenue			52,509				22,395
Customer deposit			100,000				100,000
Total Current Liabilities			1,373,693				1,593,971
LONG-TERM LIABILITIES
Convertible notes payable, net of current portion			438,775				--
Discount on convertible notes, net of current portion and amortization			(48,484	)			--
Total Long-term Liabilities			390,291				--
TOTAL LIABILITIES			1,763,984				1,593,971
COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS (Note 12)
STOCKHOLDERS’ EQUITY (DEFICIT)
Convertible Preferred Series A, $.00067 Par Value, 50,000,000 Shares Authorized, -0- Shares Issued and Outstanding, at December 31, 2011 and September 30, 2012.			—				—
Common Stock, $.00067 Par Value, 200,000,000 Shares Authorized, 59,242,220 and 66,310,618 Shares Issued, at December 31, 2011 and September 30, 2012.			39,737				44,495
Additional Paid-In Capital			65,907,960				69,982,637
Accumulated Deficit			(67,465,294	)			(71,078,288	)
Total Stockholders’ Deficit			(1,517,597	)			(1,051,156	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	246,387			$	542,815

See accompanying notes to unaudited condensed consolidated financial statements

1

BIOLARGO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2012

	For the three-month periods ended September 30,						For the nine-month periods ended September 30,
	2011			2012			2011			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue
Licensing Fees	$	109,720		$	--		$	115,500		$	--
Product Sales		10,805			10,490			26,759			55,145
Total Revenue		120,525			10,490			142,259			55,145
Cost of goods sold		12,683			6,857			36,270			32,706
Gross profit (loss)		107,842			3,633			105,989			22,439
Costs and expenses
Selling, general and administrative		580,507			828,354			2,453,038			3,064,792
Research and development		9,035			54,498			48,325			114,609
Amortization and depreciation		1,335			312			6,532			1,958
Total costs and expenses		590,877			883,164			2,507,895			3,181,359
Loss from operations		(483,035	)		(879,531	)		(2,401,906	)		(3,158,920	)
Interest expense, net		(228,639	)		(36,137	)		(642,088	)		(454,074	)
Net loss	$	(711,674	)	$	(915,668	)	$	(3,043,994	)	$	(3,612,994	)
Loss per common share – basic and diluted
Loss per share	$	(0.01	)	$	(0.01	)	$	(0.06	)	$	(0.06	)
Weighted average common share equivalents outstanding		56,340,625			65,289,303			54,826,213			62,674,578

See accompanying notes to unaudited condensed consolidated financial statements

2

BIOLARGO, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2012

(UNAUDITED)

	Common Stock
	Number of Shares		Par Value $.00067		Additional Paid-In Capital		Accumulated Deficit			Total
BALANCE DECEMBER 31, 2011		59,242,220	$	39,737	$	65,907,960	$	(67,465,294	)	$	(1,517,597	)
Conversion of a 2009 Spring Note and accrued interest obligations		1,340,820		898		736,553		—			737,451
Payment of accrued interest on Spring 2010 Notes		125,539		84		41,341		—			41,425
Conversion of a 2010 Spring Note and accrued interest obligations		47,017		32		27,002		—			27,034
Issuance of stock for cash received in Winter 2012 PPM		3,127,914		2,110		1,092,655		—			1,094,765
Issuance of stock for cash received in Summer 2012 PPM		1,925,214		1,295		768,791		—			770,086
Issuance of stock for cash received in Fall 2011 PPM		275,985		187		96,407		—			96,594
Issuance of stock for services to consultants and rent		225,908		152		88,346		—			88,498
Issuance of stock options to officer and Board of Directors		—		—		792,821		—			792,821
Issuance of stock options to consultants		—		—		334,876		—			334,876
Fair value of warrant extension		—		—		95,885		—			95,885
Net loss for the nine-month period ended September 30, 2012		—		—		—		(3,612,994	)		(3,612,994	)
BALANCE SEPTEMBER 30, 2012		66,310,618	$	44,495	$	69,982,637	$	(71,078,288	)	$	(1,051,156	)

See accompanying notes to unaudited condensed consolidated financial statements

3

BIOLARGO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2012

(unaudited)

	For the nine-month periods ended September 30,
	2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(3,043,994	)	$	(3,612,994	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash interest expense related to the amortization of the fair value of warrants issued in conjunction with our convertible notes		481,303			386,818
Non-cash expense related to options issued to officers and board of directors		135,905			779,821
Non-cash expense related to stock issued to our board of directors for settlement of obligations		163,998			—
Non-cash expense related to options issued to consultants		503,813			334,876
Non-cash expense related to stock issued to consultants		45,937			80,174
Amortization and depreciation expense		6,532			1,958
Increase (decrease) in cash from change in:
Accounts receivable		5,882			3,222
Inventory		(61,616	)		9,534
Prepaid expenses		2,469			1,346
Other assets		(26,345	)		(13,145	)
Accounts payable and accrued expenses		423,817			396,403
Deferred revenue		(54,652	)		(30,114	)
Customer deposits		82,500			—
Net Cash Used In Operating Activities		(1,334,451	)		(1,662,101	)
CASH FLOWS FROM INVESTING ACTIVITIES
Funds used to purchase equipment		(3,740	)		—
Net Cash Used In Investing Activities		(3,740	)		—
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of stock		1,122,770			1,961,445
Payment of note payable		(20,000	)		—
Net Cash Provided By Financing Activities		1,102,770			1,961,445
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(235,421	)		299,344
CASH AND CASH EQUIVALENTS — BEGINNING		425,069			128,498
CASH AND CASH EQUIVALENTS — ENDING	$	189,648		$	427,842
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash Paid During the Period for:
Interest	$	—		$	—
Taxes	$	4,868		$	4,347
SUPPLEMENTAL DISCLOSURES OF NON-CASH OPERATING ACTIVITIES:
Shares of the Company’s common stock issued for services:
Consultant obligations	$	—		$	88,498
Board of Directors and officer obligations	$	78,000			—
Option or warrant issued to purchase shares of the Company’s common stock:
Consultant obligations	$	192,834		$	334,876
Board of Directors and officer obligations	$	88,292		$	792,821
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Conversion of Noteholders to shares of the Company’s Common stock:
Convertible Notes and related accrued interest	$	989,676		$	695,410
Convertible Noteholders’ accrued and unpaid interest	$	191,402		$	110,500
Fair value of warrant extension	$	55,166		$	95,885
Fees paid related to our private securities offerings	$	--		$	90,071

See accompanying notes to unaudited condensed consolidated financial statements

4

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Business and Organization

Outlook

The accompanying condensed 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. As reflected in the accompanying financial statements, we had a net loss of $3,612,994 for the nine-month period ended September 30, 2012, and at September 30, 2012, we had negative working capital of $1,106,544, current assets of $487,427, and an accumulated stockholders’ deficit of $71,078,288. The foregoing factors raise substantial doubt about our ability to continue as a going concern. Ultimately, our ability to continue as a going concern is dependent upon our ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our BioLargo technology. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We have been, and anticipate that we will continue to be, limited in terms of our capital resources. Our total cash and cash equivalents were $427,842 at September 30, 2012. We generated revenues of $55,145 in the nine-month period ended September 30, 2012, which amount was not sufficient to fund our operations. We generally have not had enough cash or sources of capital to pay our accounts payable and expenses as they arise, and have relied on the issuance of stock options and common stock, as well as extended payment terms with our vendors, consultants and officers, to continue to operate. We will be required to raise substantial additional capital to expand our operations, including without limitation, hiring additional personnel, additional scientific and third-party testing, costs associated with obtaining regulatory approvals and filing additional patent applications to protect our intellectual property, and possible strategic acquisitions or alliances, as well as to meet our liabilities as they become due for the next 12 months.

As of September 30, 2012, we had $513,775 aggregate principal amount outstanding on various promissory notes. We may pay the principal and interest due on these notes in cash or in stock, at our option, at maturity. In addition, as of September 30, 2012, we had $971,266 of outstanding accounts payable and accrued expenses, of which $43,395 relates to interest due on outstanding promissory notes, and $927,871 relates to accrued and unpaid payables. (See Note 10.)

During the nine-month period ended September 30, 2012, we received gross proceeds of $1,961,445 pursuant to our private securities offerings. (See Note 5.)

In the opinion of management, the accompanying condensed consolidated balance sheets and related condensed consolidated statements of operations, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Estimates are used when accounting for stock-based transactions, account payables and accrued expenses and taxes, among others.

 The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to Rule 8-03 of Regulation S-X under the Securities Act of 1933, as amended. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We are still operating in the early stages of the sales and distribution process, and therefore our operating results for the nine-month period ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012, or for any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission (the “SEC”).

5

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 2. Summary of Significant Accounting Policies

Inventory

Inventories are stated at the lower of cost or net realizable value using the average cost method.  Inventories consisted of:

	December 31, 2011		September 30, 2012
Raw materials	$	27,556	$	37,069
Finished goods (see Note 4)		34,309		15,262
Total inventory	$	61,865	$	52,331

Equipment

Equipment is carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is three years. Equipment is stated on the balance sheet net of accumulated depreciation of $29,728 and $31,686 as of December 31, 2011 and September 30, 2012, respectively.

Other Assets

“Other Assets” consists of payments made to secure the patent rights to continue our efforts in commercializing the ISAN system.

We review long-lived assets using our best estimates based on reasonable assumptions and projections. An impairment loss to write such assets down to their estimated fair values is necessary if the carrying values of the assets exceed their related undiscounted expected future cash flows. We also determine impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.

Stock Options and Warrants Issued for Services

All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their fair values.

For stock issued to consultants and other non-employees for services, we record the expense based on the fair market value of the securities as of the date of the stock issuance. The issuance of stock warrants or options to non-employees are valued at the time of issuance utilizing the Black Scholes calculation and the amount is charged to expense.

Non-Cash Transactions

 We have established a policy relative to the methodology to determine the value assigned to each intangible we acquire, and/or services or products received for non-cash consideration of our common stock. The value is based on the market price of our common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received.

 The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results of our financial statements.

6

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Revenue Recognition

Revenues are recognized as risk and title to products transfers to the customer (which generally occurs at the time shipment is made), the sales price is fixed or determinable, and collectability is reasonably assured. We also may generate revenues from royalties and license fees from our intellectual property. Licensees typically pay a license fee in one or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property. License fees are recognized over the estimated period of future benefit to the average licensee.

Earnings (Loss) Per Share

We report basic and diluted earnings (loss) per share (“EPS”) for common and common share equivalents. Basic EPS is computed by dividing reported earnings by the weighted average shares outstanding. Diluted EPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock. For the nine-month periods ended September 30, 2011 and 2012, the denominator in the diluted EPS computation is the same as the denominator for basic EPS due to the anti-dilutive effect of the warrants and stock options on the Company’s net loss.

Recent Accounting

There was no recent accounting guidance issued where the adoption would have a material effect on our condensed consolidated financial statements.

Note 3.  Customer Deposit

On March 24, 2011, we entered into a contract in which Central Garden & Pet Company (“Central”) was granted the exclusive worldwide right and license to sell, market, offer for sale, distribute import, export, and otherwise exploit products that contain the BioLargo technologies in the “pet supplies industry” (which is defined in the agreement, and does not include products for equine or livestock). The agreement provided that we are the exclusive provider of the product containing the BioLargo technologies, other than in certain limited conditions. The rights granted to Central are exclusive so long as Central meets “minimum purchase requirements” of product from the Company, as set forth in the agreement.  The agreement terminates only upon uncured breach of material warranty or obligation.

Pursuant to the Central contract, we received a $100,000 deposit which will be credited against future orders. The Company has agreed to sell product to Central at a price equal to the manufacturing cost plus a “manufacturer’s margin”, in an amount to be agreed upon by the parties for each particular product. Central agreed to include a BioLargo trademark on the packaging of any products containing the BioLargo technologies.

Central shall have a right of first refusal to purchase Odor-No-More, Inc., or the Odor-No-More brand and/or intellectual property. The Company shall give notice of receipt of any offer to purchase, and Central may elect to match the terms of the offer. Central also has the right of first offer to acquire the right to commercialize new products based on BioLargo technologies in the “pet supplies industry”, following notice from the Company and a 90 day due diligence period. If Central declines to commercialize any such new product, the Company is free to commercialize such products under its own brand, but not under a third party’s brand.

The agreement also contains standard provisions typical of a license and supply agreement.

Through the date of the filing of this Quarterly Report, no product orders were received under the Central contract.

7

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4. Deferred Revenue

Horn Warehouse

Our distribution partner, Horn (formerly the E.T. Horn Company), warehouses our product and makes it available to us for later sales, and thus for revenue recognition purposes, certain sales to Horn are deferred until such time as the product is sold to retailers and/or end-users. As of September 30, 2012, a balance of $22,395 relating to the sale of Odor-No-More product to Horn remains as deferred revenue.

Sublicense to Isan USA

On March 29, 2010, we entered into a sublicense agreement (the “Isan USA Sublicense”) with Isan USA, Inc. (“Isan USA”) which grants Isan USA the exclusive rights to use, exploit, develop and commercialize the Isan System Technology in the United States, in particular fields of use.  Pursuant to the Isan USA Sublicense, Isan USA paid to BioLargo a $100,000 initial license fee plus additional payments of $23,000. Of the amounts received from Isan USA, $109,720 was considered deferred revenue as of June 30, 2011. Isan USA was unable to secure financing, and has ceased making the monthly payments required by the Isan USA Sublicense agreement. Given the failure of Isan USA to secure financing, on August 12, 2011 we and Isan USA mutually agreed to terminate the Isan USA Sublicense. The remaining Isan USA deferred revenue balance of $109,720 was recorded as revenue during the three-month period ended September 30, 2011.

Note 5. Private Securities Offerings

Summer 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.40 per share that commenced May 2012 (the “Summer 2012 Offering”), through September 30, 2012, we sold 1,925,214 shares of our common stock at $0.40 per share to seven accredited investors and received $770,086 gross, $744,515 net proceeds from the sales. Of these amounts, 1,147,500 shares were sold and $459,000 was received during the three-month period ended September 30, 2012. Each purchaser of stock in the Summer 2012 Offering will receive, for no additional consideration, a stock purchase warrant (the “Summer 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.55 per share until March 31, 2014. Subsequent to September 30, 2012, we amended the terms of this offering to lower the price per share and warrant exercise price (see Note 12 “Subsequent Events).

Winter 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced January 2012 and closed May 2012 (the “Winter 2012 Offering”), we sold 3,127,914 shares of our common stock at $0.35 per share to 30 accredited investors and received $1,094,765 gross; $1,030,265 net proceeds from the sales.

Each purchaser of stock in the Winter 2012 Offering received, for no additional consideration, a stock purchase warrant (the “Winter 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.50 per share until January 31, 2013. (See Note 7.)

Fall 2011 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced September 2011 (the “Fall 2011 Offering”), we received subscriptions of $467,317 from 16 accredited investors for the purchase of an aggregate 1,335,201 shares of our common stock at $0.35 per share. In the year ended December 31, 2011, we received $370,723 gross proceeds and issued 1,059,215 shares of our common stock. In January 2012 we received the remaining $96,594 from subscriptions committed prior to the termination of the offering and issued 275,986 shares of our common stock.

Each purchaser of stock in the Fall 2011 Offering received, for no additional consideration, a stock purchase warrant (the “Fall 2011 Warrant”) entitling the holder to purchase the same number of shares of common stock for $0.50 per share until December 31, 2012.  (See Note 7.)

8

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Winter 2011 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced January 2011 and terminated June 2011 (the “Winter 2011 Offering”) we sold 2,765,070 shares of our common stock at $0.35 per share and received $967,768 gross proceeds from the sales.

Spring 2010 Offering

Pursuant to a private offering that commenced January 2010 (the “Spring 2010 Offering”) and terminated July 2010, we sold $438,775 of our 10% convertible notes (the “Spring 2010 Notes”), which are due and payable on April 15, 2013, to 18 investors, the principal amount of which is convertible into an aggregate 763,235 shares of our common stock, at $0.575 per share. The Spring 2010 Notes can be converted voluntarily by the noteholder at any time prior to the maturity date. We can unilaterally convert the Spring 2010 Notes (i) on or after July 31, 2010, if we have received one or more written firm commitments, or have closed on one or more transactions, or a combination of the foregoing, of at least $3 million gross proceeds of equity or debt; or (ii) on the maturity date. Accordingly, the Spring 2010 Notes may be repaid in cash or may be converted, at our sole option, into shares of our common stock, on or before the April 15, 2013 maturity date.

Each purchaser of the Spring 2010 Notes received, for no additional consideration, two stock purchase warrants, each of which entitle the holder to purchase the number of shares of our common stock into which the holder’s Spring 2010 Note is initially convertible. The first warrant (the “Spring 2010 Eighteen Month Warrant”) was exercisable at a price of $0.75 per share and expired unexercised on July 15, 2011. The second warrant (the “Spring 2010 Thirty-Six Month Warrant”) is exercisable at a price of $1.00 per share and expires on January 15, 2013. (See Note 7.)

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

Note 6. Conversion of Notes

Spring 2010 Notes

On February 6, 2012, a holder of a convertible promissory note issued in our Spring 2010 Offering (see Note 5) elected to convert the principal balance of $25,000 and accrued unpaid interest of $2,034 into an aggregate 47,017 shares of our common stock, at a conversion price of $0.575.

Spring 2008 Notes

On March 31, 2011, per the terms of the Spring 2008 Notes, we elected to convert the remaining aggregate principal balance of $913,625 and $76,051 of accrued and unpaid interest into an aggregate 733,108 shares of our common stock at a conversion price of $1.35 per share.

Spring 2009 Notes

On their June 1, 2012 maturity date, we elected to convert the remaining aggregate principal balance of $670,410 and $67,041 of accrued and unpaid interest of our Spring 2009 Notes into an aggregate 1,340,820 shares of our common stock at a conversion price of $0.55 per share. As a result, the Spring 2009 Notes are fully paid.

On April 16, 2011, the holder of a note issued in our Spring 2009 Offering elected to convert the principal balance of $11,000, and accrued unpaid interest of $964, into an aggregate 21,754 shares of our common stock, at a conversion price of $0.55.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

9

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 7. Warrants

We have certain warrants outstanding to purchase our common stock, at various prices, as described in the following tables:

	Number of Shares			Price Range
Outstanding as of December 31, 2010		6,894,215		$	0.125	–	2.00
Issued		1,089,630		$	0.50	–	0.75
Exercised		—		$		—
Expired		(2,403,922	)	$	0.75	–	2.00
Outstanding as of September 30, 2011		7,156,377		$	0.125	–	2.00

	Number of Shares		Price Range
Outstanding as of December 31, 2011		7,280,683	$	0.125	–	1.00
Issued		8,158,449	$	0.40	–	1.00
Exercised		—	$		—
Expired		—	$		—
Outstanding as of September 30, 2012		15,439,132	$	0.125	–	1.00

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 calculated value is amortized over the life of the warrant. The determination of expense of warrants issued for services or settlement also uses the option-pricing model. The principal assumptions we used in applying this model were as follows:

	2011		2012
Risk free interest rate		1.87%		0.57	%
Expected volatility		558%		489	%
Expected dividend yield		N/A		N/A
Forfeiture rate		N/A		N/A
Expected life in years		3.00		5

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 presumed to be the mid-point between the vesting date and the end of the contractual term.

Warrants issued as part of our Convertible Notes

We recorded $481,303 and $386,818 of non-cash interest expense related to the amortization of the fair value of warrants issued in conjunction with our convertible notes for the nine-month periods ended September 30, 2011 and 2012, respectively. These expenses related to convertible notes issued in our Spring 2010 and Spring 2009 offerings. We have not issued convertible notes since that time.

10

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Warrant Extension

On June 1, 2012, the expiration date of the Spring 2009 Three-Year Warrant was extended nine months from June 1, 2012 to March 1, 2013.  The fair value of the extension was an aggregate $95,885 and was recorded as interest expense upon issuance.

Summer 2012 Warrants

Pursuant to the terms of our Summer 2012 Offering (see Note 5), from inception of May 2012 through September 30, 2012,  we issued warrants to purchase up to an aggregate 1,925,214 shares of our common stock to the investors in the Offering. These warrants are set to expire on March 31, 2014 and have an exercise price of $0.55 per share.

Winter 2012 Warrants

Pursuant to the terms of our Winter 2012 Offering (see Note 5), during the nine-month period ended September 30, 2012, we issued warrants to purchase up to an aggregate 3,127,914 shares of our common stock to the investors in the Offering. These warrants are set to expire on January 31, 2013 and have an exercise price of $0.50 per share. Subsequent to September 30, 2012, we lowered the exercise price of the warrants issued in this offering (see Note 12 “Subsequent Events).

Fall 2011 Warrants

Pursuant to the Fall 2011 Offering (see Note 5), we issued to the investors warrants to purchase an aggregate 1,335,201 shares of our common stock at $0.50 per share, which warrants are set to expire on December 31, 2012. Of that amount, in the year ended December 31, 2011, we issued warrants to purchase an aggregate 1,059,215 shares of our common stock, and in the nine-month period ended September 30, 2012, we issued warrants to purchase an aggregate 275,986 shares of our common stock.

Fall 2008 Warrants Extension

 Pursuant to the terms of the Fall 2008 Offering, we issued “three-year” warrants to purchase up to an aggregate 1,446,000 shares at an exercise price of $1.00 per share (initially issued at $2.00 per share). On September 28, 2011, we extended the expiration date of the Fall 2008 Three-year Warrant by one year from October 15, 2011 to October 15, 2012 resulting in a fair value of $180,172. Of this amount, $30,029 was expensed during 2011 and the remaining $150,143 was recorded as interest expense during the three-month period ended March 31, 2012.

Other Warrants

On July 23, 2012, we issued a warrant to a consultant for services provided to purchase up to an aggregate 250,000 shares of our common stock at an exercise price of $0.40 per share, resulting in a fair value of $67,500.  Of this amount $45,900 was recorded as selling, general and administrative expense during the three-month period September 30, 2012 and the remaining will be expensed ratably over the four-month vesting schedule.  The warrant expires July 23, 2017.

On May 11, 2011, we issued a warrant to consultants for services provided to purchase up to an aggregate 183,545 shares of our common stock at an exercise price of $0.55 per share, resulting in a fair value of $100,950, which was recorded as selling, general and administrative expense during the three-month period June 30, 2011.The warrant expires May 11, 2016.

11

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 8. Stockholders’ Equity

Preferred Stock

Our certificate of incorporation authorizes our Board of Directors to issue preferred stock, from time to time, on such terms and conditions as they shall determine. As of December 31, 2011 and September 30, 2012 there were no outstanding shares of our preferred stock.

Common Stock

As of December 31, 2011 and September 30, 2012 there were 59,242,220 and 66,310,618 shares of common stock outstanding, respectively. The increase in shares during the nine-month period ended September 30, 2012 is comprised of the following stock issuances: (i) 1,340,820 shares of our common stock related to the conversion of our Spring 2009 Notes and related accrued and unpaid interest, (ii) 125,539 shares of our common stock related to the conversion of Spring 2010 Notes accrued and unpaid interest, (iii) 47,017 shares of our common stock as payment of a noteholder of our Spring 2010 Notes and related accrued interest, (iv) 3,127,914 shares of our common stock issued to investors in our Winter 2012 Offering, (v) 1,925,214 shares of our common stock issued to investors in our Summer 2012 Offering, (vi) 275,986 shares of our common stock issued to investors in our Fall 2011 Offering (vii) 225,908 shares as payment to consultants in lieu of accrued and unpaid obligations.

Note 9. Stock-Based Compensation and Other Employee Benefit Plans

2007 Equity Incentive Plan

On August 7, 2007, our Board of Directors adopted the BioLargo, Inc. 2007 Equity Incentive Plan, as amended April 29, 2011 (“2007 Plan”), as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan. The Compensation Committee administers this plan. The 2007 Plan allows grants of common shares or options to purchase common shares. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. The Compensation Committee may at any time amend or terminate the plan.

Extension of Options

On April 27, 2009, in an effort to preserve the Company’s cash and reduce outstanding payables, the Board offered to third parties, officers and board members an option (“Option”) to purchase common stock in lieu of cash payment to reduce amounts owed by the Company. The Options were issued pursuant to the Company’s 2007 Equity Incentive Plan with an exercise price of $0.50 cents a share, an amount which was $0.20 per share above the $0.30 per share closing price of the Company’s common stock on April 27, 2009, and had an expiration date of April 27, 2012. The Options issued to Board members Dennis P. Calvert and Kenneth R. Code were issued at an exercise price of $0.55 per share. In consideration of the circumstances in which the Options were issued, and the fact that the price of the Company’s common stock was less than the strike price of the Options, the Board extended the expiration date of the Options by a period of seven years, to expire on April 27, 2019.  The fair value of the Option totaled $684,171 and was recorded as selling, general and administrative expense.

Vesting of Options

 During the nine-month period ended September 30, 2012, a portion of the option to purchase 300,000 shares of common stock issued to our Chief Financial Officer in exchange for his services pursuant to the April 2012 extension of his engagement agreement vested, resulting in $70,000 of selling, general and administrative expense.

During the nine-month period ended September 30, 2012, a portion of the unvested options issued to consultants vested, resulting in $147,869 of selling, general and administrative expense.

Issuance of Options

During the nine-month period ended September 30, 2012, we recorded the issuance of an option to purchase an aggregate 46,667 shares of our common stock to our independent member of our Board of Directors, pursuant to the terms of the 2007 Equity Plan which calls for an automatic issuance of an option to any new independent director. The option vests after a period of one year from the date of grant, expires ten years from the date of issuance, and 6,667 is exercisable at $0.34 per share and 40,000 shares is exercisable at $0.32 per share, the price of our common stock on the grant date. The fair value of this option totaled $15,067 and was recorded as selling, general and administrative expense.

12

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On July 5, 2012, our independent board members were issued options to purchase an aggregate 435,161 shares of our common stock at $0.40 per share in exchange for a reduction of $104,439 in accrued and unpaid obligations for their services on the board of directors.  The share price of our common stock on July 5, 2012 was $0.32 per share.  These options are fully vested and expire ten years from the date of issuance, July 5, 2022.  The fair value of the options was an aggregate $152,585, resulting in additional $48,146 of selling, general and administrative expense in the three-month period September 30, 2012.

On July 18, 2012, an option was issued to a consultant, in accordance with the service agreement, to purchase an aggregate 200,000 shares of our common stock.  Of this amount 50,000 vested upon issuance exercisable at $0.50 per share; 50,000 vest January 18, 2013 at an exercise price of $0.75 per share; 50,000 vest July 18, 2013 at an exercise price of $1.00 per share; and the remaining 50,000 vest January 18, 2014 at an exercise price of $1.25 per share.  The share price of our common stock on the date of issuance was $0.28 per share and resulted in a fair value of $56,000, of which $14,000 was recorded as selling, general and administrative expense during the three-month period ended September 30, 2012, and the remaining will be expensed ratably per the vesting schedule. These options expire ten years from the date of issuance, July 18, 2022.

Activity for our stock options under the 2007 Plan for the nine-month periods ended September 30, 2011 and 2012 is as follows:

As of September 30, 2011:	Options Outstanding		Shares Available			Price per share				Weighted Average Price per share
Balances as of December 31, 2010		4,797,223		1,202,777		$	0.25	–	1.89	$	0.51
Amendment to increase		—		6,000,000				—			—
Granted		1,805,593		(1,805,593	)	$	0.39	–	0.51	$	0.43
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2011		6,602,816		5,397,184		$	0.25	–	1.89	$	0.49

As of September 30, 2012:	Options Outstanding		Shares Available			Price per share				Price per share
Balances as of December 31, 2011		7,739,258		4,260,742		$	0.25	–	1.89	$	0.45
Granted		981,828		(981,828	)		0.34	–	0.35		0.35
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2012		8,721,086		3,278,914		$	0.25	–	1.89	$	0.45

We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes Option Pricing Model. The following methodology and assumptions were used to calculate share based compensation for the nine-month period ended September 30:

	2007 Plan
	2011				2012
Risk free interest rate	2.08	–	2.82	%		1.45	%
Expected volatility		906	%			951	%
Expected dividend yield		—				—
Forfeiture rate		—				—
Expected life in years		5				7

13

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Expected price volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. Expected volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility.

The risk-free interest rate used in the Black-Scholes calculation is based on the prevailing U.S Treasury yield as determined by the U.S. Federal Reserve. We have never paid any cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes Option Pricing Model.  Historically, we have not had significant forfeitures of unvested stock options granted to employees and Directors. A significant number of our stock option grants are fully vested at issuance or have short vesting provisions. Therefore, we have estimated the forfeiture rate of our outstanding stock options as zero.

Note 10. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses included the following:

	December 31, 2011		September 30, 2012
Accounts payable and accrued expenses	$	448,177	$	522,870
Accrued interest		86,720		43,395
Officer and Board of Director Payables		171,791		405,001
Total Accounts Payable and Accrued Expenses	$	706,688	$	971,266

Payment of Consultant Fees

On January 31, 2012, we issued an aggregate 30,147 shares of our common stock, at a conversion price of $0.31, in lieu of $9,225 of rent expense.

On March 6, 2012, we issued 100,000 shares of our common stock at a conversion price of $0.35 per share, and recorded $35,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

On July 1, 2012, we issued 80,000 shares of our common stock at a conversion price of $0.35 per share, and recorded $28,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

On September 5, 2012 we issued 15,761 shares of our common stock at a conversion price of $0.31 per share, and recorded $4,693 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

14

BIOLARGO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Payment of Accrued Interest

On April 15, 2012, in accordance with terms of the Spring 2010 Notes (see Note 5), we paid accrued interest of $41,425 by the issuance of 125,539 shares of our common stock, at a conversion price of $0.33 per share, to the holders of the Spring 2005 Notes.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

 Note 11.  Notes Payable

On June 8, 2010, we received $100,000 and issued a promissory note with an initial maturity date of December 3, 2010, which accrues interest at a rate of 10%. The noteholder, for no additional consideration, received a stock purchase warrant entitling the holder to purchase 50,000 shares of our common stock, exercisable at $0.50 per share until June 3, 2013.  (See Note 7.)  The maturity date of the note was extended to December 3, 2011, and again, to December 3, 2012.

On August 3, 2009, we received $70,000 and issued a promissory note with a maturity date of October 31, 2009 which accrued interest at a rate of 10%. On October 31, 2009 the maturity date of this promissory note was extended to February 1, 2010. The maturity date was further extended to December 1, 2010, and in March 2010 a $20,000 payment on the note was made.  On December 31, 2010 we converted $30,000 principal balance into an aggregate 100,000 shares of our common stock at $0.30, and agreed to extend the maturity date to March 1, 2011. On March 1, 2011, we paid the remaining principal amount of $20,000, and $9,590 of accrued interest, in full satisfaction of the note.

For the nine-month periods ended September 30, 2011 and 2012 we recorded $7,583 and $7,611 of interest expense related to these notes payable.

Note 12. Subsequent Events.

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

Summer 2012 Offering

On October 23, 2012, we amended the terms of the Summer 2012 Offering (see Note 5) by reducing the price of the common stock sold from 40 cents to 35 cents, and reducing the exercise price of the Summer 2012 Warrant from 55 cents to 50 cents. As a result, we issued an additional 275,038 shares of common stock to the investors, and issued those investors amended warrants reflecting the new share amount and new exercise price.

Options issued under 2007 Equity Plan

On October 2, 2012, our independent board members were issued options to purchase an aggregate 168,750 shares of common stock at $0.40 cents per share in exchange for a reduction of $45,000 in accrued and unpaid obligations for their services on the board of directors.

15

Item 2.                  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q of BioLargo, Inc. (the “Company”) contains forward-looking statements. These forward-looking statements include predictions regarding, among other things:

· our business plan;

· the commercial viability of our technology and products incorporating our technology;

· the effects of competitive factors on our technology and products incorporating our technology;

· expenses we will incur in operating our business;

· our ability to end persistent operating losses and generate positive cash flow and operating income;

· our ability to identify potential applications of our technology in industries other than the animal health industry and to bring viable products to market in such industries;

· the application of our technology in the food and beverage industry;

· the willingness of other companies to incorporate our technology into new or existing products or services and provide continued support for such products or services;

· the ability of our licensees to successfully produce, advertise and market products incorporating our technology;

· the continued success and viability of our licensees holding the exclusive right to exploit our technology in particular fields;

· the sufficiency of our liquidity and working capital;

· our ability to finance product field testing, hiring of personnel, required regulatory approvals, and needed patent applications;

· continued availability and affordability of resources used in our technology and the production of our products and services; and

· whether we are able to complete additional capital or debt financings in order to continue to fund operations and continue as a going concern.

 You can identify these and other forward-looking statements by the use of words such as “may”, “will”, “expects”, “anticipates”, “believes”, “estimates”, “continues”, or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.

Such statements, which include statements concerning future revenue sources and concentrations, selling, general and administrative expenses, research and development expenses, capital resources, additional financings and additional losses, are subject to risks and uncertainties, including, but not limited to, those discussed elsewhere in this Form 10-Q, that could cause actual results to differ materially from those projected.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011. Unless otherwise expressly stated herein, all statements, including forward-looking statements, set forth in this Form 10-Q are as of September 30, 2012, unless expressly stated otherwise, and we undertake no duty to update this information.

As used in this Report, the term Company refers to BioLargo, Inc., a Delaware corporation, and its wholly-owned subsidiaries, BioLargo Life Technologies, Inc., a California corporation, Odor-No-More, Inc., a California corporation, and Clyra Medical Technologies, Inc., a California corporation.

16

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this report.

Overview

By leveraging our suite of patented and patent-pending intellectual property, which we refer to as the BioLargo technology, our business strategy is to harness and deliver nature’s best disinfectant – iodine – in a safe, efficient, environmentally sensitive and cost-effective manner. The centerpiece of our BioLargo technology is CupriDyne®, which works by combining minerals with water from any source and delivering “free-iodine” on demand, in controlled dosages, in order to balance efficacy of disinfectant or odor control performance with concerns about toxicity.

Our BioLargo technology delivers “Nature’s Best Solution®” – iodine – to an array of problems, including odor and moisture control, disinfection, wound healing and contaminated water. Our technology enables us to deliver precise dosing of iodine in a variety of physical forms and delivery systems, which often include the combination of chemical reagents with other materials. We primarily focus on developing uses and/or applications for our technology for its use in products, in order for us to secure a licensing and/or supplier agreement with other companies, that will in turn, sell services or products to their customers within a specific industry segment. We believe that we should continually work to advance proofs of claims and commercial validations wherever possible to support our fundamental licensing strategy and improve the perceived value of our technology to potential licensees.

Armed with a solution to specific industry problems, our BioLargo technology has potential commercial applications within global industries, including animal health, oil and gas extraction, agriculture and livestock, beach and soil environmental remediation, consumer products, food processing, medical, and water industries. While we believe the potential applications are many, we have thus far commercially launched products in only one area -- the animal health industry, under the brand name “Odor-No-More”. In March 2011, we entered into an exclusive license and supply agreement with Central Garden & Pet Company (“Central”), the industry leading producer of premium pet products in the United States. Many of Central’s product brands are the industry leader and household names with more than 20 years of history, including Kaytee, Nylabone, Four Paws, and others. In September 2012, Central introduced our Odor-No-More cat litter additive to pet store retailers at SuperZoo 2012. Since that time, we have retained professionals to advise us in our marketing efforts and we are actively developing a comprehensive marketing plan and refined product messaging that focuses on developing consumer awareness to encourage increased acceptance across various media outlets and that can support numerous selling channels.

While we continue to advance our efforts to market and sell our Odor-No-More products, with the addition of key industry experts to our team, we are also actively seeking opportunities for product sales or licensing in the oil and gas industry, the food processing industry, and the medical products industry. We are in discussions with leading researchers that serve the food and agriculture industry to conduct a series of trials for both the Isan Sytem and Cupridyne based systems to help meet specific targeted needs within those industries.  We hope to begin this work as soon as possible.

In December 2011 we announced that we had been selected as a founding member of a Canadian Natural Sciences and Engineering Research Council (“NSERC”) “research chair”, joined by globally leading oil companies, the regional water district in Alberta Canada and the University of Alberta.  The Chair was formed to solve the contaminated water and tailings ponds problems associated with the oil sands industry and commenced in December of last year. The Canadian Oil Sands are the second largest deposit of oil in the world. Extracting oil from the Oil Sands creates high volumes of contaminated water (between 2 and 4.5 barrels of water to produce one barrel of synthetic crude oil), currently discharged in “tailings” ponds, sometimes for years, to separate the solids from the liquids for eventual recycling or safe discharge into the environment. With Canadian oil production estimated to increase from 1.9 million to over 6 million barrels of oil a day over the next 20 years, the released water from oil sands operations is estimated to reach one billion cubic meters in the Athabasca oils sands region by 2025. An innovative solution that can reduce the water treatment time, and thus the overall footprint and environmental impact of the tailings ponds, is required for Canada to meet its production goals. It is widely believed that the future of oil sands exploration, its social and economic contribution as the second largest oil reserve in the world, and its contribution to the public good of both Canada and the Unites States, hinges on industry’s ability to manage the wastewater in tailings ponds. Our Chief Science Officer continues to support the efforts at the University of Alberta on a direct and active basis. We believe our work with the Chair is important for this industry, both the Canadian and Unites States national interests, and could impact the global industry as the Chair was organized to develop sustainable solutions for managing these natural resources and the associated water issues. We expect technical publications by the researchers in the near future.

17

In February 2011, we added to our team a recognized industry water treatment expert, Harry DeLonge. Having spent more than 40 years at Pepsi-Cola International, Mr. DeLonge is assisting us in our efforts to commercialize our BioLargo technology in the food and beverage industry. Within the food and beverage industry, we believe the BioLargo technologies are useful in a number of applications, including “clean-in-place” related uses, treating processed and wastewater, and for enhancing performance of certain filter and water treatment technologies. In addition, we believe that we have a cost effective solution for managing dangerous and/or odorless compounds common with this industry. Our efforts to develop new patents and other intellectual property, advancing proof of claim, pilot projects and seeking customers and/or licensing partners are continuing throughout 2012.

In August of 2011, we added a medical products expert to our management team to develop and exploitcommercial opportunities within the medical industry. Since that time, in addition to organizing an internal team to champion products in this segment, we have developed prototype wound care and medical-use products incorporating our BioLargo technology for evaluation and proving basic product claims. We have engaged third party labs to validate basic product claims, and have successfully verified that our newly developed products meet required safety and efficacy benchmarks according to industry specific standards. This work is continuing as we refine and optimize our product designs.  In May 2012, we formed a wholly owned subsidiary for the purpose of commercializing medical products, and have since retained the services of Tanya Rhodes, a former Vice President at Smith & Nephew, to assist in the efforts. We are actively engaged in discussions with potential strategic partners about forming a business relationship to initiate the required regulatory applications and ultimately introduce  new products to market, but have also determined, based on the substantial work that has been accomplished by our team, to now take the necessary steps to fully develop market-ready wound care products, including obtaining required regulatory approvals as soon as we are able.  As a result, we are currently negotiating with contract manufacturers to finalize specific product specifications and technical validations for the purposes of finalizing the claims and product designs in anticipation of making an FDA application for requisite approvals which are targeted for mid-2013.

Throughout 2012, we have continued our product development, formulation refinement and test marketing for a number of animal-health related products in the equine and pet industries. We believe the work in this area is complimented by our technical advances and proofs of claims for products associated with human wound care and that many of these animal health care products could be ready for market in early to mid-2013 depending on our human and financial resources and our capability.

Results of Operations—Comparison of the three and nine-month periods ended September 30, 2012 and 2011

Revenue

We generated $10,490 and $55,145 in revenues from product sales during the three and nine-month periods ended September 30, 2012 and revenues of $10,805 and $26,759 during the same periods for 2011. In addition, for the three and nine-month periods ended September 30, 2011, we recognized revenue of $109,720 and $115,500 related to the Isan USA license transaction (see Note 4). For 2012, all of our product revenues relate to our Odor-No-More products for which sales are primarily to retail establishments at wholesale prices.

Cost of Goods Sold

For the three and nine-month periods ended September 30, 2012, our cost of goods sold was $6,857, or 65% of revenues, and $32,706, or 59% or revenues versus $12,683 or 11% of revenues and $36,270 or 25% of revenues for the three and nine month periods ended September 30, 2011. In the 2011 periods, we recognized licensing revenue, which reduced our cost of goods sold as a percentage of revenue. As well, in the nine-month period ended September 30, 2011, we agreed to purchase back product shipped in 2010 to a customer, which resulted in an increased cost of goods sold related to our product sales as compared with 2012.

18

 Our cost of goods sold includes costs of raw materials, contract manufacturing, and proportions of salaries and expenses related to the production of our Odor-No-More branded products. Because we have not achieved a large or consistent revenue base, the inclusion of the fixed costs related to the product development and manufacturing increases our cost of goods disproportionately, resulting in high percentage fluctuations.

Selling, General and Administrative Expense

Selling, General and Administrative expenses were $828,354 and $3,064,792 for the three and nine-month periods ended September 30, 2012, compared to $580,507 and $2,453,038 for the three and nine-month periods ended September 30, 2011, an increase of $247,847 and $611,754, respectively. The largest components of these expenses were:

a. Salaries and Payroll-related Expenses: These expenses were $219,291 and $1,047,400 for the three and nine-month periods ended September 30, 2012, compared to $206,484 and $875,670 for the three and nine-month periods ended September 30, 2011, increases of $12,807 and $171,730, respectively. The increase in the nine-month period is primarily related to the non-cash expense related to the fair value of stock options, the expiration dates for which were extended in April 2012 by five years. An additional portion of the increase is related to annual salary increases pursuant to contracts with our executive officers.

b. Consulting Expenses: These expenses were $319,607 and $892,110 for the three and nine-month periods ended September 30, 2012, compared to $179,494 and $657,301 for the three and nine-month periods ended September 30, 2011, an increase of $140,113 and $234,809, respectively. .  The increases are primarily related to the non-cash expense incurred as a result of the five-year extension in April 2012 of the expiration dates for warrants and stock options issued to consultants.

c. Professional Fees: These expenses were $47,464 and $155,194 for the three and nine-month periods ended September 30, 2012, compared to $39,323 and $206,459 for the three and nine-month periods ended September 30, 2011, an increase of $8,141 and a decrease of $34,976, respectively. The increase is primarily related to the non-cash expense incurred as a result of the five-year extension in April 2012 of the expiration dates for warrants and stock options issued to professionals. The decrease for the nine-month period is primarily due to the fair value of warrants issued to professionals in 2011 that have not been incurred in 2012.

Research and Development

Research and development expenses were $54,497 and $114,609 for the three and nine-month periods ended September 30, 2012, compared to $9,034 and $48,325 for the three and nine-month periods ended September 30, 2011, an increase of $45,463 and $66,284.  The increases are attributed to an increase in product development activities and patent application and prosecutions as compared to 2011.

Interest expense

Interest expense totaled $36,137 and $454,074 for the three and nine-month periods ended September 30, 2012, compared to $228,639 and $642,088 for the three and nine-month periods ended September 30, 2011, a decrease of $192,502 and $188,014. The decrease is primarily due to the repayment of $670,410 in convertible notes during 2012 (see Item 2, “Conversion of Spring 2009 Notes”, below) and amortization of the discount based on the fair value of the warrants issued in connection with our convertible debt offset by the fair value of the extension of warrants.

Net Loss

Net loss for the three and nine-month periods ended September 30, 2012 was $915,668 and $3,612,994, a loss of $0.01 and $0.06 per share, compared to a net loss for the three and nine-month periods ended September 30, 2011 of $711,671 and $3,043,994, a loss of $0.01 and $0.06 per share. Although the dollar amount of the loss has declined, the per share loss hasn’t declined as much due to the issuance of additional shares for new capital and for compensation and other related expenses.

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Liquidity and Capital Resources

We have been, and anticipate that we will continue to be, limited in terms of our capital resources. Until we are successful in commercializing products or negotiating and securing payments for licensing rights from prospective licensing candidates, we expect to continue to have operating losses. Cash and cash equivalents totaled $427,842 at September 30, 2012. We had negative working capital of $1,106,544 as of September 30, 2012, compared with negative working capital of $2,027,351 as of September 30, 2011. We had negative cash flow from operating activities of $1,662,101 for the nine-month period ended September 30, 2012, compared to a negative cash flow from operating activities of $1,334,451 for the nine-month period ended September 30, 2011. We used cash from financing activities to fund operations. Although we have reduced our negative working capital position in the nine-month period ended September 30, 2012, our cash position is insufficient to meet our continuing anticipated expenses or fund anticipated operating expenses. Accordingly, we will be required to raise significant additional capital to sustain operations and further implement our business plan and we may be compelled to reduce or curtail certain activities to preserve cash.

The accompanying condensed 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. As reflected in the accompanying financial statements, we had a net loss of $3,612,994 for the nine-month period ended September 30, 2012, and an accumulated stockholders’ deficit of $71,078,288 as of September 30, 2012. The foregoing factors raise substantial doubt about our ability to continue as a going concern. Ultimately, our ability to continue as a going concern is dependent upon our ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our BioLargo technology. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

As of September 30, 2012, we had $513,775 aggregate principal amount outstanding on various promissory notes. We may pay the principal and interest due on these notes in cash or in stock, at our option, at maturity. In addition, as of September 30, 2012, we had $971,266 of outstanding accounts payable and accrued expenses, of which $43,395 relates to interest due on outstanding promissory notes, and $927,871 relates to accrued and unpaid payables. (See Note 10.)

During the nine-month period ended September 30, 2012, we received $1,961,445 pursuant to our private securities offerings. (See Note 5.)

We will be required to raise substantial additional capital to expand our operations, including without limitation, hiring additional personnel, additional scientific and third-party testing, costs associated with obtaining regulatory approvals and filing additional patent applications to protect our intellectual property, and possible strategic acquisitions or alliances, as well as to meet our liabilities as they become due for the next 12 months. We may also be compelled to reduce or curtail certain activities to preserve cash.

In addition to the private securities offerings discussed above, we are continuing to explore numerous alternatives for our current and longer-term financial requirements, including additional raises of capital from investors in the form of convertible debt or equity. There can be no assurance that we will be able to raise any additional capital. No commitments are in place as of the date of the filing of this report for any such additional financings. Moreover, in light of the current unfavorable economic conditions, we do not believe that any such financing is likely to be in place in the immediate future.

It is also unlikely that we will be able to qualify for bank or other financial institutional debt financing until such time as our operations are considerably more advanced and we are able to demonstrate the financial strength to provide confidence for a lender, which we do not currently believe is likely to occur for at least the next 12 months or more.

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If we are unable to raise sufficient capital, we may be required to curtail some of our operations, including efforts to develop, test, market, evaluate and license our BioLargo technology. If we were forced to curtail aspects of our operations, there could be a material adverse impact on our financial condition and results of operations.

Critical Accounting Policies  

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of intangible assets and investments, and share-based payments. We base our estimates on anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.

 The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its financial statements.

We anticipate that revenue will come from two sources: sales of Odor-No-More products and from royalties and license fees from our intellectual property. Odor-No-More revenue is recognized upon shipment of the product and all other contingencies have been met. Licensees typically pay a license fee in one or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property. License fees are recognized over the estimated period of future benefit to the average licensee.

The Company has established a policy relative to the methodology to determine the value assigned to each intangible acquired with or licensed by the Company and/or services or products received for non-cash consideration of the Company’s common stock. The value is based on the market price of the Company’s common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received, as adjusted for applicable discounts.

It the Company’s policy to expense share based payments as of the date of grant in accordance with Auditing Standard Codification Topic 718 “Share-Based Payment.” Application of this pronouncement requires significant judgment regarding the assumptions used in the selected option pricing model, including stock price volatility and employee exercise behavior. Most of these inputs are either highly dependent on the current economic environment at the date of grant or forward-looking expectations projected over the expected term of the award. As a result, the actual impact of adoption on future earnings could differ significantly from our current estimate.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Inflation

Inflation affects the cost of raw materials, goods and services we use.  In recent years, inflation overall has been modest, but we believe inflation may increase our costs in the near future.  Some of our products incorporate oil based polymers, which are subject to price fluctuations based on the price of crude oil, as well as shortages.

Item 4.                  Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report.

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Our procedures have been designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the evaluation date our disclosure controls and procedures are effective.

It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 2.                  Unregistered Sales of Equity Securities and Use of Proceeds

Summer 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.40 per share that commenced May 2012 (the “Summer 2012 Offering”), through September 30, 2012, we sold 1,925,214 shares of our common stock at $0.40 per share from seven accredited investors and received $770,086 gross proceeds and $744,515 net proceeds from the sales. Of these amounts, 1,147,500 shares were sold and $459,000 was invested during the three-month period ended September 30, 2012. Each purchaser of stock in the Summer 2012 Offering will receive, for no additional consideration, a stock purchase warrant (the “Summer 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.55 per share until March 31, 2014.

On October 23, 2012, we amended the terms of the Summer 2012 Offering (see Note 5) by reducing the price of the common stock sold from 40 cents to 35 cents, and reducing the exercise price of the Summer 2012 Warrant from 55 cents to 50 cents. This change was applied retroactively to the investors of the offering. As a result, we issued an additional 275,038 shares of common stock to the investors, and issued those investors amended warrants reflecting the new share amount and new exercise price.

Winter 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced January 2012 and closed May 2012 (the “Winter 2012 Offering”), we sold 3,127,914 shares of our common stock at $0.35 per share from 30 accredited investors and received $1,094,765 gross and $1,030,265 net proceeds from the sales.

Each purchaser of stock in the Winter 2012 Offering received, for no additional consideration, a stock purchase warrant (the “Winter 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.50 per share until January 31, 2013.

Conversion of Spring 2010 Note

On February 6, 2012, a holder of a convertible promissory note issued in our Spring 2010 Offering (see Note 5) elected to convert the principal balance of $25,000, and accrued unpaid interest of $2,034, into an aggregate 47,017 shares of our common stock, at a conversion price of $0.575.

Conversion of Spring 2009 Notes

On the June 1, 2012 maturity date of the Spring 2009 Notes, we elected to convert the remaining aggregate principal balance of $670,410 and $67,041 of accrued and unpaid interest into an aggregate 1,340,820 shares of our common stock at a conversion price of $0.55 per share. As a result, the Spring 2009 Notes are fully paid.

Payment of Consultant Fees

On January 31, 2012, we issued an aggregate 30,147 shares of our common stock, at a conversion price of $0.31, in lieu of $9,225 of rent expense.

On March 6, 2012, we issued 100,000 shares of our common stock at a conversion price of $0.35 per share, and recorded $35,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

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On July 1, 2012, we issued 80,000 shares of our common stock at a conversion price of $.035 per share, and recorded $28,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

On September 5, 2012 we issued 15,761 shares of our common stock at a conversion price of $.031 per share, and recorded $4,693 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

Payment of Accrued Interest

On April 15, 2012, in accordance with terms of the Spring 2010 Notes (see Note 5), we paid accrued interest of $41,425 by the issuance of 125,539 shares of our common stock, at a conversion price of $0.33 per share, to the holders of the Spring 2010 Notes.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

Item 6.                  Exhibits

The exhibits listed below are attached hereto:

Exhibit No.	Description
4.1*	Form of Warrant issued in Summer 2012 Offering
31.1*	Certification of Chief Executive Officer of Quarterly Report Pursuant to Rule 13(a)-15(e) or Rule 15(d)-15(e).
31.2*	Certification of Chief Financial Officer of Quarterly Report Pursuant to 18 U.S.C. Section 1350
32**	Certification of Chief Executive Officer and Chief Financial Officer of Quarterly Report pursuant to Rule 13(a)-15(e) or Rule 15(d)-15(e).
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

* Filed herewith

** Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIOLARGO, INC.
Date: November 14, 2012	By: /s/ DENNIS P. CALVERT
	Dennis P. Calvert
	Chief Executive Officer
Date: November 14, 2012	By: /s/ CHARLES K. DARGAN, II
	Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
4.1*	Form of Warrant issued in Summer 2012 Offering
31.1*	Certification of Chief Executive Officer of Quarterly Report Pursuant to Rule 13(a)-15(e) or Rule 15(d)-15(e).
31.2*	Certification of Chief Financial Officer of Quarterly Report Pursuant to 18 U.S.C. Section 1350
32**	Certification of Chief Executive Officer and Chief Financial Officer of Quarterly Report pursuant to Rule 13(a)-15(e) or Rule 15(d)-15(e).
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

* Filed herewith

** Furnished herewith

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EX-4.1

EXHIBIT 4.1

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.

BIOLARGO, INC.

[FORM OF] WARRANT TO PURCHASE COMMON STOCK

WARRANT NO. XXX ISSUED:  XXXX, 2012

THIS CERTIFIES THAT, for value received,              XXXX          (the “Holder”), is entitled to subscribe for and purchase from BIOLARGO, INC., a corporation organized under the laws of the state of Delaware (the “Company”), subject to Section 1(b) hereof, commencing at the time periods prescribed herein and ending at 5:00 p.m. California time on March 31, 2014, XXXX shares (the “Shares”) of common stock, par value, $0.00067, of the Company (the “Common Stock”). The exercise price for each Share subject to this Warrant (the “Warrant Price”) is equal to $0.50. The number of Shares and the Warrant Price are subject to adjustment from time to time as provided in Section 4 of this Warrant.

This Warrant is issued in connection with and as consideration for the initial Holder’s purchase of common stock in the Company’s private securities offering dated May 14, 2012.

1.             Method of Exercise; Payment; Issuance of New Warrant.

(a) The purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, subject to the limitation set forth below, and from time to time, by (i) the surrender of this Warrant (with a notice of exercise in the form attached hereto as Exhibit A, duly executed) at the principal office of the Company and (ii) the payment to the Company, by check or wire transfer of funds to an account specified in writing by the Company, of an amount equal to the aggregate Warrant Price. The Shares so purchased, representing the aggregate number of shares specified in the executed Exhibit A, shall be delivered to the Holder within a reasonable time, not exceeding ten (10) business days, after this Warrant shall have been so exercised. Upon receipt by the Company of this Warrant at the office of the Company, in proper form for exercise and accompanied by the amount equal to the aggregate Warrant Price, the Holder shall be deemed to be the holder of record of the Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares shall not then be actually delivered to the Holder.

(b) If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of such Shares, deliver to the Holder a new Warrant evidencing the right to purchase the remaining Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or, at the request of Holder, appropriate notation may be made on this Warrant which shall then be returned to Holder.

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2.             Stock Fully Paid; Reservation of Shares.  All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all preemptive rights, taxes, liens and charges with respect to the issue thereof; provided, however, that the Company shall not be required to pay any transfer taxes with respect to the issue of shares in any name other than that of the registered holder hereof.  During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant.  The Company shall at all times take all such action and obtain all such permits or orders as may be necessary to enable the Company lawfully to issue such Common Stock as duly and validly issued, fully paid and nonassessable shares upon exercise in full of this Warrant.

3.             Fractional Shares.  No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Fair Market Value of such Shares.

4.             Adjustment.  This Warrant shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a)      Adjustment for Stock Splits and Combinations.  If the Company shall at any time or from time to time after the date hereof effect a subdivision of the outstanding Common Stock, the Warrant Price then in effect immediately before that subdivision shall be proportionately decreased.  If the Company shall at any time or from time to time after the date hereof combine the outstanding Common Stock, the Warrant Price then in effect immediately before the combination shall be proportionately increased.  Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

(b)      Adjustment for Certain Dividends and Distributions.  In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Warrant Price shall be decreased as of the time of such issuance, by multiplying the Warrant Price by a fraction:

(x) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance; and

(y) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

(c)      Adjustment of Number of Shares.  Upon each adjustment of the Warrant Price pursuant to either Section 4(a) or 4(b) of this Warrant, the number of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock, calculated to the nearest one hundredth of a share, obtained by multiplying the number of shares of Common Stock purchasable immediately prior to such adjustment upon the exercise of the Warrant by the Warrant Price in effect prior to such adjustment and dividing the product so obtained by the new Warrant Price.

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(d)      Adjustment for Reclassification, Exchange and Substitution.  If the Common Stock issuable upon the exercise of this Warrant are changed into the same or different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination provided for in Section 4(a) above, a dividend or distribution provided for in Section 4(b) above, or a reorganization, merger, consolidation or sale of assets, provided for in Section 4(e) below), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of stock and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change.

(e)      Reorganization, Mergers, Consolidations or Sales of Assets.  If at any time or from time to time there is a capital reorganization of the Common Stock (other than a subdivision or combination provided for in Section 4(a) above, a dividend or distribution provided for in Section 4(b) above, or a reclassification or exchange of shares provided for in Section 4(d) above) or a merger or consolidation of the Company with or into another entity, or a sale of all or substantially all of the Company’s properties and assets to any other person or entity, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the number of shares of stock or other securities, money or property of the Company, or of the successor entity resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale.  The Company shall not effect any reorganization, merger, consolidation or sale unless prior to the consummation thereof each entity or person (other than the Company) that may be required to deliver any cash, securities or other property upon the exercise of this Warrant shall assume, by written instrument delivered to the Holder, the obligation to deliver to the Holder such cash, securities or other property as in accordance with the foregoing provisions the Holder may be entitled to receive.  The foregoing provisions of this Section 4(e) shall similarly apply to successive reorganizations, mergers, consolidations and sales.

(f)      No Impairment.  The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon the voluntary or involuntary dissolution, liquidation or winding up of the Company.

(g)      Notice of Adjustments.  Whenever this Warrant shall be adjusted pursuant to this Section 4, the Company shall make a certificate signed by an officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the new Warrant Price and the type or the number of Shares purchasable after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

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5.             The Company’s Obligation to Make Payments.

(a)      Dividends and Distributions.  In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution, whether payable in cash, securities or other property of the Company, with respect to any of its capital stock for which an adjustment is not made pursuant to Section 4 of this Warrant, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the amount of cash plus the fair value of any property or securities distributed by (y) the number of shares of Common Stock outstanding on the record date for such dividend or distribution and (ii) the number of Shares on such record date.

(b)      Redemption of Capital Stock.  In the event the Company at any time or from time to time after the date hereof shall repurchase or redeem any of its capital stock or any rights, including without limitation, options, warrants or other convertible or exchangeable securities, to acquire such capital stock, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the aggregate amount of cash and the aggregate fair value of any property paid out by the Company in connection with any such repurchase or redemption by (y) the number of shares of Common Stock outstanding on a fully diluted basis immediately after such repurchase or redemption and (2) the number of Shares.

6.             Notice of Record Date.  In the event:

(1) that the Company declares a dividend (or any other distribution) on any of its capital stock (including without limitation, its Common Stock);

(2) that the Company repurchases or redeems any of its capital stock (including without limitation, its Common Stock) or any rights to acquire such capital stock;

(3) that the Company subdivides or combines its outstanding shares of Common Stock;

(4) of any reclassification of the Common Stock, or of any consolidation, merger or share exchange of the Company into or with another entity, or of the sale of all or substantially all of the assets of the Company;

(5) of the involuntary or voluntary dissolution, liquidation or winding up of the Company; or

(6) of any offer of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price then in effect.

then the Company shall notify the Holder at least 30 days prior to the date specified in (A), (B) or (C) below, in writing stating:

(A)           the record date of such dividend, distribution, repurchase, redemption, subdivision or combination, or, if a record is not to be taken, the date as to which the holders of Common Stock of record to be entitled to such dividend, distribution, repurchase, redemption, subdivision or combination are to be determined;

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(B)           the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up; or

(C)           the date on which such offering of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price is expected to become consummated.

7.             Compliance with Securities Act; Disposition of Warrant or Common Stock.

(a)      Compliance with Securities Act.  The Holder, by acceptance hereof, agrees that this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Act”).  All Shares issued upon exercise of this Warrant (unless registered under the Act or sold or transferred pursuant to Rule 144 promulgated under the Act) shall be stamped or imprinted with a legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACTS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.”

(b)      Disposition of Warrant or Shares.  Subject to the terms and conditions of this Warrant and applicable securities laws, this Warrant and the rights represented by this Warrant may be transferred, assigned or pledged, in whole or in part with prior written notice to the Company. Any transfer shall be accompanied by the Notice of Transfer form attached hereto as Exhibit B.

8.             Rights as Shareholders.  The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

9.             Representations and Warranties.  The Company represents and warrants to the Holder as follows:

(a)      This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;

(b)      The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable;

(c)      The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company’s Certificate of Incorporation;

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(d)      The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Articles of Incorporation or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person; and

10.           Modification and Waiver.  This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

11.           Notices.  Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the applicable party at its address specified opposite its signature below, or at such other address as shall be designated by such party in a written notice to the other.  All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier.

12.           Descriptive Headings.  The descriptive headings of the several sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

13.           Governing Law.  THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.

14.           Binding Effect on Successors.  This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise, and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder.

15.           Severability.  In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.  The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

16.           Lost Warrants or Stock Certificates.  The Company covenants to the Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

- 6 -

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and delivered by its duly authorized officer on the day and year first above written.

  BIOLARGO, INC.

      By:                     XXXXXX                      

  Name: Dennis P. Calvert, President

  Address: 16150 Heron Avenue

    La Mirada, California 90638

    Attention: Dennis P. Calvert

ACKNOWLEDGED AND ACCEPTED:

By:   

Print Name:  __________________________                                                                           

Address: __________________________

 __________________________

                ___________________________

Federal ID

or Social Security No.  ________________

- 7 -

EXHIBIT A

NOTICE OF EXERCISE

TO:           BIOLARGO, INC.

(1)           The undersigned hereby elects to purchase __________ shares of Common Stock of BIOLARGO, INC. (the “Company”) pursuant to the terms of the attached Warrant, and, unless such Warrant allows the exercise to be “cashless,” tenders herewith payment of the Warrant Price for such shares in full.

(2)           The undersigned represents and warrants to the Company that, as of the date hereof, the undersigned is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Exchange Act of 1934, as amended.

(3)           Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Name)

(4)           Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

(Federal ID or Social Security No.)

(Signature)

(Date)

EXHIBIT B

NOTICE OF TRANSFER

(To be signed only upon transfer of Warrant and subject to other conditions of this Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________________________ the right represented by the attached Warrant to purchase __________ shares of the Common Stock of BIOLARGO, INC., to which the attached Warrant relates, and appoints _____________________ as Attorney-in-fact to transfer such right on the books of BIOLARGO, INC., with full power of substitution in the premises.

The undersigned understands that any transfer of the attached Warrant is subject to full compliance with Federal and applicable state securities laws and other requirements, which requirements shall be determined and which issues shall be decided by BIOLARGO, INC., in its sole and absolute discretion, prior to consenting to and recognizing such transfer.

Dated:  

(Signature must conform in all respects to the name of the Holder as specified on the face of the Warrant)

(Address)

Signed in the presence of:  

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dennis P. Calvert, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of BioLargo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012	By:	/s/ DENNIS P. CALVERT
		Dennis P. Calvert
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles K. Dargan II, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of BioLargo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012	By:	/s/ CHARLES K. DARGAN II
		Charles K. Dargan II
		Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis P. Calvert, Chief Executive Officer of BioLargo, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that the Quarterly Report of BioLargo, Inc. on Form 10-Q for the quarter ended September 30, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of BioLargo, Inc.

Dated: November 14, 2012	By:	/s/ DENNIS P. CALVERT
		Dennis P. Calvert
		President and Chief Executive Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to BioLargo, Inc. and will be retained by BioLargo, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

I, Charles K. Dargan II, Chief Financial Officer of BioLargo, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that the Quarterly Report of BioLargo, Inc. on Form 10-Q for the quarter ended September 30, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of BioLargo, Inc.

Dated: November14, 2012	By:	/s/ CHARLES K. DARGAN II
		Charles K. Dargan II
		Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to BioLargo, Inc. and will be retained by BioLargo, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Note 11 - Notes Payable (Detail) (USD $)	0 Months Ended		1 Months Ended			9 Months Ended
	Jun. 08, 2010	Aug. 03, 2009	Mar. 31, 2011	Dec. 31, 2010	Mar. 31, 2010	Sep. 30, 2012	Sep. 30, 2011	Apr. 15, 2012
Proceeds from Issuance of Debt	$ 100,000	$ 70,000
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	50,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)	0.50
Repayments of Debt			20,000		20,000
Debt Conversion, Converted Instrument, Amount				30,000
Debt Conversion, Converted Instrument, Shares Issued (in Shares)				100,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)				$ 0.30				$ 0.33
Increase (Decrease) in Interest Payable, Net			9,590
Interest Expense, Debt						$ 7,611	$ 7,583

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Note 8 - Stockholders' Equity (Detail)	1 Months Ended	9 Months Ended	12 Months Ended		9 Months Ended			12 Months Ended	13 Months Ended	9 Months Ended
	Jan. 31, 2012	Sep. 30, 2012	Sep. 30, 2012	Dec. 31, 2010	Sep. 30, 2012 Winter 2012 Offering [Member]	Sep. 30, 2012 Summer 2012 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2012 Spring 2009 Notes Accrued Interest [Member]	Sep. 30, 2012 Spring 2010 Notes Accrued Interest [Member]
Common Stock, Shares, Outstanding		66,310,618	66,310,618	59,242,220
Stock Issued During Period, Shares, Conversion of Convertible Securities										1,340,820	125,539
Stock Issued During Period, Shares, New Issues (in Shares)	275,986		459,000		3,127,914	1,925,214	275,986	1,059,215	1,335,201		47,017
Stock Issued During Period, Shares, Issued for Services		225,908

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Note 2 - Summary of Significant Accounting Policies (Detail) - Inventories (USD $)	Sep. 30, 2012	Dec. 31, 2011
Raw materials	$ 37,069	$ 27,556
Finished goods (see Note 4)	15,262	34,309
Total inventory	$ 52,331	$ 61,865

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Note 10 - Accounts Payable and Accrued Expenses (Detail) (USD $)	1 Months Ended				1 Months Ended	0 Months Ended		1 Months Ended
	Dec. 31, 2010	Sep. 30, 2012	Apr. 15, 2012	Dec. 31, 2011	Jan. 31, 2012 Rent Expense [Member]	Sep. 05, 2012 Research and Marketing Consultant [Member]	Jul. 02, 2012 Research and Marketing Consultant [Member]	Mar. 31, 2012 Research and Marketing Consultant [Member]	Mar. 06, 2012 Research and Marketing Consultant [Member]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	100,000				30,147	15,761	80,000	100,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.30		$ 0.33		$ 0.31	$ 0.31	$ 0.35		$ 0.35
Debt Conversion, Original Debt, Amount (in Dollars)					$ 9,225	$ 4,693	$ 28,000
Accounts Payable and Other Accrued Liabilities (in Dollars)			$ 41,425						$ 35,000
Common Stock, Shares, Issued		66,310,618	125,539	59,242,220

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Note 3 - Customer Deposit

9 Months Ended

Sep. 30, 2012

Deposit Liabilities Disclosures [Text Block]

Note 3.  Customer Deposit

On March 24, 2011, we entered into a contract in which Central Garden & Pet Company (“Central”) was granted the exclusive worldwide right and license to sell, market, offer for sale, distribute import, export, and otherwise exploit products that contain the BioLargo technologies in the “pet supplies industry” (which is defined in the agreement, and does not include products for equine or livestock). The agreement provided that we are the exclusive provider of the product containing the BioLargo technologies, other than in certain limited conditions. The rights granted to Central are exclusive so long as Central meets “minimum purchase requirements” of product from the Company, as set forth in the agreement.  The agreement terminates only upon uncured breach of material warranty or obligation.

Pursuant to the Central contract, we received a $100,000 deposit which will be credited against future orders. The Company has agreed to sell product to Central at a price equal to the manufacturing cost plus a “manufacturer’s margin”, in an amount to be agreed upon by the parties for each particular product. Central agreed to include a BioLargo trademark on the packaging of any products containing the BioLargo technologies.

Central shall have a right of first refusal to purchase Odor-No-More, Inc., or the Odor-No-More brand and/or intellectual property. The Company shall give notice of receipt of any offer to purchase, and Central may elect to match the terms of the offer. Central also has the right of first offer to acquire the right to commercialize new products based on BioLargo technologies in the “pet supplies industry”, following notice from the Company and a 90 day due diligence period. If Central declines to commercialize any such new product, the Company is free to commercialize such products under its own brand, but not under a third party’s brand.

The agreement also contains standard provisions typical of a license and supply agreement.

Through the date of the filing of this Quarterly Report, no product orders were received under the Central contract.

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Note 6 - Conversion of Notes (Detail) (USD $)	1 Months Ended		1 Months Ended		3 Months Ended	5 Months Ended	1 Months Ended	3 Months Ended		5 Months Ended
	Dec. 31, 2010	Apr. 15, 2012	Feb. 06, 2012 Accrued Interest [Member] Spring 2010 Notes [Member]	Mar. 31, 2011 Accrued Interest [Member] Spring 2008 Notes [Member]	Apr. 16, 2011 Accrued Interest [Member] Spring 2009 Note [Member]	Jun. 01, 2012 Accrued Interest [Member] Spring 2009 Note [Member]	Feb. 06, 2012 Spring 2010 Notes [Member]	Mar. 31, 2011 Spring 2008 Notes [Member]	Apr. 16, 2011 Spring 2009 Note [Member]	Jun. 01, 2012 Spring 2009 Note [Member]
Debt Conversion, Original Debt, Amount (in Dollars)			$ 2,034		$ 964	$ 67,041	$ 25,000		$ 11,000	$ 670,410
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	100,000						47,017	733,108	21,754	1,340,820
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.30	$ 0.33					$ 0.575	$ 1.35	$ 0.55	$ 0.55
Interest Payable, Current				$ 76,051

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Note 5 - Private Securities Offerings (Detail) (USD $)	1 Months Ended		9 Months Ended		12 Months Ended					3 Months Ended	9 Months Ended		9 Months Ended		9 Months Ended	12 Months Ended	13 Months Ended	9 Months Ended	7 Months Ended
	Jan. 31, 2012	Dec. 31, 2010	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Apr. 15, 2012	Jun. 08, 2010	Aug. 03, 2009	Apr. 27, 2009	Sep. 30, 2012 Summer Winter 2012 Offering [Member]	Sep. 30, 2012 Summer 2012 Offering [Member]	Jun. 30, 2012 Summer 2012 Offering [Member]	Sep. 30, 2012 Winter 2012 Offering [Member]	Jun. 30, 2012 Winter 2012 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2012 Fall 2011 Offering [Member]	Sep. 30, 2011 Winter 2011 Offering [Member]	Jul. 31, 2010 Spring 2010 Offering [Member]	Jul. 31, 2010 Spring 2010 Eighteen Month Warrant [Member]	Jul. 31, 2010 Spring 2010 Thirty-Six Month Warrant [Member]	Jul. 31, 2010 Spring 2010 Offering [Member]
Sale of Stock, Price Per Share (in Dollars per share)										$ 0.40				$ 0.35	$ 0.35	$ 0.35	$ 0.35	$ 0.35
Stock Issued During Period, Shares, New Issues (in Shares)	275,986				459,000					1,925,214	1,925,214		3,127,914		275,986	1,059,215	1,335,201	2,765,070
Proceeds from Issuance of Private Placement	$ 96,594		$ 1,961,445	$ 1,122,770	$ 1,147,500					$ 770,086			$ 1,094,765			$ 370,723	$ 467,317	$ 967,768
Proceeds from Debt, Net of Issuance Costs			1,030,265							744,515
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)							0.50					0.55			0.50	0.50	0.50			0.75	1.00
Share Price (in Dollars per share)			$ 0.50		$ 0.50				$ 0.30						$ 0.35	$ 0.35	$ 0.35
Convertible Notes Payable																			438,775
Debt Instrument, Interest Rate, Stated Percentage							10.00%	10.00%											10.00%
Debt Conversion, Converted Instrument, Shares Issued (in Shares)		100,000																	763,235
Debt Instrument, Convertible, Conversion Price (in Dollars per share)		$ 0.30				$ 0.33																$ 0.575
Proceeds from Issuance of Common Stock																			$ 3,000,000

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Note 7 - Warrants (Detail) (USD $)	3 Months Ended		9 Months Ended									9 Months Ended	1 Months Ended							9 Months Ended	21 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2010	Jun. 08, 2010	Jan. 15, 2012 Spring 2010 Warrant Extension [Member]	Dec. 31, 2008 Fall 2008 Offering [Member]	Dec. 31, 2008 Fall 2008 One-Year Warrant [Member]	Dec. 31, 2008 Fall 2008 Three-Year Warrant [Member] Initial Price [Member]	Sep. 08, 2011 Fall 2008 Three-Year Warrant [Member]	Jul. 23, 2012 Other Warrants [Member]	May 11, 2011 Other Warrants [Member]	Jun. 30, 2012 Summer 2012 Warrants [Member]	Jun. 30, 2012 Winter 2012 Warrants [Member]	Sep. 30, 2012 Fall 2011 Warrants [Member]	Jun. 30, 2012 Fall 2011 Warrants [Member]	Dec. 31, 2011 Fall 2011 Warrants [Member]	Sep. 30, 2011 Convertible Notes Oustanding [Member]	Sep. 30, 2011 Convertible Notes Oustanding [Member]
Amortization of Debt Discount (Premium) (in Dollars)			$ 386,818	$ 481,303																$ 386,818	$ 481,303
Derivative Liability, Fair Value, Net (in Dollars)								95,885
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)							50,000		3	1,446,000			250,000	183,545	1,925,214	3,127,914	275,986	1,335,201	1,059,215
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)							0.50			1.00	2.00		0.40	0.55	0.55	0.50		0.50
Class of Warrant or Right, Outstanding	15,439,132	7,156,377	15,439,132	7,156,377	7,280,683	6,894,215						180,172	67,500	100,950
Stock or Unit Option Plan Expense (in Dollars)												30,029	45,900
Interest Expense (in Dollars)	$ 36,137	$ 228,639	$ 454,074	$ 642,088								$ 150,143
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period													4 years

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Note 7 - Warrants (Detail) - Warrants Outstanding	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Number of Shares (in Shares)	7,280,683	6,894,215
Price Range	-	-
Number of Shares (in Shares)	8,158,449	1,089,630
Price Range	-	-
Number of Shares (in Shares)		(2,403,922)
Price Range	$-	-
Number of Shares (in Shares)	15,439,132	7,156,377
Price Range	-	-
Minimum [Member]
Price Range	$0.125	$0.125
Price Range	$0.40	$0.50
Price Range		$0.75
Price Range	$0.125	$0.125
Maximum [Member]
Price Range	1.00	2.00
Price Range	1.00	0.75
Price Range		2.00
Price Range	1.00	2.00

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Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Text Block]

Note 2. Summary of Significant Accounting Policies

Inventory

Inventories are stated at the lower of cost or net realizable value using the average cost method.  Inventories consisted of:

	December 31, 2011		September 30, 2012
Raw materials	$	27,556	$	37,069
Finished goods (see Note 4)		34,309		15,262
Total inventory	$	61,865	$	52,331

Equipment

Equipment is carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is three years. Equipment is stated on the balance sheet net of accumulated depreciation of $29,728 and $31,686 as of December 31, 2011 and September 30, 2012, respectively.

Other Assets

“Other Assets” consists of payments made to secure the patent rights to continue our efforts in commercializing the ISAN system.

We review long-lived assets using our best estimates based on reasonable assumptions and projections. An impairment loss to write such assets down to their estimated fair values is necessary if the carrying values of the assets exceed their related undiscounted expected future cash flows. We also determine impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.

Stock Options and Warrants Issued for Services

All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their fair values.

For stock issued to consultants and other non-employees for services, we record the expense based on the fair market value of the securities as of the date of the stock issuance. The issuance of stock warrants or options to non-employees are valued at the time of issuance utilizing the Black Scholes calculation and the amount is charged to expense.

Non-Cash Transactions

 We have established a policy relative to the methodology to determine the value assigned to each intangible we acquire, and/or services or products received for non-cash consideration of our common stock. The value is based on the market price of our common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received.

 The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results of our financial statements.

Revenue Recognition

Revenues are recognized as risk and title to products transfers to the customer (which generally occurs at the time shipment is made), the sales price is fixed or determinable, and collectability is reasonably assured. We also may generate revenues from royalties and license fees from our intellectual property. Licensees typically pay a license fee in one or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property. License fees are recognized over the estimated period of future benefit to the average licensee.

Earnings (Loss) Per Share

We report basic and diluted earnings (loss) per share (“EPS”) for common and common share equivalents. Basic EPS is computed by dividing reported earnings by the weighted average shares outstanding. Diluted EPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock. For the nine-month periods ended September 30, 2011 and 2012, the denominator in the diluted EPS computation is the same as the denominator for basic EPS due to the anti-dilutive effect of the warrants and stock options on the Company’s net loss.

Recent Accounting

There was no recent accounting guidance issued where the adoption would have a material effect on our condensed consolidated financial statements.

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Note 7 - Warrants (Detail) - Assumptions Used to Determine Fair Value of Warrants	12 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Warrant [Member]	Sep. 30, 2011 Warrant [Member]
Risk free interest rate			0.57%	1.87%
Expected volatility			489.00%	558.00%
Expected dividend yield			0.00%	0.00%
Forfeiture rate			0.00%	0.00%
Expected life in years	7 years	5 years	5 years	3 years

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Note 12 - Subsequent Events (Detail) (USD $)	1 Months Ended	4 Months Ended	12 Months Ended			1 Months Ended	0 Months Ended
	Jan. 31, 2012	Apr. 27, 2012	Sep. 30, 2012	Jun. 08, 2010	Apr. 27, 2009	Oct. 23, 2012 Summer 2012 Offering [Member]	Jul. 05, 2012 2007 Equity Incentive Plan [Member]
Share Price			$ 0.50		$ 0.30
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)				0.50
Stock Issued During Period, Shares, New Issues (in Shares)	275,986		459,000			275,038
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)		300,000					168,750
Noninterest Expense Directors Fees (in Dollars)							$ 45,000

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $)	Sep. 30, 2012	Dec. 31, 2011
CURRENT ASSETS
Cash and cash equivalents	$ 427,842	$ 128,498
Accounts receivable, net of allowance	7,254	10,476
Inventory	52,331	61,865
Prepaid expenses		1,346
Total current assets	487,427	202,185
FIXED ASSETS
Equipment, net	741	2,700
OTHER ASSETS	54,647	41,502
TOTAL ASSETS	542,815	246,387
CURRENT LIABILITIES
Accounts payable and accrued expenses	971,266	706,688
Convertible notes payable, current portion	413,775	670,410
Convertible notes payable, net of current portion		438,775
Total Long-term Liabilities		390,291
Note payable	100,000	100,000
Deferred revenue	22,395	52,509
Customer deposit	100,000	100,000
Total Current Liabilities	1,593,971	1,373,693
TOTAL LIABILITIES	1,593,971	1,763,984
STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock, $.00067 Par Value, 200,000,000 Shares Authorized, 59,242,220 and 66,310,618 Shares Issued, at December 31, 2011 and September 30, 2012.	44,495	39,737
Additional Paid-In Capital	69,982,637	65,907,960
Accumulated Deficit	(71,078,288)	(67,465,294)
Total Stockholders’ Deficit	(1,051,156)	(1,517,597)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	542,815	246,387
Current [Member]
CURRENT LIABILITIES
Discount on convertible notes, net of amortization	(13,465)	(255,914)
Noncurrent [Member]
CURRENT LIABILITIES
Discount on convertible notes, net of amortization		$ (48,484)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (3,612,994)	$ (3,043,994)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash interest expense related to the amortization of the fair value of warrants issued in conjunction with our convertible notes	386,818	481,303
Amortization and depreciation expense	1,958	6,532
Increase (decrease) in cash from change in:
Accounts receivable	3,222	5,882
Inventory	9,534	(61,616)
Prepaid expenses	1,346	2,469
Other assets	(13,145)	(26,345)
Accounts payable and accrued expenses	396,403	423,817
Deferred revenue	(30,114)	(54,652)
Customer deposits		82,500
Net Cash Used In Operating Activities	(1,662,101)	(1,334,451)
CASH FLOWS FROM INVESTING ACTIVITIES
Funds used to purchase equipment		(3,740)
Net Cash Used In Investing Activities		(3,740)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of stock	1,961,445	1,122,770
Payment of note payable		(20,000)
Net Cash Provided By Financing Activities	1,961,445	1,102,770
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	299,344	(235,421)
CASH AND CASH EQUIVALENTS — BEGINNING	128,498	425,069
CASH AND CASH EQUIVALENTS — ENDING	427,842	189,648
Cash Paid During the Period for:
Taxes	4,347	4,868
Conversion of Noteholders to shares of the Company’s Common stock:
Fair value of warrant extension	95,885	55,166
Fees paid related to our private securities offerings	90,071
Board of Directors [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense		78,000
Shares of the Company’s common stock issued for services:
Consultant obligations	$88,498	$-
Spring 2008 Notes [Member]
Conversion of Noteholders to shares of the Company’s Common stock:
Conversion of noteholders to common stock	695,410	989,676
Convertible Noteholders' Accrued and Unpaid Interest [Member]
Conversion of Noteholders to shares of the Company’s Common stock:
Conversion of noteholders to common stock	110,500	191,402
Board of Directors [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense	779,821	135,905
Settlement Obligations [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense		163,998
Consultants Options [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense	334,876	503,813
Consultants Stock [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense	80,174	45,937
Consultant Obligations [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense	334,876	192,834
Board of Directors [Member]
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Non-cash expense	$ 792,821	$ 88,292

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Note 9 - Stock-Based Compensation and Other Employee Benefit Plans (Detail) - Activity for our Stock Options (USD $)	4 Months Ended	9 Months Ended
	Apr. 27, 2012	Sep. 30, 2012	Sep. 30, 2011
Weighted Average Price per share	$ 0.45	$ 0.45	$ 0.51
Options Outstanding (in Shares)	300,000
Shares Available (in Shares)	(300,000)
Weighted Average Price per share		$ 0.35	$ 0.43
Weighted Average Price per share		$ 0.45	$ 0.49
Option Outstanding [Member]
Options Outstanding (in Shares)	7,739,258	7,739,258	4,797,223
Options Outstanding (in Shares)		981,828	1,805,593
Shares Available (in Shares)		(981,828)	(1,805,593)
Options Outstanding (in Shares)		8,721,086	6,602,816
Shares Available [Member]
Shares Available (in Shares)	4,260,742	4,260,742	1,202,777
Amendment to increase (in Shares)			6,000,000
Options Outstanding (in Shares)		981,828	1,805,593
Shares Available (in Shares)		(981,828)	(1,805,593)
Shares Available (in Shares)		3,278,914	5,397,184
Min [Member]
Price per share	$ 0.25	$ 0.25	$ 0.25
Price per share		$ 0.34	$ 0.39
Price per share		$ 0.25	$ 0.25
Max [Member]
Price per share	$ 1.89	$ 1.89	$ 1.89
Price per share		$ 0.35	$ 0.51
Price per share		$ 1.89	$ 1.89

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Note 10 - Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	December 31, 2011		September 30, 2012
Accounts payable and accrued expenses	$	448,177	$	522,870
Accrued interest		86,720		43,395
Officer and Board of Director Payables		171,791		405,001
Total Accounts Payable and Accrued Expenses	$	706,688	$	971,266

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Note 9 - Stock-Based Compensation and Other Employee Benefit Plans (Detail) - Stock Options, Valuation Assumptions	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Risk free interest rate	1.45%
Expected volatility	951.00%	906.00%
Expected dividend yield		0.00%
Forfeiture rate		0.00%
Expected life in years	7 years	5 years
Minimum [Member]
Risk free interest rate		2.08%
Expected dividend yield		0.00%
Forfeiture rate		0.00%
Maximum [Member]
Risk free interest rate		2.82%

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Note 2 - Summary of Significant Accounting Policies (Detail) (USD $)	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Property, Plant and Equipment, Estimated Useful Lives	three
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 31,686	$ 29,728

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Note 1 - Business and Organization

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1. Business and Organization

Outlook

The accompanying condensed 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. As reflected in the accompanying financial statements, we had a net loss of $3,612,994 for the nine-month period ended September 30, 2012, and at September 30, 2012, we had negative working capital of $1,106,544, current assets of $487,427, and an accumulated stockholders’ deficit of $71,078,288. The foregoing factors raise substantial doubt about our ability to continue as a going concern. Ultimately, our ability to continue as a going concern is dependent upon our ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations by licensing or otherwise commercializing products incorporating our BioLargo technology. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We have been, and anticipate that we will continue to be, limited in terms of our capital resources. Our total cash and cash equivalents were $427,842 at September 30, 2012. We generated revenues of $55,145 in the nine-month period ended September 30, 2012, which amount was not sufficient to fund our operations. We generally have not had enough cash or sources of capital to pay our accounts payable and expenses as they arise, and have relied on the issuance of stock options and common stock, as well as extended payment terms with our vendors, consultants and officers, to continue to operate. We will be required to raise substantial additional capital to expand our operations, including without limitation, hiring additional personnel, additional scientific and third-party testing, costs associated with obtaining regulatory approvals and filing additional patent applications to protect our intellectual property, and possible strategic acquisitions or alliances, as well as to meet our liabilities as they become due for the next 12 months.

As of September 30, 2012, we had $513,775 aggregate principal amount outstanding on various promissory notes. We may pay the principal and interest due on these notes in cash or in stock, at our option, at maturity. In addition, as of September 30, 2012, we had $971,266 of outstanding accounts payable and accrued expenses, of which $43,395 relates to interest due on outstanding promissory notes, and $927,871 relates to accrued and unpaid payables. (See Note 10.)

During the nine-month period ended September 30, 2012, we received gross proceeds of $1,961,445 pursuant to our private securities offerings. (See Note 5.)

In the opinion of management, the accompanying condensed consolidated balance sheets and related condensed consolidated statements of operations, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Estimates are used when accounting for stock-based transactions, account payables and accrued expenses and taxes, among others.

 The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to Rule 8-03 of Regulation S-X under the Securities Act of 1933, as amended. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We are still operating in the early stages of the sales and distribution process, and therefore our operating results for the nine-month period ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012, or for any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission (the “SEC”).

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Convertible Preferred Stock, Par Value (in Dollars per share)	$ 0.00067	$ 0.00067
Convertible Preferred Stock, Shares Authorized	50,000,000	50,000,000
Convertible Preferred Stock, Shares Issued	0	0
Convertible Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value (in Dollars per share)	$ 0.00067	$ 0.00067
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares Issued	66,310,618	59,242,220

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Note 11 - Notes Payable

9 Months Ended

Sep. 30, 2012

Short-term Debt [Text Block]

 Note 11.  Notes Payable

On June 8, 2010, we received $100,000 and issued a promissory note with an initial maturity date of December 3, 2010, which accrues interest at a rate of 10%. The noteholder, for no additional consideration, received a stock purchase warrant entitling the holder to purchase 50,000 shares of our common stock, exercisable at $0.50 per share until June 3, 2013.  (See Note 7.)  The maturity date of the note was extended to December 3, 2011, and again, to December 3, 2012.

On August 3, 2009, we received $70,000 and issued a promissory note with a maturity date of October 31, 2009 which accrued interest at a rate of 10%. On October 31, 2009 the maturity date of this promissory note was extended to February 1, 2010. The maturity date was further extended to December 1, 2010, and in March 2010 a $20,000 payment on the note was made.  On December 31, 2010 we converted $30,000 principal balance into an aggregate 100,000 shares of our common stock at $0.30, and agreed to extend the maturity date to March 1, 2011. On March 1, 2011, we paid the remaining principal amount of $20,000, and $9,590 of accrued interest, in full satisfaction of the note.

For the nine-month periods ended September 30, 2011 and 2012 we recorded $7,583 and $7,611 of interest expense related to these notes payable.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 12, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	BIOLARGO, INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		66,585,656
Amendment Flag	false
Entity Central Index Key	0000880242
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Note 12 - Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Text Block]

Note 12. Subsequent Events.

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

Summer 2012 Offering

On October 23, 2012, we amended the terms of the Summer 2012 Offering (see Note 5) by reducing the price of the common stock sold from 40 cents to 35 cents, and reducing the exercise price of the Summer 2012 Warrant from 55 cents to 50 cents. As a result, we issued an additional 275,038 shares of common stock to the investors, and issued those investors amended warrants reflecting the new share amount and new exercise price.

Options issued under 2007 Equity Plan

On October 2, 2012, our independent board members were issued options to purchase an aggregate 168,750 shares of common stock at $0.40 cents per share in exchange for a reduction of $45,000 in accrued and unpaid obligations for their services on the board of directors.

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Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue
Licensing Fees		$ 109,720		$ 115,500
Product Sales	10,490	10,805	55,145	26,759
Total Revenue	10,490	120,525	55,145	142,259
Cost of goods sold	6,857	12,683	32,706	36,270
Gross profit (loss)	3,633	107,842	22,439	105,989
Costs and expenses
Selling, general and administrative	828,354	580,507	3,064,792	2,453,038
Research and development	54,498	9,035	114,609	48,325
Amortization and depreciation	312	1,335	1,958	6,532
Total costs and expenses	883,164	590,877	3,181,359	2,507,895
Loss from operations	(879,531)	(483,035)	(3,158,920)	(2,401,906)
Interest expense, net	(36,137)	(228,639)	(454,074)	(642,088)
Net loss	$ (915,668)	$ (711,674)	$ (3,612,994)	$ (3,043,994)
Loss per share (in Dollars per share)	$ (0.01)	$ (0.01)	$ (0.06)	$ (0.06)
Weighted average common share equivalents outstanding (in Shares)	65,289,303	56,340,625	62,674,578	54,826,213

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Note 6 - Conversion of Notes

9 Months Ended

Sep. 30, 2012

Conversion Of Spring 2008 Notes [Text Block]

Note 6. Conversion of Notes

Spring 2010 Notes

On February 6, 2012, a holder of a convertible promissory note issued in our Spring 2010 Offering (see Note 5) elected to convert the principal balance of $25,000 and accrued unpaid interest of $2,034 into an aggregate 47,017 shares of our common stock, at a conversion price of $0.575.

Spring 2008 Notes

On March 31, 2011, per the terms of the Spring 2008 Notes, we elected to convert the remaining aggregate principal balance of $913,625 and $76,051 of accrued and unpaid interest into an aggregate 733,108 shares of our common stock at a conversion price of $1.35 per share.

Spring 2009 Notes

On their June 1, 2012 maturity date, we elected to convert the remaining aggregate principal balance of $670,410 and $67,041 of accrued and unpaid interest of our Spring 2009 Notes into an aggregate 1,340,820 shares of our common stock at a conversion price of $0.55 per share. As a result, the Spring 2009 Notes are fully paid.

On April 16, 2011, the holder of a note issued in our Spring 2009 Offering elected to convert the principal balance of $11,000, and accrued unpaid interest of $964, into an aggregate 21,754 shares of our common stock, at a conversion price of $0.55.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

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Note 5 - Private Securities Offerings

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Text Block]

Note 5. Private Securities Offerings

Summer 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.40 per share that commenced May 2012 (the “Summer 2012 Offering”), through September 30, 2012, we sold 1,925,214 shares of our common stock at $0.40 per share to seven accredited investors and received $770,086 gross, $744,515 net proceeds from the sales. Of these amounts, 1,147,500 shares were sold and $459,000 was received during the three-month period ended September 30, 2012. Each purchaser of stock in the Summer 2012 Offering will receive, for no additional consideration, a stock purchase warrant (the “Summer 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.55 per share until March 31, 2014. Subsequent to September 30, 2012, we amended the terms of this offering to lower the price per share and warrant exercise price (see Note 12 “Subsequent Events).

Winter 2012 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced January 2012 and closed May 2012 (the “Winter 2012 Offering”), we sold 3,127,914 shares of our common stock at $0.35 per share to 30 accredited investors and received $1,094,765 gross; $1,030,265 net proceeds from the sales.

Each purchaser of stock in the Winter 2012 Offering received, for no additional consideration, a stock purchase warrant (the “Winter 2012 Warrant”) entitling the holder to purchase the same number of shares as purchased in the offering, for $0.50 per share until January 31, 2013. (See Note 7.)

Fall 2011 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced September 2011 (the “Fall 2011 Offering”), we received subscriptions of $467,317 from 16 accredited investors for the purchase of an aggregate 1,335,201 shares of our common stock at $0.35 per share. In the year ended December 31, 2011, we received $370,723 gross proceeds and issued 1,059,215 shares of our common stock. In January 2012 we received the remaining $96,594 from subscriptions committed prior to the termination of the offering and issued 275,986 shares of our common stock.

Each purchaser of stock in the Fall 2011 Offering received, for no additional consideration, a stock purchase warrant (the “Fall 2011 Warrant”) entitling the holder to purchase the same number of shares of common stock for $0.50 per share until December 31, 2012.  (See Note 7.)

Winter 2011 Offering

Pursuant to a private offering of our common stock at a price of $0.35 per share that commenced January 2011 and terminated June 2011 (the “Winter 2011 Offering”) we sold 2,765,070 shares of our common stock at $0.35 per share and received $967,768 gross proceeds from the sales.

Spring 2010 Offering

Pursuant to a private offering that commenced January 2010 (the “Spring 2010 Offering”) and terminated July 2010, we sold $438,775 of our 10% convertible notes (the “Spring 2010 Notes”), which are due and payable on April 15, 2013, to 18 investors, the principal amount of which is convertible into an aggregate 763,235 shares of our common stock, at $0.575 per share. The Spring 2010 Notes can be converted voluntarily by the noteholder at any time prior to the maturity date. We can unilaterally convert the Spring 2010 Notes (i) on or after July 31, 2010, if we have received one or more written firm commitments, or have closed on one or more transactions, or a combination of the foregoing, of at least $3 million gross proceeds of equity or debt; or (ii) on the maturity date. Accordingly, the Spring 2010 Notes may be repaid in cash or may be converted, at our sole option, into shares of our common stock, on or before the April 15, 2013 maturity date.

Each purchaser of the Spring 2010 Notes received, for no additional consideration, two stock purchase warrants, each of which entitle the holder to purchase the number of shares of our common stock into which the holder’s Spring 2010 Note is initially convertible. The first warrant (the “Spring 2010 Eighteen Month Warrant”) was exercisable at a price of $0.75 per share and expired unexercised on July 15, 2011. The second warrant (the “Spring 2010 Thirty-Six Month Warrant”) is exercisable at a price of $1.00 per share and expires on January 15, 2013. (See Note 7.)

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

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Note 1 - Business and Organization (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Net Income (Loss) Attributable to Parent	$ (915,668)	$ (711,674)	$ (3,612,994)	$ (3,043,994)
Working Capital	(1,106,544)		(1,106,544)
Assets, Current	487,427		487,427		202,185
Retained Earnings (Accumulated Deficit)	(71,078,288)		(71,078,288)		(67,465,294)
Cash and Cash Equivalents, at Carrying Value	427,842	189,648	427,842	189,648	128,498	425,069
Revenues	10,490	120,525	55,145	142,259
Long-term Debt, Gross	513,775		513,775
Accounts Payable and Accrued Liabilities, Current	971,266		971,266		706,688
Accounts Payable, Current	927,871		927,871
Received [Member]
Proceeds from Issuance of Common Stock			1,961,445
Interest Due [Member]
Interest Payable, Current	43,395		43,395
Cash Equivalents [Member]
Cash and Cash Equivalents, at Carrying Value	$ 427,842		$ 427,842

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Note 2 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Inventory, Current [Table Text Block]

	December 31, 2011		September 30, 2012
Raw materials	$	27,556	$	37,069
Finished goods (see Note 4)		34,309		15,262
Total inventory	$	61,865	$	52,331

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Note 9 - Stock-Based Compensation and Other Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Compensation and Employee Benefit Plans [Text Block]

Note 9. Stock-Based Compensation and Other Employee Benefit Plans

2007 Equity Incentive Plan

On August 7, 2007, our Board of Directors adopted the BioLargo, Inc. 2007 Equity Incentive Plan, as amended April 29, 2011 (“2007 Plan”), as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan. The Compensation Committee administers this plan. The 2007 Plan allows grants of common shares or options to purchase common shares. As plan administrator, the Compensation Committee has sole discretion to set the price of the options. The Compensation Committee may at any time amend or terminate the plan.

Extension of Options

On April 27, 2009, in an effort to preserve the Company’s cash and reduce outstanding payables, the Board offered to third parties, officers and board members an option (“Option”) to purchase common stock in lieu of cash payment to reduce amounts owed by the Company. The Options were issued pursuant to the Company’s 2007 Equity Incentive Plan with an exercise price of $0.50 cents a share, an amount which was $0.20 per share above the $0.30 per share closing price of the Company’s common stock on April 27, 2009, and had an expiration date of April 27, 2012. The Options issued to Board members Dennis P. Calvert and Kenneth R. Code were issued at an exercise price of $0.55 per share. In consideration of the circumstances in which the Options were issued, and the fact that the price of the Company’s common stock was less than the strike price of the Options, the Board extended the expiration date of the Options by a period of seven years, to expire on April 27, 2019.  The fair value of the Option totaled $684,171 and was recorded as selling, general and administrative expense.

Vesting of Options

 During the nine-month period ended September 30, 2012, a portion of the option to purchase 300,000 shares of common stock issued to our Chief Financial Officer in exchange for his services pursuant to the April 2012 extension of his engagement agreement vested, resulting in $70,000 of selling, general and administrative expense.

During the nine-month period ended September 30, 2012, a portion of the unvested options issued to consultants vested, resulting in $147,869 of selling, general and administrative expense.

Issuance of Options

During the nine-month period ended September 30, 2012, we recorded the issuance of an option to purchase an aggregate 46,667 shares of our common stock to our independent member of our Board of Directors, pursuant to the terms of the 2007 Equity Plan which calls for an automatic issuance of an option to any new independent director. The option vests after a period of one year from the date of grant, expires ten years from the date of issuance, and 6,667 is exercisable at $0.34 per share and 40,000 shares is exercisable at $0.32 per share, the price of our common stock on the grant date. The fair value of this option totaled $15,067 and was recorded as selling, general and administrative expense.

On July 5, 2012, our independent board members were issued options to purchase an aggregate 435,161 shares of our common stock at $0.40 per share in exchange for a reduction of $104,439 in accrued and unpaid obligations for their services on the board of directors.  The share price of our common stock on July 5, 2012 was $0.32 per share.  These options are fully vested and expire ten years from the date of issuance, July 5, 2022.  The fair value of the options was an aggregate $152,585, resulting in additional $48,146 of selling, general and administrative expense in the three-month period September 30, 2012.

On July 18, 2012, an option was issued to a consultant, in accordance with the service agreement, to purchase an aggregate 200,000 shares of our common stock.  Of this amount 50,000 vested upon issuance exercisable at $0.50 per share; 50,000 vest January 18, 2013 at an exercise price of $0.75 per share; 50,000 vest July 18, 2013 at an exercise price of $1.00 per share; and the remaining 50,000 vest January 18, 2014 at an exercise price of $1.25 per share.  The share price of our common stock on the date of issuance was $0.28 per share and resulted in a fair value of $56,000, of which $14,000 was recorded as selling, general and administrative expense during the three-month period ended September 30, 2012, and the remaining will be expensed ratably per the vesting schedule. These options expire ten years from the date of issuance, July 18, 2022.

Activity for our stock options under the 2007 Plan for the nine-month periods ended September 30, 2011 and 2012 is as follows:

As of September 30, 2011:	Options Outstanding		Shares Available			Price per share				Weighted Average Price per share
Balances as of December 31, 2010		4,797,223		1,202,777		$	0.25	–	1.89	$	0.51
Amendment to increase		—		6,000,000				—			—
Granted		1,805,593		(1,805,593	)	$	0.39	–	0.51	$	0.43
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2011		6,602,816		5,397,184		$	0.25	–	1.89	$	0.49

As of September 30, 2012:	Options Outstanding		Shares Available			Price per share				Price per share
Balances as of December 31, 2011		7,739,258		4,260,742		$	0.25	–	1.89	$	0.45
Granted		981,828		(981,828	)		0.34	–	0.35		0.35
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2012		8,721,086		3,278,914		$	0.25	–	1.89	$	0.45

We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes Option Pricing Model. The following methodology and assumptions were used to calculate share based compensation for the nine-month period ended September 30:

	2007 Plan
	2011				2012
Risk free interest rate	2.08	–	2.82	%		1.45	%
Expected volatility		906	%			951	%
Expected dividend yield		—				—
Forfeiture rate		—				—
Expected life in years		5				7

Expected price volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. Expected volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility.

The risk-free interest rate used in the Black-Scholes calculation is based on the prevailing U.S Treasury yield as determined by the U.S. Federal Reserve. We have never paid any cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes Option Pricing Model.  Historically, we have not had significant forfeitures of unvested stock options granted to employees and Directors. A significant number of our stock option grants are fully vested at issuance or have short vesting provisions. Therefore, we have estimated the forfeiture rate of our outstanding stock options as zero.

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Note 7 - Warrants

9 Months Ended

Sep. 30, 2012

Warrants [Text Block]

Note 7. Warrants

We have certain warrants outstanding to purchase our common stock, at various prices, as described in the following tables:

	Number of Shares			Price Range
Outstanding as of December 31, 2010		6,894,215		$	0.125	–	2.00
Issued		1,089,630		$	0.50	–	0.75
Exercised		—		$		—
Expired		(2,403,922	)	$	0.75	–	2.00
Outstanding as of September 30, 2011		7,156,377		$	0.125	–	2.00

	Number of Shares		Price Range
Outstanding as of December 31, 2011		7,280,683	$	0.125	–	1.00
Issued		8,158,449	$	0.40	–	1.00
Exercised		—	$		—
Expired		—	$		—
Outstanding as of September 30, 2012		15,439,132	$	0.125	–	1.00

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 calculated value is amortized over the life of the warrant. The determination of expense of warrants issued for services or settlement also uses the option-pricing model. The principal assumptions we used in applying this model were as follows:

	2011		2012
Risk free interest rate		1.87%		0.57	%
Expected volatility		558%		489	%
Expected dividend yield		N/A		N/A
Forfeiture rate		N/A		N/A
Expected life in years		3.00		5

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 presumed to be the mid-point between the vesting date and the end of the contractual term.

Warrants issued as part of our Convertible Notes

We recorded $481,303 and $386,818 of non-cash interest expense related to the amortization of the fair value of warrants issued in conjunction with our convertible notes for the nine-month periods ended September 30, 2011 and 2012, respectively. These expenses related to convertible notes issued in our Spring 2010 and Spring 2009 offerings. We have not issued convertible notes since that time.

Warrant Extension

On June 1, 2012, the expiration date of the Spring 2009 Three-Year Warrant was extended nine months from June 1, 2012 to March 1, 2013.  The fair value of the extension was an aggregate $95,885 and was recorded as interest expense upon issuance.

Summer 2012 Warrants

Pursuant to the terms of our Summer 2012 Offering (see Note 5), from inception of May 2012 through September 30, 2012,  we issued warrants to purchase up to an aggregate 1,925,214 shares of our common stock to the investors in the Offering. These warrants are set to expire on March 31, 2014 and have an exercise price of $0.55 per share.

Winter 2012 Warrants

Pursuant to the terms of our Winter 2012 Offering (see Note 5), during the nine-month period ended September 30, 2012, we issued warrants to purchase up to an aggregate 3,127,914 shares of our common stock to the investors in the Offering. These warrants are set to expire on January 31, 2013 and have an exercise price of $0.50 per share. Subsequent to September 30, 2012, we lowered the exercise price of the warrants issued in this offering (see Note 12 “Subsequent Events).

Fall 2011 Warrants

Pursuant to the Fall 2011 Offering (see Note 5), we issued to the investors warrants to purchase an aggregate 1,335,201 shares of our common stock at $0.50 per share, which warrants are set to expire on December 31, 2012. Of that amount, in the year ended December 31, 2011, we issued warrants to purchase an aggregate 1,059,215 shares of our common stock, and in the nine-month period ended September 30, 2012, we issued warrants to purchase an aggregate 275,986 shares of our common stock.

Fall 2008 Warrants Extension

 Pursuant to the terms of the Fall 2008 Offering, we issued “three-year” warrants to purchase up to an aggregate 1,446,000 shares at an exercise price of $1.00 per share (initially issued at $2.00 per share). On September 28, 2011, we extended the expiration date of the Fall 2008 Three-year Warrant by one year from October 15, 2011 to October 15, 2012 resulting in a fair value of $180,172. Of this amount, $30,029 was expensed during 2011 and the remaining $150,143 was recorded as interest expense during the three-month period ended March 31, 2012.

Other Warrants

On July 23, 2012, we issued a warrant to a consultant for services provided to purchase up to an aggregate 250,000 shares of our common stock at an exercise price of $0.40 per share, resulting in a fair value of $67,500.  Of this amount $45,900 was recorded as selling, general and administrative expense during the three-month period September 30, 2012 and the remaining will be expensed ratably over the four-month vesting schedule.  The warrant expires July 23, 2017.

On May 11, 2011, we issued a warrant to consultants for services provided to purchase up to an aggregate 183,545 shares of our common stock at an exercise price of $0.55 per share, resulting in a fair value of $100,950, which was recorded as selling, general and administrative expense during the three-month period June 30, 2011.The warrant expires May 11, 2016.

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Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note Disclosure [Text Block]

Note 8. Stockholders’ Equity

Preferred Stock

Our certificate of incorporation authorizes our Board of Directors to issue preferred stock, from time to time, on such terms and conditions as they shall determine. As of December 31, 2011 and September 30, 2012 there were no outstanding shares of our preferred stock.

Common Stock

As of December 31, 2011 and September 30, 2012 there were 59,242,220 and 66,310,618 shares of common stock outstanding, respectively. The increase in shares during the nine-month period ended September 30, 2012 is comprised of the following stock issuances: (i) 1,340,820 shares of our common stock related to the conversion of our Spring 2009 Notes and related accrued and unpaid interest, (ii) 125,539 shares of our common stock related to the conversion of Spring 2010 Notes accrued and unpaid interest, (iii) 47,017 shares of our common stock as payment of a noteholder of our Spring 2010 Notes and related accrued interest, (iv) 3,127,914 shares of our common stock issued to investors in our Winter 2012 Offering, (v) 1,925,214 shares of our common stock issued to investors in our Summer 2012 Offering, (vi) 275,986 shares of our common stock issued to investors in our Fall 2011 Offering (vii) 225,908 shares as payment to consultants in lieu of accrued and unpaid obligations.

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Note 10 - Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2012

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 10. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses included the following:

	December 31, 2011		September 30, 2012
Accounts payable and accrued expenses	$	448,177	$	522,870
Accrued interest		86,720		43,395
Officer and Board of Director Payables		171,791		405,001
Total Accounts Payable and Accrued Expenses	$	706,688	$	971,266

Payment of Consultant Fees

On January 31, 2012, we issued an aggregate 30,147 shares of our common stock, at a conversion price of $0.31, in lieu of $9,225 of rent expense.

On March 6, 2012, we issued 100,000 shares of our common stock at a conversion price of $0.35 per share, and recorded $35,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

On July 1, 2012, we issued 80,000 shares of our common stock at a conversion price of $0.35 per share, and recorded $28,000 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

On September 5, 2012 we issued 15,761 shares of our common stock at a conversion price of $0.31 per share, and recorded $4,693 of selling, general and administrative expense to a consultant in exchange for research and marketing services.

Payment of Accrued Interest

On April 15, 2012, in accordance with terms of the Spring 2010 Notes (see Note 5), we paid accrued interest of $41,425 by the issuance of 125,539 shares of our common stock, at a conversion price of $0.33 per share, to the holders of the Spring 2005 Notes.

All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.

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Note 9 - Stock-Based Compensation and Other Employee Benefit Plans (Detail) (USD $)	1 Months Ended	4 Months Ended	9 Months Ended		0 Months Ended	9 Months Ended	120 Months Ended		1 Months Ended	3 Months Ended					9 Months Ended
	Apr. 27, 2009	Apr. 27, 2012	Sep. 30, 2012	Sep. 30, 2011	Jul. 05, 2012 Independent Member of Board of Directors [Member]	Sep. 30, 2012 Independent Member of Board of Directors [Member]	Jul. 05, 2022 Independent Member of Board of Directors [Member]	Sep. 29, 2012 Independent Member of Board of Directors [Member]	Jul. 18, 2012 Consultant [Member]	Sep. 30, 2012 Consultant [Member]	Jan. 18, 2014 Consultant [Member]	Jul. 18, 2013 Consultant [Member]	Jan. 18, 2013 Consultant [Member]	Apr. 27, 2009 Amount Above Closing Price [Member]	Sep. 30, 2012 Chief Financial Officer [Member]	Sep. 30, 2012 Third-Party Consultants [Member]	Sep. 30, 2012 Amount Above Closing Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price						$ 0.34		$ 0.32	$ 0.50		$ 1.25	$ 1.00	$ 0.75	$ 0.20
Share Price	$ 0.30		$ 0.50		$ 0.32					$ 0.28
Expiration Date Extension	7 years
Open Option Contracts Written, at Fair Value (in Dollars)		$ 684,171
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)		300,000			435,161	46,667			200,000
Allocated Share-based Compensation Expense (in Dollars)					48,146	15,067				14,000					70,000	147,869
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						1 year
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term							10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number (in Shares)								40,000	50,000				50,000				6,667
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price			$ 0.35	$ 0.43	$ 0.40
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value (in Dollars)					104,439
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value (in Dollars)					$ 152,585					$ 56,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number (in Shares)											50,000	50,000
Investment Options, Expiration Date										Dec. 31, 2008

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Note 9 - Stock-Based Compensation and Other Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

As of September 30, 2011:	Options Outstanding		Shares Available			Price per share				Weighted Average Price per share
Balances as of December 31, 2010		4,797,223		1,202,777		$	0.25	–	1.89	$	0.51
Amendment to increase		—		6,000,000				—			—
Granted		1,805,593		(1,805,593	)	$	0.39	–	0.51	$	0.43
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2011		6,602,816		5,397,184		$	0.25	–	1.89	$	0.49

As of September 30, 2012:	Options Outstanding		Shares Available			Price per share				Price per share
Balances as of December 31, 2011		7,739,258		4,260,742		$	0.25	–	1.89	$	0.45
Granted		981,828		(981,828	)		0.34	–	0.35		0.35
Exercised		—		—				—			—
Expired		—		—				—			—
Balances as of September 30, 2012		8,721,086		3,278,914		$	0.25	–	1.89	$	0.45

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2007 Plan
	2011				2012
Risk free interest rate	2.08	–	2.82	%		1.45	%
Expected volatility		906	%			951	%
Expected dividend yield		—				—
Forfeiture rate		—				—
Expected life in years		5				7

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Note 3 - Customer Deposit (Detail) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Customer Deposits, Current	$ 100,000	$ 100,000

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Consolidated Statement of Stockholders' Equity (Unaudited) (USD $)	Winter 2011 [Member] Common Stock [Member]	Winter 2011 [Member] Additional Paid-in Capital [Member]	Winter 2011 [Member]	Summer 2010 [Member] Common Stock [Member]	Summer 2010 [Member] Additional Paid-in Capital [Member]	Summer 2010 [Member]	Fall 2011 [Member] Common Stock [Member]	Fall 2011 [Member] Additional Paid-in Capital [Member]	Fall 2011 [Member]	Consultants [Member] Common Stock [Member]	Consultants [Member] Additional Paid-in Capital [Member]	Consultants [Member]	Common Stock [Member] Spring 2009 [Member]	Common Stock [Member] Spring 2010 [Member]	Common Stock [Member] Spring 2010 [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] Officers and Board of Directors [Member]	Additional Paid-in Capital [Member] Consultants [Member]	Additional Paid-in Capital [Member] Spring 2009 [Member]	Additional Paid-in Capital [Member] Spring 2010 [Member]	Additional Paid-in Capital [Member] Spring 2010 [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Officers and Board of Directors [Member]	Consultants [Member]	Spring 2009 [Member]	Spring 2010 [Member]	Spring 2010 [Member]	Total
BALANCE DECEMBER 31, 2011 at Dec. 31, 2011																$ 39,737						$ 65,907,960	$ (67,465,294)						$ (1,517,597)
BALANCE DECEMBER 31, 2011 (in Shares) at Dec. 31, 2011																59,242,220
Conversion of Notes and accrued interest obligations													898	32	84				736,553	27,002	41,341					737,451	27,034	41,425
Conversion of Notes and accrued interest obligations (in Shares)													1,340,820	47,017	125,539
Issuance of stock for cash	2,110	1,092,655	1,094,765	1,295	768,791	770,086	187	96,407	96,594
Issuance of stock for cash (in Shares)	3,127,914			1,925,214			275,985
Issuance of stock for services										152	88,346	88,498					792,821	334,876						792,821	334,876
Issuance of stock for services (in Shares)										225,908
Fair value of warrant extension																						95,885							95,885
Net loss for the nine-month period ended September 30, 2012																							(3,612,994)						(3,612,994)
BALANCE SEPTEMBER 30, 2012 at Sep. 30, 2012																$ 44,495						$ 69,982,637	$ (71,078,288)						$ (1,051,156)
BALANCE SEPTEMBER 30, 2012 (in Shares) at Sep. 30, 2012																66,310,618

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Note 4 - Deferred Revenue

9 Months Ended

Sep. 30, 2012

Deferred Revenue Disclosure [Text Block]

Note 4. Deferred Revenue

Horn Warehouse

Our distribution partner, Horn (formerly the E.T. Horn Company), warehouses our product and makes it available to us for later sales, and thus for revenue recognition purposes, certain sales to Horn are deferred until such time as the product is sold to retailers and/or end-users. As of September 30, 2012, a balance of $22,395 relating to the sale of Odor-No-More product to Horn remains as deferred revenue.

Sublicense to Isan USA

On March 29, 2010, we entered into a sublicense agreement (the “Isan USA Sublicense”) with Isan USA, Inc. (“Isan USA”) which grants Isan USA the exclusive rights to use, exploit, develop and commercialize the Isan System Technology in the United States, in particular fields of use.  Pursuant to the Isan USA Sublicense, Isan USA paid to BioLargo a $100,000 initial license fee plus additional payments of $23,000. Of the amounts received from Isan USA, $109,720 was considered deferred revenue as of June 30, 2011. Isan USA was unable to secure financing, and has ceased making the monthly payments required by the Isan USA Sublicense agreement. Given the failure of Isan USA to secure financing, on August 12, 2011 we and Isan USA mutually agreed to terminate the Isan USA Sublicense. The remaining Isan USA deferred revenue balance of $109,720 was recorded as revenue during the three-month period ended September 30, 2011.

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Note 4 - Deferred Revenue (Detail) (USD $)			1 Months Ended		1 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Mar. 29, 2010 Additional Payments [Member] Isan USA [Member]	Sep. 30, 2012 ET Horn Warehouse [Member]	Mar. 29, 2010 Isan USA [Member]	Sep. 30, 2012 Isan USA [Member]	Jun. 30, 2012 Isan USA [Member]
Deferred Revenue, Current	$ 22,395	$ 52,509		$ 22,395		$ 109,720	$ 109,720
Proceeds from Customers			$ 23,000		$ 100,000

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Note 10 - Accounts Payable and Accrued Expenses (Detail) - Accounts Payable And Accrued Expenses (USD $)	Sep. 30, 2012	Dec. 31, 2011
Accounts payable and accrued expenses	$ 522,870	$ 448,177
Accrued interest	43,395	86,720
Officer and Board of Director Payables	405,001	171,791
Total Accounts Payable and Accrued Expenses	$ 971,266	$ 706,688

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Note 7 - Warrants (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of Shares			Price Range
Outstanding as of December 31, 2010		6,894,215		$	0.125	–	2.00
Issued		1,089,630		$	0.50	–	0.75
Exercised		—		$		—
Expired		(2,403,922	)	$	0.75	–	2.00
Outstanding as of September 30, 2011		7,156,377		$	0.125	–	2.00

	Number of Shares		Price Range
Outstanding as of December 31, 2011		7,280,683	$	0.125	–	1.00
Issued		8,158,449	$	0.40	–	1.00
Exercised		—	$		—
Expired		—	$		—
Outstanding as of September 30, 2012		15,439,132	$	0.125	–	1.00

Schedule of Assumptions Used to Determine Fair Value of Warrants [Table Text Block]

	2011		2012
Risk free interest rate		1.87%		0.57	%
Expected volatility		558%		489	%
Expected dividend yield		N/A		N/A
Forfeiture rate		N/A		N/A
Expected life in years		3.00		5