Note 13 - Subsequent Events

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

Note

13.

Subsequent Events.

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

Lincoln Park Capital Purchase of Shares and New Agreement

From

January 1, 2020,

through the date of this Report, we have sold

1,398,563

shares of our common stock to Lincoln Park pursuant to the LPC Purchase Agreement (see Note

3

), and received

$287,965

in net proceeds. In conjunction with these issuances, we have issued Lincoln Park

14,080

“additional commitment shares”.

On

March 30

,

2020,

we executed a new Purchase Agreement with Lincoln Park, which is very similar to the existing LPC Purchase Agreement, except that it improves the terms of the facility to allow the company to secure more capital as it elects. Lincoln Park also agreed to purchase

1,785,715

 shares of common stock and an immediate investment of

$250,000.

  The new purchase agreement will allow for up to

$10,250,000

to be accessible to the company, at its sole election, over the next

three

years. The Company also issued

2,928,571

shares to Lincoln Park as a commitment fee equal to

4%

of the amount committed.

Chief Financial Officer Contract Extension

On

February 25, 2020,

BioLargo, Inc. (“we”, or the “Company”) and our Chief Financial Officer Charles K. Dargan, II formally agreed to extend the engagement agreement dated

February 1, 2008 (

the “Engagement Agreement”, which had been previously extended multiple times), pursuant to which Mr. Dargan has been and continues to serve as the Company’s Chief Financial Officer. The Engagement Extension Agreement dated as of

February 25, 2020 (

the “Engagement Extension Agreement”) provides for an additional term to begin retroactively on

October 1, 2019,

and to expire

January 31, 2021 (

the “Extended Term”).

As the sole compensation for the Extended Term, Mr. Dargan was issued an option (“Option”) to purchase

25,000

shares of the Company’s common stock for each month during the Extended Term (thus, an option to purchase

400,000

shares reflecting an extended term of

16

months). The Option vests over the period of the Extended Term, with

75,000

shares having vested as of

December 31, 2019,

and the remaining shares to vest

25,000

shares monthly beginning

January 31, 2020,

and each month thereafter, so long as the agreement is in full force and effect. The Option is exercisable at

$0.21

per share, the closing price of BioLargo’s common stock on

February 25, 2020,

expires

ten

years from the grant date, and was issued pursuant to the Company’s

2018

Equity Incentive Plan.

The Option is Mr. Dargan’s sole compensation for the Extended Term. As was the case in all prior terms of his engagement, there is

no

cash component of his compensation for the Extended Term. Mr. Dargan is eligible to be reimbursed for business expenses he incurs in connection with the performance of his services as the Company’s Chief Financial Officer (although he has made

no

such requests for reimbursement in the past). All other provisions of the Engagement Agreement

not

expressly amended pursuant to the Engagement Extension Agreement remain the same, including provisions regarding indemnification and arbitration of disputes.

BKT Investment

On

March 10, 2020,

BKT Tech Co. Ltd. (“BKT”), pursuant to a Joint Venture Framework Agreement to establish a South Korea based joint venture to commercialize CupriDyne Clean products, purchased

1,593,807

shares of our common stock for

$350,000.

On

March 20, 2020,

we invested

$100,000

into the South Korean joint venture (Odin Co. Ltd.), along with

$150,000

invested by BKT and its U.S. subsidiary, Tomorrow Water. We received a

40%

equity interest, and BKT and Tomorrow Water each received

30%

equity interests.

Retired

100%

of the outstanding Vista Capital Note

Subsequent to

December 31, 2019,

Vista Capital converted the remaining amount of its note that had been scheduled to mature on

April 7, 2020,

and we issued an aggregate

2,079,359

shares of common stock in full payment thereof.

Accounts Payable Retired with Shares of Stock

The Company’s senior officers, board members, vendors and consultants continue to convert amounts owed to them in stock and options to purchase stock. On

March 30, 2020,

BioLargo’s President/CEO and its Chief Science Officer agreed to convert

$110,000

of salary and expenses due and unpaid during the

first

quarter of

2020

into shares of stock and agreed to substantial restrictions on their resale.

During the

three

-months ended

March 31, 2020,

officers, board members and vendors to Clyra Medical Technologies, Inc. converted

$285,000

of accounts payable by issuing options to purchase

920

shares of stock in Clyra Medical Technologies, Inc.

Clyra Medical Received Investment Commitment

On

March 28, 2020,

Clyra received an executed subscription for

$250,000

worth of Clyra stock, and wire transfers are in process.

Coronavirus – COVID-

19

Pandemic

Uncertainties surrounding the effects of the coronavirus, particularly potential diversion of time and resources of federal government entities which make up a significant concentration of our customer base, could cause a material adverse effect on our results of operations and financial results.  The extent of the impact of COVID-

19

on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our customers, employees and vendors all of which are uncertain and cannot be predicted.  A material disruption in our workplace as a result of the coronavirus could affect our ability to carry on our business operations in the ordinary course and

may

require additional cost and effort should our employees

not

be able to be physically on-premises.