Note 1 - Business and Organization

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

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

Note

1.

Business and Organization

Description of Business

BioLargo, Inc. is an innovative technology developer and environmental engineering company driven by a mission to "make life better" by delivering robust, sustainable solutions for a broad range of industries and applications, with a focus on clean water, clean air. The company also owns a minority interest in an advanced wound care subsidiary that has licensed BioLargo Technologies and it plans to spin out or sell when the appropriate opportunity is identified.  Our business strategy is straightforward: we invent or acquire technologies that we believe have the potential to be disruptive in large commercial markets; we develop and validate these technologies to advance and promote their commercial success as we leverage our considerable scientific, engineering, and entrepreneurial talent; we then monetize these technical assets through a variety of business structures that

may

include licensure, joint venture, sale, spin off, or by deploying direct to market strategies.

Liquidity / Going concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of our business. For the

three

months ended

March 31, 2020,

we had a net loss of

$2,616,000,

used

$753,000

cash in operations, and at

March 31, 2020,

we had a working capital deficit of

$3,651,000,

and current assets of

$1,080,000.

We do

not

believe gross profits in the immediate future will be sufficient to fund our current level of operations or pay the

$550,000

in debt due

August, 2020

which is convertible at the option of the debt-holder. We have been, and anticipate that we will continue to be, limited in terms of our capital resources. During the

three

months ended

March 31, 2020,

we generated revenues of

$439,000

through

two

 business segments (Odor-

No

-More and BLEST – see Note

10,

“Business Segment Information”). Neither generated enough revenues to fund their operations, or fund our corporate operations, overhead or other business segments, and thus, in light of our cash position at

December 31, 2019,

in order to continue operations, during the quarter we conducted private securities offerings and sold common stock to Lincoln Park (see Note

3

). With respect to the debt due

August 2020,

we intend to pay the debt through proceeds from our various financing resources, convert the remaining balance to equity, or renegotiate the terms; the remainder of debt due in

2020

is convertible at our option at maturity.

On

March 30, 2020,

we entered into a new

three

-year agreement with Lincoln Park (see Note

3

), which allows us to sell to Lincoln Park up to

100,000

shares of our common stock per day, up to a maximum of

$10,250,000.

We intend to continue to sell stock to Lincoln Park to provide working capital as needed. We also intend to raise money through private securities offerings. And, we continue to negotiate for more financing from private investors. Other than sales of stock to Lincoln Park,

no

assurance can be made of our success at raising money through private or public offerings.

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 technologies. The consolidated financial statements do

not

include any adjustments that might be necessary if we are unable to continue as a going concern.

Organization

We are a Delaware corporation formed in

1991.

We have

four

wholly-owned subsidiaries: BioLargo Life Technologies, Inc., organized under the laws of the State of California in

2006;

Odor-

No

-More, Inc., organized under the laws of the State of California in

2009;

BioLargo Water Investment Group Inc. organized under the laws of the State of California in

2019,

which wholly owns BioLargo Water, Inc., organized under the laws of Canada in

2014;

and BioLargo Development Corp., organized under the laws of the State of California in

2016.

Additionally, we own

97.5%

(see Note

10

) of BioLargo Engineering Science and Technologies, LLC, organized under the laws of the State of Tennessee in

2017

(“BLEST”). We also own

36%

of Clyra Medical Technologies, Inc. (“Clyra Medical”), organized under the laws of the State of California in

2012,

and consolidate their financial statements (see Note

2,

subheading “Principles of Consolidation,” and Note

8

).

The unaudited 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. For some of our activities, we are still operating in the early stages of the sales and distribution process, and therefore our operating results for the

three

months ended

March 31, 2020

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 

31,

 

2020,

or for any other period. These unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Annual Report on Form

10

-K for the year ended

December 31, 2019

filed with the Securities and Exchange Commission (the “SEC”) on

March 31, 2020.