Note 6 - Warrants

9 Months Ended

Sep. 30, 2014

Warrants [Abstract]

Warrants [Text Block]

Note 6. 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, 2012		8,390,741		$	0.125 – 2.00
Issued		2,603,329		$	0.50 – 1.00
Exercised		—		$	—
Expired		(1,275,298	)	$	0.50 – 1.00
Outstanding as of September 30, 2013		9,718,772		$	0.125 – 1.00

	Number of
	Shares			Price Range
Outstanding as of December 31, 2013		10,618,771		$	0.125 – 1.00
Issued		4,785,001		$	0.25 – 1.00
Exercised		(674,288	)	$	0.30 – 0.50
Expired		(6,291,362	)	$	0.50 – 1.00
Outstanding as of September 30, 2014		8,438,122		$	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:

	2013			2014
Risk free interest rate		0.12	%		.09 – 1.55	%
Expected volatility		113	%		184 – 349	%
Expected dividend yield		—			—
Forfeiture rate		—			—
Contractual life in years		1		1 – 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.

No warrants were issued in conjunction with debt or as compensation during the nine-month periods ended September 30, 2013 and 2014, as such there is no corresponding expense related to the warrants issued. Warrants reflecting those issued in the above tables are set forth immediately below.

Summer 2014 Warrants

On June 25, 2014, we began a private offering of our common stock at a price of $0.40 per share. (See Note 4.) Per the terms of the Summer 2014 offering and through the period ended September 30, 2104, we issued warrants to purchase 455,500 shares of our common stock. The warrant is exercisable at $0.75 per share, will expire on July 31, 2019, and is subject to a call provision in the event (i) the closing price of the Common Stock for each of twenty (20) consecutive business days, exceeds $1.50 per share (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the date of issuance of this Warrant), (ii) the Restricted Stock is subject to resale pursuant to 17 C.F.R. 230.144 (“Rule 144”) or pursuant to any other exemption from registration under to the Securities Act of 1933, as amended and (iii) the Shares underlying the Warrant are registered with the SEC.

Summer 2013 Warrants

Pursuant to the terms of our Summer 2013 Offering (see Note 4), since inception in June 2013 through its termination on March 31, 2014, we issued warrants to purchase up to an aggregate 3,370,000 shares of our common stock at an exercise price of $0.30 per share. Of this amount, we issued warrants to purchase up to an aggregate 3,190,000 shares of our common stock during the nine-month period ended September 30, 2014. These warrants are set to expire December 31, 2016.

During the nine-month period ended September 30, 2014 we sold 280,000 shares of our common stock in exchange for $84,000 from the exercise of our Summer 2013 Warrant.

Clyra 2014 Warrants

Pursuant to the terms of the Clyra 2014 Spring Offering (see Note 4), during the nine-month period ended September 30, 2014 we issued warrants to purchase up to an aggregate 980,000 shares of our common stock to the investors in the Clyra 2014 Spring Offering. Pursuant to the terms of the warrant, Clyra investors may tender one share of Clyra common stock for 4,000 shares of BioLargo common stock. These warrants are set to expire July 30, 2015.

Clyra 2012 Warrants

In April 2013, Clyra modified the terms of its offering, such that, in addition to shares of Clyra common stock, each Clyra investor would receive a warrant (“Clyra 2012 Warrants”) to purchase an additional number of shares of Clyra common stock as originally purchased by the investor, at a price of $1,833 per share, until July 30, 2015. The offering terms were also modified to increase the number of shares of BioLargo common stock into which the Clyra investor could convert his or her Clyra shares, from 2,858 to 4,000 shares of BioLargo common stock. We have issued warrants to purchase up to an aggregate 960,000 shares of BioLargo common stock to the investors in the Clyra Winter 2012 private securities offering. (See Note 4). The date until which the investor may tender Clyra shares to BioLargo for conversion was extended to July 30, 2015.

On August 29, 2014, an investor in Clyra exchanged 75 Clyra shares for 300,000 shares of BioLargo’s common stock.

Winter 2013 Warrants

Pursuant to the terms of our Winter 2013 Offering (see Note 4), during the three-month period ended March 31, 2013, we issued warrants to purchase up to an aggregate 1,366,664 shares of our common stock to the investors in the Offering at an exercise price of $0.55 per share. These warrants are set to expire June 15, 2015.

Winter 2012 Warrant

Pursuant to the terms of our Winter 2012 Offering, during 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 were set to expire on June 30, 2013 and have an exercise price of $0.50 per share. On June 30, 2013, the expiration date of these warrants was extended by a period of one year, such that the warrants now expired on June 30, 2014. 

During the nine-month period ended September 30, 2014 we sold 394,288 shares of our common stock in exchange for $197,144 from the exercise of aWinter 2012 Warrant. The remaining warrants to purchase 2,533,626 shares of our common stock expired unexercised on June 30, 2014.

Other Warrants

On December 31, 2013, the noteholder of our note payable (see Note 11) agreed to extend the maturity date to January 14, 2015. As consideration for the extension, we issued a warrant to purchase 60,000 shares of common stock at $0.30 cents per share, resulting in $14,412 recorded as interest expense upon issuance. The warrant expires on June 15, 2017.