Note

Convertible Notes Payable and Lines of Credit

	DECEMBER 31, 201 6		JUNE 3 0 , 201 7

Current liabilities:
Line of credit, matures December 1, 2017	$	50,000	$	50,000

Convertible notes payable
One-Year Convertible notes, mature July 8, 2017	$	280,000	$	—
One-Year Convertible notes, mature December 30, 2017		280,000		280,000
Convertible notes, mature June 1, 2018*		—		4,550,097
Total convertible notes payable	$	560,000	$	4,830,097

Long-term liabilities:
Clyra Line of credit, matures March 31, 2019	$	—	$	250,000

Convertible notes payable, net of current portion
Convertible notes, mature June 1, 2018*	$	4,800,097	$	—
Convertible notes, mature September 17, 2019		283,571		283,571
Convertible notes, mature December 31, 2019		167,000		292,000
Convertible notes, mature June 20, 2020		—		100,000
Total convertible notes payable , net of current portion	$	5,250,668	$	675,571

Total	$	5,860,668	$	5,805,668

* The convertible notes that mature

June 1, 2018,

were considered “long-term” liabilities as of

December 31, 2016,

and “current” liabilities (due within

one

year) as of

June 30, 2017.

As such, those same liabilities are in both the “long-term” and “current” liabilities section in the above table.

For the

three

and

six

months ended

June 30, 2016,

we recorded

$478,525

and

$884,850

and for the

three

and

six

months ended

June 30, 2017,

we recorded

$1,119,273

and

$2,072,829

of interest expense related to the amortization of our discount on our convertible notes payable and interest from our convertible notes and lines of credit.

Line of Credit, matures

December 1, 2017

June 6, 2016,

we received

$300,000

pursuant to a line of credit, accruing interest at a rate of

18%

per annum, for which we have pledged our inventory and accounts receivable as collateral. The line of credit

may

be repaid following

nine

-months from the date of issuance or at the maturity date

December 1, 2017.

Each investor, for

additional consideration, received a warrant to purchase our common stock. (See Note

) The warrant allows for the purchase of the number of common shares equal to the investment amount (e.g.,

one

warrant share for each dollar invested).

September 17, 2016,

investors holding

$250,000

of the line of credit converted their line of credit into convertible promissory notes and stock purchase warrants on the same terms and notes issued in the

2015

Unit Offering.

As of

December 31, 2016,

and

June 30, 2017,

$50,000

remains outstanding on this line of credit.

One-Year

Convertible

otes, mature

July 8, 2017

July 8, 2016,

we received

$250,000

and issued convertible promissory notes (convertible at

$0.45

per share) with a maturity date of

July 8, 2017

two

accredited investors’ in the aggregate principal amount of

$280,000.

Interest is charged upon issuance at

per annum. We issued these investors stock purchase warrants to purchase an aggregate

400,000

shares of our common stock exercisable at

$0.65

per share, which expire

five

years from the date of grant. (See Note

)

January 13, 2017,

the holders of these notes exercised their right to convert their notes in aggregate principal amount of

$280,000

into

640,889

shares of our common stock.

One-Year Convertible Note

, mature

December 30, 2017

December 30, 2016,

we received

$250,000

and issued convertible promissory notes (convertible at

$0.57

per share) with a maturity date of

December 30, 2017

two

accredited investors, in the aggregate principal amount of

$280,000.

Interest is charged upon issuance at

per annum. We also issued these investors stock purchase warrants to purchase an aggregate

400,000

shares of our common stock exercisable at

$0.75

per share, which expire

five

years from the date of grant. (See Note

)

Subsequent to

June 30, 2017,

the conversion price of these notes were reduced, and the holders exercised their right to convert the notes. (See Note

)

Convertible Notes, mature

June 1, 2018

(

2015

Unit Offering)

January 15, 2015,

we commenced a private securities offering of “units”, each Unit consisting of a convertible promissory note and Series A stock purchase warrant (

“2015

Unit Offering”), which was closed on

September 16, 2016.

The price and availability of the Units were set forth in

five

“Pricing Supplements” issued from time-to-time. Each note issued is convertible into the Company’s common stock at the Unit price set forth in the particular pricing supplement, and matures

June 1, 2018.

Interest due

may

be paid quarterly in cash or shares of common stock; all interest due thus far has been paid in shares of common stock. If paid by the issuance of common stock, interest is paid at a conversion price equal to the average closing price of the Company’s common stock over the

trading days prior to the interest payment due date. The principal amount of the note

may

be paid by the issuance of shares of common stock, or cash, upon maturity at the Company’s election. When paid in shares, the number of shares to be issued shall be calculated by dividing the principal amount invested by the Unit price, as it is established at the time of the original investment by the applicable Pricing Supplement. The notes

may

be converted at any time by the investor, at maturity by the Company, or by the Company prior to maturity, so long as all of the following conditions are met: (i) the shares issued as payment are registered with the SEC, (ii) the Company’s common stock closes for

ten

consecutive trading days at or above

three

times the Unit price. On

June 15, 2017,

a registration statement registering the shares issuable upon conversion was deemed effective by the SEC.

Each investor, for

additional consideration, received a Series A stock purchase warrant. (See Note

As of

June 30, 2017,

the outstanding balance for notes issued in the

2015

Unit Offering, maturing

June 1, 2018

is as follows:

Unit/ Conversion Price		Warrant Exercise Price		Aggregate
$	0.25	$	0.40	$	1,652,384
$	0.35	$	0.45		1,751,046
$	0.55	$	0.70		1,146,667
				$	4,550,097

During the

six

months ended

June 30, 2017,

investors elected to convert an aggregate

$250,000

principal amount promissory notes issued in our

2015

Unit Offering and accrued interest into

406,789

shares of our common stock.

During the

six

months ended

June 30, 2016,

we received

$535,000,

and issued unsecured convertible promissory notes with maturity dates of

June

2018,

which accrue interest at the rate of

12%

per annum.

Clyra Line of Credit, matures

March 31, 2019

March 31, 2017,

our subsidiary Clyra Medical Technologies, Inc., of which we hold

54%

of the outstanding stock, obtained a

$250,000

line of credit from Sanatio Capital LLC, accruing interest at a rate of

10%

per annum and a

original issue discount. The line of credit

may

be repaid at the maturity date

March 31, 2019.

Clyra received

$175,000

of the line of credit in the

three

months ended

March 31, 2017.

Subsequent to

March 31, 2017,

Clyra received the remaining

$75,000.

Subsequent to

June 30, 2017,

Sanatio and Clyra agreed to convert the line of credit to equity at the same price as offered to Clyra investors. (See Note

Convertible Notes, mature

September 17, 2019

September 17, 2016,

investors in the line of credit (see “Line of Credit, matures

December 1, 2017,”

above), converted an aggregate principal amount of

$250,000

plus accrued interest of

$33,571

promissory notes convertible at

cents per share. Other than the maturity date of

September 17, 2019,

these notes contain the same terms as the notes issued in the

2015

Unit Offering. Our common stock closed at

$0.70

September 17, 2016.

In addition to the convertible promissory note, the investors received a Series A stock purchase warrant to purchase an aggregate

515,583

shares of our common stock at an exercise price of

$0.70

per share. (See Note

)

Convertible Notes, mature

December 31, 2019 (

Winter

2016

Unit Offering)

December 27, 2016,

we commenced a private securities offering (titled the “Winter

2016

Unit Offering”) which offered the sale of

$600,000

of “Units,” each Unit consisting of a convertible promissory note and stock purchase warrant. The promissory notes issued to investors were convertible at

$0.57

cents per share, a discount to the market price of our stock on that date of

$0.86,

mature

December 31, 2019,

and bear interest at the rate of

12%

per annum on the amount invested. Any interest due will be paid quarterly in arrears in cash or shares of common stock. If paid by the issuance of common stock, interest is paid at a conversion price equal to the average closing price of the Company’s common stock over the

trading days prior to the interest payment due date. The principal amount of the note

may

be paid by the issuance of shares of common stock, or cash, upon maturity at the Company’s election.

When paid in shares, the number of shares to be issued shall be calculated by dividing the principal amount invested by the

$0.57

conversion price. Promissory notes

may

be converted at any time by the investor, at maturity by the Company, or by the Company prior to maturity, so long as the following conditions are met: (i) the Shares issued as payment are registered with the SEC; and (ii) the Company’s common stock closes for

ten

consecutive trading days at or above

three

times the Unit price. In addition to the convertible promissory note, each investor received a warrant allowing for the purchase of the number of shares of BioLargo common stock equal to the investment amount divided by

$0.57

(e.g.,

one

warrant share for each share of common stock which the investor is eligible to receive through conversion of his original convertible note). The exercise price of the warrant is

$0.70

per share of common stock and expire on

December 31, 2021 (

see Note

). The Company

may

“call” the warrants, requiring the investor to exercise their warrants within

days or forever lose the rights to do so, only if the following conditions have been met: (i) the underlying Shares are registered with the SEC and (ii) the Company’s common stock closes for

consecutive trading days at or above

two

times the exercise price. The shares underlying the warrants contain “piggy back” registration rights for any registrations subsequent to the Form S-

filed

January 24, 2017.

Subsequent to

December 31, 2016,

and prior to the offering’s termination on

January 13, 2017,

we received

$125,000

in investments from

three

accredited investors, and issued warrants to purchase

219,298

shares of our common stock. From inception of the offering through its termination, we received

$292,000

from

six

investors, issued convertible notes in the aggregate of

$292,000,

and issued warrants to purchase

512,281

shares of our common stock.

Convertible Notes, mature

June 20, 2020 (

Summer

2017

Unit Offering)

May 24, 2017,

we commenced a private securities offering (titled the “Summer

2017

Unit Offering”) which offered the sale of

$1,500,000

of “Units,” each Unit consisting of a convertible promissory note and stock purchase warrant. The promissory notes issued to investors are convertible at

$0.42

cents per share, mature

June

20,

2020,

and bear interest at the rate of

12%

trading days prior to the interest payment due date. The principal amount of the note

may

be paid by the issuance of shares of common stock, or cash, upon maturity at the Company’s election.

When paid in shares, the number of shares to be issued shall be calculated by dividing the principal amount invested by the

$0.42

conversion price. Promissory notes

may

ten

consecutive trading days at or above

three

$0.42

(e.g.,

one

warrant share for each share of common stock which the investor is eligible to receive through conversion of his original convertible note). The exercise price of the warrant is

$0.65

per share of common stock and expire on

June 20, 2022 (

see Note

). The Company

may

“call” the warrants, requiring the investor to exercise their warrants within

days or forever lose the rights to do so, only if the following conditions have been met: (i) the underlying Shares are registered with the SEC and (ii) the Company’s common stock closes for

consecutive trading days at or above

two

times the exercise price.