Note 1 - Business and Organization

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

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

Note

1.

Business and Organization

Description of Business

BioLargo, Inc. delivers innovative and sustainable technology-based products and services, as well as environmental engineering expertise, across a broad range of industries with an overriding mission to “make life better” with a focus on clean water, clean air, and advanced wound care. 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

nine

months ended

September 30, 2019,

we had a net loss of

$8,625,000,

used

$3,181,000

cash in operations, and at

September 30, 2019,

had a working capital deficit of

$2,191,000

and current assets of

$2,566,000.

We have been, and anticipate that we will continue to be, limited in terms of our capital resources. During the year ended

December 31, 2018,

and the

nine

months ended

September 30, 2019,

we generated revenues of

$1,364,000

and

$1,324,000

through our business segments (Odor-

No

-More and BLEST – see Note

10,

“Business Segment Information”). Neither generated an operating profit sufficient to fund their operations.

As of

September 30, 2019,

we had approximately

$2.1

million cash on hand, and over

$5

million current debt obligations. Subsequent to

September 30, 2019,

$645,000

have been satisfied through the payment of cash, and

$609,000

through conversion to our common stock (see Note

12

). As of the date of this Report,

one

debt obligation due within

12

months, in the amount of

$370,000,

must be paid in cash if the investor does

not

exercise the right to convert the note to our common stock (see Note

4,

“Convertible Note, matures

April 7, 2020”).

Additionally, we have approximately

$3.2

million in

12

-month OID notes due within

12

months, which will be converted to common stock unless the Company receives at least

$3.5

million in gross proceeds from a financing transaction. All other debt obligations due within

12

months are convertible at maturity. We continue to raise money through private securities offerings, and continue to negotiate for more substantial financings from private and institutional investors. During the

nine

months ended

September 30, 2019,

we received

$4,690,000

net cash provided by financing activities, and at

September 30, 2019

had cash of

$2,136,000.

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

five

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;

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

2016;

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

2017

(“BLEST”). Additionally, we own

38%

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

2012,

and consolidate their financial statements (see Notes

2

and

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

nine

months ended

September 30, 2019

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 

31,

 

2019,

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, 2018

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

March 29, 2019,

as amended.