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Note 14 - Subsequent Events
12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 14. 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

 

From January 1, 2023, through March 29, 2023, we sold 545,402 shares of common stock to Lincoln Park pursuant to the 2022 LPC Purchase Agreement (see Note 3), and received $105,000 in gross and net proceeds. These sales were registered with the SEC on Form S-1 (file number 333-268973).

 

Clyra Medical Series A Preferred

 

From January 1, 2023, through March 29, 2023, Clyra Medical accepted subscriptions in the aggregate amount of $225,000 and sold 726 shares of its Series A Preferred Stock for $310 per share. The investor also received a three-year warrant to purchase the same number of additional shares of common stock for $372 per share. The investor also entered into an agreement with BioLargo whereby the investor may exchange some or all of its Clyra Series A Preferred stock, plus accrued dividends, into shares of BioLargo common stock, at a price equal to a 20% discount of the volume weighted average price over the 30 prior trading days. Elections must be made during the 18-month period that begins 18 months after the closing of the Series A erred offering (which has not yet taken place), or June 30, 2023, whichever is earlier. (See Note 10.)

 

Unit Offering

 

From January 1, 2023, through March 29, 2023, we accepted $694,640 in subscriptions from twelve accredited investors and issued 3,500,000 shares of our common stock, six-month warrants to purchase 3,500,000 shares of our common stock at $0.228 per share, and five-year warrants to purchase 3,787,579 shares of our common stock at $0.285 per share.

 

BioLargo Energy Technologies, Inc.

 

On January 1, 2023, BioLargo’s wholly owned subsidiary BioLargo Energy Technologies, Inc. (“BETI”), formed to commercialize a proprietary sodium-sulfur battery technology, began an offering of its common stock for $2.00 per share. From January 1, 2023, through March 29, 2023, the company received $700,000 in investments, and issued 350,000 shares of its common stock. Of the $700,000 invested, $100,000 was from BioLargo. As of March 29, 2023, BioLargo owns 96.8% of the company’s common stock.

 

Each investor also entered into an agreement with BioLargo whereby the investor may exchange some or all of its BETI common stock into shares of BioLargo common stock, at a price equal to a 20% discount of the volume weighted average price of BioLargo’s common stock over the 30 prior trading days. Elections to exchange must be made by the investor during the calendar year 2024. An investor can make such election only one time; BioLargo does not have the ability to compel an investor to exchange its shares.

 

Satisfaction of $50,000 Note

 

On March 6, 2023, we entered into an agreement with the holder of a $50,000 note (see Note 4, “Convertible note payable, matures March 1, 2023”) to convert that note into common stock of BETI. As payment for interest, a warrant to purchase 200,000 shares of BioLargo common stock at $0.21 was issued to the investor, expiring five years from the grant date.

 

CFO Engagement Extension

 

On March 21, 2023, we 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 March 21, 2023 (the “Engagement Extension Agreement”) provides for an additional one-year term to expire January 31, 2024 (the “Extended Term”), at which time Mr. Dargan will continue to serve as CFO, unless and until either party terminates the agreement.

 

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 300,000 shares reflecting an extended term of 12 months). The Option vests over the period of the Extended Term, with 25,000 shares having vested as of March 21, 2023, and the remaining shares to vest 25,000 shares monthly beginning March 31, 2023, and each month thereafter, so long as the agreement is in full force and effect. The Option is exercisable at $0.20 per share, the closing price of BioLargo’s common stock on the March 21, 2023 grant date, 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.

 

Clyra Medical

 

On January 9, 2023, the holder of a line of credit of Clyra Medical elected to convert 322 shares of Clyra Medical common stock into 527,983 shares of BioLargo common stock at $0.1894 per share in accordance with the amendment to the line of credit agreement dated December 13, 2022. (See Note 10, subheading “Line of Credit”.)