Biolargo, Inc 10-Q for FY2025 Q2
Biolargo, Inc. (BLGO)
About this 10-Q
Biolargo, Inc filed this 10-Q on August 14, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.78M
- down 44.6% from $5.01M a year earlier
- Net loss
- $1.88M
- compared with a net loss of $780K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
BIOLARGO, INC.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
| | | OTC Markets (OTCQX) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the Registrant’s Common Stock outstanding as of August 12, 2025 was
FORM 10-Q
INDEX
| Item 1 |
1 | |
| Item 2 |
Management's Discussion and Analysis and Financial Condition and Results of Operations |
27 |
| Item 4 |
38 |
| Item 2 |
40 | |
| Item 5 |
40 | |
| Item 6 |
41 | |
| 43 |
PART I – FINANCIAL INFORMATION
BIOLARGO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
| June 30, 2025 | December 31, | |||||||
| (unaudited) | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowances | ||||||||
| Note receivable | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Equipment and leasehold improvements, net | ||||||||
| Note receivable, net of current | ||||||||
| Other non-current assets | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Financing lease right-of-use asset, net | ||||||||
| Clyra Medical note receivable | ||||||||
| Investment in South Korean joint venture | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Clyra Medical accounts payable and accrued expenses | ||||||||
| Clyra Medical debt obligations, net of discount $ and $ | ||||||||
| Debt obligations | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liability | ||||||||
| Deposits | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Debt obligations, net of current | ||||||||
| Clyra Medical debt obligations, net of current and discount $94 and $80 | ||||||||
| Operating lease liabilities, net of current | ||||||||
| Finance lease liability, net of current | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred Series A, $ Par Value, Shares Authorized, Shares Issued and Outstanding, at June 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ Par Value, Shares Authorized, and Shares Issued, at June 30, 2025 and December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total BioLargo Inc. and subsidiaries stockholders’ equity | ||||||||
| Non-controlling interest (Notes 8, 9, 10) | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BIOLARGO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except for share and per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | ||||||||||||||||
| Product revenue | $ | $ | $ | $ | ||||||||||||
| Service revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Cost of goods sold | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of service | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss: | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| PPP loan forgiveness | ||||||||||||||||
| Grant income | ||||||||||||||||
| Total other expense | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common shareholders: | ||||||||||||||||
| Loss per share attributable to shareholders – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BIOLARGO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except for share data)
| Common stock | Additional paid-in | Accumulated | Accumulated other comprehensive | Non-controlling | Total stockholders’ | |||||||||||||||||||||||
| Shares | Amount | capital | deficit | loss | interest | equity | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Sale of common stock for cash, net of offering costs of $ (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock for services (unaudited) | ||||||||||||||||||||||||||||
| Stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Stock option exercise (unaudited) | ||||||||||||||||||||||||||||
| Clyra Medical stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical stock issued for services (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical stock unit offering (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical dividend Series A Preferred stock (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Clyra Medical fair value warrant issued with debt (unaudited) | — | |||||||||||||||||||||||||||
| Noncontrolling interest allocation (unaudited) | — | ( | ) | |||||||||||||||||||||||||
| Net loss (unaudited) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, March 31, 2025 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Sale of common stock for cash, net of offering costs of $ (unaudited) | ||||||||||||||||||||||||||||
| Issuance of common stock for services (unaudited) | ||||||||||||||||||||||||||||
| Stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical stock issued for services (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical dividend Series A Preferred stock (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Clyra Medical fair value warrant issued with debt (unaudited) | — | |||||||||||||||||||||||||||
| Clyra Medical Unit Warrant offering (unaudited) | — | |||||||||||||||||||||||||||
| Noncontrolling interest allocation (unaudited) | — | ( | ) | |||||||||||||||||||||||||
| Net loss (unaudited) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance, June 30, 2025 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
BIOLARGO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except for share data)
| Common stock | Additional paid-in | Accumulated | Accumulated other comprehensive | Non-controlling | Total stockholders’ | |||||||||||||||||||||||
| Shares | Amount | capital | deficit | loss | interest | equity | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Sale of stock for cash, net of offering costs of $ (unaudited) | ||||||||||||||||||||||||||||
| Issuance of stock for services (unaudited) | ||||||||||||||||||||||||||||
| Warrant exercise (unaudited) | ||||||||||||||||||||||||||||
| Stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Stock option compensation expense Clyra (unaudited) | — | |||||||||||||||||||||||||||
| Stock for service Clyra (unaudited) | — | |||||||||||||||||||||||||||
| Clyra stock unit offering (unaudited) | — | |||||||||||||||||||||||||||
| Clyra dividend Series A Preferred stock (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| BETI stock offering (unaudited) | — | |||||||||||||||||||||||||||
| Noncontrolling interest allocation (unaudited) | — | ( | ) | |||||||||||||||||||||||||
| Net loss (unaudited) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation (unaudited) | — | |||||||||||||||||||||||||||
| Balance, March 31, 2024 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Sale of stock for cash, net offering costs of $ (unaudited) | ||||||||||||||||||||||||||||
| Issuance of stock for services (unaudited) | ||||||||||||||||||||||||||||
| Issuance of stock in exchange for BETI shares (unaudited) | ||||||||||||||||||||||||||||
| Warrant exercise (unaudited) | ||||||||||||||||||||||||||||
| Stock option exercise (unaudited) | ||||||||||||||||||||||||||||
| Stock option compensation expense (unaudited) | — | |||||||||||||||||||||||||||
| Stock option compensation expense Clyra (unaudited) | — | |||||||||||||||||||||||||||
| Stock for service Clyra (unaudited) | — | |||||||||||||||||||||||||||
| Clyra sales of Series A Preferred stock (unaudited) | — | |||||||||||||||||||||||||||
| Clyra dividend Series A Preferred stock (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Noncontrolling interest allocation (unaudited) | — | ( | ) | |||||||||||||||||||||||||
| Net loss (unaudited) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation (unaudited) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2024 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BIOLARGO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except for share and per share data)
(unaudited)
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Stock option compensation expense | ||||||||
| Common stock issued for services | ||||||||
| Bad debt expense | ||||||||
| PPP loan forgiveness | ( | ) | ||||||
| Amortization of debt discount | ||||||||
| Amortization of right-of-use operating lease assets | ||||||||
| Amortization of right-of-use finance lease asset | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Finance lease liability | ( | ) | ||||||
| (Gain) loss on investment in South Korean joint venture | ( | ) | ||||||
| Depreciation expense | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Deposits | ( | ) | ||||||
| Clyra Medical accounts payable and accrued expenses | ||||||||
| Contract liabilities | ( | ) | ||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Equipment purchases | ( | ) | ||||||
| Proceeds from note receivable | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from sale of common stock, net of commissions | ||||||||
| Proceeds from note payable | ||||||||
| Proceeds from warrant exercise | ||||||||
| Proceeds from option exercise | ||||||||
| Proceeds from sale of BETI common stock | ||||||||
| Repayment of debt obligations | ( | ) | ( | ) | ||||
| Proceeds from Clyra Medical debt obligations | ||||||||
| Proceeds from Clyra unit warrant offering | ||||||||
| Proceeds from sales of Clyra Medical common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Net effect of foreign currency translation | ( | ) | ||||||
| Net change in cash | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Short-term lease payments not included in lease liabilities | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Conversion of accounts receivable to a note receivable | $ | $ | ||||||
| Conversion of BETI common stock to BioLargo common stock | $ | $ | ||||||
| Allocation of noncontrolling interest | $ | $ | ( | ) | ||||
| Fair value of Clyra Medical warrants issued as debt discount | $ | $ | ||||||
| Clyra Medical dividend Series A Preferred stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Note 1. Business and Organization
Description of Business
BioLargo, Inc. (“BioLargo”, or the “Company”) invents, develops, and commercializes innovative platform technologies to solve challenging environmental problems like PFAS contamination (per- and polyfluoroalkyl substances), advanced water and wastewater treatment, industrial odor control, air quality control, infection control, and myriad environmental remediation challenges. 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.
Organization
We are a Delaware corporation formed in 1991, and have wholly-owned subsidiaries: BioLargo Life Technologies, Inc., organized under the laws of the State of California in 2006; ONM Environmental, Inc., organized under the laws of the State of California in 2009; BioLargo Equipment Solutions & Technologies, Inc., organized under the laws of the State of California in 2022; BioLargo Canada, 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
Liquidity / Going Concern
For the six months ended June 30, 2025, we generated revenues of $
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and partially owned subsidiaries BETI, BLEST and Clyra Medical. All intercompany accounts and transactions have been eliminated.
The accounting and financial reporting policies of the Company conform, in all material respects, to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the industry. The condensed consolidated financial statements in the Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but in the opinion of management, reflect all necessary adjustments for a fair presentation of the Company’s condensed consolidated financial position and condensed consolidated results of operations. All adjustments were of a normal and recurring nature. The condensed consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial presentation and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2024, included in our Annual Report on Form 10-K filed with the SEC on March 31, 2025. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year or any future period.
Foreign Currency
The Company has designated the functional currency of BioLargo Canada, Inc., our Canadian subsidiary, to be the Canadian dollar. Therefore, translation gains and losses resulting from differences in exchange rates are recorded in accumulated other comprehensive loss.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less when acquired to be cash equivalents. Substantially all cash equivalents are held in short-term money market accounts at one of the largest financial institutions in the United States. From time to time, our cash account balances are greater than the Federal Deposit Insurance Corporation insurance limit of $250,000 per owner per bank, and during such times, we are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the financial institution. We do not anticipate non-performance by our condensed consolidated financial institution.
As of June 30, 2025, and December 31, 2024, our cash balances were made up of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| BioLargo, Inc. and subsidiaries | $ | $ | ||||||
| Clyra Medical Technologies, Inc. | ||||||||
| Total | $ | $ | ||||||
Accounts Receivable
Accounts receivable are customer obligations that are unconditional. Accounts receivable are presented net of an allowance for expected credit losses, which represents an estimate of amounts that may not be collectible. The Company performs ongoing credit evaluations of its customers and, if necessary, provides an allowance for expected credit losses. A credit loss expense to the expected credit losses is recorded based on factors including the length of time the receivables are past due, the current business environment, and the Company’s historical experience. Credit loss expense is recorded to general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable. The Company does not have any off-balance-sheet credit exposure related to customers. As of June 30, 2025, and December 31, 2024, the expected credit losses were $
Allowance for Credit Losses
The Company recognizes an expected allowance for credit losses with respect to its note and accounts receivable. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. Accounts receivable are evaluated individually when they do not share similar risk characteristics which could exist in circumstances where amounts are considered at risk or uncollectible This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses. The Company writes off receivables when there is information that indicates the customer is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in earnings or an offset to note and credit loss expense in the year of recovery, in accordance with the entity's accounting policy election. There were no write-offs of note and accounts receivable during the three and six months ended June 30, 2025 and 2024.
Credit Concentration
We have a limited number of customers that account for significant portions of our revenue. During the three and six months ended June 30, 2025 and 2024, the following customer accounted for more than 10% of consolidated revenues:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Customer A | % | % | % | % | ||||||||||||
At June 30, 2025 and December 31, 2024, customer accounted for more than 10% of consolidated accounts receivable (see Note 7):
| June 30, 2025 | December 31, 2024 | |||||||
| Customer A | % | % | ||||||
See the subsection below titled "Note Receivable" for additional information regarding the reduction in accounts receivable from Customer A as of June 30, 2025, compared with December 31, 2024.
Inventory
Inventories are stated at the lower of cost or net realizable value using the average cost method. There was
| June 30, 2025 | December 31, 2024 | |||||||
| Raw material | $ | $ | ||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
Note Receivable
On June 6, 2025, we entered into an agreement whereby Ikigai Holdings, LLC and Pooph Inc. (ONM Environmental's largest customer, identified as "Customer A" in the tables in the subsection above titled "Credit Concentration") agreed to convert $
Other Non-Current Assets
Other non-current assets consisted of (i) security deposits related to our business offices, (ii) patents acquired on October 22, 2021, for $
| June 30, 2025 | December 31, 2024 | |||||||
| Patents | $ | $ | ||||||
| Security deposits | ||||||||
| Interest receivable | ||||||||
| Total | $ | $ | ||||||
Equity Method of Accounting
On March 20, 2020, we invested $
We account for our investment in the joint venture under the equity method of accounting. We have determined that while we have significant influence over the joint venture through our technology license and our position on the Board of Directors, we do not control the joint venture or are otherwise involved in managing the entity and we own less than a majority of the equity. Therefore, we recognized the investment on our condensed consolidated balance sheets and record an increase or decrease of the recorded balance by our percentage ownership of the profits or losses in the joint venture. For the three and six months ended June 30, 2025, the increase of our investment interest totaled $
Impairment
Long-lived and definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future undiscounted cash flows from the use of the asset and its eventual disposition is less than the carrying amount of the asset, then an impairment loss is recognized. The impairment loss is measured based on the fair value of the asset. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operations. There were no impairment losses related to intangible assets during the three and six months ended June 30, 2025 and 2024.
Loss Per Share
We report basic and diluted loss per share (“LPS”) for common and common share equivalents. Basic LPS is computed by dividing reported losses by the weighted average shares outstanding. Diluted LPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock. For the three and six months ended June 30, 2025 and 2024, the denominator in the diluted LPS computation is the same as the denominator for basic LPS due to the Company’s net loss which creates an anti-dilutive effect of the warrants and stock options. As of June 30, 2025 the vested stock options available to be exercised totaled
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used when accounting for stock-based transactions, debt transactions, derivative liabilities, expected credit losses, asset depreciation and amortization, impairment expense, among others.
The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results of our condensed consolidated financial statements.
Share-Based Compensation Expense
We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award, which is the vesting period. Fair value is determined on the grant date. Share-based compensation expense is based on the grant date fair value estimated using the Black-Scholes Option pricing model.
For stock and stock options issued to consultants and other non-employees for services, the Company measures and records an expense as of the earlier of the date at which either: a commitment for performance by the non-employee has been reached or the non-employee’s performance is complete. The equity instruments are measured at the current fair value, and for stock options, the instruments are measured at fair value using the Black Scholes Option pricing model.
The following methodology and assumptions were used to calculate share-based compensation for the six months ended June 30, 2025 and 2024:
| 2025 | 2024 | |||||||||||||||||||
| Non Plan | 2024 Plan | Non Plan | 2018 Plan | 2024 Plan | ||||||||||||||||
| Risk free interest rate | % | % | % | % | % | |||||||||||||||
| Expected volatility | % | % | % | % | % | |||||||||||||||
| Expected dividend yield | ||||||||||||||||||||
| Forfeiture rate | ||||||||||||||||||||
| Life in years | ||||||||||||||||||||
Expected price volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. The expected volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility.
The risk-free interest rate used in the Black-Scholes calculation is based on the prevailing U.S. Treasury yield as determined by the U.S. Federal Reserve. We have never paid any cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.
Warrants
Warrants issued with our convertible and non-convertible debt instruments are accounted for under the fair value and relative fair value method. The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative and not qualify for equity treatment, then it is measured at fair value using the Black Scholes Option pricing model and recorded as a liability on the condensed consolidated balance sheets. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”). If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes Option pricing model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note. Convertible debt instruments are recorded at fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. The warrant relative fair values are also recorded as a discount to the convertible promissory notes.
Non-Cash Transactions
We determine the value assigned to each intangible we acquire, and/or services or products received for non-cash consideration of our common stock based on the market price of our common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received.
Revenue Recognition
We account for revenue in accordance with ASC 606, “Revenue from Contracts with Customers”. The guidance focuses on the core principle for revenue recognition, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the guidance provides that an entity should apply the following steps:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company’s products are sold through a contract with the customer and a written purchase order, in which the details of the contract are defined including the transaction price and method of shipment. The only performance obligation is to create and ship the product, and each product has separate pricing. Revenue is recognized at a point in time when the goods are shipped if the agreement is FOB manufacturer, and when goods are delivered if FOB destination. Revenue is recognized with a reduction for sales discounts, as appropriate and negotiated in the customer’s purchase order.
Service contracts are performed through a written contract, which specifies the performance obligations and the rate at which the services will be billed, typically by time and materials. Each service is separately negotiated and priced. Revenue is recognized as services are performed and completed, or, for services related to product installations, at the completion of the installation. A few contracts have called for milestone or fixed cost payments, where we invoice an agreed-to amount per month for the life of the contract. In these instances, completed work, billed hourly, is recognized as revenue. If the billing amount is greater or lesser than the completed work, a receivable or payable is created. These accounts are adjusted upon additional billings as the work is completed. To date, there have been no discounts or other financing terms for the contracts.
As we generate revenues from royalties or license fees from our intellectual property, a licensee will pay a license fee in one or more installments and ongoing royalties based on their sales of products incorporating or using our licensed intellectual property. We have entered into a licensing agreement for the CupriDyne Clean product, and we recognize royalty and license fees on a quarterly basis as the product is sold through to third parties and reported to us.
Our Canadian subsidiary had a grant deposit outstanding at June 30, 2025 and December 31, 2024, totaling $
Government Grants
We have been awarded multiple research grants from the private and public Canadian research programs. The income we receive directly from grants is recorded as other income. We have been awarded over 90 grants since our first in 2015. Some of the funds from these grants are given directly to third parties (such as the University of Alberta or a third-party research scientist) to support research on our technology. The grants have terms generally ranging between and months and support a majority, but not all, of the related research budget costs. This cooperative research allows us to utilize (i) a depth of resources and talent to accomplish highly skilled work, (ii) financial aid to support research and development costs, (iii) independent and credible validation of our technical claims.
The grants typically provide for (i) recurring monthly amounts, (ii) reimbursement of costs for research talent for which we invoice to request payment, and (iii) ancillary cost reimbursement for research talent travel related costs. All awarded grants have specific requirements on how the money is spent, typically to employ researchers. None of the funds may be used for general administrative expenses or overhead in the United States. These grants have substantially increased our level of research and development activities in Canada. We continue to apply for Canadian government and agency grants to fund research and development activities. Not all of our grant applications have been awarded, and no assurance can be made that any pending grant application, or any future grant applications, will be awarded.
Income Taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of asset and liabilities. Deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect on deferred tax asset and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
We account for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. Under GAAP, the tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. Management believes there are unrecognized tax benefits or uncertain tax positions as of June 30, 2025 and December 31, 2024.
The Company assessed its earnings history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of June 30, 2025 and December 31, 2024. Accordingly, a 100% valuation allowance was recorded against the net deferred tax asset.
The Company recognizes interest and penalties on income taxes as a component of income tax expense, should such an expense be realized.
Fair Value of Financial Instruments
Management believes the carrying amounts of the Company’s financial instruments as of June 30, 2025 and December 31, 2024 approximate their respective fair values because of the short-term nature of these instruments. Such instruments consist of cash, accounts receivable, note receivable, accounts payable, and debt obligation. The carrying amount of debt instruments are believed to approximate fair value as the stated interest rates are reflective of the prevailing market rates.
Leases
At inception of a lease contract, we assess whether the contract is, or contains, a lease. Our assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period of the contract, and (3) whether we have the right to direct the use of the asset during such time period. At inception of a lease, we allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Leases are classified as either finance leases or operating leases. A lease must be classified as a finance lease if any of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any of these criteria. We have one lease classified as finance leases. For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, management estimates the incremental borrowing rate, which currently is estimated to be
Equipment and Leasehold Improvements
Equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from
| June 30, 2025 | December 31, 2024 | |||||||
| Equipment | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Total, at cost | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total equipment and leasehold improvements, net | $ | $ | ||||||
Noncontrolling Interest
A noncontrolling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the primary beneficiary. Noncontrolling interests are required to be presented as a separate component of equity on a condensed consolidated balance sheets. Accordingly, the presentation of net loss is modified to present the loss attributed to controlling and non-controlling interests. The noncontrolling interest on the Company’s condensed consolidated balance sheets represents equity not held by the Company. In accordance with ASC 810-10-20, “Noncontrolling Interests” BioLargo consolidates three non-wholly owned subsidiaries - Clyra, BLEST and BETI. Noncontrolling interest of Clyra represents
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Improvements to Income Tax Disclosures.” ASU 2023-09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. The adoption of the standard did not have a material impact on the Company's disclosures.
In November 2024, the FASB issued ASU 2024-03, “Expense Disaggregation Disclosures.” ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant income statement captions. The standard is effective for fiscal years beginning after December 15, 2026, and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.
Note 3. Sale of Stock for Cash
Lincoln Park Financing
On December 13, 2022, we entered into a stock purchase agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park agreed to purchase from us at our request up to an aggregate of $
During the three and six months ended June 30, 2025 we sold
During the three months ended June 30, 2024, we did sell any shares to Lincoln Park. During the six months ended June 30, 2024, we sold
Unit Offerings
During the three months ended June 30, 2024, we sold
Note 4. Debt Obligations
The following table summarizes our debt obligations outstanding as of June 30, 2025 and December 31, 2024 (in thousands). The table does not include debt obligations of our partially owned subsidiary Clyra Medical (see Note 8, “Debt Obligations of Clyra Medical”).
| June 30, 2025 | December 31, 2024 | |||||||
| Current portion of debt: | ||||||||
| SBA Paycheck Protection Program loan | $ | $ | ||||||
| Vehicle loan, current portion | ||||||||
| Term loan, current portion | ||||||||
| SBA EIDL Loan, current portion | ||||||||
| Total current portion of debt | $ | $ | ||||||
| Long-term debt: | ||||||||
| Vehicle loan, matures March 2029 | $ | $ | ||||||
| Term loan, matures April 2028 | ||||||||
| SBA EIDL Loan, matures July 2053 | ||||||||
| Total long-term debt, net of current | $ | $ | ||||||
| Total | $ | $ | ||||||
For the three and six months ended June 30, 2025, we recorded $
For the three and six months ended June 30, 2024, we recorded $
Vehicle loan
On February 7, 2023, we entered a loan agreement with Bank of America for the purchase of a commercial vehicle used in operations totaling $
Term Loan
On April 5, 2025, we entered a term loan agreement with American Express for working capital in the principal amount of $
SBA Program Loans
On February 7, 2022, we received notice that the SBA had forgiven $
In July 2020, ONM Environmental received an Economic Injury Disaster Loan (EIDL) from the SBA in the amount of $
Note 5. Share-Based Compensation
Issuance of Common Stock in exchange for Services
Payment of Officer Salaries
On June 30, 2025, we issued
shares were issued to officers as payment of salary during the three or six months ended June 30, 2024.
Payment of Consultant and Vendor Fees
During the three months ended June 30, 2025, we issued
On June 30, 2024, we issued
All of these offerings and sales were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and/or Regulation D promulgated thereunder as not involving a public offering of securities.
Stock Option Expense
During the three and six months ended June 30, 2025, we recorded an aggregate $
2024 Equity Incentive Plan
On June 13, 2024, our stockholders adopted the BioLargo 2024 Equity Incentive Plan (“2024 Plan”) as a means of providing our directors, key employees, and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan for a period of
Activity for our stock options under the 2024 Plan during the six months ended June 30, 2025, and 2024, is as follows:
| Options outstanding | Weighted average price per share | Weighted average remaining life | Aggregate intrinsic Value(1) | |||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Balance, June 30, 2024 | $ | |||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Balance, June 30, 2025 | $ | $ | ||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested balance, June 30, 2025 | $ | $ | ||||||||||||||
(1) – Aggregate intrinsic value based on closing common stock price of $
The options granted to purchase
As of June 30, 2025, there remains $
The options granted to purchase
Extension of Agreement with Chief Financial Officer
On January 31, 2025, the Engagement Agreement with our Chief Financial Officer Charles K. Dargan, II automatically extended for a -year period to expire January 31, 2026 (the “2025-26 Term”). As the sole compensation for the 2025-26 Term, Mr. Dargan was issued an option (“Option”) to purchase
On August 13, 2024, we and our Chief Financial Officer Charles K. Dargan, II agreed to extend the term of his 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 our Chief Financial Officer. The Engagement Extension Agreement dated as August 13, 2024 (the “Engagement Extension Agreement”) expired January 31, 2025 (the “Extended Term”), at which time the agreement will automatically renew for subsequent -year periods.
As the sole compensation for the Extended Term, Mr. Dargan was issued an option (“Option”) to purchase
2018 Equity Incentive Plan
On June 22, 2018, our stockholders adopted the BioLargo 2018 Equity Incentive Plan (“2018 Plan”) as a means of providing our directors, key employees, and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan for a period of
Activity for our stock options under the 2018 Plan during the six months ended June 30, 2025, and 2024, is as follows:
| Options outstanding | Weighted average price per share | Weighted average remaining life | Aggregate intrinsic Value(1) | |||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Balance, June 30, 2024 | $ | |||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Balance, June 30, 2025 | $ | $ | ||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested balance, June 30, 2025 | $ | $ | ||||||||||||||
(1) – Aggregate intrinsic value based on closing common stock price of $
During the six months ended June 30, 2025, an option holder elected to exercise
As of June 30, 2025, there remains $
The options granted to purchase
2007 Equity Incentive Plan
On September 7, 2007, and as amended April 29, 2011, the BioLargo, Inc. 2007 Equity Incentive Plan (“2007 Plan”) was adopted as a means of providing our directors, key employees and consultants additional incentive to provide services. Both stock options and stock grants may be made under this plan for a period of
Activity for our stock options under the 2007 Plan for the six months ended June 30, 2025 and 2024 is as follows:
| Options Outstanding | Weighted average price per share | Weighted average remaining life | Aggregate intrinsic Value(1) | |||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Balance, June 30, 2024 | $ | |||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Balance, June 30, 2025 | $ | $ | ||||||||||||||
(1) – Aggregate intrinsic value based on closing common stock price of $
Non-Plan Options
Activity of our non-plan stock options issued for the six months ended June 30, 2025 and 2024 is as follows:
| Non-plan Options outstanding | Weighted average price per share | Weighted average remaining life | Aggregate intrinsic Value(1) | |||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Balance, June 30, 2024 | $ | |||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Balance, June 30, 2025 | $ | $ | ||||||||||||||
| Unvested | ( | ) | $ | |||||||||||||
| Vested balance, June 30, 2025 | $ | $ | ||||||||||||||
(1) – Aggregate intrinsic value based on closing common stock price of $
During the six months ended June 30, 2025, we issued options to purchase an aggregate
During the six months ended June 30, 2024, we issued options to purchase an aggregate
Note 6. Warrants
We have certain warrants outstanding to purchase our common stock, at various prices, for the six months ended June 30, 2025 and 2024 is as follows:
| Warrants outstanding | Weighted average price per share | Weighted average remaining life | Aggregate intrinsic value(1) | |||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Expired | ( | ) | $ | |||||||||||||
| Vested Balance, June 30, 2025 | $ | $ | ||||||||||||||
(1) – Aggregate intrinsic value based on closing common stock price of $
Warrants issued in Unit Offerings
We did issue any warrants in conjunction with unit offerings in the six months ended June 30, 2025.
During the three months ended June 30, 2024, we issued -month stock purchase warrants to purchase an aggregate
During the six months ended June 30, 2024, investors exercised warrants to purchase
Warrant Fair Value
We use the Black-Scholes option pricing model to determine the relative fair value of warrants issued in conjunction with debt instruments, common stock, and for services. With respect to debt instruments, relative fair value is amortized over the life of the warrant. The principal assumptions we used in applying the Black-Scholes model were as follows:
| 2025 | 2024 | |||||||
| Risk free interest rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
| Forfeiture rate | ||||||||
| Expected life in years | .5 - 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. The expected life in years is based on the contract term of the warrant.
Note 7. Accounts Payable and Accrued Expenses
As of June 30, 2025, accounts payable and accrued expenses included the following (in thousands):
| Category | BioLargo | ONM | BLEST | BioLargo Canada | BETI | BEST | Intercompany amounts | Totals | ||||||||||||||||||||||||
| Accounts payable | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Accrued payroll | ||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||
As of December 31, 2024, accounts payable and accrued expenses included the following (in thousands):
| Category | BioLargo | ONM | BLEST | BioLargo Canada | BETI | BEST | Intercompany amounts | Totals | ||||||||||||||||||||||||
| Accounts payable | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| Accrued payroll | ||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||
See Note 8, “Accounts Payable and Accrued Expenses”, for the accounts payable and accrued expenses of Clyra Medical.
Note 8. Noncontrolling Interest – Clyra Medical
As discussed in Note 2 above, we consolidate the operations of our partially owned subsidiary Clyra Medical.
Debt Obligations of Clyra Medical
Secured Promissory Notes
During the six months ended June 30, 2025, Clyra issued secured promissory notes in the aggregate amount of $
Convertible Promissory Notes
During the six months ended June 30, 2025, Clyra issued convertible promissory notes in the aggregate amount of $
Guaranteed Note Offering
During the three months ended June 30, 2025, Clyra issued the convertible promissory notes in the aggregate amount of $
The Black-Scholes model is used to calculate the initial fair value of the warrants issued as part of the Clyra Medical debt obligations, we used a stock price on the date of grant of $
Line of Credit
On June 30, 2020, Clyra Medical entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC ("Vernal") committed to provide a $
On December 13, 2022, Clyra and Vernal amended the Revolving Line of Credit Agreement extending the maturity date of the line of credit to September 30, 2024, and modifying the payment terms such that amounts of principal due in each month are capped at a maximum of
As of June 30, 2025 and December 31, 2024 the balance outstanding on this line of credit totaled $
Equity Transactions
As of June 30, 2025, Clyra had
BioLargo Conversion of Intercompany Balances
In June 2024, BioLargo converted $
Sales of Common Stock
During the six months ended June 30, 2025, Clyra sold
During the six months ended June 30, 2025, Clyra issued
During the six months ended June 30, 2024, Clyra sold
Warrant Holder Unit Offering
During the three months ended June 30, 2025, Clyra issued unit offerings to existing warrant holders. Existing warrants holders were allowed to purchase two times the number of warrants they held and at $
Sales of Series A Preferred Stock
In an offering that closed in October 2023, Clyra sold
Clyra Stock Options
| Outstanding | Weighted average price per share | Weighted average remaining life | ||||||||||
| Balance, December 31, 2023 | $ | |||||||||||
| Granted | $ | |||||||||||
| Balance, June 30, 2024 | $ | |||||||||||
| Unvested | ( | ) | $ | |||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||
| Balance, December 31, 2024 | $ | |||||||||||
| Granted | $ | |||||||||||
| Balance, June 30, 2025 | $ | |||||||||||
| Unvested | ( | ) | $ | |||||||||
| Vested Balance, June 30, 2025 | $ | |||||||||||
Clyra issues options to its employees and consultants in lieu of compensation owed on a regular basis. The fair value of the options issued totaled $
As of June 30, 2025, there remains $
| June 30, 2025 | June 30, 2024 | |||||||
| Risk free interest rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
| Forfeiture rate | ||||||||
| Expected life in years | ||||||||
Clyra Warrants
| Outstanding | Weighted average price per share | Weighted average remaining life | ||||||||||
| Balance, December 31, 2023 | $ | |||||||||||
| Granted | $ | |||||||||||
| Vested Balance, June 30, 2024 | $ | |||||||||||
| Balance, December 31, 2024 | $ | |||||||||||
| Granted | $ | |||||||||||
| Expired | ( | ) | $ | |||||||||
| Vested Balance, June 30, 2025 | $ | |||||||||||
Accounts Payable and Accrued Expenses
At June 30, 2025, and December 31, 2024, Clyra had the following accounts payable and accrued expenses (in thousands):
| Category | 2025 | 2024 | ||||||
| Accounts payable | $ | $ | ||||||
| Accrued dividend | ||||||||
| Accrued payroll | ||||||||
| Total | $ | $ | ||||||
Sale and leaseback of equipment
On December 4, 2024, Clyra entered into an agreement whereby it sold and leased back certain equipment to be used in the manufacturing of its wound irrigation solution. Clyra received $
| Year ending | ||||
| December 31, 2025 | $ | |||
| December 31, 2026 | ||||
| December 31, 2027 | ||||
| December 31, 2028 | ||||
| Total minimum lease payments | $ | |||
| Less imputed interest | ( | ) | ||
| Total finance lease liabilities | $ |
Note 9. BioLargo Engineering, Science and Technologies, LLC
In September 2017, we commenced a full-service environmental engineering firm and formed a Tennessee entity named BioLargo Engineering, Science & Technologies, LLC (“BLEST”). In conjunction with the start of this subsidiary, we entered into an office lease in the Knoxville, Tennessee area, and entered into employment agreements with six scientists and engineers. BLEST was capitalized with two classes of membership units: Class A,
Note 10. BioLargo Energy Technologies, Inc.
BioLargo Energy Technologies, Inc. (“BETI”) was formed for the purpose of commercializing a proprietary liquid sodium battery technology. BioLargo purchased
As of June 30, 2025, BETI had
Note 11. Business Segment Information
BioLargo has operating business segments, plus its corporate entity which is responsible for general corporate operations, including administrative functions, finance, human resources, marketing, legal, etc. The operational business segments are:
| 1. | ONM Environmental -- which sells odor and volatile organic control products and services, located in Westminster, California; |
| 2. | Clyra Medical Technologies (“Clyra Medical”) -- which develops and sells medical products based on our technologies, located in Tampa, Florida; |
| 3. | BioLargo Engineering (BLEST) -- which provides professional engineering services on a time and materials basis for outside clients and supports our internal operations as needed, located in Oak Ridge, Tennessee; |
| 4. | BioLargo Canada, Inc. (“Canada”) – the main hub of our scientists researching and developing our technologies, operating out of the University of Alberta, Edmonton, Canada; |
| 5. | BioLargo Energy Technologies, Inc. (“BETI”) – which is developing our proprietary battery technology; and |
| 6. | BioLargo Equipment Solutions & Technologies, Inc. (“BEST”) – which manages the sales and distribution of our water treatment products and related services. |
Other than ONM Environmental, none of our operating business units have operated at a profit, and therefore each have required additional cash to meet its monthly expenses, funded through BioLargo’s sales of debt or equity, research grants, and tax credits. BETI and Clyra Medical have also been funded by third party investors who invest directly in exchange for equity ownership in that entity.
The segment information for the three and six months ended June 30, 2025, and 2024, is as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | ||||||||||||||||
| ONM Environmental | $ | $ | $ | $ | ||||||||||||
| BLEST | ||||||||||||||||
| BioLargo Canada | ||||||||||||||||
| Intersegment revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Stock option expense | ||||||||||||||||
| BioLargo corporate | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Clyra Medical | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Depreciation expense | ||||||||||||||||
| BioLargo corporate | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| ONM Environmental | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BLEST | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Clyra Medical | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BETI | ( | ) | ( | ) | ||||||||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Research and development expense | ||||||||||||||||
| BioLargo corporate | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| BLEST | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BETI | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BioLargo Canada | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Clyra Medical | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Intersegment R&D | ||||||||||||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Operating income (loss) | ||||||||||||||||
| BioLargo corporate | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| ONM Environmental | ||||||||||||||||
| BLEST | ( | ) | ( | ) | ( | ) | ||||||||||
| BETI | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BEST | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BioLargo Canada | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Clyra Medical | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Interest income (expense) | ||||||||||||||||
| BioLargo corporate | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| ONM Environmental | ||||||||||||||||
| Clyra Medical | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| As of June 30, 2025 | BioLargo | ONM | BLEST | CLYRA | BETI | BEST | BioLargo Canada | Elimination | Total | |||||||||||||||||||||||||||
| Tangible assets | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Operating lease right-of use | ||||||||||||||||||||||||||||||||||||
| Finance lease right-of-use | ||||||||||||||||||||||||||||||||||||
| Investment in South Korean joint venture | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| As of December 31, 2024 | BioLargo | ONM | BLEST | CLYRA | BETI | BEST | BioLargo Canada | Elimination | Total | |||||||||||||||||||||||||||
| Tangible assets | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Operating lease right-of use | ||||||||||||||||||||||||||||||||||||
| Finance lease right-of-use | ||||||||||||||||||||||||||||||||||||
| Investment in South Korean joint venture | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
Note 12. Leases
Office Leases
We have long-term operating leases for office, industrial and laboratory space in Westminster, California, Oak Ridge, Tennessee, and Alberta, Canada. Payments made under operating leases are charged to the condensed consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the operating lease agreement. Short-term leases less than one-year are not included in our analysis. For the three and six months ended June 30, 2025, rental expense totaled $
Future minimum lease payments under noncancelable leases, reconciled to the Company’s discounted operating lease liabilities are as follows:
| BioLargo | ||||||||||||
| Year ending | Corp / ONM | BLEST | Total | |||||||||
| December 31, 2025 | ||||||||||||
| December 31, 2026 | ||||||||||||
| December 31, 2027 | ||||||||||||
| December 31, 2028 | ||||||||||||
| December 31, 2029 | ||||||||||||
| Thereafter | ||||||||||||
| Total minimum lease payments | $ | $ | $ | |||||||||
| Less imputed interest | ( | ) | ( | ) | ( | ) | ||||||
| Total operating lease liabilities | $ | $ | $ | |||||||||
The Company has evaluated subsequent events through the date of the filing of this Quarterly Report and report the following.
Stock Issuances
Subsequent to June 30, 2025, we have sold
Clyra Medical Financing Activities
Subsequent to June 30, 2025, Clyra Medical (i) issued
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This quarterly report on Form 10-Q contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding BioLargo’s capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding BioLargo’s ability to carry out its planned development and production of products. Forward-looking statements are made, without limitation, in relation to BioLargo’s operating plans, BioLargo’s liquidity and financial condition, availability of funds, operating and exploration costs and the market in which BioLargo competes. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our Form most recent annual report on Form 10-K, and, from time to time, in other reports BioLargo files with the SEC. These factors may cause BioLargo’s actual results to differ materially from any forward-looking statement. BioLargo disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless otherwise expressly stated herein, all statements, including forward-looking statements, set forth in this Form 10-Q are as of June 30, 2025, unless expressly stated otherwise, and we undertake no duty to update this information.
When we refer in this report to “BioLargo,” the “Company,” “our Company,” “we,” “us” and “our,” we mean BioLargo, Inc., and our subsidiaries, including BioLargo Life Technologies, Inc., which holds our intellectual property; ONM Environmental, Inc., which manufactures, markets, sells and distributes our odor and volatile organic compound ("VOC") control products; BioLargo Energy Technologies, Inc. (“BETI”), formed to commercialize our proprietary battery technology; BioLargo Canada, Inc., our primary research and development team operating in Edmonton, Alberta Canada; BioLargo Engineering, Science & Technologies, LLC (“BLEST”), a professional engineering services division in Oak Ridge Tennessee; BioLargo Equipment Solutions & Technologies, Inc., which sells our water treatment products; BioLargo Development Corp., which employs and provides benefits to our employees; and Clyra Medical Technologies, Inc. (“Clyra Medical”), which commercializes our technologies in the medical and dental fields. All subsidiaries are wholly owned, except for BETI, BLEST and Clyra Medical.
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this report.
DESCRIPTION OF BUSINESS
Our Business - Innovator and Solution Provider
BioLargo is in the business of creating new cleantech technologies to solve tough, globally relevant problems. We invent, develop, then commercialize technologies that tackle difficult challenges in air quality, water, environmental engineering, battery energy storage, and advanced antimicrobial medical device platforms. Our model is to invent new technologies that solve specific problems, develop them and prove they work, and then commercialize them with purpose-suited subsidiaries, identify and secure the right partnerships to increase their commercial reach, or potentially sell the intellectual property.
Why do we do this work? Every member of our team – including PhD scientists, engineers, and entrepreneurs – has a passion for seeking new, never-before-seen innovations that can make life better around the world. We care about safeguarding the environment and human health for future generations. We care about making technologies that are affordable and flexible enough to be accessed around the world. And we care about being the best at what we do – creating best-in-class technologies to solve meaningful cleantech challenges.
Some of our areas of focus include environmental problems like PFAS contamination, water pollution by pharmaceuticals and micropollutants, air pollution by VOCs, hard-to-treat odors from landfills and sewage plants, infection and wound healing and the creation of energy storage systems that are more affordable, efficient, safer and environmentally friendly.
Below you’ll read about the cleantech ventures and projects we are focused on commercialization today. Behind those, however, is a pipeline of other cleantech innovations in various stages of development associated with our expansive array of issued and pending patents, and that have been funded in part by over 90 government grants.
We operate our business in distinct business segments:
| ● |
Odor and VOC control products, including consumer products, such as the Pooph-branded pet-odor control product, and our industrial odor control product, CupriDyne Clean Industrial Odor Eliminator, sold by our subsidiary ONM Environmental, Inc.; |
| ● |
Water treatment equipment and solutions, including our PFAS remediation system the Aqueous Electrostatic Concentrator (AEC), our water reuse and recycling technology co-developed with Garratt-Callahan called AROS, and our pharmaceutical removal and energy-efficient disinfection solution, the AOS, all sold by our subsidiary BioLargo Equipment Solutions & Technologies, Inc.; |
| ● |
Battery energy storage system solutions under the brand name CellinityTM being developed by our partially owned (96%) subsidiary BioLargo Energy Technologies, Inc.; |
| ● |
Medical products based on our technologies sold by our partially owned (50%) subsidiary Clyra Medical Technologies, Inc.; |
| ● |
Our professional engineering services division, which, in addition to serving outside clients on a fee for service basis, supports our internal business units, through our partially owned (74%) subsidiary BioLargo Engineering, Science & Technologies, LLC ("BLEST"); |
| ● |
Our research and support personnel, through our wholly-owned subsidiary BioLargo Canada, Inc., located on campus at the University of Alberta, Edmonton, Canada. |
Odor Control (Consumer and Industrial)
ONM Environmental, Inc. ("ONM") is BioLargo’s wholly-owned subsidiary that delivers robust and comprehensive products and services to control and mitigate odor and VOCs for both consumer and industrial applications. Its flagship product – CupriDyne® Clean – is applied to odor-emitting masses such as landfills and composting facilities by misting systems, sprayers, water trucks and similar water delivery systems designed, manufactured and installed by ONM. It is also sold to third parties under private label brands, including for consumer brands such as the "Pooph pet odor eliminator".
Pooph - Consumer Private-Label Products
We sell privately labeled odor-control products based on our technologies to third parties who market and sell the products under their own brand names. The most successful thus far is the Pooph branded pet odor control product sold through national retailers including Walmart, Amazon, PetSmart, PetCo, and Chewy.com by Pooph Inc. In addition to purchasing product from us at an agreed-upon manufacturing margin, Pooph Inc. pays us six percent royalty on their sales in exchange for exclusive rights to our technology for pet odors. If Pooph sells their brand to a third party, we would receive 20% of the exit value. The success of Pooph is an example of our goal to develop distribution channels that do not rely on our in-house sales and distribution infrastructure. While Pooph is by far the company’s most successful private label product, we sell other private label odor-control products and continue to pursue related business opportunities as a means of tapping into new odor control markets.
Industrial Odor and VOC Solutions
We believe CupriDyne® Clean is the number-one performing industrial odor-control product in the market, and that it offers substantial savings to our customers compared with competing products. We have been and expect to continue selling product to municipalities and some of the largest solid waste handling companies in the country to help control odors emitted from waste handling and sanitation sites. ONM Environmental offers a menu of services to landfills, transfer stations, wastewater treatment facilities as well as facilities in non-waste related industries. These services include engineering design, construction, installation, ongoing maintenance and on-site support services to assist our clients in the implementation and continued use of the various systems that deliver our liquid products in the field (such as misting systems). A significant portion of industrial odor control product and service revenue comes from ongoing contracts with cities and counties in Southern California, where ONM has installed comprehensive odor control systems to mitigate nuisance odors emitted from municipal waste handling and sanitation sites.
BioLargo Equipment Solutions & Technologies – Innovative Water Treatment Solutions
Over the years, we have developed multiple innovative technologies and equipment platforms that focus on challenging issues in the water treatment industry, including the AOS technology (developed to remove micro-pollutants), the AEC (developed to remove per- and polyfluoroalkyl substances, or PFAS), and the AROS water reuse technology (for industrial cooling tower water recycling such as in data centers, co-developed with Garratt-Callahan). We sell these products through our wholly-owned subsidiary BioLargo Equipment Solutions & Technologies, Inc. (“BEST”), which manages the sales and distribution of our water treatment products and related services.
BLEST's board of directors includes Jeffrey Kightlinger, former CEO of the Metropolitan Water District of Southern California, Sally Gutierrez, retired career senior executive from the US Environmental Protection Agency (EPA), and Larry Dick, former Vice Chairman of the Metropolitan Water District of Southern California and board member of the Municipal Water District of Orange County. Each brings their significant and distinctive experience from decades in the water industry to BEST’s board to help the company create the necessary regulatory and industry connections that will be critical for its efforts to secure larger and more high-profile projects for its PFAS treatment and other water treatment technologies. These board members have been instrumental in efforts to raise awareness of our innovative treatment solutions within the water industry and EPA.
Securing sales in the water and wastewater industry is a very technically intensive process and can be long and arduous. The entirety of the sales cycle can be lengthy, in some cases even taking many months or, in the case of very large projects, multiple years. A typical sales timeline for a municipal drinking water or wastewater customer, from introduction to signing the contract for a full-scale install, usually requires feasibility studies, on-site pilot projects, budget approvals, State regulatory approvals, and more. Industrial clients may have a shorter sales cycles but are under pressure to ensure that the Return on Investment (ROI) fits into company standards, so their reviews can also be lengthy. For any water treatment project, the process is also very engineering-intensive, and therefore the staff required to secure contracts for water treatment projects need to be engineers, in most cases. In our company, BLEST’s engineers fill this role.
AEC, a solution for the PFAS “forever-chemicals” crisis
One of the most significant and timely innovations in our portfolio is our per- and polyfluoroalkyl substance (PFAS) water remediation system the Aqueous Electrostatic Concentrator (AEC), a novel water treatment system that removes PFAS from water at a lower operating cost while generating only a fraction of the PFAS-laden waste of the most common currently used solutions (carbon filtration, ion exchange, and reverse osmosis). PFAS are a group of man-made chemicals used for decades in the manufacture of both household and industrial goods, which have been detected in drinking water around the world. PFAS are a concern because they do not break down in the environment, can move through soil and contaminate drinking water sources, and build up (bioaccumulate) in fish, wildlife and humans. PFAS chemicals have been linked to cancer, immune disorders, liver dysfunction, and many other human health problems. Detection of unsafe levels of PFAS around the world has given rise to a number of market opportunities for treatment and remediation technologies, including in drinking water, industrial wastewater, municipal wastewater, solid waste, organic foods and more.
We have successfully validated the AEC as an effective system to selectively extract and collect PFAS chemicals from contaminated water, including performance testing that shows “non-detect” levels of removal, which meets new EPA standards. We have demonstrated more than 10,000 hours of continuous operation showing no materially significant degradation of the AEC system’s components or performance over time, and believe the costs to operate our system will be far less than that of the two primary incumbent technologies.
As a modular system, we believe the AEC is scalable to small commercial units used in smaller remediation projects for groundwater, wastewater, or landfill leachate, as well as large commercial installations of drinking water treatment facilities, and we believe that our engineering team has the experience to deliver systems to meet the needs of any sized commercial installation. In order to provide a full turn-key solution for our customers, we have developed an expanded offering whereby we can bundle a service package with each customer project that includes a membrane exchange program, the collection of PFAS, and transport and destruction of the PFAS using a novel “electrooxidation” process which our studies have shown is capable of reaching non-detect levels of PFAS after treating AEC-concentrated PFAS containing water, wastewater, or even landfill leachate (the contaminant-laden water that drains from landfills).
Our strategy to market our PFAS treatment technology and related engineering services is as follows: 1) focus on demonstrating our technology’s efficacy in first demonstration projects, trials, and early customer deployments with the understanding that this early success can be leveraged to secure larger and more numerous subsequent projects, 2) market our PFAS expertise and our technology by presenting at industry events and conferences around the country, cultivating our status as “thought leaders” in the space, 3) use our network of manufacturer’s representatives and channel selling partners to maximize the number of potential opportunities with early adopters, and 4) engage in discussions with credible distribution partners at established water treatment technology companies. Part and parcel to our strategy, we are in the early stages of developing a collaboration with the US EPA to have our AEC technology validated through a rigorous third-party pilot study whereby our technology would be operated and analyzed by EPA staff to a high degree of technical scrutiny. Such third-party validation could significantly facilitate market adoption of the AEC by effectively de-risking the technology for customers.
The AEC’s commercial roll-out is being executed with the help of a network of sales representative organizations whose role will be to market and sell the treatment system, related equipment, and the Company’s engineering services to municipal and industrial customers across the country. We have secured channel partner agreements with several sales representative organizations ensuring coverage for most of the continental United States. The AEC for our PFAS project in New Jersey has been built and is ready for delivery and installation, now waiting on the completion of other facilities. We believe the New Jersey project will represent a key milestone for the commercialization of the AEC, as we believe industry validation of the technology in a first municipal drinking water treatment project will play an important role in showcasing the AEC’s distinct advantages over incumbent technologies like carbon filtration and ion exchange.
We believe we are well-positioned in the PFAS-removal market for multiple reasons. We have successfully completed over a dozen pilot studies with prospective customers’ PFAS contaminated water; we have successfully maintained operation of our AEC PFAS treatment system for over 10,000 hours continuously, thus demonstrating its resilience to long-term use; we have submitted bids and proposals and have received indications of interest from a wide range of customer types; we have added several high-profile experts from the industry to our team who are assisting in opening doors to potential clients and collaborators; we have entered into discussions about partnership and opportunities for collaboration with industry-leading firms who have a gap in their PFAS treatment technology portfolio. While these opportunities do not convert into commercial sales overnight, but they represent strong avenues for accelerating adoption of our PFAS treatment solution.
AROS Minimal Liquid Discharge Water Treatment
In partnership with Garratt-Callahan, one of the country’s oldest and largest privately held water treatment companies, our engineers developed a “minimal liquid discharge” wastewater treatment system called the Aqueous Reuse Optimization System (AROS) that minimizes industrial wastewater discharges and thus the regulatory fees associated with wastewater discharge, including for uses like cooling towers at data centers. Garratt-Callahan, who invented and patented the technology, is currently marketing the AROS system to its existing customer base and to new prospective customers. BLEST will serve as the manufacturing partner and Garratt-Callahan will serve as the selling distributor to leverage their national sales force and over one hundred years of providing services and products to customers.
Advanced Oxidation System (AOS)
The Advanced Oxidation water treatment system (AOS) is our patented water treatment device that generates highly oxidative and energetic species of iodine and other molecules which allow it to eliminate pathogenic organisms and organic contaminants rapidly and effectively as water passes through the device. The key value proposition of the AOS is its ability to reduce or eliminate a wide variety of waterborne contaminants with high performance, including the normally hard-to-treat class of recalcitrant water contaminants called “micropollutants”, while using very little electricity and input chemicals. The AOS has been proven capable of removing hard-to-treat organic micropollutants such as pharmaceuticals from water more quickly and energy-efficiently than other technologies. Together, these characteristics make the AOS an economical and versatile tool to enable wastewater treatment and reuse in the face of emerging water contaminants and increasing regulatory scrutiny on industrial wastewater discharge, and has, broadly speaking, two target applications: 1) treatment of municipal or industrial wastewater to eliminate bacteria, viruses, other organisms, and regulated organic contaminants, while using less electrical energy than other technologies, and 2) treatment of water or wastewater specifically to eliminate micropollutants/pharmaceuticals, at which the AOS particularly excels at compared to existing technologies. Our business development efforts to secure projects for the AOS have thus far focused on development of partnerships for the European micropollutant market, and for domestic industrial or pharmaceutical wastewater treatment purposes where micropollutants are major contributors to facilities’ wastewater surcharge fees.
BioLargo Energy Technologies, Inc.
Our subsidiary BioLargo Energy Technologies, Inc. (“BETI”) was founded to commercialize a novel battery technology with the potential to help facilitate the ongoing shift toward renewable energy production by providing a safer, longer lasting, more eco-friendly, and more affordable alternative to lithium-ion batteries. Designed for long duration energy storage, also known as "battery energy storage solutions" (BESS), our battery, called Cellinity™, uses a novel “liquid sodium” chemistry that uses common domestically sourced materials, and which has significant advantages over other battery chemistries for use in stationary, long-duration energy storage.
BETI operates out of a pilot-scale battery production facility in our Oak Ridge Tennessee engineering headquarters, and is currently manufacturing and testing prototype battery cells. Preliminary internal testing has confirmed many of the technology's exceptional performance claims that make it an attractive battery technology for long duration energy storage, including the stability of the chemistry of the battery cell and the reliability of the component construction as a sealed, non-venting cell design with no self-discharging. These recent tests also helped verify the battery's ability to quickly charge and discharge at a high voltage. It has also been proven that the battery can withstand catastrophic physical insults without causing fire or explosion, one of the battery’s key features. Once prototype batteries are built and tested, and assuming such tests show the batteries have the characteristics we expect would differentiate it from other battery technologies, we will complete the design on a larger sized battery cell that would then be incorporated into battery packs and battery sizes meant for industrial facilities. Once designed, our engineers will work to develop manufacturing processes that would allow scale production to ensure costs of goods in line with market demand and conditions. We are working to obtain technology validation from an independent organization that we believe will serve as a key milestone to the more rapid advancement of our commercial efforts.
| ● |
Increased safety, no runaway fire risks, and a more sustainable design – with no rare-earth elements – that is capable of being manufactured completely from a domestic supply chain |
|
| ● |
Ability to charge and discharge completely, with no degradation of performance, ensuring virtually unlimited charge/discharge cycles, and without self-discharge and no out-gassing |
|
| ● |
Increased energy efficiency and energy density in comparison to lithium-ion batteries, and a longer useful life expectancy of at least 10 years and expected to be up to 20 years or more |
Our battery has high energy density and high voltage, making it well-suited for large format long duration energy storage rather than mobile energy storage purposes like EVs. Its electrical performance metrics also make it well-suited for long duration storage, meaning batteries which expend their electricity over up to ten hours, rather than being limited to two- or four-hour expenditures like many lithium-ion batteries. Such batteries are sought after for grid-scale leveling, storage of renewable energy, and emergency power redundancy purposes.
We are exploring multiple opportunities to commercialize our proprietary liquid sodium batteries through joint ventures with third parties. The third parties would finance the construction of independent battery manufacturing facilities designed and built under the direction of our engineers, and the joint venture would market, manufacture and distribute batteries. BioLargo would (i) receive a minority equity position in each joint venture, (ii) separately manufacture and sell at a profit to the joint venture certain proprietary battery components, and (iii) receive a royalty on the revenues of the joint venture.
Given the global growing demand for better batteries, and, while we are witnessing a number of current examples in which battery manufacturers have secured forward-contracts to supply batteries to its customers with backlogs of orders that amount to multiple years of production capacity, we believe our offer to partner with customers to secure needed inventory provides for a clear potential pathway to access capital, and more readily scale up production to meet demand around the world. At this point, we do not intend to finance and build our own manufacturing facilities, nor would we develop in-house sales channels, although that possibility remains on the table if needed.
Clyra Medical Technologies, Inc.
Our partially owned subsidiary Clyra Medical Technologies, Inc. is a healthcare company that is developing and commercializing products based on our technologies designed to safely treat wound and skin infections and promote wound healing, while reducing the need for antibiotics. Clyra is working closely with a medical device and cosmetics manufacturer founded over 50 years ago, Keystone Industries, to manufacture its products at scale. Keystone has invested over $3 million in equipment and infrastructure in its manufacturing facilities. Clyra has invested over $2 million in molds, equipment and resources to support scale manufacturing. Clyra has recently formalized relationships with multiple wholesale distributors and sales agents, and has the infrastructure in place to support their efforts to sell Clyra’s products to the medical industry. Clyra’s management team includes Chief Medical Officer Dr. Steven J. Kavros, a twenty-year veteran of the Mayo Clinic in roles such as Director at the Rochester Mayo Clinic’s Gonda Vascular Wound Healing Center, Nick Valeriani, who enjoyed a 34-year career with Johnson and Johnson where he held numerous leadership positions in engineering, manufacturing, sales and marketing, and Linda Park of Edwards Lifesciences, where she serves as Corporate Secretary, Senior Vice President and Associate General Counsel, and as a board member of the Edwards Lifesciences Foundation.
Full Service Environmental Engineering
BioLargo Engineering, Science & Technologies, LLC (“BLEST”) offers full service environmental engineering to third parties and provides engineering support services to our internal teams to accelerate the commercialization of our technologies.
BLEST focuses its efforts in three areas:
| ● |
providing engineering services to third-party clients as well as affiliated BioLargo entities; |
|
| ● |
supporting internal product development; and |
|
| ● |
advancing their own technical innovations such as the AEC PFAS treatment technology and the Cellinity battery energy storage system. |
BLEST operates out of an engineering facility in Oak Ridge, Tennessee (a suburb of Knoxville), and employs a group of scientists and engineers, many of whom are owners of the entity (BioLargo owns 74% as of June 30, 2025 and December 31, 2024). The team is led by Randall Moore, who served as Manager of Operations for Consulting and Engineering for the Knoxville office of CB&I Environmental & Infrastructure and was formerly a leader at The Shaw Group, Inc., a Fortune 500 global engineering firm. Many of the other team members are also former employees of CB&I and Shaw, with the exception of more recent staff hires. The team is highly experienced across multiple industries and we believe are considered experts in their respective fields, including: chemical engineering, wastewater treatment (including design, operations, data gathering and data evaluation), process safety, energy efficiency, air pollution, design and control, technology evaluation, technology integration, air quality management & testing, engineering management, permitting, industrial hygiene, applied research and development, air testing, environmental permitting, HAZOP review, chemical processing, thermal design, computational fluid dynamics, mechanical engineering, mechanical design, NEPDES permitting, RCRA/TSCA compliance and permitting, project management, storm water design & permitting, computer assisted design (CAD), bench chemistry, continuous emission monitoring system operator, data handling and evaluation and decommissioning and decontamination of radiological and chemical contaminated facilities. The team has decades of high-level experience in the energy industry. The engineering team has also developed an extended network of trusted engineering subcontractors that assist in serving specific client projects as needed.
BLEST engineers generate revenue through services to third party clients, as well as for internal BioLargo projects such as the AEC and battery (revenues from internal projects are eliminated in the consolidation of our financial statements and are designed “intersegment revenue”). Third party contracts include ongoing work at U.S. Air Force bases for air quality control which generate ongoing contract-based revenue of approximately $100,000 per month. Efforts to expand this work as well as with other clients are consistently ongoing.
The staff time devoted to supporting the AEC (PFAS) and battery related work is demanding, and, BLEST needs to hire more qualified staff to meet and expanding demand for our growing list of customers and/or expected customers. When we combine the demands of current revenue generating projects and expected growth, we are presented with an obvious challenge to manage quality, timely performance as well as access to qualified staff. We are working carefully to find balance to help ensure we meet the demands of both in a practical customer centric and capital conserving way. It may be for example, when we secure larger and larger contracts for PFAS or Garrett Callan related work, we will need to depend heavily on our contact manufactures to meet the customer demands in the near term as we scale up our infrastructure and work force capabilities.
Results of Operations
Our revenues decreased 45% and 38% in the three and six months ended June 30, 2025, as compared with the same periods in 2024, primarily due to a decreased volume of sales of our pet odor control product private labeled to a third party under the brand name “Pooph”. During the three and six months ended June 30, 2025, revenues from sales to Pooph comprised 57% and 69% of our consolidated revenue; compared to the three and six months ended June 30, 2024, it comprised 70% and 78% of our consolidated revenue. Our financial statements separate revenue based on products and services. Revenues from the sale of products for the three and six months ended June 30, 2025, decreased 59% and 49% over the same periods in 2024. Revenues from services for the three and six months ended June 30, 2025, increased 517% and 300% over the same periods in 2024.
ONM Environmental
Our wholly-owned subsidiary ONM Environmental generates revenues through (i) sales of our flagship product CupriDyne Clean to industry, including related design, installation, and maintenance services on the systems that deliver CupriDyne Clean at its clients’ facilities, and (ii) sales of private-label products to third parties, including the Pooph branded pet odor control product.
Revenue (ONM Environmental)
ONM Environmental’s revenues decreased 50% and 44% (to $2,006,000 and $4,809,000) in the three and six months ended June 30, 2025, compared with the same periods in 2024. The decrease in revenues was almost entirely due to a decrease in the volume of sales of our pet odor product private labeled to a third party under the brand name "Pooph". Because the Pooph brand is owned and marketed by a third party, ONM Environmental has no control over its marketing and sales activity. Because the brand has only been on the market for three years, it is difficult to identify trends and uncertainties in sales volumes, especially so for longer periods of time. We expect annual revenues for the year ending December 30, 2025, to decrease as compared with 2024.
Cost of Goods Sold (ONM Environmental)
ONM Environmental’s cost of goods sold includes costs of raw materials, contract manufacturing, and portions of depreciation, salaries and expenses related to the manufacturing and installation of its products. As a percentage of revenue, ONM Environmental’s costs of goods for the three and six months ended June 30, 2025, were 45% and 50% a decrease of 10% and 4%, compared to the same periods in 2024. The decrease in cost of goods is due to the change in revenue concentration across product lines.
Selling, General and Administrative Expense (ONM Environmental)
ONM Environmental’s selling, general and administrative expenses ("SG&A") decreased 14% and 7% during the three and six months ended June 30, 2025, as compared with the same periods in 2024. ONM Environmental's selling, general and administrative expenses are expected to remain consistent.
Operating Income (ONM Environmental)
ONM Environmental generated operating income of $823,000 and $1,780,000 in the three and six months ended June 30, 2025, compared to operating income of $1,490,000 and $3,288,000 for the three and six months ended June 30, 2024. The operating income for both periods was primarily dependent on the sales volume of Pooph branded products, which has declined in the 2025 periods.
BLEST (engineering)
Revenue (BLEST)
Our engineering segment's (BLEST's) revenues decreased 23% (to $771,000) in the three months ended June 30, 2025 as compared with the same period in 2024, and increased 4% (to 1,237,000) in the six months ended June 30, 2025, as compared with the same period in 2024. The decrease in revenues in the three-month period is due to the timing of recognition of revenue related to the product sales. The increase in revenue in the six-month period is related to the new contracts to provide air quality control compliance services to additional U.S. Air Force bases, increasing its ongoing contract-based revenue to approximately $100,000 per month. These ongoing contracts are expected to continue provide a monthly base revenue, in addition to adding work with other clients.
In addition to providing services to third party clients, BLEST provides services for internal BioLargo projects. These services are billed internally, are considered intersegment revenue, and are eliminated in the consolidation of our financial statements. In the three and six months ended June 30, 2025, intersegment revenue for BLEST totaled $169,000 and $393,000, and for the three and six months ended June 30, 2024, intersegment revenue for BLEST totaled $257,000. and $428,000.
Cost of Revenues (BLEST)
BLEST’s cost of revenues includes employee labor, subcontracted costs and material costs. In the three and six months ended June 30, 2025, costs were 58% of revenues, versus 67% and 62% in the same periods in 2024. The decrease is related to efficiencies on fixed fee contracts, compared to product sales, which had more direct costs, attributed to the AEC project in Lake Stockholm New Jersey.
Selling, General and Administrative Expense (BLEST)
BLEST’s SG&A expenses were $224,000 and $556,000 in the three and six months ended June 30, 2025, compared to $238,000 and $441,000 in the three and six months ended June 30, 2024. The increase in the six-month period is due to the hiring of additional employees in 2025.
Operating Loss (BLEST)
BLEST generated operating income of $16,000 and an operating loss of $364,000 in the three and six months ended June 30, 2025, compared to an operating loss of $247,000 and $692,000 in the three and six months ended June 30, 2024. The operating income in the three months ended were related to an increase in third party-revenues. The six-months operating loss is reflective of the focus at BLEST on advancing internal BioLargo projects such as the Cellinity battery and AEC water treatment system. Our condensed consolidated financial statements eliminate intersegment revenues.
Clyra Medical
Clyra Medical has not yet begun commercial sales of its products and thus did not generate revenues in the three and six months ended June 30, 2025 or 2024. In the three and six months ended June 30, 2025, it incurred total costs and expenses of $1,263,000 and $2,580,000, which included $229,000 and $564,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $616,000 and $1,154,000, which included $100,000 and $213,000 in research and development expenses. The increases in costs and expenses are primarily related to stock option expense recorded as selling, general and administrative expenses and also an increase in product development cost. Management is not yet in a position to disclose when it believes Clyra Medical will begin generating revenue.
BETI
BioLargo Energy Technologies, Inc. (BETI) is developing our Cellinity battery, and has not generated generate revenue. For the three and six months ended June 30, 2025, it incurred total costs and expenses of $122,000 and $217,000, which included $54,000 and $113,000 in research and development expenses. In the same periods in 2024, total costs and expenses were $226,000, and $388,000, which included $133,000 and $220,000 in research and development expenses. We are focused on recruiting business partners to facilitate capital investment, and are unable to predict when BETI will generate revenue.
BEST
BioLargo Equipment, Sciences and Technologies, Inc. (BEST) was formed in 2024 to commercialize BioLargo's proprietary water treatment equipment, including its PFAS removal device the AEC. As the first AEC sale occurred prior to the Company's formation, and the sales cycle for advanced water treatment systems is long, BEST has not yet generated revenues. We intend future water treatment projects to be contracted through BEST. During the three and six months ended June 30, 2025, it incurred $67,000 and $125,000 of total expenses. In the same periods in 2024, it incurred $49,000 and $115,000 in total expenses primarily related to sales and marketing activities.
Selling, General and Administrative Expense – consolidated
Our SG&A expenses include both cash (for example, salaries to employees) and non-cash expenses (for example, stock option compensation expense). For the three and six months ended June 30, 2025 consolidated SG&A increased 12% and 13% (to $2,688,000 and $5,250,000). The largest components of our SG&A expenses included (in thousands):
| Three Months Ended |
Six Months Ended |
|||||||||||||||
| June 30, 2025 |
June 30, 2024 |
June 30, 2025 |
June 30, 2024 |
|||||||||||||
| Salaries and payroll related |
$ | 1,144 | $ | 802 | $ | 2,199 | $ | 1,504 | ||||||||
| Professional fees |
281 | 213 | 485 | 494 | ||||||||||||
| Consulting |
354 | 386 | 756 | 865 | ||||||||||||
| Office expense |
624 | 579 | 1,225 | 1,025 | ||||||||||||
| Sales and marketing |
88 | 139 | 265 | 238 | ||||||||||||
| Investor relations |
103 | 201 | 144 | 330 | ||||||||||||
| Board of director expense |
94 | 84 | 176 | 173 | ||||||||||||
| Total Selling, General & Administrative |
$ | 2,688 | $ | 2,404 | $ | 5,250 | $ | 4,629 | ||||||||
In the three and six months ended June 30, 2025, our non-cash expenses from the issuance of stock and stock options totaled $492,000 and $1,107,000 compared to $539,000 and $1,027,000 for the three and six months ended June 30, 2024. Our non-cash expenses are related to stock option issuances for previously issued stock options that expired during the three and six months ended June 30, 2025. and 2024. The substantial majority of this stock option expense is recorded in employee salaries and consulting expense. Salaries and payroll related expense increased due to the addition of new employees; companywide, there are 42 full time employees as of the date of this report. Professional fees increased in the three months ended June 30, 2025, due to increased corporate activity related to new private securities offerings for BioLargo and Clyra, and other organizational needs that required professionals. Office expense increased due to an increase in insurance related costs and rent expense. Investor relation expense decreased due to fewer trade show and investor events.
Research and Development
In the three and six months ended June 30, 2025, we spent $535,000 and $1,325,000 in the research and development of our technologies and products. This was a decrease of 14% and 6% as compared to the three and six months ended June 30, 2024. The decrease is primarily due to the timing of project work.
Interest expense
Our interest expense for the three and six months ended June 30, 2025, was $80,000 and $145,000 compared to interest expense of $2,000 and $14,000 in the three and six months ended June 30, 2024. The increase of interest expense is related to the increase of Clyra Medical debt obligations.
Other Income and Expense
For the six months ended June 30, 2025, we had $6,000 of grant income, compared to $15,000 of grant income for the same periods in 2024. Grant income is primarily generated through our wholly owned Canadian subsidiary. The research grants received are considered reimbursement grants related to costs we incur and therefore are included as Other Income. Grant funds paid directly to third parties are not included as income in our condensed consolidated financial statements.
Net Loss
Net loss for the three and six months ended June 30, 2025, was $1,882,000 and $3,803,000 a loss of $ (0.004) and $ (0.008) per share, compared to a net loss for the three and six months ended June 30, 2024, of $780,000 and $1,555,000 a loss of $ (0.001) and $ (0.003) per share. Our net loss for the three and six months ended June 30, 2025, increased because of the decrease in ONM Environmental revenue.
The net income (loss) per business segment is as follows (in thousands):
| Three Months Ended |
Six Months Ended |
|||||||||||||||
| June 30, 2025 |
June 30, 2024 |
June 30, 2025 |
June 30, 2024 |
|||||||||||||
| BioLargo corporate |
$ | (1,042 | ) | (1,126 | ) | $ | (1,853 | ) | $ | (2,374 | ) | |||||
| ONM |
856 | 1,496 | 1,827 | 3,292 | ||||||||||||
| Clyra Medical |
(1,379 | ) | (622 | ) | (2,778 | ) | (1,174 | ) | ||||||||
| BLEST |
16 | (150 | ) | (363 | ) | (595 | ) | |||||||||
| BETI |
(122 | ) | (226 | ) | (217 | ) | (381 | ) | ||||||||
| BEST |
(67 | ) | (49 | ) | (125 | ) | (115 | ) | ||||||||
| BioLargo Canada |
(144 | ) | (103 | ) | (294 | ) | (208 | ) | ||||||||
| Net loss |
$ | (1,882 | ) | (780 | ) | (3,803 | ) | (1,555 | ) | |||||||
Liquidity and Capital Resources
For the six months ended June 30, 2025, we generated revenues of $6,046,000, had a net loss of $3,803,000, used $3,948,000 net cash in operating activities, and received $3,699,000 net cash from financing activities. As of June 30, 2025, we had current assets of $9,187,000, including $3,471,000 cash and cash equivalents. As of June 30, 2025, we had current liabilities of $4,080,000, and working capital of $5,107,000. We do not believe gross profits in the year ending December 31, 2025, will be sufficient to fund our current level of operations for the reminder of the year, and therefore expect we will continue to be limited in terms of our capital resources, and therefore expect to continue to need further investment capital to fund our business plans and investments in our new technologies. The foregoing factors raise substantial doubt about our ability to continue as a going concern, unless we are able to (i) increase revenues, generate cash from operations, and/or generate cash from financing activities, or (ii) convert assets such as our $1,735,000 in accounts receivable and $3,572,000 note receivable into cash. If we are unable to raise additional cash through gross profits or financing activities, management may choose to curtail portions of our operations. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Critical Accounting Policies
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of offerings of debt with equity or derivative features which include the valuation of the warrant component, any beneficial conversion feature and potential derivative treatment, and share-based payments. We base our estimates on anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position.
Our significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements are described in (i) in Part I, Item 1 of this Form 10-Q, Note 2, “Summary of Significant Accounting Policies” and (ii) in the Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, in the Notes to Consolidated Financial Statements in Part II, Item 8, and “Critical Accounting Policies and Estimates” in Part II, Item 7. There have been no material changes to the Company’s critical accounting policies and estimates since the filing of its Form 10-K.
Item 4. Controls and Procedures
We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended – the “Exchange Act”) as of the end of the period covered by this Report. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Our procedures have been designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. However, our Company is continuing to grow and evolve, as our product and services sales continues to grow, and as we diversify our clients to include municipalities, increasing strain on our accounting systems. These activities put stress on our overall controls and procedures. We do not yet have the resources to implement the more sophisticated control systems used by larger companies. Although we have made some improvements, our chief executive officer and chief financial officer have concluded that, as of the evaluation date, our disclosure controls and procedures were not effective, due to the material weakness identified below.
It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our chief executive officer and the chief financial officer, we have established internal control procedures in accordance with the guidelines established in the 2013 Framework —Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management evaluated the effectiveness of our internal controls, and concluded that due to our limited financial and personnel resources, the fact that we operate our business in three distinct locations in the U.S. and Canada, and the lack of sophisticated reporting systems, we continue to have a material weakness in our internal controls with respect to the closing our financial statements. Until the Company has the financial resources to implement more robust automated systems, or to hire additional dedicated accounting personnel, we expect this material weakness to continue.
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting, or any system we design or implement in the future, will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
See the Exhibit Index for a list of exhibits filed as part of this report and incorporated herein by reference.
Exhibit Index
| Incorporated by Reference Herein |
|||
| Exhibit Number |
Exhibit Description |
Form |
File Date |
| 3.1 |
Form 10-KSB |
5/23/2003 |
|
| 3.2 |
Amended and Restated Certificate of Incorporation for BioLargo, Inc. filed March 16, 2007 |
Form 10-KSB |
5/4/2007 |
| 3.3 |
Certificate of Amendment to Certificate of Incorporation, filed May 25, 2018 |
Pos Am |
6/22/2018 |
| 3.4 |
Certificate of Amendment to Certificate of Incorporation, filed August 30, 2022 |
Form 10-Q |
11/14/2022 |
| 4.1 |
Form 10-QSB |
11/19/2007 |
|
| 4.2 |
Def 14C (Exhibit A) |
5/2/2011 |
|
| 4.3 |
Form of Stock Options issued in exchange for reduction in accounts payable. |
Form 10-K |
3/31/2015 |
| 4.4 |
Form S-8 |
6/22/2018 |
|
| 4.5 |
2024 Equity Incentive Plan | Form POS AM |
4/18/2025 |
| 10.15 |
Form 10-Q |
5/17/2023 |
|
| 10.16† | 2024 Engagement Extension Agreement with CFO | Form 10-Q | 8/15/2024 |
| 10.17 | License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated May 17, 2021 | filed herewith | |
| 10.18 | First amendment to License Agreement between BioLargo, Inc., and Ikigai Holdings, LLC, dated August 16, 2021 | filed herewith | |
| 10.19 | Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated July 9, 2021 | filed herewith | |
| 10.20 | First amendment to Preferred Master Manufacturing Agreement between ONM Environmental, Inc., and Ikigai Holdings, LLC, dated June 6, 2025 | filed herewith | |
| 31.1* |
filed herewith |
||
| 31.2* |
filed herewith |
||
| 32* |
filed herewith |
||
| 101.INS** |
Inline XBRL Instance |
||
| 101.SCH** |
Inline XBRL Taxonomy Extension Schema |
||
| 101.CAL** |
Inline XBRL Taxonomy Extension Calculation |
||
| 101.DEF** |
Inline XBRL Taxonomy Extension Definition |
||
| 101.LAB** |
Inline XBRL Taxonomy Extension Labels |
||
| 101.PRE** |
Inline XBRL Taxonomy Extension Presentation |
||
| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) |
* Filed herewith
** Furnished herewith
† Management contract or compensatory plan, contract or arrangement
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 14, 2025 |
BIOLARGO, INC.
By: /s/ DENNIS P. CALVERT |
|
| Dennis P. Calvert Chief Executive Officer |
||
| Date: August 14, 2025 |
By: /s/ CHARLES K. DARGAN, II |
|
| Chief Financial Officer |
Exhibit 10.17
LICENSE AGREEMENT
[Pet Products]
This License Agreement (the “Agreement”) is made this 17th day of May, 2021, by and between BioLargo, Inc., a Delaware corporation and its wholly owned subsidiary BioLargo Life Technologies, Inc., a California corporation, having a principal place of business at 14921 Chestnut Street, Westminster, California 92683 (collectively referred to as “Licensor”), and Ikigai Holdings, LLC, a Nevada limited liability company having a principal place of business at One East Liberty Street, Suite 600, Reno, Nevada 89509 (“Licensee”). Each of Licensor and Licensee is a “Party”, and are collectively referred to herein as the “Parties”.
RECITALS
WHEREAS, Licensor has developed a proprietary and patent-protected formulation called CupriDyne that eliminates odors and can be used as the basis for many products for use in many settings and environments, for consumer, professional, and industrial uses;
WHEREAS, Licensor and its affiliates manufacture, market and sell multiple products based on the CupriDyne formulation, including industrial odor control, consumer products, and medical products;
WHEREAS, Licensee desires to identify and launch distinctive mass-market consumer product solutions utilizing Licensor’s CupriDyne formulation and Licensee’s propriety method for creating and growing a mass-market consumer product winner.
WHEREAS, the parties desire to set forth their rights and obligations under an arrangement whereby (i) over a set period of time, Licensee tests potential products, claims, and markets to determine one or more products in which it desires to move forward to a next phase of testing, (ii) upon such decision, Licensor temporarily licenses to Licensee exclusive rights to sell a limited amount of the particular product to consumers during which time Licensee would test its viability as a potential mass-market winner (through “Phase I” testing), (iii) upon a “GO” decision to be determined solely by Licensee to proceed forward with expanding marketing and retail launch, Licensor agrees to grant to Licensee an exclusive license for such product, and (iv) in the event of a successful campaign and appropriate retail penetration, Licensee would lead an effort to sell the rights to the product to a consumer products company and Licensor shall permit Licensee to assign its exclusive rights to such third party company.
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and for the mutual covenants contained in this Agreement, the Parties hereby agree as follows:
1. Definitions.
a. “Licensor” means BioLargo Life Technologies, Inc., and BioLargo, Inc.
b. “Licensee” means Ikigai Holdings, LLC.
c. “Licensed Patents” means those patents and patent applications that are listed in Exhibit A and any other potential Licensor’s patents and patent applications improving on said listed patents and applications, and their divisions, continuations, continuations in part, patents issuing therefrom and all reissues or renewals of the same which might limit the scope of authorized manufacture use, sale and importing of Licensed Products within the scope of the Field of Use. Licensed Patents shall not include any other intellectual property rights such as, but not limited to, patents and/or patents applications not listed in Exhibit A (except if expressly stated herein), trademarks, copyrights or models.
d. “Licensed Products” means any and all compositions and methods of use of those compositions for use by an end user and falling within the scope of at least one claim of a Licensed Patent and residing solely within the Field of Use. Licensed Products include for example liquids, powders and other materials containing such liquids and powders. Licensed Products exclude any associated mechanical devices for applications. Licensed Products shall further include any and all compositions and methods of use of those compositions for use by an end user and falling within the scope of Trade Secrets and Know-How disclosed in accordance with the execution and performance of this Agreement.
e. “Field of Use” means, for purposes of defining the scope of the License under the Licensed Patents, Trade Secrets and Know-How granted in the scope of the present Agreement is limited to the manufacture, use, sale, export or importation of iodine-containing solutions or particles to reduce or eliminate odors in the air or on surfaces. The application may be by brushing, wiping, applying, coating or spraying the iodine-containing solutions or particles into the air or onto surfaces. The Field of Use excludes the use, advertising or marketing of the iodine-containing solutions or particles to the air or surfaces for purposes of antimicrobial or sanitizing uses. Specifically, the Field of Use granted under this Agreement include and are limited to (i) powdered products marketed to reduce odors caused by household pets, (ii) liquid products marketed to treat stains and odors caused by household pets, and (iii) products composed of porous fabric material and a composition distributed within the porous fabric material to produce molecular iodine (such as wipes).
f. “Net Sales Price” shall mean actual revenues recognized under generally accepted accounting principles actually received from the sale, use or other disposition of the Licensed Products under license less (i) sales discounts, use, excise, added value and withholding taxes, and (ii) shipping charges.
g. “Territory” means world-wide.
h. “Trade Secrets” and “Know-How” refers to proprietary knowledge of Licensor related to the Licensed Products and the methods, compositions, and methods of manufacturing compositions described in the Licensed Patents, the Licensed Products, and the Field of Use.
2. Initial “Rapid Testing”.
a. During the period beginning on the effective date of this Agreement, and concluding October 1, 2021 (the “Rapid Testing Period”), Licensee may test through its proprietary “Rapid Testing Process” potential product uses otherwise known as claims, and potential products in an effort to determine if one or more products based on CupriDyne is appropriate to proceed with further market testing (the “Phase I Testing” described below) with the hopes of finding a product within the Licensed Products suitable to launch a full direct- marketing campaign.
b. During the Rapid Testing Period, Licensor shall cooperate with Licensee as reasonably necessary to provide information as to potential product uses and potential products that may be suitable for initial testing. Licensor shall not be entitled to separate compensation for such cooperation.
c. On or before the expiration of the Rapid Testing Period, Licensee may advise Licensor in writing of its intention to proceed with Phase I Testing for one (1) or more particular products (such notice, a “Notice to Proceed”). Such written notice shall identify with particularity the product name, uses, claims, market and proposed pricing. In the event of Licensor’s timely receipt of such notification, the provisions of Section 3 (Phase I Testing) shall apply. If Licensee fails to timely deliver notice to Licensor pursuant to this Section, this Agreement shall terminate at that time without further action by either party, and all rights granted to Licensee pursuant to this Agreement shall terminate.
d. In the event that Licensee does not notify Licensor of a GO Decision as defined below, Licensee agrees to share with Licensor brief results and information gathered in its prior testing, all of which shall exclude confidential information as defined in the Parties’ associated Non-Disclosure Agreement.
3. Phase I Testing.
a. Provided that Licensee delivers to Licensor a written Notice to Proceed prior to the expiration of the Rapid Testing Period, Licensee may proceed to test market the product(s) identified in the Notice to Proceed (the “Phase I Product(s)”) subject to the conditions and limitations of this Section. Licensee intends to develop a brand under which the Phase I Product(s) would be sold (the “Licensee Brand”).
b. The “Phase I Testing Period” shall be approximately one hundred and twenty (120) days. The Parties agree to mutually negotiate and agree upon the commencement and termination of the Phase I Testing Period.
c. Provided that Licensee delivers to Licensor a written Notice to Proceed prior to the expiration of the Rapid Testing Period, Licensor hereby grants to Licensee the world-wide exclusive right to sell the Phase I Product(s) to consumers (the “Phase I License”) during the Phase I Testing Period. The Phase I License shall terminate upon the expiration of the Phase I Testing Period.
d. Licensee agrees to order, and Licensor agrees to manufacture, the number of Phase I Product(s) as requested by Licensee, for sale and delivery to Licensee for the purposes of the Phase I Testing, at Licensor’s cost plus a reasonable manufacturer’s margin, pursuant to the PMMA (as defined in Section 4(c) below).
e. During the Phase I Testing Period, and in consideration of the exclusive rights granted to Licensee during such time, Licensor shall pause all sales of the Phase I Product(s) that may conflict with the information provided in the Notice to Proceed regarding targeted consumers, markets and claims. In addition, Licensor shall ensure that sales by third parties with whom Licensor is under agreement pause for products similar to the Phase I Product(s) and targeted to the same consumers, under any brand. Licensor acknowledges that pausing sales in accordance with this paragraph is critical to allow Licensee to acquire essential data about the Phase I Product(s) and the associated claims.
f. On or before the expiration of the Phase I Testing Period, Licensee may advise Licensor in writing of its intention to proceed with an expanded marketing campaign (a “GO Decision”), the purpose of which is to build a broader base of consumer awareness, launch the pertinent product in retail stores, and direct customers to retail stores carrying the pertinent product. In such instance, the provisions set forth in Section 4, below, shall apply. If Licensee fails to timely deliver a GO Decision, this Agreement shall terminate at that time without further action by either party, and all rights granted to Licensee pursuant to this Agreement shall terminate.
g. In the event that Licensee does not notify Licensor of a GO Decision as defined above, Licensee agrees to share with Licensor brief results and information gathered in its prior testing, all of which shall exclude confidential information as defined in the Parties’ associated Non-Disclosure Agreement.
4. “GO” Decision on Licensed Product. Provided that Licensee has timely delivered a notice of a GO Decision to Licensor, and unless this Agreement is otherwise terminated, the Parties agree to the following:
a. License Grant. Subject to Licensee’s performance of the payment obligations and declaration obligations set forth in Section 5, and effective as of the date of delivery of the notice of GO Decision without further action by Licensor or Licensee, Licensor hereby grants to Licensee, an exclusive, royalty-bearing license under the Licensed Patents, Trade Secrets, and Know-How to make, use, sell, offer for sale, export, and import Licensed Products anywhere in the Territory solely within the Field of Use.
i. Licensee is not hereby entitled to sublicense or subcontract, in whole or in part, the rights granted to it hereunder, except as otherwise expressly agreed upon under this Agreement.
ii. Licensee may subcontract to a third party the manufacturing and assembly, including personalization, of Licensed Products provided that Licensee remains responsible for the performance of the obligations deriving from this Agreement.
iii. No license right other than those expressly granted under this Article is granted by Licensor to Licensee under this Agreement. Notwithstanding the previous sentence, Licensee shall be granted the right to license any patent covering improvements to the Licensed Patents.
iv. Licensee shall be able to assign or sell this Agreement only upon approval by Licensor in accordance with Section 6, below, which approval shall not be unreasonably withheld.
b. Exclusivity. The rights granted to Licensee under Section 4 of this Agreement shall remain exclusive, provided that Licensee continues to generate Two Million Five Hundred Thousand Dollars ($2,500,000.00) in annualized revenues, beginning on the third (3rd) full calendar quarter following the first (1st) delivery of Licensed Product to a retail store, to be determined by multiplying the quarterly revenues (of Licensed Products purchased from Licensee) of the most recent completed quarter by four (4).
c. Preferred Master Manufacturing Agreement. The parties agree to enter into a non-exclusive Preferred Master Manufacturing Agreement (the “PMMA”) to ensure the Licensed Product is manufactured with excellence and scalability. Licensee agrees to work with Licensor to plan production to scale and ensure supply chain risk mitigation.
d. For Licensee’s purchase orders placed to Licensor, payment terms are fifty percent (50%) deposit due on order placement. If the remaining fifty percent (50%) is paid within ten (10) days of delivery, the entire purchase order will be discounted by two percent (2%). All purchase terms will be net thirty (30) days of delivery.
5. Royalty and Payments.
a. Royalty. Licensee shall pay to Licensor six percent (6%) of the Net Sale Prices of any and all Licensed Products made, used, sold, or imported in the Territory or exported from the Territory (the “Royalty”). All payments under this Agreement are exclusive of any value added taxes (“VAT”), withholding and other taxes. In case VAT and/or similar tax applies to any such payment, the required amount of such tax shall be payable by the Licensee in addition to such payment to Licensor.
b. Payments. All payments under this Agreement shall be made to Licensor by bank transfer to the account listed hereafter, or at such other account as shall be furnished in writing by the duly authorized officer of Licensor.
6. Sale to Third Party. Upon a successful retail launch determined solely by Licensee of one or more Licensed Products, Licensee intends to market the product(s) under Licensee’s Brand for sale to a major consumer products company, such as Proctor & Gamble. In such event Licensor agrees to reasonably cooperate with Licensee in its efforts.
a. Exit Price. In the event that Licensee sells, transfers, and assigns its rights, title, and obligations under this Agreement to a third-party entity (an “Acquisition”), Licensee shall pay to Licensor a one-time payment of twenty percent (20%) of the total amount paid by such third-party to Licensee (the “Acquisition Exit Price”). This payment shall be delivered by Licensee to Licensor within thirty (30) days of Licensee receiving payment from a third-party for an Acquisition. Upon payment of the Acquisition Exit Price, Licensee’s obligation to pay the Royalty under Section 5 of this Agreement for the sale of Licensed Product after the payment of the Acquisition Exit Price shall be terminated.
7. Enforcement/Third Party Infringement. Upon approval by Licensor which shall not be unreasonably withheld, Licensee shall have power to institute and prosecute at its own expense suits for infringement of the Licensed Patents, and, if required by law, Licensor will join as party plaintiff in such suits. All expenses in such suits will be borne entirely by Licensee, and Licensee would be solely entitled to all proceeds of such suit, including but not limited to any settlement or judgment.
8. Reporting.
a. Licensee shall keep full and accurate books of account showing the amount of Royalties due pursuant to this Agreement. These books of account shall be kept at Licensee’s place of business, and shall be made available to Licensor at reasonable times for inspection by an independent certified public account retained by Licensor and shall be kept and made available to Licensor for the later of (i) the end of the term of this Agreement, including any extensions thereof, or (ii) two (2) years following the end of the calendar year to which they pertain.
b. Royalty Report. Not later than thirty (30) days after the completion of an Acquisition of Licensee’s rights, interest, or obligations under this Agreement to the Licensed Products and Licensed Processes, Licensee shall deliver to Licensor a true and accurate report (a “Royalty Report”), giving particulars of the business conducted by Licensee as are relevant to an accounting for Royalties due under this Agreement. The Royalty Report shall include at least the following: (i) the quantity of Licensed Products sold by Licensee; (ii) the revenues arising from sales of Licensed Products; (iii) the calculated Royalty due to Licensor; and (iv) any other revenues received from third parties. Simultaneously with the delivery of each Royalty Report, Licensee shall pay to Licensor the applicable Royalty due, as set forth in Section 5 above.
c. Audit Rights. Licensor shall be entitled, upon no less than ten (10) days written notice to Licensee and during business hours at Licensee’s office or such other place as Licensee shall designate within the state of Nevada, to inspect and examine those books and records of Licensee relating to the determination of Royalties set forth in any Royalty Report. The inspection of Licensee’s records shall be performed by a national public accounting firm (a “Qualified Firm”). The examination must be conducted within ten (10) days of such books and records being made available to Licensor (“Examination Period”). The Qualified Firm shall prepare a report indicating the results of the review (the “Audit Report”). If the Audit Report discloses that the amount of Royalties reported to Licensor was incorrect, Licensee shall pay to Licensor the deficiency, unless Licensee disputes the Report within thirty (30) days after the receipt of the Report by Licensee. If Licensee disputes the Report within this thirty (30) day period, Licensee and Licensor shall agree upon another of the national independent accounting firms to review and verify the Royalties, and provide the results thereof to Licensee and Licensor (the “Reconciliation Audit”) and the determination as set forth in the Reconciliation Audit shall be binding upon Licensee and Licensor. All costs and expenses of the auditor generating the Audit Report shall be paid by Licensor unless the audit shows that Licensee understated Royalties in the Royalty Report by more than ten percent (10%), in which case Licensee shall pay the cost and expenses of such audit. Notwithstanding the foregoing, in the event the Reconciliation Audit is performed, Licensee and Licensor shall each pay fifty percent (50%) of the cost of the Reconciliation Audit. The exercise by Licensor of its audit rights hereunder shall not relieve Licensee of its obligations to pay prior to the request for and inspection and examination of Licensee’s books and records or permit Licensor the right to audit any other sums with the exception of the amounts set forth in this Royalty Report. If Licensor does not elect to exercise its rights to audit during the Audit Period, and/or does not elect to examine the books and records during the Examination Period, then Licensee’s Royalty Report shall conclusively be deemed to be correct and Licensor shall be bound by Licensee's determination. Additionally, Licensor agrees and acknowledges that the audit right as set forth herein and the review of books and records shall be confidential and, with the exception of Licensor’s auditors, Licensor may not disclose or discuss the audit or the results of the audit to any other parties.
9. Marking of Patent Rights. All Licensed Products shall bear a trademark designated and owned by Licensee, and appropriate patent marking, such as “Patent Pending” or reference to specific issued U.S. Patents covering the Licensed Products, pursuant to and in conformance with the guidelines issued from time to time by Licensor. Licensee shall consult with and obtain the written approval of Licensor with respect to any such patent marking.
10. Insurance Requirements. Licensee shall maintain, at Licensee’s expense, during the period that any Licensed Product is made, used, sold or otherwise made available to others pursuant to this Agreement, comprehensive liability insurance, including product liability insurance, with a reputable and financially secure insurance carrier(s) to cover the activities of Licensee and its sublicensees, if any, contemplated by this Agreement, for minimum limits of Two Million Dollars ($2,000,000.00) per occurrence. Such insurance shall name Licensor as an additional insured. Licensee shall furnish a Certificate of Insurance, upon request, evidencing coverage of Two Million Dollars ($2,000,000.00) with thirty (30) days of written notice of cancellation or material change to Licensor. Licensee’s insurance shall be written to cover claims incurred, discovered, manifested, or made during the term, or after the expiration, of this Agreement. Licensee shall at all times comply, through insurance or self-insurance, with all statutory workers’ compensation and employers’ liability requirements covering any and all employees with respect to activities performed under this Agreement. All such liability insurance policies shall be written as primary policies not contributing with and not in excess of coverage which Licensor may carry.
11. Limited Warranty.
a. In no event shall any amount paid hereunder by Licensee be refundable to it, including in case of cancellation by a court of final jurisdiction or in case of any final invalidation of any Licensed Patent licensed under this Agreement, or in case of termination pursuant to Section 12.
b. Licensor guarantees only the existence of Licensed Patents. In the event that during the term of this Agreement, the existence of any Licensed Patent is threatened for any reason, Licensor may, in its discretion and at its expense, use reasonable commercial efforts to preserve such existence and will keep Licensee informed of such actions and procedures when required in writing by Licensee. Licensee will cooperate with Licensor, at Licensor’s expense, by providing any information and assistance reasonably requested by Licensor and necessary to initiate and bring the above referred actions and procedures to a satisfactory conclusion.
c. Except as set forth in this Section and set forth in the PMMA, Licensor disclaims all warranties, express or implied, including warranty of non-infringement, warranties of merchantability and fitness for a particular purpose, arising out of this Agreement and the rights provided hereunder.
d. In no event shall either Party be liable under this Agreement for any indirect, special or consequential damages including, but not limited to, lost profits or demands against the other Party by any person, or other commercial loss.
12. Events of Default and Termination.
a. This Agreement shall terminate automatically in the event that Licensee files a petition, or has a petition filed against it, under any laws relating to insolvency, including, without limitation, any filing under any provision of the U.S. Bankruptcy Code; or enters into any voluntary arrangement for the benefit of its creditors; or appoints, or has appointed on its behalf, a receiver, liquidator or trustee of its property or assets.
b. The following shall be considered an “Event of Default”:
i. Licensee’s failure to timely pay to Licensor during a particular Reporting Period an amount equal to at least the sum of the Royalty due for such Reporting Period in compliance with Section 5(b);
ii. Licensee’s failure to timely deliver to Licensor the Report due for a Reporting Period;
iii. Licensee’s assignment, or attempted assignment, of this Agreement in violation of the terms set forth in Section 18.l below;
iv. An uncured “Event of Default” by Licensee under the forthcoming PMMA, as that term is defined in the PMMA;
v. Licensor’s grant of a license to a third party in the Field of Use during the Term, provided that Licensee has not breached one or more provisions of this Agreement, or otherwise committed an Event of Default; and
vi. Licensor’s failure to pay any necessary fees for the continuation of the Licensed Patents.
Notwithstanding the above, should an Event of Default occur, Licensor or Licensee, as the case may be, agrees to provide the defaulting party notice of such Event of Default with the opportunity to cure such Event of Default within a period of thirty (30) days.
c. Termination by Licensee. Licensee may terminate this Agreement upon thirty (30) days written notice to Licensor for any or all of the following grounds, except for subsection (i) in which case termination shall occur automatically.
i. Insolvency. A receiver is appointed for Licensor or its property; or Licensor makes an assignment for the benefit of its creditors; or any proceedings are commenced by, for or against either Party under any bankruptcy, insolvency or debtor's relief law; or either Party is liquidated or dissolved; or
ii. Breach. Licensor breaches any material term or condition of this Agreement or forthcoming PMMA, and fails to cure such breach (or commence and diligently pursue cure in the event the breach is of such a nature that it cannot be completely cured within such time) within thirty (30) days after receipt of written notice thereof from Licensee.
d. Termination by Licensor. Licensor may not terminate this Agreement without cause, but in the event that it wishes to terminate this Agreement for any reason, Licensor agrees that Licensee will be provided with no less than one hundred fifty (150) days’ written notice in order to allow Licensee to reposition its business following the termination of the Agreement.
13. Obligations and Rights Upon Termination.
a. Upon termination of this Agreement for any reason, Licensee shall:
i. promptly return to Licensor all material delivered to Licensee, including but not limited to technical writings, business writings, materials, samples, data, drafts, proposals, sales information, business information, retaining a confidential copy of this Agreement, and cause one or more of its officers to execute a certification, under penalty of perjury, that all such items have been returned;
ii. immediately stop all business, sales, marketing, publication, public disclosure, and sale of Licensed Product; and
b. Upon termination of this Agreement, Licensor shall have no obligation to refund any payment or fee made to it or received by it under any provision of this Agreement, regardless of purpose.
c. Upon termination of this Agreement, Licensor agrees that Licensee shall retain ownership of the Licensee Brand, unless otherwise agreed to in writing.
14. Representations and Warranties of Licensor. Licensor represents and warrants to Licensee as follows:
a. Licensor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to own, lease and operate its property and to carry on its business as now being conducted.
e. Licensor has full power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder. This Agreement has been duly authorized by all necessary corporate action of Licensor. This Agreement has been duly executed and delivered by Licensor and, assuming this Agreement is duly executed and delivered by Licensee, constitutes a valid and legally binding obligation of Licensor enforceable against Licensor in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors’ rights generally, or the availability of equitable remedies.
f. The execution and delivery by Licensor of this Agreement do not, and compliance by Licensor with the provisions of this Agreement will not, conflict with or result in a breach or default under any of the terms, conditions or provisions of any contract to which Licensor is a party or otherwise bound.
15. Representations and Warranties of Licensee. Licensee represents and warrants to Licensor as follows:
a. Licensee is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to own, lease and operate its property and to carry on its business as now being conducted.
b. Licensee has full power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder. This Agreement has been duly authorized by all necessary corporate action of Licensee. This Agreement has been duly executed and delivered by Licensee and, assuming this Agreement is duly executed and delivered by Licensee, constitutes a valid and legally binding obligation of Licensee enforceable against Licensee in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors’ rights generally, or the availability of equitable remedies.
c. The execution and delivery by Licensee of this Agreement do not, and compliance by Licensee with the provisions of this Agreement will not, conflict with or result in a breach or default under any of the terms, conditions or provisions of any contract to which Licensee is a party or otherwise bound.
16. Confidentiality. From time to time, so long as this Agreement should be in force or effect, Licensee and Licensor shall execute a mutually acceptable non-disclosure agreement in form and substance as each other should from time to time deem necessary or desirable (the “Non-Disclosure Agreement”). Licensee and Licensor shall cause each and every one of their officers, employees, independent contractors, and other individuals or entities having access to the confidential information provided to Licensee and Licensor, to execute mutually acceptable non-disclosure agreements in form and substance as Licensor and Licensee should from time to time deem necessary or desirable.
17. Indemnification.
a. Licensee Indemnification. Licensee shall indemnify, save and hold harmless Licensor and each of its officers, directors, employees, agents and affiliates, and each of their successors and assigns (collectively, the “Licensor Indemnified Parties”) from and against any and all costs, losses, claims, liabilities, fines, penalties, consequential damages (other than lost profits) whatsoever, including but not limited to death or injury to person or damage to property, and expenses (including interest which may be imposed in connection therewith, court costs and actual attorneys’ and expert witness fees and disbursements of counsel) (collectively, “Damages”) incurred in connection with, arising directly or indirectly out of, resulting from or incident to (i) Licensee’s exercise of any of its rights or conduct of any activities granted hereunder, (ii) the commercial sale and/or use of Licensed Product and/or the Licensee Brand; (iii) the performance, non-performance, or harmful effects of the sale, manufacture, or use of the Licensed Products, including without limitation product liability claims; (iv) the content of any advertising of the Licensed Product under the Licensee Brand; (v) any federal or state agency action arising from the promotion or sale of Licensed Product.
b. Licensor Indemnification. Licensor shall defend, indemnify and hold Licensee harmless from and against any damages, claims, lawsuits, causes of action, liabilities, costs, obligations and expenses (including reasonable attorneys’ fees and court costs) arising solely out of any claim or allegation (whether or not proven) by any third party that the sale of the Licensed Product infringes upon or violates a valid intellectual property right or represents a misappropriation of a trade secret of a third party.
c. If a claim for Damages (a “Claim”) is to be made by a Party entitled to indemnification hereunder (an “Indemnified Party”) against the indemnifying Party (the “Indemnifying Party”), the Indemnified Party shall give written notice (a “Claim Notice”) to the Indemnifying Party, which notice shall specify whether the Claim arises as a result of a claim by a person against the Indemnified Party (a “Third Party Claim”) or whether the Claim does not so arise (a “Direct Claim”), and shall also specify (to the extent that the information is available) the factual basis for the Claim and the amount of the Damages, if known. If the Claim is a Third Party Claim, the Indemnified Party shall provide the Claim Notice as soon as practicable after such Party becomes aware of any fact, condition or event which may give rise to Damages for which indemnification may be sought under this Section 17. If any lawsuit or enforcement action is filed against any Indemnified Party, written notice thereof shall be given to the Indemnifying Party as promptly as practicable (and in any event within 15 calendar days after the service of the citation or summons). The failure of any Indemnified Party to give timely notice hereunder shall not affect rights to indemnification hereunder, except to the extent that the Indemnifying Party
has been damaged by such failure.
d. Such Indemnifying Party shall have the right, at its or his option, to defend at its or his own expense and by its or his own counsel any Third Party Claim, provided that (i) the Indemnifying Party acknowledges in writing (at the time such Indemnifying Party elects to assume such defense) its obligation under this Section to indemnify the Indemnified Party with respect to such Third Party Claim, which acknowledgement may be subject to a reservation of rights against the Indemnified Party, (ii) such counsel is reasonably satisfactory to the Indemnified Party, (iii) the Indemnified Party is kept fully informed of all developments, and is furnished with copies of all documents and papers, related thereto and is given the right to participate in the defense and investigation thereof as provided below, and (iv) such counsel proceeds with diligence and in good faith with respect thereto. If any Indemnifying Party shall undertake to defend any Third Party Claim, such Indemnifying Party shall notify the Indemnified Party of its or his intention to do so promptly (and in any event no later than twenty (20) days) after receipt of notice of the Third Party Claim, and the Indemnified Party agrees to cooperate in good faith with the Indemnifying Party and its counsel in the defense of such Third Party Claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to participate in the defense and investigation of any Third Party Claim with its own counsel at its or his own expense, except that the Indemnifying Party shall bear the expense of such separate counsel if (A) in the view of counsel to the Indemnified Party reasonably acceptable to the Indemnifying Party, use of counsel of the Indemnifying Party’s choice would reasonably be expected to give rise to a conflict of interest, (B) there are or may be legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party and which cannot be asserted by the Indemnifying Party on behalf of the Indemnified Party, (C) the Indemnifying Party shall not have employed counsel to represent the Indemnified Party within a reasonable time after notice of the Third Party Claim is given to the Indemnifying Party or notice that the Indemnifying Party intends to assume the defense of the Third Party Claim is given to the Indemnified Party or (D) the Indemnifying Party shall authorize the Indemnified Party to employ separate counsel at the expense of the Indemnifying Party. The Indemnifying Party shall not settle any Third Party Claim without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld or delayed; provided, that, an Indemnified Party shall not be required to consent to any settlement involving the imposition of equitable remedies; and, provided, further, that, in no circumstances shall the Indemnifying Party consent to the entry of a judgment with respect to any Third Party Claim or enter into any settlement which does not include a provision whereby the plaintiff or claimant in such matter releases the Indemnified
Party from all liability with respect thereto.
18. General Provisions.
a. Notices. All Notices, requests and other communications that a Party is required or elects to deliver shall be in writing and shall be delivered personally, or by facsimile, or by a recognized overnight courier service, to the other Party at its address set forth below or to such other address as such Party may designate by notice given pursuant to this Section:
| If to Licensor: |
BioLargo, Inc. 14921 Chestnut Street Westminster, CA 92683 |
|
| If to Licensee: |
Ikigai Holdings, LLC One East Liberty Street, Suite 600 Reno, NV 89509 |
All such notices, requests and other communications will: (i) if delivered personally to the address as provided in this Section 18(a)18.a, be deemed given upon delivery; and (ii) if delivered by messenger or courier to the address as provided in this Section 18(a), be deemed given on the earlier of the first business day following the date sent by such messenger or courier upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 18(a)18.a. A Party from time to time may change its address, facsimile number or other information for the purpose of notices to that Party by giving notice specifying such change to the other Parties hereto.
b. Publicity. Neither Party shall issue any public announcement regarding this Agreement, or which contains the name of the other Party, without giving prior reasonable notice to the other Party, and receiving written approval thereon; provided, however, that (i) Licensor may withhold its approval in its sole and absolute discretion and (ii) written approval from Licensee shall not be required for any disclosures that are required or which counsel advises Licensor are required by applicable law, including without limitation Federal securities laws, in which instance, Licensor shall so notify Licensee as reasonably promptly as commercially possible.
c. Entire Agreement. This Agreement contains the sole and entire agreement and understanding of the Parties with respect to the entire subject matter of this Agreement, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Agreement are hereby merged herein.
d. Waiver and Amendment. No provision of this Agreement may be waived unless in writing signed by all the Parties to this Agreement, and waiver of any one provision of this Agreement shall not be deemed to be a waiver of any other provision. This Agreement may be amended only by a written agreement executed by all the Parties to this Agreement.
e. Governing Law. This Agreement has been made and entered into in the State of California and shall be construed in accordance with the laws of the State of California without giving effect to the principles of conflicts of law thereof.
f. Severability. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be or become prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.
g. Captions. The various captions of this Agreement are for reference only and shall not be considered or referred to in resolving questions of interpretation of this Agreement.
h. Costs and Attorneys’ Fees. If any action, suit, arbitration or other proceeding is instituted to remedy, prevent or obtain relief from a default in the performance by any party to this Agreement of its obligations under this Agreement, the prevailing party shall recover all of such party’s attorneys’ fees incurred in each and every such action, suit, arbitration or other proceeding, including any and all appeals or petitions therefrom. As used in this Section 18.h, attorneys’ fees shall be deemed to mean the full and actual costs of any legal services actually performed in connection with the matters involved calculated on the basis of the usual fee charged by the attorney performing such services and shall not be limited to “reasonable attorneys’ fees” as defined in any statute or rule of court.
i. Rights Cumulative. No right granted to the Parties under this Agreement on default or breach is intended to be in full or complete satisfaction of any damages arising out of such default or breach, and each and every right under this Agreement, or under any other document or instrument delivered hereunder, or allowed by law or equity, shall be cumulative and may be exercised from time to time.
j. Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any person by reason of the rule of construction that a document is to be construed more strictly against the person who itself or through its agent prepared the same, it being agreed that all Parties have participated in the preparation of this Agreement.
k. Force Majeure. If any Party to this Agreement is delayed in the performance of any of its obligations under this Agreement or is prevented from performing any such obligations due to causes or events beyond its control, including, without limitation, acts of God, fire, flood, war, terrorism, earthquake, strike or other labor problem, injunction or other legal restraint, present or future law, governmental order, rule or regulation, plague, epidemic, or pandemic, then such delay or nonperformance shall be excused and the time for performance thereof shall be extended to include the period of such delay or nonperformance.
l. Assignment and Transfers. Subject to Licensor’s written consent which shall not be unreasonably withheld, Licensee may assign or delegate this Agreement or any of its rights, interests, or obligations hereunder to a third party pursuant to an Acquisition as set forth in Section 6. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns.
m. Dispute Resolution. For any and all disputes arising out of or related to this Agreement, any Party’s performance of its obligations herein, the construction and/or interpretation of the terms of this Agreement, or any Party’s post-termination obligations arising out of or related to this Agreement, the Parties agree to first attempt to resolve the matter through informal mediation. In the event the mediation does not resolve the Parties’ dispute, the Parties agree to submit their dispute to binding arbitration in Clark County, Nevada. Arbitration under this Agreement shall be conducted by the Judicial Mediation and Arbitration Services (“JAMS”) in Las Vegas, Nevada, under its Comprehensive Arbitration Rules and Procedures (the “Rules”). The aggrieved Party must deliver to the other a written notice of intent to seek arbitration no later than one (1) year after the event that first gives rise to the dispute, otherwise that party’s rights shall be irrevocably waived. The dispute shall be decided by one arbitrator selected by mutual agreement of the Parties, or absent agreement, in accordance with the Rules. The arbitrator’s fee and other expense of the arbitration process shall be shared equally. The Parties shall bear their own respective costs and attorney's fees during the arbitration and until the Arbitrator awards a prevailing party its fees and costs. Nothing herein precludes a Party from pursuing equitable relief.
| /s/ | /s/ | |
 |
 |
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| Licensor | Licensor |
n. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, the Parties have executed this License Agreement as of the date set forth above.
| LICENSOR | LICENSEE | |
| Biolargo, Inc. | ||
| BioLargo Life Technologies, Inc. | Ikigai Holdings, LLC | |
| /s/Dennis P. Calvert | /s/Jane Pak | |
| By: Dennis P. Calvert, President | By: Jane Pak, CEO |
Exhibit A
Identified Patents
US Registration Number 7,867,510, issued January 11, 2011, titled “Material having antimicrobial activity when wet”.
US Registration Number 7,943,158, issued September 20, 2011, titled “Absorbent systems providing antimicrobial activity”.
US Registration Number 8,574,610, issued November 5, 2013, titled “Material Having Antimicrobial Activity When Wet”.
US Registration Number 8,642,057, issued February 4, 2014, titled “Antimicrobial and Antiodor Solutions and Delivery Systems”.
US Registration Number 9,414,601, issued August 16, 2016, titled “Material having antimicrobial activity when wet”.
1. Continuing Patent Applications. To the extent that there is currently pending at the United States Patent and Trademark Office on the date set forth above any continuing patent application claiming benefit of priority to any of the patents providing Patent Rights under the Agreement, Licensor agrees to keep such continuing patent application or a continuation utility patent application thereof pending during the License Term of the Agreement, for so long as is allowable under U.S. patent law. For illustration purposes only, and not to limit the scope of this section, currently-pending U.S. Patent Application No. 16/184,048 claims benefit of priority to U.S. Patent No. 8,642,057. As used herein, “continuing patent application” includes any patent application claiming benefit of priority under 35 U.S.C. § 120 including, but not limited to, continuing, continuation-in-part, and design patent applications. From time to time, Licensee may request reasonable amendments to the claims of a then-pending continuing patent application, or the filing of another continuing patent application, to present claims for patenting that Licensee may desire. Licensor agrees to make such reasonable amendments or to file another such continuing application, and the Parties agree to equally share the costs of such amendment or another such continuing application in a manner to be decided by the Parties. If there is a disagreement between the Parties as to the value of continued prosecution of an application, either Party wishing to continue prosecution (including filing continuation applications and appeals) may do so at their own expense, which will not alter any other provision of this Agreement. Any patent issuing after such reasonable amendment or another such continuing application shall automatically be added to the Patent Rights under the Agreement.
Exhibit 10.18
DocuSign Envelope ID: 656651A6-A760-448C-BD4B-9E8550A59CC9
FIRST AMENDMENT TO LICENSE AGREEMENT
This FIRST AMENDMENT TO LICENSE AGREEMENT (this “Amendment”), is dated August 16, 2021, and is by and between BioLargo, Inc., a Delaware corporation, and BioLargo Life Technologies, Inc., a California corporation (“Licensor”), and Ikigai Holdings, LLC, a Nevada limited liability company (“Licensee”).
RECITALS
A. Licensor and Licensee are parties to that certain License Agreement dated May 17, 2021 (“License Agreement”). Unless otherwise defined herein, all capitalized terms used in this Amendment shall have the meanings ascribed to them in the License Agreement.
B. Licensor and Licensee desire to amend the terms of the License Agreement to expand the Field of Use to include a laundry-additive pet product, pursuant to the terms of this Amendment.
AMENDMENT
NOW, THEREFORE, in consideration of and incorporating the foregoing recitals and of the promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend the License Agreement as follows:
1. Amendment to Field of Use. Section 1(e) to the License Agreement is hereby replaced in its entirety with the following language (added language indicated by the use of red italics):
“Field of Use” means, for purposes of defining the scope of the License under the Licensed Patents, Trade Secrets and Know-How granted in the scope of the present Agreement is limited to the manufacture, use, sale, export or importation of iodine-containing solutions or particles to reduce or eliminate odors in the air, on surfaces, or in fabric materials, caused by household pets. The application may be by brushing, wiping, applying, pouring, coating, imbibing, dissolving or spraying the iodine-containing solutions or particles into the air, onto surfaces, or in the laundry. The Field of Use excludes the use, advertising or marketing of the iodine- containing solutions or particles to the air or surfaces for purposes of antimicrobial or sanitizing uses. Specifically, the Field of Use granted under this Agreement include and are limited to the following pet-odor- addressing household products: (i) powdered products marketed to reduce odors caused by household pets, (ii) liquid products marketed to treat stains and odors caused by household pets, and (iii) products composed of porous fabric material and a composition distributed within the porous fabric material to produce molecular iodine (such as wipes).
2. Miscellaneous.
(a) Effect of Amendment. Except to the extent the Agreement is modified by this Amendment, the remaining terms and conditions of the Agreement shall remain unmodified and in full force and effect. In the event of any conflict between the terms and conditions of the Agreement and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall prevail and control.
DocuSign Envelope ID: 656651A6-A760-448C-BD4B-9E8550A59CC9
(b) Entire Agreement. The Agreement, together with this Amendment, embodies the entire understanding between the parties hereto with respect to its subject matter and can be changed only by an instrument in writing signed by the parties hereto.
(c) Counterparts. This Amendment may be executed in one or more counterparts, including the transmission of counterparts by facsimile or electronic mail, each of which shall be deemed an original but all of which, taken together, shall constitute one in the same Amendment. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the California Uniform Electronic Transactions Act, e.g., www.docusign.com, www.echosign.adobe.com, etc.) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date first set forth above.
LICENSOR:
BIOLARGO, INC., a Delaware
Corporation
BIOLARGO LIFE TECHNOLOGIES, INC.,
a California corporation
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By: |
/s/ Dennis Calvert |
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Name: |
Dennis Calvert |
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Title: |
President & CEO |
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| Date signed: | 8/16/2021 |
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LICENSEE: |
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IKIGAI HOLDINGS, LLC, a Nevada limited liability company |
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By: |
/s/ Jane Pak |
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Name: |
Jane Pak |
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Title: |
CEO |
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| Date signed: | 8/16/2021 |
Exhibit 10.19
PREFERRED MASTER MANUFACTURING AGREEMENT
This Preferred Master Manufacturing Agreement (“Agreement”), dated as of July 9, 2021 (the “Effective Date”), is entered into by and between ONM Environmental, Inc., a California corporation, having a principal place of business at 14921 Chestnut Street, Westminster, California 92683(“Seller”), and Ikigai Holdings, LLC, a Nevada limited liability company having its principal place of business at One East Liberty Street, Suite 600, Reno, NV 89509 (“Buyer”, and together with Seller, the “Parties”, and each, a “Party”).
RECITALS
WHEREAS, Seller manufactures, develops, packages, and sells a proprietary and patent-protected formulation called CupriDyne that eliminates odors and can be used as the basis for many products for use in many settings and environments, for consumer, professional, and industrial uses;
WHEREAS, the Parties previously entered into that certain License Agreement executed on May 17, 2021 (the “License Agreement”), and that certain Memorandum of Understanding dated May 18, 2021, which grant Buyer certain rights to pet products based on Seller’s CupriDyne formulation;
WHEREAS, Buyer wishes to purchase CupriDyne-based products from Seller from time to time for sale to the pet products industry; and
WHEREAS, Seller desires to manufacture, develop, package, and sell the Products to Buyer.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein, the mutual covenants, terms and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF PRODUCTS
Section 1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Buyer shall purchase Products from Seller, and Seller will manufacture, develop, package, and sell, as applicable, Products to Buyer, at the Prices set forth in Exhibit A, and in the quantities set forth on the applicable Purchase Order.
Section 1.2 Forecasts. Upon execution of this Agreement and after any required Notices, Buyer shall provide to Seller an initial forecast setting forth projected Product volume purchases for the coming six (6) months. Subsequent to the initial forecast, Buyer shall provide to Seller no later than seven (7) days prior to the end of each calendar half year (June and December) after the Effective Date, a forecast setting forth projected Product volume purchases for the coming six (6) months. Each forecast submitted by Buyer to Seller shall be deemed a good faith projection by Buyer, but shall not limit Buyer’s ability to amend and supplement projected Product volumes from time-to-time in response to increased Product demand. Buyer agrees to share its Product forecasting on an ongoing basis with Seller for future planning purposes. Seller shall supply the quantity of Products specified in Buyer’s forecasts, subject to the obligations and requirements set forth in this Agreement.
Section 1.3 Subcontracting/Co-Packers. The Parties acknowledge that once certain product volumes are reached, Seller intends to subcontract out the manufacturing of the Product to one or more manufacturers (each, a “Co-Packer”). Buyer intends for that Seller, as its “preferred master” manufacturer, manage any and all Co-Packers engaged to manufacture Products.
Seller is currently evaluating potential Co-Packers, and at the appropriate time, will advise Buyer of such entities it is considering. Buyer shall have an opportunity to meet in person with representatives of the chosen Co-Packer(s), to evaluate their manufacturing facilities and capabilities, for the purpose of determining whether such Co-Packers are able to handle the products and volumes in Buyer’s sole satisfaction, and to ensure a production quality acceptable to Buyer. The parties intend that both parties approve of a Co-Packer prior to formal engagement by Seller of a Co-Packer to manufacture products for delivery to Buyer (or to Buyer’s customer), and Buyer,may approve or disapprove of the use of any such Co-Packer in its reasonable discretion. Seller shall contract directly with each Co-Packer; Buyer shall have an opportunity to review and provide input as to the terms of the proposed agreement. Seller shall manage each Co-Packer to ensure the delivery of Products in accordance with the provisions of this Agreement. So long as Seller continues to deliver Product in accordance with this Agreement, Buyer shall not contract with alternate manufacturers for the production of Products.
Section 1.4 Ordering Procedure.
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A. |
Purchase Orders. From time to time, Buyer may issue one or more Purchase Orders to Seller. Seller will deliver to Buyer an acknowledgement of its receipt of each Purchase Order issued hereunder (each, an “Acknowledgement”) within two (2) Business Days following Seller’s receipt thereof, either confirming acceptance of the Purchase Order as written, or rejecting the purchase order due to error, requested delivery date, or otherwise. If Seller fails to issue an Acknowledgement within two (2) Business Days or otherwise commences performance under such Purchase Order, Seller will be deemed to have accepted the Purchase Order. |
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B. |
Cancellation of Purchase Orders. Seller may not cancel any previously accepted Purchase Order hereunder. Buyer may cancel any Purchase Order prior to Seller’s delivery of Acknowledgement therefor, provided that Buyer, upon receipt and validation of receipts from Seller, pays for all costs incurred by Seller or its contract manufacturer prior to such cancellation. |
ARTICLE 2.
SHIPMENT, DELIVERY, ACCEPTANCE, AND INSPECTION
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Section 2.1 |
Shipment and Delivery Requirements. |
(a) Seller will procure all materials to fabricate, assemble, pack, mark, and ship Products in the quantities, to the Delivery Locations, and by the Delivery Dates specified in the applicable Purchase Order.
(b) For each shipment of Products, Seller will give Buyer sufficient advanced warning and notice of any hazardous or restricted material that is an ingredient or a part of the shipment, together with such special handling instructions as may be necessary to advise logistics providers, handlers of the Products, and Personnel of how to exercise that measure of care and precaution that will comply with any applicable Laws and prevent bodily injury or property damage in the handling, transportation, processing, use, or disposal of the Products, containers, and packing.
(c) Within two (2) Business Days after shipment of a Product, Seller will deliver to Buyer a shipment notification containing the date the Products were shipped from Seller’s facility, the name and type of transportation carrier, the transportation tracking number, Seller’s identification number for the subject Products, the quantity of Products in shipment, the number of cartons or containers in shipment, Seller’s name, the bill of lading number, and the country of origin (collectively, the “Shipment Information”). Seller will (i) ship all Products using the shipping methods and specifications specified in this Agreement or otherwise provided by Buyer and in a manner required for the protection of Products from damage or destruction by hazards during shipping and delivery and in compliance with Law, and (ii) ensure that all shipments are accompanied by the requisite documentation issued by the proper Governmental Authority, if applicable, including forms, import licenses, quota allocations, and visas and comply with orderly marketing agreements, voluntary restraint agreements, and other such agreements.
Section 2.2 Payment; Transfer of Title and Risk of Loss.
Buyer will pay all costs of shipping the Products. If Buyer desires to insure the Products during shipment, Buyer will pay all costs of such insurance. Title to each Product passes to Buyer upon the earliest of (i) Seller’s delivery of the Product to a common carrier, and (ii) payment of the Price for such product by Buyer. Seller hereby grants to Buyer as security for the delivery of each Product to Buyer hereunder, as and when due, a security interest in and to all of Seller’s right, title, and interest in and to the Product effective upon Buyer’s payment of the full aggregate purchase Price thereof.
Section 2.3 Packaging and Labeling. Buyer shall provide artwork for product and packaging labels to Seller for Seller’s production of labels for affixation to products and cases. Seller will properly package, label, pack, tag, and ship Products as instructed by Buyer and otherwise in accordance with applicable Law and prudent industry standards. Additional reasonable and documented costs incurred as a result of modifications to the packaging of the Products requested by Buyer will be reimbursed by Buyer to Seller, provided that Seller delivers to Buyer supporting documentation reasonably acceptable to Buyer of such additional costs.
Section 2.4 Inspection. Buyer will have a reasonable period of time, not to exceed five (5) days following delivery of the Products to the Delivery Location (“Inspection Period”), to inspect all Products received under this Agreement and to inform Seller of Buyer’s rejection of any Nonconforming Products. Buyer may return to Seller any rejected Products that constitute Nonconforming Products or because they exceed the quantity stated in any Purchase Order. If Buyer rejects any Nonconforming Products, Buyer may elect to (a) require Seller, at Seller’s sole cost, to repair or replace the rejected Products, (b) repair the Nonconforming Products itself or have a third party repair the Nonconforming Products (and require Seller to reimburse Buyer’s reasonable and documented costs and expense in connection therewith), (c) receive a refund from Seller for the price Buyer paid for such Nonconforming Products; in each case such option will be Buyer’s sole remedy with respect to the Nonconforming Products other than Seller’s duty to indemnify Buyer as set forth in Section 10.1, or (d) retain the rejected Products; in each case without limiting the exercise by Buyer of any other rights available to Buyer under this Agreement or pursuant to applicable Law. All returns of Nonconforming Products to Seller are at Seller’s sole risk and expense. Buyer’s acceptance of any Products will not be deemed a waiver or limitation of Seller’s obligations pursuant to this Agreement (or any breach thereof), including those obligations with respect to Seller’s Product Warranty and Seller’s duty to indemnify Buyer. Seller will maintain a retained sample of each batch and lot of Product for a period of two (2) years from the production date or one year from the date of expiration, whichever is longer.
ARTICLE 3.
PRICE AND PAYMENT
Section 3.1 Price. Buyer will purchase the Products from Seller at the Prices set forth in Exhibit A (the “Price(s)”). All Prices are in US dollars. All Products shall be delivered to Buyer free and clear of all liens and encumbrances. The Parties agree that with respect to the Price, Seller shall have the right to manufacture the Product at an initial target margin of thirty percent (30%) (the “Target Margin”), with the Target Margin being reduced to twenty-seven and one-half percent (27.5%) the month following Buyer purchasing at least one million (1,000,000) Products units in a calendar month and with the Target Margin being reduced further to twenty-five percent (25%) the month following Buyer purchases from Seller at least two million (2,000,000) Product units in a calendar month. Upon written request from Buyer, Seller shall provide Buyer with all supporting documentation required by Buyer to establish the current Target Margin. For purposes of this Section, references to “units” shall mean the total units purchased by Buyer for a given month and not merely the number of SKUs purchased by Buyer.
Section 3.2 Invoices. Seller will issue periodic invoices to Buyer for all Products (regardless of whether a subcontractor is used) ordered by Buyer, which invoices will include the amount payable by Buyer for the Products purchased based upon the Prices of the Products. Each invoice for Products must set forth in reasonable detail the amounts payable by Buyer under this Agreement and contain the following information, as applicable: (a) the Purchase Order number, (b) the line- item number, if applicable; (c) Seller’s name; and (d) a copy of the applicable Shipment Information. Buyer may withhold and set-off payment due to any invoices or related documents that Buyer disputes in good faith or that are incorrectly submitted to Buyer. Any payment by Buyer of an invoice is not an acceptance of any nonconforming element or terms on such invoice or the related Products.
Section 3.3 Payment. Buyer shall submit to Seller a deposit in an amount equal to fifty percent (50%) of all amounts submitted per Purchase Order at the time the Purchase Order is delivered to Seller. Unless otherwise set forth in any Purchase Order and except for any amounts disputed by Buyer in good faith, Seller’s accurate and correctly submitted invoices will be payable within thirty (30) days following the later of (a) Buyer’s receipt of Seller’s invoice or (b) Buyer’s receipt of the applicable Products. If Buyer pays the full outstanding amount under any Purchase Order within ten (10) business days the delivery of the Product, the entire amount owed under any Purchase Order shall be decreased by two percent (2%). If Buyer disputes the amount of an invoice, the Parties will promptly use commercially reasonable efforts to resolve the dispute as to the remainder. If a dispute occurs concerning an invoice, the deadline for payment of an invoice will be determined using the date of delivery of the correct invoice and not the date of delivery of the incorrect invoice. If Buyer has a reasonable basis for doing so, Buyer may withhold payment pending receipt of evidence, in such form and detail as Buyer may reasonably direct, of the absence of any Encumbrances on the Products. Buyer will make all payments in US dollars.
ARTICLE 4.
CERTAIN OBLIGATIONS OF SELLER
Section 4.1 Quality.
Seller will meet or exceed Buyer’s quality standards for the Products as outlined in an Acceptable Quality Levels Agreement in Exhibit A-2, which the Parties will execute simultaneously with the full execution of this Agreement, and which Buyer may reasonably modify from time to time. If Buyer makes any modifications to the Acceptable Quality Levels Agreement in Exhibit A-2, Seller shall have fifteen (15) business days to review such modifications and to determine whether Seller is capable of meeting the modified quality standards for the Products. If Seller determines that Seller is not capable of meeting the modified quality standards for the Products, Seller may terminate this Agreement by giving written Notice of ninety (90) days of such termination to Buyer. At Buyer’s request, and at Buyer’s expense, Seller will furnish to Buyer test samples of Products as reasonably required by Buyer to determine if their packaging is in accordance with the Specifications in Exhibit A and Buyer’s quality standards set forth in the Quality Agreement. Seller will perform quality inspections of Products before delivery and will certify inspection results in the manner requested by Buyer and in accordance with the terms of the Quality Agreement.
Seller will provide reasonable support as requested by Buyer to address and correct quality concerns. In addition to its other rights and remedies, Buyer may hold Seller responsible for costs associated with quality-issue investigation and containment to the extent caused by Seller’s acts or omissions, but only after Buyer has given Notice to Seller of Buyer’s quality concerns and Seller’s subsequent failure to cure such quality concerns within thirty (30) days of receiving such Notice.
Section 4.2 Duty to Advise. Seller will promptly provide Notice to Buyer after becoming aware of any of the following events or occurrences or any facts or circumstances reasonably likely to give rise to any of the following events or occurrences and Seller’s proposed actions for addressing such events or circumstances: (a) any failure by Seller to perform any of its obligations under this Agreement; (b) any delay in delivery of Products; (c) any defects or quality problems relating to Products; (d) any change in Control of Seller; (e) any deficiency in the Specifications, samples, prototypes, or test results relating to this Agreement; (f) any change in Seller’s authorized representatives or decrease in insurance coverage, or (g) loss of any relevant certifications.
Section 4.3 Certain Changes. Buyer may direct Seller to make changes with respect to the Products, which may include changes in the design, drawings, specifications, inspection, testing, quality control, methods of packing and shipping, or the date or place of delivery (a “Buyer Required Change”). Seller will promptly make any Buyer Required Change (i) that does not affect Seller’s costs or production timing, or (ii) that has resulted in a Price increase mutually agreed to by the Parties. If Seller reasonably believes a Buyer Required Change will affect Seller’s costs or production timing, within fifteen (15) Business Days after Buyer’s notice to Seller of the Buyer Required Change, Seller will deliver to Buyer a Notice of a claim for adjustment of the Price with all sufficient information and documentation regarding Seller’s costs and production timing resulting from such changes to allow Buyer to perform an audit and verify such claim. Buyer may audit any such claim. No Buyer Required Change will affect the Price or time of delivery of the Products unless (A) Buyer verifies that, in order to implement such Buyer Required Change, Seller’s actual out-of-pocket costs increased or that implementing such changes reasonably and appropriately caused a delay in the Delivery Date of any affected Products, and (B) the Parties mutually agree on an increase to the Prices hereunder in a per-unit amount solely to the extent necessary to compensate Seller for such commercially reasonable cost increases. In no event will any such increase allow for any additional margin. If Buyer’s audit and verification results indicate that Seller’s costs have actually decreased as a result of the Buyer Requested Change, the Prices hereunder will decrease on a per-unit basis to reflect the amount of any such cost savings.
Section 4.4 Records. Seller will keep, maintain, and protect (or use reasonable efforts to ensure its contract manufacturer keeps, maintains, and protects) all reasonable records it possesses that relate to the Products (including with respect to the Specifications, certificates or analysis, test results, batch production records, quality agreement testing and sanitation records, employee training materials, Product complaints and returned Products, batch or lot control numbers for traceability, reserve samples, and documentation, as applicable) and retain such reasonable records until the date that is two (2) years after the last of the applicable batch of Products is delivered to Buyer.
Section 4.5 Ingredients and Materials Disclosure. Upon Buyer’s request, Seller will promptly provide to Buyer its Safety Data Sheet(s) for each product sold to Buyer.
ARTICLE 5.
INTELLECTUAL PROPERTY
Section 5.1 Ownership. Each of the Parties acknowledges and agrees that:
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(a) |
each Party retains exclusive ownership of its Intellectual Property Rights; |
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(b) |
Buyer does not transfer to Seller any of its Intellectual Property Rights, and Seller will not use any of Buyer’s Intellectual Property Rights other than to produce and supply Products to Buyer hereunder; |
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(c) |
Seller does not transfer to Buyer any of Seller’s Intellectual Property Rights; |
Section 5.2 Prohibited Acts. Each of the Parties will not (a) take any action that interferes with the other Party’s Intellectual Property Rights, including such other Party’s ownership or exercise thereof; (b) challenge any right, title or interest of the other Party in such other Party’s Intellectual Property Rights; (c) make any claim or take any action adverse to such other Party’s ownership of its Intellectual Property Rights; (d) register (or apply for registrations of), anywhere in the world where the other Party has ongoing business, the other Party’s Trademarks or any other Trademark that is similar to such other Party’s Trademarks or that incorporates the same in whole or in confusingly similar part; (e) use any mark, anywhere, that is confusingly similar to the other Party’s Trademarks; (f) misappropriate any of the other Party’s Trademarks for use as a domain name without such other Party’s prior consent; or (g) alter, obscure or remove any of the other Party’s Trademarks or trademark or copyright notices or any other proprietary rights notices placed on the products purchased under this Agreement (including Products), marketing materials or other materials.
ARTICLE 6.
TANGIBLE PROPERTY
Section 6.1 Buyer-Supplied Material.
Buyer will provide or otherwise make available to Seller certain materials/supplies, information and other documentation identified in Exhibit C at the time(s) and location(s) specified therein. All property, including raw materials, supplies, materials, designs, drawings, artwork, copy layout, electronic data, and other items furnished by Buyer, either directly or indirectly, to Seller or to any supplier of Seller in connection with or related to this Agreement (collectively, “Buyer-Supplied Material”), including the Buyer-Supplied Material described in Exhibit C, is and will at all times remain the property of Buyer and be held by Seller on a bailment-at-will basis. Risk of loss of, and damage to, the Buyer-Supplied Material will transfer from Buyer to Seller upon delivery to Seller’s facility. If any Buyer-Supplied Material is not delivered or otherwise made available to Seller by the time(s) required in Exhibit C, Seller will estimate the impact of the delay on the Agreement and/or cost of performance, if any, and the Buyer will make an equitable adjustment to the Price, Payment and Delivery Schedule.
When Buyer-Supplied Material is delivered to Seller’s facility, Seller will verify its quantity and perform the necessary inspection(s) to ascertain its then-current condition. Seller will promptly notify the Buyer of any damage or shortages with respect to the Buyer-Supplied Material received. If the Buyer-Supplied Material received by Seller is not in a condition suitable for use, Seller will in its notification to the Buyer include details of the facts, hold the Buyer-Supplied Material, and act as directed by the Buyer. When directed by the Buyer to take any action with respect to the damaged or non-usable Buyer-Supplied Material, Seller will be entitled to and the Buyer will make an equitable adjustment to the Price, Payment and Delivery Schedule.
Seller will establish and maintain a program for the accountability, use, maintenance, protection and preservation of the Buyer-Suppled Material in accordance with its standard practices. Any special maintenance routines required for any Buyer-Supplied Material except those specifically outlined in this Agreement are not included in the Price and will be estimated separately by Seller. Seller will (a) store the Buyer-Supplied Material in such a manner as may be required for the protection of the Buyer-Supplied Material from damage or destruction and in compliance with applicable Law, and (b) deliver to Buyer, each month, commencing on the first Business Day of the month after Seller’s first receipt of Buyer-Supplied Material hereunder, a correct and complete monthly inventory count of the Buyer-Supplied Material located at Seller’s facility. Seller will not use any Buyer-Supplied Material for any purpose other than the performance of Seller’s obligations under this Agreement. Except in the performance of Seller’s obligations under this Agreement, Seller will not commingle any Buyer-Supplied Material with the property of Seller or with that of a Person other than Buyer or Seller and will not move any Buyer-Supplied Material from Seller’s premises without the prior approval by Buyer. Buyer may, at any time, for any reason and without payment of any kind, retake possession of any Buyer-Supplied Material. Upon Buyer’s request, Buyer-Supplied Material will be immediately released to Buyer or delivered to Buyer by Seller, at Buyer’s expense. Seller’s continued holding of Buyer-Supplied Material after demand has been made by Buyer for delivery will substantially impair the value thereof, and, accordingly, Buyer will be entitled to a court order of possession without any need of proving damages or a bond. To the fullest extent permitted by Law, Seller will not allow any Encumbrance to be imposed on or attach to any Buyer-Supplied Material through Seller or as a result of Seller’s action or inaction, and Seller hereby waives any Encumbrance that it may have or acquire in the Buyer-Supplied Material.
Buyer has inspected the Buyer-Supplied Material and is satisfied that the Buyer-Supplied Material is suitable and fit for its intended purposes (including consumer use), of which Buyer is aware; and SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, CONDITION, MERCHANTABILITY, DESIGN OR OPERATION OF THE BUYER-SUPPLIED MATERIAL OR ITS FITNESS FOR ANY PARTICULAR PURPOSE. Notwithstanding the foregoing, if the bailment relationship described in this Section 8.1 is deemed to be a secured financing transaction, Seller grants to Buyer a continuing security interest in any rights or interests it may have in the Buyer-Supplied Material.
Seller will bear all risk of loss of and damage to Buyer-Supplied Material after receipt by Seller. Seller will,
at its own expense, for the benefit of Buyer, insure all Buyer-Supplied Material with full and extended coverage for all losses, for its full replacement value, in accordance with the terms of Article 13. As and when it is commercially reasonable to do so, Seller will, at its sole cost and expense, maintain, repair, refurbish, and replace Buyer-Supplied Material. All replacements of Buyer-Supplied Material will also be Buyer’s property.
Seller will maintain a written inventory of all Buyer-Supplied Material that sets forth a description and the location of all Buyer-Supplied Material and provide a copy of this inventory to Buyer upon request. Seller will mark all Buyer-Supplied Material conspicuously to identify it as the property of Buyer, and indicate Buyer’s name and address. Seller will immediately sign any documents reasonably requested by Buyer to evidence all of Buyer’s rights to and interests in Buyer-Supplied Material.
Seller will be responsible for any loss or destruction of, or damage to, Buyer-Supplied Material from the time of its delivery to Seller until its return to Buyer to the extent such loss or damage is directly attributable to the negligence or willful misconduct of Seller.
Upon becoming aware of loss or destruction of or damage to any Buyer-Supplied Material, Seller will so promptly notify Buyer as such, including a statement of:
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the lost, destroyed or damaged Buyer-Supplied Material; |
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the time and origin of the loss, destruction or damage; and, |
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the insurance policy or policies, if any, covering the lost, destroyed or damaged Buyer-Supplied Material. |
After such time as Buyer notifies Seller of the timeframe in which the Buyer-Supplied Material will be repaired or replaced, Seller will estimate and promptly notify Buyer of the effect of the lost, destroyed or damaged Buyer- Supplied Material on the performance and obligations of Seller under this Agreement.
Seller will do nothing to prejudice Buyer’s right to recover against any third party for any loss or destruction of, or damage to, Buyer-Supplied Material. Upon the request of Buyer, and at Buyer’s expense, Seller will furnish to Buyer all reasonable assistance and cooperation in obtaining recovery.
If Seller transfers the Buyer-Supplied Material to the possession and control of a contract manufacturer, the transfer will not affect the liability of Seller as set forth in this Article 6.
Except as specifically set forth herein, Seller will not be responsible for repair, replacement, delay or any other cost or liability related to the Buyer-Supplied Material. To the extent the loss or destruction of the Buyer-Supplied Material for which Seller is not solely responsible under this Article 6 causes a delay in Seller performance, such delay will be an excusable delay which will entitle Seller to an equitable adjustment in both Price and Delivery Schedule.
Section 6.2 Seller’s Property. Unless otherwise agreed to by Buyer, Seller, at its sole expense, will furnish, keep in good condition, and replace when necessary all facilities and equipment and other items necessary or helpful for the packaging of the Products other than the Buyer-Supplied Material (“Seller’s Property”). Seller will insure Seller’s Property with full and extended coverage for all losses, for its full replacement value, in accordance with the terms of Article 13.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES; PRODUCT WARRANTY
Section 7.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party that:
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it is a legitimate business entity duly organized, validly existing and in good standing under the laws of the state or province in which it is organized or incorporated; |
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it is duly qualified to do business and is in good standing in every jurisdiction in which such qualification is required, except where the failure to be so qualified, in the aggregate, could not reasonably be expected to adversely affect its ability to perform its obligations under this Agreement; |
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it has the full right, power, and corporate authority to enter into this Agreement and to perform its obligations hereunder; |
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the execution of this Agreement by its representative whose signature is set forth at the end of this Agreement, and its delivery of this Agreement, have been duly authorized by all necessary corporate action; |
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its execution, delivery, and performance of this Agreement will not violate, conflict with, require consent under or result in any breach or default under (i) any of its organizational documents, (ii) any applicable Law or (iii) with or without notice or lapse of time or both, the provisions of any agreement to which it is bound; |
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this Agreement has been executed and delivered by it and (assuming due authorization, execution and delivery by the other Party) constitutes the legal, valid and binding obligation, enforceable against it in accordance with its terms; |
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it is in compliance with all applicable Laws and contracts relating to this Agreement; |
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it has obtained all Permits required by applicable Laws to conduct its business generally and to exercise its rights and perform its obligations under this Agreement; |
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it is not insolvent and is paying all of its debts as they become due; and in the case of Seller only, Seller represents that: (i) all financial information that it has provided to Buyer is true and accurate and fairly represents Seller’s financial condition; (ii) all of Seller’s manufacturing or warehousing facilities used by Seller to fulfill its obligations under this Agreement have a current and appropriate registration required for domestic or foreign facilities; and (iii) none of Seller’s Intellectual Property used in the Products infringes or violates any Intellectual Property Right of any Person. |
Section 7.2 Seller Representations and Warranties. In addition to the representations and warranties provided in Section 7.1, Seller represents and warrants to Buyer that Seller shall order and maintain an inventory of raw materials and packaging materials sufficient to meet all forecasts submitted by Buyer.
Section 7.3 Product Warranty. Seller warrants to Buyer for the period starting at the time of delivery of the Products and continuing for one (1) year thereafter (the “Product Warranty”):
The packaging for the Products will:
(a) conform to the Specifications;
(b) conform to samples of packaging for the Products previously approved by Buyer;
(c) be assembled and packaged in accordance with the agreements between the parties.
ARTICLE 8.
TERM; TERMINATION
Section 8.1 Term. The term of this Agreement commences on the Effective Date and remains in full force and effect for all Products for a period of five (5) years. At the expiration of the initial term of five (5) years, the term shall be automatically extended for one additional two-year term unless notice of non-renewal is provided in writing at least 180 days before the date of expiration. Either Party may terminate this Agreement and/or a Statement of Work by (a) both Parties executing a document terminating this Agreement and/or a Statement of Work, (b) a Party giving notice to the other if there are no Purchase Orders for Products that have not been fully satisfied or terminated as provided herein, or (c) as otherwise provided herein (the “Term”). A Party may terminate a particular Purchase Order as provided herein or therein.
Section 8.2 Buyer’s Right to Terminate for Cause. Buyer may terminate this Agreement, by providing Notice to Seller if:
(a) Seller is in breach of, or threatens to breach, any representation, warranty or covenant of Seller under this Agreement (except for any of the foregoing covered by another subsection of this Section 8.2) and either the breach cannot be cured or, if the breach can be cured, it is not cured by Seller within thirty (30) days following Seller’s receipt of Notice of such breach;
(b) Seller fails to, or threatens not to, timely deliver Products conforming to the requirements of, and otherwise in accordance with, the terms and conditions of this Agreement except to the extent Seller is paying liquidated damages thereof as required by Section 8.5; or
(c) Seller (i) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, (iii) makes or seeks to make a general assignment for the benefit of its creditors, or (iv) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
Any termination under this Section 8.2 will be effective on Seller’s receipt of Buyer’s Notice of termination or such later date (if any) set forth in such termination Notice. Upon the occurrence of any of the events described under this Section 8.2, Buyer may, in addition to any of its other rights under applicable Law or in equity, immediately suspend its performance under all or any part of this Agreement, without any liability of Buyer to Seller (including any liability for a Cancellation Charges Claim, but excluding its liability for payment of any outstanding invoices prior to the termination), and at its election, recover all damages, costs (including attorneys’ and other professionals’ fees and costs), expenses and losses incurred by Buyer as a result of any event described under this Section 8.2.
Section 8.3 Seller’s Right to Terminate for Cause. Seller may terminate this Agreement, by providing Notice to Buyer if:
(a) Buyer is in breach of any representation, warranty or covenant of Buyer under this Agreement, and either the breach cannot be cured or, if the breach can be cured, it is not cured by Buyer within a commercially reasonable period of time (in no case exceeding thirty (30) days) after Buyer’s receipt of Notice of such breach; or
(b) Buyer (i) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, (iii) makes or seeks to make a general assignment for the benefit of its creditors, or (iv) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
Any termination under this Section 8.3 will be effective on Buyer’s receipt of Seller’s Notice of termination or such later date (if any) set forth in such termination Notice, but Buyer shall not be relieved of its liability for payment of any outstanding invoices or other liability incurred prior to the termination.
Section 8.4 Effect of Expiration or Termination.
(a) Seller’s Obligations. Immediately upon termination of this Agreement, Seller will, unless otherwise directed by Buyer, immediately terminate all performance under this Agreement and under any outstanding Purchase Orders; provided, however, that Buyer will pay for all costs incurred by Seller and/or Seller’s contract manufacturer up until such termination if the termination is not caused by Seller’s action or inaction.
(b) Mutual Obligations. Upon the termination of this Agreement, each Party will: (i) return to the other Party (or destroy, if directed to do so by the other Party) all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on the other Party’s Proprietary and/or Confidential Information; (ii) permanently erase all of the other Party’s Confidential Information from its computer systems, except for copies that are maintained as archive copies on its disaster recovery or information technology backup systems, which copies will be destroyed upon the normal expiration of its backup files; and (iii) upon the other Party’s written request, certify to such other Party that it has complied with the requirements of this Section 8.4(b).
(c) Effect on Previous Obligations. Expiration or termination of the Term will not affect any rights or obligations of the Parties that: (i) come into effect upon or after termination or expiration of this Agreement; or (ii) otherwise survive the expiration or earlier termination of this Agreement pursuant to Section 15.4 or were incurred by the Parties prior to such expiration or earlier termination.
(d) No Liability of Non-Breaching Party. Without prejudice to any obligations of the Parties that by their nature survive termination of this Agreement, the Party terminating this Agreement in accordance with this Article 8 will not be liable to the other Party for any damage of any kind (whether direct or indirect) incurred by the other Party by reason of the termination of this Agreement. Termination of this Agreement in accordance with this Article 8 will not constitute a waiver of any of either Party’s rights, remedies or defenses under this Agreement, at law, in equity or otherwise.
Section 8.5 Liquidated Damages. Damages to Buyer caused by Seller’s failure to comply with the Delivery Dates are difficult to ascertain. Accordingly, the liquidated damages set forth in Exhibit D (a) represent a fair, reasonable, and proportionate approximation of Buyer’s damages caused thereby and do not constitute a penalty, and (b) shall be the sole damages available to Buyer for Seller’s failure to comply with the Delivery Dates, but the liquidated damages shall not preclude Buyer’s exercise of (i) other non-monetary remedies that may be available for such default, including termination of a Purchase Order of this Agreement if Seller suspends payment of liquidated damages or a cap on liquidated damages has been met, equitable relief, or a request for adequate assurance, or (ii) any remedies (monetary or otherwise) available for other defaults that occur currently with, before, or after such default.
ARTICLE 9.
INDEMNIFICATION
Section 9.1 Seller Indemnification. Seller will indemnify, defend and hold harmless the Buyer Parties (each, a “Buyer Indemnified Party”) against any and all losses, damages, liabilities, deficiencies, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys’ fees, fees and the costs of enforcing any right to indemnification under this Agreement and the cost of pursuing any insurance providers (collectively, “Losses”), incurred by any Buyer Indemnified Party , including as a result of a third-party Claim against a Buyer Indemnified Party, to the extent the Losses arise out of (a) a negligent or wrongful act, error, or omission of, or a breach of the representations, warranties, or covenants of this Agreement by, Seller or its Representatives; (b) any bodily injury, death, or damage to property directly or indirectly caused by Seller or its Representatives; (c) manufacturing, supplying, or handling of the Goods prior to delivery thereof; or (d) any allegation that any of the following violates applicable Laws or infringes, misappropriates, or otherwise violates any Intellectual Property Right or other right of any Person: (i) Seller’s Intellectual Property or any Foreground Intellectual Property Rights developed by Seller alone or as requested by Buyer in connection with this Agreement, (ii) the use of Seller’s Intellectual Property or any Foreground Intellectual Property Rights developed by Seller alone or as requested by Buyer in connection with this Agreement in the design, manufacturing, production, or supply of the Goods (or otherwise embodied in the Goods), or (iii) the Goods or the use thereof for the particular purpose intended by Buyer, its customers, and end users.
Section 9.2 Buyer Indemnification. Buyer will indemnify, defend and hold harmless the Seller Parties (each, a
“Seller Indemnified Party”) against any and all Losses incurred by any Seller Indemnified Party, including as a result of a third-party Claim against a Seller Indemnified Party, to the extent the Losses arise out of (a) a negligent or wrongful act, error, or omission of, or a breach of the representations, warranties, or covenants of this Agreement by, Buyer or its Representatives; (b) any bodily injury, death, or damage to property directly or indirectly caused by Buyer or its Representatives, (c) any alleged violation of Law related to the marketing or sale of the Products.
Section 9.3 Exceptions and Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement, Seller is not obligated to indemnify or defend any Buyer Indemnified Party against any Claim or corresponding Losses to the extent such Claims result directly from the Buyer Indemnified Party’s or its Personnel’s gross negligence, willful misconduct, or a breach of the representations, warranties, or covenants of this Agreement by, the Buyer Indemnified Party or its Representatives.
Section 9.4 Exceptions and Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement, Buyer is not obligated to indemnify or defend any Seller Indemnified Party against any Claim or corresponding Losses to the extent such Claims result directly from the Seller Indemnified Party’s or its Personnel’s gross negligence, willful misconduct, or a breach of the representations, warranties, or covenants of this Agreement by, the Seller Indemnified Party or its Representatives.
Section 9.5 Procedure. If a third party Claim is made against a Buyer Indemnified Party or a Seller Indemnified Party that could reasonably be expected to result in a Loss that is subject to the indemnification obligations of Section 9.1 or 9.2, or if the Buyer Indemnified Party or Seller Indemnified Party discovers any inquiry or investigation that it believes may involve or expect to lead to a third party Claim that could reasonably be expected to result in such a Loss, the respective Buyer Indemnified Party will promptly notify the other party, and the parties will cooperate to defend or settle such third party Claim.
Section 9.6 Effect of Insurance. The obligations of this Section will apply regardless of the amount of insurance coverage held by Seller, including any such coverage under any workers’ compensation act, disability act, or other employee benefit act, or any other applicable Law that would limit the amount or type of damages, compensation or benefits payable by or for Seller, and will be both independent of and not limited by or to any insurance carried or provided by Seller pursuant to this Agreement or otherwise.
ARTICLE 10.
NO LIABILITY FOR CONSEQUENTIAL OR INDIRECT DAMAGES
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, EXCEPT TO THE EXTENT LIABILITY ARISES FROM A PARTY’S (a) BREACH OF ITS CONFIDENTIALITY OBLIGATIONS HEREUNDER, (b) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (c) IN THE CASE OF SELLER AS THE LIABLE PARTY, (i) INTELLECTUAL PROPERTY INFRINGEMENT BY THE PACKAGING FOR PRODUCTS OR (ii) INDEMNIFICATION OBLIGATIONS HEREUNDER IN CONNECTION WITH A THIRD-PARTY CLAIM.
ARTICLE 11.
CONFIDENTIALITY
Section 11.1 Scope of Confidential Information. From time to time during the Term, either Party (as the “Disclosing Party”) may disclose or make available to the other Party (as the “Receiving Party”) information about its business affairs, goods and services (including any Forecasts), confidential information and materials comprising or relating to Intellectual Property Rights, trade secrets, third-party confidential information, and other sensitive or proprietary information. Such information, as well as the terms of this Agreement, whether orally or in written, electronic or other form or media, and whether or not marked, designated, or otherwise identified as “confidential” constitute “Confidential Information” hereunder. Confidential Information does not include information that at the time of disclosure and as established by documentary evidence:
(a) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Article 11 by the Receiving Party or any of its Representatives;
(b) is or becomes available to the Receiving Party on a non-confidential basis from a third- party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information;
(c) was known by or in the possession of the Receiving Party or its Representatives prior to being disclosed by or on behalf of the Disclosing Party; or
(d) was or is independently developed by the Receiving Party without reference to or use of, in whole or in part, any of the Disclosing Party’s Confidential Information.
Section 11.2 Protection of Confidential Information. The Receiving Party will (a) protect and safeguard the confidentiality of the Disclosing Party’s Confidential Information with at least the same degree of care as the Receiving Party would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care; (b) not use the Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement without the Disclosing Party’s prior approval; and (c) not disclose any such Confidential Information to any Person, except to the Receiving Party’s Representatives who need to know the Confidential Information to assist the Receiving Party, or act on its behalf, to exercise its rights or perform its obligations under this Agreement, provided that such Representatives agree to not disclose the Confidential Information to any third party without the Disclosing Party’s prior consent. The Receiving Party will be responsible for any breach of this Article 11 caused by any of its Representatives.
Section 11.3 Disclosure Compelled by Law. If the Receiving Party is compelled to produce Confidential Information of the Disclosing Party by Law or by a subpoena or other legal process, the Receiving Party will give the Disclosing Party prompt notice of such subpoena or legal process and will reasonably cooperate with the Disclosing Party in seeking a protective order or other appropriate protection to safeguard the Disclosing Party’s Confidential Information. If a protective order or other appropriate protection is not obtained, or if the Disclosing Party waives its right to seek a protective order or other appropriate protection, the Receiving Party will (a) furnish only that minimum portion of the Confidential Information that, upon the advice of legal counsel, it is legally required to disclose, and (b) exercise reasonable efforts to ensure that confidential treatment is afforded to such Confidential Information.
ARTICLE 12.
INSPECTION AND AUDIT RIGHTS
Section 12.1 Audits. Seller hereby grants to Buyer, and its authorized Representatives, access to Seller’s premises and all pertinent documents and other information, whether stored in tangible or intangible form, including any books, records and accounts, in any way related to Seller’s performance under this Agreement (including Sellers’ processes and procedures), Products, Buyer-Supplied Material or any payment or other transaction occurring in connection with this Agreement, for the purpose of auditing Seller’s compliance with the terms of this Agreement, including Seller’s charges for Products, or inspecting or conducting an inventory of finished Products, work-in-process or raw-material inventory or Buyer-Supplied Material. Buyer will provide Seller with reasonable advance notice (at least one (1) Business Day) prior to conducting such audit or inspection, and Seller will cooperate fully with Buyer in connection with any such audit or inspection. Buyer will use reasonable efforts to conduct such audit or inspection during Seller’s regular business hours and in a manner that does not unreasonably interfere with Seller’s day-to-day operations, and Seller shall select one of its agents to accompany Buyer or its Authorized Representative while they are on the premises. Seller will maintain, during the Term and for a period of seven years after the Term, complete and accurate books and records and any other financial information in accordance with GAAP. Seller will segregate its records and otherwise cooperate with Buyer so as to facilitate any audit by Buyer. Seller will reimburse Buyer for all amounts associated with errors discovered during an audit. In addition, Seller will reimburse Buyer for the amount of Buyer’s reasonable costs and expenses incurred in conducting the audit if the results of such audit indicate that Buyer has paid more than five percent (5%) of the total amount actually payable by Buyer for the period examined, and Buyer will reimburse Seller for the amount of Seller’s reasonable costs and expenses incurred in connection with the audit if the results of such audit do not indicate that Buyer has paid more than five percent (5%) of the total amount actually payable by Buyer for the period examined. If requested by Buyer, Seller will use reasonable efforts to permit Buyer and its Representatives to obtain from subcontractors or other suppliers to Seller the information and permission to conduct the reviews specified with respect to Seller in this Article 12.
Section 12.2 Buyer Right of Inspection and Tests. Buyer and its Representatives may inspect and test the Products and any quality assurance or other records related to the Products during their design, manufacture, processing, construction, preparation, delivery, and completion, at reasonable times upon reasonable advance notice (at least one (1) Business Day) and in a manner that does not unreasonably interfere with Seller’s operations. While on the premises of Seller or Seller’s Personnel, Buyer will, and will cause Buyer’s Representatives to, comply with all site-specific rules and regulations, and Seller shall select one of its agents to accompany Buyer or its Authorized Representative while they are on the premises. Seller will give Buyer reasonable notice of readiness for inspection of each Product before such Product is boxed or crated for shipment. At Buyer’s request, Seller will supply test reports and material certificates. Unless otherwise stated in writing by Buyer, Buyer’s performance of (or failure to perform) any inspection or test will not be deemed (a) an assumption of risk, liability, or control over Seller or Seller’s Personnel, (b) an acceptance or approval of the Products, or (c) a waiver of (1) Seller’s obligation to perform its obligations in accordance with the covenants and warranties of this Agreement or (2) Buyer’s right to make a claim for Losses hereunder.
Section 12.3 Regulatory Inspections and Action. If either Party is notified or otherwise becomes aware that it is to be the subject of an audit, site visit, or inspection (each, an “Inspection Event”) by, or otherwise receives any correspondence or inquiry from (including, without limitation, any seizure of Products or recall request), the EPA or any other Governmental Authority, in each case, in connection with the Products, such Party will, to the extent permitted by applicable Law: (a) immediately, and no later than the next Business Day after such Party becomes aware of such Inspection Event, notify the other Party thereof, investigate the inquiry or complaint, and if applicable, advise the other Party of the results of its investigation and/or the occurrence of and circumstances of the Inspection Event; (b) if applicable and at its discretion, allow the other Party or its representative to assist in the preparation for such Inspection Event, subject to the confidentiality obligations set forth in this Agreement; (c) if applicable, notify the other Party of the results of the Inspection Event; (d) at its discretion, incorporate in good faith any recommendations provided by the other Party with respect thereto prior to submitting such correspondence or response to the applicable Governmental Authority; and (e) obtain the other Party’s prior consent before referring to such Party in any regulatory correspondence unless such reference is necessary or advisable under applicable Law. In the event of any action described in this Section, the Parties will cooperate in determining, and will mutually agree upon, the response, if any, to be made to such action and each Party agrees to cooperate with the other in responding to any communication or inquiry and attempting to resolve any such action.
ARTICLE 13.
INSURANCE
Section 13.1 Seller Insurance. During the Term and for the period of time thereafter that Seller is in possession of any Buyer-Supplied Material, Seller will, and will cause its subcontractors and contractors to, at its own expense, maintain and carry in full force and effect the following insurance policies with financially sound and reputable insurers: Commercial General Liability (including product and completed operations, personal and advertising injury, contractual liability coverage) with a minimum of $2,000,000 general aggregate limit; $2,000,000 Products and Completed Operations Aggregate limit; and $1,000,000 each occurrence. Upon Buyer’s reasonable request, Seller will provide Buyer with a certificate of insurance evidencing the insurance coverage specified in this Section. The certificate of insurance will name Buyer as an additional insured and loss payee. Seller will provide Buyer with ten (10) Business Days’ advance notice in the event of a cancellation or material change in such insurance policy. Seller waives and Seller will cause its insurers to waive, any right of subrogation or other recovery against Buyer, its Affiliates, and their insurers.
Section 13.2 Buyer Insurance. During the Term and for the period of time thereafter that Seller is in possession of any Buyer-Supplied Material, Seller will, and will cause its subcontractors and contractors to, at its own expense, maintain and carry in full force and effect the following insurance policies with financially sound and reputable insurers: $2,000,000 Products and Completed Operations Aggregate limit; and $1,000,000 each occurrence. Upon Seller’s reasonable request, Buyer will provide Seller with a certificate of insurance evidencing the insurance coverage specified in this Section. The certificate of insurance will name Seller as an additional insured and. Buyer will provide Seller with ten (10) Business Days’ advance notice in the event of a cancellation or material change in such insurance policy. Buyer waives and Buyer will cause its insurers to waive, any right of subrogation or other recovery against Seller, its Affiliates, and their insurers.
ARTICLE 14.
DEFINITIONS
“Acceptance” means verification by Buyer of completion, compliance and certification by Seller of completion of specifically defined specifications or performance criteria.
“Acknowledgment” has the meaning set forth in Section 1.4.
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Assignment” has the meaning set forth in Section 15.13.
“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located are authorized or required by Federal Law to be closed for business.
“Buyer” has the meaning set forth in the preamble to this Agreement.
“Buyer Indemnified Parties” has the meaning set forth in Section 9.1.
“Buyer Parties” means Buyer, its Affiliates, and its and their respective officers, directors, shareholders, members, managers, partners, and employees, and the successors and assigns of all of the foregoing.
“Buyer’s Intellectual Property” means all Intellectual Property Rights owned by or licensed to Buyer (excluding Seller’s Intellectual Property).
“Claim” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or other, whether at law, in equity or otherwise.
“Confidential Information” has the meaning set forth in Section 11.1.
“Control” (and correlated terms, including “Controls,” “Controlled by,” and “under common Control with”) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies, or activities of such Person, whether through the ownership or voting securities, its capacity as a sole or managing member, its capacity as a general partner, by contract, or otherwise.
“Co-Packer” hs the meaning set forth in Section 1.3.
“Delivery Date” means the delivery date for Products ordered hereunder that is set forth in the applicable Purchase Order.
“Delivery Location” means the street address for delivery of the Products specified in the applicable Purchase Order.
“Disclosing Party” has the meaning set forth in Section 11.1.
“Effective Date” has the meaning set forth in the preamble to this Agreement.
“Encumbrance” means any charge, claim, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, right of first refusal, deed of trust, or restriction of any kind, whether or not filed, recorded or otherwise perfected, or any interest of a vendor or lessor under any conditional sale agreement, capital lease, or other title retention agreement.
“Force Majeure” has the meaning set forth in Section 15.20.
“Forecast” means, with respect to any period, a good faith projection or estimate of Buyer’s requirements for Products during each month during the period identified in the forecast, which approximates, based on information reasonably available at the time to Buyer, the quantity of Products that Buyer may order for each such month.
“GAAP” means US generally accepted accounting principles in effect from time to time.
“Goods” means the physical Products identified in this Agreement on Exhibit A, which may be changed, from time to time by the mutual written agreement of the Parties.
“Governmental Authority” means any federal, state, local, or foreign government (including any country in which the Products or any material or ingredients incorporated into the Products is mined, produced, manufactured, assembled, or packaged) or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi- governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court, or tribunal of competent jurisdiction.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, award, or determination entered by or with any Governmental Authority.
“Inspection Event” has the meaning set forth in Section 12.3.
“Intellectual Property Rights” means all current and future intellectual property rights, industrial rights, and other proprietary rights, including: (a) Patents; (b) Trademarks; (c) works of authorship, expressions, designs, and design registrations, whether or not copyrightable, including copyrights and copyrightable works, software, and firmware, files, records, schematics, data, data files, and databases and other specifications and documentation; (d) Trade Secrets; and (e) all other intellectual property rights, and all rights, interests, and protections that are associated with, equivalent or similar to, or required for the exercise of, any of the foregoing, however arising, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, such rights or forms of protection pursuant to the Laws of any jurisdiction throughout any part of the world.
“Law” means any statute, law, ordinance, regulation, rule, code, constitution, treaty, common law, Governmental Order or other requirement or rule of law of any Governmental Authority, including the Foreign Corrupt Practices Act, the Federal Trade Commission Trade Practice Rules, the Fair Packaging and Labeling Act, Fair Labor Standards Act, the Federal Food, Drug, and Cosmetics Act, the Dietary Supplement Health and Education Act, the Federal Insecticide, Fungicide, and Rodenticide Act, regulations related to the foregoing, and similar laws.
“License Agreement” has the meaning set forth in the Recitals.
“Losses” has the meaning set forth in Section 9.1.
“Nonconforming Products” means any packaging for the Products received by Buyer from Seller that: (a) do not conform to the description listed in the applicable Purchase Order or the Specifications; or (b) on visual inspection, Buyer determines are otherwise defective; or (c) exceed the quantity of Products ordered by Buyer pursuant to the Purchase Order. Where the context requires, Nonconforming Products are deemed to be Products for purposes of this Agreement.
“Notice” has the meaning set forth in Section 15.5.
“Party” has the meaning set forth in the preamble to this Agreement.
“Patents” means all patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions, and extensions thereof), patent applications, and other patent rights, and any other Governmental Authority-issued indicia of invention ownership (including inventor’s certificates, petty patents, and patent utility models).
“Permits” means permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances, and similar rights obtained or required to be obtained, from any Governmental Authority.
“Person” means an individual or entity.
“Personnel” of a Party means any agents, employees, contractors, or subcontractors engaged or appointed by such Party.
“Price” has the meaning set forth in Section 3.1.
“Product” or “Products” means the products identified on Exhibit A and described in the Specifications.
“Product Warranty” has the meaning set forth in Section 7.2.
“Purchase Order” means Buyer’s purchase order in a form substantially similar to the form attached hereto as Exhibit B issued to Seller hereunder, which may, among other things, specify items such as: (a) a description of the Products to be purchased, (b) the quantity of each of the Products ordered, (c) the Delivery Date, (d) the unit Price for each of the Products to be purchased, (e) the billing address, and (f) the Delivery Location; in each case, including all terms and conditions attached to, or incorporated into, such purchase order.
“Receiving Party” has the meaning set forth in Section 11.1.
“Representatives” means a Party’s Affiliates and each of their respective Personnel, officers, directors, members, managers, partners, shareholders, attorneys, third-party advisors, successors and permitted assigns.
“Seller” has the meaning set forth in the preamble to this Agreement.
“Seller Parties” means Seller, its Affiliates, and its and their officers, directors, shareholders, members, managers, partners, and employees, and the successors and assigns of all of the foregoing.
“Seller Indemnified Parties” has the meaning set forth in Section 9.2.
“Seller’s Intellectual Property” means all Intellectual Property Rights owned by or licensed to Seller (excluding Buyer’s Intellectual Property), used in the design, production, and manufacturing of the Products.
“Shipment Information” has the meaning set forth in Section 2.1(c).
“Specifications” means the specifications for the Products attached hereto as Exhibit A.
“Term” has the meaning set forth in Section 8.1.
“Trademarks” means all rights in and to US and foreign trademarks, service marks, trade dress, trade names, brand names, logos, symbols, trade dress, corporate names, and domain names and other similar designations of source, sponsorship, association, or origin, together with the goodwill symbolized by any of the foregoing, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection in any part of the world.
“Trade Secrets” means all inventions, discoveries, trade secrets, business, and technical information and know-how, databases, data collections, patent disclosures, and other confidential and proprietary information and all rights therein.
“UCC” means the Uniform Commercial Code, as adopted in the State of California.
ARTICLE 15.
MISCELLANEOUS
Section 15.1 Further Assurances. Upon a Party’s reasonable request, the other Party will, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this Agreement.
Section 15.2 Relationship of the Parties. The relationship between Seller and Buyer is solely that of vendor and vendee and they are independent contracting parties. Nothing in this Agreement creates any agency, joint venture, partnership or other form of joint enterprise, employment or fiduciary relationship between the Parties. Neither Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any third party.
Section 15.3 Entire Agreement; Order of Precedence. This Agreement with accompanying License Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes and replaces all previous negotiations, understandings and writings relating to the subject matter hereof. If there is any inconsistency among the terms in the body of this Agreement, any Purchase Order, or the Pricing outlined in Exhibit A, then the terms will control in accordance with the following order of priority: first, the terms in Exhibit A and Article 3 with respect to the Prices only; second, the terms in the body of this Agreement; and third, the terms in the applicable Purchase Order. Without limitation of anything contained in this Section 15.3, any additional or different terms contained in any Acknowledgement or any of Seller’s invoices or in any other documents, certificates, or communications provided by either Party are deemed rejected by the Parties and will not modify this Agreement or be binding on the Parties unless such terms have been fully approved in a signed writing by authorized representatives of both Parties.
Section 15.4 Survival. The terms and conditions of Section 2.4, Section 3.3, Section 4.5, Section 5.1, Section 7.3, Section 7.4, Section 8.4, Section 8.5, Article 9, Article 10, Article 11, Article 13, Article 14, and Article 15 will survive the expiration or termination of this Agreement. The other terms and conditions of this Agreement will survive the expiration or termination of this Agreement to the full extent necessary for their enforcement and for the protection of the party in whose favor they operate.
Section 15.5 Notices. All notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a “Notice”) will be sufficient in all respects if given in writing and delivered to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this section) in person, by email, by overnight courier, or by certified mail, postage prepaid, return receipt requested. Notice will be deemed given, delivered, and received on the earlier of the date of delivery, in the case of personal delivery or email, or on the delivery or refusal date, as specified on the return receipt in the case of certified mail or on the tracking report in the case of overnight courier.
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Notice to Seller: |
Notice to Buyer: |
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ONM Environmental, Inc. |
Ikigai Holdings, LLC |
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14921 Chestnut Street |
One East Liberty Street, Suite 600 |
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Westminster, CA 92683 |
Reno, NV 89509 |
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United States |
United States |
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E-Mail: Joseph.Provenzano@biolargo.com |
E-Mail: jpak@ikigaiholdingsllc.com |
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Attention: President, Joseph Provenzano |
Attention: CEO, Jane Pak |
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Copy to: dennis.calvert@biolargo.com |
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Copy to: john.browning@biolargo.com |
Section 15.6 Interpretation. Unless a clear contrary intention appears, (a) the words “include,” “includes,” or “including” mean including without limiting the generality of the description preceding such term; (b) the word “or” is not exclusive; (c) the phrase “this Agreement” and the words “herein,” “hereof,” “hereby,” “hereto,” “hereunder” and derivatives or similar words refer to this entire Agreement as a whole and the applicable Purchase Order, as the same may be amended from time to time, which is incorporated herein; (d) references to any Purchase Order refer to such Purchase Order; (e) the singular includes the plural and vice versa; (f) references to Sections and Exhibits mean the Sections of, and Exhibits attached to, this Agreement; (h) references to an agreement, instrument, Law, or other document means such agreement, instrument, Law, or other document as amended, supplemented, replaced, and modified from time to time; and (i) all references to money will be in US dollars.
Section 15.7 Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
Section 15.8 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability does not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or provision is invalid, illegal, or unenforceable, the Parties will negotiate in good faith to modify this Agreement to affect the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Section 15.9 Amendment and Modification. No amendment to this Agreement is effective unless it is in writing and signed by an authorized representative of each Party.
Section 15.10 Waiver. No waiver under this Agreement is effective unless it is in writing and signed by an authorized representative of the Party waiving its right. Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated and does not operate as a waiver on any future occasion. None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege, or condition arising from this Agreement: (a) any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under this Agreement; or (b) any act, omission or course of dealing between the Parties.
Section 15.11 Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties or otherwise.
Section 15.12 Equitable Remedies. Each Party acknowledges and agrees that (a) a breach or threatened breach by such Party of any of its obligations under Article 5, Article 11, or Section 15.2 could give rise to irreparable harm to the other Party for which monetary damages may not be an adequate remedy and (b) in the event of a breach or a threatened breach by such Party of any such obligations, the other Party will, in addition to any and all other rights and remedies that may be available to such Party at law, at equity, or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford an adequate remedy. Each Party agrees that such Party will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section 15.12.
Section 15.13 Assignment. Neither this Agreement, nor the rights and obligations hereunder, may be assigned, delegated, transferred, or subcontracted (each, an “Assignment”) by either Party without the prior consent of the other Party. No Assignment by either Party will relieve that Party of any of its obligations under this Agreement, and any purported Assignment by either Party in violation of this Section is null and void.
Section 15.14 Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties and their respective permitted successors and permitted assigns.
Section 15.15 No Third-Party Beneficiaries. This Agreement benefits solely the Parties and their respective permitted successors and permitted assigns and nothing in this Agreement, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 15.16 Governing Law. This Agreement, including all exhibits, schedules, attachments and appendices attached hereto and thereto, and all matters arising out of or relating to this Agreement, are governed by, and construed in accordance with, the Laws of the State of California, United States of America, without regard to the conflict of Laws provisions thereof. The Parties agree that the United Nations Convention on Contracts for the International Sale of Products does not apply to this Agreement. THE PARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Section 15.17 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original and all of which, taken together, will constitute one agreement. A signature page in “PDF” format or an electronic signature to this Agreement will be deemed an original and binding upon the Party against which enforcement is sought. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc.) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
Section 15.18 Force Majeure. To the extent a Party is rendered wholly or partly unable to perform, or is delayed in the performance of, its obligations under this Agreement (other than Buyer’s obligation to pay the invoices pursuant to the terms of Section 3.3) due to an event that (a) is beyond its reasonable control (b) is not the result of negligence, willful misconduct, breach of contract, or intentional act or omission of the affected Party, and (c) could not reasonably be anticipated as of the date of the applicable Purchase Order, including acts of God (including fire, flood, earthquake, storm, lightning strike, tornado, volcanic eruption, hurricane, global pandemic, or other natural disaster), nationwide strikes, lockouts, war, riots, acts of public enemy or terrorist, acts of government, government shutdown despite the Party’s diligent efforts (a “Force Majeure”), such failure to perform or delay in performance will not constitute a default under this Agreement, so long as the affected Party (i) notifies the other Party as soon as practicable following the commencement of the Force Majeure, (ii) takes reasonable steps to avoid or remove the Force Majeure, and (iii) resumes performance when and to the extent the Force Majeure is removed. Unless a Force Majeure substantially frustrates the performance of a Party’s obligations under this Agreement, the Force Majeure will not operate to excuse, but only delay performance, and the obligations of such Party will be extended in an amount of time equal to the time of such delay. If a Force Majeure occurs on the part of Seller causing a delay in Seller’s delivery of any Products of more than thirty (30) days beyond the Delivery Date for such Products, Buyer may invoke a termination as to Products so affected without cost to Buyer (including any penalty or Cancellation Charges Claim).
Section 15.19 Changes. Buyer may from time-to-time direct changes for: (i) technical requirements; (ii) shipment or packing methods; (iii) place of delivery, inspection or acceptance; (iv) reasonable adjustments in quantities, delivery schedules or both; (v) amount of Buyer-Supplied Material; (vi) time of performance; and (vii) place of performance. If any such change causes an increase in the price or a decrease in the time required for its performance, Seller will promptly notify Buyer thereof and assert its claim for equitable adjustment within three (3) days after the change is ordered, and an equitable adjustment shall be made.
However, nothing in this provision shall excuse Seller from proceeding immediately with the directed change(s). Changes shall not be binding upon Buyer except when specifically confirmed in a written subcontract or change order. Only the Buyer authorized agent has authority to direct such changes.
The Parties hereto have executed and delivered this Preferred Master Manufacturing Agreement as of the Effective Date.
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IKIGAI HOLDINGS, LLC |
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By |
/s/ Jane Pak |
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Name: |
Jane Pak |
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Title: |
CEO |
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| ONM ENVIRONMENTAL, INC | |||
| By | /s/Joseph L. Provenzano | ||
| Name: | Joseph L. Provenzano | ||
| Title: | President | ||
Exhibit A
to
PREFERRED MASTER MANUFACTURING AGREEMENT by and between
Ikigai Holdings, LLC
and ONM Environmental, Inc.
Dated as of _______________________
Products and Specifications
Specifications for each Product will include all of the specifications provided in the following documents. Each document may be amended from time to time by Buyer providing an updated version of each document to Seller from time to time in its normal course of business, including through mail or email:
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1. |
Label specifications as shown on each label proof provided by Buyer to Seller |
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2. |
Finished Products, Specifications & Prices (Exhibit A-1) |
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3. |
Defect Classification – Acceptable Quality Levels document. Sample form provided in Exhibit A-2 |
Exhibit A-1
Finished Products, Specifications & Prices
Terms not defined below shall have the meaning set forth in the Agreement.
Products:
To be determined by amendment
Exhibit A-2
Defect Classification - Acceptable Quality Levels
The defects listed in this document are those identified to be most plausible. These defects may apply to the individual unit, any outer packaging, and/or the shipping case. The identified defects have been combined into critical, major A, major B, and minor categories which include the associated maximum allowable failure rate.
To be discussed and determined with each Co-Packer.
Exhibit B
To
PREFERRED MASTER MANUFACTURING AGREEMENT
by and between
Ikigai Holdings, LLC
and ONM Environmental, Inc.
Dated as of _______________________
Form of Purchase Order
See attached.
| PURCHASE ORDER | |
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Purchase Order No. |
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Issue Date |
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Branch Plant |
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BILLING INFORMATION |
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Buyer: Ikigai Holdings, LLC One East Liberty Street, Suite 600 Reno, NV 89509 Phone: Purchasing Agent: Jane Pak ______________________________________________
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Seller: ONM Environmental, Inc. 14921 Chestnut St. Westminster, CA 92683
Representative: Joseph Provenzano Email: joseph.provenzano@biolargo.com
__________________________________________________
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TERMS AND CONDITIONS
This purchase order is governed by that certain Preferred Master Manufacturing Agreement, between the above referenced Buyer and Seller, dated as of _____________, 20__.
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PRODUCTS; QUANTITY; PRICES |
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ITEM # |
DESCRIPTION OF PRODUCTS |
REQUESTED DELIVERY DATE |
UNIT PRICE (USD) |
QUANTITY (UNITS) |
TOTAL VALUE | ||
| __/__/__ | $ | ||||||
| __/__/__ | $ | ||||||
| __/__/__ | $ | ||||||
| __/__/__ | $ | ||||||
| __/__/__ | $ | ||||||
| SUBTOTAL (USD): |
$ |
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| FREIGHT (USD) (if delivery is F.O.B. Destination): |
$ |
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| TAX (USD): |
$ |
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| TOTAL (USD): |
$ |
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SHIPPING TERMS; DELIVERY LOCATION |
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Delivery Location:
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Carrier:
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Special Instructions: [Buyer to add specifications not included in Exhibit A and packing and marking requirements.]
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ADDITIONAL TERMS AND CONDITIONS |
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BUYER:
IKIGAI HOLDINGS, LLC
By:______________________________________
Name: ___________________________________
Title: ____________________________________
Exhibit C
to
PREFERRED MASTER MANUFACTURING AGREEMENT
by and between
Ikigai Holdings, LLC
and ONM Environmental, Inc.
Dated as of _______________________
Buyer-Supplied Material
NONE
Exhibit D
to
PREFERRED MASTER MANUFACTURING AGREEMENT
by and between
Ikigai Holdings, LLC
and ONM Environmental, Inc.
Dated as of _______________________
Liquidated Damages
In accordance with Section 8.5, Seller shall pay to Buyer, as liquidated damages (and not as a penalty), whichever of the following is applicable, and if more than one of the following is applicable whichever is the higher amount of liquidated damages:
One-half of one percent (0.5%) of the total price of such Goods set forth in the applicable Purchase Order for the first week (of such delay/failure) or part thereof, and one percent (1%) of the total price of such Goods for each subsequent week (of such delay/failure) or part thereof, and so forth up to a maximum of ten percent (10%) of the total purchase price of such Goods as set forth in the Purchase Order;
Such liquidated damages shall be immediately payable by Seller upon Buyer’s demand. Buyer may, at its option, deduct such liquidated damages from payments due by Buyer to Seller.
Buyer's rights and remedies under this Exhibit D are in addition to all of its other rights and remedies available under this Agreement and/or under a Purchase Order issued pursuant to this Agreement and/or at law or in equity.
Exhibit 10.20
FIRST AMENDMENT
TO
PREFERRED MASTER MANUFACTURING AGREEMENT
This FIRST AMENDMENT TO PREFERRED MASTER MANUFACTURING AGREEMENT (this “Amendment”) is made as of June 6, 2025 (“Amendment Date”) by and between ONM Environmental, Inc., a California corporation (“Seller”), and Ikigai Holdings, LLC, a Nevada limited liability company and Pooph Inc., a Nevada corporation (collectively, “Buyer”). (Seller and Buyer, collectively, the “Parties”.)
RECITALS
A. WHEREAS, Buyer and Seller are parties to that certain Preferred Master Manufacturing Agreement dated July 9, 2021 (“PMMA”), pursuant to which Seller is selling to Buyer certain pet-odor control products which Buyer markets and sells under the brand name Pooph. Unless otherwise defined herein, all capitalized terms used in this Amendment shall have the meanings ascribed to them in the PMMA.
B. WHEREAS, Buyer and an affiliate of Seller, BioLargo, Inc., entered into that certain License Agreement dated May 17, 2021, as amended (“License Agreement”), pursuant to which Buyer was granted a royalty-bearing license to sell “licensed products” in the “territory” within the “field of use” of household pet stain and odors.
C. WHEREAS, the Parties have agreed to amend certain provisions of the PMMA and have agreed to evidence such agreement in this Amendment.
NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Incorporation of Recitals/Capitalized Terms. Except as modified herein, all of the other terms, covenants and conditions of the PMMA are hereby ratified and affirmed and the same shall remain in full force and effect. From and as of the Amendment Date, all references to the word “Agreement” in the PMMA shall mean the PMMA as amended by this Amendment. Unless specifically defined herein, the capitalized terms used in this Amendment have the meanings defined in the PMMA.
2. Purchase Order 385. Buyer submitted to Seller Purchase Order 385 (“PO 385”) in the amount of $525,850, and delivered a deposit of $262,500 to Buyer on April 28, 2025, leaving a remaining balance due of $263,500. Buyer agrees to pay the remaining $263,500 due on Purchase Order 385 within 30 days of Seller’s delivery of the subject product (such 30-day period beginning upon delivery of all product subject to the purchase order) (“Final Payment Due Date”). Unpaid amounts as of the Final Payment Due Date shall accrue interest at the rate of 1.5% per month.
3. Payment of Past Due Amounts. As of the Amendment Date, Buyer owes to Seller $2,385,468.40, which excludes any alleged credits or deductions owed to Buyer by Seller for claims related to the Litterizer products, on invoices related to product purchases as set forth on Schedule A attached hereto, not including PO 385. Additionally, Buyer owes to Seller (and Seller affiliate BioLargo Inc.) royalties under the License Agreement in the aggregate amount of $1,378,140.54 as follows: (i) $764,292.52 for fourth quarter of calendar year 2024, and (ii) $613,848.02 for first quarter of calendar year 2025. In the aggregate, not including PO 385 and net of payments previously made, Buyer owes to Seller:
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Description |
Amount |
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Product invoices |
$ | 2,385,468.40 | ||
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Royalties |
$ | 1,378,140.54 | ||
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Total |
$ | 3,763,608.94 | ||
Buyer shall make weekly payments to Seller in the amounts set forth on Schedule B attached hereto, no later than Friday of each week, beginning May 30, 2025, and continuing thereafter, said payments to be made via ACH (routing number 121000358) or wire transfer (routing number 026009593) and delivered to Seller’s deposit account (Bank of America account number 325105755511) no later than the due date as set forth in Schedule B. Unpaid amounts shall bear interest at an annual percentage rate of ten percent (10%) beginning May 23, 2025. Late payments shall incur interest at an annual percentage rate of fifteen percent (15%). Nothing contained herein shall prohibit Buyer from paying off the Past Due Amounts at any time.
4. Future Purchase Orders. With respect to Purchase Orders submitted by Buyer to Seller after the Amendment Date, Buyer shall deliver to Seller concurrently with the Purchase Order a cash deposit equal to fifty percent (50%) of the Purchase Order (“Cash Deposit”). Seller shall have until 5:00 p.m. Pacific Time on the second business day following delivery of the Purchase Order to accept or reject the Purchase Order in accordance with Section 1.4.A of the PMMA, and will confirm expected product delivery dates per SKU as soon thereafter as possible. If the Cash Deposit is not timely delivered, Seller may pause and any expected delivery dates may be adjusted. Thereafter, Seller shall use its best efforts to expeditiously effectuate delivery, in whole or in part, of the product subject to the Purchase Order by the confirmed expected delivery date. Buyer shall pay to Seller the remaining amounts owed on Purchase Order in accordance with Section 5 below based on ROG (receipt of goods), in whole or in part, by Buyer’s representative (e.g., currently Global Supply Logistics, or as designated in the Purchase Order), in such form as specified in the Purchase Order. Any amounts not timely paid in accordance with the foregoing shall bear interest at an annual percentage rate of fifteen percent (15%).
5. Purchase Order Invoicing. On Friday of each week, Seller may submit invoices to Buyer based on delivery of products ordered not yet invoiced (e.g., for deliveries that had occurred during the week). Amounts invoiced shall credit a pro-rata amount of the Cash Deposit received with respect to the Purchase Order applicable to the delivered products (e.g., an invoice for $20,000 in products shall reflect a $10,000 credit for the 50% Cash Deposit). Buyer shall pay the invoices in four (4) equal weekly installments beginning the Friday of the week following email delivery of the invoices.
6. Modification of Section 3.3, Payment. The third sentence in Section 3.3 of the PMMA, which reads “If Buyer pays the full outstanding amount under any Purchase Order within ten (10) business days the delivery of the Product, the entire amount owed under any Purchase Order shall be decreased by two percent (2%)”, is hereby amended to state the following:
“If Buyer pays the full outstanding amount under any Purchase Order within ten (10) business days the delivery of the Product, the entire amount owed under any Purchase Order shall be decreased by three point five percent (3.5%).”
7. Default. Buyer’s failure to timely pay any amount due as set forth in this Amendment shall be an Event of Default. Upon the occurrence of an Event of Default, Seller may withhold, without cure, delivery of product.
8. Purchase Orders for Puppy Pads. Buyer previously placed purchase order 352 (in the amount of $36,099 for POPP-30) and purchase order 378 (in the amount of $156,800 for POPP-50), and has previously paid $12,033 as against PO 352. The contract manufacturer to whom Seller placed an order to manufacture the products advised Seller on May 16, 2025 that it was filing for bankruptcy protection. Seller is currently sourcing a new manufacturer and shall submit a proposed new manufacturer for Buyers’ approval, which may be withheld in Buyer’s sole discretion.
9. Issues Not Addressed in this Amendment. Buyer and Seller reserve all rights, claims and defenses related to all claims asserted by each party related to the License Agreement and the PMMA. Nothing set forth in this Amendment shall constitute a waiver of any such right, claim or defense, all of which remain expressly reserved.
10. Miscellaneous.
(a) Effect of Amendment. Except to the extent the PMMA is modified by this Amendment, the remaining terms and conditions of the PMMA shall remain unmodified and in full force and effect. In the event of any conflict between the terms and conditions of the PMMA and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall prevail and control.
(b) Entire Agreement. The PMMA, together with this Amendment, embodies the entire understanding between the parties hereto with respect to its subject matter and can be changed only by an instrument in writing signed by the parties hereto.
(c) Counterparts. This Amendment may be executed in one or more counterparts, including the transmission of counterparts by facsimile or electronic mail, each of which shall be deemed an original but all of which, taken together, shall constitute one in the same Amendment. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the California Uniform Electronic Transactions Act, e.g., www.docusign.com, www.echosign.adobe.com, etc.) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this FIRST AMENDMENT TO PREFERRED MASTER MANUFACTURING AGREEMENT effective as of the date first set forth above.
| SELLER: |
BUYER: |
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| ONM Environmental, Inc. |
IKIGAI HOLDINGS, LLC, a Nevada limited liability company |
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| By: | /s/Joe Provenzano | By: | /s/Jane Pak | ||
| Name: | Joe Provenzano | Name: | Jane Pak | ||
| Title: | CEO | Title: | CEO | ||
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POOPH, INC., a Nevada corporation |
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| By: | /s/ Jane Pak | ||||
| Jane Pak | |||||
| CEO | |||||
SCHEDULE A
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PO# |
Invoice # |
Product |
Invoiced Amount |
Payments |
Amount due |
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| 347 | 8404 |
20/32 oz |
$ | 484,700.00 | $ | (371,175.02 | ) | $ | 113,524.98 | ||||||||||
| 354 | 8448 | 20/24 oz | $ | 301,200.00 | $ | (75,300.00 | ) | $ | 225,900.00 | ||||||||||
| 356 | 8477 |
Princo 50 |
$ | 84,244.46 | $ | (58,799.97 | ) | $ | 25,444.49 | ||||||||||
| 357 | 8509 | 20 24 32 | $ | 289,250.00 | $ | - | $ | 289,250.00 | |||||||||||
| 358 | 8499 |
20 oz |
$ | 82,950.00 | $ | - | $ | 82,950.00 | |||||||||||
| 359 | 8501 | 20 oz | $ | 104,000.00 | $ | - | $ | 104,000.00 | |||||||||||
| 360 | 8523 |
Wipes |
$ | 56,112.77 | $ | - | $ | 56,112.77 | |||||||||||
| 365 | 8531 | Princo 50 | $ | 168,250.72 | $ | - | $ | 168,250.72 | |||||||||||
| 366 |
8532A |
asst |
$ | 566,650.00 | $ | - | $ | 566,650.00 | |||||||||||
| 366 | 8532B | 12/20 oz | $ | 203,850.00 | $ | - | $ | 203,850.00 | |||||||||||
| 366 |
8532C |
16 oz |
$ | 64,000.00 | $ | - | $ | 64,000.00 | |||||||||||
| 377 | 8578A | ASST | $ | 418,650.21 | $ | - | $ | 418,650.21 | |||||||||||
| 377 |
8578B |
32 oz |
$ | 60,150.00 | $ | - | $ | 60,150.00 | |||||||||||
| 8565 | Wipes | $ | 6,735.23 | $ | - | $ | 6,735.23 | ||||||||||||
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Total |
$ | 2,890,743.39 | $ | (505,274.99 | ) | $ | 2,385,468.40 | ||||||||||||
SCHEDULE B
Payment Schedule
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Date |
Amount Due |
Accrued Interest |
Total |
Payment |
New amount due |
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5/23/2025 |
$ | 3,763,608.94 | $ | - | $ | 3,763,608.94 | $ | - | $ | 3,763,608.94 | ||||||||||
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5/30/2025 |
$ | 3,763,608.94 | $ | 7,217.88 | $ | 3,770,826.82 | $ | (55,000.00 | ) | $ | 3,715,826.82 | |||||||||
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6/6/2025 |
$ | 3,715,826.82 | $ | 7,126.24 | $ | 3,722,953.06 | $ | (55,000.00 | ) | $ | 3,667,953.06 | |||||||||
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6/13/2025 |
$ | 3,667,953.06 | $ | 7,034.43 | $ | 3,674,987.49 | $ | (55,000.00 | ) | $ | 3,619,987.49 | |||||||||
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6/20/2025 |
$ | 3,619,987.49 | $ | 6,942.44 | $ | 3,626,929.94 | $ | (55,000.00 | ) | $ | 3,571,929.94 | |||||||||
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6/27/2025 |
$ | 3,571,929.94 | $ | 6,850.28 | $ | 3,578,780.21 | $ | (55,000.00 | ) | $ | 3,523,780.21 | |||||||||
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7/4/2025 |
$ | 3,523,780.21 | $ | 6,757.93 | $ | 3,530,538.15 | $ | (55,000.00 | ) | $ | 3,475,538.15 | |||||||||
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7/11/2025 |
$ | 3,475,538.15 | $ | 6,665.42 | $ | 3,482,203.56 | $ | (55,000.00 | ) | $ | 3,427,203.56 | |||||||||
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7/18/2025 |
$ | 3,427,203.56 | $ | 6,572.72 | $ | 3,433,776.28 | $ | (55,000.00 | ) | $ | 3,378,776.28 | |||||||||
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7/25/2025 |
$ | 3,378,776.28 | $ | 6,479.84 | $ | 3,385,256.13 | $ | (55,000.00 | ) | $ | 3,330,256.13 | |||||||||
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8/1/2025 |
$ | 3,330,256.13 | $ | 6,386.79 | $ | 3,336,642.92 | $ | (55,000.00 | ) | $ | 3,281,642.92 | |||||||||
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8/8/2025 |
$ | 3,281,642.92 | $ | 6,293.56 | $ | 3,287,936.48 | $ | (55,000.00 | ) | $ | 3,232,936.48 | |||||||||
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8/15/2025 |
$ | 3,232,936.48 | $ | 6,200.15 | $ | 3,239,136.63 | $ | (55,000.00 | ) | $ | 3,184,136.63 | |||||||||
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8/22/2025 |
$ | 3,184,136.63 | $ | 6,106.56 | $ | 3,190,243.20 | $ | (55,000.00 | ) | $ | 3,135,243.20 | |||||||||
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8/29/2025 |
$ | 3,135,243.20 | $ | 6,012.80 | $ | 3,141,255.99 | $ | (55,000.00 | ) | $ | 3,086,255.99 | |||||||||
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9/5/2025 |
$ | 3,086,255.99 | $ | 5,918.85 | $ | 3,092,174.84 | $ | (55,000.00 | ) | $ | 3,037,174.84 | |||||||||
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9/12/2025 |
$ | 3,037,174.84 | $ | 5,824.72 | $ | 3,042,999.56 | $ | (55,000.00 | ) | $ | 2,987,999.56 | |||||||||
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9/19/2025 |
$ | 2,987,999.56 | $ | 5,730.41 | $ | 2,993,729.97 | $ | (55,000.00 | ) | $ | 2,938,729.97 | |||||||||
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9/26/2025 |
$ | 2,938,729.97 | $ | 5,635.92 | $ | 2,944,365.89 | $ | (55,000.00 | ) | $ | 2,889,365.89 | |||||||||
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10/3/2025 |
$ | 2,889,365.89 | $ | 5,541.25 | $ | 2,894,907.14 | $ | (65,000.00 | ) | $ | 2,829,907.14 | |||||||||
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10/10/2025 |
$ | 2,829,907.14 | $ | 5,427.22 | $ | 2,835,334.36 | $ | (65,000.00 | ) | $ | 2,770,334.36 | |||||||||
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10/17/2025 |
$ | 2,770,334.36 | $ | 5,312.97 | $ | 2,775,647.33 | $ | (65,000.00 | ) | $ | 2,710,647.33 | |||||||||
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10/24/2025 |
$ | 2,710,647.33 | $ | 5,198.50 | $ | 2,715,845.83 | $ | (65,000.00 | ) | $ | 2,650,845.83 | |||||||||
|
10/31/2025 |
$ | 2,650,845.83 | $ | 5,083.81 | $ | 2,655,929.64 | $ | (65,000.00 | ) | $ | 2,590,929.64 | |||||||||
|
11/7/2025 |
$ | 2,590,929.64 | $ | 4,968.91 | $ | 2,595,898.55 | $ | (65,000.00 | ) | $ | 2,530,898.55 | |||||||||
|
11/14/2025 |
$ | 2,530,898.55 | $ | 4,853.78 | $ | 2,535,752.33 | $ | (65,000.00 | ) | $ | 2,470,752.33 | |||||||||
|
11/21/2025 |
$ | 2,470,752.33 | $ | 4,738.43 | $ | 2,475,490.76 | $ | (65,000.00 | ) | $ | 2,410,490.76 | |||||||||
|
11/28/2025 |
$ | 2,410,490.76 | $ | 4,622.86 | $ | 2,415,113.62 | $ | (65,000.00 | ) | $ | 2,350,113.62 | |||||||||
|
12/5/2025 |
$ | 2,350,113.62 | $ | 4,507.07 | $ | 2,354,620.68 | $ | (65,000.00 | ) | $ | 2,289,620.68 | |||||||||
|
12/12/2025 |
$ | 2,289,620.68 | $ | 4,391.05 | $ | 2,294,011.74 | $ | (65,000.00 | ) | $ | 2,229,011.74 | |||||||||
|
12/19/2025 |
$ | 2,229,011.74 | $ | 4,274.82 | $ | 2,233,286.55 | $ | (65,000.00 | ) | $ | 2,168,286.55 | |||||||||
|
12/26/2025 |
$ | 2,168,286.55 | $ | 4,158.36 | $ | 2,172,444.91 | $ | (65,000.00 | ) | $ | 2,107,444.91 | |||||||||
|
1/2/2026 |
$ | 2,107,444.91 | $ | 4,041.68 | $ | 2,111,486.59 | $ | (75,000.00 | ) | $ | 2,036,486.59 | |||||||||
|
1/9/2026 |
$ | 2,036,486.59 | $ | 3,905.59 | $ | 2,040,392.18 | $ | (75,000.00 | ) | $ | 1,965,392.18 | |||||||||
|
1/16/2026 |
$ | 1,965,392.18 | $ | 3,769.25 | $ | 1,969,161.42 | $ | (75,000.00 | ) | $ | 1,894,161.42 | |||||||||
|
1/23/2026 |
$ | 1,894,161.42 | $ | 3,632.64 | $ | 1,897,794.06 | $ | (75,000.00 | ) | $ | 1,822,794.06 | |||||||||
|
1/30/2026 |
$ | 1,822,794.06 | $ | 3,495.77 | $ | 1,826,289.83 | $ | (75,000.00 | ) | $ | 1,751,289.83 | |||||||||
|
2/6/2026 |
$ | 1,751,289.83 | $ | 3,358.64 | $ | 1,754,648.47 | $ | (75,000.00 | ) | $ | 1,679,648.47 | |||||||||
|
2/13/2026 |
$ | 1,679,648.47 | $ | 3,221.24 | $ | 1,682,869.71 | $ | (75,000.00 | ) | $ | 1,607,869.71 | |||||||||
|
2/20/2026 |
$ | 1,607,869.71 | $ | 3,083.59 | $ | 1,610,953.30 | $ | (75,000.00 | ) | $ | 1,535,953.30 | |||||||||
|
2/27/2026 |
$ | 1,535,953.30 | $ | 2,945.66 | $ | 1,538,898.96 | $ | (75,000.00 | ) | $ | 1,463,898.96 | |||||||||
|
3/6/2026 |
$ | 1,463,898.96 | $ | 2,807.48 | $ | 1,466,706.44 | $ | (75,000.00 | ) | $ | 1,391,706.44 | |||||||||
|
3/13/2026 |
$ | 1,391,706.44 | $ | 2,669.03 | $ | 1,394,375.46 | $ | (75,000.00 | ) | $ | 1,319,375.46 | |||||||||
|
3/20/2026 |
$ | 1,319,375.46 | $ | 2,530.31 | $ | 1,321,905.77 | $ | (75,000.00 | ) | $ | 1,246,905.77 | |||||||||
|
3/27/2026 |
$ | 1,246,905.77 | $ | 2,391.33 | $ | 1,249,297.10 | $ | (75,000.00 | ) | $ | 1,174,297.10 | |||||||||
|
4/3/2026 |
$ | 1,174,297.10 | $ | 2,252.08 | $ | 1,176,549.18 | $ | (85,000.00 | ) | $ | 1,091,549.18 | |||||||||
|
4/10/2026 |
$ | 1,091,549.18 | $ | 2,093.38 | $ | 1,093,642.56 | $ | (85,000.00 | ) | $ | 1,008,642.56 | |||||||||
|
4/17/2026 |
$ | 1,008,642.56 | $ | 1,934.38 | $ | 1,010,576.94 | $ | (85,000.00 | ) | $ | 925,576.94 | |||||||||
|
4/24/2026 |
$ | 925,576.94 | $ | 1,775.08 | $ | 927,352.02 | $ | (85,000.00 | ) | $ | 842,352.02 | |||||||||
|
5/1/2026 |
$ | 842,352.02 | $ | 1,615.47 | $ | 843,967.49 | $ | (85,000.00 | ) | $ | 758,967.49 | |||||||||
|
5/8/2026 |
$ | 758,967.49 | $ | 1,455.55 | $ | 760,423.04 | $ | (85,000.00 | ) | $ | 675,423.04 | |||||||||
|
5/15/2026 |
$ | 675,423.04 | $ | 1,295.33 | $ | 676,718.38 | $ | (85,000.00 | ) | $ | 591,718.38 | |||||||||
|
5/22/2026 |
$ | 591,718.38 | $ | 1,134.80 | $ | 592,853.18 | $ | (85,000.00 | ) | $ | 507,853.18 | |||||||||
|
5/29/2026 |
$ | 507,853.18 | $ | 973.96 | $ | 508,827.14 | $ | (85,000.00 | ) | $ | 423,827.14 | |||||||||
|
6/5/2026 |
$ | 423,827.14 | $ | 812.82 | $ | 424,639.96 | $ | (85,000.00 | ) | $ | 339,639.96 | |||||||||
|
6/12/2026 |
$ | 339,639.96 | $ | 651.36 | $ | 340,291.33 | $ | (85,000.00 | ) | $ | 255,291.33 | |||||||||
|
6/19/2026 |
$ | 255,291.33 | $ | 489.60 | $ | 255,780.93 | $ | (85,000.00 | ) | $ | 170,780.93 | |||||||||
|
6/26/2026 |
$ | 170,780.93 | $ | 327.53 | $ | 171,108.45 | $ | (85,000.00 | ) | $ | 86,108.45 | |||||||||
|
7/3/2026 |
$ | 86,108.45 | $ | 165.14 | $ | 86,273.59 | $ | (86,273.59 | ) | $ | 0.00 |
EXHIBIT 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Dennis P. Calvert, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of BioLargo, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 14, 2025 |
By: |
/s/ DENNIS P. CALVERT |
||||
|
Dennis P. Calvert |
||||||
|
Chief Executive Officer |
||||||
EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Charles K. Dargan II, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of BioLargo, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 14, 2025 |
By: |
/s/ CHARLES K. DARGAN II |
||||
|
Charles K. Dargan II |
||||||
|
Chief Financial Officer |
||||||
EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Dennis P. Calvert, Chief Executive Officer of BioLargo, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that the Quarterly Report of BioLargo, Inc. on Form 10-Q for the quarter ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of BioLargo, Inc.
|
Dated: August 14, 2025 |
By: |
/s/ DENNIS P. CALVERT |
||||
|
Dennis P. Calvert |
||||||
|
President and Chief Executive Officer |
||||||
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to BioLargo, Inc. and will be retained by BioLargo, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
I, Charles K. Dargan II, Chief Financial Officer of BioLargo, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that the Quarterly Report of BioLargo, Inc. on Form 10-Q for the quarter ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of BioLargo, Inc.
|
Dated: August 14, 2025 |
By: |
/s/ CHARLES K. DARGAN II |
||||
|
Charles K. Dargan II |
||||||
|
Chief Financial Officer |
||||||
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to BioLargo, Inc. and will be retained by BioLargo, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.