BLGO BioLargo Inc (QB)

During the year ended December 31, 2019, BioLargo, Inc. (the “Company” or “we”) raised $4,223,000 through the issuance of convertible promissory notes. As of December 31, 2019, we had $4,657,000 of these notes outstanding. As of July 31, 2020, we converted $3,137,000 principal amount to equity, leaving a balance of $1,520,000. We intend to convert an additional $414,000 of these notes over the next 45 days, leaving a balance of $1,106,000, as described in more detail below.

Of the amount of convertible debt outstanding at December 31, 2019, $3,112,000 was outstanding on twelve-month OID notes issued June, 2019 through September, 2019 (see Form 10-K filed March 31, 2020, Note 4, subheading Convertible Twelve-month OID Notes). Each twelve-month OID note allows the Company to either pay the note at maturity with cash, or redeem it by issuing shares of common stock at a conversion price equal to the lower of $0.17 and 70% of the lowest daily volume weighted average price of the Company’s common stock during the 25 trading days preceding the conversion date. As these notes have matured, we have chosen to redeem the notes through the issuance of shares of our common stock, the first such conversion occurring on June 7, 2020. On July 22, 2020, the aggregate shares of common stock issued for conversion of twelve-month OID notes exceeded 5% of the 179,191,783 common shares outstanding as reported on Form 10-Q filed May 19, 2020. As of July 31, 2020, we have issued 25,570,106 shares of our common stock in payment of $2,698,000 principal, and $121,000 interest, for conversion of twelve-month OID notes. We intend to convert the remaining $414,000 of twelve-month OID notes into common stock as they mature over the next 45 days. The initial sales of the twelve-month OID notes, and the issuances of common stock in conversion of the notes, were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and Regulation D promulgated thereunder as not involving a public offering of securities.

We and holders of notes in the principal amount of $550,000 due August 12 and August 16, 2020, have agreed in principal to extend the maturity date of the notes by one year. With respect to the $475,000 note due August 12, 2020, the holder has agreed to convert one-fourth of the note at the $0.17 conversion price set forth in the note, and as consideration for the extension of the maturity date, we have agreed to issue an additional 299,370 shares of common stock and extended the expiration of two stock purchase warrants. The holder expressed the intent to further convert the remaining principal balance over time during the next 12 months. With respect to the $75,000 note due August 16, 2020, we paid the holder $25,000 cash, and agreed to extend the maturity date by one year. The initial sales of these notes, and the issuances of common stock for conversion of principal and to extend the maturity date, were made in reliance on the exemption from registration contained in Section 4(2) of the Securities Exchange Act and Regulation D promulgated thereunder as not involving a public offering of securities.

The following table sets forth the Company’s note-payable obligations as of December 31, 2019 and July 31, 2020: