BioLargo, Inc. (OTCMKTS:BLGO) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On June 30, 2020, BioLargo, Inc. (“we”, or the “Company”) and our partially owned subsidiary Clyra Medical Technologies, Inc., amended our technology license agreement. The amendment:
Through the amendment, BioLargo also converted the “Initial License Fee” that would have required $50,000 per month payments from Clyra once Clyra began generating $4,000,000 in annual revenues. The license fee of $6,979,039 was converted to 22,513.03 shares of Clyra common stock.
Additionally on June 30, 2020, Clyra and BioLargo board member Jack B. Strommen agreed to convert the $1,125,000 that would be due on the consulting agreement between Clyra and his company Beach House Consulting, LLC, into 3,629.03 shares of Clyra common stock. Payments under the consulting agreement were due to begin once Clyra generated $250,000 in gross sales for three consecutive months.
Following these conversions, BioLargo owns 50% of Clyra’s issued and outstanding common stock. This percentage does not include approximately 10,000 shares issuable upon the exercise of options and 10,500 shares issuable to Scion Solutions, LLC upon the occurrence of certain conditions as set forth in the agreements through which BioLargo and Clyra acquired intellectual property from Scion, dated September 26, 2018 (see Closing Agreement, attached hereto as Exhibit 10.9).
Finally, on June 30, 2020, Clyra entered into a Revolving Line of Credit Agreement whereby Vernal Bay Capital Group, LLC, a current BioLargo investor, committed to provide a $1,000,000 inventory line of credit to Clyra, with a first draw of $200,000 received July 6, 2020. Clyra is required to use funds from the line of credit to manufacture inventory. Its first draw will allow it to complete manufacturing of 50,000 units of its Clyraguard Personal Protective Spray. Additional draws are conditional upon Clyra presenting invoices or purchase orders to the lender equal to the greater of one-half of principal outstanding on the line of credit, and $200,000.
The line of credit note earns interest at 15%, matures in one year, and requires Clyra pay interest and principal from gross product sales. For the first 180 days, on a monthly basis, Clyra is required to pay 30% of gross product sales to reduce amounts owed, and thereafter 60% of gross sales. Clyra issued Vernal Bay 323 shares of its common stock as a commitment fee for the line of credit, valued at $100,000. A security agreement of the same date grants Vernal Bay a security interest in Clyra’s inventory, as that term is defined in the Uniform Commercial Code. Clyra may prepay the note at any time.
Item 9.01 Financial Statements and Exhibits
BIOLARGO, INC. Exhibit
EX-10.3 2 ex_193293.htm EXHIBIT 10.3 ex_193293.htm Exhibit 10.3 SECOND AMENDMENT TO LICENSE AGREEMENT THIS SECOND AMENDMENT TO LICENSE AGREEMENT (“Amendment”) is made and entered into as of this June 30,…
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About BioLargo, Inc. (OTCMKTS:BLGO)
BioLargo, Inc. is a provider of platform technologies. The Company’s products are used to eliminate contaminants that threaten the water, health and quality of life. Its technology has commercial applications within several industries. The Company focuses on four areas: water treatment; industrial odor control applications; commercial, household and personal care products (CHAPP), and advanced wound care. Its AOS Filter combines iodine, water filter materials and electrolysis within a water filter device. It generates oxidation potential in order to oxidize and breakdown or otherwise eliminate, soluble organic contaminant, which are found in contaminated water. Its CupriDyne formula is used to deliver iodine within products. The Isan System is an automated iodine dosing system, which features controlled measuring, flow control, dosing and iodine extraction and removal technology, as well as an automatic tracking system that delivers iodine in calibrated doses.