Executive Summary

Q2 2018 delivered record quarterly product sales with total revenue of $326,738, up 227% year over year, and up 24% vs Q1 2018, driven by CupriDyne Clean adoption and continued government solidifier orders .
Net loss widened to $3.600M as interest expense spiked from conversions and higher debt balances; EPS was $(0.03), flat year over year but down vs Q1’s $(0.02) due to greater share count .
Management guided to exceeding $1.0M in 2018 annual revenue; Q2 commentary emphasized scaling odor-control services and near-term pilots for AOS, while also pursuing a NASDAQ uplisting .
Balance sheet improved post-quarter via debt-to-equity conversions totaling $5.8M over 90 days, reducing interest burden; Vista and FirstFire notes saw conversions and price protections to $0.25 per share .

What Went Well and What Went Wrong

What Went Well
- Record product sales; Q2 product revenue reached $315,553 (vs $99,978 in Q2 2017), with total revenue at $326,738 (+227% YoY; +24% QoQ), and 6M revenue of $589,767 .
- CupriDyne Clean revenues rose 30% QoQ in Q2 and total odor-related products and services rose 41%; multiple national/regional adoptions and four leading waste industry companies now served .
- “We are more prepared than ever before to leverage our considerable technology portfolio and human know-how to grow our business,” CEO Dennis Calvert noted, highlighting multiple commercial growth opportunities and imminent AOS pilot work .
What Went Wrong
- Net loss widened to $3.600M in Q2 (vs $2.574M YoY) and $6.029M for the first half; interest expense rose to $1.729M in Q2 due to higher debt and conversion-related costs .
- SG&A and R&D increased with scaling of BLEST and commercialization efforts; SG&A rose 10% YoY in Q2 and R&D rose 31% YoY in Q2 .
- Liquidity constraints and going-concern disclosures persisted; working capital remained negative with $651,061 cash at quarter-end, necessitating ongoing capital raises .

Financial Results

Metric	Q2 2017	Q1 2018	Q2 2018
Total Revenue ($USD)	$99,978	$263,029	$326,738
Product Revenue ($USD)	$99,978	$224,397	$315,553
Service Revenue ($USD)	$0	$38,632	$11,185
Gross Profit ($USD)	$26,579	$99,837	$125,826
Gross Margin (%)	26.6% (26,579/99,978)	37.9% (99,837/263,029)	38.5% (125,826/326,738)
SG&A ($USD)	$1,162,018	$1,169,613	$1,316,605
R&D ($USD)	$324,280	$521,730	$425,576
Interest Expense ($USD)	$953,636	$832,408	$1,728,799
Net Loss ($USD)	$(2,574,146)	$(2,429,568)	$(3,599,910)
EPS (Basic/Diluted) ($USD)	$(0.03)	$(0.02)	$(0.03)
Weighted Avg Shares	97,770,161	104,695,818	118,748,451

Segment Breakdown

Segment Revenue ($USD)	Q2 2017	Q1 2018	Q2 2018
Odor-No-More	$99,978	$224,397	$315,553
BLEST (Engineering)	$0	$38,632	$11,185
Consolidated Total	$99,978	$263,029	$326,738

KPIs

KPI	Q2 2018	Context
CupriDyne Clean QoQ Revenue Growth	+30% vs Q1 2018	Regional adoption by national customers
Odor-related Products & Services QoQ	+41% vs Q1 2018	Expanded turnkey services and bids
National Waste Customers Served	4 leading companies	Multiple flagship wastewater clients
Debt Reduction (90 days)	~$5.8M converted	Reduced future interest burden

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD)	FY 2018	None disclosed	Management expects to exceed $1,000,000	Introduced/Positive

Management also disclosed an application to uplist to NASDAQ to enhance shareholder value and access to capital .

Earnings Call Themes & Trends

No Q2 2018 earnings call transcript was available. Themes are drawn from Q2 10-Q MD&A and Q1 disclosures.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2018)	Trend
Odor Control Product Adoption	National purchasing agreements; record Q1 sales; expanding sales force	Regional rollouts; 30% QoQ CupriDyne growth; turnkey service bids >30	Accelerating adoption
Engineering Services (BLEST)	Early contracts; $687M biofuels project owner’s engineer; T&M projects pipeline	Owner’s engineer engagement; PMMSA compliance work; military incinerator emissions testing; expanding capabilities (RTA)	Building pipeline
Technology (AOS)	Planning pilots; grants; process engineering; spiral design testing	Fall 2018 pilots (poultry, brewery); CA$235k NRC-IRAP grant; >$4M grants submitted	Advancing toward pilots
Regulatory/Legal	FDA 510(k) for first product; OCP requests; preparing second submission	Pursuing premarket clearance for second product; partnering and clinical work	Iterating submissions
Balance Sheet/Liquidity	Heavy debt burden; plan to convert unit notes; LP Capital program	~$5.8M converted; remaining Vista/FirstFire notes adjusted; going-concern; uplist application	Improving via conversions

Management Commentary

“The company is poised to take advantage of what we believe are multiple commercial growth opportunities with massive market potential. We are more prepared than ever before to leverage our considerable technology portfolio and human know-how to grow our business.” — Dennis P. Calvert, President and CEO .
“National customers have begun adopting CupriDyne Clean on a regional basis and the company expects the trend to continue.” .
“To support the planned pilots for the AOS, BioLargo Water has secured public funding… including a CA $235,000 grant… and… applications for a series of substantial government grants (totaling more than $4M USD).” .

Q&A Highlights

No Q2 2018 earnings call transcript was located; therefore, analyst Q&A themes are unavailable in primary sources for this quarter [Search result showed no earnings-call-transcript for BLGO in the period] [functions.ListDocuments].

Estimates Context

Wall Street consensus (S&P Global) for Q2 2018 revenue and EPS was unavailable due to data access limitations, so we cannot quantify beats/misses versus consensus for this quarter [GetEstimates error: Daily Request Limit Exceeded].

A relevant Q1 2018 press release noted “record product sales and revenues” with product sales up “over 400%” YoY, consistent with Q1 10-Q disclosures, providing context for the upward revenue trajectory entering Q2 .

Key Takeaways for Investors

Revenue trajectory is positive (Q2 up 227% YoY and 24% QoQ), anchored by odor-control wins and growing services; near-term execution focus is scaling CupriDyne Clean and turnkey deployments with national/regional customers .
Losses widened near-term due to interest expense and scaling costs; however, ~$5.8M debt-to-equity conversions reduce forward interest expense run-rate (management expects ~-$150k per quarter reduction, assuming no new debt) .
AOS pilots (poultry and brewery) in Fall 2018 plus secured/targeted grants could catalyze validation and commercial conversations; monitor pilot results and OPEX/CAPEX disclosures from field data .
FDA pathway is iterative; watch for 510(k) progress on the second wound-care product and potential strategic partnerships to accelerate commercialization .
Liquidity remains tight; uplisting plans and continued use of equity financing instruments (e.g., Lincoln Park) are central to funding strategy; stock volatility can be sensitive to financing announcements .
Near-term trading implications: revenue and pilot headlines, debt conversion updates, and any NASDAQ uplisting steps are likely catalysts; absence of consensus estimates limits beat/miss framing for Q2 .
Medium-term thesis: If CupriDyne Clean scales regionally/nationally and AOS pilots validate cost/performance, the multi-segment platform (odor control, engineering, water, medical) offers optionality; balance-sheet repair and operating leverage will be critical .

Additional Relevant Q2 2018 Press Releases

Debt conversions improving balance sheet (July 10, 2018) .
Achieves record product sales and revenues; marching to industry-wide adoption (Aug 14, 2018 press release attached to 8-K) .

Notes on Document Availability and Searches

Read the full Q2 2018 8-K and press release (EX-99.1) and Q2 2018 10-Q; no earnings call transcript was available in the document catalog for the quarter [functions.ListDocuments].
Read prior quarter Q1 2018 10-Q for trend analysis; incorporated Q2 2017 comparisons from Q2 2018 10-Q .

BIOLARGO, INC. (BLGO)·Q2 2018 Earnings Summary