Engagement Extension Agreement dated as of February 23, 2020 between BioLargo, Inc. and Charles K. Dargan, II

Exhibit 10.3

BioLargo, Inc.

2020 Engagement Extension Agreement

This Engagement Extension Agreement (the “Extension”) references the Engagement Agreement and Scope Letter dated February 1, 2008 (“2008 Agreement”) by and between CFO 911 (Charles K. Dargan II) (the “Advisor)” and BioLargo, Inc. (the “Company”), and written extensions to the Agreement (the “Prior Extensions”), pursuant to which Charles K. Dargan II has been serving as the Company’s Chief Financial Officer. The parties desire to extend the terms of the prior agreements for a period of one year, pursuant to the terms of this Extension. The 2008 Agreement, the Prior Extensions and this Extension are collectively referred to herein as the “Agreement”.

Except as expressly amended or modified herein, all terms and conditions set forth in the 2008 Agreement and Prior Extensions are incorporated herein by this reference and continue to be in full force and effect. The parties acknowledge and confirm that Mr. Dargan has been serving as the Company’s Chief Financial Officer since February 1, 2008, and that he continues to do so through today’s date. Retroactively effective as of October 1, 2019, the Advisor and the Company hereby agree to extend the Term of the engagement as set forth in the 2008 Agreement to expire January 31, 2021 (the “Extended Term”). Notwithstanding the foregoing, either party may terminate this Agreement upon 30 days’ written notice. At the end of the Extended Term, unless this Agreement has been terminated, Advisor shall continue to serve as the Company’s Chief Financial Officer until new terms are agreed upon, or until one of the parties gives notice to terminate the relationship.

During the Extended Term, the Advisor shall receive the compensation as set forth in this Extension. The Company shall issue to Charles K. Dargan II an option (the “Option”) to purchase 25,000 shares of the Company’s common stock for each month during the Extended Term (thus, an option to purchase 400,000 shares). The Option shall vest over the period of the Extended Term, with 75,000 shares having vested as of December 31, 2019, and the remaining shares to vest 25,000 shares monthly beginning January 31, 2020, and each month thereafter, so long as this Agreement is in full force and effect. The Option shall be exercisable at the closing price of the Company’s common stock as of the date hereof, and shall expire ten years from the grant date. The Option shall be issued pursuant to the Company’s 2018 Equity Incentive Plan.

The Company also acknowledges that Advisor has never received a penny of cash compensation from the Company, but has been paid solely through the issuance of ten-year options pursuant to the 2008 Agreement, and that those options have begun to expire, unexercised, as the exercise prices are higher than current stock prices. The Company has recently adopted a plan to replace options issued to those still providing services to the Company that have expired under those circumstances. The Company acknowledges the following options to purchase an aggregate 110,000 shares issued to Advisor that have now expired unexercised:

The Company agrees to issue an option to Advisor for 27,500 shares, for the purpose of replacing the options issued and expired in the above table. The Option shall be exercisable at the closing price of the Company’s common stock as of the date hereof, and shall expire ten years from the grant date. The Option shall be issued pursuant to the Company’s 2018 Equity Incentive Plan, and is fully vested upon grant.

AGREED TO AND ACCEPTED AS OF THE DATE LAST SIGNED BELOW