UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
for
the fiscal year ended
or
For the transition period from: _____________ to _____________
Commission
File Number:
(Exact name of small Business Issuer as specified in its charter)
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
| n/a |
| Former address if changed since last report |
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| OTCQB |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Check
whether the issuer (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 of time 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 or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Emerging
Growth Company | |
| Smaller
reporting 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 accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
Yes
The
aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s
most recently completed second fiscal quarter was $
State the number of shares outstanding of the registrant’s $ par value common stock as of the close of business on the latest practicable date (March 10, 2025): .
Documents
incorporated by reference:
TABLE OF CONTENTS
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FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Report”), including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 contains forward-looking statements regarding future events and the future results of Blue Biofuels, Inc. and its consolidated subsidiaries (the “Company”) that are based on management’s current expectations, estimates, projections and assumptions about the Company’s business. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “sees,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those discussed in the “Risk Factors” section in Item 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and elsewhere in this Report as well as those discussed from time to time in the Company’s other Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions. Such forward-looking statements speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Report. If we update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect to other forward-looking statements.
ITEM 1. BUSINESS
Background
Business Overview
Blue Biofuels, Inc., was incorporated in Nevada on March 28, 2012, as Alliance Media Group Holdings, Inc. Since December 2013, Blue Biofuels, Inc. (the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.
In early 2018, the Company’s chief executive officer (“CEO”) Ben Slager invented a new reactor technology with a higher yield and a continuous throughput in the Cellulose-to-Sugar process, or CTS, and the Company filed a process patent application for this technology. Mr. Slager has since further developed the system with the technical staff of the Company. The CTS patent was awarded in 2021 in the United States (U.S. Patent No. 10,994,255) and has subsequently been granted in Japan, Australia, Russia, and El Salvador. The Company also filed this patent in other major jurisdictions of the world including the European Patent Organization, Brazil, China, and the African Regional Intellectual Property Organization. The patent applications are currently pending in all of these international jurisdictions. In addition to this patent, the Company has received one additional patent in the United States (U.S. Patent No. 11,484,858B2), for which it has also applied in all the above-mentioned jurisdictions. Further, the company has filed for 3 other patents in the United States which are currently pending.
Mr. Slager has since further developed the system with the technical staff of the Company. The patented CTS process is a continuous mechanical/chemical dry process for breaking down cellulosic material for conversion into biofuels. CTS can break down any cellulosic material – including grasses and agricultural waste. The CTS mechanical/chemical process allows for exact process control to ensure that all the material passing through it does so on the optimum reaction parameters through which optimal efficiency is achieved.
The new technology made it worthwhile to financially restructure the Company through Chapter 11. The Company voluntarily filed for Chapter 11 on October 22, 2018, in the U.S. Bankruptcy Court in the Southern District of Florida. The Company exited Chapter 11 on September 18, 2019, while keeping all classes, including shareholders, unimpaired. The bankruptcy case was closed on October 25, 2019.
CTS is environmentally friendly in that it has no toxic waste, and it has a low carbon footprint: the amount of added atmospheric carbon created by burning the biofuels produced by the CTS system was absorbed by the plant-based feedstock while growing and is merely released back into the atmosphere. No extra CO2 is released into the atmosphere when our biofuels are burned. This is to be distinguished from fossil fuels because new CO2 is released when fossil fuels are burned.
The Company believes a significant difference between CTS cellulosic ethanol and corn ethanol is the wide range of abundantly available feedstocks that CTS can process compared to just corn as the feedstock. The CTS feedstocks are nonfood and have much lower costs than corn. In addition, while in corn ethanol only the corn kernels are used, CTS uses the whole plant or its waste products, meaning it could obtain much higher yields per acre.
In 2022, the Company partnered with K.R. Komarek to build its CTS machines going forward. Komarek is an industry leading manufacturing company that builds briquetting machines and compaction/granulation systems with throughput capacities up to 50 tons per hour.
In 2023, the Company completed the build-out of a pilot plant based on a modified Komarek machine and optimized the core process. The Company is now upscaling, testing and optimizing the pre and post processing elements at this pilot scale plant to finalize design and operational parameters to provide operating cost estimates of a full-scale commercial volume system. Due to its mechanical nature and modularity, we anticipate that one plant would have multiple modular CTS systems. This process is partially funded by the $1.15 million SBIR Phase 2 Department of Energy grant, which followed up from the SBIR Phase 1 DOE grant that helped fund the finalizing of the proof of concept.
In addition, the Company has licensed the Vertimass Process which is a patented one step process that converts ethanol into sustainable aviation fuel (SAF) and other renewable biofuels including bio-gasoline. The license agreement with Vertimass is the subject to a confidentiality agreement between the parties.
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Plan of Operation
The total process from cellulosic feedstock to SAF consists basically of three steps:
| 1) | Conversion from feedstock to fermentable cellulosic sugars (CTS) | |
| 2) | Ferment the cellulosic sugars into cellulosic ethanol. | |
| 3) | Covert the ethanol into SAF and related products. This third step happens with the Vertimass technology which the Company has licensed. |
In January 2024, the Company formed a 50-50 joint venture partnership with Vertimass called VertiBlue Fuels, LLC, that has the mission to build an ethanol-to-SAF facility in Florida with the initial goal to produce around 5-10 million gallons of Sustainable Aviation Fuel (SAF), and then expand SAF production to approximately 70 million gallon per year. VertiBlue Fuels plans to initially convert sugarcane ethanol, and then, when the Company’s CTS technology is fully commercialized, to build commercial CTS and ethanol facilities on the front-end to produce cellulosic SAF and generate the large D7 RIN and other government credits. Commencing commercial production will require project financing.
Any new biofuels plant that is built would require various government permits. In particular, renewable fuels are subject to rigorous testing and premarket approval requirements by the EPA’s Office of Transportation and Air Quality and regulatory authorities in other countries. In the U.S., various federal, and, in some cases, state statutes and regulations also govern or impact the manufacturing, safety, storage and use of renewable fuels. The process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations requires the expenditure of resources. The Company anticipates raising the necessary capital for this as a part of its project-based financing.
The ethanol industry is competitive with over 200 ethanol plants in the United States alone. Currently, the vast majority use corn as feedstock. Their profitability depends highly on the fluctuations between the price of corn and the price of ethanol. Since the Company does not plan to use corn, and plans on having long-term purchase agreements with cellulosic feedstock suppliers, we anticipate that our profitability will be more consistent. Further, cellulosic biofuels yield much higher incentives than non-cellulosic biofuels.
The Energy Policy Act of 2005, which included the Renewable Fuel Standard Program enforced by the US Environmental Protection Agency (EPA), mandates a certain amount of renewable fuel be blended into the transportation fuel used by all vehicles in the country. This Program provides monetary incentives to companies that produce renewable transportation fuel, and establishes Renewable Identification Numbers (RINs) or credits for each gallon of renewable transportation fuel produced in the United States, and breaks down those fuels into different D-codes depending on the source of the renewable fuel. D3 is the code for renewable ethanol that comes from cellulosic materials. The EPA’s final D3 RIN volume mandates for cellulosic biofuel include 840 million gallons for 2023, 1.09 billion gallons for 2024, and 1.38 billion gallons for 2025 (the D3 mandate). This mandate has increased every year and is statutorily mandated to increase in the future and become a larger portion of the full renewable fuels mandate, if and when cellulosic biofuels can be produced profitably in larger and larger quantities. The RFS mandate for 2024 called for 21.54 billion gallons of total renewable fuel, whereas for 2025 it’s 22.33 billion gallons with 7.33 billion gallons from advanced biofuels, including cellulosic biofuels, leaving 15 billion gallons for conventional biofuels (corn ethanol). The “blend wall” (or upper limit to the amount of ethanol that can be blended into U.S. gasoline and automobile performance and comply with the Clean Air Act) of limiting ethanol content in gasoline to 10%, limits the total amount of ethanol consumed in the United States. Recent proposals have make 15% blending available year around in some states. The value of the D3 RIN fluctuates, but as of this filing, it is approximately $2.48 per gallon of ethanol. For comparison, the D6 RIN for corn ethanol is $0.72. To profit from these incentives, the Company plans to apply for these RIN credits as it brings its first plant into commercial operation.
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Section 45Z of the Inflation Reduction Act passed on August 16, 2022, offers a Clean Fuel Production Credit (CFPC) per gallon of transportation fuel produced with a base amount of 20 cents per gallon or up to $1 per gallon for a qualified facility (depending on its carbon index) that was built while paying at least prevailing wages and which met apprenticeship requirements. For sustainable aviation fuel, those figures are 35 cents and $1.75 per gallon respectively. The Company plans to apply for CFPC credits when it begins building its commercial facilities. The CFPC currently does not apply to transportation fuel sold after December 31, 2027.
A Low Carbon Fuel Standard Credit (LCFS) is offered by various states (primarily California) for any amount of reduced CO2 in the production lifecycle of transportation fuels as compared to the amount of CO2 emitted in the production lifecycle of fossil fuels. The production lifecycle includes transportation costs to the point of use. California is currently offering around $57 per metric ton of CO2 reduction. When it is closer to commercial production, the Company plans to analyze the cost effectiveness of applying for these LCFS credits to determine in which state it could earn the most credits.
At commercial scale, management expects to be able to earn substantial renewable fuel credits and produce sustainable ethanol, sustainable aviation fuel, biogasoline, and other sustainable biofuels more profitably than they could be from existing commercial corn ethanol producers. Cellulosic ethanol comes with a much more valuable D3 RIN credit as compared to the D6 RIN allocated to corn ethanol; cellulosic SAF comes with a very valuable D7 RIN, and cellulosic bio-gasoline comes with a valuable D3 RIN. The Company also expects to receive Clean Fuel Production Credits related to section 45Z of the Inflation Reduction Act, and the Company also plans to pursue Low Carbon Fuel Standard Credits.
After its first plant is profitable, the Company intends to grow with additional plants in the United States and explore international growth by either licensing the CTS technology or forming joint ventures with foreign domestic partners to build plants.
The Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization. As of this date, the Company has not generated any material revenues from its business.
Description of the Company’s Securities
The Company is currently authorized to issue 1,000,000,000 Shares of Common Stock par value $0.001 and 10,000,000 shares of Preferred Stock par value $0.001. Each share of Company Common Stock is entitled to one (1) vote per share.
Employees
The Company currently employs six full-time employees, one part-time employee and seven consultants. The Company plans to hire additional employees to more rapidly commercialize its technology.
ITEM 1A. RISK FACTORS
Not required as the Company is a “smaller reporting company.”
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 1C. CYBERSECURITY
Through our IT consulting firm, we employ continuous monitoring mechanisms to detect and respond to cybersecurity threats promptly. Regular reports are generated as needed for management and the board, providing insights into our cybersecurity posture, incidents, and remediation efforts. We conduct regular assessments and testing to ensure the effectiveness of these controls, especially those related to the protection of financial information. The implementation and management of these processes are integrated with the Company’s overall operational risk management processes that seeks to limit our exposure to unnecessary risks across our operations.
Our employees receive regular training on cybersecurity best practices, emphasizing the protection of financial information. We foster a culture of cybersecurity awareness and responsibility throughout the organization.
We maintain a comprehensive incident response plan that outlines the steps to be taken in the event of a cybersecurity incident. This plan includes procedures for promptly reporting material incidents to the SEC, as required, and for communicating with affected stakeholders. Upon discovery of a cybersecurity incident, the identifying party immediately notifies the Company’s CFO. The CFO activates the incident response plan to include the following:
| ● | Gather preliminary information about the cybersecurity incident. |
| ● | CFO notifies the CEO and the Board of Directors of the cybersecurity threat. |
| ● | The CFO allocates resources for disclosure if determined to be a material cybersecurity event. |
| ● | The CFO consults with cybersecurity consultants and other involved parties to identify the undesirable effects of the cybersecurity incident. |
| ● | The CFO develops a recommendation for determination of materiality. |
| ● | If disclosure is required, the material incident disclosure plan is executed by the CFO. |
ITEM 2. PROPERTIES
Offices
The Company maintains its corporate office at 3710 Buckeye Street, Suite 120, Palm Beach Gardens 33410. The Company’s telephone number is 888-607-3555. On August 30, 2019, the Company signed a lease for a period of twenty-four (24) months from November 1, 2019, through October 31, 2021. In December 2020, this lease was extended for twelve (12) months, and in August 2022, extended the lease for two more years until October 31, 2024. The most recent extension is until October 31, 2029. Annual rent in the latest lease extension commenced at approximately $109,205 per annum and increases on a year-to-year basis by three percent (3%) over the base year. In addition, the Company is obligated to pay an amount equal to 10.41% of the operating expenses of the building together with sales tax on all amounts. This office space includes the Company’s research and demonstration facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. As of the date of filing, there are no material claims or suits whose outcomes could have a material effect on the Company’s financial statements.
ITEM 4. Mine Safety Disclosures
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market for Registrant’s Common Equity
The Company became subject to Securities Exchange Act Reporting Requirements in October 2012. The symbol “BIOF” is assigned for its securities. The Company’s common stock commenced trading on the OTCBB on February 5, 2014, under the symbol ALLM and changed to BIOF on August 27, 2021.
On November 13, 2018, the Company filed a Form 15, suspending its duty to file reports under sections 13 and 15(d) of the Securities Exchange Act. The Company has subsequently traded on the Pink Sheets. On January 5, 2021, the Company filed a Form 10 Registration Statement to become fully reporting again and has been fully reporting ever since.
Options and Warrants
At various times over the years, warrants have been issued for services, as parts of contracts, or in settlement agreements. Warrants also have been issued as a part of some financings.
As of the date of filing, not including expired or exercised warrants, the Company has issued warrants to purchase an aggregate of 28,071,495 shares of common stock. The exercise prices associated with these agreements range from $0.05 to $0.30 and terms range from twenty four months to ten (10) years.
As of the date of this filing, the Company has issued option agreements to its independent directors, officers, employees, and consultants, to purchase an aggregate of 90,530,661 shares of common stock of which 44,259,324 have vested and 46,271,337 have not yet vested. The exercise prices range from $0.05 to $0.23 and terms range from five (5) to ten (10) years.
Other than the foregoing, none of the Company’s shares of Common Stock are subject to outstanding options or warrants.
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Holders
As of the date of filing, there were 308,629,508 shares of common stock outstanding and approximately 340 stockholders of record.
Transfer Agent and Registrar
The Company’s transfer agent is ClearTrust, LLC., 16540 Pointe Village Dr., Suite 205, Lutz, FL 33558, Phone: 813-235-4490.
Dividend Policy
The Company has never paid any cash dividends on its Common Stock and does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. The Company intends to retain future earnings to fund ongoing operations and future capital requirements of its business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon the Company’s financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
There are as of December 31, 2024, fully earned and vested option agreements in place to purchase an aggregate of 32,655,548 shares of common stock under the Company’s 2021 Employee, Director Stock Plan and there are additional agreements vesting over the next 5 years, or conditional upon events, to purchase an additional 18,451,722 shares of common stock. Outside of the ESOP, there are fully earned and vested option agreements in place to purchase an aggregate of 4,788,019 shares of common stock, and there are additional agreements that vest over the next two years or that conditionally vest to purchase an additional 33,076,282 shares of common stock.
| Plan category | Number of | Weighted- average | Number of securities remaining available for future issuance under equity compensation plans (1) | |||||||||
| Equity Compensation Plans Approved by Securities Holders | 51,107,270 | $ | 0.14 | 8,171,598 | ||||||||
| Equity Compensation Plans Not Approved by Securities Holders | 37,864,301 | $ | 0.13 | - | ||||||||
| Total | 89,971,571 | $ | 0.13 | 8,171,598 | ||||||||
| (1) | As of December 31, 2024. |
The Plan provides that awards may be granted to officers, employees, consultants, or directors of the Company and its affiliates (“Eligible Persons”). The Plan permits the board of directors of the Company to grant three types of awards (“Awards”) to Eligible Persons: (a) a stock appreciation right (“Stock Appreciation Right”); (b) a stock option (“Stock Option”); and (c) a stock award (“Stock Award”).
Stock Options may be granted alone or in addition to other Awards granted under the Plan and may be of two types: (a) incentive Stock Options; and (b) non-qualified Stock Options. The exercise price per share under a Stock Option is determined by the administrator of the Plan (which is either the entire board or a designated committee comprised solely of independent directors); provided, however, that such exercise price is not less than the fair market value per Purchaser Share on the date the Stock Option is granted, subject to certain exceptions. The term of each Stock Option is fixed by the administrator of the Plan and no incentive Stock Option may be exercisable more than 10 years after the date such incentive Stock Option is granted. The Plan provides that other terms and conditions may be attached to a particular Stock Option, such terms and conditions to be referred to in an option agreement.
In the event an option holder ceases to be an Eligible Person other than by reason of death, disability or cause, the option holder may exercise any Stock Option granted to him or her to the extent that such Stock Option is exercisable on the date of such termination. In the event an option holder ceases to be an Eligible Person by reason of death or disability, the option holder or his or her representative, as applicable, may exercise any Stock Option granted to him or her to the extent that such Stock Option is exercisable on the date of such death or disability. All outstanding and unexercised Stock Options of an option holder will be cancelled in the event that such person ceases to be an Eligible Person by reason of cause.
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Stock Appreciation Rights may be granted either on a stand-alone basis or in conjunction with all or part of any Stock Option granted under the Plan. Stock Appreciation Rights granted on a stand-alone basis may be exercisable only at such time or times and to such extent as determined by the administrator of the Plan. Stock Appreciation Rights granted in conjunction with all or part of any Stock Option may be exercisable only at the time or times and to the extent that the Stock Options to which they relate are exercisable. Upon the exercise of a Stock Appreciation Right, a holder will be entitled to receive an amount in cash, Purchaser Shares or both, which in the aggregate is equal in value to the difference in the fair market value of the Purchaser Shares at the date of exercise less the fair market value of the Purchaser Shares at the date of grant.
Stock Awards may be directly issued under the Plan, subject to such terms, conditions, performance requirements, restrictions, forfeiture provisions, contingencies and limitations as the administrator of the Plan may determine.
Subject to adjustment as provided in the Plan, the aggregate number of shares of common stock which may be delivered under the Plan shall not exceed a number equal to 15% of the total number of shares of common stock outstanding. The maximum number of shares of common stock which may be delivered under the Plan shall automatically increase by a number sufficient to cause the number of shares of common stock covered by the Plan to equal 15% of the total number of shares of common stock then outstanding, assuming for this purpose the conversion into common stock of all outstanding securities that are convertible by their terms (directly or indirectly) into common stock. The exercise price per share of common stock purchasable under a Stock Option shall be determined by the administrator of the Plan; provided, however, that the exercise price per share shall be not less than the Fair Market Value (as defined in the Plan) per share on the date the Stock Option is granted, or if the Stock Option is intended to qualify as an Incentive Stock Option and is granted to an individual who is a Ten Percent Holder (as defined in the Plan), not less than 110% of such Fair Market Value per share. The term of each Stock Option shall be fixed by the administrator of the Plan, but no Incentive Stock Option shall be exercisable more than 10 years (or five years in the case of an individual who is a Ten Percent Holder) after the date the Incentive Stock Option is granted.
Recent Sales of Unregistered Securities
Below is a list of securities sold by the Company from January 1, 2024 through the date of filing which were not registered under the Securities Act.
| Entity | Date of Investment | Title of Security | Amount of Securities Sold | Consideration | ||||||
| Vestech Securities | 01/26/24 | Common Stock | 52,500 | Professional Services | ||||||
| Tito Sanchez | 04/25/24 | Common Stock | 62,045 | Professional Services | ||||||
| Steven Sadaka | 07/01/24 | Common Stock | 312,500 | Note Conversion | ||||||
| Anthony Santelli, Sr. | 09/30/24 | Common Stock | 1,875,000 | Note Conversions | ||||||
| Mark Monahan | 09/30/24 | Common Stock | 625,000 | Note Conversion | ||||||
| Bohdan Rudawski | 11/14/24 | Common Stock | 250,000 | Purchase @ $0.10 per share | ||||||
| Randall Brodsky | 11/14/24 | Common Stock | 500,000 | Purchase @ $0.10 per share | ||||||
| Rick Seidner | 11/14/24 | Common Stock | 200,000 | Purchase @ $0.10 per share | ||||||
| Anthony Santelli, Sr. | 11/22/24 | Common Stock | 800,000 | Purchase @ $0.10 per share | ||||||
| Charles Wesley Works | 12/09/24 | Common Stock | 220,000 | Purchase @ $0.10 per share | ||||||
| Randall Brodsky | 12/26/24 | Common Stock | 315,500 | Note Conversion | ||||||
| Clay Taylor | 01/21/25 | Common Stock | 625,000 | Note Conversion | ||||||
The securities issued in the above-mentioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(a)(2) of that Act and Rules 504 and 506 of Regulation D.
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ITEM 6. [Removed and reserved]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion should be read in conjunction with the Company’s audited financial statements and the notes thereto.
Forward-Looking Statements
This annual report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation — Risk Factors” identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement.
Business Overview
Blue Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels, and lignin technologies sectors.
In early 2018, our chief executive officer (“CEO”) Ben Slager invented a new technology system referred to as Cellulose-to-Sugar or CTS, and the Company filed, and received, two patents for this technology. The CTS process is a continuous mechanical/chemical dry process for converting cellulose material into sugar and lignin.
The CTS system converts plant-based feedstock into one primary product, soluble sugars, which can be further processed into cellulosic ethanol and other biofuels like jet fuel, and potentially into bio chemicals.
In 2022, the Company partnered with K.R. Komarek to build its CTS machines going forward. Komarek is an industry leading manufacturing company that builds briquetting machines and compaction/granulation systems with throughput capacities up to 50 tons per hour. In 2023, the Company completed the build-out of a pilot plant based on a modified Komarek machine and is in the process of further upscaling and optimizing the pre and post processing elements at this pilot scale plant to finalize design and operational parameters to provide operating cost estimates of a full-scale commercial volume system. Due to its mechanical nature and modularity, we anticipate that one plant would have multiple modular CTS systems.
In addition, the Company has licensed the Vertimass Process to convert ethanol into sustainable aviation fuel (SAF) and other renewable biofuels including bio-gasoline. The license agreement with Vertimass is the subject to a confidentiality agreement between the parties.
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Plan of Operation
The total process from cellulosic feedstock to SAF consists basically of three steps:
| 1) | Conversion from feedstock to fermentable cellulosic sugars (CTS) | |
| 2) | Ferment the cellulosic sugars into cellulosic ethanol. | |
| 3) | Covert the ethanol into SAF and related products. This third step happens with the Vertimass technology which the Company has licensed. |
In January 2024, the Company formed a 50-50 joint venture partnership with Vertimass called VertiBlue Fuels, LLC, that has the mission to build an ethanol-to-SAF facility in Florida with the initial goal to produce around 10 million gallons of Sustainable Aviation Fuel (SAF) and related products, and then expand SAF and related product production to approximately 70 million gallon per year. VertiBlue Fuels plans to initially convert sugarcane ethanol, and then, when the Company’s CTS technology is fully commercialized, to build commercial CTS and ethanol facilities on the front-end to produce cellulosic SAF and generate the large D7 RIN and other government credits. Commencing commercial production will require project financing.
The Energy Policy Act of 2005, which included the Renewable Fuel Standard Program enforced by the US Environmental Protection Agency (“EPA”), mandates a certain amount of renewable fuel be blended into the transportation fuel used by all vehicles in the country. This Program provides monetary incentives to companies that produce renewable transportation fuel, and establishes Renewable Identification Numbers (“RINs”) or credits for each gallon of renewable transportation fuel produced in the United States, and breaks down those fuels into different D-codes depending on the source of the renewable fuel. D3 is the code for renewable ethanol that comes from cellulosic materials. (D6 is for corn ethanol). The value of the D3 RIN fluctuates, but as of this filing, it is approximately $2.48 per gallon of ethanol. To profit from these incentives, the Company plans to apply for these D3 RIN credits as it brings its first plant into commercial operation.
Section 45Z of the Inflation Reduction Act passed on August 16, 2022, offers a Clean Fuel Production Credit (CFPC) per gallon of transportation fuel produced with a base amount of 20 cents per gallon or up to $1 per gallon for a qualified facility (depending on its carbon index) that was built while paying at least prevailing wages and which met apprenticeship requirements. For sustainable aviation fuel, those figures are 35 cents and $1.75 per gallon respectively. The Company plans to apply for CFPC credits when it begins building its commercial facilities. The CFPC currently does not apply to transportation fuel sold after December 31, 2027.
A Low Carbon Fuel Standard Credit (LCFS) is offered by various states (primarily California) for any amount of reduced CO2 in the production lifecycle of transportation fuels as compared to the amount of CO2 emitted in the production lifecycle of fossil fuels. The production lifecycle includes transportation costs to the point of use. California is currently offering around $57 per metric ton of CO2 reduction. When it is closer to commercial production, the Company plans to analyze the cost effectiveness of applying for these LCFS credits to determine in which state it could earn the most credits.
At commercial scale, management expects to be able to earn substantial renewable fuel credits and produce sustainable ethanol, sustainable aviation fuel, and other sustainable biofuels more profitably than they could be from existing commercial corn ethanol producers. Cellulosic ethanol comes with a much more valuable D3 RIN credit as compared to the D6 RIN allocated to corn ethanol; cellulosic SAF comes with a very valuable D7 RIN, and cellulosic bio-gasoline comes with a valuable D3 RIN. The Company also expects to receive Clean Fuel Production Credits related to section 45Z of the Inflation Reduction Act, and the Company also plans to pursue Low Carbon Fuel Standard Credits.
| 11 |
After its first plant is profitable, the Company intends to grow with additional plants in the United States and explore international growth by either licensing the CTS technology or forming joint ventures with foreign domestic partners to build plants.
The Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization. As of this date, the Company has generated $194,319 in revenue, however it has not generated any revenues from its core business.
Results of Operations
Comparison of the year ended December 31, 2024, to December 31, 2023
For the year ended December 31, 2024, the Company has a net loss of $1,418,981, as compared to a net loss of $3,055,194 in 2023. This was primarily attributed to a gain on extinguishment of debt of $2,417,502.
For the year ended December 31, 2024, the Company recognized $0 in revenue and $0 in 2023.
For the year ended December 31, 2024, the Company’s general and administrative expenses increased by $386,317 to $1,726,106 from $1,339,789 in 2023. This increase is primarily due to higher stock-based compensation recognized in 2024 which was $535,395 compared to $169,382 in 2023.
Interest expense decreased in the year ended December 31, 2024 by $33,175 to $64,604 from $97,779 in 2023.
For the year ended December 31, 2024, the Company was awarded a grant valued at $1,150,000 , of which $285,000 was recognized as grant income in 2024,versus $233,500 in 2023. The grant money in 2024 comes from the Department of Energy SBIR Phase II grant, and in 2023 comes from the Department of Energy SBIR Phase I grant.
Research and Development
The Company expenses all research and development costs as incurred. For the years ended December 31, 2024, and 2023, the amounts charged to research and development expenses were $2,329,413 and $1,849,967, respectively. The increase is largely due to the vesting and expensing of options in 2024 valued at $1,114,160, versus $467,646 in 2023.
Liquidity and Capital Resources
Liquidity
As of December 31, 2024, the Company had $48,797 in cash and stockholders’ deficit of $2,845,903.As of December 31, 2023, the Company had $41,008 in cash and stockholders’ deficit of $3,561,082. At December 31, 2024, total current liabilities is $2,212,115 compared to $1,503,169 at December 31, 2023. This increase is primarily attributable to deferred wages of management and directors fees. Long-term liabilities at December 31, 2024 total $2,023,375 as compared to $3,088,132 in 2023. The decrease is attributable to the discharging of notes payable with balances of $2,417,502 as of September 18, 2024 in accordance with the Company’s 2019 bankruptcy, offset by additional borrowings of $930,000.
During the fiscal year ended December 31, 2024, the Company’s operating expenses increased $865,964 to $4,056,879 from $3,190,915 in 2023. This increase can primarily be attributed to stock-based compensation of $1,674,710 in 2024 due to the vesting and expensing of options versus $728,911 in 2023.
During the fiscal year ended December 31, 2024, the Company’s investing activities used $115,791 in cash versus $320,505 in 2023. This decrease can be attributed to $287,828 used to purchase machinery and equipment and $32,677 in patent costs in 2023 versus $71,138 and $44,653 respectively in 2024.
During the fiscal year ended December 31, 2024, the Company generated an aggregate of $1,127,000 through its financing activities which is a decrease of $623,024 from fiscal year 2023 where it was $1,750,024. This decrease from the prior year can be attributed to $197,000 net proceeds raised in private placements as compared to $1,002,773 in 2023, offset by the issuance of $930,000 in convertible notes in 2024 versus $700,000 in 2023. There was also $97,251 received from the exercise of options and warrants in 2023 as compared to $0 in 2024, and a $50,000 debt repayment in 2023 versus $0 in 2024.
| 12 |
Capital Resources
At this time, the Company has limited liquidity and capital resources. To continue funding its operations, the Company will need to generate revenue or obtain additional financing for current and future operations. The Company anticipates needing between $15 million and $100 million to pay for its share of the VertiBlue Fuels joint venture and start commercial production of Sustainable Aviation Fuel. The Company anticipates generating revenue from this joint venture 18-24 months from financing. There is no guarantee that we will achieve all of the additional funding that is needed.
As of the date of filing, the Company has raised $930,000 through the issuance of convertible notes in 2024, and $197,000 from the issuance of common stock. The Company also was awarded a grant for $1,150,000 from the Department of Energy, $285,000 of which was received in 2024. The Company raised $1,800,024 through a private placement, the exercise of warrants and options and the issuance of convertible notes in 2023, in addition to $16,115,852 raised through the end of 2022 through its private placement offerings, and in addition to capital raised through debt or convertible notes. However, there is no guarantee that the company will be able to raise any additional capital on terms acceptable to the Company.
The inability to obtain this funding either in the near term and/or longer term will materially affect the ability of the Company to implement its business plan of operations and jeopardize the viability of the Company. In that case, the Company may need to re-evaluate and revise its operations.
Going Concern
The Company has incurred losses since inception, and it may be unable to raise further capital. At December 31, 2024, the Company had a working capital deficit of $2,130,829 and had incurred accumulated losses of $57,255,761 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up activities. As disclosed in Note 2 to the financial statements, there is substantial doubt as to the Company’s ability to continue as a going concern based upon recurring operating losses and its need to obtain additional financing to sustain operations. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses.
Equity
As of December 31, 2024, shareholders’ equity was negative $2,845,903.
There were 307,960,508 shares of common stock issued and outstanding as of December 31, 2024.
| 13 |
There were no preferred shares outstanding.
The Company has paid no dividends.
Critical Accounting Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Financial Statements include estimates of impairment assessment of identifiable intangible assets, valuation allowance for deferred tax assets, and stock based compensation. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.
Stock Compensation
The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation”. We account for all share-based payments and awards under the fair value-based method. We account for the granting of stock options and warrants using the fair value method whereby all awards will be recorded at fair value on the date of the grant. The fair value of all stock options and warrants is expensed over their vesting period with a corresponding increase to additional paid-in capital. The fair value of stock options and warrants is determined using a Black-Scholes valuation model. Option pricing models require the input of subjective assumptions including the length of time employees will retain their vested stock options and warrants before exercising them, expected share price volatility, and interest rate. The fair value of share-based awards is based on the valuation of the common stock on the date of grant. The fair value of time-based awards that are ultimately expected to vest is recognized as an expense on a straight-line basis over the requisite service period. The fair value of performance-based awards is adjusted for the probability of achieving the performance conditions and is recognized on a straight-line basis over the term of the award agreement. Changes in the input assumptions for options and warrants can materially affect the fair value estimate and the Company’s net loss.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell. The Company monitors its investment in property, equipment, and patents and trademarks for impairment at least annually and makes appropriate reductions in the carrying value if it determines that an impairment charge is required based on qualitative and quantitative information.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 8. Financial Statements and Supplementary Data.
Set forth below are the audited financial statements for the Company for the years ended December 31, 2024, and December 31, 2023, and the report thereon of Assure, CPA.
| 14 |
Blue Biofuels, Inc.
Financial Statements
Years Ended December 31, 2024, and 2023
Index to Financial Statements Page
| F-1 |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Blue Biofuels, Inc.
Opinion on the Financial Statements
The Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has accumulated losses since inception and has negative working capital. These factors raised substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
March 19, 2025
We have served as the Company’s auditor since 2023.
| F-2 |
Blue Biofuels, Inc.
BALANCE SHEETS
| December 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Prepaid Expenses | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Other Assets | ||||||||
| Property and Equipment, net of accumulated depreciation and amortization of $ | ||||||||
| Security Deposits | ||||||||
| Right of Use Assets, net of accumulated amortization | ||||||||
| Patents and Trademarks | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Accounts Payable - Related Party | ||||||||
| Deferred Wages and Directors’ Fees - Related party | ||||||||
| Right of Use Lease Liability - Current | ||||||||
| Convertible Notes Payable — Related Party | ||||||||
| Convertible Notes Payable — Other | ||||||||
| Interest Payable - Related Party | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Long term liabilities | ||||||||
| Right of Use Lease Liability, Long Term | ||||||||
| Notes Payable — Related Party | ||||||||
| Convertible Notes Payable — Related Party | ||||||||
| Convertible Notes Payable — Other | ||||||||
| Legacy Notes Payable — Related Party | ||||||||
| Legacy Notes Payable — Other | ||||||||
| TOTAL LONG TERM LIABILITIES | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (NOTES 9 AND 10) | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock; $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common stock; $ par value; shares authorized; issued and outstanding at December 31, 2024, and issued and outstanding at December 31, 2023. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | $ | ( | ) | $ | ( | ) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
Blue Biofuels, Inc
STATEMENTS OF OPERATIONS
| Year Ended | ||||||||
| December 31 | ||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | $ | ||||||
| Operating expense: | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Loss on disposal of assets | ||||||||
| Total operating expenses | ||||||||
| Loss from operations: | ( | ) | ( | ) | ||||
| Other (income) expense: | ||||||||
| Government Grants | ( | ) | ( | ) | ||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Interest expense - related party | ||||||||
| Interest expense - other | ||||||||
| Total other (income) expense | ( | ) | ( | ) | ||||
| Income (Loss) before provisions for income taxes | $ | ( | ) | $ | ( | ) | ||
| Provisions for income taxes | ||||||||
| Net Income (Loss): | $ | ( | ) | $ | ( | ) | ||
| Net income (loss) per share - basic and diluted | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these financial statements
| F-4 |
Blue Biofuels, Inc.
STATEMENTS OF STOCKHOLDERS’ DEFICIT
| Common Stock | Preferred Stock | Additional Paid-in | Accumulated | Total Stockholder’s | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amt | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common stock for services | $ | $ | $ | |||||||||||||||||||||||||
| Issuance of | ||||||||||||||||||||||||||||
| Issuance of | ||||||||||||||||||||||||||||
| Repricing of warrants for services | ||||||||||||||||||||||||||||
| Cancelling | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | ||||||||||||||||||||||||||||
| Issuance of common stock and warrants on the conversion of notes | ||||||||||||||||||||||||||||
| Stock based compensation recognized under the employee, director plan | ||||||||||||||||||||||||||||
| Net Income (Loss) | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common stock for services | $ | $ | $ | |||||||||||||||||||||||||
| Issuance of | ||||||||||||||||||||||||||||
| Issuance of | ||||||||||||||||||||||||||||
| Warrants exercised | ||||||||||||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | ||||||||||||||||||||||||||||
| Stock based compensation recognized under the employee, director plan | ||||||||||||||||||||||||||||
| Employee stock options exercised | ||||||||||||||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these financial statements
| F-5 |
Blue Biofuels, Inc.
STATEMENTS OF CASH FLOWS
| Year Ended | ||||||||
| December 31 | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation | ||||||||
| Extinguishment of debt | ( | ) | ||||||
| Issuance of warrants for interest expense | ||||||||
| Loss on Disposal of assets | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable | ( | ) | ||||||
| Deferred wages and directors’ fees -related party | ||||||||
| Interest payable - related party | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Net purchase of property and equipment | ( | ) | ( | ) | ||||
| Patent and trademark costs | ( | ) | ( | ) | ||||
| Net cash from (used in) investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Net proceeds from issuance of common stock | ||||||||
| Net proceeds from the issuance of convertible notes — RP | ||||||||
| Net proceeds from the issuance of convertible notes — Other | ||||||||
| Proceeds from exercise of warrants and options | ||||||||
| Repayment of debt | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalent at beginning of the year | ||||||||
| Cash and cash equivalent at end of the year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid during the year for | ||||||||
| Interest | $ | $ | ||||||
| Taxes | $ | $ | ||||||
| Supplemental schedule of non-cash financing and investing activities | ||||||||
| Recognition of operating lease liability and right-of-use asset | $ | $ | ||||||
| Issuance of common stock and warrants on the conversion of notes payable | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
| F-6 |
Blue Biofuels, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION
Blue Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels, and lignin technologies sectors.
NOTE 2 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation
of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities in the normal course
of business. The Company has not generated any significant revenue since inception and has incurred losses since inception. As of December
31, 2024, the Company has incurred accumulated losses of $
Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities, and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, or sell additional shares of stock or borrow additional funds. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”).
Principles of Consolidation
The accompanying financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. In 2023 and 2024, the Company did not have any wholly owned subsidiaries, and so the financial statements include the results of the parent company only.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Financial Statements include estimates of depreciable lives of assets, impairment assessment of long-lived assets, valuation allowance of deferred taxes, and valuation of stock-based compensation. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.
Cash and Cash Equivalents
All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.
The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock.
| F-7 |
Stock-based Compensation
The Company uses its common stock for various forms of share based compensation arrangements entered into with directors, officers, employees and consultants. Share based compensation arrangements are accounted for at fair value on the date of grant. For awards with graded vesting, the fair value of each tranche is measured separately and recognized over its respective vesting period. The total amount recognized as expense is adjusted to reflect the number of share options which ultimately vest. The Company recognizes forfeitures as they occur.
The fair value of common stock and share-based awards that do not contain market conditions is based on the valuation of the common stock on the date of grant. The fair value of time-based awards that are ultimately expected to vest is recognized as an expense on a straight-line basis over the requisite service period. The fair value of performance-based awards is adjusted for the probability of achieving the performance conditions and is recognized on a straight line basis over the term of the award agreement.
The fair value of stock options and warrants is determined using a Black-Scholes valuation model. Option pricing models require the input of subjective assumptions including the length of time employees will retain their vested stock options before exercising them, expected share price volatility, and interest rate. The risk-free interest rate is based on the U.S. Treasury Daily Yield Curve Rate with an equivalent term in effect as of the date of grant. The expected option and warrant lives and volatility assumptions are based on historical data of the Company’s closing day market price per share. Changes in the input assumptions can materially affect the fair value estimate and the Company’s net loss.
Property and Equipment
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful
lives of the assets, generally
Patents
If a product is currently under research and development and is not currently approved for market, costs incurred in connection with patent applications are generally expensed in the statement of operations in the period incurred because there is uncertainty as to the future economic benefit of the asset. Conversely, if a product is approved for market (as is the case of the end product ethanol), or if future economic benefit is probable, or if an alternative future use is available to the Company, then such patent costs can be capitalized and amortized over the expected revenue life of the patent(s). Since the Company’s primary end products are expected to be sugar, ethanol, and SAF, which are in wide use, the Company has determined that it is reasonable to capitalize the patent costs associated with its CTS process.
Research and Development
The Company expenses all research and development costs as incurred.
Leases
Upon inception, the Company determines if a contractual arrangement is, or contains, a lease. Right-of-use (“ROU”) assets and liabilities related to operating leases are separately reported in the Balance Sheets. The Company currently has no financing leases.
ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that a lessee would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Operating lease ROU assets and liabilities also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
| F-8 |
Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred.
Common Stock Purchase Warrants and Other Derivative Financial Instruments
The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to its own stock. The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
We evaluate uncertain tax positions in a two-step process, whereby (i) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the related tax authority would be recognized. The Company has no material uncertain tax positions for any of the reporting periods presented.
Basic profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method. The warrants and options are antidilutive for all periods presented. When net loss is reported, diluted and basic net loss per share amounts are the same as the impact of potential common shares is antidilutive.
| F-9 |
Grant Income
Government grants income is recognized in earnings on a systematic basis in a manner that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. A grant receivable is recognized for expenses or losses already incurred but for which grant funding has not yet been received. Grant funding received in excess of expenses or losses incurred is recognized as deferred revenue.
The Company has adopted the disclosure requirements of Accounting Standards Codification (“ASC”) 832 Government Assistance.
Fair Value Measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
At December 31, 2024 and 2023, the Company has no assets or liabilities that are measured at fair value on a recurring basis. The estimated fair value of certain financial instruments including notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
Segment
The Company operates as a single operating segment. All financial information is reviewed by the Company’s Chief Operating Decision Maker (CODM). The Company’s CODM is its chief executive officer. The CODM uses net loss, as presented in the statement of operations, to assess segment performance and allocate resources. The measure of segment assets is reported on the balance sheet as total assets.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. The adoption of this update as of December 31, 2024 had minimal impact on our consolidated financial statements and disclosure.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
| F-10 |
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on our consolidated financial statements and disclosures
From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.
NOTE 4 – PROPERTY AND EQUIPMENT
| PROPERTY AND EQUIPMENT | Life | December 31, 2024 | December 31, 2023 | |||||||||
| Building and Improvements | $ | $ | ||||||||||
| Construction and Engineering | ||||||||||||
| Machinery and Equipment | ||||||||||||
| Furniture and Fixtures | ||||||||||||
| Computer Equipment | ||||||||||||
| Less Accumulated Depreciation | ( | ) | ( | ) | ||||||||
| Property and Equipment | $ | $ | ||||||||||
Total
depreciation expense was $
In
the fiscal year ended December 31, 2023, the Company disposed of laboratory equipment and machinery that was no longer in use for a total
of $
NOTE 5 – PATENTS AND TRADEMARKS
The
Company has obtained two patents and has applied for three more patents on its technology, and has also applied for international patents.
The Company has obtained one trademark and has four more pending. The Company has capitalized the legal and filing fees of its patents
and trademarks in the amount of $
NOTE 6 – DEBT
Activity for the years ended December 31, 2024 and 2023 associated with the Company’s debt is outlined below.
Notes Payable – Related Party
During 2023, the Company entered into long term convertible note agreements of $460,000 with board member Chris Kneppers. These notes bore interest at 10% and were convertible into shares of the Company’s comment stock at rates that ranged from $0.13 to $0.25 per share. A portion of the notes were due to be paid or automatically converted in 2024. The remaining were to be paid when the Company completes a capital raise of at least $5.0 million.
| F-11 |
In 2024, prior to June 22, 2024, the Company borrowed an additional $240,000 from Mr. Kneppers. These notes were non-interest bearing and were initially due 13 months after issuance. The outstanding principal balance due to Mr. Kneppers on June 22, 2024 was $940,000.
On June 22, 2024, the terms of all of the convertible notes due to Mr. Kneppers were modified. Under the modification, the notes are now payable on the earliest of the date on which the Company (1) uplists to the Nasdaq or NYSE; (2) receives $5 million in equity financing; or (3) begins generating revenue from its first facility. Subsequent to the amendment, the Company borrowed an additional $440,000 with same terms. Total outstanding principal balance due Mr. Kneppers at December 31, 2024 is $1,140,000. In January and February 2025, the Company borrowed an additional $100,000 from Mr. Kneppers with the same terms.
In connection with modification of the terms of all of Mr. Kneppers notes, interest stopped accruing on March 31, 2024. In lieu of interest, the Company will pay Mr. Kneppers 100% of the outstanding loan balance due him contingent upon the financing of the first plant. All interest and loan amounts automatically come due upon a change of control of the Company or if the Company files for bankruptcy under Chapter 11 or Chapter 7. During the years ended December 31, 2024 and 2023, the Company recognized $11,500 and $35,151, respectively, in interest expense on these notes due to Mr. Kneppers. At December 31, 2024 and 2023, accrued interest payable to Mr. Kneppers is $46,651 and $35,151, respectively.
Convertible Notes Payable – Related Party
In June and November 2023, the Company entered two long-term convertible notes with board member Edmund Burke with principal amounts of $25,000 and $15,000, respectively, to be repaid when the Company receives an equity investment of at least $3 million. The notes may convert into common stock at $0.13/share at the option of the holder for a total of 307,692 shares. Until repayment, the note agreement requires the Company to issue to Mr. Burke 80,000 warrants having a strike price of $0.15 and an expiration of 5 years every twelve months in lieu of interest. During the years ended December 31, 2024 and 2023, 80,000 warrants with a fair value of $5,932 and $8,180, respectively, were issued to Mr. Burke (see Note 7). The fair value of these warrants is included in interest expense – related parties on the statement of operations.
In April 2023, the Company entered a long-term convertible note with board member Edmund Burke, with a principal balance of $150,000, to be repaid when the Company receives an equity investment of at least $1.5 million. The notes may convert into common stock at $0.13/share at the option of the holder for a total of 1,153,846 shares. Until repayment, the note agreement requires the Company to issue to Mr. Burke 100,000 warrants having a strike price of $0.15 and an expiration of 5 years every six months in lieu of interest. During the years ended December 31, 2024 and 2023, 100,000 warrants with a fair value of $6,518 and $13,914, respectively, were issued to Mr. Burke (see Note 7). The fair value of these warrants is included in interest expense – related parties on the statement of operations.
Convertible Notes Payable – Non-Related Parties
In January through April 2024, the Company issued convertible notes to four different individuals totaling $250,000. These notes carried no interest and were convertible, at the option of the lender, into common shares of the Company at 8 cents per share plus a warrant with a strike price of 10 cents per share and a 5-year expiration. These notes were due 13 months after issuance and would automatically convert into shares of the Company’s common stock if not paid. In the second half of 2024, all of these notes converted into 3,125,000 shares of the Company’s common stock and 3,125,000 warrants (see Note 7).
In December 2023, the Company issued a convertible note to one individual for $50,000. The note was non-interest bearing and had a term of thirteen months. In January 2025, the note was converted into 625,000 shares of the Company’s common stock and 625,000 warrants with a strike price of $0.10 per share and a five year expiration.
| F-12 |
Legacy Notes Payable
In July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. These notes had a value of $2,002,126 and accrued interest at a rate of six percent (6%) per annum. As of December 31, 2018 and December 31, 2017, the total interest accrued on the notes was $278,795 and $176,460 respectively. All of the notes were due on August 4, 2017 and then were in default. However, the notes were held by related parties with the understanding that the notes were not to be paid until the Company begins generating profit. The Company renegotiated some of these notes during its Chapter 11 proceedings, whereas others failed to submit a claim and were discharged upon the Court’s Confirmation Order approving the Company’s Chapter 11 Plan on September 18, 2019. The renegotiated amounts, as per the Plan Confirmation are all to be paid from 50% of the future net profits and discharged to the extent unpaid five years after the Plan effective date of September 18, 2019. These amount are 1) Mark Koch $240,990 plus 6% interest on any portion not repaid within 12 months of the Company’s first reported quarterly net profit; 2) Animated Family Films $579,942 out of the Company’s net profits plus 6% interest; 3) Steven Dunkle, CTWC, & Wellington Asset Holdings $1.5 million plus 6% interest once there is positive quarterly EBITDA from the first plant of Company, or, at its option, may convert that into an equity investment in the first plant of the Company, measured by a percentage of the total cost to build, subject to a minimum equity interest of 1.25% in said plant. This was discharged on September 18, 2024, and the Company recognized a gain on debt extinguishment of $2,320,932.
Legacy Notes Payable — Other
On February 28, 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable on May 1, 2018. The note does not accrue interest, however the Company provided 2,000,000 inducement shares to secure the note. These inducement shares were valued at $84,000 and are being amortized over the life of the note. The note’s maturity date was extended to 7/1/2018. If the note is not repaid at maturity, then an additional 5,000,000 shares of common stock will be due. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $100,000 is to be paid out of future gross revenues to satisfy this note in full, with no additional shares to be issued.
On May 15, 2018, the Company entered into a short term loan with Christopher Jemapete, with a principal balance of $50,000 due and payable on May 16, 2019. The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration. These inducement shares were valued at $36,250 and are being amortized over the life of the note; the warrants had a value of $24,449. On August 25, 2018, this note was restructured to remove the warrants. As of June 30, 2018 accrued interest on this note is $315. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315 is to be paid out of future gross revenues.
On May 15, 2018, the Company entered into a short term loan with Pamela Jemapete, with a principal balance of $50,000 due and payable on May 16, 2019. The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration. These inducement shares were valued at $36,250 and are being amortized over the life of the note; the warrants had a value of $24,449. On August 25, 2018, this note was restructured to remove the warrants. As of June 30, 2018 accrued interest on this note is $315. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315 is to be paid out of future gross revenues.
In July 2016, the Company issued a short-term note payable to a third party in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. The note had a principal balance of $96,570 and accrued interest at a rate of six percent (6%) per annum. As of December 31, 2018, and December 31, 2017, the total interest accrued on the note was $14,382 and $8,588 respectively. The note was due on August 4, 2017 and was then in default. The Company renegotiated this note during its Chapter 11 proceedings, and as per the Plan Confirmation, now the $96,570 is to be paid with no interest out of the same 50% of the future net profits of the Company as the notes mentioned above, if any, or discharged to the extent unpaid five years after September 18, 2019. This Note was discharged on September 18, 2024, and the Company recognized a gain on debt extinguishment of $96,570.
| F-13 |
In November 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $143,000 due and payable on May 30, 2018. The note carries an 8% one-time interest charge, a $43,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $39,500 and were amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. In May 2018, the company made two principal payments totaling $40,000. The note went into default on June 1, 2018 and incurred a 40% penalty of the outstanding balance immediately prior to the default event. On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central District. That case was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the Southern District of Florida. Negotiations took place and a settlement was reached on this note and a subsequent note, and confirmed as part of the Plan Confirmation Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company.
In February 2018, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $165,000 due and payable on September 21, 2018. The note carries an 8% one-time interest charge, a $15,000 original issue discount and a 40% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note. These inducement shares were valued at $14,500, and were amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. The Note went into default on June 1, 2018, through a cross default provision with another Note to Hoppel, and incurred a 40% penalty of the outstanding balance immediately prior to the default event. On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central District. That case was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the Southern District of Florida. Negotiations took place and a settlement was reached on this note and a prior note, and confirmed as part of the Plan Confirmation Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company to settle both notes.
On March 27, 2019, the Company entered into an agreement with another creditor, such that its debt will be reduced from $32,000 to $20,000 payable out of future gross revenues, upon the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed by the Court on September 18, 2019.
A summary of all Notes that remain of those indicated in the Notes above is as follows:
| Notes Payable | December 31, 2024 | December 31, 2023 | ||||||
| Current Convertible Notes — Other | $ | $ | ||||||
| Current Convertible Notes – Related Party | ||||||||
| Long Term Convertible Notes Payable – Related Party | ||||||||
| Long Term Convertible Notes – non-Related Party | ||||||||
| Long Term Notes Payable – Related Party | ||||||||
| Long Term Notes Payable from future revenue — Related Party | ||||||||
| Long Term Notes Payable from future revenue — Other | ||||||||
| Long Term Note Payable from future profits — Related Party | ||||||||
| Long Term Note Payable from future profits — Other | ||||||||
| TOTAL NOTES PAYABLE | $ | $ | ||||||
As of December 31, 2024, only $50,000 of the $1,700,630 outstanding notes payable was due at a specific point in time. That $50,000 was converted in January 2025. Of the remaining amount outstanding: $1,330,000 is due on a successful capital raise ranging from $1.5 million to $5 million; and $320,630 will be paid from future revenue or profits.
| F-14 |
NOTE 7 – STOCKHOLDERS’ EQUITY
Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. The Company has yet to designate any rights, preferences and privileges for any of its authorized Preferred Stock.
During the year ended December 31, 2024, the Company had the following transactions associated to its shares of common stock:
| ● | Sold
units consisting of one shares of its common stock consisting of one share of common stock and one warrant through private
placements for $ |
| ● | Issued
shares of its common stock with a fair value of $ |
| ● | Issued
shares of its common stock upon conversion of notes payable with a principal balance of $ |
During the year ended December 31, 2023, the Company had the following transactions associated to its shares of common stock:
| ● | Sold
units consisting of one share of common stock and one warrant through private placements for $ |
| ● | Issued
shares of its common stock for services with a fair value of $ |
| ● | Issued
|
| ● | Issued
shares of common stock upon exercise of employee stock options for proceeds of $ |
Warrants
| Number of Warrants | Weighted Average Exercise Price | |||||||
| Balance, December 31, 2022 | $ | |||||||
| Issued in connection with: | ||||||||
| Common stock units sold for cash | ||||||||
| Services | ||||||||
| Debt-related interest | ||||||||
| Expired | ( | ) | ||||||
| Exercised | ( | ) | ||||||
| Balance, December 31, 2023 | ||||||||
| Issued in connection with: | ||||||||
| Common stock units sold for cash | ||||||||
| Services | ||||||||
| Debt-related interest | ||||||||
| Debt conversion | ||||||||
| Expired or rescinded | ( | ) | ||||||
| Exchanged for stock options | ||||||||
| Balance, December 31, 2024 | $ | |||||||
As of December 31, 2024, outstanding warrants have a weighted average remaining life of years.
During
the year ended December 31, 2024, the Company issued warrants for services having a fair value of $
| F-15 |
During
the year ended December 31, 2023, the Company issued warrants for services having a fair value of $
Stock Options:
In 2021, the Company adopted the 2021 Employee, Director Stock Plan (the “2021 Plan”) to provide the Corporation with share-related mechanisms to attract and retain persons eligible to participate in the 2021 Plan, motivate Participants to achieve long-term Company goals, and further align holders’ interests with those of the Company’s other stockholders.The Plan was approved by the Corporation’s shareholders on June 2, 2021. The Plan allows for grants of restricted stock, stock options and other forms of incentive compensation to our officers, employees, directors and consultants. Under the terms of the Plan, the aggregate maximum number of shares that may be issued pursuant to awards granted under the Plan cannot 15% of the Company’s issued and outstanding common stock on a fully-diluted basis. Shares delivered under the Plan will be from authorized but unissued shares of the Company.
Number of Options | Weighted Average Exercise Price | |||||||
| Balance, December 31, 2022 | $ | |||||||
| Options granted | ||||||||
| Options expired | ( | ) | ||||||
| Options exercised | ( | ) | ||||||
| Balance, December 31, 2023 | ||||||||
| Options granted | ||||||||
| Options expired | ( | ) | ||||||
| Exchanged for warrant | ( | ) | ||||||
| Balance, December 31, 2024 | $ | |||||||
| Vested, December 31, 2024 | $ | |||||||
During the years ended December 31, 2024 and 2023, the Company recognized share based compensation expense from options of $ (general and administrative expense of $ and research and development expense of $) and $ (general and administrative expense of $ and research and development expense of $), respectively.
The weighted average remaining life of outstanding and vested options is years and years, respectively. At December 31, 2024, outstanding vested options had an intrinsic value of $, and the total intrinsic value of all options is $
During
the year ended December 31, 2024, the Company granted options with a fair value of $
During
the year ended December 31, 2023, the Company granted options with a fair value of $
| F-16 |
Fair Value of Warrants and Stock Options issued:
| 2024 | 2023 | |||||||
| Stock price | $ | - $ | $ | - $ | ||||
| Risk-free interest rate | % - | % | % - | % | ||||
| Expected term (in years) | to | to | ||||||
| Expected share price volatility | % - | % | % to | % | ||||
| Expected dividend yield | % - | % | % - | % |
NOTE 8 – INCOME TAXES
No
benefit (provision) has been recognized for the years ended December 31, 2024 and 2023. The reconciliation of income tax benefit at the
U.S. statutory rate of
| December 31 | ||||||||
| 2024 | 2023 | |||||||
| Statutory federal income tax rate | % | % | ||||||
| State income tax, net of federal benefits | % | % | ||||||
| Change in Valuation Allowance | ( | )% | ( | )% | ||||
| Income tax provision (benefit) | % | % | ||||||
The tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2024 and 2023 are as follows:
| Years Ended, December 31 | ||||||||
| 2024 | 2023 | |||||||
| Deferred tax asset | ||||||||
| Net operating loss carryovers | $ | $ | ||||||
| Total deferred tax assets | ||||||||
| Valuation Allowance | ( | ) | ( | ) | ||||
| Deferred tax asset, net of allowance | $ | $ | ||||||
As
of December 31, 2024, the Company has U.S. net operating loss carryforwards (“NOLs”) of approximately $
| F-17 |
In 2024 and 2023, the Company evaluated its tax positions for years which remain subject to examination by major tax jurisdictions and as a result concluded no adjustment was necessary. The Company had no unrecognized tax benefits as of December 31, 2024 and 2023. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in its income tax provision. U.S. tax returns for the years 2021 to 2023 remain subject to examination but there are currently no ongoing exams in any taxing jurisdictions. Tax returns for years prior to 2021 may remain open with respect to net operating loss carryforwards that are utilized in a later year, as tax attributes from prior years can be adjusted during an audit of a later year.
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. The Company is not in any litigation at this time.
Leases
During
2024 and 2023, the Company maintained a lease agreement for office and laboratory space in Palm Beach Gardens, Florida, classified as
an operating lease. The original lease, signed in 2019, had a -year term and was renewed by the Company in 2024 for an additional
five years. The renewed lease includes escalating monthly payments ranging from $
At December 31, 2024, minimum lease payments to be paid by the Company are as follows:
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Present value of lease liabilities | ||||
| Current portion | ( | ) | ||
| Long term portion | $ |
Additionally,
the Company leases
During
the year ended December 31, 2024 and 2023, the Company recognized rent expense, including common area maintenance fees and state sales
tax, of $
| F-18 |
NOTE 10 – RELATED PARTIES AND TRANSACTIONS
Related Party transaction with the Company are as follows:
| 1) | Short-term notes payable, convertible notes, and legacy liabilities issued to related parties are described in NOTE 6. | |
| 2) | A board resolution was passed on February 13, 2020 that pledged the patents and pending patents to secure the back pay claims of Ben Slager, CEO, Anthony Santelli, CFO, and Charles Sills, Director. This was done to ensure the continued involvement of management to build the Company while they receive less than full salaries. | |
| 3) | During 2024, the board
of directors approved an increase in salaries to two officers of the Company retroactive to August 1, 2023, in light of the fact
that they are not receiving payments of salaries on a consistent basis. CEO Ben Slager is to receive annual salary of $ | |
| 4) | In June 2024, the board
of directors approved a partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director Chris Kneppers
to be paid in restricted stock units and stock options of | |
| 5) | As of April 1, 2024, the
board of directors approved ceasing accruing interest on back pay due to officers and on directors’ fees. In lieu of interest,
the Company will pay an additional $ | |
| 6) | As of August 28, 2024,
|
NOTE 11 – GRANT INCOME
In
September 2024, the Company was awarded a Small Business Innovation Research (“SBIR”) Phase II grant by the U.S. Department
of Energy (DOE) in the amount of $
During
the year ended December 31, 2024, $
In
July, 2023, the Company was awarded an SBIR Phase I grant by the U.S. DOE in the amount of $
NOTE 12 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financial statements were available to be issued. Based on this evaluation, the Company has identified the following subsequent events:
Subsequent to December 31, 2024, the Company issued shares of its common stock upon the cashless exercise of stock options.
The
Company converted a convertible note for $
The
Company borrowed an additional $
The board of directors granted options with exercise price of $ to the Company’s employees.
| F-19 |
ITEM 9. – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of December 31, 2024. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that our disclosure controls and procedures were effective.
Management’s Annual Report on Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.
Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) 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.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the December 31, 2024, based on the framework set forth in Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was effective as of the Evaluation Date.
Changes in Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART III
ITEM 10. – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors, Executive Officers and Significant Employees
The following table sets forth information with respect to the Company’s directors and executive officers.
| Name | Age | Position and Offices | ||
| Benjamin Slager | 62 | Chief Executive Officer and Chairman | ||
| Anthony Santelli | 59 | Chief Financial Officer and Director | ||
| George D. Bolton | 75 | Director and Secretary | ||
| Charles F. Sills | 81 | Director | ||
| Peter Zimeri | 71 | Director | ||
| Edmund Burke | 64 | Director | ||
| Chris Kneppers | 74 | Director |
Benjamin Slager became a director in October 2016, the Chief Technology Officer on April 1, 2017, the Chief Executive Officer on July 6, 2018, and Chairman on February 26, 2019. Mr. Slager is a seasoned business professional with significant experience in corporate finance, venture capital, and entrepreneurship. He has a proven record in founding, developing and selling high tech companies. He is the inventor of the patented CTS technology.
Mr. Slager began his career in 1987 as a financial analyst with a venture capital firm, NesBic Holding BV, in Utrecht, the Netherlands. He also served as a market maker on the European Option Exchange in Amsterdam, while working for International Option Investment BV, in Amsterdam. In 1990, Mr. Slager turned his focus to sales and marketing while serving as a sales engineer and international sales director for ASM Pacific technologies in the Netherlands. In 1993, Mr. Slager began a 28-year career as a serial entrepreneur in starting, developing, and selling technically innovative companies. He was the Founder and CEO of NedCard and MicroIdentt a company assembling chips for bank cards and other electronic identification carriers. He started and grew that company from zero to a $100 million revenue base with affiliates in several countries. Further Ben was founder and CEO of SolarExcel BV, which had a patented solution to increase solar cell performance. He was also the CEO of Novameer BV, a company with high tech patented fibers. Ben sold off all of these companies to large multinationals. He has 20 families of patents summing to 108 in his name, divided over different territories in the world, including the CTS process that is owned by Blue Biofuels.
Mr. Slager received his Bachelor of Science in Chemical Engineering from Technical College of Chemical Engineering in Hilversum, the Netherlands, in 1985. He also received a degree in Business Administration from Nijenrode University for Business Administration in 1987. The Company’s board determined that Mr. Slager is well-qualified to serve in senior management and member of the board of directors through his experience developing our technology and his prior experience founding, developing and selling technology companies. He is not a director of any other public company.
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Anthony Santelli II became a director on May 4, 2018, the Chair of the Audit Committee on May 11, 2018, until 2020, the Chief Operating Officer on October 20, 2018, and the Chief Financial Officer on February 1, 2020. His financial expertise along with his experience restructuring and building companies is the reason he was selected to be a board member and senior executive. Dr. Santelli served as a money manager for 20 years as the Founder and Chief Executive Officer of AES Capital, a hybrid venture capital-hedge fund management company. Dr. Santelli is an entrepreneur who has started, helped finance, or turnaround, various private companies and micro-cap publicly traded companies concentrating in the mining, energy and alternative energy fields. He has served in senior management and board positions at various private and micro-cap companies, although he has not served on the board of any other public company in the past five years. He previously was employed by Andersen Consulting, now known as Accenture, rising to the level of a Senior Management Systems Consultant before going to graduate school.
Dr. Santelli received his M.A. and Ph.D. in Economics from George Mason University, did graduate studies in economics and finance at NYU, and has a B.S. in Industrial Engineering from Cornell University. He had taught economics and finance at Union College and George Mason University prior to creating AES Capital. He is not currently a director of any other public company.
Charles F Sills became a director of the Company in July 2015. Mr. Sills has worked for the Defense Leadership Forum since 2014 as National Program Director for the Defense Contracting Summit Conferences. He has extensive experience planning and directing international industrial, infrastructure, environmental and energy initiatives, having served as a member of the Danube Task Force, the governing council that ran the Danube Basin Environmental Restoration Program led by the World Bank, the European Bank for Reconstruction & Development and the UN Development Program, involving 13 countries from Austria to Moldova. He also served on the Japan-U.S. Joint Fund for Social & Economic Development in Central/Eastern Europe, the Helsinki Commission focused on the environmental clean-up of the Baltic Sea, the Kaliningrad Defense Conversion Initiative, and the NGO Delegation to NAFTA, where he helped draft the Environmental Supplements. Mr. Sills was responsible for securing major funding support for the Smithsonian Institute’s biodiversity preservation/cancer cure research program in Brazil’s Amazon region; for the Sassari, Sardinia symposium on ozone depletion organized by the International Council of Scientific Unions; and for the White House Presidential Awards program sponsored by the President’s Council on Sustainable Development. He is not a director of any other public company.
Mr. Sills has been engaged in the renewable energy sector since the 1980’s, when he led the Martin Marietta Aerospace (now Lockheed Martin) team that won the contract for and installed the world’s largest (at that time) solar photovoltaic energy installation, under a pilot program co-funded by the U.S. and Saudi Arabian Governments; researched and wrote a worldwide survey of renewable energy technologies and commercialization opportunities; and testified before Congress on the need for pro-active U.S. Government support for advanced renewable energy R&D and demonstration programs. Currently, he serves on both the Defense & Security Advisory Committee and the International Advisory Committee for the American Council on Renewable Energy (“ACORE”); and serves as a Board Member and Advisor on Energy and Environment for the Eurasia Center/Eurasian Business Coalition, where he has planned and moderated conferences on “Doing Business with the BRICS (Brazil, Russia, India, China and South Africa)”, and energy and infrastructure investment opportunities associated with the “New Silk Road”.
He has extensive experience in Government Contracting, and an advocate for Small Business access to Federal and Military contracting opportunities, which is the reason he was chosen to be a director. (He is not a director of any other public company.) He has served as a member of the U.S. Chamber of Commerce’s Small Business Council, and an observer to the White House sponsored Inter-Agency Task Force on Veterans Business Development. He is President of FED/Contracting LLC, a consultancy that assists Small Businesses in partnering with Prime Contractors, and helps the Prime Contractors qualify Veteran and Minority vendors as teammates for project opportunities with mandated Diversity Supplier content. Based on the U.S. Defense Dept. ‘Mentor-Protégé’ program that he managed, Trillacorpe Construction, a Service-Disabled Veteran-Owned Small Business, was awarded the 2010 Defense Department Nunn-Perry Award for “superior performance in the areas of business growth and return on investment, Government contracting, technical performance and quality management”.
George D. Bolton became a director of the Company in July 2015. Mr. Bolton had been retired since 2010. Mr. Bolton was selected to the board for his agriculture industry experience and his expertise with climate change. Although not a member of any other corporate board, he is a seasoned business professional with significant experience in production agriculture. From the management of fertilizer and chemical plants to the development and integration of a precision farming system for a national fertilizer and chemical distribution company, George has worked to develop and integrate new technologies for agriculture.
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Prior to becoming a director of the Company, Mr. Bolton recognized the impact carbon intensity would have on agriculture. Mr. Bolton was one of the founders of AgCert International, and co-author of the first agricultural baseline methodology approved by the United Nations Framework Convention on Climate Change (UNFCC) AM0016: Greenhouse gas mitigation from improved animal waste management systems in confined animal feeding operations. Under his direction this methodology was the catalyst which allowed AgCert International to construct over 725 biodigesters impacting more than 94% of the qualifying concentrated animal feeding operations in Mexico and Brazil. The construction and operation of these biodigesters dramatically improved each farms local environment impact while also lowering their carbon intensity. The cooperation between AgCert and the local farmers enabled the use of the Clean Development Mechanism of the UNFCC to produce and market millions of certified emissions for the purchasers, as well as covering the costs of each farm’s biodigesters.
Peter Zimeri is self-employed and has been semi-retired since 2010. He has been the single largest private producer of electricity in Central America through his ownership and operation of five power plants producing 120 MW of electricity. He has also been the owner of a textile plant with a workforce of over 3000. He has degrees in Mechanical and Aeronautical Engineering from Georgia Tech. He has been a board member of the International Civil Aviation Organization and has extensive contacts in the aviation world, which is the reason he was selected to be a director, along with his experience managing plants. He is not currently a member of any other corporate board.
Edmund (Ned) Burke has been a director of the Company since 2020 and previously served in the financial services industry for the last 36 years, and his extensive contacts are the reason he was selected to be a board member. He recently retired as CEO of ALPS Holdings Inc., a wholly owned subsidiary of SS&C Technologies Inc. Ned joined ALPS in 1992 as National Sales Manager, was named President in 2000 and became CEO in 2005 with the acquisition of ALPS by private equity firm Lovell Minnick Partners. ALPS was then acquired by DST Systems in 2011 and he remained CEO through DST being acquired by SS&C until his retirement in 2019. From the time he became president in 2000 through his retirement in 2019, his company’s revenue grew from approximately $10 million to over $220 million. Prior to ALPS, he held Regional Vice President positions with Fidelity Investments and Pioneer Investments.
Mr. Burke currently serves on the boards of 4 investment company complexes: Financial Investors Trust, ALPS ETF Trust, Clough Global Funds and Liberty AllStar Funds. He also is an investor/advisor to a number of small companies. He has a B.A. in Economics from the University of New Hampshire.
Chris Kneppers Chris has been a director of the Company since September, 2022, and is not on the board of any other public company. He was educated in South Africa as a Mechanical Engineer. He has 45 years of experience in the Construction industry in several engineering disciplines with an emphasis in Cost Estimating. His experience includes involvement in a wide range of projects, including large civil works, diesel generation in power stations, and solar electric installations.
Chris Kneppers was one of the Principals of MKA International, Inc. (formerly Madsen, Kneppers & Associates) and has been involved in its running and development since 1989. MKA is a multi-disciplined Construction and Engineering Consulting firm. Chris recently stepped down from his position as Vice President and still serves as a Board Member. His role in the 33 years with the firm included establishing and developing offices, attracting and growing a client base, along with facilitating various technical disciplines within the company to address the needs of clients.
Audit Committee and Audit Committee Financial Expert
The Company’s board of directors has an audit committee which currently consists of Edmund Burke (chair), Chris Kneppers, and Peter Zimeri. Mr. Burke is the audit committee financial expert.
Other Board Committees
The Company’s board of directors has a compensation committee consisting entirely of independent directors, with Edmund Burke as Chair and Peter Zimeri and Charles Sills as the other members.
The Company has established a nominating and corporate governance committee, consisting entirely of independent directors, with George Bolton serving as chair and Edmund Burke and Peter Zimeri as the other members.
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Involvement in Certain Legal Proceedings
During the past five years no director, person nominated to become a director, executive officer, promoter or control person of the Company has: (i) had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or (iv) been found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated except for the following:
Four of the directors of the Company (Messrs. Slager, Santelli, Sills and Bolton) were directors or executive officers of the Company at the time of the Company’s filing of a Voluntary Petition for Non-Individuals Filing for Bankruptcy pursuant to Chapter 11 of the United States Bankruptcy Act in the United States Bankruptcy Court for the Southern District of Florida (Case No. 18-23071-EPK) on October 22, 2018. This Bankruptcy Proceeding was closed on October 25, 2019.
Section 16(a) Beneficial Ownership Reporting Compliance
Our shares of common stock are registered under the Securities Exchange Act of 1934, and therefore our officers, directors and holders of more than 10% of our outstanding shares are subject to the provisions of Section 16(a) of such Act which requires them to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. The Company filed a Form 15 in 2018 ceasing to be a “reporting Company”. On January 5, 2021, the Company filed a Form 10, which became effective 60 days later, on March 8, 2021. Based solely upon our review of reports submitted to us during the fiscal year ended December 31, 2023, The following table sets forth the name of any such person that failed to file the required forms on a timely basis, including the number of late reports, the number of transactions not reported on a timely basis and any known failure to file a required form.
| Name | Number of late reports | Number of transactions not reported timely | ||||||
| George Bolton | 1 | 0 | ||||||
Code of Ethics
The Company’s board of directors has adopted a code of ethics that its officers, directors and any person who may perform similar functions is subject to. The Code of Ethics does not indicate the consequences of a breach of the code. If there is a breach, the board of directors would review the facts and circumstances surrounding the breach and take action that it deems appropriate, which action may include dismissal of the employee who breached the code.
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ITEM 11. – EXECUTIVE COMPENSATION
The Company’s board of directors has a compensation committee consisting entirely of independent directors, with Peter Zimeri as chair and Edmund Burke and Charles Sills as the other members. The Company’s compensation philosophy is based on its belief that its compensation programs should be aligned with stockholders’ interests and business objectives; reward performance; and be externally competitive and internally equitable. The Company seeks to achieve three objectives, which serve as guidelines in making compensation decisions:
| 1. | Providing a total compensation package which is competitive and therefore enables it to attract and retain, high-caliber executive personnel; | |
| 2. | Integrating compensation programs with its short-term and long-term strategic plan and business objectives; and | |
| 3. | Encouraging achievement of business objectives and enhancement of stockholder value by providing executive management long-term incentive through equity ownership. |
The Company may compensate its officers with cash compensation, common stock and common stock options. The Company has not established any quantifiable criteria with respect to the level of compensation, stock grants or options. Rather, the Board of Directors and its compensation committee will evaluate cash, stock grants and stock options paid to executives in similarly situated companies.
With respect to stock grants and options which may be issued to the Company’s officers and directors, the Board and its compensation committee will consider an overall compensation package that includes both cash and stock-based compensation which would be in line with the Company’s overall operations and compensation levels paid to similarly situated companies. Under the Company’s 2012 Employee, Director Stock Plan, the administrator can provide for the grant of non-qualified stock options (“Non-Qualified Stock Options”), incentive stock options (“ISOs”, together with Non-Qualified Stock Options referred to herein as “Stock Options”), stock appreciation rights (“SARs”), restricted stock (“Restricted Stock”) and registered stock (“Registered Stock”), (collectively, the “Awards”) to eligible Participants.
As of the date of this filing, the Company has two executives.
Commencing on January 1, 2021, Ben Slager, CEO, has an employment contract to receive a salary of $360,000 per annum, along with health insurance. Various bonuses are offered based on performance and may be accrued, at his discretion, if the Company doesn’t have the funds to pay them. He has received only partial salary and no bonuses due since Q3 2023. In February 2024, his salary was increased due to inflation and higher cost of living to $525,000, most of it being accrued and unpaid, at his discretion, which is expected to be paid when the Company raises significant capital to fund its future. His employment contract indicates that he must be given 6-months’ notice of termination, and shall receive a severance package of one-month’s pay in addition to the 6-months’ notice, or 3 months’ salary if he dies. If there is a change of control, all his options shall vest.
As of December 31, 2024, Ben Slager is owed $839,738 in back pay and accrued bonuses, along with interest of $18,013.
Commencing January 1, 2021, Anthony Santelli, CFO, has an employment contract to receive a salary of $250,000 per annum, and may not be terminated until all his back pay due is paid. Various bonuses are offered based on performance and may be accrued, at his discretion, if the Company doesn’t have the funds to pay them. He has received only partial salary and no bonuses due since Q3 2023. In February 2024, his salary was increased due to inflation and higher cost of living to $325,000, most of it being accrued and unpaid, at his discretion, which is expected to be paid when the Company raises significant capital to fund its future. In addition, the CFO must be given 6-months’ notice of termination and shall receive a severance package of one-month’s pay in addition to the 6-months’ notice, or 3 months’ salary if he dies. If there is a change of control, all his options shall vest.
As of December 31, 2024, Anthony Santelli is owed $582,189 in back pay and accrued bonuses, along with interest of $72,205.
As of December 31, 2024, AES Financial Advisors, LLC, an entity owned by Anthony Santelli II and his wife Marjorie Santelli, Esq., is owed $72,670, primarily dating from 2018, prior to when Dr. Santelli became an officer of the Company, plus interest of $20,235.
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During
the year ended December 31, 2024, none of our directors or executive officers
The following tables set forth the compensation paid by the Company to its officers and directors for the fiscal years ended December 31, 2024, and December 31, 2023. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any, actually paid. Accrued back pay is included in Other in the year in which it is actually paid. Unvested but granted stock options are included in the year in which they vest. The compensation discussed addresses all compensation awarded to or paid to its named executive officers.
| Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards (1) | Non-Equity Incentive Plans | Non-Qualified Deferred Comp on Earnings | Other (back pay) | Total | |||||||||||||||||||||||||||
| Benjamin Slager | 2024 | 150,050 | - | - | 295,961 | - | - | - | $ | 446,011 | ||||||||||||||||||||||||||
| (CEO) | 2023 | 265,500 | - | - | - | - | - | - | $ | 265,500 | ||||||||||||||||||||||||||
| Anthony Santelli II | 2024 | 70,142 | - | - | 193,110 | - | - | $ | 263,252 | |||||||||||||||||||||||||||
| (CFO) | 2023 | 177,082 | - | - | - | - | - | $ | 177,082 | |||||||||||||||||||||||||||
| (1) | See note 7 to the audited financial statements included in this filing for assumptions used in valuation. |
OUTSTANDING EQUITY AWARDS
Grants of Plan-Based Awards
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Unearned Options (#) | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | ||||||||||||||
| Ben Slager, CEO Chairman | 12/11/2024 | - | 4,493,450 | $ | 0.11 | 12/11/2034 | ||||||||||||||
| Anthony Santelli, CFO Director | 12/11/2024 | - | 3,279,476 | $ | 0.11 | 12/11/2034 | ||||||||||||||
| Ben Slager, CEO Chairman | 12/11/2024 | 826,446 | - | 826,446 | $ | 0.121 | 12/11/2029 | |||||||||||||
| Ben Slager, CEO Chairman | 12/11/2024 | 2,173,554 | 2,173,554 | $ | 0.11 | 12/11/2034 | ||||||||||||||
| Anthony Santelli, CFO Director | 12/11/2024 | 826,446 | 826,446 | $ | 0.121 | 12/11/2029 | ||||||||||||||
| Anthony Santelli, CFO Director | 12/11/2024 | 1,173,554 | 1,173,554 | $ | 0.11 | 12/11/2034 | ||||||||||||||
| Ben Slager, CEO Chairman | 3/1/2023 | - | 6,000,000 | $ | 0.20 | 3/1/2033 | ||||||||||||||
| Anthony Santelli, CFO Director | 3/1/2023 | - | 4,000,000 | $ | 0.20 | 3/1/2033 | ||||||||||||||
| Ben Slager, CEO Chairman | 1/5/2021 | 6,000,000 | - | - | $ | 0.15 | 1/5/2031 | |||||||||||||
| Anthony Santelli, CFO Director | 1/5/2021 | 4,000,000 | - | - | $ | 0.15 | 1/5/2031 | |||||||||||||
| Ben Slager, CEO Chairman | 5/9/2020 | 4,940,000 | - | 5,000,000 | $ | 0.10 | 5/9/2030 | |||||||||||||
| Anthony Santelli, CFO Director | 5/9/2020 | 5,000,000 | - | 5,000,000 | $ | 0.10 | 5/9/2030 | |||||||||||||
| Total | 24,940,000 | 32,772,926 | ||||||||||||||||||
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Warrants Issued to Management
Grants of Plan-Based Awards
| Name | Grant Date | Number of Securities Underlying Unexercised Warrants (#) Exercisable | Number of Securities Underlying Unexercised Warrants (#) Unexercisable (1) | Warrant Exercise Price ($) | Warrant Expiration Date | |||||||||||||||
| NONE | - | - | $ | - | ||||||||||||||||
| Total | - | - | $ | - | ||||||||||||||||
| (1) | As of December 31, 2024. |
Outstanding Equity Awards at Fiscal Year End
In December 2024, the Company’s Chief Executive Officer Ben Slager received 826,446 fully vested incentive stock options to purchase shares of the Company’s common stock and 826,446 incentive stock options that vest in 2025 under the Company’s 2021 Employee Director Stock Plan at an exercise price of 12.1 cents per share. Using a Black-Scholes option pricing model, these were valued at $144,818. In December 2024, he also received 2,173,554 fully vested non-qualified stock options and 2,173,554 non-qualified stock options that vest in 2025. These were valued at $447,104. He also received 4,493,450 unvested non-qualified stock options that vest conditionally upon the commencement of production or upon the stock listing on a major exchange. These were valued at $462,367. In March 2023, the company’s Chief Executive Officer Ben Slager received options to purchase up to 6,000,000 shares of the Company’s common stock under the Company’s 2021 Employee Director Stock Plan at an exercise price of 20 cents per share that will vest if and when the company is uplisted to the Nasdaq or NYSE. Using a Black-Scholes option pricing model, these were valued at $1,015,146. In January 2021, the company’s Chief Executive Officer Ben Slager received options to purchase up to 6,000,000 shares of the Company’s common stock at an exercise price of 15 cents per share that vested January 1, 2022. Using a Black-Scholes option pricing model, these were valued at $743,298. In the year ended December 31, 2020, the Company’s Chief Executive Officer received options to purchase up to 10,000,000 shares of the company’s common stock under the Company’s 2012 Employee Director Stock Plan at an exercise price of 10 cents per share, half that vested immediately, and half that vest upon the commercialization of the CTS process. Using a Black-Scholes pricing model, the vested options were valued at $414,850.
In December 2024, the Company’s Chief Financial Officer Anthony Santelli received 826,446 fully vested incentive stock options to purchase shares of the Company’s common stock and 826,446 incentive stock options that vest in 2025 under the Company’s 2021 Employee Director Stock Plan at an exercise price of 12.1 cents per share. Using a Black-Scholes option pricing model, these were valued at $144,818. In December 2024, he also received 1,173,554 fully vested non-qualified stock options and 1,173,554 non-qualified stock options that vest in 2025. These were valued at $241,402. He also received 3,279,476 unvested non-qualified stock options that vest conditionally upon the commencement of production or upon the stock listing on a major exchange. These were valued at $337,452. In March 2023, the company’s Chief Financial Officer Anthony Santelli received options to purchase up to 4,000,000 shares of the Company’s common stock under the Company’s 2021 Employee Director Stock Plan at an exercise price of 20 cents per share that will vest if and when the company is uplisted to the Nasdaq or NYSE. Using a Black-Scholes option pricing model, these were valued at $676,764. In January 2021, the company’s Chief Financial Officer Anthony Santelli received options to purchase up to 4,000,000 shares of the Company’s common stock under the Company’s 2012 Employee Director Stock Plan at an exercise price of 15 cents per share that vested on January 1, 2022. Using a Black-Scholes option pricing model, these were valued at $495,532. In the year ended December 31, 2020, the Company’s Chief Financial Officer received options to purchase up to 10,000,000 shares of the company’s common stock under the Company’s 2012 Employee Director Stock Plan at an exercise price of 10 cents per share, half that vested immediately, and half that vest upon the commercialization of the CTS process. Using a Black-Scholes pricing model, the vested options were valued at $414,850.
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Pay Versus Performance Disclosure Table
| Value of Initial Fixed $100 Investment Based on: | ||||||||||||||||||||||||||||
| Year | Summary Compensation on Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation on Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | Total Shareholder Return | Total Shareholder Return of Peer Group | Net Income | |||||||||||||||||||||
| 2024 | $ | 446,011 | $ | 446,011 | $ | 263,252 | $ | 263,252 | 36 | % | N/A | $ | (1,418,981 | ) | ||||||||||||||
| 2023 | $ | 265,500 | $ | 265,500 | $ | 177,082 | $ | 177,082 | -44 | % | N/A | $ | (3,055,194 | ) | ||||||||||||||
| 2022 | $ | 1,223,798 | $ | 1,996,694 | $ | 745,532 | $ | 1,260,796 | -42 | % | N/A | $ | (3,960,183 | ) | ||||||||||||||
| 2021 | $ | 1,017,205 | $ | 1,017,205 | $ | 293,690 | $ | 293,690 | 149 | % | N/A | $ | (2,139,310 | ) | ||||||||||||||
| 2020 | $ | 600,350 | $ | 600,350 | $ | 575,681 | $ | 575,681 | 96 | % | N/A | $ | (2,181,127 | ) | ||||||||||||||
Additional Narrative Disclosures
A majority of the Company’s employees, including its executive officers, have entered into employment contracts with the company. The company does not offer any benefits package, deferred compensation, or retirement plan at this time, other than an employee stock option plan.
Director Compensation
In March 2015, the Board of Directors approved a resolution to award compensation packages to the Company’s independent directors for their service as directors or as members of any committee of directors. Directors who are also officers are not to receive additional compensation for being Directors. A resolution dated May 5, 2021, reduced board compensation to $2,500 per quarter paid, at the option of the director, in cash or stock at the market price at the end of the quarter. Some directors have been accruing that as back pay. A resolution dated February 27, 2023, granted each board member 500,000 options that vest when the Company uplists to a major exchange.
The following table sets forth compensation we paid to our non-officer directors during the years ended December 31, 2024 and 2023:
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) (1) | All Other Compensation (S) | Total ($) | |||||||||||||||
| George D. Bolton | - | - | $ | 67,760 | - | $ | 67,760 | |||||||||||||
| Charles F. Sills | - | - | - | - | $ | 0 | ||||||||||||||
| Peter Zimeri | $ | 14,500 | - | - | - | $ | 14,500 | |||||||||||||
| Ned Burke | - | - | - | - | $ | 0 | ||||||||||||||
| Chris Kneppers | - | - | - | - | $ | 0 | ||||||||||||||
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) (1) | All Other Compensation (S) | Total ($) | |||||||||||||||
| George D. Bolton | $ | 11,000 | - | $ | 84,698 | - | $ | 95,698 | ||||||||||||
| Charles F. Sills | - | - | - | $ | 0 | |||||||||||||||
| Peter Zimeri | $ | 15,300 | - | - | - | $ | 15,300 | |||||||||||||
| Ned Burke | - | - | - | - | $ | 0 | ||||||||||||||
| Chris Kneppers | - | - | - | - | $ | 0 | ||||||||||||||
(1) See note 7 to the audited financial statements included in this filing for assumptions used in valuation.
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ITEM 12. – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding beneficial ownership of the Company’s Common Stock as of December 31, 2024, by: (i) each current director; each nominee for director, and executive officer of the Company; (ii) all directors and executive officers as a group; and (iii) each shareholder who owns more than five percent of the outstanding shares of the Company’s Common Stock. Except as otherwise indicated, the Company believes each of the persons listed below possesses sole voting and investment power with respect to the shares indicated.
| Name and Address | No of Shares (2) | % Owned (1) | ||||||
| Benjamin Slager (3) | 47,580,000 | 14.6 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| Anthony Santelli, II (4) | 52,219,755 | 16.0 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| Charles F. Sills (5) | 1,100,000 | 0.4 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| George D. Bolton (6) | 5,500,000 | 1.8 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| Peter Zimeri (7) | 100,000 | 0.03 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| Edmund Burke (8) | 13,790,276 | 4.5 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| Chris and Angela Kneppers (9) | 23,351,270 | 7.5 | ||||||
| 3710 Buckeye Street, Suite 120 | ||||||||
| Palm Beach Gardens, FL 33410 | ||||||||
| All officers and directors as a group (seven persons) | 143,641,301 | 41.5 | ||||||
| (1) | The percentages in this table are based upon 307,960,508 shares of common stock issued and outstanding as of December 31, 2024, and assumes the person’s vested options and warrants are exercised but none other. |
| (2) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to the shares. Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage of the person holding such options or warrants, but are not deemed outstanding for computing the percentage of any other person. |
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| (3) | Includes 500,000 exercisable warrants obtained as part of a private placement in the Company; 15,000,000 shares owned by the Benjamin Slager 2021 Irrevocable Trust; and shares underlying 16,940,000 fully vested and exercisable employee options owned by Benjamin Slager. Benjamin Slager also has 15,493,450 additional employee options awarded that will vest upon the sooner of revenue generation from a production facility or the uplisting to the Nasdaq or NYSE, unless the company enters into a merger or purchase agreement, at which time all options shall vest immediately. |
| (4) | Includes 23,366,803 shares, 125,000 fully vested and exercisable warrants, and 13,000,000 vested and exercisable employee options owned by Anthony Santelli, II; 3,476,775 shares and 600,000 fully vested and exercisable warrants owned by AES Capital Partners, LP; 8,026,177 shares and 3,625,000 fully vested and exercisable warrants owned by The AES Capital Resource Fund, LP, two entities controlled by Anthony Santelli, II. Anthony Santelli also has 12,279,476 additional employee options awarded that will vest upon the sooner of revenue generation from a production facility or the uplisting to the Nasdaq or NYSE, unless the company enters into a merger or purchase agreement, at which time all options shall vest immediately. |
| (5) | Charles Sills also has 1,579,167 options that vest upon obtaining an offtake agreement; and 789,583 options that will vest if the Company uplists to the Nasdaq or NYSE. |
| (6) | Includes 900,000 fully vested and exercisable options. George Bolton also has 331,667 options that vest over time; 1,579,167 options that vest upon obtaining an offtake agreement; and 789,583 options that will vest if the Company uplists to the Nasdaq or NYSE. |
| (7) | Includes 100,000 fully vested and exercisable options. Peter Zimeri also has 789,583 options that will vest if the Company uplists to the Nasdaq or NYSE. |
| (8) | Includes 360,000 warrants. Edmund Burke also has 789,583 options that will vest if the Company uplists to the Nasdaq or NYSE. |
| (9) | Includes 19,517,937 shares owned communally, and 2,333,333 fully vested and exercisable warrants. Chris Kneppers also has 789,583 options that will vest if the Company uplists to the Nasdaq or NYSE. |
The Company is not aware of any person who owns of record, or is known to own beneficially, five percent (5%) or more of the outstanding securities of any class of the issuer, other than as set forth above.
Changes in Control
The Company does not currently have any arrangements which if consummated may result in a change of control of the Company.
ITEM 13. – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Related Transactions
| 1) | Short-term notes payable, convertible notes, and legacy liabilities issued to related parties are described in NOTE 6 to the financial statements included herein. | |
| 2) | A board resolution was passed on February 13, 2020 that pledged the patents and pending patents to secure the back pay claims of Ben Slager, CEO, Anthony Santelli, CFO, and Charles Sills, Director. This was done to ensure the continued involvement of management to build the Company while they receive less than full salaries. | |
| 3) | During 2024, the board of directors approved an increase in salaries to two officers of the Company retroactive to August 1, 2023, in light of the fact that they are not receiving payments of salaries on a consistent basis. CEO Ben Slager is to receive annual salary of $525,000 and CFO Anthony Santelli $325,000. | |
| 4) | In June 2024, the board of directors approved a partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director Chris Kneppers to be paid in restricted stock units and stock options of 4%, 3%, and 3%, respectively, of the equity and warrants sold to investors on the next $50 million in equity raised into the Company or its subsidiaries. This is compensation for their deferring salary or lending funds to the Company until such raise(s) is affected. These restricted share units will be issued as the Company raises capital through sale of its common stock. As of the end of 2024, Ben Slager is to be issued 88,800 RSUs and options with a 15 cent exercise price and expiring on November 14, 2029, and both Anthony Santelli and Chris Kneppers are each to be issued 66,600 RSUs and 66,600 options. These remain payable as of December 31, 2024. | |
| 5) | As of April 1, 2024, the board of directors approved ceasing accruing interest on back pay due to officers and on directors’ fees. In lieu of interest, the Company will pay an additional $25,000 to each director contingent upon the financing of the first plant or the successful uplisting to the NYSE or Nasdaq. Similarly, a performance bonus equal to 100% of the outstanding back pay balance due to Officers Ben Slager and Anthony Santelli shall be paid contingent upon the financing of the first plant. These amounts automatically come due upon a Change of Control or if the Company files for bankruptcy under Chapter 11 or Chapter 7. | |
| 6) | As of August 28, 2024, each Director that is not an Officer shall receive 3.5% in cash and 3.5% in warrants for any investor first introduced to the Company by the Director. The warrants shall either be at the same price as any warrants being offered in the raise, or, if there are no warrants in the raise, then at the closing market price on the date in which the funds are received. All warrants will have a 5-year expiration from the date of the investment. No such cash/warrants were earned in 2024. |
The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.
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Director Independence
The Company currently has five (5) independent directors within the meaning of Nasdaq Marketplace Rule 4200. With five (5) independent directors, the company feels that the current board can competently perform the functions that an independent Board of Directors should provide.
ITEM 14. – PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
The aggregate fees billed by the Company’s auditors, Assure, CPA for professional services rendered for the audit of its annual financial statements for fiscal year ended December 31, 2023, and review its interim financial statements for the first, second and third quarters of 2024 are approximately $59,479.
Audit Related fees
During the past fiscal year, no fees were billed or incurred for assurance or related services by the Company’s auditors that were reasonably related to the audit or review of financial statements reported above.
Tax Fees
During the past fiscal year, the Company incurred approximately $4,100 for tax preparation fees for the fiscal year ended December 31, 2023 and $2,900 for fiscal year ended December 31, 2022.
All Other Fees
During the past fiscal year, no other fees were billed or incurred for services by the Company’s auditors other than the fees noted above. The Company’s board, acting as an audit committee, deemed the fees charged to be compatible with maintenance of the independence of its auditors.
The Board of Directors Preapproval Policies
The Company has had a functioning audit committee since May 2018. For the fiscal year ending December 31, 2024, the Company’s full board approved of the audit arrangement with Assure, CPA. Board of directors pre-approval of audit and non-audit services will not be required if the engagement for the services is entered into pursuant to pre-approval policies and procedures established by the Company’s board of directors regarding its engagement of the independent auditor, provided the policies and procedures are detailed as to the particular service, its board of directors is informed of each service provided, and such policies and procedures do not include delegation of its board of directors’ responsibilities under the Exchange Act to its management. The Company’s board of directors may delegate to one or more designated members of its board of directors the authority to grant pre-approvals, provided such approvals are presented to the board of directors at a subsequent meeting. If the board of directors elects to establish pre-approval policies and procedures regarding non-audit services, the board of directors must be informed of each non-audit service provided by the independent auditor. Board of Directors pre-approval of non-audit services, other than review and attest services, also will not be required if such services fall within available exceptions established by the SEC. For the fiscal year ending December 31, 2023, 100% of audit-related services, tax services and other services performed by the Company’s independent auditors were pre-approved by its board of directors.
The Company’s board has considered whether the services described above under the caption “All Other Fees”, which are currently none, is compatible with maintaining the auditor’s independence.
The board approved all fees described above.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following documents are filed as part of this 10-K:
1. FINANCIAL STATEMENTS
The following documents are filed in Part II, Item 8 of this annual report on Form 10-K:
2. FINANCIAL STATEMENT SCHEDULES
All financial statement schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.
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3. EXHIBITS
The exhibits listed below are filed as part of or incorporated by reference in this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Blue Biofuels, Inc. | ||
| (Registrant) | ||
| By | /s/ Benjamin Slager | |
| Benjamin Slager | ||
| Chief Executive Officer, (Principal Executive Officer) | ||
| Date | March 19, 2025 | |
| By | /s/ Anthony Santelli | |
| Anthony Santelli | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| Date | March 19, 2025 | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.
| By | /s/ Benjamin Slager | |
| Benjamin Slager | ||
| Chief Executive Officer, (Principal Executive Officer) | ||
| Date | March 19, 2025 | |
| By | /s/ Anthony Santelli II | |
| Anthony Santelli | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| Date | March 19, 2025 | |
| By | /s/ George D. Bolton | |
| George D. Bolton | ||
| Director | ||
| Date | March 19, 2025 | |
| By | /s/ Charles F. Sills | |
| Charles F. Sills | ||
| Director | ||
| Date | March 19, 2025 | |
| By | /s/ Peter Zimeri | |
| Peter Zimeri | ||
| Director | ||
| Date | March 19, 2025 | |
| By | /s/ Edmund Burke | |
| Edmund Burke | ||
| Director | ||
| Date | March 19, 2025 | |
| By | /s/ Chris Kneppers | |
| Chris Kneppers | ||
| Director | ||
| Date | March 19, 2025 |
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